Hi,
I've received a very few of PMs and emails regarding the way I transaction.
Also a variety of folks were saying that my articles were all around the forum and it would be fine if they were all put in one area,so that I will attempt to consolidate everything into one rather condensed thread.
Love this thread, keep it up Jacko
Who am I ??
I started trading Forex about a year ago. Have traded futures much longer (15 years?) .
Started a trading journal at DailyFX at Feb 2006. (ONLY FOR PEOPLE IN LIVE TRADES-Jacko's Pleasure and Pain discussions ).
Http://www.learncurrencytrading.com/...ead.php?t=2373
Lost interest there when a lot of young aggressive newbies came in.
This sounds a more rational forum.
On that Forum I traded reside time for around six months and, as was seen by all who followed those transactions, was very powerful in my trading. If you've read that diary, you may know it had been live time trading and there was no possibility of any B.S. because I (and others) were posting as we traded. If we'd tried to B.S. then everybody would have jumped on us. Originally I started with very tiny numbers of regular lots, but since I started to make very serious money, I stepped up my trading volumes and eventually found my perfect comfort level. I am still trading these massive lot numbers.
I trade a bit differently now than in my original trading pattern. I trade longer duration, and commerce on average only about two times weekly. Less stressful, more profitable.
I am an American who now resides in Asia. I am amazed and angry at how dumb our Government and companies has been.
I watch, almost on a daily basis, the rise of the Asian markets and realised some time ago that ole George and his recent predecessors have wasted the enormous wealth of America on absurd follies.
China will overtake the US as a world manufacturing economic power sooner than everybody expects.
I am a Trend Trader
EVERYONE SHOULD TEST OUT THIS VERY UNUSUAL AND RARELY USED STRATEGY;
1. Buy/ sell ONLY in the direction of the major fashion and
2. Buy/sell on dips. (Use support lines to direct you regarding price. . .also round numbers... I also use the 50% Fib ratio. .)
3. Bank your profits
Primarily, how do you know what the trend is?
DETERMINE THE TIME FRAME THAT YOU WANT TO TRADE.
1. In case the graph on the chart begins in the bottom left hand corner and ends at the top right hand corner, the market is going UP.
2. In case the graph on the chart begins in the top left hand corner and ends at the bottom right hand corner, the market is going DOWN.
3. If you're still confused, print it off and display it to a 5 year-old. . .they will get it right each time. . .LOL
The fad is your ideal friend you could possibly have in the Forex market.
When you trade with the trend, even if you make a mistake, the market will get you out of your difficulty....If you make an error and you're fighting the trend. . .YOU ARE STUFFED, BIG TIME !!!
Secondly,I think the round numbers (1.2900...1.3000. . .etc) are valuable. I just use minimum numbers of trend lines as well as the ONLY Fibonacci number I use is the 50% amount....
That is the limitation of my T/A...
KISS = Keep It Short and easy
Note: I do NOT use any moving averages (or some other of the fancy measures). They are historical numbers!!!
The reasons that I use just Round numbers, trend lines, and also the 50% Fib amount is the big players ALL use them. The more complied you make your trading parameters, the less amount of individuals will be utilizing them.
Forex is among the most trendy markets. In other words, it trends MUCH more powerful than say metals, oils etc in stocks markets. The pair that are the most powerful trend market is your Euro/USD. Trending markets are soooo much easier to trade than choppy, volatile and inconsistent markets
Thirdly, Slow down... this market will be here for the rest of your life...
DON'T BET YOUR BANK...
It is better to have rich slowly. . .than to go broke.
Fourthly, A much wiser man than me once said that in the event that you find yourself in a deep pit, then cease digging
Can NOT throw good money after bad money. . .stop and accept the loss... then clear you go so you are able to see more clearly...
You need to either
1. Close out the trade, and let the market go up/down....but after the market begins to retrace, then set your short/long position back on at exactly where you closed it out. This ensures that you get back into the trade along the road down (the Jacko alternative means of hedging) or
2. Close to the place and take the loss. Then look at getting back into a good trade next moment. This market is going to be here long after you and I will be dead, so there is no need to hurry in and attempt to find all your money back in one day.
Fifthly, the is a tendency for newbies to PANIC when the market goes somewhat against this is due to:
1. Probably scared to lose cash
2. Probably undercapitalised
3. New to business....therefore probably uncertain about your own abilities
4. Unsure the trend lines, 50% Fib line and round numbers are as reliable as they are in practice.
4. Probably inexperienced in business and investment by a practical aspect
5. Probably unsure who to speak to for guie
there's a remedy to each of the above.... It is called old age....LOL
Ultimately, you ask why I would rather use the longer term transactions. The solution is that the shorter the time frame, the more you're betting and punting on miniature moves. The smaller the time period, the less they will follow the trend lines, Fib numbers and round number principles.
The longer the time period, the more powerful will be the trend lines
Additionally, short-term trading is emotionally more draining.
Just some additional little things that I have recalled that may be of help to anybody looking to place trade:
Primarily, do not over-trade. Some folks here seem to want to bet on every tic. The thing that kills new traders would be the uncontrolled punting on what that goes two ticks.
Secondly, stop thinking you need to outsmart the market.
You do not have to..this company is very simple if you leave your brain at the door....just follow the trend = follow the cash =going with the flow = barking with the big dogs.
Stop thinking it can't be that simple....it is!!!
Thirdly,, you need to detach yourself emotionally in the cash. . .that is the hard part. . .stop seeing it as money, and look at it as numbers.
Also, do not play with cash you can't afford to lose. . .or rather, set the money aside and tell yourself it is lost. (You MUST detach yourself from the cash
Ultimately, I am not saying anything different to that which all of the good trading books say. . .but it is amazing that every newbie would like to take on the market and wonders that express freight train flattened them (and destroyed their trading accounts).
The majority of individuals are trading for the adrenaline rush rather than the boring concept of just Assessing profits
The Forexmarkets are arguably the very trendy market there's, especially the Euro.
Once a trend is in place, it requires a lot of electricity to undo it. Have a look at the weekly charts. This current long started back in early Dec 2005 at approx 1.1650. (almost 1700 pips in where it is currently ) It had a comparatively minor correction in approx 1.3000 into 1.2500 before continuing on to where it has become today.
Even more strong evidence for the power of this trend is the above long is a portion of an even more powerful long from 0.8363 in July 2001.
Price does not like support or resistance levels. It mostly tests them and then moves off quickly. You#8217;ll seldom find much price action in the neighborhood of the line. When price is hanging around a support or resistance level, it#8217;s likely to split in the contrary direction.
(For example we all know that professional traders love round numbers to target. . .it brightens up their dull day to push and cajole the market to a target amount. Currently Euro/USD 1.3000 is your roundest amount there's around those amounts, therefore the pros have gotta be saying that the big game in the business would be to currently mill and push the market to 1.3000. After they do not care, they have had their pleasure. . .and thats why a market will whip and drop/rise dramatically straight after the target has been hit).
Smart Money is the Central Banks. They really determine the trend by sheer quantity of cash. (Central Banks turn the long-term currency markets to accomodate the appropriate government's trade conditions ). Then following them would be the huge hedge funds.
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This egy was invented by me instead to hedging which was often discussed on Forums as a panacea to a losing trade.
Hedging to me is only hiding a reduction under another opposite trade. . .and sooner or later, when the hedge comes off, there's an ugly reduction exposed...I really don't like that notion!!! (But to those who use them, '' I say, different strokes for different folks. . .that is, its own choice).
Currentlythis is what appears to occur to a Traders...
1. You place a trade on and you place a stop reduction of around 40- 50 pips
2. The market goes against you (horrors...I was wwwwwrong!! )
3. Allow the market continue. . .it will probably go say a different 30 - 100 pips past your stop. . .who understands???
4. At length, the market comes back around and starts to head in the opposite direction
5. By now you are totally hacked off with all the market and you allow it to go
The alternative I discovered is a pretty simple one but one that has to be implemented without fail...
Scenario 2
This egy is:
1. You place a trade on and you place a stop reduction of around 40- 50 pips
2. The market goes against you (horrors...I was wwwwwrong!! )
3. Allow the market continue. . .it will probably go say a different 30 - 100 pips past your stop. . .who understands???
4. PUT AN ORDER IN AT THE specific SAME FIGURE AS YOUR STOP LOSS (if you're initially short then put a brief order) This ensures that if the market comes back, as it invariably does, you have a DEFINATE order set up to place you back into the market where you're initially. . .and you are presently in the same direction as the market is moving. .
5. At length, the market goes back around and starts to head in the opposite direction
6. The market picks up you on its new direction
7. THE ADVANTAGES OF THIS (THEORETICAL) STRATEGY IS THAT
a. IT HAS AN EFFECTIVE AND DISCIPLINED COURSE OF ACTION
b. IT Provides YOU A SPECIFIC ENTRY POINT
c. IT REDUCES LARGE DRAWDOWNS
d. IT PUTS YOU BACK IN THE MARKET EXACTLY WHERE YOU GOT OUT
I understand that there are DISADVANTAGES with this egy, buy I believe the total effect of the benefits outweigh the disadvantages.
I also think that this egy is more attractive to my business sense of minimising risk than the original notion of hedging that originally set me off to discover an alternate egy to hedging.
I've now been using this particular egy for a couple of months and it's working brilliantly.
PLEASE NOTE: I am a medium to long term trend trader. The above method works best on these time frames. It works less well on short-term time frames because of the volatile noise on the market.
After a stop loss has been triggered, I let it go past my SL with a minimum of 50 pips until I set the new order.
Once the market has turned and is coming down in the trend direction, my order is subsequently opened.
Try it. . .you will be amazed how good it is.
The key benefit is that you are not tempted to hang on to a losing trade....and so your drawdowns are minimised.
However this is a default option trade. It is NOT the prime egy to use.
DO NOT LOSE SIGHT THAT the prime egy would be to exchange medium/ long term and exchange with the trend, with a trailing stop.
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Time frames (for me) as a Trend Trader
I start with weekly, and then move closer in using daily, 4 hour and one hour to help me make a determination. Less than 4 hours will be noise rather than a fad. They are the sucker rallies and declines.
PS Don't be the sucker...
But I am also beginning to notice that it does not really matter anymore where I buy or sell.
The anti-hedging egy is FAR, FAR, a lot more important.
The anti-hedging egy ensures that,... if you create a trade in the wrong direction,.... You can get your losses . . .AND you're in the direction of the trend.
Stick a trailing stop loss on it and you're guaranteed a profit.
So...
1. If your trade is a winner, then you stick a trailing stop loss on it and let it run.
2. If your trade is a loser, then apply the anti-hedging egy, and at any moment, you can get your losses . . .AND you're in the direction of the trend. Stick a trailing stop loss on it and let it run.
K.I.S.S. (keep it short and simple)
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In my opinion,
You have NO chance seeking to trade the news (buy or sell the moment the news is released). . .the traders will ALWAYS be in front of you. (you require a broker also that won't play unfair tips during those high volatility times, those tricks include freezing the platform, a few will expand the spread way too much, others are going to get you full way to far in the price you wanted to).
Whichever broker you trade with, you are trading via their platform. Consequently, their brokers will therefore have an advantage over you.
To think otherwise is naive.
They are taking the other side of the transaction (which they need to in trading the news since they don't have time to spread their risk), and they'll fight tooth and nail not to give away a company advantage to any trader. That is the reason why they're doing all of the items (plus much more) outlined previously.
Its such as poker, when you look around the area and can't see the patsy, then you're the patsy. The quicker / shorter time frames which you attempt to play in this industry the more you are in a disadvantage. Retail traders trading the news are like fish swimming together with hungry sharks in blood-filled water.
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Aaagghh.. .the bit everone wants to know..the outcomes.
Prior to March 2006
Until early March 2006, I was a RABID brief. I was vociferous about going short since the Forex Express was definitely a South bound Express.
When I look back through my previous posts on this Forum (DailyFX), I was really quite rude. . .but nevertheless...I was making money and others were losing money. . .so I was just trying to help.
About March 29, 2006
Below is a copy of a ribbon from the other Forum of which I've been a part. (I haven't posted there for ages. . .too several loopies were hanging about...)
it's dated EXACTLY one year ago on March 29 2006. Watch Post 5305
http://www.learncurrencytrading.com/...t=2373page=354
Originally Posted by ;
About April 25 2006
Below is a copy of a ribbon from DailyFX It's dated EXACTLY one year ago on April 25 2006. (Watch Post 11079) regarding my long term guess on where the market was going.
Http://www.learncurrencytrading.com/...3666#post92696
It was followed two or three days later by this post (article 11670).
PLEASE NOTE: This was posted 12 months past
_
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</b>
As seen from above
About April 25 2006 (when the Euro was at 1.2400) I suggested that I'm looking to 1.3666 over 12 weeks
On April 25 2007, the Euro hit 1.3664 (I missed the goal by 2 pips!!!)
All this goes to prove one thing....
ANYONE can get lucky in this business
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The House is open.
If you have any queries, feel free to ask...
Should I don't need to reply....well, then I'll not!!!
When I haven't answered, its probably because I haven't seen it or, more probably, I am ignoring the question (so please don't ask it twice)
However, please see the above posts so I don't have to repeat myself endlessly. (I am NOT your mom, so I expect you to do some work BEFORE asking me questions).
Also, everyone who is truly interested in Forex should read as broadly as possible. I have recently read some amazing novels. I have highlighted the salient points:
Jesse Livermore: The Worlds Greatest Stock Trader by Richard Smitten
1. Don't eliminate cash
2. Consistently Establish a Stop
3. Keep Cash in reserve
4. Permit the (Powerful ) Position ride. . .until you have a Clear Reason to Sell.
5 Take the Profits from money. . .and place 50% in a separate account
Lessons From the Greatest Stock Traders of Time by John Boik
1. Trade with the Trend
2. Cut Losses short
3. Let Profits run
4. Manage Risk
How Legendary Traders made Millions by John Boik
1. Understand the General Trend of the market
2. Use the Knowledge of History on your Study and Observation of the Markets
3. Use your Own Research and Don't cling to Others
4. Buy the Leaders
5. Buy only on Breakouts and Utilize a Pyramiding Strategy to incorporate to all those Winners
6 Cut Your Losses short
7. Hold on to your own Winning Spots until Classic Sell Signals tell you to unload your Positions
NOTE: In asking some questions, remember to please allow for time differences.
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