Ingot54

That's an engulfing move that exceeds the past two days' closes, when yesterdays' close was a slight pullback from the day-before's close. Not too hard when you draw the pattern, and yes, an excellent setup I imagine. As you also alluded, Siuya: Yes, this is the nuts-and-bolts part ... the trade management, and I suspect many of us have a piqued interest in this.

It's not for me to make suggestions, OT, because whatever I have done before has brought me to this point - my cup is empty, and needs filling. Previously that cup has been full - information overload. Is there anything in the belief that different RSI work better for different TF? I have observed that the short period RSI is too "noisy" when used on the higher TF, and the longer period RSI is too slow i the shorter TF. What are your thoughts on that? To be honest I was hoping members would have been a little more adventurous when choosing the indicators we will be using in the poll. Most of us have used the MA crosses unsuccessfully in the past, and my immediate thoughts are that most of us respondents are hoping that someone will confirm to us that there is a way we can stick to old methods and still make this work. These are not my thoughts, tbh. In this exercise I have no preconceptions at all, other than to participate, and learn from someone who does have a clue. I know that you understand how MA crosses can be used to advantage, else you would not have offered it as a choice in your poll. I guess I was hoping that something less popular would get to fly this trip - to sweep away old concepts and ideas, and introduce something different that could be a centre of focus. I have experimented with MA crosses in the past, and I have found that when combined with a trend indicator, the probability of discovering the likely direction that price might follow, is improved - almost reliably sometimes.

Nothing to add here ... the best ... from a life well-lived! [ame=http://www.youtube.com/watch?v=JqUqwz8aFnc&feature=player_embedded]YouTube - ‪Challenges to Pursue‬‏[/ame]

Russ Horn is giving one away free to promote his latest Commercial System release (already sold out I believe). I have it, but I am not interested in using it. Unsure how good it is for that reason. If you Google: Russ Horn Candle recognition software you will find more than enough links to locate the indicator, the manual, and a youtube vid on how to use it. He had "only 750 copies" @ $999 for sale, and suddenly found an extra 21 hidden somewhere, for "those who missed out!". The maths: 750 x $999 = $749,250 OR ... you can make 2 x $650 payments instead. Now I don't know about you, but I've got an idea ... :rofl:

I forgot to mention the Office of fair Trading and Consumer Affairs. Google them and add your State for your local State office. This might also be a start: Complaintline complaint categories - consumer affairs, fair trading agencies, small claims tribunals and courts There is also this from the ACCC - a very informative page: The Consumers Online website ASIC also has a help page to inform the public of how to make a claim or complaint: Australian Securities and Investments Commission - Complaining about companies or people

Verified The place to start is with the initial presentation, and the representations BEFORE you signed the contract. Anything you relied on to form an opinion, which later led you to sign a contract, could legally be construed as a verbal contract. Try to remember, or obtain brochures, recordings, youtube presentations, website URL's that promote and make promises and representations. Write all of this down in a subjective and factual way. Try to remember with whom you spoke, what the conversation was about, what guarantees and promises they mentioned or gave you. Get as much of this down on paper as you can, along with dates where you can, and phone numbers, venues and so on. You need to be able to point to a specific promise that was made to you, or even the fact that someone used someone else's testimonial, or someone else's trading figures, to convince you that you would also achieve this, if you sign up. You also need to do the same if you later "upgraded" to a platform, data feed, broker, private room, one-on-one or whatever ... show WHY you took the action you did. You are NOT a foolish person in my view - you are someone who knew a little about the eMini's and wanted to receive professional training in order to become independently profitable with the "right" help. You made your decisions because you believed 21st Century eMini's would provide you with that "right" help. The thing you need to show is: What was represented to you, or what were you told, that convinced you that 21st Century eMini's would provide that assistance? What was it that convinced you to sign that contract? You need to have things such as: Mr X told me that if I do "a" ... and "b" and "c" then I can expect to earn / expect / realise / achieve "d." Then you need to have some sort of time line of your progress - how much "training you did in Sim / Demo before going live; who assessed that you were ready to attempt live trading and why; whose direct guidance and advice were you under at all stages; what you did, with whom, and when, at the time you realised this was not going to work out. Having organised the answers to all that, you are only half done. Now you need to put together the evidence that shows that 21st Century eMini's have breached their part of the contract. You are looking for non-performance issues. Regardless of whether it is written down on paper or not, any thing you relied on in forming the view that the contract would meet the expectations and promises made to you, should be legally binding. A verbal promise is legally binding, if you relied on that verbal information to form a view on whether you would indeed receive what you were contracting yourself to receive, in exchange for money. If any part of the story has now changed, then that is a breach of promise / breach of contract too. They may have been able to convince you that what you thought was incorrect - but think again - you obviously were thinking certain things for a reason - you most likely didn't dream it up. I do not know your personal circumstances, but I have had experience with companies who fail to perform their contracted obligations. You have far more going for you than you think. Never underestimate the power of the Internet ... and there are MANY forums like this one in Australia and elsewhere, on which to tell your story. I think this is your best leverage, and may even get you some results without having to go through the Ombudsman. Home Page :: Financial Ombudsman Service Have a read of their site.

CONSTRUCTING A FOREX TRADING SYSTEM - PART 1 Before beginning our construction of a forex trading system we need to know whether our system is going to be purely rules-based and fully mechanical, or discretionary, or a mix of both (the most popular ones). We shall keep in mind that there are hundreds of systems available on the Internet trading forums, and I shall be posting several of the better ones on my blog, with the permission of the originators. But for now, we are going to build our own “from the ground up.” WHAT KIND OF SYSTEM? It would be wise for us to stick to purely rules-based trading for our first forex trading system. I say this because beginner-traders usually trade with their emotions, and with poor knowledge of how markets, indicators and charts really work. For inexperienced traders to be making discretionary trading decisions based on what the account balance is doing, can cause panic and uncertainty. Mechanical Trading Systems can always have a degree of discretion added later on, as traders grow in trading wisdom and experience. For example, it might be ok to simply take a “buy” trade because the rules say so, but to be buying when price is almost hard up against a strong resistance level, is not something an experienced trader would be looking to do. Therefore, discretion to ignore that signal would be used, and the trader would wait with interest, to see if a “sell” signal developed after testing the resistance level. There is far more to that situation, of course, but enough for now. FIRST PRINCIPLES … things we need to know and consider Right now we will keep our trading system simple. All we need to know is how to “read” the chart, so as to understand what kind of probability we have of price going higher/lower, and how to get into and out of that trade in the best possible places. In order to profit through trading, we need to be along for the ride when price moves … simple. Buy when price is going up … sell when price is going down … right? Well … yes … and no. Quite often much of the move is over by the time we visually recognise a change in the trend. Or the move is short-lived, and reverses or moves sideways before we can take a position, or establish any profit. But sometimes a strong trend commences, and it is these trends that make us the money in trading, providing we recognise an entry in good time. I should state here that many traders start their trading careers by trying to scalp the market. While I have no opinion on what you should or should not do, I would just say it is something that I would not be looking to do myself as a beginner. Why? Because scalping requires specialist knowledge of the instrument traded. The moves can be fast and furious – as can be the reversals. Traders need very well-developed reflexes to know and understand and judge what might be going on in the market when certain moves occur. Experience can tell the trader if the move is a reversal, or volatility. A novice trader would not be expected to understand or know how to handle that. Volatile price moves could be fake-outs, designed to shake weak hands from their positions. Or they could be just knee-jerk responses to news, causing great price swings before settling down again, and the previous trend, more frequently than not, resumes. Such trading occurs in the lower time-frames like the 1 minute and 5 minute and even the 15 minute charts. Traders of the higher time-frames, like the 1 hour, 4 hour and Daily time-frames call this “noise” and avoid trading it. It usually has little to do with the main trends. So let’s make our first decision based on time-frame to trade. For the purposes of this exercise, we’ll choose the 4 hour. This is a time-frame that gives us plenty of time to analyse, and is not easily moved by news announcements, or sentiment. And if there is going to be a change of direction, this time-frame usually sends signals to traders that it is going to do that, in time to react to what price is doing. Our decision will be unhurried, and low-stress. I should add that after we construct our forex trading system, we will be able to apply it to other time-frames too. Price action is said to reflect the thinking of the market participants, and the price activity seen in the chart is the manifestation of what the market was collectively thinking at that time. Well … we didn’t get far today. I had hoped to define all the parts of the trading system, but I can see it is a bigger task than I realised. I did discover one thing though, and that is if we are going to create a trading system, we have to define every component. There are sound reasons for that. I have never been one to simply put indicators or trend-lines or moving averages on a chart and expect to be able to make a trading decision based on what I can then see. If I have something on my chart, then I need to know it has earned the right to take its place there. I will have an expectation of it, to tell me its secrets. I need to have as many indicators and filters on my charts as I need to confirm my actions … but not more. If there are too many, then the purpose of having them there is defeated. Each filter chokes back the opportunities more. Each moving average and indicator screams “Look at me!” and soon you have a series of conflicting signals. We don’t want that. We want to keep it simple, and meaningful. We need to be able to look at every object on out charts, and KNOW why they are there, and WHAT it is that they are telling us. We'll take this further next time ... and hopefully get some real progress on designing our own strategy and system. _________________________ __________________ Posted in my Blog: http://forexapplepie.com/

Ahimsa - please forgive my arrogance in making little changes to your post, to make it more readable. Your English is understood by me quite easily because I have a French wife, and I am also a teacher of English as Second Language to Adults (TESLA), as well as my health work. I have not abridged or paraphrased everything - just enough to clarify for all readers - that might be my folly and arrogance. I haven't changed everything, because I love the way you express yourself - it's beautiful. Well Ahimsa, I understand what you are saying, and yes, you could say that when we have loss (or when we fail) it is quite normal and natural to feel miserable. The little adage is really saying that in life, losing and failure in some things, is inevitable. No one wins all the time, and no one is successful in everything. But to be miserable about it is actually a choice. Sure we feel the pain of an unfortunate outcome, but the human spirit is capable of rising above even the worst calamity. By choosing (that is the key word here) to put the loss/failure in the past as quickly as possible, and to refuse to be miserable is the great victory over circumstances. No one else has to suffer for my problems. No one has to dwell morbidly on a loss or a failure. There is another saying: "Misery loves company." Notice how, in a workplace for example, when the conversation turns to politicians or the economy, the mood of the room turns negative, as people express their disappointment with leaders, with management failures and so on. But notice also that when a person who has a bright and cheerful attitude comes into the room, and refuses to associate with the negativity, or refuses to take part in that conversation, the mood begins to lift. We all love such people. They cheer us up, whether we want to be cheered up or not! The dynamics of the group can be turned around simply by one positive action. To participate in misery is optional - we do not have to be that way. We do not have to allow circumstances to destroy us. I think we are saying the same thing, but in different ways. Character is what makes us do the right thing, even when no one is looking. It is not something that can be gained from a book - but it is something that comes from having an understanding and a love and respect for other people. It puts personal gain into second place when that gain would be someone's loss. This does NOT include normal trading on a level playing field, where all traders are competing on the same terms, and with full knowledge that loss can and will occur. I think it refers to situations where a person could make some great gain at the expense of someone else who would not notice the loss, but chooses NOT to take advantage of the situation, and forgoes the personal gain. But the issue of character could fill a large thread on its own - particularly where it would apply to trading issues. The way we behave when we suffer hardship will depend on the strength of the spirit within. It will depend on the level of maturity existing within the person in that situation. Many people from all countries and all levels of community, have a spirit that rises in strength whenever disasters like floods, fires, storms and tornadoes, drought and famine and earthquakes occur. We see it all the time - people working together to help one another through the disaster. The Global Financial Crisis is a great example of how character is revealed. We can clearly see who gained, who lost and why. Yet because it is the financial world, it is accepted. Why? Because within all of us is a desire to improve and do better for ourselves - whether through greed or through altruism - the path chosen tests character. Problems arise when people try to introduce ethics and morality to financial dealings. The two issues are incongruent. We are better not to go in the kitchen if we don't like the heat! That is why I use that adage. Yes, hardship DOES strengthen the character. But it also reveals the character that is pre-existing. Instead of whinging and moaning about losses and bad luck, the person with inner strength will accept the situation with courage, and move on with life. Let me tell what happened to me recently. I had a few moments of reflection on my trading history over the past 7 years. The picture is not pretty, and many times I was close to giving up. But I have never been a quitter - even when it might have been best for me to move on. I could write a book about the things I have overcome and succeeded in, through having an attitude of "I can do this." I see life as an adventure to be lived, not as a competition to amass the most money. Life to me, has been a gift from a loving and benevolent Creator, so I may see things quite differently from some others. That is not to judge them nor me. And that attitude has led me into extraordinary situations - places and crises that many people never even know about - let alone experience themselves. Yet trading has become for me, the greatest challenge I have faced - the challenge to conquer myself. And I won't quit - even if successful traders try to tell me I will never make it - it doesn't faze me one little bit. That's because I have been through enough of life to know that there is always a way through anything. If I have to reinvent my belief system, then so be it. But the process will never dent my character, or who I am. It is not arrogant to believe in oneself. But it is wise to be humble and learn from others along with that. Marianne Williamson wrote: Nelson Mandela used that quote in his inauguration speech. After being in prison for more than 25 years, he was still able to triumph over his adversity. Did his imprisonment build his character ... or did it reveal his character?

I have a lot to learn OT - I have never heard it put that way before.

I should mention that 100% of Robots disappear. Some fail and are discarded, or become less profitable than when released because of curve-fitted software or curve-fitted results. There are some Robots that do not suffer this fate, but they still disappear ... they are purchased by Institutions and Banks because of their reliability, and the public never gets to see them in the light of day. For further confirmation of this, Google: Forex world cup contest or Robbins World Cup. The interviews with the three winners are well worth the time. The most interesting comment was that these men develop their own strategies, and no one else has them. Period. Their edge belongs to them - these things are NOT shared. The winner will gets $100,000 prize, and the runners up will share the remaining $50,000 prizemoney. But the winner may be losing more than the $100,000 he wins, as he loses all rights to marketing his robot for 6 months. It seems to be the way of the future, but I am wondering if the future will still involve the small player? Those with the money can afford to lock up the best software, and the small trader will still need to find his edge by the seat of his pants, one would think - very much like it always has been.

What??!! Trading is NOT drama??? Well stone the crows! It might be time I took annual leave! :haha: Ingot54 :rofl::rofl:

Agree OT - When I first found this Trading Plan and adapted it into its current form, it seems like a rose-coloured-glasses plan that explained in general terms the idealist dream that having a written trading plan could deliver. However, it is very broad, and apart from delivering a structure to what traders do, it actually does little about organising a real and workable plan. But what it does do is make traders think about what they are doing - and that process is not a bad thing in itself. It really does need to be taken to the next level though, and fleshed out with practical and productive action steps. In the absence of anything else, it does get people thinking about their trading goals. I like your paradigm shift from an Income Model to a Profits Model, and is something I will take on board. Thanks mate. I guess what we are looking for here is getting the method right and the profits will take care of themselves. From "profits" it is a short hop to "income."

Here is another idea, as opposed to a story about an actual breakthrough. But reading these tips can actually BE the breakthrough for some people: This ideo is 1:24 long. [ame=http://www.youtube.com/watch?v=QEPtqx90grI&feature=related]YouTube - ‪Jack Canfield: Finding a Mentor‬‏[/ame] This is a principle that I KNOW will benefit any person on the planet - if you can grasp this and take action, then you can not help but advance towards your goals. And remember what Napoleon Hill said: "A goal is a Dream with a Deadline."

There are a lot of things that lead to breakthroughs - some people are already living the ideas that others are just discovering. In my own case, I was alerted to the "improved life" at the age of 23yrs, when I saw an advertisement for a $10 book written by Joe Karbo. Joe was a "retired" entrepreneur (they never retire), but he had a generous spirit. And, enterprising to the end, he had produced this book which I believe was his finest contribution, called: "The Lazy Man's Way to Riches." He died 10 years later, in 1980 at the age of 55yrs, while being interviewed by a breakfast TV crew. The book is still available, through Amazon.com I loaned mine to someone who thought he needed it more than I did. By then he was probably correct - the book had already turned on the lights for me! That book moved me from "farm boy" to entrepreneur in 3 weeks, though to be candid I believe I was born with the mindset that led me to "discover" such things. I suggest you Google for "the lazy man's way to riches by joe karbo" or simply go to one of the two links provided above. Meanwhile I read the book "Think and Grow Rich" by Napoleon Hill. Here in this 7 minute video, Hill gives an interview about the events that led up to the writing of the book, and his meeting with the philanthropist Andrew Carnegie. [ame=http://www.youtube.com/watch?v=1GCaEZscfvA]YouTube - ‪Napoleon Hill talks about his meeting with Andrew Carnegie‬‏[/ame] There are many other similar videos to follow that one - I leave it to the reader to pursue that to whatever extent they feel it will benefit them. But I recommend that readers do explore some of these - you may be one to whom this will provide one of the "missing links" in your earthly education. The "mastermind" video might be worth a look. Some of you are already far past this point, and others of you will merely scratch heads and dismiss it. You take from this whatever you need [ame=http://www.youtube.com/watch?v=J4mo0pz8oi4&NR=1]YouTube - ‪Napoleon Hill Think and Grow Rich Two-Mastermind Principles‬‏[/ame]

Siuya - every time I make any sort of phone call, I write in my diary who I spoke to, what it was about, what agreement was reached, and any sort of information about WHY the decision or agreement was reached. It saved me $5400 two years ago. We were renting through a Real Estate office, but the landlady kept interfering with repairs and maintenance issues, and after the initial 3 months, the R/E office dropped her as a client, and told us in future they would no longer be dealing with her - and that we would need to deal directly with her ourselves. No problem - we were reasonably friendly with her, and as long as we could put up with her procrastinating and disorganised ways, we would manage. However ... we had a broken oven and because that model stove was no longer made, a new one had to be installed. It dragged on for 7 weeks instead of 2 weeks. The lady finally installed a $6000 oven, and then decided she would really like to be living back in the home herself. Well - just quietly we had just about all we could take from her by then, and agreed that she could move back in. We found another place, and signed up for the lease. We gave her the required 2 weeks notice, and packed up. Problem. She had a change of heart, and decided not to move back to the home after all. We were told by her that if we moved out, we would be breaking the lease. We had nothing in writing. All the "hard evidence" we had, of her intention to move back, was a message on our answering machine saying that she had found us a lovely home close to my place of work, and a nice flat attached, suitable for our older son yada yada ... all rosy and cosy! I also had in my diary an agreed date that we would vacate, and the date and time of the "final inspection." And ... I had diary entries of every single issue on every occasion. Copies of "notice to remedy breach" forms, from us to her, and ... you know the rest! We moved out, and she said she would sue for unpaid rent to the end of the contract. Anyway - we ended up in the small claims court. We had over 120 date-stamped photographs of the home inside and out, as proof of the cleanliness and on the day of the "final inspection" she failed to show up. I had a time-line of facts and events, without any of the subjective and emotional baggage that goes along with these disputes. It took me 2 weeks to prepare for the court case - I was working night shifts at the time, so I was totally spent ragged by the time we got to court. My wife and I were also tearing at each other over some of the issues - that will show you the stress and tension that we suffered. In court, the magistrate asked her to first tell her story, and explain what she wanted the court to do for her. Straight away she rambled and raved, without getting straight to the point. It took five minutes for him to get it out of her, that she wanted the court to give her redress for a breach-of-contract situation against us as defendants. Then I had an opportunity to respond. It was difficult to have listened to the lies and innuendo without making rolling-eyes faces, or body-language poses that spoke of our disagreement with her story - but I warned my family to keep a "poker face" and not perform the drama of television. I handed the magistrate a straight-forward account of the situation - a full time-line of events and situations; copies of diary entries; statements from the R/E agent; and the coup de grace ... a transcript of the recorded phone message I mentioned above. There was a bit more "he-said-she-said" but it was clear by the tone of the magistrates conversation with her, the he regarded her as petty and tiresome. In his summary, he said he said the case came down to an issue of credibility. He found that the plaintiff was a person who had little grasp of the truth, with an element of paranoia throughout her statements to the court. On the other hand, he found that we were organised people who presented an entirely believable account of what transpired. he found our story and evidence consistent with the facts of the situation, and found in our favour. He then said: "You can all leave now. You will be receiving a copy of my judgement in the mail." The ex-landlady then proceeded to pour herself a glass of water, and was muttering about the magistrate being biased. The magistrate told her: "Take your things and get out of my court-room now." She told him: "I will when I'm good and ready." He asked her if she would like 30 minutes in the cells to think about that. She said: "Oh, you'd like that, wouldn't you." We were, by that time at the door, and I do not know what happened next. I can only assume he asked the bailiff to escort her out of the building. I'd like to think she did get that 30 minutes in the cells. That would have been the cream on the cake, of that magistrate's decision in our favour, given all the stress, lies and wrangling we had endured in that six month period. But I guess the lady only had herself to blame for the entire mess. She ended up $5400 out of pocket for rent, as well as other "costs" (fictitious accounts and statements) which the magistrate dismissed. The lessons: *Always get it in writing if it has to do with money or business. * Always keep a diary of every phone conversation involving inquiries and involving decisions * Always be honest and open in your dealing with everyone * Always take your time when making decisions that have the potential to affect your life and the well-being of your family as well * Always keep receipts in a safe and secure place. * Always seek confirmation of the intent of the other party to a deal * Never deal with a deranged personality in business

Short answer and the truth ... No ... I am not profitable. Long answer and also the truth (you knew I would say that, didn't you!) ... Sure ... I can do some great trades, and I can even win seven or eight trades in a row, but regarding locking in profits and moving forwards to capitalise on that base ... no. Trades still turn against me and take away profits. Or should I say, I ALLOW that to happen - it is NOT done TO me. So far it is not working for me. I still tenaciously believe I can do this, and that I will break through - there is absolutely NO DOUBT in my mind about that. No one will take away that belief. But I understand that I have not been approaching this professionally, and that is the area I'm working on now. I have seen a lot of stuff in my years at this, and one thing I have seen in the past 3 months ... is myself. I talk too much and take my own advice too little. I no longer lose accounts as in the past, but I guess I am one of the 90 - 95% who are working at the restaurant and not the 5% who are eating there. But I have seen the menu. I don't beat myself up too much over it Teeroy - I just get more determined than ever. I tend to want to solve the same problem for others, and in so doing I post stuff that I believe takes me further down the road, and hopefully might help others at the same time. Information is not a bad thing, as per the above post about correlated pairs. It is good stuff to know, and can prevent losses being magnified. But as far as actually helping to nail an individual trade, and securing consistent profits, it is more skirting around the real issue. Just another part of the reason traders need a decent education - the $97courses and systems are never going to cut it. Maybe I should have been a journalist ... or an author ... or ... a boundary rider ... or ... perhaps I could run an icecream shop ... or ...maybe "work" for Goldman Sachs! EDIT: That is an excellent philosophy, and absolutely the only way to approach trading - sit at the feet of someone you KNOW is already doing it.

TRADING SYSTEMS Before posting any trading systems here, I’ll show you how to construct your own system. Then you will be able to judge the suitability or otherwise, of specific systems for your own purposes. I need to remind you from the outset, that trading success relies less on the system used than on the skills of the user. And success does not depend on the number of indicators used, or on how mechanical or discretionary the system might be. And to pop the bubble of those who believe that getting a great entry is the best way to succeed, it should be noted that no profits are made until the trade is closed. First let’s look at the kinds of trading systems: 1) Mechanical Systems 2) Discretionary Systems 3) Proprietary Systems 4) Black/Grey Box Systems 5) EA’s and Robot Systems These are self-explanatory really, but I’ll quickly run through them to explain my own understanding of them MECHANICAL SYSTEMS: These are the simplest of all – If “A” occurs then the trader does “B”. It can be as simple as price crossing a specific moving average; or the crossing of two specific moving averages; or price crossing a trend-line. The process can become a little busier when other conditions are introduced as filters. These may include using indicators such as MACD, Stochastic, RSI, CCI, PSAR, Bollinger Bands, Price Envelopes and/or any number of specially constructed indicators. And for those who are taking their trading to higher technical levels, support and resistance, or supply and demand levels can be established. Signals are generated around a break-out or breach of these levels. This is where Mechanical Systems begin to overlap with Discretionary Systems. Sometimes the signal needs to be validated by the trigger signal occurring within the context of the “set-up filter” conditions occurring first. DISCRETIONARY SYSTEMS: These are usually based on Mechanical Setups, but the experience of the trader kicks in, and he exercises CHOICE about whether to take the signal, or ignore it or wait for further confirmation: eg what is the price of Gold or Oil doing; or if trading the AUDUSD, he may wish to check the chart of the EURUSD first. Some traders simply look at the chart and make their trading decision based on their experience. Very few systems are “pure” – they usually involve a combination of everything the trader has learned. This can also involve the use of Candle-sticks or OHLC bars, or even more exotic kinds of charting – Point-and-Figure, Heiken Ashi, Range Bars and so on. There are as many discretionary approaches as there are traders, I suspect. PROPRIETARY SYSTEMS: These systems are used by Institutions and Banks and so on, and are well-kept secrets. There are of course claims that “this is the system used by the XXX bank”, but such claims are baseless generally. The truth is that such large institutions normally base their trading on supply and demand, and have certain price targets they are trying to achieve. It is true that they may be using more sophisticated software than the general retail trader, but this neither gives them an advantage over the retail trader, nor any better guarantee of success. They may have their own private indicators, but it is unlikely that this renders any better advantage. In any situation, success or otherwise will be determined by the willingness of the trader to submit to the discipline of following specific and immutable guidelines. BLACK BOX SYSTEMS: These are best described as private indicators which are sold with the promise that they “made $xxx or zz pips/trade” over a period of time, and the exact formula and settings for the indicator are hidden “inside” the software. Unless the trader knows how to “crack the code” the setup remains a mystery. Traders purchasing these are taking on trust that the system will continue to perform in the future as well as it supposedly did in the past. GREY BOX systems usually have some user-adjustable parameters, and may or may not be used in conjunction with other setups, involving trader discretion. EA’s AND ROBOTS: (Expert Advisors and Automatic Trading Software) These are becoming more popular and there are even World Robot Trading Competitions these days, so that inventors can test their Robots and EA’s under live competition conditions. So far the success rate of these has been disappointing, but there are a few that have done OK. I suspect that the best ones have been locked up under contract to large institutions … and why not? Still, a very great effort goes into finding that elusive tweak in software that will deliver trading success … while you sleep! So … we have covered the main kinds of trading systems … except for the retail system market! I would just warn readers to be very careful when considering paying for a retail trading system of the kind you find advertised by spam and on the Internet. These have been around for years now, and are always mutating, evolving … and ultimately failing and disappearing! In any event, there are forums that deal with these now. In your “search” box, type in the name of the system you are interested in, and add the word “Scam”. This can tell you something of the experiences of others. But beware – the marketers are even ahead of you on this now, and set up sites to sell the product under the guise of refuting the scam claims! Do some research – ask around – join a forum – or simply devise YOUR OWN system. Chances are that you will trade much more successfully, because you will understand it, and you will “own” it yourself. In the next entry, we will get on with system construction … to be continued. _________________________ _________________ Posted in my Blog: http://forexapplepie.com/

Never been one to avoid a story! In early 2007 we could see the DOW rolling over, and could see the housing bubble in the USA (I get a couple of informed newsletters), so we made arrangements to sell a second property we had but kept our duplex home temporarily. We also got right out of the equities markets and placed all superannuation in cash at 8.4%. Good moves - yes - but I might have been smarter - I could have locked in a 3 year interest rate instead of 1 year!! Live and learn! Only one person ever got back to me and told me he had followed my advice and liquidated everything. He said I saved him over $200,000 - that's more than I saved myself! Anyway - I digress ... The hiccup came when our (then) Bank - Suncorp Metway here in Queensland - settled one of the property loans. We essentially had 2 properties mortgaged at the outset, and the loans were split 50/50 fixed and variable interest. That meant 4 loans all up. They asked me which loans I wanted to settle. That was a bit bewildering, because I assumed they would apply the proceeds of the sale to the same mortgages as the property sold - that would be common sense, and to me the most cost-effective for our balance sheet. However, they applied the settlement capital to our domestic property in error. That meant we had a loan over a property which we no longer held! And at the same time, we had our duplex home paid off! I asked them to "fix" the problem, but they refused, saying there was nothing wrong with the situation - we could just go along paying off the "ghost" loan. This didn't sound right to me so I took a closer look at the settlement documents. Suncorp had chosen to settle the loans that were most favourable to THEM, not us. We were charged an interest penalty on the settlement because we had not held the property for more than 5 years. The settlement attracted a latent fee because when that loan was taken out, they waived the loan establishment fees on the condition we maintain the loan for at least five years. This was a considerable amount - I think it was 3 months interest plus a $600 fee on each loan!! None of these penalties would have applied on the investment property that was the subject of the sale. In all, we were put of pocket by $2400 over the 2 loans. After 6 phone calls, emails, calls not getting returned, staff no longer working in bank sections, and the general run around, I wrote a final letter, which was ignored. I then got in touch with the office of the Financial Ombudsman Service. In fact I was going through some details of this tonight - about 4 hours ago - over an unrelated matter. It was 6 weeks before we heard back from the Ombudsman. The bank told a tale about us providing no calculations to support our claims for interest lost because of a bungle over the actual date of settlement - their failure to forward the application for settlement document. We were in the branch of the bank, and by coincidence found that no application for settlement had been sent - even though we had completed and lodged the form 10 days earlier. The settlement was unable to go ahead, and the bank refused to accept responsibility - blaming a series of public holidays for the delay and misplacing of the application. The first approach to set things right was made to the bank on 5th April, and the matter resolved to our satisfaction on 13th September. The annoying thing is that the bank stuck to their position on each point until, by return mail, through the Ombudsman we provided evidence to support each claim. This process took the longest, and was quite harrowing because it was downright pig-headed stubbornness by the bank to simply look into what had happened, and rectify it. Fortunately I had a photocopy of the signed and dated Loan Settlement Application forum! Effectively we came out much better off because of the ordeal. The bank finally waived ALL fees and penalties, plus credited our a/c with $300 "good-will" after I threatened to tell the story on every Internet forum in Australia! I can tell you that when you are fighting with a recalcitrant bank, who uses delaying tactics to string things right out, you feel like giving up. They know that the ordinary John Q Citizen is not used to dealing with these kinds of negotiations and disputes, and simply folds under the pressure. My wife was in tears over it a few times, and urged me to drop it. But I was determined to get things corrected ... and the persistence paid off ... finally! Banks - I love them all - where else can you get such growth-inducing experiences for free? It's the kind of "zone-toughening" you only want to experience once! This is worth a look ... especially if you have any degree of cynicism ... like I have!

Hi Daanja "Correlation" is a smarter way of saying "co-related." It is a way of describing the relationship between currency pairs. They do not all move randomly as one might first think. The simplest way I can put it is that as some pairs rise, others will rise with them - this is positive correlation. As some pairs rise, others fall - this is negative correlation. To complicate matters a little, there are times that some pairs can be positively correlated, and at other times those same pairs can be neutral or even negatively correlated. A lot will depend on the fundamentals which are the key drivers of trend in the currency markets. During times of economic uncertainty - "risk off" or "risk averse" times - certain currencies are seen as "safe haven" currencies to own. During "risk on" or what the market perceives as low risk times (happier economic times) safe haven currencies may get sold, as speculators take on more risk. The USD, despite its financial problems. is still seen as a safe haven currency, because it still holds reserve status. So even during terrible economic news for the USA (eg housing figures or unemployment figures come out badly) the USD will get bought strongly. If exactly the same news occurred in the GBP (British Pound Sterling) the GBP pairs might get sold off heavily. So economic news that may cause the USD to get bought, would cause the GBP to get sold if the same news was announced there. It has a lot to do with the "nerves" of the speculators, reserve currency status, or simply irrational behaviour - go figure! How does this apply to traders? We need to work out whether certain pairs are positively correlated or not, and if we know this, we will structure a portfolio differently from what might happen without this knowledge. For example the EURUSD and GBPUSD are considered positively correlated. Wisdom dictates that if you go long both pairs, you are essentially trading the same direction, in 2 pairs, so you are doubling your risk ... ie opening 2 positions in pairs that are likely to rise or fall together. On the other hand, the EURUSD and the USDCHF are considered to be negatively correlated - generally speaking. So if you went long both pairs, you would essentially be taking a neutral position - the gains in one would be wiped out by the falls in the other. Similarly, if you were long one pair, and short the other, you would essentially be doubling risk again, as the negative correlation would double-up your risk, and at the same time double up your profits, should you be fortunate enough to take the correct position in your trade. What interferes with this nice state of affairs, is that there are times when the correlation breaks down - as in right now. The EURUSD and USDCHF have currently decided to "get married" - they are waltzing along in the same direction. If you can see the 1H charts of both side-by-side, you will notice that over the past 15 candles, both have risen 100 pips! However, in time the relationship will move in an opposite direction once again, and "divorce proceedings" may begin again. The AUDUSD usually moves with the EURUSD too, but not always!! Some traders do quite well trading the arbitrage available when correlation becomes deranged. They wait until the "standard" or most usual patterns begin to reassert themselves, and then take opposite positions, or parallel positions in negatively correlated pairs, as the relationships become restored to the longer term norms. I suggest you google: correlation in currency pairs and do a bit of reading on what comes up. You should be able to construct a list of positively correlated pairs and one of negatively correlated pairs, and a third one of pairs that are seemingly not correlated at all. There are sites dedicated to discussing and trading these relationships, and I believe there is a niche here for traders who have a good eye for charts, to specialise and do well trading the principles of correlation. The whole idea is to take on board when some pairs are moving in step, and so you choose the better of those two pairs to trade, rather than both. And of course the same goes for strongly negatively correlated pairs - you might consider avoiding trading both of these at the same time, while they are so completely out of step. You stand to receive better results by sticking to either one or the other of such pairs. Hope that is not too confusing.

Welcome back Pa18 ... nearly a year since your last post. Are you a banker ... or a slave to the banks? I have my own banking story ... not half as interesting as the ones above but an equally stressful and tenacious affair, let me assure you. The little problem was resolved in my (our) favour after a lengthy battle. I am not and never will be on any bank's asset sheet. But you have to have some empathy with the people shown in the video ... yes?

I agree 100% with you Max. My reasons are selfish - I trade retail Forex. But happy to go with the flow. I know that futures traders are also heavily represented on TL. Ivan

If you have been burned ... add your story. [ame=http://www.youtube.com/watch?v=8Y2pvrJd_wc&feature=autoplay&list=ULdDba5Oqvs8s&i]YouTube - ‪TodayTonight more nab bastardry‬‏[/ame] Are the other banks in on this little scam too? Too big to take on? Getting justice in this country ... is this still an option for "little" people who are victimised by the banks? This is a pretty big deal ... but will it get oxygen? PS - Mr Troiani died late last year of a stroke. NAB - they want your life!

I apologise to those who may be wondering what that first video was about - it was an incorrect link. This is the correct story that the post was about: [ame=http://www.youtube.com/watch?v=ByvsaWyzku0&feature=mfu_in_order&list=UL]YouTube - ‪Today Tonight Kay v nab‬‏[/ame]

Is this an act of extreme bastardry? Would you trust the NAB after this little anecdote? I wouldn't trust them with my dead cat!! Is this typical of all banks? I would say given half a chance ... that would be a resounding "YES! They are ALL bastards." And their behaviour during the recent interest rate rises in Australia is further proof. But I digress ... this story has nothing to do with official interest rate rises ... and all to do with larceny and corporate crime. Only this time they picked on the wrong people. Is your bank this nice ... their motto? "More Give ... Less Take" Let's see how they demonstrate their love ... EDIT: My apologies - I added the wrong link. This is the correct link to that story: [ame=http://www.youtube.com/watch?v=ByvsaWyzku0&feature=mfu_in_order&list=UL]YouTube - ‪Today Tonight Kay v nab‬‏[/ame] [ame=http://www.youtube.com/watch?v=OqB4k9R8BgQ&feature=autoplay&list=ULdDba5Oqvs8s&index=10&playnext=1]YouTube - ‪nab exposed‬‏[/ame]

CREATING A WORKABLE TRADING PLAN If you have ever needed a written trading plan – here is one from which to model your own. I have adapted it for my own forex trading. I am certain you can soon flesh-out a workable plan for your own trading activities, whether for currency trading, energies, precious metals trading, or indices and so on. The principles remain the same. Remember, this is YOUR plan – no one twists your arm, so be flexible at first until you feel comfortable that you have molded it and made it personal. Then when you have the basics, remember to refine and improve, and DO have a weekly “Wash-up” of your activity, discussing these things with an empathetic friend or mentor. So let’s begin … here is one Forex Trading Plan Transition to Retirement Goal I’d like to retire in a few years, but I still need a regular income. I plan to educate myself about trading Foreign Exchange, and in the meantime, any trading profits will still be secondary to my main salary. I plan for my Forex Trading profits to exceed my salary eventually, thus completing the transition to retirement. I will use my spare time to work towards this goal – learning and practicing technical analysis of the currency markets. I will stay in my present employment until I have proven my ability to generate regular trading income. Strategy My initial trading account will be with $10,000. But this will not be funded until I have traded profitably on a practice account for three months. I will use an online broker to place my trades, and will research the benefits and pitfalls of using various brokers through research and discussion with other currency traders. Trading Pairs The currency pairs I will trade initially, will be the majors, because of the higher liquidity, and the lower spread available. I will research further to match profitability against spread in other currency pairs, as I become experienced and proficient. These are the ones I will trade: EURUSD GBPUSD USDCHF GBPCHF USDJPY EURJPY AUDUSD GBPJPY Selection of forex trades will be made from all time-frames – weekly, daily, 4 hour, 1 hour and 15-minute technical charts, using my own setups and strategy. I will use candle-stick charts, because they convey much more information to me than other representations of price activity. I will study Price Action Trading, and use this wherever appropriate, as another useful technical trading tool. Rules for Strategy Execution All of my currency trades will follow a strict rules-based (mechanical) approach. 1. I will take every signal my mechanical strategy produces without question 2. All trades will have a stop-loss applied at the time of placing the trade 3. Stop-loss orders will not be moved 4. I will always trade with the dominant trend – the higher time-frames – never against 5. A full analysis will be done involving all time-frames before a trading decision is made 6. I will not use leverage exceeding 50:1, determined by my position-sizing approach 7. No trade entries to be made within one hour before and one hour after news releases 8. I will write down my rules in an unambiguous form 9. My trading journal records will be used to refine and update these rules as necessary 10. I will not trade closely correlated pairs in order to minimise risk of loss Money Management My money management will be based on position sizing principles. 1. My position sizing aims to restrict trading losses per trade to 3% of capital maximum based on positions of one mini lot 2. No more than 4 trades to be open at any one time – fewer if possible 3. Trading capital will be protected by setting stop-loss levels between 200 and 300 pips from entry 4. I will monitor portfolio risk at all times Trading Returns I should be able to make 50% per year on my trading capital. I have divided this into 12 equal amounts giving a monthly target of $420. This equates to a weekly profit of around $100 … or 100 pips using a mini account. Eventually I will switch to a standard account. This involves moving up from $1 per pip to $10 per pip. I will not do this until I have proven my ability to grow my account by at least 50% per year. In order to achieve this without the addition of extra trading capital, I will simply increase the number of mini-contracts opened per trade, to match the 3% risk rule. Trading Journal My journal will be updated after every trade … or after every session if busy managing trades My records will include: Currency Pair traded and time opened and closed Opening and closing Price Position of stop loss Profit or loss A chart showing entry/exit if possible for further examination later Daily and weekly record of drawdown as well as current profit and loss A review of my weekly and monthly profit target A daily balance of the overall account, including cash and open positions Comments on how to improve my trade management, errors made and so on At the end of each trading week I will summarise my activity and set guidelines designed to exploit strengths and minimise weaknesses in my trading rules. This will prevent repetition of error, and boost confidence and skill I will discuss my activities with a colleague or mentor each week in order to improve my strike rate. _________________________ _______________ Posted at my blog: http://forexapplepie.com/