Monthly Archives: November 2011

Who Will Give Up First?

Last weeks newsletter article (“The Most Important Question You Can Ask”) generated quite possibly the second largest email workload ever (behind the 4-day backlog generated by “6.18 Reasons Why Fibonacci is an Illusion”). The feedback was all incredibly positive and supportive of my efforts with the YTC site. Thanks to all who responded. It’s greatly appreciated.

The feedback also generated some followup questions by a YTC reader, Krasimir, which I thought would be well worth sharing.

Before we get to that Q&A, if you have not read “The Most Important Question You Can Ask” then please read that article first. In fact, even if you have read it I advise a quick review of the main concept.

I’ll also place a copy of the second image from that article here, to review as you read through the question:

 

 

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The Most Important Question You Can Ask

As a discretionary trader, the MOST IMPORTANT question you can ask during analysis and trade management is:

  • Where are the orders?

I had an email chat this week with a trader, Bruce, who is progressing well in identifying potential sources of orderflow for trade entry. Bruce took a limit order buy entry at point B on the following chart, based upon the principle of Prior Resistance Becoming Support.

 

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How To Make a Strategy Your Own

There is a period of time required in implementing a new discretionary trading strategy, in which the trader must make the strategy their own.

This goes far beyond just learning the rules of the strategy.

A trader must take the time to understand the principles underlying the strategy, to confirm these principles are compatible with their current market beliefs, and to blend the new information with their existing belief systems.

You should NOT jump straight into live markets.

Success in operating a discretionary trading strategy is a result of identifying and maintaining an accurate market bias, identifying wholesale trade opportunity within that environment, and managing trades to balance competing requirements of minimising risk and maximising gains.

Significant changes to your approach (such as when adopting a new strategy) will affect both your assessment of bias and the way you identify and manage trade opportunity. You should take these changes through a graduated test and evaluation process in order to gain trust in the strategy, and trust in your ability to trade the strategy, before risking funds in a live environment.

Adjust as required for your current level of knowledge and skill, but as a general example I'd suggest something like this:

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Productivity Tip – Increased Webinar and Video Playback Speed

I watch a LOT of trading videos and webinars.

Whenever possible, rather than watching them live or streaming them, I prefer to download the video which then allows more active control over the playback speed.

I personally find that playback at 1.4 times the normal speed still allows the presenter to be clearly understood, while ensuring I minimise the wasted time through long sections of basic content and useless conversation.

If a section is of particular interest, I can always replay it or reduce the speed to normal (1x).

Not all media players will have this feature. You’ll have to check your own. It’s usually accessible through either the menu functions (top left), right click menu functions (on-screen) or from a toolbar option somewhere within the video controls.

Accepting that the control location may vary in future video-player updates, here are two current examples:

Windows Media Player

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Asian Session False Breakout

Wednesday’s price action (3 Nov 2010) in the GBP/USD provided a good reminder of the importance of being aware of the key market structure and timeframe influences that exist in our markets.

In forex, one of the most obvious features is the typically narrow range Asian Session. (See here for a related article on the forex trading sessions)

While a breakout of this narrow range can often lead to great trending moves, an even better scenario occurs when we get a false breakout.

So… here’s a rule to add to your Lessons Learnt book: A failed breakout of the Asian Session range has a high probability of a trending move in the opposite direction.

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If Your Trading Performance is Good, it’s Only Because You Haven’t Yet Made it Better

"Good is the enemy of great."
…Jim Collins

I am guilty of allowing my trading development to stagnate. Generally happy with my level of performance, I have seen little new progress over the last year. To some degree, the 3-4 hours per day answering YTC emails and writing a new blog post or newsletter article does get in the way. But it's not a valid excuse. In fact, I wonder sometimes if this is simply a convenient rationalisation allowing me to avoid the fear and discomfort of further progress.

Enough is enough!

I need to work on increasing size. I need to improve my ability to hold the potential outliers for longer. And I need to further explore options for trading during MY timezone, whether via longer timeframes or one of the Asian session futures contracts, as I'm not sure how many more years I'll be interested in working till 3am.

Have you also accepted less than you're capable of achieving?

We fear growth because to grow means to always be operating just outside of our comfort zone. Always stretching and striving for more. Growth involves risk.

But the greater risk is the risk of stagnation.Just as water loses its purity through stagnation, so to does our passion for life and our passion for trading.

If your trading performance is good, it's only because you haven't yet made it better.

Stop resting on your laurels.Take action. Face your fears and proceed ever more boldly forward towards them. This is the path to greatness.

Lance Beggs

PS. Your next step is here: http://yourtradingcoach.com/trading-business/3-simple-steps-to-accelerate-your-learning/