Trading - a mind game
First, you should change your mind from thinking of a normal person to think speculator. Almost all traders I have ever met, apart from a few successful, really made millions and billions by trading in the market, just wasting your time trying to learn the easiest type to read data and graphs, improving the inputs and outputs are practicing, etc. Trading - a game of mind and, without a structure of consciousness, it is - a losing game, even before its start. Preparation of the traders mind - the first step for any successful trader, but almost all new traders ignore them, which explains why more than 95% of traders eventually fail.
Acquisition of knowledge of the market does not hinder anyone with average intelligence, after several years of diligent training. But neither the intelligence nor the knowledge does not determine the result of market action trader. The determining factor is the decision making process, which is so difficult for most traders, but it is the main reason for the success or failure of any trader. Some easy to make decisions and stick to them, but for most it is very difficult. Unfortunately, any decision-making process in trade - a painful process, but people tend to avoid pain and seek pleasure, even if only temporary. In addition, necessary and sufficient knowledge of the market, coupled with a robust trading system (it is - the second most important element of success in trading. Benefits of any system based on the quality of information obtained).
After spending time on studies and research to put into practice their knowledge and develop a system, the trader is suited to the task decisions. How many traders can honestly say that without the worry will leave the ranch, when working a deal proposed by their own system (assuming that the trading - the game case), leaving a profit to rise for weeks and months as recommended by the system, but how many know how turn taking losses routine process, when the situation demands. It's all easy to say but hard to do when it comes to real money in the market. I still can not sleep when I have an open position, because even if the profit has grown to several hundred dollars, and the system tells you to go on, there is no guarantee that profits will not turn into a loss in a day or two, if that happens, is unexpected. Painful process for the senses. It hurts not to know what will happen in the future and fear of loss. Only the discipline helps the trader to overcome the pain right decisions at the right time, on which depends the result of the transaction. So I call the trading conundrum. When I conduct interviews with prospective young traders, I am always looking for a disciplined and determined person - these I put in the first place, but, oddly enough, in most cases come to imagine themselves as geniuses with good mental ability, but without any discipline.
I always try to average the mid-position when convinced of the emergence of a new trend. Thus, the starting position on USD / JPY from 135, I added 132 and 129. The same goes for the AUD / USD and EUR / USD. But look at how the setbacks take up a lot of money - not an easy job, is always very painful. Most traders, even among experienced, can not stand the pain and too early to come out. But there is no other way to make big money, and we should endure the pain, "sit and accumulate" until the mid-term trend remains intact. That's why I always believe that the psychological aspect of trading is much more important than anything else, for successful trading. Mind game, similar to poker.
Words of Wisdom
Any market, be it real estate or forex, is a way of transferring money from the crowd to a few very lucky. In the speculations with the real property of mass to make money, a lot of money but the money can be seen only on paper, as profits evaporate before they are able to convert paper profits into hard cash. Most of the speculation in the Forex weight a few years barely surviving due to lack of market knowledge and murderous arm. Both of these types of market speculators to bring a sacrifice so hard-earned money in exchange for a dream.
Each trader needs to find its own method / system which is suitable only to him. So if Tom, the medium-term trader, with his method of making money for three decades, his system may not be suitable for Dick and Harry, day traders, and vice versa.
Successful trading - is the ability to get as much as possible when you are right and lose as little as possible when wrong. This is the essence of this business. Therefore, any theory or system that satisfies this rule - is good.
System - that a soldier guns on the market. You should get it as soon as possible.Otherwise, it would be like to fight with bare hands with well-armed robbers. It is best to build the system yourself, because you'll never feel comfortable in other people's shoes, although borrowing good ideas from others - a good thing.
You can not make money if you do not follow most of the time the crowd or trend. However, one must be cautious when approaching the overbought-oversold, and know how to roll over in the pivot point for movement with the opposite trend. Following the crowd does not require exceptional ability and courage, but the turning point where you want to take the necessary action, require not only intellect, but also great courage. Luck loves the brave.
Money Management - this is where most traders almost always does not operate as it should, causing among the winners in the end are a few. Money management and discipline - that's what makes a trader, not the basic methods of input and output.
Trade Forex: it is - playing with the emotions of the crowd mentality, where even the best players with the best forecasts are knocked out of good positions magic price movement.
Trade with the trend: the accumulation and distribution
The forex market, just like any other, works very simply. For some time he accumulated in a region and as soon as the accumulation is complete, it moves a certain distance, making the distribution, then comes the accumulation phase, then again moves a certain distance, and again and again. Daytrading can not lead to better results when fighting the accumulation and distribution, neutralizing each other zigzagging steps. At the same time when the market is beginning to emerge from the area of accumulation, day trading - a reliable way to break a profit. Generally, trading within the day, in my experience - not the best form of profit, contrary to some authors, who are trying to prove it, not making real money in this game.
The safest and best way to make some money, it's wait until the "accumulation" and take the entire length of the course "distribution" in the form of short-term, within 2-10 days, a transaction, depending on the circumstances.
Technical analysis and charts
Learn the 8-hour or 4 hour charts bars or candles, especially looking for patterns and 20-period high on the charts for several months every day, and you'll discover what I mean by the accumulation and distribution for short-term transactions in the Forex-market. These processes are inherent in the market, so you can always decide what tactics to use in this stage. The rest - the case of money management and discipline, and, of course, experience.
On the technical side of trading, the first thing to do is to determine the trend in this time scale, and pick an appropriate trading strategy for the trend. Some hold the position for many months, while others - less than an hour or day, and their views on the trend is clearly different. For a trader who holds positions for months, the daily fluctuations can only be a meaningless noise, while for the daytrader same day swings can be a monstrous tsunami.Availability of equipment, and precise identification of the trend and turn it around in-time trader, and the adoption of proper strategies for this trend - the first elementary step in the hard school of trading.
I try to keep the technical analysis of any pair of currencies as simple as possible, to see how you can use the situation to their advantage. For me, strategy is to determine the "range of the transaction." Always place a stop order when you open any new position.Medium-term reversals can be confirmed only on the monthly, weekly and daily charts.Reading the chart can not predict the top or bottom of the movement, but can confirm a trend change as soon as it happens, to take the correct strategy for this new trend.
Each new cycle is different, and this is - the beauty of the market. It is extremely important to see the whole picture from a distance, instead of minutes or hours to study under a microscope.
I use a very primitive graphical methods. Look at the 8-hour schedules EUR / GBP with 20 and 40 MA, take a look at round numbers and breakthroughs (from consolidations, then you will realize that there is no more primitive method than this, but no less effective). Buy on dips to the support is added to the breakout of consolidation, considering the two inputs as a single transaction, with one level of stop-loss and keep it until the market goes in the right direction.
As a rule of thumb, a 20-period moving average on an 8-hour, daily, weekly and monthly chart helps determine the direction of the trend and support and resistance levels. Not sure if it will work in day trading.
Look at the weekly EUR / USD and USD / JPY with a 10-month RSI and AUD / USD with 10 RSI, watching the "patterns" rather than levels. So you will find primitive things work, and it is better to do it, along with more simple means. RSI is useful "only for weekly and monthly time scale." You can ignore the RSI on the short-term scale, as long ago told us, the inventor of RSI, Wilder.
If you trade intraday, 30-minute and 15-minute candlestick chart in combination with MACD and MA may be more useful than the hourly or even daily charts. Especially do not miss the long tails of candles, as a confirmation of changes in short-term trend. If you - an experienced trader, even a single candle is enough to pull the foot up or down a long shadow. When you trade the dollar / yen, we look at the Swiss / yen, the pound / yen and euro / yen together to confirm the top or bottom. When you trade a pair of Euro / Dollar or Dollar / Swiss franc look at the pound / Swiss and euro / pound together to confirm the same.
Acquisition of knowledge of the market does not hinder anyone with average intelligence, after several years of diligent training. But neither the intelligence nor the knowledge does not determine the result of market action trader. The determining factor is the decision making process, which is so difficult for most traders, but it is the main reason for the success or failure of any trader. Some easy to make decisions and stick to them, but for most it is very difficult. Unfortunately, any decision-making process in trade - a painful process, but people tend to avoid pain and seek pleasure, even if only temporary. In addition, necessary and sufficient knowledge of the market, coupled with a robust trading system (it is - the second most important element of success in trading. Benefits of any system based on the quality of information obtained).
After spending time on studies and research to put into practice their knowledge and develop a system, the trader is suited to the task decisions. How many traders can honestly say that without the worry will leave the ranch, when working a deal proposed by their own system (assuming that the trading - the game case), leaving a profit to rise for weeks and months as recommended by the system, but how many know how turn taking losses routine process, when the situation demands. It's all easy to say but hard to do when it comes to real money in the market. I still can not sleep when I have an open position, because even if the profit has grown to several hundred dollars, and the system tells you to go on, there is no guarantee that profits will not turn into a loss in a day or two, if that happens, is unexpected. Painful process for the senses. It hurts not to know what will happen in the future and fear of loss. Only the discipline helps the trader to overcome the pain right decisions at the right time, on which depends the result of the transaction. So I call the trading conundrum. When I conduct interviews with prospective young traders, I am always looking for a disciplined and determined person - these I put in the first place, but, oddly enough, in most cases come to imagine themselves as geniuses with good mental ability, but without any discipline.
I always try to average the mid-position when convinced of the emergence of a new trend. Thus, the starting position on USD / JPY from 135, I added 132 and 129. The same goes for the AUD / USD and EUR / USD. But look at how the setbacks take up a lot of money - not an easy job, is always very painful. Most traders, even among experienced, can not stand the pain and too early to come out. But there is no other way to make big money, and we should endure the pain, "sit and accumulate" until the mid-term trend remains intact. That's why I always believe that the psychological aspect of trading is much more important than anything else, for successful trading. Mind game, similar to poker.
Words of Wisdom
Any market, be it real estate or forex, is a way of transferring money from the crowd to a few very lucky. In the speculations with the real property of mass to make money, a lot of money but the money can be seen only on paper, as profits evaporate before they are able to convert paper profits into hard cash. Most of the speculation in the Forex weight a few years barely surviving due to lack of market knowledge and murderous arm. Both of these types of market speculators to bring a sacrifice so hard-earned money in exchange for a dream.
Each trader needs to find its own method / system which is suitable only to him. So if Tom, the medium-term trader, with his method of making money for three decades, his system may not be suitable for Dick and Harry, day traders, and vice versa.
Successful trading - is the ability to get as much as possible when you are right and lose as little as possible when wrong. This is the essence of this business. Therefore, any theory or system that satisfies this rule - is good.
System - that a soldier guns on the market. You should get it as soon as possible.Otherwise, it would be like to fight with bare hands with well-armed robbers. It is best to build the system yourself, because you'll never feel comfortable in other people's shoes, although borrowing good ideas from others - a good thing.
You can not make money if you do not follow most of the time the crowd or trend. However, one must be cautious when approaching the overbought-oversold, and know how to roll over in the pivot point for movement with the opposite trend. Following the crowd does not require exceptional ability and courage, but the turning point where you want to take the necessary action, require not only intellect, but also great courage. Luck loves the brave.
Money Management - this is where most traders almost always does not operate as it should, causing among the winners in the end are a few. Money management and discipline - that's what makes a trader, not the basic methods of input and output.
Trade Forex: it is - playing with the emotions of the crowd mentality, where even the best players with the best forecasts are knocked out of good positions magic price movement.
Trade with the trend: the accumulation and distribution
The forex market, just like any other, works very simply. For some time he accumulated in a region and as soon as the accumulation is complete, it moves a certain distance, making the distribution, then comes the accumulation phase, then again moves a certain distance, and again and again. Daytrading can not lead to better results when fighting the accumulation and distribution, neutralizing each other zigzagging steps. At the same time when the market is beginning to emerge from the area of accumulation, day trading - a reliable way to break a profit. Generally, trading within the day, in my experience - not the best form of profit, contrary to some authors, who are trying to prove it, not making real money in this game.
The safest and best way to make some money, it's wait until the "accumulation" and take the entire length of the course "distribution" in the form of short-term, within 2-10 days, a transaction, depending on the circumstances.
Technical analysis and charts
Learn the 8-hour or 4 hour charts bars or candles, especially looking for patterns and 20-period high on the charts for several months every day, and you'll discover what I mean by the accumulation and distribution for short-term transactions in the Forex-market. These processes are inherent in the market, so you can always decide what tactics to use in this stage. The rest - the case of money management and discipline, and, of course, experience.
On the technical side of trading, the first thing to do is to determine the trend in this time scale, and pick an appropriate trading strategy for the trend. Some hold the position for many months, while others - less than an hour or day, and their views on the trend is clearly different. For a trader who holds positions for months, the daily fluctuations can only be a meaningless noise, while for the daytrader same day swings can be a monstrous tsunami.Availability of equipment, and precise identification of the trend and turn it around in-time trader, and the adoption of proper strategies for this trend - the first elementary step in the hard school of trading.
I try to keep the technical analysis of any pair of currencies as simple as possible, to see how you can use the situation to their advantage. For me, strategy is to determine the "range of the transaction." Always place a stop order when you open any new position.Medium-term reversals can be confirmed only on the monthly, weekly and daily charts.Reading the chart can not predict the top or bottom of the movement, but can confirm a trend change as soon as it happens, to take the correct strategy for this new trend.
Each new cycle is different, and this is - the beauty of the market. It is extremely important to see the whole picture from a distance, instead of minutes or hours to study under a microscope.
I use a very primitive graphical methods. Look at the 8-hour schedules EUR / GBP with 20 and 40 MA, take a look at round numbers and breakthroughs (from consolidations, then you will realize that there is no more primitive method than this, but no less effective). Buy on dips to the support is added to the breakout of consolidation, considering the two inputs as a single transaction, with one level of stop-loss and keep it until the market goes in the right direction.
As a rule of thumb, a 20-period moving average on an 8-hour, daily, weekly and monthly chart helps determine the direction of the trend and support and resistance levels. Not sure if it will work in day trading.
Look at the weekly EUR / USD and USD / JPY with a 10-month RSI and AUD / USD with 10 RSI, watching the "patterns" rather than levels. So you will find primitive things work, and it is better to do it, along with more simple means. RSI is useful "only for weekly and monthly time scale." You can ignore the RSI on the short-term scale, as long ago told us, the inventor of RSI, Wilder.
If you trade intraday, 30-minute and 15-minute candlestick chart in combination with MACD and MA may be more useful than the hourly or even daily charts. Especially do not miss the long tails of candles, as a confirmation of changes in short-term trend. If you - an experienced trader, even a single candle is enough to pull the foot up or down a long shadow. When you trade the dollar / yen, we look at the Swiss / yen, the pound / yen and euro / yen together to confirm the top or bottom. When you trade a pair of Euro / Dollar or Dollar / Swiss franc look at the pound / Swiss and euro / pound together to confirm the same.
Use crosses and gold
EUR / GBP and GBP / JPY are the property of leading indicators movement USD / JPY and EUR / USD. EUR / CHF is similar to EUR / GBP in the forecast value.
In short, EUR / GBP and GBP / CHF are leading indicators for the EUR / USD and USD / CHF, and GBP / JPY, EUR / JPY and CHF / JPY - leading indicators for the USD / JPY.EUR / JPY is very important for the direction of EUR / USD, while the GBP / JPY plays the same role for the GBP / USD. For example, yesterday's weakness in EUR / USD largely began with sales of EUR / JPY, have sent EUR / USD and USD / JPY down. As a rule of thumb, if the EUR / USD does not move, and EUR / GBP started to move it - a good indicator that someone later lead the EUR / USD in the same direction, and when moved EUR / USD, but EUR / GBP did not move sooner or together, then it is very likely that the movement of EUR / USD will be short-lived and soon replaced by the opposite. The same applies to the USD / JPY for EUR / JPY and GBP / JPY.
EUR / USD, EUR / GBP, EUR / JPY and GBP / CHF, to some extent correlated with each other. It just shows how money moves between these pairs. In fact, GBP / CHF and EUR / GBP, in many cases move a candle or two before EUR / USD. Watching charts GBP / CHF and EUR / GBP, you can learn in many cases before the motion to enter EUR / USD.The same goes for charts GBP / JPY and EUR / JPY, leading the movement USD / JPY. A careful study of the movements of these pairs also show you some more interesting things.
I used the code USD and EUR / GBP (or GBP / CHF) as a pointer to the direction of the late '70s, with sufficient accuracy by determining the medium-term trends. I've never lost money on the medium-term transactions in reliance on these pointers. But they do not work when intentionally devalued pound.
AUD / JPY - one of the major pairs that affect the AUD after the Dollar, Euro and Pound.Usually, falling AUD / JPY Yen is good for the bulls.
Gold - a mirror of the Dollar for hedging purposes, and their correlation is excellent.Sometimes when I get tired of too much cross-check information, changing by the hour, I was just watching the Golden. Graph of Gold - one of the main plots, you should always watch when trading forex. Chart EUR / GBP, with a timetable for EUR / JPY, is also an excellent mirror for directing EUR / USD most of the time. Gold Charts, EUR / GBP and EUR / JPY tell the story of the market despite the fact that gold and EUR / GBP is most often lead the rest of the world of Forex.
The use of stops
Always place a stop order that matches your risk profile, when you open any new position.Medium-term reversals can be confirmed only on the monthly, weekly and daily charts.Reading the chart can not predict the top or bottom of the movement, but can confirm a trend change as soon as it happens, to take the correct strategy for this new trend.
When setting stops to consider the basic mood of the market in this time scale, the situation with the liquidity of the market at this time and size of the position. Stop level can be based on technical levels or a certain sum of money or a percentage of total assets.Each trader must develop his own unique style of stop orders. But unfortunately, all that can be learned only by giving money to the market for training.
Yes, as a position trader, I never use tight stops. The same applies to trailing stops. They are all I have are very far from the market that they did not touch the market noise. The initial stop, I always have at 1% of my assets.
You can avoid problems in most cases, leaving the market, trailing stops, that is, without setting a profit target. Then every winning trade will work as long as the market itself does not tell you to go, hitting your trailing stop. When you enter the market at a signal, and then move the trailing stop the accumulation of profits, thereby lifted most difficult part of decision-making process.
Tips for USD / JPY
One of the most stupid rules of thumb to trade USD / JPY - she rarely goes to 700-800 pips in a row without a correction of 200 pips or more in the middle of the course, and almost always rolled back to 350 points from the beginning of his movement in the 700-800 pips . All of this - because of liquidity problems in the market Yen.
This battle between bulls and bears for medium-term trend in the market is always going on about Jena on line 20-day MA.
Position traders hold positions yen to a few hundred pips. For intraday trades require much more clever approach. As Yen position trader, please never buy falling below 20 day MA, and will never sell above the rising 20 day MA, regardless of how attractive is the situation. Start buying only when daily 20 MA starts to rise on any level - is not only safe, but proven way to make money, even though it looks so simple.
The reaction to the news
News and data are always read in the direction of the prevailing market sentiment. The data may well show the state of the market. If the data is bad, and the price rises or does not respond, it must be a bull market, when is the best choice strategy of buying at the bottom. Conversely, if the data is good, but the price does not rise or even falls, this downward trend, when the best strategy is to sell on the rebound. An important point is, when the bad or good news will not affect the price as before. Changes in market sentiment is usually accompanied by a reaction to the news.
Various venues
The first hour after opening in Tokyo sets the tone for the liquidity of the day, at which time most of the major players trying to solve their problem, not to then do not have problems during the day. Opening of Sydney is often used by some players as the hour of the ambush, as the time window before the opening of Tokyo. There is a rule of thumb - if the yen jumped at the opening of Tokyo, it is possible that this movement will continue throughout the day, and maybe a few more days.
One hour after the opening of Tokyo, London and New York - while most market liquidity.At that time, market makers set the trend for the session, or even the whole day. You can see most of the movements of the session or the day started, or at the opening of London, or Tokyo or New York. Pay special attention to the opening of London. Other markets are too thin for large traders.
Sayings
On the Forex need to think about how to properly take the nearest target, instead of worrying about the distant future. The immediate goal may be 2 pips or 20 pips, or 200, or 500, depending on the style of the trader.
Forex is possible.
Information of good quality - it's all in this game.
Fishing on the bottom of the USD / JPY - the foundation of all high-risk transactions.
We always learn to trade, and every day we learn from each other. This is the beauty trade and life in general.
Do not worry about what will make the market. Suppose you worried that you will do when the market reaches your "pain points" or "bliss point".
Players can operate forex secret, but they could not hide his movements on the charts.
Yes, no liquidity and no condemnation of conviction} {players are not forced to remind the market of a tramp, loitering in his usual area.
Good sleep is essential for a good trade, but most traders I know, like, sleep with one eye open.
