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TradeDirect365.com.au We provide a fair and effective platform for traders. Our aim is to shake up the established players and provide a compelling alternative. Our ASX CFD's trade the same as the underlying share price. Commission is 30% cheaper than IG Markets quoted price (Oct 2013) FX spreads are industry leading - Fixed 24hr 0.8 pip on AUD/USD, EUR/USD USD/JPY (no commission) You will not get requotes or any funny business with us as without the huge marketing budgets of IG and CMC we rely on word of mouth about the quality of execution. All client money is fully segregated with Westpac Bank (Tier1) Only our own company funds are used for hedging. ASIC regulated in Australia. Previous to setting up this business I traded 12 years earning my primary income from trading so I have a better understanding than other providers about traders requirements. If you have any questions about TradeDirect365 or related to CFD's and FX don't hesitate to get in contact with me. (Davin Clarke)

I was an eager trading upstart with a few trading profits from the dot com boom way back before the year 2000. I chucked in my job, sold my printing equipment and researched day and night to find the system to be the next George Soros. Does this tale sound familiar? Of course 3 weeks in I had found the answer, stochastics. I couldn’t believe how wonderful it looked as my eyes caught the signals generating the start of amazing trends. Why hadn’t anyone else seen how much money was available in trading pullbacks. The private jet was just around the corner. Maybe I could buy Christopher Skase or Alan Bond’s used one!!! So after adjusting my Stochastic settings to my secret formula (I think I moved the K period to 11), off I went to trade for a living. Now the reality did not quite fit the TV ads of me with my laptop by the infinity pool watching my account grow. I was watching signals on my large (for late 1990’s) 15 inch screens hitting the stochastic cross and then not magically going up like it should. Sometimes it would move lower, sometimes it would chop and every now and then it would move higher. Many times as I moved to a profit I would move my stop to break-even and then get stopped out. Eventually after a few losses I would take off the stop altogether and bail for a large loss just before a reversal where the market would shoot up. We’re now in 2013 and I look at markets a lot differently to back then. Market structure and corrective phases are what I focus on in my trading and how I teach clients. My view is that trading using stochastic or other momentum indicators in isolation creates fairly random outcomes without an understanding of the bigger picture. When we look at indicators our eyes often skip the failed trades and lock in on the successful ones. System developers often see this bias when evaluating and back testing potential ideas. Let’s review the 6 stochastic signals from an entry perspective on a Euro chart (attached below) and then look at it with a focus on market structure points. Signal 1 came after a weekend gap up and deep correction. Both this first area and the Signal 2 setup could have produced nice returns if traders had wide stops in place and managed to second guess the Fed meeting where price zoomed up. Signal 3 produced an entry after the vertical move up. There was very little follow through and would have been difficult to produce a positive outcome. Signal 4 had a little downside follow through but failed to trend strongly. Signal 5 had no follow through and failed and signal 6 failed after moving a few points to the downside. With trading the stochastic indicator in this example there is a conundrum. Take large stops to get the occasional out-sized winner but lose more on each loss, or take small stops and often get stopped out before a big move comes about. There is nothing wrong with using a momentum indicator but it needs to be in context with the market dynamics. Trading the first bounce after an exhaustive vertical move (Signal 3) is a different structure to trading the 2nd retracement of a range bound market (signal 2). I have developed an understanding of market structure to improve my trading and believe it is essential to create a lasting edge. Here is a few key structure observations which have provided me an edge when trading: The Gap and Trap. Point “A” Gaps are often exhaustive in nature, when they occur after a trending move. Over optimism has buyers entering the market at a price point where there is no-one on the sidelines willing to bid higher. Usually we see a small impulse move above the open high before traders start accepting lower prices. This is a key setup for me after a positive profit announcement and a prior run up in price and at times where there is an optimistic crowd. My job as a trader is to identify where the upward momentum stalls and capture a low risk entry as selling commences. Price in this instance moves in the path of least resistance. Think about this – If there are no more buyers on the sidelines willing to trade a higher price, no matter how exciting the news is the price cannot move higher. And as the first traders start accepting lower prices to close their positions it forces other traders holding a long position to contain losses and sell creating a snowball effect. Pump Fake. Points ”B” The pump fake is defined where price action thrusts above support or resistance and then reverses, moving back within the prior range that has developed. These spikes tend to shake out stop losses and set up break out traders positioned on the wrong side, forcing them to close their position and effectively adding to the price reversal. I have marked in 3 areas with a “B”. Tip. Have a look at the stochastic at each of these “B” points. The crossover at each had nice follow through. Combining momentum and structure will improve trade selection and timing. Key Message Working off specific zones that trap traders is a way to counter-punch. In boxing the counter punch when an opponent is off balance is a deadly weapon. Catch traders that have committed to a trade and capture profit as they acknowledge the dynamics have changed by reversing their positions. Contrary dynamics that surprise the majority are what creates directional movement.

Hi Richard, Just wanted to add a comment to your stop loss post. I agree with you on the money management requirements for a stop position to be set. I have no problem with stops being moved to breakeven although I believe the timing of stop movement is important. I have found that markets the majority of time tend to probe or spike multiple times in a range. This is where traders go through emotional stress as both long and short positions move from profit to break even to loss prior to any range expansion. If we take the view that retail traders generally lose to market professionals what market movement would cause the most pain to this group? In the FX market I would think that a range of 25-40 pips would be where retail traders do not have enough reward to risk and would experience the most pain from multiple market rotations. Moving stops in this area will result in a mixture of stop losses and breakeven trades and lessen the resolve of many traders to stick with their trade discipline. On range expansion I am in favor of trailing stops up to breakeven or profit. Where I see traders struggle is not understanding the context of the market and moving stops at inappropriate times. I am in no way criticising your post, just adding my thoughts from hard lessons learned.

That's me. Back on the Sunny Coast now after some prop trading in Atlanta US with Alexander Tzarvaras. Those meetings that I ran were fun but time constraints became a factor. Hope your trading has been going well Ingot. Saw the post about trader returns and thought I should write that good returns are possible but require the hard yards and a bit of independent thinking that most can't commit to. A hard way to make an easy dollar. Think the commissions to Comsec got up to the half mill + over a 2yr period. The chrissy presents were a bit stingy only a dozen beers on one of those years. Lucky I'm a beer fan.

I agree with you Bluehorseshoe on your comment. During the 18mth period my volatility and draw downs apart from the odd brain fade were very low. I built my account up day by day with low risk and trained our 20yr old babysitter/childcare to trade my account alongside me. I think it is the consistency of the trading approach with an edge over a large sample size that is important.

I had an 18 mth run trading 1 Jan 2006 to 30 June 2007. 333 days traded with total profit Aud $1,497,527. Ave $4497 per day. After brokerage costs of around $250,000 per year with Comsec Aot desk in Aus. Was one of their largest private traders at that time. That was my best return over a set period. Before that I had some average years and some good years. Probably doesn't compare with some of the guys from the US though. But I was trading from a few home computers with a trainee and occasionally my wife. The edge I had at that time is a lot smaller nowadays with the HFT guys. I trade now online with a few pro traders from Aus in the Fx and futures markets. Just thought this can show that it is possible if you can develop an edge over a large sample size.

I have an interesting dilemma with where I stand in this discussion. In my previous post I was upfront that I both trade and teach. I didn't make public my trading site so as not to spam or promote unduly. I have only posted a few times with no hidden agenda and would like to think there are others that are on this forum that do similar. I am a genuine trader and I trade for a living. I actually ran a free monthly meeting at my house for a few years to help traders on the Sunshine Coast, Australia. So I teach because I want to and enjoy helping other traders - but that doesn't mean I should do it for nothing (although I have in the past). The bigger problem comes from vendors who have big budgets and sales people with no trading experience flogging trading programs to the unsuspecting. All the traders here that have spent years in producing a skill set to make them successful find these parasites the most disgusting. Is there a way to filter the few professionals from the pretenders? Maybe a start is to help change newer traders perspective of what is real and what is fairytale.

Hi, I've read through these posts on the topic of vendors. I rarely have posted on any forum but find this interesting because of my situation as a full time trader who teaches. I have remained anonymous and not tried to sell anything through a forum. The hardest thing for new traders is differentiating between slick sales guys and genuine skilled traders. The slick sales guys usually have a larger sales budget and as they don't actually trade have the time to create an illusion of high quality teaching. The sales pitch appeals to those that have a need or desire to quickly change their financial status. What way would be best to filter the few professionals from the pretenders. Can we ask questions about their skill which is able to be verified independently. The answer of lack of it may help to determine their abilities. I would like to hear your opinions and ideas on this.

Sorry that I didn't explain the entry criteria. I was trying to get across the structure of the market needed before the trade setup. The higher low area is the entry area on the long side trades. I need to see a failed retracement at this point. This is where sellers are forced to cover with the previous price structure exhausting selling strength. The second exhaustion is on lower volume and a test of the first exhaustion. My entry is 2 bar high then an entry on the next higher tick for a long trade. I find my risk is small compared to potential reward. The setup I trade in real time. I can only show examples here in hindsight. This is a setup on the Dax I traded today

I find the best trading setups are where traps catch out one side of the market forcing covering of positions. One setup that I find very useful is best shown on a one minute chart with volume setting up conditions. I am looking for a low on an expansion bar and with high volume. I have marked it - Exhaustion 1. The second exhaustion has slightly less volume and forms after a retracement. This exhaustion bar is usually at new lows but can be at a slightly higher low. The theory is that these exhaustion bars get rid of the majority of sellers leaving the potential for a reversal to the upside. The entry is based on a failed move to the downside which traps sellers forcing them to cover. I expect a fast move to the upside, so if price doesn't move quickly I will close out. There is a few potential entry areas that I have marked. The reverse is applicable for downside trades. (The entry area for the short should read Lower High)

I trade a few thousand contracts a month on the Dax. For brokerage I found Advantage futures the cheapest at around $1.50 US per side. Funny I'm an Aussie who trades the Dax through a US broker. I used ninja-trader at first but found at peak times the system would freeze. I now use TT's X-Trader which is more expensive on lower volume but similar on higher volume transactions (excellent for speed). I would not recommend trading the Dax for beginners.