WHAT REALLY WORKS from one professional

Trading Discussion
1

I am not a professional Forex trader, but I came across this snippet recently…

QUOTE

I have been a professional for years, I’ve run commodity pools/small investment organizations, multi-city enterprises. Our returns were consistently above 50 % per month.

I have won and lost like the rest of us. I am at the top of the game right now, yet am facing the end of my days possibly so I want to share a few insights to help those of us who strive to achieve all we can for those we love.

  1. There is no magic indicator. You must learn to perceive price.

  2. Big money runs stop areas (runs price up slightly above recent highs momentarily to collect pips, and runs price below recent lows momentarily to collect pips… like a religion… it’s too easy when you have the money to move the market, it’s like playing checkers to them).

  3. Perceiving price involves being able to visualise median without the use of a moving average.

  4. Place orders above/below recent highs/lows depending on the perceived median price.

  5. Worst case scenario in this way is you will have at least a small retrace where you can close a loss and run with the trend with a new order.

  6. DMI/ADX will make you a statistic.

  7. Stochastics are less capable than the naked eye and become wrong.

  8. MACD is often wrong once a run has been made. The momentum dies but the direction does not, and MACD takes the shift in momentum as a directional change. It will stab you.

This may sound silly but it,s true. The best martial artist is one with perception. He is above the game.

UNQUOTE

I’m sorry, but some of my friends ‘in the game’ tell me much the same as above.

Good luck all…

2

It definately seems like good advice but in my opinion if you are someone new just starting out than you have to atleast know how the indicators work. How can you build instinct from nothing at all unless you have a mentor? Once you understand the ins and outs of why an indicator works or fails than you can use it to your advantage. Just my opinion.

Topgun

3

Even with a mentor, instinct only comes from experience.

You say that you need to study indicators, which is fine, but where to start? There are tons of them covering all different ideas on the markets.

I definitely went through the learn everything I can about every indicator out there. The final decision? Not to use them. They are just representations of data, and sometimes 2 or 3 steps away from the market.

4

I have been trading for some time and have had ups (+80 pips on the Non Farm Payroll) and downs (-80 pips, Thanksgiving Holiday).

Having searched the net, trying this fantastic system and that theory, I still find that something as simple as the Cowabunga system can bring success.

The greatest problem I had, and still have, is discipline.

Recipe for disaster 1:
Okay, you set yourself a daily target of 20 pips, risking 10 dollars a pip. Great. Just made my 20 pips. Finished. Then it strikes! Instead of switching off for the day, you think "Well I could easily get another 20 pips… oops, lost that trade, try again and before you know it, panic sets in and you’re overriding your trading system trying to regain those 20 pips.
(GREED)

Recipe for disaster 2:
"Well, it’s easy to make 20 pips, I think I’ll risk 30 dollars a pip and make more money! This is risking much more than 5 percent of my account but I’m on a certain winner here… oops, stopped out! " You realise, with that sinking feeling, you have just entered ‘massive drawdown alley’! The battle to repair your account will probably empty it.
(GREED)

Recipe for disaster 3:
“Wow! I’ve just entered this trade and made my 15 pips. Great I’ll exit now and top up my account. Damn! As soon as I closed the position, the price went up another 20 pips! I wish I hadn’t panicked !”
(FEAR)

Recipe for disaster 4:
" I’ve been in this trade for a while now and the price MUST go up but it’s going down! I’ll move my stop-loss down a bit until the price starts to rise. A bit more, down a bit more, Oh no! I’ve lost 50 pips. Better exit the trade now!" (Draw-down alley, again).
(GREED)

Sound familiar?
Here is my suggested method for newcomers. The success curve follows the learning curve!!!

  1. Find a SIMPLE trading system, there are plenty at Babypips.
  2. Work from its signals.
  3. No, it will not be perfect and you WILL LOSE trades more than you will WIN them.
    GET OUT of the losing trades. PROTECT yourself with stop losses
  4. If you’re onto a winner, FOLLOW IT. Use a trailing stop-loss, move your stop-loss to protect your profits. Learn when to EXIT as well as learning when to ENTER
  5. Learn DISCIPLINE DISCIPLINE DISCIPLINE! Protect your account, it’s all you have. FIGHT FEAR and GREED
  6. You will NEVER see into the future. The market will do what the market wants, all you can do is follow! Listen to what she says. She leaves little clues for you to follow and then runs away while you try to understand her.

GOLDEN RULE:
Demo accounts are great for playing with BUT sometimes they are designed to be TOO EASY. Don’t be fooled! Nothing can prepare you for the ups and downs of live trading, risking MONEY. The only way to learn this one is by DOING IT.

A stockbroker I know summed it up quite nicely: " Oh yes, Forex. You make 10,000 dollars in the morning and lose 15,000 in the afternoon!"

With PERSISTENCE, DISCIPLINE and LEARNING, yes you WILL start to perceive…

5

Great advice paul, I too have been through that road and the only way toward success is t conquer that road.

6

What do you mean by a statistic? (another trader who just quit trading?)

You keep mentioning the ability to “perceive” what are trying to say? I must be able to look at price from a different standpoint?

How can one visualize price without the use of a moving average?

7

Common wisdoms tend to be ignored just like value indicators are ignored for flashy $6 grand plus trading suites. After all, the Dream can only be realized by ‘premium’ packages, right!
Most successful traders talk about intuition but I’m afraid it is generally built using flawed indicators at first and learning when they fail and why. Of course, there are some better than others, those that focus on market structure etc. But the common denominator amongst the successful are screen time, regardless of what indicators your current belief system is tethered to.

For price action study, I recommend Al Brooks and Woodies. They are old school and what they know stands the test of time.
For clean trading tools, I recommend daytradeessentials.com
Simplicity is the ultimate sophistication and narrowing your trade entry and exit decisions to 3 or less criteria is the goal that most in this field should strive for. A friend at Morgan Stanley mentioned that to me several years ago and it has proven its wisdom to me over the years since.
Thx

8

You REALLY WORK
Your brain REALLY WORK
Market REALLY WORK :wink:
Broker platforms REALLY WORKS ( often ;))
Forex REALLY WORKS
Wining REALLY WORKS
My car REALLY WORK
Strategies REALLY WORKS
So if everything really works why do we still lose

REALLY WORKS not mean works good. If something doesn’t work, think about it and ask yourself - how can I do something in such a way to work better?

See You in my new blog

9

Paulr57,

Thank you for sharing your advice. You mention that you are facing your end of days. I hope that you are not sick in a way. If so, all the best in what has to come. Would like to know some more about it.

Regards,

Idefx

10

Paul’s last contribution to this thread was 5½ years ago, so he might have moved on.

11

Absolutely right! Well said!

12

Hahahahaha, Simon. Didn’t notice that…:smiley: Well at least I showed some interest…:slight_smile: Ahhh well, this is another character building silly moment… Thank you!

I keep on having that the last days. Replying to old threads…:wink: