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Your Foreign Exchange & Forex Trading US-Dollar Market Financial Resource for Dollar Traders!
Trading Successfully
The commodities, forex and futures
markets have been moving with large price swings, including
the US dollar, foreign currencies, FX, interest
rate markets tbonds, tbills, metal markets and especially gasoline and
crude oil futures. Some financial markets have been trending more
than most of us thought was possible, especially the oil markets and
currencies/ The US Stock Market has also surprised us with it steady trend too,
in particular the S&P, NASDAQ and the
Dow Jones Industrial Average.
As I look back at my past trading years
and examine my style of commodity futures
and currencies trading, I am even more excited
and committed to this type of futures trading.
Why? Well here are some points that
I will review which have found to be
beneficial to myself and hopefully to
other traders. As a futures trader,
these are issues I have thought-out
during the year, but it is a good time
to reflect, review and plan my next
year of trading.
Many traders are still searching for
a good trading method and have been looking
for an
internet-based trading-system for years.
This is one of the most frustrating
modes to be in, because how can you
plan for a prosperous year if you still
don't know exactly how you are going
to trade or approach the markets, or your trading tools.
You simply cannot have any confidence
if you do not have a method or way of
identifying trades along with money
management guidelines. You're lost in
the woods, so to speak. I was there
for many years. What did I do? This
may help a lot of you.
Ended up tossing out 98% of all the
crap I learned about oscillators, divergence's,
Elliott Wave, cycles, MACD, RSI, timing,
seasonals, elliott wave, w d gann methods,
gann angles, trendlines, pitchforks,
volume, candlestick indicators, fractals,
time cycles, stochastics, overbought/oversold
(this is a good one - the stock indexes,
currencies and cotton for example everyone
said were overbought and topping in
late winter). Look what they
really did!
Needless to say, I don't pay attention
to this anymore either, etc., etc. The
list goes on to infinity almost. I went
back to trade basics. I went back to a
few simple chart patterns, (a simple
moving average and trendline now and
then for a visual aid).
I came up with a low-risk money-management
trading plan and put it together with trading
with the trend and a time-proven and
effective US Dollar futures or forex market
trading plan. The trade plan is simple and has worked
since trading began and will last me
a lifetime. What a relief not to have
to spend countless hours every night
trying to find a new and better way
to trade. I am sick and tired of that
after more than 7-years as a trader.
When my trading day is done my technical
analysis for the next trade day is automatically
done in less than 5-minutes on my own
software program I had developed and
I'm off to enjoy my evening. No more,
honey, I need to analyze the charts
till midnight again and all weekend.
Now I can concentrate on improving my
psychological or mental skills during
the trading day.
This will be an ongoing lifelong challenge.
Nobody ever stops learning and trying
to be a little better. Is my method
perfect? No! (None are) am I perfect?
Surely not. But it is the simplest and
most accurate way of trading that I
have come up with, and I've looked at
lots (tons) of ways of trading. My method
or approach works just as well on daily,
or weekly charts. I choose not to trade
that way.
I really enjoy and believe in the daytrading
concept. There are so many advantages.
No overnight risk exposure to huge price
gaps, not getting sick to your stomach
over the weekend if it rains in Iowa during
the growing season and your long soybeans,
or some government official makes the wrong comment over
the weekend on "Meet the Press"
and your life flashes before your eyes,
because your long currencies and they're
going to tank on the opening Monday
morning. I've been through it and so
have many of you. No thank you anymore.
Every day is a new day. You start fresh
with a clean slate.
You slept at night. You enjoyed your
weekend with your family. If you made
a mistake yesterday, you can try to
do better today. I realize that some
traders cannot trade during the day
because of other commitments. That's
OK, you will just have to deal with
the overnight risk. So trade small size
and use stops. Perhaps use the Mini-Markets
or a smaller equivalent to the futures market
you are trading, if available. If you
can have some access to intraday charts,
you can use this to establish a longer
term or intermediate term position with
lower risk.
For example, when a daily
trader sees a good trade setup, they can look at
intraday charts and wait for the same setup intraday.
Establish the contract position with a fraction
of the trading risk, turn the monitor off, walk
away, and then monitor it from a daily
perspective. You just need to be aware
of gaps (there's that nasty word again)
of which you have no control. So daytrading
even has a place for the position trader.
I also believe at becoming an expert
at one market and its behavior and then
putting all your skills and energy to
work in a concern(traded) manner. Get
good at that market and trade the heck
out of it. Increase your size over time
and you'll make more money with less
effort. There are lots of professionals
that do this. Look at some floor traders
or locals that stay in the pit for many
years trading one market exclusively.
You say you can't do it. I have two
words for you. Tom Baldwin made all
his money watching, waiting and learning
the intricacies of the tbonds until he
could trade them in his sleep (which
I'm sure he did, I do it all the time,
most traders do!) and then traded the
hell out of them. Point Made!
One thing that I have learned this
year, is that I am trying to cut back
on the number of trades I take and be
more selective and not trade in congestion
as much as I did before. I miss some
good trades out of congestion, but I
save myself a lot of mental energy,
buy myself some more free time during
the day, and get better more profitable
trades.
My attitude is changing now to one
or two good trades, and that is all
I need to make my week (a triple or
a home run, so to speak). There are
plenty of them during any given weeks
time. There are also a lot of singles
and doubles to add to that and a few
strike cuts or losers to absorb. This
is part of the learning process and
part of getting older. So I pass these
observations on to you, in order that
you may profit from my experience. Don't
try to reinvent the wheel.
Trading can also be fun. Once you have
a method and good money management in
place, it allows you to concentrate
on trading and not on searching and
researching. That gets old and frustrating.
Make it your goal to find a simple method
for next year. One that you can hang
your hat on and that will last you a
lifetime. Trading is simple. Remember
that it's the Execution or implementation
of your trading plan that is the bigger
challenge.
Most people make finding the method
the big challenge. That is because there
is so much junk thrown at traders. They
feel like a child in a candy store and
have to try every doodad in the place.
When they are done, they are sick and
never want to see another candy store
(trading gizmo) again. They could have
had the plain piece of milk chocolate
at the front of the store (simple method
price patterns) which would have done
everything they desired and fulfilled
all their needs.
I think CTCN
has evolved into a very good sounding
board for trading ideas and interaction.
I'm glad to see a lot more discussion
on the psychological aspects of trading.
I feel that this is where the most improvement
for traders will come.
I wish to all a great new year. I hope
some will be able to end their journey
in search of the Holy Grail or technical
indicator to possibly turn their life
around. Search for simplicity. Use the
K.I.S.S. Theory (keep it simple stupid).
You may be surprised what has been
right under your nose all the time,
right there in front of you on the futures
markets charts. Pay close attention
to what they say and they will tell
you everything. You need to listen and
get to know them. Develop a sound trading
plan based on good trading principles
and good money-management techniques.
(Authors Name Not Disclosed. Article enhancements by
Website Editor).
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