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The Trader's Academy - by Traders for Traders

  • #161
  • Nov 11, 2015 3:41am Nov 11, 2015 3:41am
Quoting cat
I see much written about trading plans, that you've got to have one, etc, but the concept of having a trading plan is often misunderstood. To have a set of rules written down is problematic because the market just doesn't conform to rules very well. Personally, I don't have a plan as such, never really did, and if you asked me now to show you my trading plan, I wouldn't be able to. This is because over the years my knowledge of the market has evolved as I have become more experienced. To have had a plan when I started out would have been pointless...
Interesting... I agree 100%, I don't know if you trade this way but my best trades are when I've got the order flow nailed and I can tell you when price is going to turn and where its going, I can see the players involved be it pro's or retail and who's buying or selling or is the action covering and a reversal is close,i'm currently in the process of eliminating distractions to get this consistent ...
  • #162
  • Nov 11, 2015 4:12am Nov 11, 2015 4:12am
The Distinguishing Traits of Professional Traders:



1. Premeditated approach.

2. Sickening discipline.

3. Understanding the maths.

4. understanding the psychology of markets and market participants.

5. Pros don't try to avoid losses.

6. Well educated, well read and well planned.



Happy trading,
Yomi.
Time always comes before price
  • #163
  • Nov 11, 2015 5:10am Nov 11, 2015 5:10am
Quoting fxrabbi
The Distinguishing Traits of Professional Traders: 1. Premeditated approach. 2. Sickening discipline. 3. Understanding the maths. 4. understanding the psychology of markets and market participants. 5. Pros don't try to avoid losses. 6. Well educated, well read and well planned. Happy trading, Yomi.
and may I add ' understanding oneself ' - very important for trading.
  • #164
  • Nov 11, 2015 5:27am Nov 11, 2015 5:27am
Quoting ThePiptaker
{quote} Interesting... I agree 100%, I don't know if you trade this way but my best trades are when I've got the order flow nailed and I can tell you when price is going to turn and where its going, I can see the players involved be it pro's or retail and who's buying or selling or is the action covering and a reversal is close,i'm currently in the process of eliminating distractions to get this consistent ...
Yes definitely, all trades are seen in advance, they are not just reactions unless one is trading the news, but then that's more of a gamble than anything else even though it can be very profitable. The exact way the price is going to behave can never be predicted, but if it obeys the levels that you have previously set in place, then you can go with it. It is simply a question of setting traps for the price to fall into - if it doesn't you leave it alone, if it does, you act.

As for knowing the composition of the players involved, whether it is possible or not, it is not something I ever think about. The only time I think about other players in the market is when I am exiting a trade as I ask myself whether, if there's no obvious reason to exit, others will also be exiting their trades at this level. If the answer is no, and I am compelled to exit a trade purely from my emotions, then I stay in and ignore the urge to take profits. Better always to set modest TP levels as a way to override the urge to exit too early, but again, this is all part of the discipline traders have to have, though there also has to be a fair degree of flexibility as well, because price seldom conforms to what you want it to do.
  • #165
  • Nov 11, 2015 5:44am Nov 11, 2015 5:44am
Quoting cat
{quote} and may I add ' understanding oneself ' - very important for trading.
Time always comes before price
  • #166
  • Nov 11, 2015 6:09am Nov 11, 2015 6:09am
Here's an example from yesterday of setting a trap for the price - waiting for the price to come to you. This was a trade I had in the morning. The price had fallen heavily, but support was found on the 4 hour 100sma. This was a good place to exit for any shorts, because a big MA like this on a popular time frame like the H4 was always likely to give support. At this point, the 30 sec chart gave a wonderful diversion pattern with MACD, so a trade can be taken up towards the 1m 100sma ( blue dotted ) Once black candles start to appear and the price starts to range back and forth around the 20ema ( blue/red ) then this is where that little long should be closed in preparation for the price to fall again, as it will most likely fall away from the 100sma. When it does, ( and there's another great trade opportunity here, Bollinger squeezed and price most likely to fall away from the big MA ( 100sma ) rather than break towards it ) you have no way of knowing whether it will break the previous low and carry on down, or find support again, here putting in a slightly lower low before turning. At this point you look to your higher charts, because this attempt to break lower has formed a very strong diversion pattern on the 3 minute chart. Can you now trade? Well, yes, you can, especially off of the second white candle, but personally, I want a bit more confirmation than this because it could catch me out by suddenly turning south again. What I am expecting it to do is to rise to the 100sma and then to come back off it, which it does, and I know it'll probably do this because I have 20,000 hours under my belt watching the price behave like this more often than not. The next phase is to see how far the price will come back, because if it finds support on a fib, most typically the 61.8% or the 76.4% with the Dax, and then puts in a nice hammer or two, which it does as you can see, then this is where to jump in with your long, no hesitation, stop loss for me typically 10 - 15 pips, here it was 13 for me, unlucky for some, but not for me this time!.

I know it looks simple on historical charts, and it is never so clear cut live, but the levels were there - it did fail to break lower, it did come back off the 100sma, and it did obey the 61.8% fib level, then the hammer followed by successive positive candles, gave what was for me, the perfect trade opportunity - they simply don't get any easier than this one.
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  • #167
  • Nov 11, 2015 12:37pm Nov 11, 2015 12:37pm
" If you keep making smart trades and preserving your money, you'll be standing long after most other traders "

" The best day traders try to hit a lot of singles in their trading and keep booking modest profits "

Marcel Link, trader and author of ' High Probability Trading '. A great book by the way.
  • #168
  • Nov 11, 2015 1:02pm Nov 11, 2015 1:02pm
Try not to flip between markets/pairs. It is tempting when nothing is happening to have a look elsewhere to find some action, but this in my opinion is a mistake. I have learnt that focusing on just one currency pair or indecis provides more than enough opportunities to make money on any one day. The constant search for action is usually counter-productive, demonstrates impatience and lack of focus. If the markets are quiet, I use this time either to take a break, or do some research/backtesting/analysis. People do trade multiple markets I know, but the best traders I know concentrate on just one or two, whilst also having longer positions which they may keep open for days or even weeks when the conditions are right and there's a nice trend in place., and this can be on anything, gold/oil whatever, as long as it doesn't interfere with shorter term day trading.

That's just my opinion, as I like to keep things as simple as possible. If you are trading multiple pairs, you are losing money and probably stressed to the hilt as well, then cut down to one or two. It is far better in trading to know just one currency pair or index really well, than it is to spread yourself too thin and have only limited knowledge of several .
  • #169
  • Nov 11, 2015 1:50pm Nov 11, 2015 1:50pm
Quoting cat
Try not to flip between markets/pairs. It is tempting when nothing is happening to have a look elsewhere to find some action, but this in my opinion is a mistake. I have learnt that focusing on just one currency pair or indecis provides more than enough opportunities to make money on any one day. The constant search for action is usually counter-productive, demonstrates impatience and lack of focus. If the markets are quiet, I use this time either to take a break, or do some research/backtesting/analysis. People do trade multiple...

1. Patience. 2. Discipline. 3. Focus.
Time always comes before price
  • #170
  • Nov 11, 2015 3:08pm Nov 11, 2015 3:08pm
Quoting cat
Try not to flip between markets/pairs. It is tempting when nothing is happening to have a look elsewhere to find some action, but this in my opinion is a mistake. I have learnt that focusing on just one currency pair or indecis provides more than enough opportunities to make money on any one day. The constant search for action is usually counter-productive, demonstrates impatience and lack of focus. If the markets are quiet, I use this time either to take a break, or do some research/backtesting/analysis. People do trade multiple markets...
Hmm...... I have exactly the opposite experience! I guess it comes down to the individual.....the level of experience and the trading style. Different things work for different people.
For me personally, trading only one pair leads to overtrading and poor results.
I like to be active. So with very limited number of choices I will force myself to trade even when there is no good signals. Over time the quality of the trades goes down, and the end result is mediocre.
Much better to have a lot of choices and to pick only the best setups.
I use technique that I call "mental rating". Based on my past experience and intuition, I put 0 - 10 score on every potential signal, and trade only setups with score above 8.
Every time I see potential situation, I ask myself - do I really want to trade this setup? Is it good enough? Quality, that's what I want.
It all comes down to probability and statistics. If you know that the best setups represent less than 10% of all setups. Then statistically you trade only 1 out 10. So you need a lot of choices.
I want the odds to be strongly in my favour every single time.
And when I open position and if immediately something doesn't feel right - i'm out. We see things differently when we have open positions.
  • #171
  • Nov 11, 2015 3:47pm Nov 11, 2015 3:47pm
Quoting cat
Try not to flip between markets/pairs. It is tempting when nothing is happening to have a look elsewhere to find some action, but this in my opinion is a mistake. I have learnt that focusing on just one currency pair or indecis provides more than enough opportunities to make money on any one day. The constant search for action is usually counter-productive, demonstrates impatience and lack of focus. If the markets are quiet, I use this time either to take a break, or do some research/backtesting/analysis. People do trade multiple markets I know,...
I agree. Oil and E/J for me on 15 minute and 5 minute time frames respectively. Presently looking at Dax on three minute charts since it appears that Dax is less "whippy" than oil (Long tailed candles). Further research to be undertaken.
every Saint has a past. Every Sinner has a Future
  • #172
  • Nov 12, 2015 1:35am Nov 12, 2015 1:35am
[quote=alphaomega;8586956]{quote} Hmm...... I have exactly the opposite experience! I guess it comes down to the individual.....the level of experience and the trading style. Different things work for different people.

As you say, what works for some doesn't work for others. Good to have your point of view
  • #173
  • Nov 12, 2015 2:42am Nov 12, 2015 2:42am
4 Insightful Quotes From Professional Traders:



1. "In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten" - Peter Lynch.

2. " I'm always thinking about losing money as opposed to making money. Don't focus on making money, focus on protecting what you have" - Paul Tudor Jones.

3. "If you personalise losses, you can't trade" - Bruce Kovner.

4. "It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that, you'll do things diffently" - Warren Buffett.



Happy trading,
Yomi.
Time always comes before price
  • #174
  • Nov 12, 2015 3:47am Nov 12, 2015 3:47am
Cultivate the right habits -

You can do well by trading badly on a good day. The secret is to be able to do well on a bad day, to do this you have to be good. The former reinforces bad habits, the latter will teach you to be a good trader for life.
Katte, kabuto no o wo shime yo. Size doesn't matter, leverage is the killer
  • #175
  • Nov 12, 2015 6:55am Nov 12, 2015 6:55am
I know that most people on FF are part time traders, ie, they work for a living and either trade as a hobby or view it as something they would like to be able to do full time one day. If you have limited time to trade, say evenings or anytime when you're not working, then you are the ideal candidate for trading off of small time frames, by which I mean 1m or smaller. Very few retail traders I know of trade anything smaller than 1 min, though many commercial traders scalp off much smaller than that, down to just a few seconds. Madness I hear you say, the price is just a mess on any TF so small, how could you possibly determine an entry and an exit? Moving averages my friends, moving averages. These give structure to price action, allowing you to pinpoint entries. Your stops are small and you move it to BE as soon as you are in the clear. Exits you determine on the bigger time frames. You have lots of modest trades, your losses are never big, and you can usually expect a 3:1 ratio or more.

I am just trying to get those of you who are struggling with the time issue to think about dramatically downsizing your time frames if you are trading say a 15 min and it's just not happening for you. I am a big advocate of moving averages, so if you don't use them, would like to use them, or don't know how to use them, then you should seriously consider doing so. I have tried just about every indicator that exists over the years, but eventually settled on just a few relatively simple ones - moving averages; fibonacci; MACD ; Bollinger bands : trend lines and pivot points. With moving averages, it's just a question of finding the right ones for you. When you're learning to trade, you have to do an awful lot of experimentation. It takes time, but it'll pay off eventually if you stick with it.

" I failed my way to success "

Thomas Edison - inventor of the phonograph, motion picture camera, and electric light bulb.
  • #176
  • Nov 12, 2015 8:15am Nov 12, 2015 8:15am
Trading is all about emotional intelligence. It is about entering into a trade and keeping access to your left brain completely open. Logic is the oxygen and life to a trader, whilst uncontrolled emotion is death. When you trade by your heart instead of by your chart, no matter how smart you are, you are finished!

Jared Martinez.
  • #177
  • Nov 13, 2015 3:09am Nov 13, 2015 3:09am
10 steps to deal with forex trading stress:


1. Acknowledge.

2. Switch off.

3. Identify stress source.

4. Define goals and objectives.

5. Use daily affirmation.

6. Work out regularly.

7. Watch your diet.

8. Drink enough water.

9. Meditate regularly.

10. Have a trading plan.


Happy trading,
Yomi.
Time always comes before price
  • #178
  • Nov 13, 2015 3:11am Nov 13, 2015 3:11am
Quoting cat
Trading is all about emotional intelligence. It is about entering into a trade and keeping access to your left brain completely open. Logic is the oxygen and life to a trader, whilst uncontrolled emotion is death. When you trade by your heart instead of by your chart, no matter how smart you are, you are finished! Jared Martinez.
Time always comes before price
  • #179
  • Nov 16, 2015 8:49am Nov 16, 2015 8:49am
Things you need to know about managed forex account:



1. There are still some risks involved.

2. Do not believe everything you hear.



Happy trading,
Yomi.
Time always comes before price
  • #180
  • Nov 16, 2015 2:47pm Nov 16, 2015 2:47pm
One of the reasons why so many people fail as traders is that trading is one of the most solitary pursuits one can expose oneself to. Life in general does nothing to prepare us for it. In our family, in school, college or university, and in business, we have the support and encouragement of others, we are part of a team and we rely on others just as others rely on us. But none of this exists in the world of retail trading. We are on our own, there is no back up, no support, no team to fall back on, no encouragement, just us, and we live or die alone. All of the psychological challenges within trading arise from this peculiarity, and apart from the difficulty of learning the technical aspect of trading, this psychological hurdle is one which many people just never come to terms with.

As a trader, you have to be comfortable with locking yourself away in isolation for hours, days, weeks, years, alone with your thoughts, emotions, and your vices. If you are not, then probably retail trading is not for you. This doesn't mean that you have to become some kind of anti-social friendless freak show, but it does mean that as far as trading is concerned, there is only one boss for every single thing that you do, and that is you.
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