Of course, senior traders are welcome to chime in, or correct any mistakes I make, but this post is for new traders who are having a hard time.
Here’s a quick list of old timey traders rules, sayings and folklore you should be familiar with. The list comes with a warning that in the markets, every rule has an exception, and every exception has an exception. Take what you like and toss the rest. We can discuss exceptions if you like. These aren’t in very good order, but you can order them yourself. Ask any questions you like:
Always trade with a stop loss.
Never move a stop to stay in a trade that’s going against you.
Never average down.
Always trade with the long term trend.
Cut losses short, but give your trade room to breathe.
Let profits run, but if you don’t take SOME profit, you won’t make any money.
The first loss is the easiest to take.
Don’t trade a dead or thin market.
Be patient. Let the market tell you which way it is going to go.
Never take a flyer. No fooling around. Every pip counts.
Don’t trade tired, sick, angry, or depressed.
Don’t let losers languish or winners turn into losers.
Minimize risk to capital with in initial tight stops and small size.
Maximize profits by taking bigger risks only with profits.
Consider trading capital sacred, but profits are for making more profits.
If a trade goes unusually in your favor, take the risk out first, then take some winnings off the table.
Like I said, if you are bored by this, just skip it. There will be some repetition.
There will be a few repetitions or just saying the same thing different ways.
Use a system and don’t deviate from it.
Use money management at all times.
Establish your trading plan before entering the market.
Have a plan for each trade.
Develop a worst case exit plan for each trade.
Establish entry and exit points and understand risk reward ratios.
Accept small losses as part of the game if you want to win.
Stand aside from a position, knowing you have taken a position.
Stay the course so you are around for the big moves.
Don’t blame the market for your losses. You are the reason for your losses.
Do not concentrate on just making break even levels when you are losing.
Break even levels do not impact the future success of a position.
Don’t liquidate a winner to keep a loser.
Develop and maintain an exit plan. Follow this plan with rigid discipline.
Remember that greed kills.
Never add to a losing position. A losing position means you were wrong.
Sustain your patience. Big moves take time to develop.
Remind yourself that there is nothing new in the markets.
Don’t predetermine your profits.
Avoid techniques you don’t understand.
Don’t be overly curious about the why of a big move.
The key to wealth in trading is simplicity,
Bulls make money, bears make money, but pigs get slaughtered.
Like I said, if this post bores you, you probably don’t need it, so just skip it.
Level areas often end up in bubbles and sausages. Today one trade EURJPY 15 min chart. Entered in squeeze around 10:00gmt very nice OBB just closed for for weekend
Then we were looking at a different trade or a different chart. I was looking at the top chart he posted, with the first line on the chart marking a potential entry.
The example of Tymens you point to there is very different (ie, I was looking at a bubble where as that is clearly a squeeze).
So essentially, we were discussing entry for completley different trades.
Just a few more of these old timers sayings. I really wanted to discuss managing trades, but I realized we’d be on entirely different planes unless you knew at least some of what senior traders know. They really do trade this way, most of the time.
Beware the King Kong effect after a big win.
Most money is made sitting on your hands.
Never guess what the market will do. This is not a guessing game.
Have an open mind. Consider the opposite case. What is the trader on the other side of your trade thinking?
Have the courage of your convictions.
The correct position size seems too small to be worth the time and effort.
Concentrate on preserving capital and minimizing risk and profits will come effortlessly.
Respect but don’t fear the markets. They are more powerful than any individual trader.
You aren’t as good as you think you are. You are only as good as you really are.
Check the economic calender first thing each day.
The trend is your friend.
Look for multiple reasons to enter a trade.
If you don’t have time, trade later. The markets aren’t going anywhere.
You probably miss 1,000 good trades a day somewhere. If you worry about missing a good trade, that’s a lot of worry.
Take care of your health. You can’t trade if you are dead.
After a big win. Take a break and reward yourself.
After a big loss, take a break until you are completely over it.
Be cautious trading during major news.
Always allow enough time to execute your exit plan.
Buy low, sell high.
Winning traders exit their trades according to a plan. They don’t wait until their stop is hit.
When a trade is going against you even a little ask yourself, knowing what you know now would you still have entered this trade? If no, exit immediately.
If you are confused about what the market is doing or why it is doing it, sit this one out.
If you doubt an entry, just wait to see if you were right.
Don’t trade a thin or dead market.
OK, that’s out of the way. It wasn’t the point of my post, but I needed to get it out there. If I missed any important ones, I hope a senior trader will pipe up.
Like all good stories, this one starts with: So there I was…
So there I was; having taken the advice of Tymen and other experienced contributors like Graviton; trading more slowly, patiently and not fighting the major trends. Multi TF, S/R and BB. Nothing else on the charts. Clean, clinical. Trading no more than 4 pairs at any one time. Live account up 10% in one week, mainly on the basis of moves in the EUR over the last few days.
So… I decide that I’ll take a break, have some wine, relax and watch TV with the family. Tighten up the stops and leave the charts alone.
But… I forgot that I had a EUR/JPY limit order in the system that had not yet expired. I use them to take the incremental profit rather than kill the whole trade. For this reason, they have no TP or SL set
Come back after a few hours and see that the EUR/JPY pair has skyrocketed and this blinkin’ limit order has activated and had quite happily devoured a third of my weeks profits. What a bleedin’ noob mistake. :o
If you learn from this after only doing it two or three times, you are a faster learner than I was. But 10% in a week? Great! Hang in there, you are only 500 more mistakes from being a world class trader, but you have to make them one at a time like the rest of us. No fair knocking out three at a time:D
Don’t forget I am coming off a very low base. I wiped out most of my starting capital in my first 3 months using various indicators that worked fine in demo but failed when live trading because I couldn’t get my psychology sorted out.
Well, many of us are online right now and it is generally pleasing to see that some traders are starting to get a handle on some of the concepts.
To [B]Merchantprince [/B]I say like the others - hang in there!!
There are 3 groups of people on this forum…
live traders
demo traders
lurkers.
Just lurking is an acceptable practice if you do not wish to demo trade.
As far as those NO NO BB bubble + sausage retracement trades go, by all means practise trading them if you think you can handle it.
But too many demo losses and this area should be out of bounds for now.
That leaves us with level/squeeze trades OO and OBB if they go on to walk a BB.
It is the OBB price actions that make the most pips.
Thank you to [B]Graviton [/B]for posting those traders sayings!!
Good advice as always!!
Thank you for being here [B]o990l6mh[/B].
Good to have another experienced [B]Honorary FX Member[/B] watching over everything.
Thank you, [B]Master Tang[/B] for the beer.
The screen is now empty - I have taken it with me!!
Thank you [B]Kockneerebel [/B]for encouraging [B]Merchantprince[/B].
[B]We do seem to have a good team here.
I do not know of any other thread on this forum where there is so much reinforcement and encouragement!![/B]
I must admit i at first was a bit sceptic to this whole CBL thing and not going for candlestick patterns, a more mature approach has led me to believe that this method combined with the ultimatecandlestick would be the ultimate forex wedding:p!
You cant helping going “ohh” and “ahhh” with the blending that occurs on the charts, the relationship between “patterns” and the CBL :)! Its also really fun to watch, makes one feel like a wildlife scientist or something:D!
Looking forward to the final set of rules in the pdf, while enjoying the learning process! Great work and good luck with the new home, hope you and Sweetie will both enjoy it!
