Hey everyone, today I worked on all of the graphics for my next article. It will be about step 2 of finding PA setups, finding key S/R areas. I will be discussion what S/R is from a market view, why it works and how to use the various S/R tools to find PA. I hope to have it posted sometime tomorrow.
Thank you for the tip of not moving to much lower TF I will keep that one in mind, I am not risking much at all but yes I am âafraidâ of losing I guess it is more about self confidence at this point than it is about dollar value.
As you also know I tried to get back to a demo account and it didnât make loosing easier all it did was making winning worse because I had no real ârewardâ out of it so I went back to real account but now basically risking $15 usd / trade with 0.01 lots so basically less than a burger would cost me to have lunch but at least now I do feel I am making money when I win.
I am waiting to get more confident before moving back to bigger amounts but if you say I should, out of discipline, not touch my trade once it is running for now then this is what I will do
thanks
Iâm glad to here that you are trading with small $ amounts, and I am glad to see you are trading with real money. That big loss seemed to have impacted you pretty heavily and itâs obvious you are trying much harder to stick to the rules.
I am against demo accounts. By trading with real money you are instilling into yourself that this is a business, and real money is made or lost based on how you trade. The problem with virtual accounts is that they are giving you $50,000 to play with. First of all trading isnât playing, itâs a business so the idea of having virtual âplayâ money is started a new trader off with the wrong mindset. Secondly most people arenât going to be trading with $50,000, so again itâs such a large amount that it makes fantasy and not real. I learned more from losing my 10$ trade than I did losing half of my virtual account. There are plenty of brokers out there were you can trade micro lots and risk between 5-10$ per trade. For most people that is low enough to not hurt your total broker account, but it still helps you realize how making bad decisions causes you to lose real money.
Even if I am testing out some new technique in my method or trying out different trade management techniques, I still use my real cash I just trade tiny amounts of money. It keeps my eyes focused on how to perfect my method and not the money itself.
I am really glad to know we agree on the virtual account thing, it felt so fake/weird that I couldnât stand it.
I made 8 usd this week and 9 last week although this is a laughable amount it is still reflecting that I grew my account about 3% over the last 2 weeks. If i am constantly winning till new year Iâll take my wife out for dinner and think of increasing my risk a bit.
The road is much longer than I anticipated but I am more thrilled than ever to walk it.
Cheers
Apparently every trader remembers that one trade that wiped them out or most of their account in the beginning. After reading The Market Wizards, most of the legendary traders interviewed in the book had an experience which they learned from and later thought of it as a learning experience. Everyone in that book made their money pre 90s, so there was no demo accounts, everyone just took the plunge with their own money and lives at stake.
I see my account busting incident as paying my dues and a tuition to learning the business.
Another attribute was that their biggest losses came right after a string of wins when confidence was at its peak.
Trading psychology is such an important aspect and it is the hardest to implement in my opinion.
Youâre absolutely right, mate. As much as I want to say that I have known the way to survive in Forex, that doesnât change the fact that I have only been doing this for a year at least. Virtually each and everyone of us will fell how smart we are when we make that one big win⌠only later to learn another lesson of humility when we once again lose more than we expect.
Krugman and I once discussed about the legend of Jesse Livermore. It seems like Livermore really knew how to make serious dough from trading⌠and somehow lost it again and again until he decided to shoot his own head after once again feeling like a failure! While itâs controversial, we like to think that Livermore already had a solid personal trade plan that was proven profitable in the long run, and he always lost everything whenever he violated his own trade plan. Or at least thatâs what I want to believe. Is it really about the money? Or is it more about a lifelong journey of self-discovery?
Ahh Mr. LivermoreâŚa lot of controversy there.
One thing however remains certain. You really donât know yourself until you start trading Forex. It becomes a matter of discovery, then control 
Hell I didnât know about âparalysis by analysisâ and ârevenge tradingâ until I almost wiped my account.
Here is a trade that I will be watching closely. At the daily level we have an inside bar setup with a âpinbar likeâ inside bar. I have zoomed down to the 1 hour level to help see in detail the price bounding off of the trendline and the horizontal S/R. If traded at the break the RR is too low as the next resistance line is fairly close by. Looking at the H1 chart both the trend and pink horizontal line are getting ready to overlap to create a nice strong support. Look at the green line support line below, when the trenline crossed over the major horiztonal support a large pin bar formed and create an explosive move up. That could have netted anywhere from a 1:2 to a 1:4.
There are a couple way this could be played. A PA signal that forms in the yellow both could be taken with TP area being the green bar.
A more risky play could be to enter any PA that forms in on the support area, move SL to BE once price reaches the next resistance line. If price is able to break through it would be quite explosive as this also the daily resistance. The next resistance line isnât for quite a distance further.
A take profit at the first resistance line would net around 1:1.5, a tp at the next resistance line would net a 1:5 or 1:6 RR.
There are complaints I have about this trade such as the prolonged stall in the upward momuntum. The near overhead resistance. The large size of the IB. But there are notable things such as the strength of the trend line. Every touch of the trend line has been immediately rejected with a few pips, while the overhead resistance was temporarily breached earlier. There is not doubt a squeeze happening, and a break of the trend or a break of the horizontal line will most likely result in a very aggressive move.
Note: While I donât use lower time frames to manage trades, I will use them to enter the retracement of a signal to find the best entry point. In my post I call it a âtouch entryâ. If I am going to enter on a retrace for a better RR, I will enter as soon as price pulls back to a resistance area on the lower time frame. As soon as I am in the trade I will leave stick to the time frame with the PA signal.
In this case the 1H has a good layout, so I would enter a trade based on a pay signal, and manage the entire trade from the 1H level. Although I know my H1 long entry coincides with a daily long signal helps increase my confidence in the trade and shoot for a further take profit area.
Note 2: On my charts I use green horizontal lines to mark daily S/R as the higher timeframe S/R is more important and generally more powerful. The pink S/R lines are minor S/R areas that I identify on time frames lower than D1. I only look for minor S/R if I am about ready to enter a trade, otherwise my chart only displays the daily major S/R green lines.
Speaking of psychology, Krugman, what was the craziest thought ever happened to you in the beginning of your Forex journey? Maybe thinking of âshooting your own headâ like Livermore is a bit extreme, but you did mention about âparalysis by analysisâ and ârevenge tradingâ here. Mind to elaborate a little bit more?
Anybody here can share his or her story a little bit. My craziest thought was that after I blew up my account again and again, I did notice that had I taken the complete opposite position of my trade, I would have ended up with much higher pips at the end. That means, [B]if I saw a good trade setup to go long, I simply said â[U]screw it[/U]â, as I just needed to do the opposite and go short![/B]
Sounds crazy enough for you guys? But of course, that was me during my âDark Ageâ. 
[QUOTE=âwm247;548953â] Speaking of psychology, Krugman, what was the craziest thought ever happened to you in the beginning of your Forex journey? Maybe thinking of âshooting your own headâ like Livermore is a bit extreme, but you did mention about âparalysis by analysisâ and ârevenge tradingâ here. Mind to elaborate a little bit more? Anybody here can share his or her story a little bit. My craziest thought was that after I blew up my account again and again, I did notice that had I taken the complete opposite position of my trade, I would have ended up with much higher pips at the end. That means, if I saw a good trade setup to go long, I simply said âscrew itâ, as I just needed to do the opposite and go short! Sounds crazy enough for you guys? But of course, that was me during my âDark Ageâ. :([/QUOTE]
I think waking up in the middle of the night with cold sweats because of over risking, or gong days with almost no sleep because of over risked trades hovering right around the stop loss. I always traded more and risked more ask I losses, I never got that paralysis feeling where I was too scared to take anymore trades.
To be honest with this topic, then I didnât have any problems trading on demo account and now Iâm doing very well on a live account. Whatâs the point losing money on real account while you are learning, even if itâs a small amount? If you really take this business with all seriousness and have a trading plan etc., then it shouldnât matter what kind of account you are trading, just demo trade until you are profitable. BUT I guess itâs pretty individual.
It has been studied and shown that the human mind is like a soft plastic and patterns and habits are learned after a few weeks. When you do something wrong and feel the sting of pain from that, your mind very quickly learns how to manage and avoid whatever it was that caused that pain. Now Iâm not convinced that losing 25,000 virtual dollars is even remotely as close to the pain as losing real $25,000.
People can take this business serious and have a trading plan, and still trade on a demo, thereâs no doubt about that. But I think that same person, with the same seriousness and the same business plan will learn better, faster and more realistically the consequences of bad money management, bad trade management, overtrading, etc.
Itâs of course up to the trader what they want to do, I personally donât care either way as long as they are learning a solid PA method. But I canât count the number of times traders have gone from a demo to real money and said âWow this is such a different feelingâ. If it âfeelsâ different going from demo to live, that tells me you have trained your mind to trade in fantasy or play, and now your brain is shocked by the reality of trading, winning and losing real money. I say lets learn both the price action methods and how to manage a real cash account at the same time.
That sums it all. No matter what you choose to do, whether on demo or live, or on small or big amount of money, it all comes to nothing if you donât treat it as a real deal. Just because J or K told you to stick to demo or go live directly, whatâs the point if you still think it as a joke? [U]In the spirit of freedom of this thread[/U], lâll say that [B]losing is still losing[/B], even if it is just paper money, the cost of less than a burger, or even your whole farm. How you treat your losing and learn from it are actually much more important than the pointless debate of sticking to demo or going live.
Yep, I agree.
To those, who want to improve themselves psychologically, I suggest reading [B]Mark Douglas âTrading in the Zoneâ[/B]. As I mentioned somewhere previously, then this book completely turned my trading around and since then I have never looked back. I guess for me the problem was to pull the trigger even if the setup was A++, I was focusing too much on the individual trades rather than on the long run, but now Iâve fixed this issue and that took me only about 1 week, but of course it depends on a person.
While I agree with a lot of what you say Aaron I still think stay with demo until you can be consistently profitable even if it takes a few years.For me personally it upset me plenty even losing on demo,heaps in fact I take trading that seriously,and if you donât you shouldâent even trying to learn.If your trading real money even small amounts its just too demoralizing to consistently lose and most people will quickly pack it in.Thatâs how I feel anyway but I respect others opinion.
This is why I have changed my demo account balance to 1000. Thatâs my plan whenever Iâm ready with real money. I definitely trade like itâs real. For as serious as I am, if I canât be consistent with the demo, I wonât be on the live one. I blew one account already with the 1k balance. I was upset. It bends me all out of shape. So, when I see on paper that I can be consistent enough, then Iâm in. I was hoping to go live this Jan., but I have changed my mindset now and am waiting to prove to myself, on paper, that I can do this.
Oh, I know I will get there, nooooo doubt about that, itâs justâŚhow long will it take.
I absolutely love this thread. Thank you all.
Aaron, your awesome.
Hi all,
I would like to post about a setup. It is the first time in a long time that the whole thing looks clear.
GBPUSD 4h Pinbar
Happened at a very good level from D1. Pair is in a downtrend on the 4hr Timeframe and pinbar shows a rejection of a former support turned resistance. Pinbar has the right shape, is within previous candle and it protrudes very clearly
Check entry TP and SL on the chart.
If prices can break the low of the pinbar, It will be a trade with a small SL and about same size TP which makes it pretty much a 1/1 with a nice lot size without risking much.
Let me know what you think,
Yves
For some reasons, the way you mentioned it reminds me to the last quote from the movie Green Mile. âWe each owe a death â there are no exceptions. But oh God, sometimes the Green Mile seems so longâŚâ
Hi Mike,
I like the way you wrote it. Thatâs exactly what I think and what everybody in here should think. It is not a question of will I succeed or not, itâs only a matter of when !
All the best to you !
Yves
Hi yves 
i am not sure with this, check the area of the entry and you will see that this is a very well respected support area! i had my pending order in but canceled it because of this. do you see what i mean and what do you think about?
edit: i would have taken it on H1 beacuse this nice BEEB⌠don´t know if this small pin, regarding to the others would be enough but technically i think it is fine