The Fundamentals of Trading

ENZD
Any retrace that gets back near 16780 will be sold IMO,
Simon

What kind of update or scenario do you have with the NZD USD...thanks

Thank you for your lessons Simon!

In order to practice some more, how about this (potential?) level at GCH:



Still some 370 pips to go, giving us time to get ready

Thank you for the videos, they really helped to explain everything!

Reply to G05

good level at 13025, the only issue I have with it is what happened a few days prior and that's the intervention of the SNB, with such a long wick sellers could keep probing lower looking for longs, hard to say which way it will go this is why if you take the long prior you must be prepared to kill it quickly if it dosent bounce as you will get killed in a trade like this, otherwise wait for reaction and trade accordingly.

Simon

reply to fxlan

your welcome I am glad they help, I am no film maker or teacher but I am glad you are getting something from them.

Simon

Reply to Korndawg

I will look at NZDUSD shortly.

Simon

Reply to Korndawg

Everytime I look at the charts for NZDUSD it seems like it should be going down and dosen't, so I don't feel like I have a good read on this at the moment.

I always take the view that if the market strongly disagrees with me then it's time for me to take a step back and re evaluate where I am at with this pair, and this is how I feel at the moment.

My overall take just looking at the price action is this:

6950 - if we go above here then my view is that we should only be looking to play longs
6600 - there is a big level here and at 6483 and because of all the action recently between 6600 and 6950 (latest range), most of the buying and selling has been taken out or absorbed already, making a fall way more possible in my view.

However I say all of the above without confidence on this pair at the moment.

Simon

Thanks, will keep that in mind.

GBPNZD
Its like ground hog day, started at around 20700 yesterday and we are straight back there.
Simon

GBPAUD
my bias is still long Asia could see this pair come back to 18670 for orders.
Simon

EURNZD
still looks bearish 16735 for a pullback before going lower is my take
Simon

EURAUD
bottom of the range that was built from 15150>15050 over the last few days gotten taken out yesterday, so a pullback towards 15068>15100 looks possible before going lower.
Simon

GU

I will video this later, I am at the office this morning for a few meetings so I will cover in more detail later, needless to say a couple of great examples of levels and their significance got taken out yesterday, so I will expand on that later and why.

Simon

AUD
same story as GU, will cover later
Simon

I was talking to a friend of mine yesterday, and we got talking about how many people in business work really hard and seem to get no where and this seems to happen all the time.

I basically said to him that I believed this happened for two reasons:

1. Sweat the small stuff in there business, like where someone might sit in the office or a car parking space.
2. They are so busy running around doing everything they don't have time to actually see what is really going on.

Now how does this relate to trading, well it has everything to do with it, stop worrying about every little machination in the market look at where the big gains are going to be had, where the high probability lies and become a subject matter expert on a few. If you do this then you can sit back wait for all the other market participants to move the price into your range before trading, this will equal low risk and high probability.

This will also give you time to find other businesses to be involved in or a chance to start your own and the time to properly set it up so others can eventually run them for you.

Simon

Let me pose a question to the reading audience on here

Q - How many of you are sitting on trades that are going against you.

A. probably a few waiting for a turn in their fortunes, why not close it, whats the problem with that loose too much money, The most important skill you have to have above anything is to be man enough to admit that this trade is a dud its going against you and to kill it

If you can't do this then quit now is my advice cause it won't get better.

Simon

Proper Planning

I thought I might talk about planning for your day, as many I have mentored have had a real haphazard approach to their day, so I thought I might go through what I do each day starting with when I sit down at the desk. Its the old saying fail to plan is planning to fail.

I take this as serious as a heart attack, piss poor planning leads to piss poor performance.

1. As my day starts when NY closes and before Asia opens then the first thing I do is read the news from overnight, note - i didn't say open charts, open broker program, look at phone or tablet, I open Reuters or some other feed and get the talking heads to tell me why they think the market did what it did overnight. Why is this important because for the most part 95% of what I read is rubbish complete and utter crap but every now and then they will have quotes from central bankers etc, you always need to know what the big influencers are saying before anything else so your not bias to that information or miss it cause your thinking about something else.

2. Open charts and 1 pair at a time look at a d1, then 4h, then 1h etc. The sequence is important start with the big picture and move down to see the machinations and buying and selling action of the day.

3. Repeat step 2, I always miss something on the first pass.

4. Assess what's happened have a look and see if the levels that I have been following have been hit, (what did I miss while I was sleeping) see if any orders I might have had have been executed. Then assess any chart work that might need to happen like redrawing new levels etc.

This is essentially how my day begins its truly a regimented military approach you may not like mine but you should develop your own.

The only way to win is to be what most of your opposition is not - PREPARED.

Simon

Why its important to think about your opposition in Trading

I want to share with you an approach I add in before every trade,

- so you have picked out your highest probability level
- you have worked out your stop loss
- you worked out where the profit stops will be
- your just about to put your order into the market

WAIT Don't do it

I want you to think about this first

assuming your broker is a market maker so they are taking the other side of your trade, so your buy is their sell and vice versa.

- Now go back to your chart, have a look at the trade they are taking,
- Whats its good points,
- Is it risky for them,
- Is there a high probability it could go your brokers way

The most important question I want you to answer is this:

- If your the broker would you feel comfortable taking this trade, if the answer is NO then chances are your on a high probability trade.

When I make trades I want my broker to be looking at my trade going oh F@ck that trade sucks for me.

Its like coaching a football team for the most part its not about your team as coached well this takes care of itself, its about the opposition and finding the weak points and exploiting them.

Simon

GJ

Its difficult to catch a knife but here goes.

This trade is either going to work or not, there will be no in between here.

1. stop below 15200
2. Entry around 15280 waiting a retest, prepared not to take it if reaction is poor
3. Take profits at 15490, 15609, 15700, 15860 and the last of it at 16090
4. R:R - at worst 2.5:1

expect to wait days for the full trade to play out.

Here is my chart and justification

I normally wouldn't lay out a whole trade like this as I prefer you to learn for yourself but I am doing it this time to make sure you see the whole thing as I do.

I will not trade a large position on this as this is definitely counter trend in the long time frames, however I believe that Yen needs a rest before the next move on the downtrend.

I won't take this trade until the very last minute when I can see reaction, this is critical to see the price action prior to the entry price being hit.

Lastly if I am the broker taking the other side what do I see:

1. Its a definite downtrend so this trade is counter trend
2. Its put in a double bottom on the 4h - not great for me this could mean its going up.
3. pound news in early europe could blow away the levels around 153, 152 and continue the downtrend.
4. On the daily chart there is clutter below where price is now, no clear level to shoot for on the downside

Is the broker trade high probability or is my trade. I'd say its 50/50 depending on news.

Simon