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No more BS - What have you learned?

  • #161
  • Sep 12, 2010 5:06pm Sep 12, 2010 5:06pm
Quoting Deusomega
That making a fortune scamming would be much easier than making a fortune trading. Too bad I have a conscience.
And the scammers are probably those 5% of Forex traders that make a living at it.......not the actual trading mind you.....just the scamming!
  • #162
  • Sep 12, 2010 5:31pm Sep 12, 2010 5:31pm
Quoting pip_daddy
And the scammers are probably those 5% of Forex traders that make a living at it.......not the actual trading mind you.....just the scamming!
if trading is so impossible why are you hanging out on a trading forum?
  • #163
  • Sep 13, 2010 12:59am Sep 13, 2010 12:59am
In Currency Trading there are a multitude of strategies that can be profitable. I don’t care which strategy you use but if you don’t overlay your strategy with the 5 points below then I believe that the probability of success will be really low.
1. Always Use Stop Losses – I cannot stress this enough. To be able to use stop losses you have to accept them as a cost of doing business. The same way a shopkeeper has to pay for rent or electricity, the trader has to pay for Stop losses. Usually new traders do not like to use Stop Losses because many times the price returns towards their initial entry and they end up being in the money. So in their mind, using a stop loss would only create an unnecessary red spot in their account. But you might find yourself in a scenario where the price does not return to your entry and your account gets wiped out.
Remember, trading is a marathon and not a sprint. You have to survive for a while until you learn how to trade. And the only way to survive is by using stop losses!
2. Multi-Timeframe Analysis – You might have a favorite time frame to trade. If you don’t then you should. Choose one so you learn the ins and outs of trading within that timeframe. But always look out on the next timeframe to make sure you are on the correct side of the trend and that you are not selling into bigger timeframe support or buying into bigger timeframe resistance. For example, I always trade on the 15 minute chart but always consult the 1H timeframe.
3. Keep it Simple but not too simple – Trading should be simple enough so that decision making is clear and not complicated but you should keep in mind that confluence is important as well. Confluence means that more than one indicators/price action characteristics support a trading decision. For example I might buy a pair if it bounces over its upward sloping trend line and also bouncing of a support level in addition to forming a rejection candle.
4. Learn the signal frequency of your method – You have to learn your method/strategy like the palm of your hand. I know how many signals my strategy usually generates throughout every trading session. And I know this, because I am ‘connected’ with my strategy. This means that I do not over trade. I trade the 2-3 signals a day my strategy generates and that’s it. If I start entering into more trades than what my strategy usually generates then I know I am overtrading. Over trading can kill an account, since every new trade brings new risk on the table. And as traders we hate risk!
5. Concentrate on the risk and not the profit – When you equate trading to risk management that’s when you will see your account grow. Trading is all about managing your risk. So cut your losses short. Winning trades are usually winning from the get-go. Be quick to protect your account. Personally I move my SL to entry as soon as a trade goes 15 pips in my favor. That’s a method that suits my strategy. You should protect your account as well with a method that suits your strategy.
  • #164
  • Edited 6:29am Sep 13, 2010 1:53am | Edited 6:29am
I have been in this game long enough to know that if you want to win then take it seriously and learn everything you can. The bad news is a lot of information on the internet is pure garbage and so are a lot of books that I spent both money and time.

No one thing is going to work all the time that is a given but having as much knowledge as possible puts you in a position of strength and not weakness. If I'm going to war I won't be using a bow and arrow. I also study the enemy as the enemy will take my money and will never even send a thank you note. The enemy is the market and the big players. They play this game like a master violist plays his violin with precision stokes up and down all day long. If you don't know the tune their playing they take your money it's just that simple.

This means studying the markets and having an idea what moves the markets and why. Watching the news, reading the FF calendar for pending news events and knowing what news and how it effects the currency pairs you trade. Keeping a sharp eye on the futures market prior to the London and US Opens gives you an edge on direction.

Even with all this arsenal of news, education and years of learning it comes down to the market will go wherever it darn well pleases and big money is orchestrating the direction.

The fundamentals will catch up to the value of a particular currency eventually but is it today, tomorrow, next week? The when is still the underlying and sometimes unanswered question. Get it wrong and your money is gone.

But again many traders who do as I've stated never make any money and it comes down to a simple fact. Knowing all the basics of how to trade doesn't make you a dime until you can put that information you've crammed into your brain into a working plan.

Sorry, learning how to trade won't make you a trader. It's not like the intern brain surgeon where one slip and your patient is well, brain dead but unfortunately you have to wade into the deep end eventually and actually trade. Although you may make a million on the demo account it doesn't give much of a return on investment. The demo doesn't require you to use the side of your brain that fear resides in and this little thing called fear will kill all good trades before they fully mature into big fat profits and actually turns good trades into bad trades.

So many of us have read so much it puts us into a state of total confusion and now paralysis of analysis takes place and coupled with the fear factor makes us a very bad trader. We start this game as a total newbie and trade like an idiot. We finally get smart and learn everything and now we trade just as bad or worse then we did before except now we are an educated idiot trader. The good news is we at least now we know weez are one because as a newb we actually made a little money.

I have found indicators will do this sort of thing to a trader quicker then most. The best thing to do if you find yourself in this situation is to delete most of your indicators. Any indicator that keeps you from looking at the price action is worthless. Indicators can be good but also very detrimental to making money. It's like walking down the street with your eyes looking behind you and you walk out into traffic and get run over by a truck.

The best way to make money is knowing how to read a chart and know when the PA is reaching exhaustion. Play the momentum of the Market Opens and take money off the table quickly and often to eliminate risk. This is where watching for pending news puts money in your account. News during heavy volume will extend the Price beyond the true value thus giving you a large move in both directions.

Learning support and resistance will be a valuable tool to help you see where the turning points of the PA will take place as well as showing how far away from equilibrium the price has stretched.

Trade with money management and risk as your partner for they will always keep you in the game. Stray too far from them and game over.

Johnny
  • #165
  • Sep 13, 2010 2:23am Sep 13, 2010 2:23am
Quoting JohnnyBSmart
directions.

Learning support and resistance will be a valuable tool to help you see where the turning points of the PA will take place as well as showing how far above equilibrium the price has stretched.

Johnny

Interesting post Johnny thanking you

Just interested to know - How does one determine an equilibrium price level? Would this not change constantly with changes in demand and supply? Shifting the supply and demand curves left and right constantly?

All things being equal what you said would make sense but isnt the FOREX market in particular a constatly changing market?
Time hides Nothing
  • #166
  • Sep 13, 2010 2:33am Sep 13, 2010 2:33am
Quoting pip_daddy
And the scammers are probably those 5% of Forex traders that make a living at it.......not the actual trading mind you.....just the scamming!

I suspect it's more like 1% and 95% of those are Scammers, sad world we live in where screwing each other over to get by is common.

Sadly the scammers, create a fake persona which people listen to then fill there heads with BS of how to trade and thats why 99% fail.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #167
  • Edited 10:40am Sep 13, 2010 6:57am | Edited 10:40am
Quoting CindyXXXX
Interesting post Johnny thanking you

Just interested to know - How does one determine an equilibrium price level? Would this not change constantly with changes in demand and supply? Shifting the supply and demand curves left and right constantly?

All things being equal what you said would make sense but isnt the FOREX market in particular a constatly changing market?
Hello Cindy,

Slight slip of the pen as I typed above instead of away from equilibrium but the message hasn't changed.

The market is constantly changing and equilibrium is most definitely a moving target but a simple moving average gives you a picture of where the price is likely to return to or stretch from. Utilizing the 50, 100 and 200 SMA will give you short, medium and longer term price direction as well as a line that will be crossed over and under to visually show over bought and over sold conditions. Trading the extremes back and forth will put pips in your account.

Johnny
  • #168
  • Sep 13, 2010 7:11am Sep 13, 2010 7:11am
1) Only read forums for ideas

2) Don't believe anything unless you can test it yourself

3) If you get results that are too good to be true they usually aren't but sometimes actually are

That's basically it
  • #169
  • Edited 11:06am Sep 13, 2010 7:30am | Edited 11:06am
Quoting JohnnyBSmart
Hello Cindy,

Slight slip of the pen as I typed above instead of away from equilibrium but the message hasn't changed.

The market is constantly changing and equilibrium is most definitely a moving target but a simple moving average gives you a picture of where the price is likely to return to or stretch from. Utilizing the 50, 100 and 200 SMA will give you short, medium and longer term price direction as well as a line that that will be crossed over and under to visually show over bought and over sold conditions. Trading the extremes back and...
Gotcha! good one - theres a trader on here AMYc who does this awesomelly she has a journal and anyone saying that trading is impossible and TA is rubbish take a look at her journal - she has her own style

its quite cool -
Time hides Nothing
  • #170
  • Sep 13, 2010 7:30am Sep 13, 2010 7:30am
Quoting mikkom
1) Only read forums for ideas

2) Don't believe anything unless you can test it yourself

3) If you get results that are too good to be true they usually aren't but sometimes actually are

That's basically it
NP - agree 100% prticularly 1 and 2
Time hides Nothing
  • #171
  • Sep 13, 2010 10:09am Sep 13, 2010 10:09am
Funny when people talk about moving avarages. Its common to see talk like "price follows the MA this and that"...but in reality, its the MA that follows the price!
  • #172
  • Sep 13, 2010 10:35am Sep 13, 2010 10:35am
Quoting CindyXXXX
NP - agree 100% prticularly 1 and 2
Great thread Cindy!
Gone to a better place
  • #173
  • Sep 13, 2010 10:36am Sep 13, 2010 10:36am
Quoting johto
Funny when people talk about moving avarages. Its common to see talk like "price follows the MA this and that"...but in reality, its the MA that follows the price!
And the only reason the MA's are relevant is because everyone watches them so it's self fulfilling.
  • #174
  • Sep 13, 2010 10:47am Sep 13, 2010 10:47am
Quoting johto
Funny when people talk about moving avarages. Its common to see talk like "price follows the MA this and that"...but in reality, its the MA that follows the price!
johto,

No kidding we all know that bit of divine information but the effect is still the same the price will and does cross moving average lines. I didn't see anybody posting this incorrectly so what's your point.

Johnny
  • #175
  • Sep 13, 2010 10:48am Sep 13, 2010 10:48am
Quoting pip_daddy
And the only reason the MA's are relevant is because everyone watches them so it's self fulfilling.
pip_daddy,

You're kidding right?
  • #176
  • Sep 13, 2010 11:03am Sep 13, 2010 11:03am
Quoting pip_daddy
And the only reason the MA's are relevant is because everyone watches them so it's self fulfilling.
That can be said about everything in trading.
  • #177
  • Sep 13, 2010 11:03am Sep 13, 2010 11:03am
Quoting pip_daddy
And the only reason the MA's are relevant is because everyone watches them so it's self fulfilling.

Kinda, the Funds buy / sell programs are based around them, EMA's being what they use.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #178
  • Sep 13, 2010 12:40pm Sep 13, 2010 12:40pm
Quoting pip_daddy
KISS!

Keep It Simple Stupid! If it is not something obvious enough for almost everyone staring at the charts to see then it's not going to have much influence. As anyone reading posts from people who have been on the inside with the big dogs will know, the big dogs always just keep it simple. So by complicating things by looking for exotic patterns in the noise or whatever, we are only lowering our probability.

Oh....and:

While it may be true that 95-99% of Forex traders fail, 100% of Forex traders who never give up will succeed.
pip_daddy,

The big dogs trade the longer time frames with lower spreads and better information. They are not the best traders as any good retail trader can run rings around the professionals. The fact is a Harvard degree and two years training on Wall Street does not a trader make. Wall Street would hire a self trained retail trader any day of the week and they do. They hire the retail traders to train there high priced professionals.

I have run into a few of these over paid and over educated Wall Street wonders and they know they can't trade all that well. It quite surprised me at first but one explained that most traders spend eight hours a day in a small cubicle doing exactly what somebody else told them to do and never having to think for themselves doesn't make them any smarter.

As far as your comment about never giving up is concerned that doesn't seem to hold any water either as I see dozens of traders that have been around a long time but just showing up for class doesn't get you a college degree not will it make you any money. A strong desire to learn as well as a relentless positive attitude is the only thing that will move you from failure to success.

You see traders that say they are chartist and others who proclaim the fundamentals are the way to go. Some say the heck with both and watch the PA with nothing on a chart as indicators always failed them in the past. These seem to disappear after a while.

The truth is that taking a class on Physics does not make one an engineer. Trading the market with only a small piece of the puzzle solved and firmly implanted in your brain only gives you enough education to make you dangerous. This occurs on a regular basis on trading forums as traders posts their ideas and trading methods and then Whamo a coder shows up and an EA is coded all before the method has proven itself worthy of anything.

Everybody waits in nervous anticipation when they start up the EA and dreams of riches enter their minds. This rarely occurs because the sad fact is even a great coder can only code the system as designed by the trader posting his method.

If the trader lacks trading skills the EA only reflects this solemn fact. Any success at first is soon negated and your back to square one or out of money. Even the better methods see only average results such as Bollinger Band, RSI and MACD systems. These are generally scalping methods and some degree of success is attained but still are lacking in greatness.

You see Martingale Systems, profit enhancement methods and everything from A-Z to covering up the fact they don't have a clue on trading basics. Most of these methods are better thrown into the recycle bin. Time has a way of sorting out the good from the bad systems as the mediocre and bad methods die a quick death on these Forex sites. The basic ideas may be good but the lack of trading skills by the thread's originator and his inability or unwillingness to change his method just clears the threads path to failure.

Keeping things simple to me is another way to say I'm too lazy to learn. This "KISS" quote I see being posted by way to many here. You're trading activity should have clear rules, a trading plan and a thorough understanding of the market. Without these key ingredients then failure is in your future.

I liken it to a gun fight with Clint Eastwood. He's come to the fight with a 44 magnum and when he speaks those now famous words "Go ahead make my day" or this one "you’ve got to ask yourself one question: “Do I feel lucky?” Well, do ya, punk?- Dirty Harry". What weapons do you have in your arsenal to take to the fight. Packing a knife just won't get the job done now will it? Now ask yourself the next time you say that "Keep it Simple Stupid" line, who exactly is the word "Stupid" referencing.

Johnny
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  • #179
  • Sep 13, 2010 1:10pm Sep 13, 2010 1:10pm
Quoting JohnnyBSmart
pip_daddy,

The big dogs trade the longer time frames with lower spreads and better information. They are not the best traders as any good retail trader can run rings around the professionals. The fact is a Harvard degree and two years training on Wall Street does not a trader make. Wall Street would hire a self trained retail trader any day of the week and they do. They hire the retail traders to train there high priced professionals.

I have run into a few of these over paid and over educated Wall Street wonders and they know they can't trade...

Although the big dogs might trade off higher TF's thats cause there trading with 1000's of lots and unlike us they can't get in and out at the click of a button, they use Buy / Sell programs which run primarily of MA's from very small S5 time frames, which tried to get there 1000 full lots filled at a good price without running up the market.

Big 30pip up moves happen for no reason, cause someone somewhere in the world has clicked buy 1000 lots please and how agressively they've set the system to get them in. Although the moves are enterable and visible whilst there happening, this is what makes predicting things with indicators so ridiculous, you just can't predict when some fund will instruct there computers to start buying in.

The main advantage the big dogs is, they know how we trade and how to screw us to be fair we are pretty dumb as we don't work together, ALL Big dogs make money, huge money covering there huge overheads and some, so the only place new dumb money comes from is us retail traders on mass all over the world, they can also to a large degree manipulate the movements on the markets to create fake out, hit stops, bla bla bla.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #180
  • Edited 1:33pm Sep 13, 2010 1:20pm | Edited 1:33pm
Quoting Turveyd

The main advantage the big dogs is, they know how we trade and how to screw us to be fair we are pretty dumb as we don't work together, ALL Big dogs make money, huge money covering there huge overheads and some, so the only place new dumb money comes from is us retail traders on mass all over the world, they can also to a large degree manipulate the movements on the markets to create fake out, hit stops, bla bla bla.
Do you really think institutional traders give a rats about what retail mini and micro accounts are doing, those trades rarely see the light of day let alone the market. They're not interested in taking our nickels and dimes....
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