Strategy Development 101

Hi

Caught a webinar on a forex site.
Thought forex factory might get a kick out of it.

Looking forward to your thoughts and comments.

Cheers

Very Informative.

Thanks for the link.

Refers to more details in next, where can I watch/read more?

I think that everything in that document is backwards. Let me count the ways:

1) "Realistic Goals" - it just rediculous that they are trying to define what's realistic. This is about as fluid and variable as it comes. I'd say that this one downright upset me to read. The guy doesn't bother to take the goal and say, "Okay, here's what we want to do - now how are we going to achieve it?" But pretty much instead says (between the lines), "Your goal is stupid and unrealistic. Mostly because I don't know how to build a bridge to make your goal happen. Instead of admitting that I don't know how to do what you want to do, I'll say your goal is stupid, toss it out the window, and require that you completely forget about why you wanted to do Forex in the first place."

2) Starting Capital - you're telling me that nobody has been able to start with less than $10,000 and be successful enough to go full time?

3) Screen Time - access to 8-10 hours p/day of screen time. How laughable is this? If you're not 22 years old or less and living at your mom's house, it's about as likely that you're going to find a spare 8 hours p/day to sit in front of a screen as you are to find a $10,00 roll of bills laying around. I do in fact sit in front of the screen for 10 hours p/day Mon-Fir, but that's because I get up in the middle of the night to do so and I also don't have a traditional job. This means that I have a flexible schedule that allows me to go to sleep after noon for an hour or two, then do the rest of my stuff throughout the day. Not many people have that luxury.

4) 4h & Daily Charts - I'll give the guy the benefit of the doubt here. Let's assume that HE is assuming that whoever is watching his presentation has a full-time job, so they can't trade on lower time frames. But why then would you need 8-10 hours p/day of screen time? To watch 4 hour bars develop? Might as well watch paint dry. Those two don't seem to mesh in my mind.

There were a number of other ones, but here's the biggest mistake of them all....

5) No Risk-to-Reward Integration - the exit rules said nothing about using risk-to-reward ratios in exiting a position. Instead the concepts of pulling out when the market turns against you was discussed. How crazy is that? This is the biggest reason, in my opinion, why people don't succeed in this business. They toss their Risk/Reward Trump Card out the window and then start pulling the plug on their trades early.

Bottom line is that you never, ever, at any point in time know what the market is going to do. If it looks like it's moving against you, it pretty much has the same probability that it will turn back around the other way and give you profit. Pulling out early in order to "protect capital" is the fast-lane to the poor house if you ask me. The STOP LOSS is what protects your capital.

Once you enter a trade you should commit to it until your TP is hit or your SL is hit. Period. Pulling out early means you'll probably never achieve a 1:2 or 1:3 Risk/Reward ratio. It's highly unlikely that you're going to be able to make up the profits you'll loose by pulling out early simply by increasing your win/loss percentage ratio. Who cares if you have an 85% win ratio if all your winners are weak? If you could have made 20x what you did by pulling out early simply by riding out every trade to S/L or T/P and only achieved a 37% win ratio....who cares? The money doesn't know that it showed up in your bank account from a system that was losing more trades than it won.

The worst part about this is that guy probably had people thinking that what he said made sense. It seemed to be locked on. The thought flow seemed logical enough, right? Well...some people are impressed by fancy, techno-charged indicators which supposedly help you predict which direction the market is going to move too.

Owned.

What else then to play diablo 3 in between while waiting for the 4 hr bar to develop