Tag Archives: educational

USD Forex Trading Mistakes of The Day

USD Forex Trading Mistakes of The Day

Another day, another mistake and more learning.

I took a trades based on 2618 shorting style. I made 3 trading mistakes today:

USD Forex Trading Mistake of the Day
USD Forex Trading Mistake of the Day
  1. First Trading Mistake was that there was psychological price 1.3200 level just above which I should have included in my stop loss calculations. That would have meant bigger stop which leads me to second trading mistake.
  2. The second trading mistake was to wait for a confirmation in the zone to take an entry as stop levels were supposed to be high.
  3. Third mistake is the one which caused all this mess to start with. I missed/ignored the fact that there was a news expected on USD today.
    FriOct 23 9:45am USD Flash Manufacturing PMI

All these are there in my trading plan so moral of the story again is remember to remember your trading rules. One deviation from it can be costly.

-TradeYodha

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Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
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Why Rules and Trading Psychology Matter – AUDUSD Example

Why Rules and Trading Psychology Matter – AUDUSD Example

I wanted to post a review of my previous AUDUSD trade but I thought it will be a good post to record my experience on that trade. EURUSD trade last week humbled me and reminded me of my mistakes which I am glad that I did not do in this AUDUSD trade.

I initially planned for this trade as below:

AUDUSD Bat Gartley Patterns for Long Short Forex Trade
AUDUSD Bat Gartley Patterns for Long Short Forex Trade

But it turned out as below:

Why Trading Rules and Trading Psychology Matter - AUDUSD Example
Why Trading Rules and Trading Psychology Matter – AUDUSD Example

Soon after entry, the market started showing bearish signs but my stops were in place with acceptable losses so it was ok. The market then turned in my favor. And then again turned bearish. It was going completely against me.

It was quite a roller coaster in its behaviour. Honestly at several times, thoughts of cutting my losses and getting out of market for a little profits came to me. But then last week’s lessons reminded me to stick to my plan and rules. Once a trade is in, it is in. There is nothing I can do to control the market. I can only work with it. So I stuck to my plan and accepted that it will probably hit my preplanned acceptable stop loss.

I guess for my patience and discipline luck also favored me by few pips. The market came very close to hit my stops but due to spread it did not.

The out come was great. It hit my first target making this overall trade a break even now and is still going strong in my favor.

Trading Psychology is the biggest factor and that is what differentiates Winning Traders from Losing Traders.
-TradeYodha

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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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Today’s Forex Trading Mistakes Journal

20-October-2015: Today has not been a profitable day however it has been productive. I was lost and today’s Forex market humbled me once again and reminded me of few trading mistakes that I made on my way.

For some reason I have been interpreting market signals in contradictory ways. Instead of following rules and patterns I was all over the place. Tried to take 5 positions on NZDJPY, AUDCAD, GBPUSD and AUDUSD. All of them were either cancelled or failed. So a lost a total of 122 pips loss. So approximately a total of 86 pips. This has set back my profit that I made last week by a bit. I am back to 350 pips of profit so far in October so far.

Reviewing today’s actions I found my trading mistakes:

  1. Several of my positions today were based on Advanced Patterns. Every time they were complete and I took a position, they started to go against me. I should have followed the plan and rule to let the market play. But I closed them prematurely only to see that that I was right and pattern did work.
  2. SMAs where all tangled up in few trades. I kept on confusing them with patterns and structures. Instead of following just one thing I tried to mix them.
  3. Did not use RSI as it should be used. Must use them for to read them overbought, oversold and divergences correctly.
  4. Paralysis by analysis created biases. Switched between time frames to justify biases. Must stick to one Trading time frame.
  5. Too much of screen time created emotions causing moving stops. Once trades are in, there should be minimal screen time.

Another day of mistakes and position losses but another day of great learning! Nothing lost only gained!

-TradeYodha

 

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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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How To Trade Forex Harmonic Patterns

Trade Forex Harmonic Patterns

AB=CD (50.0)

  1. C point retraces less than 50.0 of AB, CD will be equal to AB
  2. Do not trade an AB=CD pattern with less than 38.2 retracement
  3. Always use Double Top with divergence for entry.
  4. Target 1: 38.2 of AD leg, Target 2: 61.8 of AD leg

ABCD (Alternative ABCD) (50.0, 127.0, 1.414, 1.618.0)

  1. C point retraces more than 50 of AB, CD will be 1.27AB or 1.414AB or 1.618 AB
  2. Always use Double Top with divergence for entry.
  3. Target 1: 38.2 of AD leg, Target 2: 61.8 of AD leg

abcd

Gartley (61.8 XA, 61.8 AB, 127.2 AB) – (60-70% Profit Making Pattern)

  1. B must touch at least 61.8 of XA but must not touch (wick) or close beyond 6 of XA
  2. C touches at least 61.8 of AB but its wick cannot go beyond point A
  3. D point will be at 127.2 of AB in confluence with 78.6 of XA. 127.2 AB extension is more important.
  4. PRZ between 127.2 AB extension and point X
  5. Must have at least valid ABCD pattern
  6. Stop is 2 ATR below X
  7. Target 1: 38.2 of AD leg, Target 2: 61.8 of AD leg

gartley

Butterfly (78.6 XA, 38.2 AB, 127.2 AB) – (Low Profit Making Pattern)

  1. B retraces to at least 78.6 of XA but must not touch (wick) or close beyond 6 of XA
  2. C retraces to at least 38.2 of AB but its wick cannot go beyond point A
  3. D point will be at 127.2 of AB. D point must pass point X
  4. PRZ between 1.27 AB and 1.618 AB
  5. Stop is 2 ATR below previous structure, look left on the chart
  6. Target 1: 38.2 of AD leg, Target 2: 61.8 of AD leg

butterfly

Bat (50.0 XA, 61.8 AB, 161.8 AB) – (80% Profit Making Pattern)

  1. B touches at least 50.0 of XA but must not touch (wick) or close beyond 8 of XA
  2. C retraces to at least 61.8 of AB but its wick cannot go beyond point A
  3. D point will be at 161.8 of AB, 0.886 of XA
  4. Stop is 2 ATR below X
  5. Target 1: 38.2 of AD leg, Target 2: 61.8 of AD leg

bat pattern

Cypher (38.2 XA, 127.2 XA, 78.6 XC) – (80% Profit Making Pattern)

  1. B retraces to at least 38.2 of XA but must NOT close beyond 8 of XA
  2. C is at 111.3 of XA in the XA direction (must close above A), must not close above 1.414
  3. D must touch 78.6 of XC
  4. Stop is 2 ATR below X
  5. Target 1: 38.2 of AD leg, Target 2: 61.8 of AD leg

cypher pattern

 

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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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Best Financial Stock/Forex Trading Training Videos

These are some of the best financial Stock/Forex trading training videos that has helped me in past. I thank to all posters of these great trading videos and grant whole credit to them for their contents.

5 Candlestick Patterns

Candlestick Breakout Patterns

Trading Trend Lines and Channels

Harmonic Ratio Trading

Forex Trading

Forex Trading: Risk/Reward, Hedging

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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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Must Read Books for Forex Traders and SmallCap Investors

Here are some Must Read Books for Forex Traders and SmallCap Investors

The New Market Wizards: Conversations with America’s Top Traders (Paperback)


List Price: £12.99 GBP
New From: £8.19 GBP In Stock
Used from: £3.03 GBP In Stock

Hedge Fund Market Wizards: How Winning Traders Win (Part of Set 9781118582978) (Hardcover)


List Price: £32.99 GBP
New From: £18.68 GBP In Stock
Used from: £21.56 GBP In Stock

One Good Trade: Inside the Highly Competitive World of Proprietary Trading (Wiley Trading) (Hardcover)


List Price: £52.50 GBP
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Fibonacci Trading: How to Master the Time and Price Advantage (Professional Finance & Investment) (Hardcover)


List Price: £59.99 GBP
New From: £30.33 GBP In Stock
Used from: £42.00 GBP In Stock

Harmonic Trading, Volume One: Profiting from the Natural Order of the Financial Markets: 1 (Paperback)


List Price: £36.99 GBP
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Used from: £24.99 GBP In Stock

Trade What You See: How to Profit From Pattern Recognition (Wiley Trading) (Hardcover)


List Price: £50.00 GBP
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Used from: £22.00 GBP In Stock

High Probability Trading Strategies: Entry to Exit Tactics for the Forex, Futures, and Stock Markets (Wiley Trading) (Hardcover)


List Price: £57.50 GBP
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Used from: £25.57 GBP In Stock

Come Into My Trading Room: A Complete Guide to Trading (Wiley Trading) (Hardcover)


List Price: £39.99 GBP
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Used from: £19.20 GBP In Stock

Harmonic Trading, Volume Two: Advanced Strategies for Profiting from the Natural Order of the Financial Markets: 2 (Paperback)


List Price: £55.99 GBP
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Used from: £79.74 GBP In Stock

Trading in the Zone (Hardcover)


List Price: £37.32 GBP
New From: £21.96 GBP In Stock
Used from: £32.13 GBP In Stock

Trade Chart Patterns Like the Pros: Specific Trading Techniques (Paperback)


New From: £75.78 GBP In Stock
Used from: £69.03 GBP In Stock

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Leave a comment: I would love to hear your thoughts, suggestions on this topic. Please leave a comment.
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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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Videos for Traders and Investors

Best Learning Videos for Traders and Investors

Floored: Into The Pit – Epic Trader Movie!

Mark Douglas – MIND OVER MARKET

A Market Wizard Speaks: Marty Schwartz

Trading Video Winning Methods of the Market Wizard Jack Schwager

Disciplined Trading Van Tharp

Trading Emotions & Psychology – Forex The Secret of Getting a Winning Psychology

Rise Of London’s Millionaire Forex Traders

Jim Cramer – Market Manipulation

Jim Cramer Tells You How to Trade Like a Professional

Cramer’s Hedge Fund Tricks

Ex-Goldman Sachs Trader Tells Truth about Trading – Part 1

Ex-Goldman Sachs Trader Tells Truth about Trading – Part 2

Ex-Goldman Sachs Trader Tells Truth about Trading – Part 3

Ex-Goldman Sachs Trader Tells Truth about Trading – Part 4

Ex-Goldman Sachs Trader Tells Truth about Trading – Part 5

Ex-Goldman Sachs Trader Tells Truth about Trading – Part 6

How to Make Money Like Top Hedge Fund Managers

Wall Street Billionaire Traders Lifestyle

How we made our Millions

Qualities of a Winning Trader

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Leave a comment: I would love to hear your thoughts, suggestions on this topic. Please leave a comment.
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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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Making Money in London AIM Markets

Making Money in London AIM Markets

1. Never have ego. Market feeds on people with ego because they are one who are trapped more often and get their stops hit. They buy high and sell low. Is that how you usually do your shopping? Aren’t you supposed to buy low and sell high?

2. Market manipulation (AIM is heavily manipulated by hedge funds and institution who release news, tips etc. Watch Jim Cramer’s video on that, If you can not beat them in their game, you have no chance of survival. So at least stay in the game with them. They have the kind of money to move a stock up and down.)

3. Charts and market behaviours (You can not escape that. Chart shows orders filled and L2 shows orders in book. They tell you what will happen with 80% of accuracy in my experience not matter what RNSs. Charts are representation of market psychology)

4. Investment versus trading (hedge funds trade, novices invest in AIM. Read up on 4 emotional cycles link)

5.Never trust any one. Make your own decisions and research. If you are not capable enough, stop trading/investing and study markets.

6. Plan your trades/investments and follow that. Remember: “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win – Art of War”. This quote explains the difference between professionals and novices.

7. Trade what you see, don’t speculate

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Leave a comment: I would love to hear your thoughts, suggestions on this topic. Please leave a comment.
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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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Issues With RNS Based Trading/Investing – Simple Logic

Issues with News(RNS based trading)/investing are:

1. you do not know when it is expected
2. you do not know what it is or will be
3. you do not know at what price it will come
4. you do not know what is the max the share price will go up to.
5. you do not know whether and RNS is not something designed by Institutions.

For example: Let’s say a particular stock goes down to lets say 5p and then the long awaited RNS comes and I get a bullish signal and I enter the market at 7p.

Lets assume that on this long awaited RNS the share price can go up to 100-200% up but what really matters is point 3 above i.e. at what price the RNS came in. Lets say it it came in at 5p and the stock goes up by 200% so the price will be 10p. At this point the person who bought at 10p will NOT be in profit. He will barely break even. A person who bought at 10p+ price will still be in loss.

On the other hand, because I entered at 7p price I will be up by 40%+ at soon it hits 10p and if the market carries on further I will make more and more profits. In this example, in effect I have bought at low price and sold at high price. Whereas people who bought at 10p or 10p+ will still be either in break even or loss.

It is simple logic.

Remember: It is a war, plant it or lose it

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Leave a comment: I would love to hear your thoughts, suggestions on this topic. Please leave a comment.
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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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Dangers of Averaging Down Your Positions

One of the most common practices that investors and traders is average down. In simple terms it makes sense but some of the logical and obvious points are always ignored. Here are Dangers of Averaging Down Your Positions.

People who average down by adding at lower prices have following issues:

1. If their previous buys were at high prices then they will have to spend a lot more money to be able to bring their average to a break even level

2. You do not know when the market has bottomed out. What if you bought more at a low price to average down but then market falls further. Now you will have to buy even more. There is no end to it. Every time market falls further, you will have to spend more and more money to bring your average to break even.

3. By buying too many shares in the rush to average down, you are increasing your market risk exposure. That means if the company goes bust, you will be seriously out of pocket; much more than you previously were before you started averaging down.

4. If there is a heavy placement of new shares at low prices, it may dilute the stock value. The share price in that case may never return to its highest highs leaving investors/traders in losses for good.

It is all simple logic and maths. Take care.

Happy Trading

Remember: It is war there, plan it or lose it.

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Leave a comment: I would love to hear your thoughts, suggestions on this topic. Please leave a comment.
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Disclaimer: This web site is just my financial trading log and is for educational purposes.
Please do your research, analysis and take your decisions. You must not rely on my actions or analysis.
Please see the Disclaimer page.
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