Forex Trading Philosophy

Thanks for your post tashkent !

Mind over money

There is no greater disaster than to underestimate danger.

Is the glass half full?
or is it half empty?



It doesn't really matter much as you are not risking anything when you question yourself if it is either half empty or half full.
But when it comes to trading, it is makes all the difference.



50% (half) of the choices will be wrong, minus the spread and the probability is 49.9%

Happy Trading
CrucialPoint

That is a very good example.
It's always the same problem, on a chart we can see only the past or the effects and the only way to trade the effects is guessing, until we understand what is behind a chart and build some tools showing us the dark side of the market, that is to say the causes, and one chart is not even enough.

It is mid of summer but the weather is pretty gloomy today where I live. It has been pouring rain for all day; dark clouds in the sky and everywhere looks so grey; can see through the window a few slow, lazy cars moving up and down the street. Actually I like days like this. It gives you opportunity to stop from running and look, observe and think about things around you. It has been ages since I have not watched TV or listened to news, so these are not my way of spending time. These days everything we watch, read and listen (by Media/TV/News channels) takes us afar from the real "reality". Sometimes I thing we live in an "imaginative" world created by the system/order. Saying that, please do not assume that I am some crazy conspiracy fan guy. This is just the way the current world order build on. The basis of this order is human psychology/behavior/mindset. It is the wrong or right doings of human being which created the current political/social/financial systems. So there is really nothing to generate conspiracy theories.
Can you imagine that the most of the things we know are wrong? Most of the things we see and listen are manipulated with the same system which is built upon our own weaknesses such as greed, vanity, selfishness, deceptiveness, etc... Every time we break the universal laws, we think we can get away with it, but in reality all these wrong doings of humanity directly and indirectly create another "being" - the system, which we live under and which controls us. Therefore, you can easily understand when you hear someone complaining about the politicians or the financiers or banks - the higher servants of the order/system which WE ALL created together.
After all these, what is FOREX?
If we understand the necessities what created it, the factors that keeps it alive, the reasons of its motions, the boundaries and limits of its vibrations, then, I guess, we have put the right steps in the right direction of understanding the markets.

CP, thank you for your continuous participation in this thread, I really enjoy and love to read your posts, please keep them coming!

http://www.tradewithme.me/uploads/7/...99/1267283.png

What Crocodiles Can Teach You About Forex Trading?

In tropical Australia, the saltwater crocodile is a fearsome and intelligent predator known to wait patiently for days or weeks on end until unaware prey come to the water’s edge and become its next meal. Crocodiles are by many accounts the most successful animal that has ever lived; they’ve been around for about 200 million years and have out-lived the Dinosaurs, and they’ve evolved over time to become perhaps the most successful predator on Earth, next to humans. Crocodiles are opportunistic predators; they’ve been known to learn the behavior of their prey and lie in wait for long periods of time almost to the point of starving, and then when the time is right they snatch their prey with confidence and precision.

In fact, it is quite common for people to swim with these animals for days or even weeks without any sign of aggression, until one day somebody goes swimming, fishing or even walking, and they never return. This demonstrates real-world evidence that one of the oldest and most methodical predators on Earth is also one of the most patient and disciplined that has ever lived. Darwin’s survival of the fittest theory certainly favors this creature; they’ve been around since Dinosaur times because their method of hunting and adapting is so successful. The salt water crocodile is perhaps nature’s ultimate “sniper”… it only needs to eat once a week or so because it makes high quality kills rather than a high quantity of low-quality kills.

As traders, there’s a ton of things we can learn from the crocodile, let’s discover some of them… Some of these are :

Crocodiles are a trader’s best role model :

They wait in prey for the big juicy meals rather then morsels of shoals of small fish that pass them buy. Crocs are designed and have evolved to be patient “sniper” hunters…many little meals do not interest them as much as a big juicy nourishing meal does. By trading less… our aim is to make a nice large “meaty” size trade that sustains us until our next trade. Sure we may have a few losses along the way to our big prize, but the goal here remains clear; waiting on the sidelines (or the shores of the river like the crocodile) to pounce on our prey and cop a huge nourishing meal. We don’t want to be running all over the pond or river looking for any small piece of meat or fish that we can find…we are going to wait it out and score ourselves a nice big juicy profitable trade (or in the crocodiles case, probably a kangaroo, a dog, or maybe even a human).

Crocs have a high strike-rate: It’s fairly safe to say that if a croc gets its jaws around its prey, the prey is not getting away.

Crocs have a good strike-rate because they are patient and wait for the “easy” opportunities and then act with confidence and speed…they don’t hesitate. Whereas a Lion might have many failed hunting attempts trying to catch a Gazelle or some other quick animal, expending a lot of energy in the process, crocs tend to have less “losing trades” or failed hunting attempts…because they don’t waste time or energy…they wait and wait and control themselves with precision until their prey almost walks into their mouth…then they feed.

As traders, waiting and being patient can increase your strike rate. Controlling ourselves is really all we can do as traders…we cannot control our “prey” (the market)…we can only conserve our money and wait patiently until our trading edge presents itself. This is how you get a high strike rate as trader, not by trading a hundred times a week in some futile effort to “scalp” the markets.


Crocodiles are good at avoiding risky situations; they learn fast:

Crocs “…learn quickly and adapt to changes in their situation. They particularly learn to avoid dangerous situations very quickly”, according to the article The Extraordinary Lives of Crocs. The article went on to discuss that this ability of crocs to learn quickly and avoid dangerous or risky situations is yet another reason they’ve outlasted the dinosaurs and are still thriving today. Avoiding risk is one way that a species can survive over time and “win” the evolution battle of the fittest. Similarly, not taking on more risk than is necessary as well as learning quickly are two very important keys to becoming a successful trader.

Conserving energy for the next kill: The crocodile waits for the big meal because it makes more sense to wait and conserve energy by eating a large chunk of protein less often. The croc conserves energy and time by eating this way and it also is one of the main things that have ensured the survival of crocodiles over hundreds of millions of years during many periods when food was scarce.

If you think about not interfering with your trades as helping to make you money, it might make it easier to do. I actually imagine that I am making money by not trading and by simply doing nothing, because by not losing money from over-trading and over-involvement…technically you ARE making money. A crocodile would probably eat less food overall if it was constantly running around trying to find small prey, the crocodile intuitively knows that by being patient and disciplined it has a better chance at getting a higher-quality meal. The crocodile “knows” itself and its own limitations and uses its strengths to its advantage. Indeed, the fact that the crocodile has been around since dinosaurs walked the Earth is evolutionary proof that the concept of patience and discipline most certainly pays off.

The crocodile intuitively knows that it needs to conserve energy and wait for a big kill, this patience is actually a “skill” for the crocodile and it’s also a habit that has developed and reinforced in crocs over millions of years of providing them with large tasty meals. Longevity is critical to a trader; we need to conserve the money in our trading accounts so that when the “easy prey” or obvious trades come along we can get the most out of them. If we go around trading everything we see we will shrink our trading accounts and we won’t have enough money in our accounts to get the most out of the high-probability signals. Just as if a croc ran around all day trying to catch smaller prey it would not have the energy or positioning to grab the bigger and better prey.

Crocodiles are highly adaptable:

Crocodiles learn quickly and adapt to changes in their situation. This is a large part of how and why they have survived for millions of years whilst many other animals have become extinct during that same time. According to the article I mentioned earlier’The Extraordinary Lives of Crocs’; “…crocodile researchers often have to change their capture techniques because it’s very hard to catch them [crocs] with the same trick twice.”

Many researches think that the adaptability of the crocodile, including its ability to “ignore” hunger for long periods while it waits patiently for the “perfect” feeding opportunity, is one of the main reasons they survived whatever killed off the dinosaurs. It’s clear that the crocodile’s ability to adapt to its environment and to changing situations is one of the reasons it has survived and thrived for millions of years.

As traders, we have to adapt to changing market conditions, and as we’ve already discussed we need to haveice cold discipline to only trade when our “prey” is ripe for the taking. One of the beautiful things about price action trading analysis is that it’s an inherently adaptable trading strategy. Whereas many trading systems are rigid and make you stick to a strict set of rules or conditions, price action analysis gives you more of a “framework” to work off of when analyzing the markets and this framework can be used to trade any market condition as well as adapt to changing market conditions.

Acknowledgement and credit for this article on Crocodile traits to Niall Fuller at : http://www.learntotradethemarket.com...-forex-trading

One of the best reads I found on this forum. Thanks, tashkent!

Money and Life

All you need is to find your ONE THING which works for you to be successful in any profession and build everything else around it.
Have you found it yet?

WTF does that mean?

There is a small thread in the Members Lounge section, titled: "Secret to Forex" (with around 5 response to the thread).
The first post stated, "Close your trades in profit."

It's ironic that the most valuable lessons/posts/threads are the ones that doesn't draw much attention. I didn't bother replying to the thread as I believe it was perfect on its own (5 response and didn't draw much attention). In this post, I'm going to illustrate something that resides in all of us. You may get it, or you may not. Nevertheless, I'll try to entertain you and hopefully you get some CrucialPoints

If I was to sum up my trading experience and knowledge into 1 elegant principle (that would describe or embodied the pinnacle of trading),
it would be:
"Close your trades in profit."

Let me tell you a story (I hope you can also relate to this story). I look up to my Dad, I see him as a very successful man. He's very intelligent and creative in his field of endeavors. His surrounded with good family and friends. Highly accomplished in whatever he pursue (one of those people whom you might say got the "Midas touch") When I was young, I asked my dad for some advice.
I said, "Dad, what should I do with my life?"
Dad paused for awhile, looked at me in deep connection and said, "Follow your heart."

"My heart... Follow my heart... WHAT THE F*CK does that mean!?" ... that's what I literally exclaimed.
I literally didn't know what my old man was saying. I honestly didn't understand what the heart metaphorically resembled.

He continued, "Do what you love... Do what you want... What do you love?... What do you want?"
My response: "I don't know... I don't know what I want..."

You may laugh, but, comprehending and communicating is not that simple as we take for granted.
It reminds me of Chris Tucker in Rush Hour, miscommunication in simple and plain language:


What you don't know, you don't know. When you are not ready... you are not ready.

"Close your trades in profit".... WHAT THE F*CK does that mean!?
"Close your trades in profit" is the same advice that says "Follow your heart".

How do you close your trades in profit? >>>> "I don't know... I don't know what I want..."

I often ask people what they want. They reply; "a nice car, a nice house, a loving partner, good health, lots of money, kids, etc..." I don't rain on their parade, but I know that's NOT what they want. What they really (and don't know) want is the attention, they want the validation, they want the joy and satisfaction. What they don't know is what they truly want; To feel "HAPPY" on the inside. And all these things(materialistic), ambitions and goals (non-materialistic) we have, can make us feel good and feel happy... but then, we misapprehend.

"Close your trades in profit" is one of the powerful advice you will hear. You may not understand it, but maybe one day

"Close your trades in profit" - a secret to FOREX.
Indeed, this is an ultimate purpose of every trader. The statement is extremely simple and clear, and like every other simple thing, pregnant with extreme complexity. There are countless methods, systems exist to reach this purpose.
All I need is one pip profit with 100% certainty every day and I am ready to give up everything in my possession to have such an edge
"Close your trades in profit" - definitely not a solution; it is the Pandora's box... it is the forbidden fruit.

OK rules? Nah. Technique? Applied probability theory. Or what ever. I dunno. I just do it. Call it this call it that. Some say "scalping". Ok if i close on 4 pips. Maybe thats scalping. What if someone says scalping is 5-10 pips of profit? Then my 4 pip isnt scalping? Why? I dunno. I dont really care what you call it, im just trading. If i enter at a really good place, my probability of quick profit is good. When it seems to becoming less good, i close it on profit. In a way it doesnt matter when you enter the trade. What matters is where and how big you place the next position. I dont use stoploss. Thats my thing. Anybody else can do what ever, dont matter to me. I dont go buy rules. Or maybe i do. Maybe its more like a method. Or not. I dont really care that much what its called.

Call it "Scolping" if 4 pip is too small to count into "Scalping". Language is matter to just deciding this or that and calling this or that this name or that name. I have 9 names. For all the 9 worlds. I come and go through time, for time is a continous flow. Back forth, here there, where ever.

Thats my philosphy. Maybe. Or not. Probably.

What if i close on 20 pip? What is that? Swing trade? What ever. Words are words. Math is math. If you want to talk about it, we need a synthethic language. In other words a language THAT WE CONSTRUCT TOGETHER. We cant rely on other peoples patterns and what ever. But i dont want to go around shouting out everything to who ever is looking/listening. Not EVERYTHING. Besides, and im gonna say this even though it might seem weird or what ever: You gotta be fucking smart to do this. I see stupid people trying. Dont matter who they are. They cant do it. You need to have gone a certain way. Left some shitty ideas behind and stuff like that. Now i will call the spirits through the smoke.

See what i mean? No? Yes? Taken from one of my threads, a couple of minutes after i posted something or other. I dunno. Im just an artist. Or mathematician. Or avatar. Or what ever. But im no human thats for sure. I listen to people when they talk about being human. Thats not me. I do what ever i want.

I always liked the Heraclitus quote, "No man ever steps in the same river twice, for it's not the same river and he's not the same man."

Yeah thats a good one.