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Trading Made Simple the right way, and other trading lessons 334 replies

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Trading Made Simple

Quoting adamjhdavis
{quote} ok then for the trend you need to look at daily and weekly! My view of it is that it has just broken and closed below support from 4th and 5th Aug. there is more support at .7700 but it hasn't been below there for a while! You are not going to get a certain answer whether it will go up and down you can only trade what you see. You have missed the recent 4H short cross and the pair is definitely ijn a down trend which could or could no be over. The point I make is trade what you see get a plan for long and a plan for short, have patience...
yup i have an eye on the support at .7680. so i will look at the PA at the start of the frankfurt open tomorrow..........and will open trade accordingly...
Come tomorrow, I'll wake up new
Quoting gsbharaj
ok i am looking at the NZD/USD chart. on the daily time frame you can see that it is at a monthly s1. the trend has been down. if you look at the h4 chart you can see that its at the weekly support zone which was in june. now i am confused that whether the price will go up or down. can someone guide me please. {image} {image}

Hi gsbharaj;


As Adam Said u cann't get a certain answer but if u look at the 1st pic u see that Price is closed under the Supp and the other pic is going to be bounced! ( No one can say it is 100%)


So u can say that price is going to be downward! ( 70% not 100%)


One more thing should pay attention is Supp Zone ( Not Supp line )

always wait for some pips under Supp or Res because some time price break supp or Res Line and pulls back again! So if Price is going Down under the Supp zone, then push SELL button Comfortably !
Quoting farhad10
{quote} Hi gsbharaj; As Adam Said u cann't get a certain answer but if u look at the 1st pic u see that Price is closed under the Supp and the other pic is going to be bounced! ( No one can say it is 100%) So u can say that price is going to be downward! ( 70% not 100%) One more thing should pay attention is Supp Zone ( Not Supp line ) always wait for some pips under Supp or Res because some time price break supp or Res Line and pulls back again! So if Price is going Down under the Supp zone, then push SELL button Comfortably !
i am getting more confident now. thanks to all the masters
Come tomorrow, I'll wake up new
A moment of Enlightenment

Forex trading is like anything you learn in life or at school. Rick compares it to learning math. You start with the basics and step by step you learn to solves increasingly complex problems. But for me that comparison goes even further. I don't know for you, but for me when I was studying math or statistics I was often astonished by a strange phenomenon. This phenomenon was that no matter how hard I studied, how much I made and re-made the exercises I couldn't solve them on my own. I could follow the logic once the solution was in front of me but the task of solving it by myself was nearly impossible. That's where frustrations get in. This in itself wasn't the strange part. The strange part was that a year or 2 years later, when confronted to comparable problems (without having expanded my knowledge on the matter during that period) the solutions and the logic behind it came to me like a godly revelation. Apparently knowledge, information need the time to get structured, analysed and integrated in your logical system. At the time that I studied, the information inflow was too important, the task too vast too really grasp it. Time and patience where needed so that everything would fall slowly into place.

The point that I want to make is that learning to trade is, for me, exactly the same as learning math or statistics ... (Thank you Rick for that light bulb)
You can't rush it, some are better than others, but don't make the mistakes to think you are brighter than everyone else and that you will get it in a matter of weeks. You need the time, often years, so that bit by bit everything gets clear. It's like an adventure in complete darkness. You don't know where to go so you get lost ... but by learning and TIME a light bulb will go on and you will step in that direction and as your knowledge expands and the time orders your thoughts another will go on, and another. Slowly but surely advancing to reach your final destination.

Learning is advancing light bulb by light bulb. You will often get very close to one but won't realize it at that time. That's no problem, maybe your time will come maybe it won't. You read so much everywhere about trading, so much rules, hints and tips ... that you read past them without understanding the true meaning.

Some of those light bulbs :
- Don't get discouraged by your failing, it needs time and mistakes to get there .. Never forget to LEARN from your mistakes. It's said so often but do you really apply it ? Do you really get that ? Don't make a mistake to rush into a new one, take the time to think about it, to realize what you did. Write it down and don't make it again ! Re-read that !

- Make up your mind. Don't try this than this than maybe this. Stick to one time frame. Decide to use pivots or not, but stick to it. Stick to it until you master it like tying your shoes. (I have to fight this tendency to do this every week)

- Don't trade to become rich quickly. You can earn a lot of money that's true ... but the truth is that you need one of these 2 things :
1) An important capital to start with. If you make 5 to 10% a month that's very good. So how much capital do you need to live from it ? Don't expect to live from it with 500 or 5000€.
2) Years to slowly build up your capital from scratch.

- And this last one that only became clear to me recently and really clicked with Rick's seminar. Two things clicked together : That is EXPECTATIONS and PATIENCE. Be patient, don't over-trade. I'm sure that we all heard that one. We all read that rule somewhere. One ear in and the other ear out. There was a PDF with 25 rules of trading, it was in there I think; Alexander Elder said it; Emmanuel said it, Big E said it, Rick said it and I'm sure PHX said it or at least thought it. What is the 1 thing they ALL have in common ... Exactly, profitability ! So maybe, just maybe, this rule is important !

Why do we over-trade ? Because we want to take every opportunity. We don't want to miss a single shot !
Why don't we want to miss an opportunity ? Because we want to be rich, wealthy, or at least make a pile of money !
Wrong expectations ! We have to be realistic ...
If we match expectations 5 or 10% a month with patience, what do we get ? Only a couple of trades every month ?
Exactly !

Take only the best ones, that's all you need

Sorry for this enormous text But i hope it helped someone !

Have a good weekend everyone
Don’t ever let someone tell you that you can’t do something.
how did the webinar go down - any good ?
i missed it but hoping to catch it from the recording next week....

nelly..

Emmanuel thanks - i have found your post for the TDI RT - i will load this one to my charts this afternoon ready for the morning..
Quoting Sicarius
{quote} Damn well I'm screwed then trying to trade this. I knew there had to be a reason why I hadn't been able to find a single tdi crossover at the open of a candle in 2 months lol.
The price action in your chart tell you when to enter the market.
When you do not see a clear TDI cross when the candle open, you should see the TDI PL in 12-2 or 4-6 position.
That all depends on the price above.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
Quoting Nellycopter
how did the webinar go down - any good ? i missed it but hoping to catch it from the recording next week.... nelly.. Emmanuel thanks - i have found your post for the TDI RT - i will load this one to my charts this afternoon ready for the morning..

You can already run this using the strategy tester.
Just create a new template with both TDI versions, then save that template with name "tester.tpl"
Run the strategy tester and it will load the chart with this "tester.tpl" automatically and you can slowdown the price movement and observe both the TDI versions. You will learn plenty doing this. You will also spend less time in the pubs.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
Quoting gsbharaj
{quote} i am getting more confident now. thanks to all the masters

you need to develop COMPETENCE in trading. Confidence comes with that.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
Here is a quick back-test with TDI_RT vs TDI Red Green:

You see the difference in realtime.

This is why when you trade with robot Expert Advisor, this can cause huge difference in trade results.
Attached Image (click to enlarge)
Click to Enlarge Name: TDI RT vs TDI Red Green eg1.png Size: 22 KB
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
Quoting Nellycopter
how did the webinar go down - any good ? i missed it but hoping to catch it from the recording next week.... nelly.. Emmanuel thanks - i have found your post for the TDI RT - i will load this one to my charts this afternoon ready for the morning..
Rick' webinar was reaffirmation of what I have learned the 3+ years ago and that I still need plenty of practice in live market to read the market structure and to catch the high probability turning points.
*** Pay attention to the topic on Skewing - the Left Skew and the Right Skew, when you watch the replay recording. Powerful stuff when you can see them on your charts when you trade live.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
Some questions that struggling traders should ask themselves

Myself, i struggled long time without being able to figure out why I was losing all the time. my moments of improvement came, when i was able to have clear answers to these questions.. Hope that this helps some of you....

Which type of trader i am?


·Am I a swing trader (4h) ? If yes, am I prepared to handle trades for a couple of days, have stops around 100 pips or more and handle retracements of 60 or more pips against me?


·Am I a scalper (15M) ? If yes, am I ready to have many fake signals and therefore have many losers in a ranging day? Am I prepared to take smaller profits and then see the trend continue for 100 more pips in my direction but without me in the trade?

Be realistic about the advantages and disadvantages of each trader type. You cant have the best of both worlds....


How do I define a trend?

some traders will define the trend based on the HA color of Daily candle (when trading 1h), some will use the relation between price and 10 ema on HTF (assuming 4H, if you trade the 1h), some will use 200 ema on the TTF chart, some will look at HH,HL,LH,LL on the TTF. Some will look at the TDI MBL (if below 50, downtrend, if above, uptrend). You need to decide how do you define a trend and then stick to it… you cannot change the glasses through which you analyse the markets every day….


How do I manage my money?


You don’t need to spend much time on this subject. If you aren’t profitable, just demo or trade 1 micro lot. You don’t need to use fixed ratio or any other method of calculating position sizing. Until you are consistent, just make sure you bet the lowest possible. Your objective should be to learn and protect your capital and not to earn money at this stage. Once you start making money consistently, then you can focus on this.


How do I decide when to enter and when to exit?


For beginners, a mechanical trading system is advised. The mechanical model establishes rules for entry, exit, trend definition, position sizing, etc. so it removes the emotional side of trading. The trader is supposed to follow the rules like a robot. Until you have clear rules to follow, you will struggle because at every tick you will want to move your stops, move your targets, close the trade, close and open in opposite direction.... you know what I mean.... be gentle to yourself and define rules to protect you from yourself. Once you have rules in place, you will see that you will become calmer during the trade. Your success should be measured (at this stage) not by the amount of money you make, but on the consistency of you following your own rules…


How do I know if the rules that I defined for me will make money over time?


Only you can answer that. Even if I tell you that it does, you have to believe otherwise you won’t be able to pull the trigger. Solution: define your rules and back test them manually. Enter all the information from each signal (backtest at least 100 signals) on an excel sheet and do some calculations : how many pips I can make in average per month, what’s my average drawdown, how many signals I do receive per day, what’s the expectancy of my trading system? Which of my setups perform better? Etc.... Try different variables like exiting at 50 pips, at structure, at 2XATR(7) or taking 50% of position at structure and then trail the rest... Backtesting is key for you to understand the system you are trading.

Do i have the patience and required discipline to follow my plan?

once i started trading less, i started earning more. there are no 7 trading opportunities on the 1H chart every day!!! so why are we trading so much. look at the trades you made every day, place them on the chart and ask to yourself : "why i am trading so much?" There are on average 1 trade per day on 1H chart, 20 trades per year on daily chart, etc... This is the most difficult aspect to overcome. This is where most of us fail. Change one habit per day. once you do it for 20 days, it will be imprinted in your brain, and you can start changing another behaviour. go step by step.you will get there...

As Mark Douglas says, promise to yourself that you will follow the next 20 signals by the book. Just start with 20. if you are able to follow your rules 20 times in a row, then you can do it for 40....

All the best to all of you

Munir
Quoting Armacom
A moment of Enlightenment Forex trading is like anything you learn in life or at school. Rick compares it to learning math. You start with the basics and step by step you learn to solves increasingly complex problems. But for me that comparison goes even further. I don't know for you, but for me when I was studying math or statistics I was often astonished by a strange phenomenon. This phenomenon was that no matter how hard I studied, how much I made and re-made the exercises I couldn't solve them on my own. I could follow the logic once the solution...
A rather 'wordy' post but in fact a very worthy post to read and pick on the finer points and lessons.

Thank you Armacon for writing this length.

Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
(Note: My post was approved too late and now It is buried far away in the post... so I'll repost.. thanks and sorry)

Hello guys!
First of all I have to say that my english is not top so If you don't understand anything I say feel free to ask/correct me hehe.

I'm new to the forum and I've been reading this post for a while since a friend recomended me this strategy. I've read most of the pdf's available with phx and BigEs comments, however, I haven't traded yet the strategy in both H1 or H4 timeframes; in fact I've used to scalp the market in the past so transition would have been quite hard for me so I started trading TMS with M5 and M15 with 70% winning trades and low DDs. Same rules, TDI cross and wait for next candle, Heikin-Ashi etc. Any case I would switch to the longer time frames as university restarts in September.

As you all know, M5 charts have a lot of noise If you compare to H1 or H4, and I've practiced TMS adding some indicators I found doing math research. These are KST (KnowSureThing) and one I did myself, KST vs Average (really simple). The reason of this post is discussing them, and their suitability to the strategy. I've found them really useful to improve my succes and my entries are much better and makes my entry decision much easier. However, my experience is not as huge to most of the guys of here so I would like to see your opinions and suggestions and discuss any improvements that could be made to my indicators/plan.

My chart setup is the following:
- Heikin-Ashi candles (standard)
- TDI w/Green and Red line (standard)
- Weekly pivot points (standard)
- KST: KnowSure Thing is an indicator based on Rate of Change indicator. It takes the ROC value for 4 different periods, makes an average of them, and finally makes a weighted average between the 4 values, giving more importance to the longer term than the shorter. After KST is calculated and plotted, you add a a Exponential Average (9 standard value, and found that 15 gives less noise) to it and the crosses between them intend to be long/short signals. More information and better explanation can be found here http://stockcharts.com/help/doku.php...sure_thing_kst
- KST vs Average: Simply subtract the EMA of KST to KST (KST-KST EMA).

Here you have a GBPJPY H1 chart with it.

Attached Image (click to enlarge)
Click to Enlarge Name: rrj92y3uts4f39bdjv8h162tu.png Size: 71 KB


As you can see, KST gives a good and clear idea of market wave and trend , and KST vs AVG usually changes direction before market tops/bottoms, being good to get alert of market reversals, but I haven't been using it for entries, only for confirmation. It has been also really useful to filter entries where TDI crossed and HA looked to reverse but KSTvsAVG and KST didnt go in the same direction so I avoided this trades and in general worked. Of as every set of rules they have a probability of succes/fail.

Also, they give divergence signals, as well as TDI. When both give a divergence, the diverge is usally very very strong and only you have to wait for the usual TMS trigger to enter.

Resuming, I apply original TMS rules, with TDI and HA + technical analysis and price action, and I add to it KST and KSTvsAVG to confirm/reject trades.

What do you think of it? I would be pleased to hear your thoughts or comments, suggestions, whatever. If anyone wants to have KST I got it for MT4 as well.

Cheers!!
Quoting Armacom
A moment of Enlightenment
That math thing, It's exactly what I experienced in highschool. Same with economics, physics and chemistry. :-)
You're so right, it's all about giving it time and have patience, learn to have control over emotions like impatience and greed, and in the mean time just learn what ever can bring you closer to your goals.
Quoting munirpt
Some questions that struggling traders should ask themselves Myself, i struggled long time without being able to figure out why I was losing all the time. my moments of improvement came, when i was able to have clear answers to these questions.. Hope that this helps some of you.... Which type of trader i am? ·Am I a swing trader (4h) ? If yes, am I prepared to handle trades for a couple of days, have stops around 100 pips or more and handle retracements of 60 or more pips against me? ·Am I a scalper (15M) ? If yes, am I ready to have many fake signals...
a really enlightening post. i got some good points out of it. thank you.
Come tomorrow, I'll wake up new
EUR/USD Big Picture Planning

I'm trying top down analysis here, this pair is in down trend following Thursday move, so Plan A is looking to short the pair

1st chart daily
2nd 4H
Last 1H

Purple Line is last month high and low

Orchid line is last week high and low

Gold line is support and resistance drawing using line chart from daily time frame

Lime is support and resistence drawing using line chart from 4H timeframe

I put my notes on the chart, let me know what I misses, or if you agree with the plan or disagree, thanks
Attached Image(s) (click to enlarge)
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I Have Learned to Take Some Losses to Make Profits
Thanks munirpt for the article

I feel after almost one year of starting FX trading, I really value what you are preaching here, not only value, but I feel like these things happen to me on daily basis, I will keep this article for further reading, very informative

I used to take so much trades before, 3 to 4 trades daily on the 1H time frame, and what?! boom, frustrations, ... etc

then I decided to take 2 trades a day , well things improve , so I decided to take 1 trades a day, I mean search for one good trade and work my best to end it positively even in a loss but with discipline, good managing, etc, I would cal it positive , because tomorrow there might be a winner waiting

So thanks for your post, appreciate it
I Have Learned to Take Some Losses to Make Profits
Quoting TheScorpS
EUR/USD Big Picture Planning I'm trying top down analysis here, this pair is in down trend following Thursday move, so Plan A is looking to short the pair 1st chart daily 2nd 4H Last 1H Purple Line is last month high and low Orchid line is last week high and low Gold line is support and resistance drawing using line chart from daily time frame Lime is support and resistence drawing using line chart from 4H timeframe I put my notes on the chart, let me know what I misses, or if you agree with the plan or disagree, thanks {image} {image} {image}
EU will be interesting in Sep.
I see a 450 pips range to trade.
The Monthly and Weekly candles are both interesting.

The H4 TDI MBL crossed below the 50-level, watch the Price Action and see if this will continue downwards and the MBL will reach 32-level. The TDI PL/TSL goes into extended widen VB.

With last week bearish move, we need to see if there will be a shallow retracement or a deep retracement.
I will be watching the Week Open level and if market goes into a trend, then the 60% and 100% Average Weekly Traded range will be my weekly swing targets.

Let's see how the market will trade on Monday, no rush to jump in so early in the week.
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
Emmanuel et Dabbeljoe, thank you for reading and the comments !
Scorps, will make my BPP for EU now and post it afterwards if you like
Don’t ever let someone tell you that you can’t do something.
Quoting emmanuel7788
TRADING CONSISTENCY Trading consistency is a common challenge among traders to achieve and maintain. How many of you folks trading TMS face this challenge(problem)? Do you feel that it is time you open up and admit this? Do you believe there is 'light at the end of the tunnel' to your problem? Post and reply 'YES' to this. This will help me focus and work on what I will share as we move forward from today. There is nothing new nor technical things to add to TMS. The basics of the method are all here and have been repeated over and over CONSISTENTLY....
My answer is definetely YES. My problem is time: as I work fulltime my monitoring time is limited. But I am determined to succeed and I am very thankful to Emmanuell for his exceptional insights and posts.

Kind regards,
thrax
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