Monthly Archives: October 2011

YTC Beginners Guide to Technical Analysis

Rather than reinventing the wheel through production of a YTC Beginners Guide to Technical Analysis, I’m going to use this article to refer you to existing internet resources that already meet this need in a comprehensive, accurate and easy to read style.

This will allow me to focus on more advanced topics of "the application of technical analysis", rather than basic knowledge. So enjoy these resources but please return to YTC to take your knowledge to the next level.

The following are my current top two recommended sites. They contain some duplication of content so I recommend five minutes per site to skim through the material and pick the one that appeals the most to your reading style. Study that chosen site in full. And then skim the other to receive a different perspective and fill any gaps in knowledge.

It might help to bookmark them for future reference.

Note: Both sites are forex related. Don’t let that put you off if you’re trading other markets. The TA material is applicable across all markets. Just skim over the forex specific education (nature and role of the forex market and its participants etc).

Please advise if either link is no longer active so that I may update the page as soon as possible.

Thanks,

Lance Beggs


Are You Struggling Counter Trend?

One area where many traders struggle is with counter-trend entries; such as reported through this email comment:

"My numbers show a profit when trading with the trend but that just gets destroyed by the trades which are against the trend."

My first suggestion is usually short and straight to the point:

STOP trading counter-trend!

Simple, isn't it. If you have an edge with-trend and you stop trading counter-trend, then your overall results will be a positive equity curve.

For some reason we have a tendency to persist with that which is not working. We identify those areas of poor performance and focus hard on improving them. And that's great.

But quicker results can be obtained by identifying those areas of stronger performance and focusing hard on improving them. Avoid the areas of poor performance.

Later… when you're achieving consistent profitability in your stronger areas and have exhausted all ideas for further improvement, you can then turn to the weaker performance areas if you still wish to do so. Of course, you may not wish to do so. And that's absolutely fine. No-one says you have to trade all market conditions. Focus on your strengths. Avoid your weaknesses.

Cheers,

Lance Beggs

PS. The same applies to all areas of strong vs weak performance. If a particular setup is providing a negative edge, you don't need to persist with it. Focus on your strengths and work to expand and improve upon them.


Reducing Trading Anxiety through Clean Charts

"The more you have, the more you are occupied.
The less you have, the more free you are."
… Mother Teresa

Anything on your charts that is not required for your strategy, or does not act to simplify your analysis, should be removed. It acts as a distraction and increases (even if just slightly) the potential for information overload leading to doubt, stress and anxiety.

First, remove all miscellaneous items as demonstrated below. (Your platform may offer different items).

Remove any indicator labels. They add unnecessary clutter. You should know what indicators are on your screen without having to display labels.

 

Remove any right hand side price scale markers associated with indicators. If you don’t use the indicator figure for your strategy, then you don’t need to know the value. The only one I keep is the last price.

(more…)