Trade what you see NOT what you expect

Wish You all guys happy X-mas

To everybody on the thread have a great Christmas and New Year

Merry Christmas and Happy New Year to everyone!

EO a huge thanks to you !!

Merry Christmas to everyone. Thank You to everyone on this thread, especially Ken for directing me here. I long for the day when I am good enough to help out the newcomers. 2010 is going to be a good trading year for everyone. I can feel it..

Merry Christmas to all!

What they said!

Hi, Everyone
Merry Christmas and Happy New Year!

merry christmas everybody! looking forward to a ROCKIN 2010!

Merry Christmas and Happy New Year!

Hi Ken,

Many thanks for that. My question was regarding the range break out with a close of the M15 outside the range and subsequent buy/sell pullback to the M15 5EMA (red circles).

Like in your example there is first a false break (long) and then a violent reversal in the other direction (short). I wonder if it makes sense to have a stop and reverse order to get in the short if the long fails.

Merry Christmas and a Happy New Year to everyone too.

Thomas

I think the most important thing Eo stresses is to take direction off the higher tf's! Here is how i see the daily.

It is that time of year again. When make new and renew old goals for ourselves. Why we do this during this time of year only is strange . Winter is probablly one of the hardest times for people to get more excrises because of weather and finances are in a shambles do to the holidays and the spreading of cheer. So that all amkes ou8r new yeas=rs resolutions harder if not impossible.

So lets see if we can make a effort to improve our chances of reaching a goal or two this year and not have them just be dreams.
My last position in the private sector was managing a location of a large national company. Every year we were requiered to put together a forecast. Which was a itemized set of goals for the following year. This forecast was derived from a line item report called a General Ledger. This report was monthlly as well as yearlly. It was a snapshot of all exspenses and profits for every month broken down into every single item wiether it be a Bill or a customers invoice (In our case a increase in equity or a withdrawl).

I know during that 1/3 of one trimester in highschool when they taught us how to spend money by writing a check. There was a minor notation about making a budget which of course not having any money we didn't listen too. But let us assume we want to be fulltime traders making our income from this thing called Forex. The sooner we start treating the accounting postion of trading as the business it is the better off we will be. Some are lucky they all ready have a company big or small and realize the importance of precise financial paper work. Anything in the finacial world wiether you want a loan or taxes or to proof your poor even. Requires you to prove on paper why your just telling people.

In the U.S. we actually fill out or taxes based on our own assumptions yes we have paperwork to back up our claim. But the IRS ( Internal Revenue Service) Doesn't start to input that data or verify anything for 3 years after we file our tax returns. Which if we wanted too could let us right ourselves a loan if we wanted . But the penalities and interest are not favorable.

So back to the task at hand. So we have the goal to be successfull and we are to a point we take out some money from time to time. Then it all goes to crap for one reason or other. We could actually end up oweing taxes on money we made and spent after we lose all our equity and quit trading. That would be the worst case scenario. So if your taking withdrawls remmeber you will owe taxes on that money at some point. The only reason not if you take out the same amount you put in and lost all you put in . Then it would be a draw no loss no gain. But if you make 10,000 and your equity is equal too or greater you owe taxes on 10,000 and any other equity over your deposits. I know this is basic but to get hit with a large tax bill when you least can afford it desreves a reminder.

The accountants would tell you to place your estimated taxes into a seperate account and draw some interest on it before you have to pay. If you are a very discplined person that is great advice if your not. Maybe every time you take a draw from your account send 1/3 of that draw to the IRS. as a prepayment. One item of importance is to do a prelimanry tax aduit before it is due. We have almot 4 months to do this yet must wait to the last moment. Just log on to anyone of many free internet services and fillout the forms and this will give you a good idea where you stand and what you possiblly owe. You then have 4 months to make this money or lay some aside.

Enough on that just be aware and have some plan to deal with it. The main focus here is that we all should make some sort of forecast for the up coming year. The more detailed the better as our trading progresses the more important these records will become. So if you start now it will make simpler.. So start seperating your bills . A good starting point would maybe one of the accounting software like quickbooks or something. If your real lazy if you pay all your bills on one credit card then pay it in FULL every month they can seperated it for you. But you should have at the least the following details.

1. Housing
a Mortgage
b Taxes
c Insurance
d Rent ( Yes you can have a mortgage and rent)Think Redneck Hilton
Double Wide.
e Condo or maintence fees

2 Utilities
a electric
b water
c sewer
d trash
e Phone

3 Trading exspenses.
a Internet ( may be portion of phone)

b Secondary internet. ( 3 G card Cable internet)

c Phone Either seperate line or portion of house line.

d Computer expsenses.( Printer ink , printer paper , UPS)

e office supplies ( paper. enevelopes, pens postits. everything)

f office equiptment ( phones, fax machine ,copier,answer machine)

g office rent (Portion of housing exspenses. If home office)

h travel exspenses. To seminaries are to check on ivestments
a plane tickets
b hotel
c meals
d entertainment of other traders or possible clients or mentors
any dealings with anyone that has to do with your business.
accountants lawyers landlords sedcrateries, maintence people
can be wrote off as a bussiness exspense. But you have to have
backup paperwork. Start making it a habbit to keep restraunt and
gas reciepts and write small notes on the back.

i gifts may fall under entertainmant but are tax detuctable.

j company car
a payment
b insurance
c Fuel ( keep reciepts or Credit card statement of gas card)
d Detailing / maintenance
e Toll charges


k health insurance
a Eye care
b dental
c health

l Retirement funds
a 401 k
b ira's

m Contract payments onetime services of relatives possiblly.



I think you get the picture a lot of these details may not apply right a way but once you start making real money in forex you will need to talk to someone about starting a company to allow you to write of against your tax bill a good portion. I worked for a guy once to everyone in the office 5 people to lunch everyday and wrote it off. The important thing is a paper trail especially if you use cash. IF you use a credit card try and use the same one for the same things are better yet make one the company card. anything that might be a bussinees exspense should be charged on that card. Then if you lose your reciept you have a backup.

You will be able to write off so many of your daily living exspenses. Then the best way to get cash is as a paycheck to yourself. But if you start tracking all your cost in this way you may see where money is just leaking out of your life and then you can stop that flow. Plus you can make a real plan based on real facts. I want to have a extra 200 to spend a month on entertainmnet. Maybe just moving things around you can. Plus once you start keeping track of items this way. You will be able at a glance see how your doing.

A Review monthlly and adjustments quarterlly will help to keep you focused. And you can see where your slipping. One item I didn't metion was captial exspenditures. This would include any major chages in your budget like a new offece or new car some of those types of purchases can be deducted over years.

The we may want to diversify which would reguire divisions of your main company to protect your personal assets. This why you will normally have one company that has a few LLC under it. The LLC (Limited Liablity Companies ) carry the risk and can be closed if needed protecting the major company. You see it all the time in major corporations debt gets to high in one part it goes under opening tomorrow under a different name. Regardless what people think that is still not a good thing. better to run profitable companies . But this can also protect you from liabilty caused by lawsuits., and if peole start to know you have money beware. They might start stepping in front of your car. Why we drive a company car . LOL

So start seperating your exspense a number code on a excel spread sheet is fine. Then file in seperate folders. That way when you do talk to a accountant or lawyer about starting that new trading and investment firm . You will be ahead of the game.

Sorry I know I got a bit of track. But hope this will get you to thinking about the future. Plan now that way it is a smooth transition. And don't wait till the last minute. If you have years of losses as a bussiness they are also treated differentlly. But would be better to take against profits.

Happy New Year Ken

Jack B PIP
Hey Ken and everyone,
I'm practicing my chart anaylisis and here is one of the spot's I'm still having trouble with in real time. Here is my 15m and 1h charts. I'm wanting to sell here but then I start thinking am I supposed to trade away from the ma's here, or is it wait for the break one way or another and then get in on a 1 or 5 oclock trade? Thanks for any comments on my chart anaylisis
Jack
http://i923.photobucket.com/albums/a...ingsignals.jpg
This is where the drawing of the S/R lines comes into it's own. Those give you the areas to at the very least beware. It is where we expect price to either stall or turn around or both. as it did. it stalled pulled back off the first test then tried again failed the second time and turned. This are also the places to get in the longer term trades. targeting another area off the higher time frame charts but possiblly takeing some profit along the way off the smaller time frame charts. This is the reason why we say when trading towards the major MA's we tka profit at the different ma's because price could turn back. The major ma's being the main focus.
Also if you watch you will see the price start to close the other side of the ma's. You could have taken a long on the first pullback but when it failed to go higher a alarm in your head should start to go off. it isn't going higher becarefull.
The 35/50 area is normally in line with a major fib level or retracement area. That is why it has it's own trading entry. The same goes for the 62 ema 1 hr touch trade it is a major retracement on the 1 hr chart. But you must know the difference between a retracement and a reversal. That is why I mention a Check mark. If it is a V shaped swing maybe a reversal not a retracement.

Your making some great trades and starting to see the entries as you take more and more it gets easier. But don't forget the other enties. both those double tops had some good signals. Maybe start by just placing a mark where you think a different type trade is then that will help you gainn the trust required.

Great Trading Ken

http://forums.babypips.com/avatars/k...ine=1213113964KENNETH LEE http://forums.babypips.com/images/st...ser_online.gif
Master Contributor and Member


Join Date: Aug 2007
Location: Key West , Florida
Posts: 490


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Quote:
Originally Posted by Shr1k http://forums.babypips.com/images/buttons/viewpost.gif
Thanks Ken
I like looking at your charts. Have you looked at the BB and moving averages thread here on BP I see that some very similar trades would be had following that method and yours. Its nice to see conformation.
My method is sort of a hybrid of both focusing on PA for entry with the BB to help me decide on a reasonable exit. I also scalp most of my trades. PA(what goes up must come down well not all the time and not all the way back down but enough to work withhttp://forums.babypips.com/images/smilies/wink.gif) and BB are the only thing I have found worth anything on a 5min chart.

Thanks again for the great contribution and Merry Cristmas

Thanks for the post. Yes actually almost any other strategy and this one should have common factors if your taking any good trades. because this one has a entry at almost every possible entry point. if it can just help with confirmation of any of the types of trades your currentlly using it is well worth the additional information.

I have found this is how I want to trade but am trying to grow as a trader to use all these different entries to trade. We have very few that have been able to incorporate the total package , longer term and the shorter scalping trades into a single package. But those that have are probablly the best traders I have ever heard of anywhere. If you look over the complete system you will see it has entries for every type price movement. the best traders use mulitple accounts to take advantage of all the trades holding longterm while taking countertrend in a second account.

It is easy to see how this is done after the fact. But harder to gain that trust to pull it off ourselves. So hope you can use some of the information here and if you have additional comments or want nay clarifaction on any points just ask.

Happy Holidays Ken

Here is that post about finances retyped by Mary4x.. Thanks a lot .. ken

Also downloaded the DOC file. opens better..


It is that time of year again, when we make new and renew old goals for ourselves. Why we only do this during this time of year is strange. Winter is probably one of the hardest times for people to get more exercise because of weather and finances are in a shambles due to the holidays and the spreading of cheer. So that all makes our new year’s resolutions harder if not impossible.

So let’s see if we can make an effort to improve our chances of reaching a goal or two this year and not have them just be dreams.

My last position in the private sector was managing a location of a large national company. Every year we were required to put together a forecast, which was an itemized set of goals for the following year. This forecast was derived from a line item report called a General Ledger. This report was monthly as well as yearly. It was a snapshot of all expenses and profits for every month broken down into every single item whether it be a bill or a customer’s invoice (in our case an increase in equity or a withdrawal).

I remember during that 1/3 of one trimester in high school when they taught us how to spend money by writing a check. There was a minor notation about making a budget, which of course not having any money we didn't listen to. But let us assume we want to be fulltime traders making our income from this thing called Forex. The sooner we start treating the accounting portion of trading as the business it is the better off we will be. Some are lucky--they already have a company big or small and realize the importance of precise financial paperwork. Anything in the financial world whether you want a loan or taxes, or to prove you're poor even, requires you to prove on paper what you’re telling people.

In the U.S. we actually fill out our taxes based on our own assumptions. Yes, we have paperwork to back up our claim. But the IRS (Internal Revenue Service) doesn’t start to input that data or verify anything for 3 years after we file our tax returns. Which if we wanted to could let us write ourselves a loan. But the penalties and interest are not favorable.

So back to the task at hand. So we have the goal to be successful and we are to a point we take out some money from time to time. Then it all goes to crap for one reason or other. We could actually end up owing taxes on money we made and spent after we lose all our equity and quit trading. That would be the worst-case scenario. So if you’re taking withdrawals, remember you will owe taxes on that money at some point. The only reason not is if you took out the same amount you put in and lost all you put in. Then it would be a draw, no loss no gain. But if you make $10,000 and your equity is equal to or greater you owe taxes on $10,000 and any other equity over your deposits. I know this is basic but to get hit with a large tax bill when you least can afford it deserves a reminder.

The accountants would tell you to place your estimated taxes into a separate account and draw some interest on it before you have to pay. If you are a very disciplined person that is great advice. If you’re not, maybe every time you take a draw from your account send 1/3 of that draw to the IRS as a prepayment. One item of importance is to do a preliminary tax audit before it is due. We have almost 4 months to do this yet most wait to the last moment. Just log on to any one of many free Internet services and fill out the forms and this will give you a good idea where you stand and what you possibly owe. You then have 4 months to make this money or lay some aside.

Enough on that. Just be aware and have some plan to deal with it. The main focus here is that we all should make some sort of forecast for the upcoming year. The more detailed the better. As our trading progresses the more important these records will become. So if you start now it will make it simpler. Start separating your bills. A good starting point would maybe be one of the accounting softwares like QuickBooks or something. If you’re real lazy and if you pay all your bills on one credit card then pay it in FULL every month and they can separate it for you. But you should have at the least the following details.

1. Housing
a. Mortgage
b. Taxes
c. Insurance
d. Rent (Yes, you can have a mortgage and rent (Think Redneck
Hilton.) Double Wide.
e. Condo or maintenance fees
2. Utilities
a. electricity
b. water
c. sewer
d. trash
e. phone
3. Trading Expenses
a. Internet (may be portion of phone)
b. Secondary internet (3 G card Cable internet)
c. Phone, either separate line or portion of house line
d. Computer expenses (printer ink, printer paper, UPS)
e. Office supplies (paper. envelopes, pens. post-its, everything)
f. Office equipment (phones, fax machine, copier, answering machine)
g. Office rent (portion of housing expenses if home office)
h. Travel expenses to seminars or to check on investments
1) plane tickets
2) hotels
3) meals
4) entertainment of other traders or possible clients or mentors; any dealings with anyone that has to do with your business--
accountants, lawyers, landlords, secretaries, maintenance people
can be written off as a business expense. But you have to have
backup paperwork. Start making it a habit to keep restaurant and
gas receipts and write small notes on the back.
i. Gifts may fall under entertainment but are tax deductible.
j. Company car
1) payment
2) insurance
3) fuel (keep receipts or credit card statement of gas card)
4) detailing /maintenance
5) toll charges
k. Health insurance
1) eye care
2) dental
3) health

l. Retirement funds
1) 401 k
2) IRA’s

m. Contract payments--onetime services of relatives possibly.
I think you get the picture. A lot of these details may not apply right away but once you start making real money in forex you will need to talk to someone about starting a company to allow you to write off against your tax bill a good portion. I worked for a guy once who took everyone in the office, 5 people, to lunch every day and wrote it off. The important thing is a paper trail especially if you use cash. If you use a credit card try and use the same one for the same things. Or better yet make one the company card. Anything that might be a business expense should be charged on that card. Then if you lose your receipt you have a backup.

You will be able to write off so many of your daily living expenses. Then the best way to get cash is as a paycheck to yourself. But if you start tracking all your costs in this way you may see where money is just leaking out of your life and then you can stop that flow. Plus you can make a real plan based on real facts. I want to have an extra $200 to spend a month on entertainment. Maybe just by moving things around you can. Plus once you start keeping track of items this way, you will be able to see at a glance how you’re doing.

A review monthly and adjustments quarterly will help to keep you focused. And you can see where you’re slipping. One item I didn't mention was capital expenditures. This would include any major changes in your budget like a new office or new car. Some of those types of purchases can be deducted over years.

Then we may want to diversify which would require divisions of your main company to protect your personal assets. This way you will normally have one company that has a few LLC’s under it. The LLC (Limited Liability Companies) carry the risk and can be closed if needed protecting the major company. You see it all the time in major corporations. Debt gets too high in one part it goes under, opening tomorrow under a different name. Regardless what people think that is still not a good thing. Better to run profitable companies. But this can also protect you from liability caused by lawsuits, and if people start to know you have money, beware. They might start stepping in front of your car. Why we drive a company car. LOL

So start separating your expenses. A number code on an excel spread sheet is fine. Then file in separate folders. That way when you do talk to an accountant or lawyer about starting that new trading and investment firm, you will be ahead of the game.

Sorry, I know I got a bit off track. But I hope this will get you to thinking about the future. Plan now. That way it is a smooth transition. And don't wait till the last minute. If you have years of losses as a business they are also treated differently. But it would be better to take against profits.

Happy New Year Ken
__________________
Good Trading To All ; Ken Lee

[quote=KENNETH lEE;3328401]http://forums.babypips.com/avatars/k...ine=1213113964KENNETH LEE http://forums.babypips.com/images/st...ser_online.gif
Master Contributor and Member


Master Contributor and Member? Is this some type of new designation?

[quote=cisco;3328957]
The post was posted on another thread first and then copied and pasted here.. One of their labels..

Hope your having a nice holiday. Ken

If GU closes below the 1.5917 level to turn the prior support level to resistance, might we see 1.5727? see the daily chart.

Originally Posted by jaggu86 http://forums.babypips.com/images/buttons/viewpost.gif
Hi Ken ,

Today London session was quite confusing for me after priced reached 62 EmA . I was quite unsure which direction to favour because price was in boucing in between 62 EMA and 35/50 cross break out . How do u treat this kind of situation . Attached is the chart.
It being one of the worst weeks of the year to trade. look closelly at your charts.. This doesn't mean there aren't trades as you can see 140 pip drop on gbp. Just maintain tight stops.

Hi, EO, KEN and all
A very happy new year to all of you !
I read and study this thread for a few weeks, I believe this is a very good trading method, I started trading using this method, but unfortunitily my first 2 trading failed. maybe it was because this week is the worst trading week, maybe I have not understood the method. I have some questions, if any of you got time from your busy schedule, please give some advise.
1) 1 or 5 o'clock trading, where is better entry point? like when the price touch 5ema or 10 ema or 21ema? or...?
2) When we try to trade 1 or 5 o'clock in 15m, normally at the same time 1h will form a long wick candle or something like hammer..., any suggestion for this kind or trading?
3) I attached a picture regarding my first 1h62ema trading, can you please give me any advise or suggestion?

Hi, Ken
Thanks for your excellent analysis.
I still do not understand why we can not go long when the price touch 1h62ema (according the method provided by this thread)? or we can go long with tight SL, but we can only get 10+ pips if lucky.
Thanks and Happy new year