The perfect trading system
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Thread: The perfect trading system

  1. #1
    FOREX TRADING 101

    INTRODUCTION


    Trading internet foreign exchange (Foreign Exchange ) is a really large risk enterprise. It is necessary to get a solid understanding of the operation of the Foreign Exchange market and the risks involved to succeed. Forex market could be likened to a powerful ocean and retail traders are little fish swimming with sharks. It is very easy for these traders to be devoured within an instant resulting in financial ruins. Most traders frequently fall into this dangerous snare. The simple fact of the matter is that the odds are just contrary to the retail traders. The question at this point is how do you survive in very dangerous environment that has ruined the life of many? The announcement that 95% of Foreign Exchange traders will wind up being as failure is well-known to all Foreign Exchange traders. What are the things a Foreign Exchange trader need to do to avoid being part of the numbers of failed trader and also be counted one of the 5 percent elites of successful traders?

    WHY MOST NEW TRADERS FAILED

    I considered it necessary to address why many traders neglected since majority of them come into the market together with the mindset that Foreign Exchange trading is the simplest way of making money. Having researched Foreign Exchange critically for the past six months by studying from major Foreign Exchange websites, books, experienced traders in various forums, attending seminars and trading over 10 systems equally in life and demo accounts, I have come to realize that what's needed to become successful traders are absolutely simple rules. In the procedure, I've blown more than five accounts both demo and life. I reached a stage where I had been making continuous profits in my demo accounts, but ended up still blowing my accounts. Why am I a powerful with demo accounts and wind up failing with life accounts?


    I shall make attempts to provide answers to a number of these questions in my next post.


    ADDITIONAL INFORMATION

    This thread has evolved over the past couple of years and among the critical posts that I thought I should share on this page is your mindset of a successful trader. This post encapsulate my trading philosophy. You need to endeavour to look for the articles related to the steps mentioned here. These articles are a few of the most important ones. As times goes on, I'll offer the links to these critical posts and update them based on new findings. Knowledge is dynamic, it's not static. Read on.


    THE MINDSET OF A SUCCESSFUL TRADER!

    For those who have been following this thread for quite a while, you should have by now be in a position to trade with confidence. That notwithstanding, I will now discuss the following special stepson how to think, act and develop the mindset of a successful Foreign Exchange trader:

    Step 1: Trade the Masterchart. It should be your No. 1 guide. The levels on the Masterchats I posted here are products of extensive research. What is going on in the Foreign Exchange market is that series of bad/good news (fundamental), manipulation/greed by the large players (banks, hedge funds etc) and many times fear/panic by the investing public will always push the price out of one support/resistance amount to another. The truth of the matter is that the world economy generally is in shambles that's the reason you will always see series of bad economic news followed by string of good news resulting in #8220;bull bear bull bear#8221; usually repeated over and over again in your weekly chart.

    Step 2: Trade in the direction of this weekly chart: The most dependable direction in the Foreign Exchange is the management of this weekly. If the weekly is in a bear/bull mode it might stay that way for 4-10 weeks. Read the post on understanding trend to better understand how to see the bigger picture utilizing the weekly chart.

    Step 3: The best trading opportunities are in the weekly: To increase your probability of success, market only the very best of nN, mM and buy around the base of V, U and W over the weekly charts. To recognize these level signs, open a weekly chart, look closely and you'll begin to comprehend them. This simple trick will make your trading live a lot easier. I will begin to post this signals on this particular thread.

    Step 4: Use money management: Use my recommended money direction lots/account dimension ratio as follows:

    0.01 lot for $1000 Trading account (maximum of 5 open trades at the exact same period )
    0.10 lots for $10000 trading account (maximum of 5 open trades at the exact same time trades), etc

    Should you gather more experience or make money frequently, you may gradually raise your lot sizes or open trades to double the recommended lot sizes.

    Go through the early part of this thread for a better knowledge of my views of cash management.

    Step 5: Trade the daily trade-friendly chart: The weekly is the manual along with also the daily is your primary area of play. Trade the daily chart after the direction of this weekly. Study a few of those daily charts I have on this thread for better comprehension of the daily charts.


    Step 6: Trade 1000 Pips circle. Read and comprehend the 1000 pips price actions analysis. For your major pairs from the pin of a weekly candle expect 1000 and more before any major reversal. In case the destination of 1000 pips PAA is nearer to some major support/resistance on the master chart anticipate a bit of that amount. Identifies expected levels beforehand and you only monitor price reaction around such areas.

    Step 7: Avoid thinking regarding pips. Avoid thinking regarding pips but with regard to real currencies e.g. cent, pence, etc.. If you believe this way you can avoid the graveyard of most Foreign Exchange traders (i.e. chasing low pips (under 100 pip). If you believe concerning currency you will realize that a transfer 1000 pips proceed by GBPUSD transfer from 1.54000 into 1.64000 is a mere 10 cents. Further a 1000 pips go on GPBJPY from 130 to 120 is a merely 10 yen.

    Step 8: Use H4 50 Pips Price Action Analysis. Utilise price movement on H4 candles within 50 pips range to determine where to put in a trade. If you do so you will realize that you are able to have up 16 hours and much more to enter a trade. Trading this way that you do not have to take a seat in monitor your chart endlessly to get trading opportunities. In the worst case scenario you only have to check the chart every 4 hours.

    Step 9: Input trades utilizing only M15 trade-friendly chart: whenever the price reach your desired areas on the greater time, put in your trades at the best discounts by using M15 onto a trade-friendly chart. Should you require additional explanation read my previous post about developing a trade-friendly chart.

    Step 10: Recognizing the importance of 50 point amount on RSI: 50 point amount on RSI in your trade-friendly chart is normally an area where price normally stalls, changes management or proceeds on any time frame. Study how price respond at this stage for a better comprehension of price action.

    Step 11: Set concrete zone on H4 chart: Price generally trade for many major currency pairs within 250-400 pips over a time period within a concrete zone. The concrete zone is a great guide on where to put stop losses. For your short term trade, place stop losses marginally above the concrete zone to your market and marginally below to your buy. Read my previous articles on concrete zone for superior comprehension of the concrete zones.

    Step 12: Stop reduction : Most traders recommend you should not risk more than 2% of your account per trade. This is a fair recommendation, but I do not support tight stop loss. Together with my greatest recommended lot size/account ratio 2% account risk per trade on $1000 account size trading 0.01 lots is $20 i.e. 200 pips (should you trade the maximum you raise your vulnerability to 10 percent ). The main thing about stop loss is cash management, in case your lot size is little you can manage to increase you stop loss settings and provide your trades space to breathe. Read my views of prevent loss in a number of my earlier articles.

    Step 13: Take profit at pre-determined amount: Set your take profit at pre-determined points based on your expected returns. If you're trading the weekly chart anything less than 200 pips is a waste of attempts. You need to be aiming for 200 pips and above.

  2. #2
    SPOT THE DIFFERENCE - JUNE 2014

    By January 2014 year prices have been consolidating 500-1000 pips for the majority of the currency pairs. Since it is there isn't anything new or interesting till PA breaks from the current consolidation (concrete zones) for many pairs. Trading this consolidation, we have attained our 2014 annual goals for the majority of our accounts. It is extremely easy to take advantage of this monthly consolidation (concrete zone) and benefits from the many bounces on the reduced time frames (most effective Daily, H8 and H4 candles) within the concrete zone.

    By way of example, see May and June charts for GBPJPY and spot the difference if you can. The Daily and H8 charts show the many bounces within this zone in the last 6 months. You can print the monthly charts for different pairs and then compare these with my May Update to see the larger image. A trader won't undergo long-term success till be starts to see the larger pictures.

    Love the rest of the month!




  3. #3
    GBPJPY

    buy: 130
    sell 142

    1200 pips profits currently locked! On the Lookout for the Upcoming chances.

  4. #4
    GBPJPY 12,000 pips cycle - The big picture along with the real thing!



  5. #5
    UPDATE - MAY 2014

    Prices have remained stagnant in the previous 4 weeks and 6 weeks in a couple of instances prices have been consolidate between 500-1000 pips for the majority of the currency pairs.

    As it is there isn't anything new or interesting until PA breaks from the current 4-6 months consolidation (concrete zones) for many pairs. By now a wise trader on this thread would have known how to take advantage of this monthly consolidation. See some of the current monthly charts for some major pairs below.


    Enjoy your day!







  6. #6
    1000 pips breakdown of This 12000 Pips Cycle on the Monthly Weekly and Daily Charts



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