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#1 Trader

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Posted 30 June 2009 - 11:35 AM

My blog http://joetradingplace.wordpress.com/
Follow me on twitter https://twitter.com/...#!/Tradingplace

follow me on stocktwits http://chart.ly/users/joetradingplace

I am going to share my experience of trading in this thread. I have a lot of Ebooks on trading that I can email anyone interested. Firstly, trading is not a get rich quick scheme, you need to put a lot of hours in learning this business. If you take time to learn and practice, you will never regret those sleepless nights, coz trading is one of the most rewarding business.
How many people are interested in trading? I am asking this question because i want to find out if its worth sharing trading info on this forum.

Trading is a very challenging career choice, dont let all the adverts fool you about teaching you to become a successful trader on a day course. Trading is like any other profession, you wouldn't attend a day course to teach you how to perform brain surgery in your spare bedroom, so why do the same for trading. Learning how to trade is a process, never ending and cant be taught on a day course. You can learn to trade by either joining a trading firm (prop, hedge fund...bank), you can be self taught (harder) or you can find a mentor (very hard to find)who is willing to teach you the ropes. Be careful out there when you look for mentors and tutors, coz some of them dont even trade what they teach you, they earn their mny from teaching others not trading. I am not saying there are no good mentors out there...but be careful know how to separate the wheat from the chaff (asking for a live trading statement is not a crime, if he/she is reluctant to provide this, then be suspicious).

A lot of new traders fail because they focus on their P&L column, they want to make a fortune before they even learn the art of trading, they usually get in the business without any business plan. We know that statistically, most new businesses fail in the first year, so dont be a statistic, play your cards right and you will be good to go. Develope a sound business plan, good money management and have the right mindset and the sky is the limit. Dont rush into depositing mny in your trading account, play with the demo or just a small account and put more hours into learning how the markets move. Learn a few patterns that happen more often than not, place your trades everytime you see your setup, we are playing a game of probabilities here. Like i said before, dont focus on your P&L column, focus on the process of trading, place your trades flawlessely and dont let the previous outcome of your trade affect your trading decisions, all trades are independent.

Dont try to invent the wheel, you can easily take some simple trading systems from reputable trades from reputable forums and twick them to your own personality. Never jump from one system to the next, but focus on improving whatever system you have. Do your own backtest, i prefer manual backtesting, it takes a long time but its worth it.

When you decide to go fulltime, make sure that you have saved a lot of mny to keep you going for at least 2-3 years without depending on your profits. This will take pressure off your shoulders by fighting the market to try and make mny for the bills. Also make sure that you only deposit 30% of your capital to trade and save the other 70% just incase you blow the first account. A lot of traders give up after blowing several accounts and by that time they would have been closer to turning the corner if they had some more funds on the side.

If you place a trade and you cant leave your computer or go to sleep, you are probably trading a bigger size than your phyche can take...reduce your trading size to a more comfortable size, even if it means trading 0.01p per point just do it until you become profitable and increase your position size as your account grows. Trading is 80% psychological and 20% technical, and you wonder why 95% fail, because they focus on the technical aspect of trading. The technical aspect of trading is simple to learn, but the psychological part takes a long time and cant be learnt from a book, but from live day to day trading.


Trading is a business, so it should be treated as one...like any other business, the first thing you need to do before yu place a single trade is to have a business plan. A Trading/BP is a complete set of rules that covers every aspect of your trading life. For those without a business plan, there is a template of a BP.

INTRODUCTION
Why do yu want to be a trader? etc
MISSION STATEMENT
PERSONAL GROWTH GOAL
Explains how yu will proceed to the next level as a trader, either by reading books, seminars etc
FINANCIAL COMMITMENT
How much is your starting capital....Pc costs, broadband, screens etc
TIME COMMITMENT
How many hours yu be willing to sacrifice to your trading career?
RECORD KEEPING
How will yu record all your trades and mistakes
MARKETS, INTRUMENTS TO BE TRADED
What markets suits your investment agenda?...
TRADING PLAN METHODOLOGIES
How are you going to trade...either technical...fundamental..price action...reading the tape etc. Your trading method should be very precise....I buy/sell when XYZ happens, my SL is at Z, my targets are at Y...what timeframes are yu going to use etc
RISK & MONEY MANAGEMENT
How much you will risk per trade/per day/ etc...how you will take profits
COMPENSATION
How much yu will pay yourself per month/per quarter/per yr
TESTING & DEVELOPMENT OF STRATEGY & MM TACTICSResearch and Developement
Check http://joetradingplace.wordpress.com/ for daily analysis on forex, commodities and indicies
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#2 LadyMo

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Posted 30 June 2009 - 11:58 AM

Welcome Trader!! Well, i am one of those interested in trading...still an amateur so your contributions will be very helpful! Thank you!!

#3 zimloverman

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Posted 30 June 2009 - 12:20 PM

Thanks for posting Trader. I tried to follow the other thread on the old forum and definitely learned some useful stuff. I've just been side tracked into other things, but forex trading is still there on my mind.

For those who might want to see what the old thread was about, here is the link, if you able to log into the old forum that is

Online Forex Trading: link to old forum thread

If not, I'm sure Trader and his crew would love to help teach you how to trade like a pro

#4 Trader

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Posted 30 June 2009 - 03:26 PM

I trade using only price action, coz price tells everything you need to know about the markets. My strategy is based on support and resistance, whether itís intraday trading or position trading i use the same strategy and vary my money management rules. Unsuccessful traders spend most of their time jumping from one system to the other, stick to one system and focus more on your mental attitude. As a trader you have to think in probabilities, do not focus on one trade because the outcome is random, but focus on a huge sample of trades. It takes years to be proficient in trading just as it takes many years to be a GP. Why do I say that, because markets have different conditions and for a trader to be proficient, they should go through all those different market conditions to see if their strategy can survive.

Imagine those people who started trading when the Nasdaq was in a bull run, they thought trading was the easiest way to make money and some of them even quit their jobs. When the market turned, they kept buying thinking it was a retracement and they lost everything they have made when the market was in an uptrend. An experienced trader would have noticed that the market has turned, itís time to cover your longs and maybe go short, but these new traders havenít seen a bear market, all they knew was a bull market. Same thing happened when the eur/usd was in an uptrend from around 2002 and some traders got caught in the downtrend which started in July 08.

A proficient trader is able to make money in any market conditions, whether the market is going up, going down, moving sideways and very volatile, he/she knows when to be on the sidelines depending on his/her trading methodology. Money management and mental attitude are key aspects to successful trading, what separates successful traders from the rest is thinking independently and not taking any losses or wins personally.  They look at the market objectively and take every trade that their system or method triggers, they always think in probabilities. A lot of unsuccessful traders focus on entry, coz they want to be right all the time. Trading is not about being right or wrong, itís about placing yourself in a high probability trade with the least risk possible and letting the winning trades run whilst you lock in your profits.  Richard Dennis lost almost 95% of his trades.. YES 95%, but he made millions from the market. How, coz he made sure that his losses were very small and his wins were enormous. Some traders have a 75% win ratio, but at the end of the month, their accounts will be in the red..WHY, because they cut their winners and let their losers run, because when they see a small profit they quickly take it coz of their fear to lose but when they see a losing trade they give it a lot of room hoping and praying that it will turn. Hoping and praying is one strategy that doesnít work in trading.

My Simple Method
I use levels of S/R and trade near these levels using price action. My rules are as follows
1. If price is bouncing off support. I buy pullbacks
2. If price is bouncing off resistance. I sell rallies
3. If price is accelerating towards support. I sell
4. If price is accelerating towards resistance. I buy

I think some people are saying is that all. Yes it is

Check http://joetradingplace.wordpress.com/ for daily analysis on forex, commodities and indicies
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#5 Pablo

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Posted 30 June 2009 - 09:50 PM

QUOTE (Trader @ Jun 30 2009, 08:26 AM) <{POST_SNAPBACK}>
I trade using only price action, coz price tells everything you need to know about the markets. My strategy is based on support and resistance, whether itís intraday trading or position trading i use the same strategy and vary my money management rules. Unsuccessful traders spend most of their time jumping from one system to the other, stick to one system and focus more on your mental attitude. As a trader you have to think in probabilities, do not focus on one trade because the outcome is random, but focus on a huge sample of trades. It takes years to be proficient in trading just as it takes many years to be a GP. Why do I say that, because markets have different conditions and for a trader to be proficient, they should go through all those different market conditions to see if their strategy can survive.

Imagine those people who started trading when the Nasdaq was in a bull run, they thought trading was the easiest way to make money and some of them even quit their jobs. When the market turned, they kept buying thinking it was a retracement and they lost everything they have made when the market was in an uptrend. An experienced trader would have noticed that the market has turned, itís time to cover your longs and maybe go short, but these new traders havenít seen a bear market, all they knew was a bull market. Same thing happened when the eur/usd was in an uptrend from around 2002 and some traders got caught in the downtrend which started in July 08.

A proficient trader is able to make money in any market conditions, whether the market is going up, going down, moving sideways and very volatile, he/she knows when to be on the sidelines depending on his/her trading methodology. Money management and mental attitude are key aspects to successful trading, what separates successful traders from the rest is thinking independently and not taking any losses or wins personally.  They look at the market objectively and take every trade that their system or method triggers, they always think in probabilities. A lot of unsuccessful traders focus on entry, coz they want to be right all the time. Trading is not about being right or wrong, itís about placing yourself in a high probability trade with the least risk possible and letting the winning trades run whilst you lock in your profits.  Richard Dennis lost almost 95% of his trades.. YES 95%, but he made millions from the market. How, coz he made sure that his losses were very small and his wins were enormous. Some traders have a 75% win ratio, but at the end of the month, their accounts will be in the red..WHY, because they cut their winners and let their losers run, because when they see a small profit they quickly take it coz of their fear to lose but when they see a losing trade they give it a lot of room hoping and praying that it will turn. Hoping and praying is one strategy that doesnít work in trading.

My Simple Method
I use levels of S/R and trade near these levels using price action. My rules are as follows
1. If price is bouncing off support. I buy pullbacks
2. If price is bouncing off resistance. I sell rallies
3. If price is accelerating towards support. I sell
4. If price is accelerating towards resistance. I buy

I think some people are saying is that all. Yes it is


Its refreshing to have you back trader.

#6 Trader

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Posted 01 July 2009 - 08:26 AM

The chart below shows two of my rules of trading S/R. The first trade would have been taken when price moved towards resistance and then tried to move up again but failed as shown by the red arrow, this is a sign that sellers are more dynamic than buyers below resistance, so i sell, but i couldnít trade this setup coz I was in bed. The second setup is shown with some blue arrows, price accelerated towards resistance, but this time, sellers didnít show their authority below resistance instead buyers kept pushing the market higher denying sellers dominance. I took this trade and itís still live. My strategy gets me in before the breakout traders are in and if the breakout is a fake, I would have already locked in some profits or moved my stop loss to break even. This chart is a five minute chart, but for me the principle is the same, whether itís a 4hr, daily or weekly chart. I only trade near these levels of S/R, if a market is far away from these levels; I donít even look for a trade in that particular market.

Another easier way to look at the market is looking for higher highs (HH) and higher lows (HL) in an uptrend and lower highs (LH) and lower lows (LL) in a down trend. Buy on pullbacks when the market is making HH and HL near support and sell rallies when the market is making LH and LL near resistance. Reading price action like a sheet of music comes with experience, you have to keep practicing all the time, look at charts and donít just stare at price moving, but have some reference points (S/R) and look at what current price is doing on those levels. Practice with a micro account, a DEMO account wasnít good for me coz it was not real money, I think I only DEMO traded for less than a week. Print some charts and draw lines of S/R by hand, study those charts like you are reading a book
Some of the stuff is difficult to explain in writing

Check http://joetradingplace.wordpress.com/ for daily analysis on forex, commodities and indicies
Follow on twitter: https://twitter.com/tradingplace

#7 Trader

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Posted 01 July 2009 - 11:03 AM

QUOTE (Trader @ Jul 1 2009, 09:26 AM) <{POST_SNAPBACK}>
The chart below shows two of my rules of trading S/R. The first trade would have been taken when price moved towards resistance and then tried to move up again but failed as shown by the red arrow, this is a sign that sellers are more dynamic than buyers below resistance, so i sell, but i couldnít trade this setup coz I was in bed. The second setup is shown with some blue arrows, price accelerated towards resistance, but this time, sellers didnít show their authority below resistance instead buyers kept pushing the market higher denying sellers dominance. I took this trade and itís still live. My strategy gets me in before the breakout traders are in and if the breakout is a fake, I would have already locked in some profits or moved my stop loss to break even. This chart is a five minute chart, but for me the principle is the same, whether itís a 4hr, daily or weekly chart. I only trade near these levels of S/R, if a market is far away from these levels; I donít even look for a trade in that particular market.

Another easier way to look at the market is looking for higher highs (HH) and higher lows (HL) in an uptrend and lower highs (LH) and lower lows (LL) in a down trend. Buy on pullbacks when the market is making HH and HL near support and sell rallies when the market is making LH and LL near resistance. Reading price action like a sheet of music comes with experience, you have to keep practicing all the time, look at charts and donít just stare at price moving, but have some reference points (S/R) and look at what current price is doing on those levels. Practice with a micro account, a DEMO account wasnít good for me coz it was not real money, I think I only DEMO traded for less than a week. Print some charts and draw lines of S/R by hand, study those charts like you are reading a book
Some of the stuff is difficult to explain in writing


Eur/usd has been moving sideways since it broke the 1.4050 resistance level, we will see if the New Yorkers push it higher.
The Cable is still bound in the 1.6400 and 1.6500 range, a very tight range to intiate a trade, so i will just watch how price reacts to these levels. So nothing much is happening now on these 2 pairs, thats when trading becomes boring when there is not much action.

On another note i would like to find out how many people are interested so that i know how often to post, so far there are 3 people.
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#8 LadyMo

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Posted 01 July 2009 - 11:38 AM

QUOTE (Trader @ Jul 1 2009, 12:03 PM) <{POST_SNAPBACK}>
Eur/usd has been moving sideways since it broke the 1.4050 resistance level, we will see if the New Yorkers push it higher.
The Cable is still bound in the 1.6400 and 1.6500 range, a very tight range to intiate a trade, so i will just watch how price reacts to these levels. So nothing much is happening now on these 2 pairs, thats when trading becomes boring when there is not much action.

On another note i would like to find out how many people are interested so that i know how often to post, so far there are 3 people.


There is some news of high importance today, circa 2pm. Its USD ISM Manufacturing survey for June. It could bring some action to the two pairs. Lets see!

#9 Trader

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Posted 01 July 2009 - 11:40 AM

My eurusd trade is not looking healthy, we are now back to 1.4050 acting as support, if this line breaks i will close my trade for a small profit. There is no need to hang on a long position when support levels are breaking to the downside. If yu have a long trade, yu want support levels to hold and buyers to keep pushing the market higher, but when buyers fail to show their dominance above support, its the sellers who will be more forceful and as a trader you need to acknowledge that, by either taking partial profits on your long position or closing your trade.
Lets see what buyers have up their sleeves above 1.4050
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#10 Trader

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Posted 01 July 2009 - 12:33 PM

QUOTE (Trader @ Jul 1 2009, 12:40 PM) <{POST_SNAPBACK}>
My eurusd trade is not looking healthy, we are now back to 1.4050 acting as support, if this line breaks i will close my trade for a small profit. There is no need to hang on a long position when support levels are breaking to the downside. If yu have a long trade, yu want support levels to hold and buyers to keep pushing the market higher, but when buyers fail to show their dominance above support, its the sellers who will be more forceful and as a trader you need to acknowledge that, by either taking partial profits on your long position or closing your trade.
Lets see what buyers have up their sleeves above 1.4050

1.4050 held as support, buyers are being forceful above support, thats what a buyer want to see.
Watch out on GBp/USD, price is accelerating towards the resistance noted at 1.6500
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#11 Trader

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Posted 01 July 2009 - 01:02 PM

eurusd continues to move up, thanks New Yorkers.


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#12 Trader

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Posted 01 July 2009 - 01:21 PM


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#13 Pemt ©

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Posted 01 July 2009 - 03:36 PM

http://www.4shared.com/file/96740657/227e2...ver_Market.html

hello....before any of you get any big ideas

Posted Image


.The Real Pemt.

.No fugazy.


A Japanese proverb states that: "For a Samurai to be brave, he must have a bit of Black blood." Another recording of the proverb is: "Half the blood in one's veins must be Black to make a good Samurai." Sakanouye Tamura Maro, a Black man, became the first Shogun of Japan.


#14 homeless4ever

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Posted 02 July 2009 - 06:06 AM

QUOTE (pemt © @ Jul 1 2009, 10:36 AM) <{POST_SNAPBACK}>
http://www.4shared.com/file/96740657/227e2...ver_Market.html

hello....before any of you get any big ideas


Count me in trader thanks so much for reviving this thread , we look forward to your valuable info.

#15 Trader

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Posted 02 July 2009 - 08:56 AM

QUOTE (Trader @ Jul 1 2009, 02:21 PM) <{POST_SNAPBACK}>

Flexibility is key in trading, a trader have to change their mind quickly especially when you are trading short time frames. I was bullish the GBPUSD yesterday, the market broke out with great force, but the buyers failed to sustain their dominance. I think you know from the previous forum that some of my best trades are when a breakout fails, i normally take a position in the opposite direction to the failed breakout. For example the breakout from yesterday failed and i took a short position this morning, because if buyers fail to mantain their dominance above support areas, their efforts to push the market up is not credible (Vatengi vakatadza kukwidza mutengo nyaya yavo hapachina). The red arrows shows price accelerating towards support, when that happens i will be understanding that a break of support is more likely so i sell before the breakout (Rule number 3).

If you look at the market objectively, sellers are being more dynamic on the cable than on the eurusd.

Can you guys/gals read the text on the charts, it looks too small on my monitor? Let me know so that i can use big text


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#16 Trader

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Posted 02 July 2009 - 09:00 AM

Does my explanation make any sense?
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#17 LadyMo

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Posted 02 July 2009 - 09:50 AM

QUOTE (Trader @ Jul 2 2009, 09:56 AM) <{POST_SNAPBACK}>
Flexibility is key in trading, a trader have to change their mind quickly especially when you are trading short time frames. I was bullish the GBPUSD yesterday, the market broke out with great force, but the buyers failed to sustain their dominance. I think you know from the previous forum that some of my best trades are when a breakout fails, i normally take a position in the opposite direction to the failed breakout. For example the breakout from yesterday failed and i took a short position this morning, because if buyers fail to mantain their dominance above support areas, their efforts to push the market up is not credible (Vatengi vakatadza kukwidza mutengo nyaya yavo hapachina). The red arrows shows price accelerating towards support, when that happens i will be understanding that a break of support is more likely so i sell before the breakout (Rule number 3).

If you look at the market objectively, sellers are being more dynamic on the cable than on the eurusd.

Can you guys/gals read the text on the charts, it looks too small on my monitor? Let me know so that i can use big text



The text is a bit small Trader! I was tempted to use a magnifying glass on one of the charts yesterday laugh.gif



#18 LadyMo

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Posted 02 July 2009 - 10:00 AM

QUOTE (Trader @ Jul 2 2009, 10:00 AM) <{POST_SNAPBACK}>
Does my explanation make any sense?


I think you explain it very well, however i reckon one needs more screen time and reading Price Action to understand the fundamentals better.

#19 Trader

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Posted 02 July 2009 - 11:02 AM

QUOTE (LadyMo @ Jul 2 2009, 11:00 AM) <{POST_SNAPBACK}>
I think you explain it very well, however i reckon one needs more screen time and reading Price Action to understand the fundamentals better.

You can read a lot of books and follow a lot of good forums on trading...BUT NOTHING CAN BEAT SCREEN TIME. My mentor used to say to me that some of the things he saw in the market were difficult to explain to someone. Reading price like a sheet of music comes  with experience and experience comes with screen time. A mechanical system is easy to show or teach someone, but discretionary trading is very difficult to teach someone.

Your fav pair is gradually moving down towards 1.4050, where we will see a more resounding fight from buyers.

remember NFP is out today.
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#20 Trader

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Posted 02 July 2009 - 11:27 AM

QUOTE (LadyMo @ Jul 2 2009, 11:00 AM) <{POST_SNAPBACK}>
I think you explain it very well, however i reckon one needs more screen time and reading Price Action to understand the fundamentals better.

One for the Ladies http://www.forexfactory.com/showthread.php?t=177319
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