ETMA_The Evolution

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9. The Solitary Moon
Nowhere is the beast, and the oxherd is master of his time,
He is a solitary cloud wafting lightly along the mountain peaks;
Clapping his hands he sings joyfully in the moon-light,
But remember a last wall is still left barring his homeward walk.

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10. Both Vanished
Both the man and the animal have disappeared, no traces are left,
The bright moon-light is empty and shadowless with all the ten-thousand objects in it;
If anyone should ask the meaning of this,
Behold the lilies of the field and its fresh sweet-scented verdure.

EU, the gift that keep on giving , UCAD is slowly carving a top .

The USD is breaking yet another Resistance and the Brent (UK OIL) is stabilising on the 60$ Level.

Discipline and Stupidity.

Good Morning, some charts for the day, The Dax still hanging on but the S&P, The Dow, The Nasdaq and the Russell 2000 is having a Mini Crash, take a look.

And so is the Gold.

What Your Trading Results Can Teach You.


This is a Post from Rolf @Tradeciety (He has some of the best content and trading graphics on twitter).

“You only learn from your mistakes” is a very dangerous and misleading statement. And at the same time, it is totally wrong. In fact, there is so much you can only learn from your winning trades that not using this opportunity will cost you a lot of money as a trader. In the following article we will take a look how you should analyze your winning and your losing trades and what to focus on when evaluating your trades.

Not all winning trades are good
In the first step you have to understand that you can make a bad trading decision, violate all your trading rules and still come out ahead. Having a winning trade while breaking trading rules is very dangerous for the development of a trader because it might lead to sloppy trading behavior and a mindset that trading rules should not be taken too seriously. On the other hand, the best setup can turn into a losing trade, and there is nothing to worry about. It is the nature of the game that not all trades will be winners. The graphic below illustrates the connection between the outcome of a trade and the adherence of trading rules.

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How to learn from winning trades

There are mainly three things that you have to ask yourself when it comes to analyzing your winning trades when it comes to increasing your trading performance.

1. Were you just lucky?

“In trading, it does not matter whether you are right or wrong; the only thing that matters is whether you are making money”.
The quote above wanders around trading forums and on social media, but it could not be further from the truth. The previous diagram shows, you can easily end up in a winning trade while having violated all your trading rules; a winning trade would then be the result of pure luck.
Inexperienced and ignorant traders might start to believe that they don’t need trading rules and that their ‘gut feeling’ tells them what to do. Dead wrong. Winning trades, when violating rules, can be very harmful for a trader’s discipline and his overall development. It is therefore important to analyze whether your winning trades are the result of accurate planning and following the plan, or whether you were just lucky.

2. How to make more money?

If you have followed the rules and price made it to your take profit order, you did what a trader is supposed to do. But, did you execute your plan in the best possible way, or was there something you could have done better? There are two things you should analyze when it comes to optimizing your trading performance:
• Was my entry good? Could I have entered later for a better price and, therefore, had a bigger winner?
• Could I have used a smaller stop loss or a wider take profit target?
Although analyzing these two points is crucial for a trader to increase his performance, it is even more important to avoid knee-jerk decisions. Only after you have collected data on a big enough sample size, the numbers can tell you what to do.

3. What do your winning trades have in common?

Finally, you should evaluate your winning trades and find things they have in common. If you are able to find a common denominator you can take more of those trades that already work. Pay attention to the time of the trade entry, a certain indicator setting if you use any, the prevailing market conditions or just whether you have more winning trades on certain instruments than on others.

How to learn from losing trades

It is great when you can find ways to turn winning trades into even bigger wins, but finding out how to eliminate losing trades is equally important for your overall success. And keep in mind, you will never be able to avoid all your losses. They are just part of the game. The following three points can serve as a guideline when analyzing your losing trades.

1. Could the loss have been avoided?

This is probably the most obvious question and the one you have to ask yourself first. Did you violate your trading rules, or was there any way that the loss could have been avoided? Besides breaking trading rules, going against the overall trend and ignoring the impact or release of important news usually fall into this category. But be honest, you cannot avoid all losses and even the best setups will fail over and over again.

2. Could you have lost less?

If you rule out the possibility that the loss was avoidable, you have to answer the question whether it would have been possible to minimize the loss. Did you see early signs for a potential losing trade or was it even your mistake, due to wrong trade management decisions that caused the loss?
Traders sell winners at a 50% higher rate than losers. 60% of sales are winners, while 40% of sales are losers.- Odean (1998): Volume, volatility, price, and profit when all traders are above average
Finding ways to cut losses early is one of the fastest ways to increase trading performance. Evaluate your losing trades to find patterns that signal early when the trade goes wrong. Most trades do not head straight to your stop loss order, but provide opportunities to get out for a smaller loss.

3. What do your losing trades have in common?

In the last step you have to evaluate your losing trades and check whether you can find similarities. Often traders find that they lose a disproportionate amount of money on a specific kind of trade, setup or instrument. Some traders even report that they are better at trading long trades than short trades. An easy way to avoid losses is to find what is not working for you and stop doing it. It seems so obvious, but not many traders follow this advice.
Conclusion: There are several ways to increase your trading performance
Most traders do not see the bigger picture and only focus on finding a ‘better’ indicator that can tell them how to find better trades, whereas the answer is so often right in front of them. By analyzing how to win even more on your winning trades and how to cut losses in an effective way, you can become a profitable trader much faster than believing in the Holy Grail of trading.

You can find more of Rolf’s great articles at www.Tradeciety.com

Inline with my Trading philosophy.

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All is not gone, UCHF Giving back all the losses since the Unpeg Day, one more time patience is key, Hooray.

And this is how i traded it, Be Fearful when everybody is greedy and Greedy when everybody is fearful (The unpeg Day).

I'm on it Bass. It's payback time. Blessed are the cheesemakers?....or is it blessed are the clockmakers?...... :-)

Failure is not the opposite of success, it's part of your success

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Evolution of a Tsunami, the Swissy Currency, some crosses.

The DX Retracing back from the 100 Mark, the DAX keep on roaring up although retraced a bit today.

Shorting corn on retest and confirmation, going long Wheat.

Apple gapping up.

The Trade Cards Series.

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Ze FOMC Volatility, the DX example.

Retest and closing the Gap, long apple with a tight stop.

Trading card # 361, position sizing.

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42 Ways To Trade Like A Market Wizard

What if you could read the principles for success for some of the world’s greatest traders? Well you can, here is how author Jack Schwager summed up the the similarities of the ‘Market Wizards’ he spent years interviewing in his second book.
The following is a summarized excerpt from Jack D Schwager’s book, TheNew Market Wizards. I highly recommend this book for all active traders.

1. First Things First You sure you really want to trade ? It is common for people who think they want to trade to discover that they really don’t.
2. Examine Your Motives Why do you really want to trade ? Did you say excitement ? Then don’t waste your money in market, you might be better off riding a roller coaster or taking up hand gliding.The market is a stern master. You need to do almost everything right to win. If parts of you are pulling in opposite directions, the game is lost before you start.
3. Match The Trading Method To Your Personality It is critical to choose a method that is consistent with your your own personality and conflict level.
4. It Is Absolutely Necessary To Have An Edge You cant win without an edge, even with the world’s greatest discipline and money management skills. If you don’t have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don’t know what your edge is, you don’t have one.
5. Derive A Method To have an edge, you must have a method. The type of method is not important, but having one is critical-and, of course, the method must have an edge.
6. Developing A Method Is Hard Work Shortcuts rarely lead to trading success. Developing your own approach requires research, observation, and thought. Expect the process to take lots of time and hard work. Expect many dead ends and multiple failures before you find a successful trading approach that is right for you. Remember that you are playing against tens of thousands of professionals. Why should you be any better ? If it were that easy, there would be a lot more millionaire traders.
7. Skill Versus Hard Work The general rule is that exceptional performance requires both natural talent and hard work to realize its potential. If the innate skill is lacking, hard work may provide proficiency, but not excellence.Virtually anyone can become a net profitable trader, but only a few have the inborn talent to become supertraders ! For this reason, it may be possible to teach trading success, but only upto a point. Be realistic in your goals.
8. Good Trading Should Be Effortless Hard work refers to the preparatory process – the research and observation necessary to become a good trader – not to the trading itself.“In trading, just as in archery, whenever there is effort, force, straining, struggling, or trying, it’s wrong. You’re out of sync; you’re out of harmony with the market. The perfect trade is one that requires no effort.”
9. Money Management and Risk Control
   Money management is even more important than the trading method. The Trading Plan
   1. Never risk more than 5% of your capital on any trade.
   2. Predetermine your exit point before you get in a trade.
   3. If you lose a certain predetermined amount of your starting capital (say 10 to 20%), take a breather, analyze what went wrong, and wait till you feel confident and have a high-probability idea before you begin trading again.

10. Trying to win in the markets without a trading plan is like trying to build a house without blue prints – costly (and avoidable) mistakes are virtually inevitable. A trading plan simply requires a personal trading method with specific money management and trade entry rules.
11. Discipline
    Discipline was probably most frequent word used by the exceptional trades that I interviewed.
    There are two reasons why discipline is critical. Understand That You Are Responsible
    1. Its a prerequisite for maintaining effective risk control.
    2. You need discipline to apply your methods without second guessing and choosing which trade to take.

    A final word, remember that you are never immune to bad trading habits – the best you can do is to keep them latent. As soon as you get lazy or sloppy, they will return !
    

12. Whether you win or lose, YOU ARE RESPONSIBLE for your own results. I’ve never met a successful trader who blamed others for his losses.
13. The Need For Independence You need to do your own thinking. It also means making your own trading decisions. Never listen to other opinions.
14. Confidence An unwavering confidence in their ability to continue to win in the markets was a nearly universal characteristic among the traders I interviewed.
15. Losing is Part of the Game The great traders realize that losing is an intrinsic element in the game of trading. This attitude is linked to confidence. Because exceptional traders are confident that they will win over the long run, individual trades no longer seem horrible; they simply appear inevitable.There is no more certain recipe for losing than having a fear of losing. If you cant stand taking losses, you will either end up taking large losses or missing great trading opportunities – either flaw is sufficient to sink any chance for success.
16. Lack of Confidence and Time-Outs Trade only when you feel confident and optimistic.
17. The Urge to Seek Advice The urge to seek advice betrays a lack of confidence.
18. The Virtue of Patience Waiting for the right opportunity increases the probability of success. You don’t always have to be in the market.Guard particularly against being overeager to trade in order to win back prior losses. Vengeance trading is a sure recipe for failure.
19. The Importance of Sitting Patience is important not only in waiting for right trades, but also in staying with trades that are working. The failure to adequately profit from correct trades is a key profit-limiting factor.“One common adage .. that is completely wrong headed is : You cant go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits.”
20. Developing a Low-Risk Idea The merit of a low risk idea is that it combines two essential elements: patience (because only a small portion of ideas will qualify) and risk control (inherent in the definition). “Open a doughnut shop next door to a police station”.
21. The Importance of Varying Bet Size It can be mathematically demonstrated that in any wager game with varying probabilities, winnings are maximized by adjusting the bet size in accordance with the perceived chance of a successful outcome.
22. Scaling In and Out of Trades You don’t have to get in or out of a position all at once. Scaling in and out of positions provides the flexibility of fine tuning trades and broadens the set of alternative choices.
23. Being Right is More Important than being a Genius Think about winning rather than being a hero. Go for consistency on a trade-to-trade basis, not perfect trades.
24. Don’t Worry About Looking Stupid Don’t talk about your position.
25. Sometimes Action is More Important than Prudence When your analysis, methodology, or gut tells you to get into a trade at the market instead of waiting for a correction – do so.
26. Catching Part of the Move is Just Fine Just because you missed the first major portion of a new trend, don’t let that keep you from trading with that trend (as long as you can define a reasonable stop-loss point).
27. Maximize Gains, Not the Number of Wins The success rate of trades is the least important performance statitstic and may even be inversely related to performance.
28. Learn to be Disloyal Never have loyalty to a position.
29. Pull Out Partial Profits Reward Yourself !
30. Hope is a Four-Letter Word Hope is a dirty word for a trader, not only in regards to procrastinating in a losing position, hoping the market will come back, but also in terms of hoping for a reaction that will allow for a better entry in a missed trade.
31. Don’t Do the Comfortable Thing Do what is right, not what feels comfortable.
32. You Cant Win If You Have To Win “Scared money never wins”. If you are risking money you cant afford to lose, all the emotional pitfalls of trading will be magnified. The market seldom tolerates the carelessness associated with traders born of desperation.
33. Think Twice When The Market Lets You Off The Hook Easily There must be some very powerful underlying forces in favor of the direction of the original position !
34. A Mind is a Terrible Thing to Close Open-mindedness seems to be a common trait among those who excel at trading.
35. The Markets are an Expensive Place to Look for ExcitementExcitement has a lot to do with the image of trading but nothing to do with success in trading.
36. The Calm State of a Trader If there is an emotional state associated with successful trading, it is the antithesis of excitement. Exceptional traders are able to remain calm and detached regardless of what the markets are doing.
37. Identify and Eliminate Stress Stress in trading is a sign that something is wrong. If you feel stress, think about the cause, and then act to eliminate the problem.
38. Pay Attention to Intuition Intuition is simply experience that resides in the subconscious mind. The objectivity of market analysis done by the conscious mind can be compromised by all sorts of extraneous considerations (e.g., one’s current market position, a resistance to change a previous forecast). The subconscious, however, is not inhibited by such constraints. Unfortunately, we cant readily tap into our subconscious thoughts. However, when they come through as intuition, the trader needs to pay attention. “The trick is to differentiate between what you want to happen and what you knowwill happen.
39. Life’s Mission and Love of the Endeavor Many traders felt that trading was what they were meant to do – in essence, their mission in life.
40. The Elements of Achievements
    Faulkner’s list of the six key steps to achievement Prices are Nonrandom = The Markets can be Beat
    1. using both “Toward” and “Away From” motivation;
    2. having a goal of full capability plus, with anything less being unacceptable;
    3. breaking down potentially overwhelming goals into chunks, with satisfaction garnered from completion of each individual steps;
    4. keeping full concentration on the present moment – that is, the single task at hand rather than the long-term goals;
    5. being personally involved in achieving goals (as opposed to depending on others); and
    6. making self-to-self comparisons to measure progress.

    Robert Krausz’s basic tasks necessary to become a winning trader.

    1. Develop a competent analytical methodology.
    2. Extract a reasonable trading plan from this methodology.
    3. Formulate rules for this plan that incorporate money management techniques.
    4. Back-test the plan over a sufficiently long period.
    5. Exercise self-management so that you adhere to the plan. The best plan in the world cannot work if you don’t act on it.

41. In reference to academicians who believe market prices are random, Trout says, “That’s probably why they’re professors and why I’m making money doing what I’m doing.” These exceptional traders have proved that it can be done !
42. Keep Trading in Perspective There is more to life than trading !