Price Action

Hi Forex Traders. It's Monday today and forex market is open for us to see what's going up and what's going down. During this time I'm sidelined until something 'catchy' comes out and ask me to take a forex trade.

Therefore at this point I would like to answer a question that I received on my private messages from some of followers sent me on my e-mail. I would like to thank those who asks because giving answer to related subject gives me how my blog helps those who needs them.

Question:
"Dear Admin, I'd like to ask how do you identify Price Action (PA) and their setups? You often mention Price Action several times on this blog and I'm interested to learn them."

My Answer:
Yes, my trade is based on Price Action because for me, Price Action shows me the future, and many indicators I've known shows only the past. Learning several types of important Price Actions such as Pin Bar or Outside Bars & Inside Bars are the first signal and then combined with other simple manual tools such as trend lines, Fibonacci, Support & Resistance lines increases the rate of success of your forex trade(s).

As for Price Action, there are many free e-books out there that you can get from Google-ing, forums, etc. I learn my Price Action from one of the e-books found here. Remember to learn all of them and back-test them on your preferred forex pairs you trade and apply them on your demo account.

Best Regards

READ MORE - Price Action

Another great post from a great poster

I've been trading for a living for many years. Using robust methods that have worked for decades, and I trust will continue for more decades. I've had good years and slow years, while very successful over the long haul, thought I better tell those who think that trading can replace their job have the better odds winning the Powerball. Really! There are hundreds more who have won big in the Powerball than actually earn their money from private trading.

Thinking otherwise is denying reality and the facts. It is easy to ignore because the facts about trading are difficult to dig out, and only the determined care to find out anything or succeed at anything worthwhile.

After reading many posts in these threads, I decided I had to weigh in on a couple of things. I would have to agree with -Isotonic- that a very small subset of posters are actually trading for a living.

Most of my friends are traders, many of whom I helped bring into the winning fraternity. We all have to keep on our game every day, 100% , or some mistake could eradicate months or years of progress.

"Making a living" is very much a similar question as of what "is" is.

All of the professional traders I know, whether they trade forex or futures markets, do not make "so much per day". That is a phrase used by marketers, because they know what beginners are looking for, and that is a steady income so they can get rid of their jobs. Money from the market that you can count on does not come steady or nicely "so much per day". Real traders make profits, budget their expenses, save some profits, add some profits to their accounts for further building of the account, etc. Just like any business, which is what real trading is.

Most of the trading setups that you see bandied about are "tricks". Most "tricks" have small edges, and trading them continually teaches little about the big picture, and the big picture is where the big money is made. When a marketer is trying to separate you from your money, he is likely promoting a "trick".

Nothing wrong with trading these "tricks", if you know that they have a strong, provable edge. But, to know that a "trick" has a definable edge, you already have to have an underlying construct or context to compare and/or use that edge.

Almost like the chicken and the egg. To know something has an edge you have to know what an edge is.

Quickly, name all your friends who have that going for them. A couple of great trades, or a month of great trades, or a year of great trades is nowhere near enough. To make 50 thousand-plus trades and be ahead, to be able to survive years of changing markets, politicians, governments, wives, ex-wives, good health, bad health--- while trading profitably is what you need from an edge.

Private, profitable traders (those who've done the above) can tell you their edge immediately, and can prove it. Unfortunately, this set of traders is very small, estimated a few years ago by a research company at less than 800 in America--- and most of you reading this will never among them. And that is not a bad thing. That doesn't mean that you won't make money from your trading. You might even have more richness in your life by doing something else than trade.

I will tell the only way a trader is able to make $1,000,000 from trading.

Here's an example of 10 thousand trades. Of these trades, you might lose on 6000 of them for small losses, win on 3800 of them for moderate profits, and win fairly big on 200 of them. You make your million from this series of trades by losing only $9 million on your total of losing trades while making $10 million dollars on your total of profitable trades. This means averaging $50 a trade per lot or contract (in the case of futures), which is really good after expenses. Very doable with robust methods. And, you have to stay on your game or you won't do this well.

But this is nothing like you've been promised by the "gurus" and promoters of the "money per day" foolishness.

Trading for a living is demanding mistress. Read on if you can stand it.

99% of my success has come from trading and working breakouts. Primarily larger breakouts. Why? They work!

When you learn that breakouts "work" as a trading concept, over the years you continually seek the best breakouts like seasoned surfers all continually seek the best waves. The best breakouts use and highly reward your acquired skills better than lesser ones. Then you stay trading in the zone where the greatest edge is and trade the best breakouts and ignore less useful ones.

For, example, I know that the Vegas material (I have no personal connection with him whatsoever) dealing with the one hour tunnel has a firm statistical edge. A rock-solid statistical edge.

But it takes a professional to trade it. And the method's breakouts are small in expectation relative to others available. But, as in most tradeoff situations, there are more of them.

I wouldn't have any problem encouraging someone to follow the concept for trading. But, I would be willing to bet that less than 1 percent of the people who have downloaded his material are trading it, and probably an equally small percentage of them will profit long term from trading with it.

Trading as a lifestyle is like being a fireman who gets paid per fire. You don't make any money until a fire happens, and you don't make any money if you die in the fire or quit before the fire is over.

I know that posting this may not encourage trading as a career, but if I can shine a little light on the reality of trading, I'm happy to do it. I wish someone had illuminated for me what I was in for 25 years ago when I got serious. It wouldn't have stopped me for a second, but it would have helped me prepare for the future differently.

I know that anything I could say would never discourage someone who is meant to be a trader, because nothing can dissuade a real trader, which is as it should be.

I personally love trading, and believe that it is the one thing I am best suited to do on earth. There are times trading is fun, but mostly it is details, details, and risk management. The best times are after a long trading campaign (fire) and you are relatively flat for a while. You can take time to get perspective. And get mentally prepared for the next one.

Most people think that communities like this forum make it easier to learn how to trade, but I am certain the opposite is true. If most of the posts are from non-winners the only logical reaction for an individual who wishes to win is fade the advice you see in these forums.

Everyone posting has a motive, even me. Most motives are simple self promotion, aspiring traders trying to make themselves feel good, look smart. A few posters have the motive to help others. Many figure that if they can't win, maybe they can help someone else and that makes them a winner somehow. Maybe so. But likely it is a case of the blind leading the blind.

I'd bet you'd rather make money from trading the markets the way things really are, not the way some very literate, but non-winner says they are. Think of that the next time you read a "helpful" post. 99.9% odds the post is from a non-winner.

Trading is a solitary business, with few peer get-togethers except by phone. And when you get discovered by people hoping to accomplish what you've done with extreme care and trial by fire (amazing fireman analogy again!) they demand your help and time (hard won by now) but don't want to compensate you because they think you should just give to them because you've been so fortunate.

Perhaps this missive will be useful to someone. If no one believes it, that is ok too.

-TheRealThing-

Source: forexfactory.com

READ MORE - Another great post from a great poster

The Unspoken Rules Of Trading

Hello forex traders. It's weekend and I would like to share few things that I consider interesting and is essential for forex traders to read to widen our general knowledge, especially for newbies. I would like to post a fantastic advises from a successful trader with user name FUDOMYO from one of the best forex forum site I've known. Here it is:

"I can only speak for myself, but I actually do make a living at trading. It was hard won. It took intensive study and a level of due diligence and discipline that most jobs don't require.

It is a certain breed that rises to the challenge and thrives in this environment.

So cutting the wheat from the chaff starts at the bottom. If anyone finds themselves in any one of the categories of the "people who shouldn't trade" below, then save yourself a lot of money and give up now. What I'm going to share may sound harsh, but it's not mean spirited in the least. The market is brutal and honesty is critical. Anyone giving people false hope or encouragement is doing a great disservice.

The Unspoken Rules of Trading

1. Stupid people shouldn't trade.

It takes a level of mental acuity that pushing the button for the fries doesn't. Trading is professional work and requires an aptitude for strategic thinking as well as a high level of problem solving skills. Here's a link for industry IQ averages. http://iqcomparisonsite.com/Occupations.aspx The chart includes administrative functions as well as professionals, so you need to look at the 50% mark and above. In Finance the cutoff is 110 IQ for professional work, for general employment the cutoff for professional work is 100. There is another statistical table here http://www.geocities.com/rnseitz/Definition_of_IQ.html. Remember these are minimum cutoffs, not levels of excellence. These polls are based on actual employment figures, so it isn't an opinion whether someone has what it takes, it's just reality. Do yourself a favor and take a simple IQ test online. There are plenty.

You are going up against the top minds in the world in this market, so you need to ask yourself, "Do I really have the necessary fire power?" The market isn't an equal opportunity employer, it's a predator.

2. Lazy people shouldn't trade.

It's hard work. Anyone who thinks they can cut corners are deluding themselves. The problem is most lazy people don't realize they're lazy. I don't mean the people who can't be bothered to get out of bed kind of lazy. I mean the one's who went to college, got a degree and spent their time until now being handed work to do rather then ever taking an initiative to improve upon a process, to strive for a level of excellence above the bare minimum of what was expected of them, and always sought the line of least resistance kind of lazy. Trading takes a high level of commitment, a willingness to make sacrifices, and an ability to innovate. If you've never risen to the challenge or developed these skill sets, putting large sums of money on the line is a tough way to find out you don't have them.

3. Emotionally weak or unstable people shouldn't trade.

You need to have a high degree of emotional intelligence, stability, and self awareness to make it. If you don't have the constitution for it, or haven't dealt with your emotional weaknesses they will interfere with your decision making process and you will lose. Fear, greed, ego, hope, and anger are obvious things that need to be overcome. More serious maladies will have an even greater impact so it's up to the individual to introspect if they have the emotional stamina for this profession. Trading will push every button, bring out every demon, and then some you never knew existed. If you haven't seen the "coffee's for closers" speech on youtube, it's worth watching, and if you think that's abuse, then you have no idea what you're up against.

4. Substance abusers, alcoholics shouldn't trade.

For obvious reasons besides drunk courage and nodding off for 12 hours while a trade's going with no stop loss at 500:1 leverage.

5. Unlucky people shouldn't trade.

If you've never won at anything in your life why would trading be any different? There is an underlying cause for unluckiness. I don't buy into the notion that some people are naturally lucky and others aren't. We create our own luck and lot in life. If you are a glass is half empty person, or constantly of the view that the deck is stacked against you, it will be. State of mind defines our path. Losers love to be proven right. The "see I told you, no one's a winner" types.
With that vantage point someone has already cast their own misfortune. They usually try to find like minded beings to substantiate their view so they can blame it on the system and not take personal responsibility for their own failings or correct them. Misery loves company.

Naive people don't really belong on this list, but should always trade demo first. We all have to start somewhere. So being new to something doesn't mean you are not going to make it. But heading into this with a notion that it's easy or listening to people brag about their winnings on a forum and thinking "I can do that too" is a completely false impression. I watch the Interactive threads and from half the stuff I read you'd think people are making a fortune.

This is just not true. There are a handful of good traders, but you need to understand enough about the market dynamics to know who is good at this and who is full of it or just demo trading.

Then there are the scammers. The people who shake down newbies by throwing fairy dust in their eyes. So be cautious of trading systems and signal services that sound too good to be true. They are.

No trading system will replace real knowledge. People who put their faith in a trading system will lose. You need to study from the bottom up. Candlestick patterns, chart patterns, price action, all the components that create market dynamics. If you can't understand what's happening on a naked chart, no indicator is going to help. There is no holy grail, no magic bullet.
There is only thousands of hours of chart time and studying everything you can get your hands on for technical analysis, trading psychology, and learning how the global financial market operates.

Then there's money management, risk reward, and overcoming negative expectancy. Trading is a business, not a game. It needs to be approached with a high level of professionalism. The bottom line is critical. You are the President, the Trader, the Analyst, Systems Technician, and Accountant. You have to wear each hat equally well and your business is only as strong as it's weakest link. If you have no prior experience running a business, then you need to learn. Trading is more than just placing trades.

After you've put all this together, then there's the market, which is a fickle beast. It eats the best and brightest as a snack before lunch. It's unforgiving, uncompassionate, and unrelenting. If you get cocky, or complacent, it will rip you to shreds. Even if you do everything right, sometimes you get broadsided, which is why money management is so important.

The last one's standing are the one's you're up against. And they are 10 moves ahead, have years of collective experience and inside market knowledge that retail traders don't.

No mean feat. But if you think you've got what it takes, great.

Trading is not a glamorous job. It's a boring, rote, solitary activity. You need lots of patience and to remain passionate about it at the same time. Personally, I love it. It's like playing financial chess against a thousand Kasparov's. When you get the moves right there's an indescribable satisfaction to it. Making money is the end game, but the side effects are personal improvement and self autonomy, and an in depth understanding of how the global financial system actually works. All good stuff.

Anyway, that's my take on it.

I hope some of this is useful to someone just setting out on the path."

Source: www.forexfactory.com

READ MORE - The Unspoken Rules Of Trading

Trading Environment

Hello Forex Traders,

There wasn't any perfect opportunity I've waited to show up on the last forex trading session on 4hour time frame. There were however quite a significant moves on the market, though there weren't any complete formation for my trading style to take part on both Euro Dollar and Pound Sterling Dollar pairs.

Therefore here on this post I would like to show how trading environment look alike. Me myself I trade forex market on my mobile phone or on my laptop I am using now. Mobile trading is so flexible that we can trade anywhere and anytime as long as we are connected to internet and have a compatible software to support the program.

Here are some pictures I wanted to show about city life trading environment:

READ MORE - Trading Environment

FOREX TRADING SKILLS TO BE ACQUIRED

To excel in any activity—whether it is mental, such as trading, or physical, such as swimming — we need to learn specialized skills. These skills give us the necessary requirements to look at, think about, and behave toward events in a manner different from what we may be used to or what we may have been taught.

However, beyond the sheer mechanics of the activity, which just about anyone can master, lies a particular thinking methodology or strategy that leads to excellence. Although few people have it, such a thinking methodology can nevertheless be learned.

Any thinking methodology requires a series of approaches to goals and problems. These approaches might be better described as mental techniques, even skills of thought application. For example, one such skill might be the ability to identify those conditions that are conducive to making a common trading error before it actually happens. Other techniques or skills include:

1. Learning the dynamics of goal achievement so you can stay positively focused on what you want, not what you fear.

2. Learning how to recognize the skills you need to progress as a forex trader and then stay focused on the development of those skills, instead of the money, which is merely a by product of your skills.

3. Learning how to adapt yourself to respond to fundamental changes in forex market conditions more readily.

4. Identifying the amount of risk you are comfortable with; your "risk comfort level" and then learn how to expand it in a way that is consistent with your ability to maintain an objective perspective of forex market activity.

5. Learning how to execute your forex trades immediately upon your perception of an opportunity.

6. Learning how to let the market tell you how much is enough, instead of assessing the potential from your personal value system of how much is enough.

7. Learning how to structure your beliefs to control your perception of forex market movement.

8. Learning how to achieve and maintain a state of objectivity.

9. Learning how to recognize "true" intuitive information and then learning how to act on it consistently throughout your forex trading behaviour.

Source: The Disciplined Trader

READ MORE - FOREX TRADING SKILLS TO BE ACQUIRED

Forex Trading Psychology - Get the Mindset of the Pro Traders Who Make Big Profits

It's a actuality that forex trading can be abstruse by anyone but best traders abort and the acumen they do is they don't accept forex trading psychology. If you do, you can accompany the aristocratic 5% who accomplish big constant profits...

So what why is mindset so important?

The simple acknowledgment is forex trading is not aloof about method, it's additionally about the conduct to barter your method.

If you don't accept the conduct to barter your system, you artlessly don't accept one.

So why is trading with conduct so hard?

The acumen is simply, you will at some point face a cord of losses and it happens to alike the best traders.

Forget all the debris you read, about trading with little or no drawdown, you apprehend from vendors - It's not true. You are activity to face periods of losses which may aftermost abounding weeks and you accept to accumulate going, admitting demography losses and your affections will be cogent you to aberrate from your plan.

Its here, that able-bodied money administration and discipline, will backpack you through a accident period, until you hit profits again.

Discipline agency you accept to accept what you are accomplishing and accept confidence.

Most traders anticipate they Can chase a so alleged able and win, while best admonition and forex robots awash online are junk, they deceit alike chase the few acceptable admiral and forex trading systems because they don't apprentice from the arena up.

When you accomplish in the forex market, you accomplish in an ambiance that presents these different challenges:

- The bazaar is all able and is consistently appropriate and alone you can be wrong

- Its anarchy and anarchy and you will lose for periods of time

- Its an allowance based bold and you charge to apprentice how to barter them

- There is no aphorism of law and of advance you accept to accomplish your own rules to survive

- The assignment belief doesn't administer and assignment amount counts for nothing.

- Actuality able additionally counts for annihilation alone actuality appropriate does

In this anarchic and abandoned world, your rules and conduct will advice you survive and prosper. You can win but bethink your adjustment is alone allotment of the blueprint it's your mindset that is key.

As we said beforehand anyone can apprentice bill trading- but best traders anticipate it's accessible or they can chase others. They don't anytime bother to apprentice the basics to get aplomb and conduct and they lose.

Forex trading isn't a airing in the park, that's why 95% of traders draft up.

Of advance for the austere trader, this presents a abundant befalling for big gains.

Forex trading attitude is the key, to putting you in the 5% of acceptable traders, who accumulation up the big profits and bethink - the bazaar doesn't exhausted the trader, the banker beats himself. This is about due to a poor compassionate of forex trading psychology.

READ MORE - Forex Trading Psychology - Get the Mindset of the Pro Traders Who Make Big Profits

How to Avoid Pitfalls in Forex Trading

Forex trading bazaar is a active abode area abounding traders win millions and abounding added lose a acceptable bulk of their capital. There are abounding affidavit which culminate in accident money, you acquire to be actual accurate in advance your basic as a bad barter may clean off your account. In this commodity we will altercate few tips to abstain this lose. These are not adamantine and fast rules, aloof few things to accumulate in apperception while trading Forex.

Firstly, accumulate your focus on the trade. Don't be a day dreamer about your profits. Be realistic; accumulate your focus on accepted trade, abode a reasonable stop lose on your barter and again sit back. Once traded, it is out of your hands, now you can not do anything. You acquire to delay what bazaar will do with your money. If you lose, acquire your abortion and be accessible for the abutting trade. Money accident is more good than accident your courage. Wining and accident is allotment of this game. Apprentice from your experiences.

Secondly, you can apprentice a lot from audience accounts. But use them as a allotment of your acquirements Forex and don't be abased on them. Once you apprentice how Forex bazaar works, how your agent systems works, again instead of application audience account, alpha trading with baby bulk of absolute money, every barter will add a fresh affair in your experience.

Thirdly, don't barter if you are accepting apathetic or borderline about the market. If you are not in able anatomy of apperception for trading or clumsy to concentrate, don't accomplish a deal, it ability advance you to accident a trade.

Moreover, don't be emotional, as affecting decisions are generally wrong. Being aflame afterwards acceptable a barter or afraid afterwards losing, will afflict the akin of your confidence. Either you will become over assured or you ability lose your confidence, in both cases affairs of lose will increase.

Additionally, baddest the assurance aces broker. Abounding brokers are in the bazaar aloof to accomplish money so be accurate in allotment a broker.

These few tips will advice you in trading. Forex bazaar is a circuitous place; you should apprentice the rules of this bazaar afore advance your money.

READ MORE - How to Avoid Pitfalls in Forex Trading

Trade Forex and Achieve Financial Freedom

Achieving success through Forex trading is not a myth. There are more than 40 million professional Forex traders (could also be called Forex or FX traders) all over the world who are trading for a living and enjoying their financial freedom life. You could possibly be one of them.

According to Robert Kiyosaki, the columnist of the book, 'Rich Dad Poor Dad', to get out of the rat race, we should not work for money, but instead, let our money come for us through businesses or investments. Why? Because letting money comes to us is an easier way to actualize financial freedom and retire early. Forex trading is a wealth creation method that your wealth advisers or financial planners would not normally tell you.

Starting from a small forex account or small financial capital is a good way to get to the top by leveraging step by step until you have your own large account and produce an account that lets you trade for a living with money management and have disciplines of trading. With the potential of Forex Market with a volume that surpasses 3.5 Trillion US Dollar a day, Forex market could be a way for us to reach the financial freedom which, if calculated, distributes 1,000 US Dollar for each Forex traders each day, which equals to 30 Billion foreign exchange currency traders would potentially benefit from it!

Ask yourself in mind, would the income of 1,000 US Dollar per day be sufficient for your life living in your city? With the help tools available on many free sites on the internet, basic Forex training courses and trading experiences, you can consistently make money through online trading in the Forex market. Although Forex strategies are available in many CDs, books, eBooks, or even Forex forums, do not just learn these lessons from their style on your own. Sacrifice a bit of your pocket money to register for tuition fees so that you will have fully understands the real strategy of the foreign exchange currency market. This way you could shorten your learning process from 3-5 years to 3-5 months!

Taking advise from your wealth advisers or financial planners about Forex trading could discourage you from trading Forex, as we Forex traders all know, Forex trading is a high risk investment, though with fully understands of money management and self discipline, Forex market could be a place for us to get to the financial freedom and success.

It is true that Forex trading could be very risky if you haven’t master and fully understands the whole market potential, however there are lots of testimonials from real successful people who have successfully mastered the real art of Forex trading. They are trading in the foreign currency market and making money over the internet every single day. It is not impossible, and you can do it too!

READ MORE - Trade Forex and Achieve Financial Freedom

Great Article!

I've added an article saved in Microsoft Word. A very interesting article to read!! This is how equity curve should be applied to your trading plan.
Added Word Document:
- The Magic of Compounding

Must consume!!

READ MORE - Great Article!

Relating News to the Current Analysis

I found an interesting article for the coming trade plan:

OUTLOOK US economic indicators to be released in the coming weekWASHINGTON (Thomson Financial)

The following is a synopsis of US economic indicators to be released in the coming week with forecasts compiled by Thomson Reuters IFR Markets.Next week is light in the area of economic data, but is highlighted by speeches and testimony from Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Henry Paulson on housing and financial market regulation, and also includes new economic outlooks from key Fed members.

FRIDAY, JULY 11

Friday is expected to bring more expected news of a wider trade deficit and less consumer confidence. Analysts at Credit Suisse said in a memo today that while a weak dollar will mean continued favorable export conditions, 'price-related gains in petroleum imports are likely to nudge oil imports sharply higher, and the potential increase looks large enough to overwhelm any improvement on the export side of the trade ledger.Economists are expecting a 62.1 bln usd trade deficit for May, up from 60.9 bln usd the prior month.Consumer confidence is expected to erode slightly, from 56.4 to 56.0. Again according to Credit Suisse, the index should remain near its record low, since there's no reason for it to rise.'Consumers' biggest concerns are higher prices and unemployment, and we do not see nay relief in the recent news.'

READ MORE - Relating News to the Current Analysis