The most important technical skill to learn

For this thread, I'm not gonna talk about money management or risk...just the most important skill you need to learn in order to win.

If I could go back in time and tell myself to learn ONE thing what would it be? I have watched over and over again, new guys struggle with different strategies. You are not unique like a snow flake. I personally did this so many times, but like Edison, I learned 10,000 different ways that these methods/strategies didn't work. Or did they?

The answer is yes, they all work and they all fail.

But how do you tackle the problem? Recognize that there are only 2 real situations, trends and breakouts. Churning? If you think a pair is churning then drop the time frame and you will see a trend. So should you trade the trend or breakouts? You will literally drive yourself nuts over this one so I'm gonna tell you a serious short cut.

Trade both. In order to do that you need a serious skill and what is that ONE single skill to master? Here is the gold...you need to master trading the pullback.

In both scenarios, trading the breakout or the trend, you MUST master the pullback. Think about it. In a trend, the pullback returns to support then resumes its course of the trend. In a breakout, a trend was in place and it looked like a pullback was taking place then it just kept going in that new direction...the breakout to establish the new trend. Then once you see what has taken place you will want the best entry and that will be the pullback of the new trend after the initial breakout.

In order to really master the pullback, you should really hone your skills at drawing diagonal trend lines. Remember, a diagonal trend line is only 2 things...support and resistance. But support, sell resistance. Once it's broken then do it all over again.

Yes boss agreed 1000% Now let see some real solid numbers behind this brilliant theory. If you got it right 3 out of 5 calls with a definitive entry/sl/tp then you will be my new master of the forex universe.....


GS

the most important thing in forex trading is to try to trade with the maximum. Forex is a business that has a high risk that we should be able to learn a lot and practice trading. To succeed in forex, then we should be able to improve their skills and good trading psychology

Forex consist of two basic principles.
1. Good profitable strategy(system)
2. Property risk management.
Percentage of this points is 50/50
One do not lives without other.

Ocd: hi, i come across with your first post in Big E's TMS thread talking about using TDI with your stock options trading, that really excites me as I'm testing using this indi with my index options trading strategies.

So what happened after you "!!!Holy cow!!!" on some of your 40%-400% wins. then you went into journey from "I don't trade fx nor do I understand it..." to full time trading for "pips"?

Actually I now have TDI in my ThinkorSwim platform and am back testing. I'm a 10-year index options trader with quite a success until last August when market experienced extreme volatility. And I overextended myself a bit too much. So all of a sudden I stopped trading to take full rest, to reflect, to find new ways to contain my risk. I was too happy when I made average $280k/week, for 5 months before August 19th, 2015. I blew up more than 60% of my $5.75 million account that was major part of my 10 years' accumulated profits.

Any thought about the popular TDI indicator for equity/index options trading? would highly appreciate it.

Wounded Wolf on Long Island, NY

The hardest skill to manage in my opinion is profit taking.

Very hard to get that right.

My opinion : Your take profit should be based on your risk for sustainability in the long run.
Risk : Reward ratio should be 1:1 bare minimum if the strategy is 55% winners.
Ideal situation of risk : reward ratio should be 1:2 or greater.
Markets will always extend up and down which may not be accurately predictable all the time , hence take your share and leave it for the moment.

One of the foremost important skill in the trading is, keep your losses small and pyramiding on winners.

I think that the most important skill one can learn is when and why they should close a position. Either to cut their losses or to take their profit. It's not so hard to learn to see the entry, but exiting can be a real issue. Do you wait to make a bigger profit? Do you wait hoping that the price would return to a previous level and your losses wouldn't be as big? Do you get out now? And so on, and so forth. It's really hard to find that balance, at least in my experience.

Yep, I agree 100%.

There was some book written a few years back (can't remember the name) and the author mentioned a trader who had pulled $100m+ out of the markets and apparently the trader's biggest weakness was never being able to properly master profit taking. Sure, he still made big money but perhaps there is no way anyone can really master the profit taking angle. Perhaps it's human weakness where we think there is a solution but in reality there isn't. So maybe the best plan is to have a plan but understand most of the time (with hindsight) it's going to be far from perfect.

Having said all of that one concept that I've found good for holding off for bigger profits is 'swing freedom'.

Swing freedom is a big blank space for price to move into. See chart.

Something else I've found useful when looking to take profits is the 'character change'.

Often this will get you out near the highs or lows. Works on all timeframes.

Sure, sometimes you cover too early and bam, off price goes without you on board but this is a probability game.

Hmmm, If I could go back in time and drill ONE thing into MY head at the start of all this, it WOULD be that money management, risk, and position control are 10 times more important than strategy. And that many of the old axioms are just bad advice from mostly losing traders.

Good thought.
+1