Learning Cycles For New Traders
Flip a coin. Generally you play them all with reasonable stop losses in place. You can back your decision by some other indicators and run with it. Develop a visual method that seems to work the best on past graph movements and run with it. Everybody takes hits, but the smart traders limit their losses so when a major trend move happens (which happens 2 to 4 times a week roughly) it makes up for the losses plus leaves good pips in the plus column. Study to create good entry points and good exit points. Each EA and visual program I have studied in the last 2 years has weaknesses. Minimize them, and let your profits run. Also as everybody has said using wisdom. It is best to trade in phase with the longer term trend. This is up to the trader as to what the long term trend is - Depends on the time frame you are trading.
I wish I had all the answers - If I did, I would be in Tahiti drinking a Mai Tai with a lovely young native girl with a grass skirt - We all can dream!
I wish I had all the answers - If I did, I would be in Tahiti drinking a Mai Tai with a lovely young native girl with a grass skirt - We all can dream!
:D
I have a hint. Divergence.
Rgds,
SFX
most of the times, you get a whipsawed? maybe this article could help..
------------------------------------
LEARNING CYCLE FOR NEW TRADERS
Hi folks.
This cycle is as true for trading as it is for learning to drive a car and consists of five components.
I'm going to take you through each stage so you can recognise exactly where you are in your trading journey.
Step One: Unconscious Incompetence.
This is the first step you take when starting to look into trading. you know that its a good way of making money cos you've heard so many things about it and heard of so many millionaires.
Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be?? - price either moves up or down - what's the big secret to that then - lets get cracking!
Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. you take lots of trades and lots of risks. when you enter a trade it turns against you so you reverse and it turns again .. and again, and again.
you try to turn around your losses by doubling up every time you trade - sometimes you'll get away with it but more often than not you will come away scathed and bruised
Well this is stage one - you are totally oblivious to your incompetence at trading. Stage one can last for a week or two of trading but the market is usually swift and you move onto stage two.
Stage Two - Conscious Incompetence
Stage two is where you realise that there is more work involved in this and that you might actually have to work a few things out.
you consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.
During this phase you will buy systems and e-books galore, read websites based everywhere from Russia to the Ukraine. and begin your search for the holy grail.
During this time you will be a system whore - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. every time you came upon a new indicator you'll be ecstatic that this is the one that will make all the difference.
you will test out automated systems on Meta-trader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today.
you'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them cos you are so sure you are right.
You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly.
You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be making that amount cos you've studied and you don't make that, you know as much as they do and they must be lying. but they're in there day after day and their account just grows whilst yours falls.
You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and over leverage your account even though everyone says you are mad to - but you know better.
you'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you either.
This phase can last ages and ages - in fact in reality it can last well over a year - My own period lasted about 18 months.
Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times.
Then comes stage 3
Stage 3 - The Eureka Moment
Towards the end of stage two you begin to realise that it's not the system that is making the difference.
you realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right
You start to read books on the psychology of trading and identify with the characters portrayed in those books.
Finally comes the eureka moment.
The eureka moment causes a new connection to be made in your brain.
you suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.
You start to work just one system that you mold to your own way of trading, you're starting to get happy and you define your risk threshold.
You start to take every trade that your 'edge' shows has a good probability of winning with.
when the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade will have higher odds of success cos you know your simple system works.
You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what.
You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile
you weren't ready then, but you are now.
The eureka moment came the moment that you truly accepted that you cannot predict the market.
Then comes stage four
Stage 4 - Conscious Competence
Ok, now you are making trades whenever your system tells you to.
you take losses just as easily as you take wins
you now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it loses and when you're on a loser you close it swiftly with little pain to your account
You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money.
you are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away.
You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.
you'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again.
you will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.
this lasts about 6 months
then comes Stage Five
Stage Five - Unconscious Competence
Now were cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level.
you are running on autopilot. You start to pick the really big trades and getting 100 pips in a day is becoming quite normal to you.
This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.
you're a star in the trading chat room and people listen to what you say. you recognise yourself in their questions from about two years ago.
you pass on your advice but you know most of it is futile cos they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two but a few will.
Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.
You can now say with your head held high "I'm a currency trader"
I hope you've enjoyed this text and can recognise yourself in some stage or another - personally I'm at stage four now and am constantly making good amounts of pips - I've been trading in total for about 3 years and the first two were hell on earth.
for those of you reading this who stick with it, ill look forward to the banter we have together in the future when we are both bored to death during the trading day
Soultrader.
------------------------------------
Build your own system, or adapt another good system to yours. Usually there's a lot of things to learn during the process.
Nb: This is not my article, I'm still learning too
most of the times, you get a whipsawed? maybe this article could help..
------------------------------------
LEARNING CYCLE FOR NEW TRADERS
Hi folks.
This cycle is as true for trading as it is for learning to drive a car and consists of five components.
I'm going to take you through each stage so you can recognise exactly where you are in your trading journey.
Step One: Unconscious Incompetence.
This is the first step you take when starting to look into trading. you know that its a good way of making money cos you've heard so many things about it and heard of so many millionaires.
Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be?? - price either moves up or down - what's the big secret to that then - lets get cracking!
Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. you take lots of trades and lots of risks. when you enter a trade it turns against you so you reverse and it turns again .. and again, and again.
you try to turn around your losses by doubling up every time you trade - sometimes you'll get away with it but more often than not you will come away scathed and bruised
Well this is stage one - you are totally oblivious to your incompetence at trading. Stage one can last for a week or two of trading but the market is usually swift and you move onto stage two.
Stage Two - Conscious Incompetence
Stage two is where you realise that there is more work involved in this and that you might actually have to work a few things out.
you consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.
During this phase you will buy systems and e-books galore, read websites based everywhere from Russia to the Ukraine. and begin your search for the holy grail.
During this time you will be a system whore - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. every time you came upon a new indicator you'll be ecstatic that this is the one that will make all the difference.
you will test out automated systems on Meta-trader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today.
you'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them cos you are so sure you are right.
You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly.
You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be making that amount cos you've studied and you don't make that, you know as much as they do and they must be lying. but they're in there day after day and their account just grows whilst yours falls.
You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and over leverage your account even though everyone says you are mad to - but you know better.
you'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you either.
This phase can last ages and ages - in fact in reality it can last well over a year - My own period lasted about 18 months.
Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times.
Then comes stage 3
Stage 3 - The Eureka Moment
Towards the end of stage two you begin to realise that it's not the system that is making the difference.
you realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right
You start to read books on the psychology of trading and identify with the characters portrayed in those books.
Finally comes the eureka moment.
The eureka moment causes a new connection to be made in your brain.
you suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.
You start to work just one system that you mold to your own way of trading, you're starting to get happy and you define your risk threshold.
You start to take every trade that your 'edge' shows has a good probability of winning with.
when the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade will have higher odds of success cos you know your simple system works.
You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what.
You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile
you weren't ready then, but you are now.
The eureka moment came the moment that you truly accepted that you cannot predict the market.
Then comes stage four
Stage 4 - Conscious Competence
Ok, now you are making trades whenever your system tells you to.
you take losses just as easily as you take wins
you now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it loses and when you're on a loser you close it swiftly with little pain to your account
You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money.
you are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away.
You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.
you'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again.
you will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.
this lasts about 6 months
then comes Stage Five
Stage Five - Unconscious Competence
Now were cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level.
you are running on autopilot. You start to pick the really big trades and getting 100 pips in a day is becoming quite normal to you.
This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.
you're a star in the trading chat room and people listen to what you say. you recognise yourself in their questions from about two years ago.
you pass on your advice but you know most of it is futile cos they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two but a few will.
Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.
You can now say with your head held high "I'm a currency trader"
I hope you've enjoyed this text and can recognise yourself in some stage or another - personally I'm at stage four now and am constantly making good amounts of pips - I've been trading in total for about 3 years and the first two were hell on earth.
for those of you reading this who stick with it, ill look forward to the banter we have together in the future when we are both bored to death during the trading day
Soultrader.
------------------------------------
Build your own system, or adapt another good system to yours. Usually there's a lot of things to learn during the process.
Nb: This is not my article, I'm still learning tooGreat article. Priceless.
What about making poll count out of it. Can you do it?
Which stage are we, so that we can help each other to overcome hurdles.
Rgds,
SFX
:D
:D
I have a hint. Divergence.
Rgds,
SFXI tried Divergence. I get whipsawed less frequent. But still get whipsawed a lot of times. What indicator do You recommend for Divergence? What are the settings? Thanks man.
Dan. Cheers.
I tried Divergence. I get whipsawed less frequent. But still get whipsawed a lot of times. What indicator do You recommend for Divergence? What are the settings? Thanks man. Dan. Cheers.
Important thing is what timeframe you are using for trading. There are different indicators you can use. WCCI, RSI, Mtm and other too. Try to coordinate your trading with bigger timeframe. The true picture can only be get if we refer bigger timeframe. Smaller timeframe most of the time lies. Try to find our your setup on extreme points, like not all your setups are playable. Try to squeeze them and play them at best place like on swing high or swing low or on solid technical support and resistance. Try to keep up with news too. I don't believe on those traders who think without news technical is everything, they are lying. Try to keep up with news. Because main driving force running this forex business is fundamentals not technicals.
I hope it will help.
SFX
what about,
.
.
.
7. ... <-- you can add something here7. Patient is the KEY 
what about,
1. Not to trade against higher trend
2. Do demo a lot to learn to put suitable SL depend on your system.
3. Take loses as easy as wins. Win and lose are not unordinary. Don't get panic if your SL gets hit. If you have a system with 50:50 win-lose ratio and 1:2 risk:reward ratio, and trade it consistently, you may consider yourself a good trader.
4. Learn some forex trick such as trapping (if your broker allows it), and maybe some others.
5. Don't judge anything too fast, some lessons need sometime to understand.
6. Enjoy your journey
7. ... <-- you can add something here
7. Patient is the KEY
Focus, patient and discipline as Nina say 
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If are trading Chart Patterns, like Symmetrical, Ascending, a Descending Triangles, Wedges, Flags, then pleases help me. You see....., most of the times, I get a whipsaw! And it kills me! I want to ask You, how do You know if the breakout will be real or false? If You know, how do You trade with chart patterns? Thanks. If You know, I will get the knowledge from You, and I will know that knowledge, and then I can help You even more. Because everybody thinks differnently. Hope this thread will be good.
Cheers.
Dan.