Ingot54

The market thought this was always going to happen - the event was a nothing-to-see here-move-along event. Chuck Butler of the Daily Pfennig had this to say tonight:

Wrapping up the "Hard Right Edge" Concept Hi John Continuing the HRE idea ... It really does not have much more to go, to be complete as a concept, and as a trading principle. You can think it through for yourself pretty much now. You do your analysis according to your written plan. You have your position size and stop orders already worked out. You know the next two upper time frame trends, so that you are not going counter trend. And ... like a hunter, you wait for the precise signal that will tell you to spring the trap! I can best describe this by illustrating a demo trade that I found on my platform (Forex). There a few basic indicators that I use - these are specific to Forex, and probably would work as well on Equities, but I do not make an recommendation about them - it's just my setup. I use a mixture of (specific MA's) on the main candlestick chart. I use a (specific) Stochastic, which tells me when the market agrees about change of momentum. I use a customized MACD which gives me momentum and confirms change of direction. I use a (specific) MA to give me rising/falling market direction. I use a Daily Pivot Point without (removed). John, I have attached 4 charts to illustrate the HRE concept. This is where a true setup reveals itself, and where trade management must happen. Of course we watch what happens on the screen, but MANY times we miss the best part of the move, simply because we waited too long for the pattern to "properly" set itself up. By the time we enter, the bird has flown, and we only manage to take the remnants, if any. Frequently though, we may encounter a whipsaw. These CAN be avoided by moving to a HIGHER time frame to find your setups, and then dropping to the lower TF to grab the entry. The concept is so simple and workable, that for many people it doesn't seem complicated enough to be able to work. Disbelief comes in, and we say ... "yeah, but ...!" A lot of traders will not use "simple" when "complicated" is available It may take a bit of getting used to, and practice. It may be that you are already doing exactly this. But if you are having trouble with failed trades/stop-outs and late entries, then the solution is to jump to the higher TF to spot the entries. You WILL miss a few trades, but be assured they may only be small moves anyway. But you will still pick up the bigger moves that began in the lower TF by seeing the conditions coming together on the HIGHER TF as well. You may get: FEWER trades but BIGGER moves ... and FEWER whipsaws and MORE spare time ... LESS stress and MORE enjoyment from your trading. And of course being a relaxed trader will help you to avoid the fog that comes in with intense analysis and irritating trouble-shooting (and excess screen time - added ). That is about it John. It is so long since I actively traded equities, that I forget how they flow now. But it is clear that prices of all instruments ebb and flow in waves. I am not a fan of Elliott Waves, but I mention "waves" to show that if you are trading with the strongest TF - which will be the HIGHER TF, then even a bad trade can get itself out of trouble, when the pressure of the main trend resumes. If you get into a bad trade, always look to see if the higher TF trend is still intact. If it is, then you stand a chance of riding out a small draw down. If not, then cut the trade quickly. You will feel the financial loss of course, but as well, you will feel instant relief and freedom as the trade is gone. You are then free to take a break, save the energy and burnout, and set about looking for another trade. I know you already know much of this John, but I hope what I am saying also serves to reinforce what you are doing correctly, as well as what you may give some thought to implementing. Kind regards Ivan

After 50 years of dealing with self-opinionated professionals, and listening to their psycho-babble, I have become pretty good at spotting frauds. You're proof. Thank you for the free assessment though Rande - about the same value as much of your other stereotyping and generalising. Look, I suggest that rather than losing your cool over what I write and attacking me, you might dig a bit deeper into your ability as a reasoning human being, and see if there is actually anything of truth and substance in what I wrote. You might notice that wherever I have called you to account on this forum (and there have been several instances of it) it has not been personal - it has always been in response to something ridiculous you have written, that is pseudo-scientific in sound, but baseless in fact. Your mis-representation of the true state of "Alexithymia in males" in your post #35 above, is a classic example of your tendency to attempt to dazzle the masses with a sprinkling of terminology that is used infrequently on trading forums. It is this that I take exception to - not any legitimate and caring attempt by you to provide an intervention that might actually assist traders to succeed. The authoritative literature appears to be in conflict with your views on this occasion ... why is that? Have you had a falling out with the American Psychological Association's Society for the Psychological Study of Men and Masculinity and the other authorities? You seem to have a fixation with being correct - and any trader will tell you that this is a definite negative trait to have as a trader. What must you be teaching your students with a mindset that you are the authority? And you not even a real trader? Might I suggest that as a wannabe counselor for losing traders, you ditch the "I'm right - you're wrong" mentality, and develop some humility. That way you will blend in better with those you are attempting to win over to your psychology coaching or whatever it is that you do. Stop the narcissism and get real with yourself - then you might come over a bit more legit than you do. Did it ever occur to you that: "After 20 years of couseling (sic)couples and watching males avoid dealing with emotional conflict ..." you were only dealing with a miniscule sample of "males with emotional conflict?" Your assessment is therefore biased according to the pathology of the males you counseled. Yes? ALL MALES don't necessarily have these kinds of conflicts. Do you? Did it ever occur to you that just because you may be seeing a few males like this, it does not mean that ALL males are alexithymic? (Thanks for the new word - you will see that I am using it correctly too:) ) You seem to have a problem with generalisations, and an obsession with being right. Is this correct? Please contact me privately and we may be able to deal with some of these issues. I have a course ... some DVD's ... a work-book ... And if you knew me, you would know that luck is the last thing that influences my life, though the well-wishes were appreciated - thank you. Your validation of me as "proof" needs further clarification: 1) Proof that my spouse is trying to reconnect to me? 2) Proof than I am emotionally aloof from my spouse? 3) Proof that I have an observant mind? 4) Proof that you don't see anything different? Please clarify ... You see Rande, I am not attacking you personally, and I am not wishing you "good luck" or "have a good life" .... the sorts of comments made by petulant little boys when caught out telling whoppers ... no - I avoid that stuff. What I want you to do, as a professional, is to hold a debate ON TOPIC, and to desist from throwing in red-herrings or straw men every time someone asks you for proof of what you are saying. If your credibility is taking a dive, you have to look no further than the mirror for the reason. Traders have been lied to for so long over the past 15 years and more, by marketers and charlatans, that they spot one a mile off today. You sir may not be one such ... but you are surely dressing like one. Please answer the comments about Alexithymia as I posted, and clarify why your statement: is at odds with the scientific and psychological literature on the subject. Maybe it is time you DID bother to enter into some discussion, instead of pontificating, then running hard in the other direction, or hiding behind deflections. No one cares if you got it wrong - they do care if you lie about it.

Cheers Neo The idea of "suing" was more a way to shut it down and expose the scam. I doubt an individual or even a group of individuals could accomplish a successful law suite. I actually have a "silent" email address just for this purpose - that's how I know the spammer is connected to the advert. There is no spam ... suddenly after the connection to the advert, there is spam! In Australia over the past 3 years there have been about 4 cases where spammers were fined over $2 million! We take our spam seriously down here! :rofl::rofl: Thank you for the reply, and the suggestion though - appreciated.

Trading the Hard Right Edge Good morning Ivan Well its morning here and I am not sure the exact time difference between us. Its 8am as I write this. I hope all is well and you are getting back to some sort of normalness out your way. We have bitter cold and even snow that turns to ice very quickly. Makes driving more difficult. I looked at the thread you started on TL on "Breakthrough moments" and see that some very good posts have been contributed. I would like to add a post but when I think of breakthrough moments I think that consistency follows and even trading success (profitability) and at that point I can offer some valuable insight. I am having many little "awakenings" in my learning as I am sure everyone has and still does no matter how long they have traded for. I don't want to change direction of the thread to someone looking or working towards their moment without talking with you first, so I have not added a post. The 2 weeks off has done me well and I am going to sit at my computer today and look at the market. I don't plan on trading, but with my trading plan I will start to get a better feel for what I am looking to do. I have gone over the plan and I think it suits me but will take focus to use it every time, and then I hope it becomes second nature. I am wondering what your thoughts are about my plan and would like to hear about the right edge when time permits. Its almost time for the open so I will end and say thanks again and hope to hear from you soon. Kindest Regards John ************************* ********************** THE HARD RIGHT EDGE Hi John Well I have pretty much left you alone, except for an occasional email over the past couple of weeks. It is 3 weeks today since your initial email to me, and I am sure you are already a much more thoughtful person regarding your trading, and what you are trying to achieve through your trading. Congratulations on making an effort to change. It does not matter what you write on that thread - Breakthroughs That Led to Trading Improvement and Success. - Traders Laboratory Forums I am sure it will be on topic if it represents what you feel has been a breakthrough moment in the past. We all have them, and usually plenty of them. I am still learning new things, and just this week I made some decisions about my charts, that has simplified them and made the tech stuff clearer. I removed one of the indicators I previously thought was indispensable, but in looking back at trades, it was hardly ever needed, and pretty much followed one of the others anyway. Now - regarding the Hard Right Edge concept .... There is nothing break-through about it in the sense that it is innovative. It is not - it has always been the case that price unfolds on that part of the screen, and we do NOT know what is going to happen next. All we can do is know what worked in the past when a certain chain of events occurred, and then REACT to what price is doing. That reaction will be based on the higher probability advantage our strategy tells us is setting up. Think back on your trading education. If you read text books, they have probably "conditioned" you to "see" setups that have worked out nicely. You might see MACD crossing, a pin-bar candle (narrow hammer, or shooting star) rising volume and maybe RSI above/below 50 and trending up/down nicely. The text then goes on to show you that the trade made 4 points/60 pips or whatever, to prove their point. The writer is well respected in trading circles, and has a beautiful website, and "the $197 Course." Naturally you nod your head in agreement, and eagerly lap up the next chapter, where you learn even more setups that have worked out IN THE PAST. There are several other setups in the book, and you remember that these are similar setups (to what) you read elsewhere, so it must be right. Then (after this) remember any (training) videos you saw. Many of them also point to a setup and show how and where you "would have entered" and where the take profit point "was". Many videos (presenters) on the Internet (Youtube) are now a bit smarter than that - they know traders don't want to look at what "would" have been the setup, they want to see how the "$197 method" would have traded TODAY as the action unfolded. So they either shoot their video and move it forward frame-by-frame, showing what price does that conforms exactly with the strategy; or they say: "Let's pause the video here, and come back in a couple of hours to see how that worked out." Now some of these guys are genuine, and some are out-and-out tricksters. Like you and me, they have to live, buy groceries and pay the utilities. And they want the nice house and car, and they want these things FAST! But there is NO fast road to wealth if you live honestly and deal truthfully in this world, without hard work and commitment. And I can tell you, John, you are already AT "fast" ... you ARE there ... there is probably NOTHING left for you to know, except TRADE THE WAY YOU KNOW YOU SHOULD. So how do they short-cut you and make it look like the trades are genuine? Many ways. They can make several videos, and just publish the ones that worked out. Or they can just film away until a setup occurs, and then edit the film to only show the select trade. They can make and pause many videos, and only show the paused ones that DID work out. Occasionally they throw in a failed trade, to show that they are "genuine" and that everything has an occasional failure. Bottom line - it is all leading you to grab their system/indicators/course/signal service and so on. But I can tell you John, you already have what it takes to succeed. You have had enough experience now to be able to make a winning trade or two, and you have the honesty to look back over your plan, and see where you either messed up through not following strictly (which can be corrected); or you did follow exactly the plan, but it simply did not work out "this time", which we expect. You know that from time-to-time you will get the outlier ... the "home run" trade of more points than you imagined. And you will get the target amount sometimes, and sometimes take a hit. That's not unusual. What you are, as a trader, is a manager. You are managing an account for JOHN. Are you a good employee? Are you sticking to the company policy of culling the losers? Are you setting contracts that are in accordance with John's specifications? Are you taking the insurance (stops) that the company policy dictates? And so on ... according to the strategy, trading plan, business plan etc. Or are you a rogue trader, who varies the position size when "it looks like a good setup." or who lets a trade run further into loss "because it looked like a reversal was likely"? Does the cost of brokerage out-weigh the cost of the loss? Would it be more prudent to scrap the trade, pay the brokerage, and wait for another setup? As you know, good trades work from the outset ... there usually is little doubt. Now you may think this has nothing to do with the Hard Right Edge (HRE) ... but it does. I am a story teller of sorts, and it takes me awhile to get to the point sometimes. But I mentioned the idea of being a manager of "John's a/c" because as a manager you are entitled to REACT ONLY TO WHAT THE MARKET IS DOING NOW! What the market is doing NOW is only shown on the HRE. Of course we need to do our analysis, understand that we are trading with a trend, and understand the higher time frames too ... all of that is STILL valid. But once we are IN a trade, that must move to background, and becomes the governor of your decisions. The ACTUAL decision can only occur as a result of the next price bar As a trader, you give up your freedom of choice (and I may write about some of this stuff on the Traders Laboratory threads sometime). You only have permission, as the manager of someone else's a/c, to operate according to the stated rules. Otherwise, you deserve to be sacked. You have been entrusted to make money for JOHN, and as such you are being paid to do exactly that function. You do not have any right to explore, experiment, take risks or to do anything outside of the stated intention of the strategy. Ok mate - I have set a bit of background there for you ... and in the next email I will get down to how the HRE works, and how we as traders must use that activity to manage our trades. Kind regards Ivan Food for thought: This is an update on Paul Rotter, who was/is the world's most successful trader. You may Google for the original story - this seems to be an update of an other story on him http://www.trading-naked.com/library/paul-rotter-trader-monthly.pdf Interview with "The Flipper" Paul Rotter | TraderDaily

Silly me! I found nothing under "Alexithermia" in men, but I guess "*thermia" in men might mean he's a hot guy ... and for females, she might be a hot chick! :rofl: But if we are discussing "Alexithymia" then that is also something I had never heard of until you threw it up just now. Thanks ... you have enriched my knowledge. The Google article I read on it: NORMATIVE MALE ALEXITHYMIA had this to say: "In light of these claims we must ask is it really true that men have an "inability to identify their feelings"? Or that they cannot sense inwardly and "feel feelings" as most women purportedly can? In one of only a few studies which found a higher prevalence of alexithymia amongst males, the following Finnish study found that men assessed with the Toronto Alexithymia Scale (TAS-20) scored higher than women on factor 2 (difficulty in describing feelings), but there was no gender difference in factor 1 scores (difficulty in identifying feelings). This is an important finding in regards of alexithymia because an inability to identify feelings constitutes the heart of the alexithymic deficit in emotional cognition, from which the secondary difficulty in describing feelings naturally arises. If the difficulty in describing feelings does not result from the prior inability to identify feelings, but rather from repression or cultural proscription to "keep your feelings inside" then we are dealing with a different phenomenon altogether from alexithymia proper. Men may have the words, but they keep them inside." According to your own theory (Alexithymia) Rande, this article seems to reveal it does NOT hold water. So it seems: " ... men are (generally) less skilled than women in their ability to describe feelings, he is demonstrably incorrect in claiming that men are less able to identify specific feeling states in self or others in the true clinical sense of alexithymia. Here it would seem that Levant has failed to discriminate between the separate factors of (1) identifying and (2) describing feelings." I submit that your flash-word, "Alexithymia," is nothing but a red herring in this conversation Rande, and designed to boost the awe in which we are supposed to hold you, as an erudite psychologist, resident on this forum. Further, if your textbook is telling you otherwise, I suggest you read a little more widely: "According to College of New Jersey psychologist Mark Kiselica, past president of the American Psychological Association's Society for the Psychological Study of Men and Masculinity, most men are not alexithymic: “it is not a 'norm'”. Kiselica reports that a literature review showed only a few studies found that males have slightly higher rates of developing the disorder, while the majority of studies found no differences between the genders, with overall about one in 10 people of either gender showing any significant level of alexithymia." Is there any greater authority than the American Psychological Association's Society for the Psychological Study of Men and Masculinity? Your attempt to dazzle the forum with little-known science, and buzz-words may have come a little unglued, Rande. But I recognise your contribution was a good attempt to influence people. Now, imagine if some poor trader actually thought that you understood what you are talking about, and signed up for your therapy. Thousands of dollars worth of theoretical stuff - DVD's, workbooks, one-on-one time and so on ... but it has been my contention all along, Rande, that until YOU actually become a trader YOURSELF - even on demo - then you have very little to contribute towards the success of any individual in his trading activities. What would you possibly be trying to tell them, when you don't and can't, trade yourself? I leave the last word to the researchers: "In the final analysis this superficial conflation of alexithymia with maleness may reflect the influences of contemporary gender stereotyping more than it does the findings of rigorous scientific method." Do you still hold that it is: "Not really worth the effort to respond beyond that." I think you have quite a bit of responding to do. Make the effort! Standard stuff indeed!:haha:

John's Written Plan Greetings Ivan Hope all is well and conditions are improving for you and your family. I have been away from the markets for 2 weeks and only one day did I actually turn on my screen, just to take a peek. I have spent the last couple days going over my trading plan and found that a person can really find out things about themselves and their personality when doing this. It has smoothed out some of the rough edges and helped me better focus how I view things. I look at a chart and I see trend ... I don't see counter trend I see trend and my thoughts are to go with trend. I have traded counter-trend and its just not comfortable. I don't see counter-trend when I view a chart. Two of the guys that I Skype with see counter-trend and I must be true to myself. Just wanted to pass that along to you as I think that was of importance. (Hope that made sense). I would be greatful if when you have some time you could read my trading plan. I think I did a good job and am open to any and all suggestions. I feel as if I am moving forward and view anything you say as steps in that direction and not negative. Below is my trading plan Kindest regards John ************************* ************* John's Trading plan The trading plan outlined here is specific for me and my personality. The plan will detail my trading strategy and the rules that I will follow. I will focus on one strategy and become the best at that strategy. Certain conditions must be met for me to put my hard earned money at risk and with good money management and risk control I can have confidence when placing a trade. My Strategy: I am a breakout trader. I will only take trades that breakout from a pre-defined daily level on my chart. I will go long or short in my stock on breakouts. I will use a daily chart to determine the trend of a stock and the level it is headed for a breakout trade. I will look for a consolidation below (or above for a short) my stock for an entry to my price. Sometimes if there is no consolidation I will look for price to breakout at my price. I know that the higher time frames dominate the lower time frames and I will make my decision for my entry on the 5 minute chart. As with the daily I will look for the consolidation of price action on the 5 minute chart and a break of that to my target. If my stock is at my target level and hasn't consolidated I will look for entry at the target, unless the stock is over extended. I will also use the 2 minute chart. I believe that momentum begins on the shorter time frame charts. I will use the 2 min chart to help find an exact entry and look to see if volume increases, as that will help to determine interest/strength in my entry level. I will also have a chart of the SPY's on a screen to see the overall direction of the broad market. I will also have daily levels on my SPY chart to notice support and resistance levels. My levels on the daily chart all come from the Highs and Lows of past days. Nothing in-between. The high and lows of days are the extremes and seem to have the most importance. I will only trade WITH trend, long or short. To determine trend I will look for divergences. I will look for a stock to have come to an area of support, hold and reverse up (on longs). I will look for increased volume. I will look for the stock to make higher lows and higher highs as well as the broad market. I will not trade a stock that has large swings where I cannot determine its trend/direction. I will look for news releases or announcements on my stocks that may come out in advance and have an impact on my stock. I will also look for daily news announcements on the markets and will not trade at or just after the announcements. I will allow the market to settle and absorb the information. I will also have a list of all the stocks I trade with their earnings report dates listed. I will look for a minimum of a 2:1 risk reward in my trades. Sometimes a stock will breakout of an intraday high (or low for a short) and my stop will be a few cents below the breakout point. I will look at the Higher trend on a higher time frame chart on pullbacks and may even sit with a small drawdown if the negative action on the shorter timeframe doesnt affect the higher timeframe. My main goals are : To never freeze on my stops and accept the losses. I do not always have to take my maximum loss if I have evidence that my stock is going against me but if my max loss is hit I have accepted the loss before I take the trade. Prior to taking a trade I will have a profit target level on my entry chart established. In my opinion this is where being a descretionary trader will come into play. Sometimes price will fall short of my target price and reverse. I will look at higher time frames and broad market. Sometimes price will hit my target and consolidate where it could reverse or continue higher (for a long). As my share sizes increase (in the future once I am consistant) I can take partial gains and leave most to work. At times I will exit most as I see conditions change with the broad market. And there will be times that my stock runs past my target and can give me 10:1 or even 20:1 risk reward. This wont happen often but it can and will. One thing for certain. If I don't take every trade that my plan says to take I will not be in a position to have winning trades. My goal and mantra is to TAKE EVERY set-up that my plan calls for. Only by doing this can I build the discipline necessary to become a confident trader. I believe that confidence is born from discipline. I now have a trading plan that I can follow. I now have rules in place. Listed below are my rules that will be in front of me at my trading desk. The night before or the morning before the market opens I will consult my daily charts for the levels that I will trade and establish entry and risk/reward potiential. 1. Is there above average volume? 2. Is the trend with me? 3. Is the stock showing greater relative strength than the overall market? 4. Is the intraday pattern nice and tight without big volatile spikes up and down? 5. Is the breakout coming off an intraday consolidation instead of a chase of a vertical move which should be avoided? Summary: I have outlined the trading plan and a checklist of 5 important market factors that must be met for me to take a trade. As I am still trading 100 share sizes and its difficult to scale in or out of a trade I am looking to increase share size to 200 and then can implement better money management rules.

Just a heads up on what I think is a rogue advertiser on Traders Laboratory. My email box has been spam-free for about 4 weeks. Tonight I clicked through the advert pictured below, and entered my first name and email address in order to reach a download link for a free eBook ... standard stuff. However, within 6 hours I have received 4 spam emails. It is too coincidental. I am posting the particular email subject lines below, in case others have been spammed by exactly the same people, following clicking on the same advert. I have reported the issue to Google Ads. These are the email subjects: 1) PIPNOCULAR ... First Forex Robot That Makes Millions from $250 2) I Love Hardware.info ... Your Computer Repair Giving You Headaches? 3) ach@nacha. org ... ACH transaction canceled 4) Rebecca Russell ... Re: Career Finders Needless to say I did not click on anything within the body of these emails, nor did I attempt to unsubscribe - another way they know they have a "live" email address. If anyone who clicked on the advertisement below has also been spammed by these same people, then we may have a case to prosecute the company who is abusing the email Privacy Act (or not!!) Cheers Ingot

Before I would accept, as an assertion, that and I would have to see the source of that info to make sure that it is a grounded assessment.

My post makes #126!! What a pity I had to read through 7 pages to get here. Many comments were worthwhile, but ... Phantom - do you still have plans to summarise your ideas into a .pdf file or similar? I'll come back in mid July ... this has been an exasperating read! Is there a needle in this haystack, because ...

Thank you OT. Still reading the Kroll .pdf and appreciate the quality of that document. I hope to participate in this thread. Cheers and thanks again Ingot

Understanding the value of the Rules Hello Ivan It looks as if the worst is over for you weather wise unless I missed something. I am glad to hear you are well and many years from now you will have some more interesting stories to tell your grandchildren. Things are well here as last week was productive and much time spent with my daughter. We have very cold weather here which is typical and have had a lot of snow. This is my second week away from trading and I did turn on my screens yesterday for a bit and looked things over a little. No trades and not even a desire as I am very comfortable with my decision to allow myself this time away. Thank you for the very detailed e-mail with explanations. As a novice trader with my mentor/coach he did have his students make a trading plan but I didn't realize how valuable that would be. He traded only pivot points and that's what he taught. I since found that trading pivots and his style of trading didn't suit me and my trading plan was useless. I understand that there are many different ways people can trade and have different tools and that's great but its also important to find what suits your personality. You touched on some really excellent points and I am eager to condense my strategy and put it down on paper and ultimately it will become my very own trading plan. I think I may have to smooth some of the edges along the way but now I will have a foundation. I understand the importance of the check boxes now and you are correct in what happens without that and how the mind (my mind) works and you almost fool yourself. Being disciplined and following rules has never been a problem for me (well mostly) but in this instance I feel I have been all over the place with no set rules to be disciplined with. I will spend my time going over my trading plan and my rules. I wanted to start sooner and was so glad that you suggested I do that. I remember in the TL post you made that you said that you stopped being a jack of all trades and focused on one strategy and learned everything about that. I think you said something to that effect. It made sense. I will put my trading plan on paper and when I have it to where anyone can follow it as you mention, I would like to send it to you and get your thoughts. I am going to take my time and really go over everything. Again many thanks to you Ivan. Everything you have suggested to me has been most positive and even though I haven't traded I am feeling less lost and that's a BIG thing. I will send my Trading plan off soon and I am eager to also hear about the right side. Thanks again John

IS MY SYSTEM WORTHLESS? First part here In this second part of the topic, we begin to really address how to operate your trading system Part ONE asked the question: “Is the Trading System I bought useless?” in the context of “Comparing “Hindsight with Reality.” What I meant was this: It is very easy to throw together a few Moving Averages and a few Indicators, and call it a SYSTEM; and then it is just as easy to find a chart the demonstrates how good this system functions, in choosing winning trades. The scam system vendor from a nice, bright Internet site, is really coming up with great trades … in HINDSIGHT. He is NOT showing you the trades AS THEY HAPPEN. What I am doing, is the reverse. I am “cherry picking” a section of a chart where the system worked nicely, purely to illustrate THE WAY TO OPERATE A SYSTEM, not to prove that the system actually works. My approach is to show you how to read the chart at the right hand edge of your screen, candle-by-candle as the price reveals itself. That is the contrast between “Hindsight Trading” and “Reality Trading.” In the last paragraph of the last post, I said: “But notice that the MACD histogram has crossed UNDER its signal line, and is falling. This tells us MOMENTUM is slowing … nothing else. Next, the RSI is still ABOVE 50, and parallel to the 50 line. No conclusions to be drawn there either. We need to wait another hour, to see what price is going to do.” Refer to Chart 1 below We don’t have that situation yet, so we need to wait until we do see the fast MA, the 5, cross the slowest MA, the 34. In fact it does not happen until 7 hours later, at the close of the candle illustrated below. There is a decisive move down, and after the candle closes, we can see that the MA’s have actually crossed. So, after waiting patiently – I call it “stalking” the trade – we finally have the alert AND the trigger. Refer to Chart 2 Note: This MA crossing might not have been seen on the “entry candle” until the candle actually closed, and certainly had the following candle been a rallying candle, the MA cross may even have disappeared – thus triggering a whipsaw situation, but not necessarily negating the trade. These are the risks of trading. Had the 4H chart remained in a downtrend, we would not have been stopped out of the trade. That’s for another day. We enter the trade immediately the new candle opens. We can expect some draw-down because as mentioned earlier, price is dynamic – it ebbs and flows like a living thing, as it progresses. There are two other things to take note of here: The MACD histogram has crossed DOWN through the zero line, and the RSI has not only crossed down through the 50 line, it has revisited the 50 line and then dropped sharply away again, in the direction of the possible new trend. In this style of trading, you do not know where your take-profit level will be. You only know you are a part of a very good trend, and you claimed your entry at an excellent point in a pullback. These trades can run for days, because they are based on the 4H charts, which are les susceptible to “noise” in lower TF. It would be easy to say here that our trade made about 130 pips, based on the crossing of the medium MA – the 13EMA, by the fast, or 5EMA on the 1H chart. But this is not the case, unless you have enough experience to use skilled discretion in closing the trade. The trade actually closed out with around 70 pips, based on the system rules. I closed the trade at that point so as to illustrate two things: The first is that we can have an arbitrary rules-based strategy to tell us the conditions under which we will close the trade, no questions asked! The second thing is that we can use our thinking (discretion) and experience, to remain in “good” trades long enough to extract the maximum pips, but not so long that we give back more pips than we really needed to. Refer to chart 3 below, for an arbitrary closing signal … the crossing of the fast and the medium speed EMA’s: Closing the trade here gave us around 70 pips, as we said, but had we managed the trade from the 1H chart, we would have made around 120 pips – far better it seems than the pips made following the 4H chart. Or so we think … we are not finished with this lesson yet. Which is the best strategy for trade management, and why? Refer to closing point on the 1H chart. chart 4 below. The better action here is to remember to check ALL TF before making a decision about closing this trade. If we checked the DAILY chart, we would see that the DOWNTEND is still strongly intact, and we are experiencing a pullback on the 4H chart, but not a true signal to close the trade. The best situation is to remain with the 4H chart, and manage the trade from there. Why? Because the RSI has NOT crossed the 50 line, and the MACD has NOT crossed the zero line. Further, on the 4H chart, the MACD is very flat – it does not look like it is really wanting to rise much further. You will notice we are not losing many pips in the pullback. Experience teaches us that if we follow rules in trading, we can come out of scary trades as a winner. In this case, we have the CONFIDENCE of a powerful DAILY trend backing us. So what you may think is an error, in not using the lower TF – the 1H – to manage the trade, is actually just consistent application of the rules. Failing to do this, could well have cost us hundreds of pips at other times. By the way – by applying this same strategy to the DAILY chart, we could have scooped about 550 pips, and the trade was still running. Maybe we could have made more pis .. maybe fewer … we don’t know until our trades are closed out. Refer to this nice DAILY Chart, chart 5 below. There are 550 pips in that trend at the point we see it. Trading is full of hypothetical situations. You can only make your rules and stick to them. The situation about the trend continuing down in the higher Daily TF, could have been written in your journal as a post-trade comment, and certainly an important case made for the future, to allow for such circumstances in the rules. There is no substitute for screen time … and more screen time. One swallow does not make a summer, and one great trade that works out, by manipulating the rules, does not invalidate the rules. Rules should only be amended when a benefit to do so can be demonstrated consistently over time. If you can bend and break the rules so easily, then they are not rules at all … they are guidelines! I can tell you, good traders don’t have “guidelines” … they have iron-clad rules! Finally, had we been trading the DAILY charts, through following what is going on in the WEEKLY TF, and taking entries from the 4H charts, we might have enjoyed a trade of between 1000 and 2000 pips … and the trend is still running. A bit better than 70 pips … or 120 pips! Longer trends have immeasurable benefits to us – the least of all is the stress-free method of trading. I hope I have been able to show the benefits of a few things here: 1) Higher TF trades can be just as successful as scalping the very fast TF and with less stress 2) Trading decisions are made from the reality of the right-hand-edge of the screen, not hindsight, or setups 20 candles earlier 3) Using multiple TF can be of huge advantage to traders regardless of style 4) Following the rules strictly can actually have an enormous positive impact on your account 5) Rules can be amended based on consistent evidence from your trading journal 6) Following the rules strictly has an enormous reinforcing effect on the traders confidence in his method, and in his ability as a trader. CONCLUSION A traders failure to understand and apply a system consistently and accurately, speaks more about his lack of attention to detail and rules, than it does about the efficacy of the strategy employed. Rather than blame the system for failing to deliver the profits promised on the website, traders should first of all be certain they are trading a simple system – one that they can easily understand, without too many indicators and filters. We have seen how a simply devised forex trading strategy DOES have the ability to make pips, without the need for more complications.Then it is easy to accept responsibility for our own trading decisions, and NOT blame a strategy that is over-size for our current skills. Quite often it is the eagerness of traders to overtrade, that is at the root of their problems. There are many virtues successful traders need to have, and the chief amongst them would have to be patience, focus and discipline to follow simple rules. A poor system in skilled hands can do as well or better, than a sophisticated system in unskilled hands. And how do you get the skills? Certainly not from a system purchased over the Internet! Skill is developed, not purchased. You acquire forex trading skills through screen time, practice, working under a successful mentor, engaging in forum conversation with quality contributors, learning about what drives the forex market, understanding your indicators through and through, watching what happens to price on different TF simultaneously, and of course the golden trio: focus, commitment and consistency. In one word, these three qualities add up to … discipline! I hope you enjoyed this two-part series of posts. next post will be much shorter, but I will post something useful to your trading bottom line. Posted in my blog: http://forexapplepie.com/

Why write down your RULES? ... and market manipulation! Hi John All good this end - hope you are going along ok too. You said (below) that you "don't have any set rules", yet you were able to tell me pretty much what it is that you do. This is the beginning of your rules ... you already have a strategy. Now - what is essential, is to GET IT ON PAPER. This is very important, and can not be stressed enough. If you are to develop consistency in what you do, you have to check all the boxes. But you won't be able to do that if there are no boxes to check. This is what happens ... * You have a mental picture of how you approach the markets ... or your trades * You look at all the information, and you are unconsciously already forming a bias * Many of the (imaginary) boxes will be checked as you go, but the subconscious will continue to over-look some boxes, because of the bias you have unknowingly formed * Some markets will be your favorites, and you may skip some of the boxes because you "already know 'x' and 'y' about it" * If you over-look just ONE critical detail then it does not matter what else you do - everything will count for naught * If the boxes are not checked, then it allows you to be free of the discipline of following good practice eg Money Management, Position Sizing, Trading in a consistent TF, Trading only WITH the trend and not trading counter-trend, not trading before/after news releases, and so on - you may be able to add other short cuts you are tempted to take that you are aware of, that amount to inconsistency Only when you are able to write down on paper what you do, so that any other person can follow it, can you be said to have a plan. Further, having that plan in front of you creates a written record of WHAT YOU DID - not just what you must do - and as such, already provides the 'bones" for an autopsy of both winning and failed trades MANIPULATION ... PROOF Now - here's something I noticed a few years ago when I was trading stocks myself. For a few days before major news was due for release, the price of the stock would tick up. This can only point to insider activity. We live in an imperfect world, and the temptation to make a few bucks illegally is no longer respected - indeed the world will think you are nuts if you do NOT take advantage of insider information. But far from being hurt by this, you can learn to ride along with it. The insider activity is seen in the charts - it will pick up more each day as triggers are set off in scanning software that detects the movement, and even more traders will get in. And even more insiders decide to use the information - or it is passed 'word-of-mouth' to friends who promise to 'keep it to yourself'. Now, the question is - do you take profits BEFORE the news release, or afterwards? Most stocks sell off fast after news, because the news disappoints the market - it was not as good as expected. Or the insiders all dump and take profits - many of them one-timers in the markets, and consider $300 to be good pin money! Sometimes the markets will jump because the stock had been down-ramped prior to release, and the insiders are ready with contingent orders, to snap up the cheap stocks getting sold down. Here is where you can use contingent orders - buy stop or sell stop orders at certain levels. And you can set limit orders to take profits. Always be prepared to leave money on the table for someone else. Do not be the last 'greater fool' - if you know that theory. And if a stock rockets, don't wait for it to move even higher - take your money out and be contented with the gift. How many times have other profit takers beaten you to it, because they were happy with the profit? It is not necessary to wring every last dollar from a trade. It is not necessary to get out near the top, or buy in near the bottom. All you want is a slice of what is on offer - leave the action to those who drive the market. As far as taking profits 'way too soon' - that is relatively easy to fix. Keep in mind the reason you entered the trade. Is the price still moving with the HIGHER trend? And the TF above that one? Is the reason you entered still valid? There are times when you HAVE to take smaller profits of course - and this may happen many times in a row - markets do change over time. But there are also times when outliers occur - events that will give you 10 times the target reward. You do not have to get out at an arbitrary profit, unless the conditions are just the normal daily swings. There are times when a big move is under way, and you may even need to take a small drawdown to stay with the higher TF signals. Your plan has to be flexible in your profit-taking criteria. That's about it for one day, John. I will address trading the right hand edge of the screen next time. Kind regards Ivan PS - You will soon pass your 2 week mark - congrats for the effort you are putting in. It doesn't really matter if you did have one or two peeks at the screen - it is entirely up to you. But what you do need time away from, is the analysis of your stocks and charts. This is where your mind needs to create space - let the fuzzy stuff fade away

There are always plenty of opportunities to respond to things people say. I don't know if I tolerate fools or not, because I tolerate everyone. I was not born clever, so I look up to everyone as a teacher. And that's the way to enjoy a very long and fulfilling life. I am 112 years old, and have outlived 7 wives! I have a few children and several grandchildren, and am currently trying several times a week for more children of my own! My wife is currently resting ... ! I have no doubt that "The Force" is indeed with me! :rofl::rofl: Why is it that Angels can fly? Because they take themselves so very lightly!

:rofl: It's a hot one ... and daring indeed is the man who attempts to take it on without the necessary diplomatic skills! It's not all that hard though. Regardless of what kind of shoes you wear, your statement of the true choices apply equally across the genders ... and across the spectrum of participants. Unfortunately (or fortunately if you are at the desired end of the spectrum) the spectrum of trading skills ranges from the hopeless-but-hopeful at one end and the accomplished-and-competent at the other. Any attempt to pigeon-hole traders according to gender is just a waste of time - interesting, but still a useless and distracting exercise. There are some reputable female traders and coaches (Raschke, Toghraie, Horner spring to mind) but really does it matter? I love to chew the fat, but this week I'm all about focusing on my own trading. I really won't have a choice soon - I am near the end of one life's journey, and the boat that brought me here will soon be burning. If I am to survive (and I will) I will need to dispense with this useless chatter and be more disciplined and focused. There is no turning back.

FXGirl - you have a philosophy of trading after my own heart (almost) - and I fully support your views on the reasons behind success ... that is a great list, and truly represents the required ethic. Gender has little to do with it. I would think: * aptitude * attitude * motivation * insight could also be added to the list. Maybe the gender differences (if they exist) might relate more to the idea that women probably don't force themselves to persist in an occupation that is unsuitable to them. And that might be related to the fact that the colloquial term "macho" is seldom if ever, used to describe a woman! The 19th and early 20th Century models, having Dad as "the breadwinner" still persist in the psyche - look at my attitudes to this issue as a prime example of that. And this might be why men struggle to "prove" they can succeed. The inherited psyche of (the older) women regarding this issue, is still a little bit novel, perhaps, in that they are yet to become of age in the corporate and income hierarchies. I personally feel that a woman still has a lot more choice in these areas than men do. Regardless of how equal a women becomes, the fact will never be eroded that the genders ARE different, and DO bring different strengths and weaknesses to the table. That is probably why I truly respect the views of my wife when we discuss my trading activities. She has an impartial perspective that is not burdened by the pressures I am feeling. While it is I who wants to make a transition from my current occupation, to a system where I can grow capital through trading activity, it is she who can see things that I overlook. But I still filter her comments through the filter of my own knowledge of the markets. She doesn't have the insight I have, but I don't have hers either. I think she would make an excellent trader - if only I could get her addicted! But I think she values too highly the privilege of making a secure home for us all, above any material pleasures derived from proving she is equal to any man. Of course she has nothing to prove.

I am not a mysogynist, FXGirl, but I wonder if women are truly happy now that they have been emancipated from the ironing board to the board room? Who would exchange the security of home duties (why are they seen as female slavery in a family where the breadwinner is male?) for the insecurity of the corporate ladder??? Any woman who thinks that being "freed" from the duties of keeping home and being there for the kids, is less desirable than having to pay for a second car and baby-sitting just to get back to a rat race, has rocks in their heads! We are bombarded by "work-from-home" enticements all over the Internet. Why? Because research shows that most people have had a belly full of traffic jams and corporate bullying in the office, just so they can be seen to be "getting ahead" ... whatever "ahead" represents! Look - if the woman wants to work - I am all in favour of that. But who is minding the kids? And who is going to pay for the Psychologist for these young people later in life when they realise they were NOT brought up, but just "grew up" without all the potential they could have realised? I think ONE parent has to be there as the kids leave for school, and as they get home from school, as the very least requirement. That parent could be either Mum or Dad - but it should be ONE of them. Something wrong with being a parent? Then BE a parent, don't abrogate that responsibility ... the day-care provider does NOT care about your kids, despite what the brochures say - it's all about the MONEY! If children had access to a relaxed and interested Mum, instead of a tense and exhausted authority figure, who has no energy left for her kids, herself or her husband, then life might have been more secure, the prisons might have been smaller, the homework might have been completed more willingly and diligently, and society much better off as a community organism. And the kids might have attained that school grade EVERY year, that ensures they had available to them the kind of vocation others only dream of. I meant it when I said I am not mysogynistic. My wife does not work outside of our home, and except for a brief period when she established a small business that operated on casual hours she herself controlled, she has never wanted to take on that pressure. She was an executive secretary to a busy import/export business in the Pacific before we married. Our kids are well balanced and far more wealthy in their 30's than I could ever be. Their own children are well adjusted and excel in their educational spheres. My wife loves that she can live her life with freedom and without pressure. She is an organised person - rises early and chucks on a load of washing, and it is done by 07.30am. Each individual irons thier own clothes if needed. We share the cooking and washing dishes (no dishwasher by choice), and we make our own beds. This small arrangement of domestic discipline has proven over time to be the very best arrangement for us - it needn't be for everyone else. It just takes a bit of responsibility, but oh! the freedom it confers! Under these conditions, why would my wife want to return to the savagery of corporate life? She is already free! And I will die defending her rights to choose either way. Is there something she is missing? She is already self-actualising with her personal websites - an activity that chews up about 2 hours a day ... when it suits her. I see nothing submissive about a woman choosing to accept what she is given in life ... that is the ultimate satisfaction - gratitude for what comes one's way, and having the wisdom to recognise when one is well off. Having worked in a rat-race environment, quickly makes one grateful for the opportunity to kept securely, without that kind of pressure - the pressure that leads to mental and emotional breakdown. Human beings were simply NOT designed to live under the kind of pressure they face today, and have faced, ever since the domestic appliances revolution in the 1950's began to soak up what was left of a family's disposable income. I have always been appalled at the two-income family model, because it is unbalanced and has now become a requirement, not a choice. My own model is working, and I suspect, happier, though I don't preclude the 2-income model from producing happiness. I know the women I work with are tired, bitchy, worn out, burned out and run down, and dream - oh how they dream - of being home and out of the workforce, where they can spend time with their families in the way they thought the extra income would supply for them! Unfortunately the Germaine Greer-style Social Engineering has only ensured the offices of Psychologists like yourself, have full waiting rooms, 6 days a week. Society IS breaking down, isn't it, FXGirl? It sure isn't getting stronger, happier, easier, more fulfilling and more secure, is it? Why is that? Could it have something to do with the quality of the citizens that are produced in the cradles of our society? getting women into the workforce might be seen as "equal opportunity" by the social engineers, but I can see the personal results of that in the sad faces of the women I work with. I don't call the results "emancipating." It more resembles slavery, because these women do not have family situations that could be said to be better off because they work. Sorry for going off-topic - but there are some comments that are too defensive and should not be allowed to pass into folk-lore. I know I have a minority view, and I think I am right in it, but I have seen the results of BOTH models, and I know the one I prefer ... the happy one. I respect your right to defend the working-women model, if you choose that, but I think we need some balance. The choice to work soon becomes a compulsion to work. Then it is too late. "Success" does NOT necessarily equate to happiness.

I agree in principle with the sentiments Thales is expressing. It is well-known that there is a bit of history between MM and S46, but they won't go too far with it because ultimately tit-for-tat is destructive to reputations ... self-destructive. One or the other has something to lose by such a public display of ... "reciprocative mutual irritation" to coin a phrase! When a response is ostensibly done in "defence," it is generally clear to everyone except that poster that the ego has been chipped, and just a teeny bit of pay-back, or one-up-manship is at work in the inevitable reply. But the line has to be drawn when it becomes personal, otherwise we risk descending into the insanity of that other major forum that many of our new members are coming from, in droves. And I don't think any of us want a bar of that. The last thing this forum needs is to start seeing suspensions and banning, over issues that could just as easily have been allowed to go through to the keeper. The high ground is always the safest.

Non-Trading stuff in the interum Hello Ivan, I just read about the Flooding in Australia and have been looking for your area 'Hervey bay' in Queensland. I know you said you were near the beach and can't find exactly what and where everything happened but fear its near you. My prayers go out to you and family or friends that have been affected. I haven't had the news on much and today was looking online and heard about the devastation. I just cannot imagine that happening and even seeing some pictures it unreal. I hope and pray you are safe and well Kindest regards John ************************* ****************** Hi John All well here - and thanks for your caring email mate. There is a lot of heartbreak to the south of us - Brisbane has not had a flood like this since 1974. We were fortunate - only scattered showers where we live, and no inconvenience apart from no bread and milk because the major highways have been cut by flood waters. Even Burger King (Hungry Jack's in Australia) and MacDonald's ran out of supplies yesterday. Any bread and milk is being rationed. We have stocks of tinned goods in our pantry (larder) so all good for us. Most people are coping ok with the reduced groceries situation - supermarket shelves are empty. I remarked to my wife that this is expected in places like maybe Russia during hard times, but not in Australia. We have three Cyclones developing in the Pacific Ocean to the East of us. The largest is striking New Caledonia (where my wife comes from) as we speak, and is a category 4 today and that is one smaller than maximum intensity. I hope they will get through it over there with little damage. But I also hope the thing blows itself out before reaching here, which is in its path. Will catch up as soon as I can - (maybe tomorrow) when I am hoping to answer your earlier email. Kind regards and thanks Ivan ************************* *********** Hello Ivan,, Great to hear you and family are doing ok with everything happening so near. I saw Youtube videos of some areas and just cannot imagine. People on boats looking at their homes only to see just the roof. I guess it happened pretty fast. You seem well stocked there to get through and I did see some stores shelves on video that were completely empty. It looks like mud and sludge and will be a massive clean up project. I am sure they will try and clear the roads so vehicles can get through for food and emergency supplies. Thank you for taking the time to let me know you are doing ok as you have much to take care of. When time permits and you can respond to my e-mail that would be great ... no worries. Oh one more thing,,,yesterday was my first week of not trading and as I plan on one more week off I believe its doing me good ... thanks Stay safe and talk soon John

Getting a Trading Plan onto paper Hello Ivan It was really great to read your last e-mail to me that I read it a few times as I sit here. Especially interesting was your trade of the other day. You have your set-up that you look for,everything in your trading plan must have lined up and you didn't hesitate and took the trade, and you placed your trade with a stop in place. You accepted the loss but did not compound the loss with the "revenge" trade. The first thing that comes to mind as I read this is ... that was a successful trade. Actually that is the second thing that comes into my mind as the first thing is I rarely ever can say that I have a successful trade. I remember you saying in the post you made in TL that one of the things that turned your trading around was that you take EVERY trade set-up and that's where winners come from. I do not do this and have much hesitation before an entry and of course this pause gives me an excuse to not take the trade as its moving now away. I do have things that I look for and study charts for certain levels to trade off of but as I write this ... well ... I do not have a trading plan written down. Ivan Please, Please bare with me as we try to make some sense out of my confusion. Tomorrow I will write down what I believe is my trading plan / style and try and condense what it is I look for and how I go about doing this when placing a trade. I may in fact have a trading plan and not even know it or I may not and think that I do. I know that I hesitate and lack confidence and yes I have fear. I have come a long way and know that I have learned a great deal. I believe you sensed a lot of what I am saying here in my first letter to you and that's one reason you had me take a step back. Thank you for all the timely responses and I am sure you understand that I am eager to hear back from you ... BUT ... I completely understand that you also have a family and responsibilities. I will write down as clearly as I can how and what I look for and how I have been managing my trades and look forward to your opinion and ideas. Again Many Thanks John ************************* *********** THE PLAN Hello Ivan, As I mentioned I really don't have set rules to have a defined trading plan and this may need my attention. I do daytrade stocks and have a favorite stock in John Deere ... (DE) ... I have learned to study and pick levels from longer term time frames ... (the daily) ... I believe that the higher time frames dominate the lower time frames but have noticed that momentum will start in the shorter time frames ... 2 min ... 5 min. On the daily I will draw lines from the previous days high and lows. ( I may have 6 or 7 lines drawn at any given time). I believe that these levels are most significant as this is where price has stopped and reversed so it must be of high interest / volume ... (extremes). I look for breakout trades and reversals of these levels. Of course getting the direction and timing is an area where I lack. I will look for the levels on the daily chart and while watching the short term chart during the day I will decide whether to enter at those levels. I especially like when I see yesterdays high or low being tested today and look for a breakout or reversal. I also have noticed that when a stock consolidates below a daily level of resistance or above a daily support level and is kind of smooth and tight ( instead of wild choppiness ) it sort of bases ... that may be a better entry level than waiting for the crowded trade at the breakout level. I just noticed this recently. I always look to see when earnings are coming out on any stock I trade. I look on Bloomberg.com and look on their economic calender to get the days announcements ... Job claims ... FOMC minutes ... Housing ... Oil reports ... ISM manufacturing ... Philly fed ... and will not trade during those times. I am a technical trader and do not look at fundamentals. I have a 5 minute chart of the SPY's on at all times and a daily chart of the SPY's with the highs and lows to keep an eye on. I try and watch the broad markets direction and look to go long or short in my stock with this in mind. For me this doesn't always work as I need to really define direction. Another trade I look for is a stock to come up to resistance (a level on the daily) and look for divergence. Is it making higher lows as its approaching? ... if it breaks out and I miss it I look for the retracement to that previous resistance level which now may become support. Its called a 1-2-3 trade I think. (of course I didn't invent it ). 1 is where it breaks resistance 2 is where it stops above resistance and retraces back down to 3 where it holds new support and goes higher. (it also works on a short trade at support ) I hesitate on these trades also as when it gets to entry time ... I am just not sure. I know that perfection is impossible but I just wonder if I have everything lined up to give me the highest probability. Also I usually find this set-up (1-2-3 pattern) on the shorter time frames and not the daily. Another set-up I look for is a retest of daily support or resistance from at least a week or more ago. Many times I have a level on my daily chart that is kind of in no mans land and a stock will seek out this level. Sometimes it will come to the exact penny and other times will come close. I am a genius after the fact but when it gets there I hesitate. I feel that I am guessing and that's gambling I think? I like trades that I mentioned because I believe they work and the exit area is very close by. A break of support or resistance and a retrace and its a few pennies past for an exit. On the 1-2-3,,,if price doesn't hold for a few pennies ... stop out. So far I am only using 100 share sizes and usually will risk 10 cents looking for a 20 cent profit. I think I mentioned that I cut my profits way too soon. How many times have I made a trade and seen it go 15 or 18 cents in my favor and pull back to 5 or 6 cents profit ... I exit. Then I watch the thing go off in my favor ... many times past my profit target. Its an awful feeling. This will sound crazy but many times I almost expect a loss. I have moving averages on my charts and also pivot points. I NEVER trade the pivots but I have noticed that many day traders will and those are areas that when hit can become important. So they are there for further information. Many also use the moving averages to trade but I do not ... they are on there because if a stock gets there and stops I can see why. I am sorry this is so long and I am sure there is more but I hope you can get an understanding of what I am doing and even what I am not doing. Your opinion is very well respected by me as everything you have talked with me has been most positive. Also I have 2 computers on at a time. One has 3 nice big monitors on it and the other computer has only one screen. Some days I will Skype with a couple friends and some days I am alone. I have noticed that if I am here all day and only make a trade or 2 ... I am good with that. I don't have to make 50 trades a day. I want to trade my set-ups and if that means 5 trades today and one tomorrow ... its ok. I have noticed that there are days when the market trends nicely and its time to be a little more aggressive and then there are times the market is tired and you must be more patient. I would say that I am trying to become a price action trader looking at volume and price,,,Level2,,,, and would like to hear more about trading the right side of the chart that you mentioned in TL some other time. I am so sorry its such a long letter. Please take your time and know I am so greatful. Thank you John

Ha ha MMS ... I have an experience to share, and I say that it "might" be right ... but I think that Mirus/Ninja slide probably should have read: "Trained women are MUCH more profitable then men at trading!" A couple of years ago my dear wife was watching me struggle to keep my trading head above the whirlpool of the Forex market. She has always been more of a right-brain intuitive type, and told me that I should be "trading intuitively", and that I should "stop analysing and thinking" so much, and "just do it." As you can imagine ... I thought: "Who is this upstart woman to be telling me how to trade ... I ... who have studied and 'know' what I am talking about!" So I decided to risk $100 and let her have her way! We found a nice setup with the EURJPY and I told her I thought it was setting up for a trade. I said: "Just tell me when to enter, and which direction." At the appropriate time the call was made "intuitively" by her, and the trade began to run a little in her favour - 3 pips. She was feeling smug, but experience told me that the trends (other TF) were in favour of the other direction. We had just broken even (spread paid) when suddenly price reversed, as the higher TF asserted itself. I kept my mouth shut, and kept the smug smirk off my face. The price burned through $60 and she called for a close. We had a serous discussion about it. I told her that indeed there is a place for intuition, but that I thought it was more useful AFTER a trader had learned to trade well, and that I thought trader's intuition was the product of unconscious knowledge of patterns practised thousands of times in the brain, until they were popping out without too much conscious effort. That is what I would call an "intuitive trade", which I believe was the goal she was pursuing in her approach to that trade. In an untrained person, in my view, such an approach is little more than a guess based on the "look" of the trend, and without the advantage of supply/demand ... support/resistance and knowledge of what the higher TF trends are doing. Needless to say, she has never mentioned intuitive trading to me again, and basically still supports me 100% in whatever approach I take. I could give many excuses for why I am so far not extracting enough capital from the markets to match our family expenditure, but they would be just excuses. I am a firm believer in making excuses, but then dealing with them in a way that makes me an overcomer. You can have that quote - it is an original from me! PS: I have indeed learned much from my wife, believe it or not. She is a very wise person, and I do think that if she wanted to trade, she would make a far better manager of trading positions that I currently am. :missy: PS2: Google: "Lehman Sisters wouldn't have failed" for a balanced look at this topic

I don't necessarily agree with you, MM, and I don't necessarily agree with Steve46 either, on this topic. If the conversation could be kept to a rational state of affairs, without the name calling and in-kind retorts, I would almost be inclined to start a thread on this issue, but because of the egos and high stakes, I resist the temptation to investigate this important issue. The risk-to-reward ratio makes such a thread a very poor choice of discussion! My own experience has taught me that indeed it is possible for me to make money trading. It's just that I am probably not using enough of my capital to trade with (and I probably won't until I become more consistent) to make me a more cheerful participant ... My reasoning then goes like this: "If Ingot54 can make a few good trades, then why can't others also do it, but do it better, for higher stakes, and run their trades a little longer?" The truth I believe, is that they can do it better than I can. I believe Steve is trading profitably, and I also believe Mighty Mouse has a strong point - that rumours of great success may have been embellished with the sauces of hind-sight at times, to keep the dinner guests gushing a little about how good the chef is. Of course when you taste a decent dinner, you really are not thinking about the chef - you are focused on the food. No one wants the chef to be waving and gesturing that he is the one who did the cooking. And no one wants to be sitting at the table when a guest keeps demanding to see if that chef really is the one who did the cooking, or whether the food came from Woolworths! This is why I believe that requests to "show proof" are destined to fail to achieve an objective, but succeed in raising the ire of the target. Any discussion on this issue can only go one way - into melt-down, and destruction of forum relationships that are currently the best in the world on TL. For this reason I don't think I need to see proof of success - it would not assist my own trading. What would help me is to hook up to a trading "mechanic" who can see how I start my trading car, put it in gear and drive it. Or who can be truthful with me and tell me I am driving a "clunker." My mechanic might even come along for the ride in my trading car, and offer pointers about why I am crashing out on bends, and also show me how to reach top speed in the straights, without crashing out on the bends that loom out of the low-lying foggy patches on the journey. The mechanic would also help tune the engine so it is running more sweetly. What I have described could be likened to the activities of a decent coach. Rarely will a coach tune a "car" out of good-will - but some will, because they simply love motor vehicles, and they love to see "drivers" get the best out of their chosen "vehicle." Optiontimer I believe is one trading "mechanic" who is putting together an "engine" and a decent "vehicle" with the assistance of the apprentices who are learning the "motor trade." See the thread, and follow along: http://www.traderslaboratory.com/forums/technical-analysis/9925-trend-momentum-indicators-choice-ii-2.html#post121696 This kind of activity strikes a much better chord with me than do statements of success, proof of ability, and rumours that there is a lot of rice in China. I want to see how that rice got there, and I want to drive one of the trucks that bring some of that rice to the stock-pile. Follow the thinking? That way I will be able to improve on what I am already doing, and to me that little bit may just mean I can achieve the objective that attracted me to learn trading the financial markets 7+ years ago. And do it without ego getting in the way. Ego is a very overweight passenger.

:rofl: I am going to rain on some parades today, because the weather outside is doing that to mine. The initials: "IQ" actually stand for "Industry Quotient" - referring to the amount of effort and diligence traders apply to their chosen tormentor ... the markets. In any Laboratory you do need a degree of intelligence - monkeys in charge of a Lab will take a long time to discover that C12H22o11 is sucrose! But you also need a degree of industry. I suspect that most of us pass the intelligence test - wherever that particular bar is set.

IS THE FOREX TRADING SYSTEM I BOUGHT ... USELESS? This is a long topic, so I separated it into two posts for ease of reading and understanding. PART ONE … Comparing Hindsight with Reality Every day we see on the Internet, new and interesting forex trading systems. The sales pitch that goes with these trading systems is so well written, that many currency traders become convinced that “at last – a breakthrough” has occurred that will turn their losing trading efforts into profits. The story promises to give ordinary traders an advantage they never had before. The retail forex market is truly in the trading and investing spotlight today, and an amazing amount of recycled and old information is packaged and sold as “a breakthrough.” How many hundreds of forex vendors have sprung up on the Internet to “share with the public for the very first time, the trading secret that made them a millionaire”? … blah … blah … blah! Forex charts, videos and equity curves are even produced, and guarantees are given that promise to refund your money “no questions asked” if not satisfied. Some of these system marketers do honour their guarantees, and some will blame the trader for “not following the rules.” There is a grain of truth in some of these counter-claims, but generally, a response like that from a vendor clearly points to problems … “money-back-no-questions-asked” should be honoured as stated. I have bought four or five strategies/systems myself, so I know some of them DO actually work and function well. Some do not. Most forex system vendors DO honour their guarantees. Some do not. Forex trading strategies have several things in common – you need to actually understand and master them, and apply the strategy and the principles to your trading. Another thing they have in common is: they do not work ALL the time. Nothing does. All trading systems WILL take a draw-down at some stage during their operation. There is a reason for that. Markets trend. Then they consolidate within a range. Systems are designed to take advantage of trending markets or ranging markets – few strategies can handle both ranging AND trending markets. Ok – so let’s get back to the topic: if some of the forex trading systems on the market are NOT failures, then where does that leave the trader? What is the deal here? Clearly the issue comes down to how the trader applies that system to what he is seeing on his charts. Traders are inventive and entrepreneurial people. They are never contented with the opportunity to trade a strategy faithfully that has been proven to work well. Some traders will always try to apply a different indicator, a different setting, or they will want it to work on other TF or other currency pairs than it was designed for. In fact, you could bet the house that traders will feel some need to change something, somewhere about the strategy. But could there be more to this problem than just the application of the strategy? There certainly could be … and there is a LOT more. To expect a trading system to work “out of the box” … meaning as soon as you receive it and apply it to your charts – could be a bit too much to expect. Salespeople do not care whether you are an experienced trader from Tennessee, or a newbie from Newport! So to solve this dilemma, let’s assume the trader has enough experience to know his way around a trading platform, and has traded demo mode for a few months. In other words, the trader has some experience, and knows what he is looking at. And we’ll also assume that the system happens to be a reasonable trading strategy that genuinely does make pips … a positive expectation. To simplify the issue, let’s take the system that we created a few days ago, (see April blog entries) and see if we can show how to use it, from a section of the chart that I admit I did “cherry pick” for the illustration. The system I am using here is similar to one found on a popular Internet forex trading forum. I have applied slightly different values to the indicators. But the principles of most systems that involve using a three Moving Averages cross-over, are generally the same: when the fast MA cross the medium MA, there is an alert. When the fast MA then crosses the slower MA too, then you have the signal to buy or sell. The strategy of using three (or even four) time frames to assess trend, is an effective approach, but still there can be no guarantee that any trend will continue. Trends end, and price can become range-bound … consolidating. If traders keep this in the front of their minds at all times, then the dangers associated with attempting to find trend-trades when there are none, will be lessened. Check the 4H chart attached below, with our three moving averages coming together in a nice area of confluence. I can assure you that the DAILY chart is in a strong down-trend, so we are only interested in trades that we can enter in the short direction. The price trend on the 4H charts is UP. We treat this as a pull-back, and look for short entries. The MACD is clearly also showing UPWARD MOMENTUM. We can not trade against this upward momentum. The RSI is ABOVE 50, so the expectation is that the upward trend “should” continue. I refrain from using such terms as “will” because as traders it is NOT our role to be telling the market what it “will” do. Instead, our role is to follow exactly what the market IS doing – we REACT to activity – we do not dictate activity. So … while our first thoughts are that price might continue to rise, there are clues that this is NOT necessarily the case. There is something else developing. Take a closer look at RSI … clearly it is still above the 50 level – yes - but it is turning down fairly steeply, even though price is in a nice uptrend. Further evidence that there might be an imminent change in trend direction, is seen by the confluence of the three EMA’s – exactly on that last 4H candle. Now we can not know what is going on until the current candle has completed, and the new one begins … or can we? Well the answer to that question, is: look at the next lower TF … the 1H. Notice where we are looking as we apply this system. We are not looking at the activity 10 or even 7 candles back … we are looking at the CURRENT candle, because when you are trading, THIS is the candle, and THIS is the price that you will be dealing with. What your indicators are doing RIGHT NOW is what will be fuelling your emotions, intellect, intuition and interpretation of what you are seeing. The decisions you make will be based partly on what has gone before – yes – but the actual buy/sell trigger will be pulled depending on what is happening in the present moment – not 4 or 40 hours ago. This is what the Forex System vendors will be showing you – where you “could” have entered, and where their “system” generates the profits. But they are unable to show you H-O-W to actually detect and execute a trade, so that you DO get the expected profits. Getting back to our 1H chart we can see that the fastest EMA – the 5 – has crossed the medium EMA – the 13 – at the same point of confluence we saw on the 4H chart earlier. The fast 5EMA has not yet crossed the slow 34EMA. But notice that the MACD histogram has crossed UNDER its signal line, and is falling. This tells us MOMENTUM is slowing … nothing else. Next, the RSI is still ABOVE 50, and parallel to the 50 line. No conclusions to be drawn there either. We need to wait another hour, to see what price is going to do. There is no other conclusion we can draw right now. In PART TWO of this exercise (next blog post) we will continue with this setup. And I will show you how to actually locate the signals and place the trades, according to real rules; and I’ll show you how to locate the legitimate exits that lead to real trading profits. Continued and concluded with next Blog post ……. Posted in my Blog: http://forexapplepie.com/