The Trader's Academy - by Traders for Traders

I promised a few examples of small time frame trades, so I'm posting these quickly. I'll be posting more this week, some 10 second and some 3 second entries, because I know a lot of people want to trade off of small time frames but either don't know how to or they have been scared away from them by other traders telling them you can't make money this way. The first of these produced 50 pips, the second 35, and the third 55 - not exactly scalping!

I haven't got time right now to explain these charts, so I'll do that later. Questions welcome.

Where it says, " look at these candles...." I realize you couldn't see them, so here's a close up, and the first trade read ..." combined with positive MACD rising from below zero"

learn two fundamental building blocks to become mastery. inner knowledge and outer knowledge. inner is about ourself as human, on there beneath greedy fear and lot of like a deep ocean. outer knowledge absolutely is about market. learn and dig deep on both of them then practice, the mastery will come

On the second screenshot posted above, you'll see a dark blue horizontal line in the top right hand corner. This is the marker for the 2m 100SMA. which I've attached here. You'll see the perfect shooting star candle on this one for the following short entry on this time frame, and falling away from a major moving average like this, this is as good a sell signal as you are ever going to get in trading. Try and place Stop losses above/below the Bollinger band, on any time frame. This is how you take profits, use the big moving averages on the bigger time frames to set your exits. See how the price reacts and never be greedy with this type of trading, you are in and out like a sniper. Knowing which time frames to use together is simply a matter of practice and trial and error. I typically use 3 sec, 10 sec, 30 sec, 2 mins, 10 mins, 30 mins, H1. You really need 4 monitors for this type of trading, though I have six, reserving one for my trading platform.

Loads of trades today. Here are two, showing how I used the 10 second chart to pin down the best entry candles on the trades. The first of these shots is the 30 sec TF. Support was the 61.8% fib from the morning low. The trade confirmation you can see clearly on both the 30 sec and the 10sec in the form of the cadle patterns and diversion with MACD. The exit was taken on the 200ema ( 70 pips - the Dax is a big mover ) With the momentum now having turned, I now looked for an opportunity to re-enter on the long side. As you see, I managed to get a nice trend line in, and then I waited for the price to confirm that it was going to push higher. This confirmation can be seen clearly on chart number 3, which shows the trend line and a perfect entry signal candle on the 10 second chart.

For those who wondered how to use a chart as small as the 10 seconds, this is one of the ways. I use it because it really helps pin down the entries with a stop loss here of 12 pips.

ps - never enter a trade on the first break of the trend line, because the price usually tests it then falls back again. Wait for this, and look for a positive candle on which to enter, as you'll normally get one. The important thing to remember is that most traders are looking for the same thing which is why these patterns repeat themselves over and over, and are, to a fair degree, predictable, if such a thing exists in trading.

I use an online diary called penzu.com where I can attach screenshots of my trades along with my written analysis of what I did or did not do right. I have always kept a record of my trades, and have found that doing so has helped me improve my trading greatly over the years.

As promised, a simple example of a 10 second trade, which would have been impossible to even see on any higher time frame. It was against the trend as the price had been rising, but it was just after the London open at 8am GMT on Wednesday, and as so often happens at this time of day on the Dax, there will be a counter trend move to take the price back down to a level that is safer for buying than buying at the top.

So first of all with this trade, experience of trading one particular market all the time, in this case the Dax ( I trade nothing else except the Dow - so in my opinion, if you're trading more than three forex pairs or markets, you are trading too many ) teaches you what to expect. Once you know what to expect, you look for tell tale signs which will give you confirmation of one thing happening or not. The first on this one was the failure of the price to push above the previous high, and then I got a present in the form of a fantastic shooting star candle formation, a very bearish candle which you should always look out for. Second big give away that the price might be about to drop is MACD, just look at the diversion! I've had idiots here on FF ridicule me before now for pointing out diversion on such a small time frame, and I'll tell you something for nothing, those people no longer post anything, and haven't for a long time.

Whether you hit the sell button at the close of the shooting star or not is decision you would have to take, because it might be best to wait for a bit more confirmation. You can wait until the 20 EMA ( blue/red ) has been crossed, but often, these moves are quick, and that candle might well take the price to a level beyond your risk allowance. Personally, I would take and did take the first shooting star, because here a 10-15 pip SL is more than enough. However, waiting for another confirming candle is a good idea, there will normally be one before the price races off, and the second shooting star, even though it is a positive colour, is still a shooting star, and the strength of the subsequent candle shows that alot of traders pulled the trigger on the close of that candle. This trade gave 50 pips in less than 10 minutes, and who here would pass up a 50 pip trade, not many.

ps - the 15 pip stop loss marker in red is from the second entry opportunity, not the first, so entering the trade from the first shooting star with a 10 pip stop loss would have given the price loads of room.

This is the last time I'll be posting anything on this thread for awhile as I've had little interest in it and I didn't want to be the only poster on it, but if anyone has any questions, I'll be happy to answer them.

I'm going to post some screenshots of candlesticks this weekend, showing what I look for and how the right candle/s can provide you with a great entry opportunity provided your other indicators are in place to make the trade, so check this thread over the weekend/next week. I'll welcome any other input regarding candles or anything else people want to post, especially as this thread, which could be really useful for everybody, especially those new to trading, is struggling to get off the ground, for it was not my intention of starting this thread just for my own input.

One of my favourite films is Gladiator. There are some great lessons to be learnt from it, not only for life in general, but to achieve success as a trader. If you haven't seen it, and you're looking for inspiration, then it's well worth two hours of your time.

http://www.slideshare.net/bright9977...from-gladiator

Attached are three screenshots showing examples of trades from last week's Dax. The first two are from the 6th, showing the 30 second and the 30 min chart, and the third is from the 8th. As you can see, both examples are taken from just after the London open at 8am, the single best time to get in on a trade if your quick enough, though the Frankfurt open at 7am is now also a great time to catch pips, not right on the open, but usually just after.

The purpose here is to show how I wait for a signal from the candles to get into a move. The first screenshot shows 4 different opportunities to get into the trade, and I think that the candle shapes speak for themselves. Momentum is down on this short time frame ( falling away from the 200ema/sma ) with the price here respecting the 100sma. All four candles are a bearish signal and have to be sold - there will be times when you'll be caught out and the price will not do what you are hoping, but believe me, they will be few and far between. Why? Because there are many other eyes waiting for these candles, and with momentum of your side, many other traders out there will be hitting the sell button on these candle closes, so with the vast majority of the money being placed south, why would the price go north? It might, but usually it won't. But it's not just the candles, you've got to have everything else going for you as well - momentum, price reversing to a major moving average, a trend line if you can draw one ( here is wasn't possible, but this didn't stop me from taking the trade ) and the right candle, all of these being shooting star except the second one from the left, which is a Bearish Engulfing pattern, and actually the one next to it which is more of a Doji, but the important thing is that all of these are giving the green light to go.

The 30 min chart I've included really to show you how to combine the time frames - a 30 second to get into the trade, and a 30 min to get out of it. On the 30 min you can see that the overall momentum is up, and so with the sell trade, I was always looking to get out of it once a line of support was reached, and then of course, turn my direction around and look for a Buy. Using moving averages is also a good way of allowing you to follow a trade down or up, because you cannot always know what support or resistance level traders are going to be heading for, but that's another topic.

The third chart is the 2 min time frame from the 8th last week. Again, this I think doesn't need to much explaining, apart from the fact that here, the price does not drop as far as the 100sma or the 200ema, But as always, I put in my fibonacci levels, and I let the price action do the rest. As you can see, momentum is up, so I'm expecting this London fake to find support and then go aggressively back in the direction of the trend. Just look at those four candles - you won't get better signals to go long than this. Again, I took my entry on the 10 sec chart so as to get a nice tight stop loss.

The best thing about these trades with the momentum on your side, is that when you time then right, the price usually races off really fast, which is why you don't need a big stop loss. 10-15 pips is normal for me.

If I think of anything else it's important to add, then I shall. Otherwise, if anyone has any questions about anything I've posted here, them don't be afraid to ask

I'll try and post something on exits at some point- very important to get as much as you can from a winning trade!

4 Question Your Trading Plan Should Answer:


1. When should a trade be opened.

2. How large should the trade be.

3. Where should the initial stop be placed.

4. How will the trade be exited.

8 ways to increase the winning probability of forex trades:


1. Go with the trend.

2. Make fewer trades.

3. Do not enter multiple trades.

4. Wait for the best setups.

5. Have a clear strategy.

6. Understand the market is a coin toss.

7. Keep emotions in check.

8. Trust the market.

EURUSD (M15) = +11.1pips (manually exit because of the BRN ahead).


Trade ideas:

1. EsikeM15Bomb EA (type 1b).
2. Sync in pair.
3. Strength.


Cheers,
Yomi.

I've only just found out that Mark Douglas, author of the brilliant book on trading psychology, died suddenly a month ago. This book was a great help to me, and so I'm re-posting this interview with him which I would recommend anyone to watch if you haven't already seen it. RIP Mark Douglas.

Elevate Your Trading with 5 Tips on Trading Losses:


1. Accept Losses.

2. Commit to Trading well.

3. use losses to learn more.

4. Trade with an Edge.

5. Study market context.



Yomi.

EUR (M15) +28.3pips.


Trade Ideas:

1. EsikeM15Bomb EA (type 2).
2. Sync in pair.
3. Strength.


Cheers,
Yomi.

Here's a great example of the sort of candle I look for to pull the trigger - a perfect shooting Star. This is this morning's Dax 30, London open. The price had already been falling, and all the charts were showing that we were going to go down, an observation I posted prior to this move. What London will normally do is take it back to a level where a good, safe entry can be obtained. This rose sharply at the open to just above my 2 min 200ema, and then left this candle. Blink, and you'd have missed it, and though there were other opportunities to get into this trade a bit lower down, this for me was the obvious one.

ps - just added the 2 min chart to show you how the 200ema/sma was my resistance line.

5 Ways Trading Goals Make You A Better Trader:


1. Trading goals give you direction.

2. Trading goals focus your attention.

3. Well-constructed trading goals tell you how well you are doing.

4. Working on your trading goals puts you in control of the right things.

5. Trading goals help you develop confidence.

EURUSD (M15) +14.3pip.

Trade Ideas:

1. Sync in pair.
2. Strength.
3. 5ema trigger.
4. Momentum.


Cheers,
Yomi.

Additional trades on GBPJPY = 43.4pips.