Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff

Simon Denham's Daily Market Comment

Another week another Libor scandal as further details of other banks partaking in fixing are revealed, but this time it’s the usually squeaky clean Lloyds bank that’s at the heart of the accusations. This is not news we didn’t know about and we can expect this to run and run as more fines will be handed out. The headlines will remain full of bad banking practices and poor judgement of a select few as the vote winning and populist bash a banker theme continues. There’s no question that the rules need to be tightened and the actions taken by people to fix rates in order to line their pockets are completely wrong, but there comes a point when the chastisement is enough and we are in danger of driving these major employers and huge tax contributors away from the UK.

The last few years has seen banks having to increase their capital buffers, adopt more regulations, suffer a seriously negative public perception and at the same time politicians have been screaming at them to lend more to businesses and individuals in a climate that is hardly conducive to investment. Some of these banks, if not all of them, will having already been weighing up their options and with the world of global finance so interlinked it wouldn’t take too much for a HSBC or a Barclays to say we’re off. There are plenty of places that would welcome them with open arms like Shanghai, Dubai or New York and whilst many people might say good riddance to them, we have to remember that our services based economy is heavily reliant on finance. Banking certainly needs a good clean up, but our major industries ought to be encouraged as opposed to continually berated.

The markets ended last week on a high and the Dow put in a very decent gain whilst sustaining its highs as well. After China's GDP came in on expectations and avoided the much rumoured collapse investors were encouraged that it hadn't fallen off a cliff whilst at the same time had dipped enough to keep the prospects of more stimulus very much alive. Also adding to the tide of positive sentiment were the earnings results from JP Morgan which sparked a strong recovery in financial shares. The buying frenzy spread to other sectors and the Dow rallied 204 points to close at 12,777.

This morning the FTSE is trading flat after an exciting first 5 minutes where futures opened lower than where we had expected before bringing the index back to around the 5660 level. After Friday’s strength we’re back towards the resistance levels of 5700/25, although still a little way off, but this remains the major hurdle for the index. To the downside 5600 is pegged in as the major near term support.

Once again the euro put in another 2 year low on Friday at 1.2163 but the bears were quickly swept aside and afternoon bounce saw earlier losses pared in moving into positive territory to close at 1.2247. The reversal in sentiment was triggered by a successful Italian bond auction but the general risk on mood added to the upward momentum. This morning EUR/USD is at 1.2235 not showing a huge indication that it wants to carry on higher, but Friday’s rally could just be the start of a bigger bear squeeze.

Gold rose on Friday, gaining $20 to close at $1588.1, as a general risk on mood descended on markets and weakened the demand for the dollar. Despite its gains however, gold posted its second weekly loss as the likelihood of a third round of quantitative easing from the Federal Reserve looks ever more distant.

Crude oil futures gained on Friday as the US’s sanctions on Iran continue to press the supply disruption trade. Also adding to the gains was the general weakness in the dollar as other markets experience a strong risk on appetite. Missile tests by Iran have also added to the upward pressure on crude prices, but this morning things are just a little softer with Brent trading at 101.25.

http://www.capitalspreads.com/simon-denhams-daily-market-comment

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',

Cliff 

Are You Trading to Win?

By Dr. Woody Johnson


Have you ever experienced doubt…or worry, or fear, or any of the other negative emotions that can sideswipe your results?  Of course you have…you are human; and as a human you are an emotional being.  Now, as an emotional being, you cannot take emotions out of the trading equation.  Yes, it is possible to distance yourself from negative emotions that can distort your judgment and distract your thinking through training and consistent work at it; but to think you will ever be “totally” in control and/or devoid of emotions is an exercise in futility.  It is far more effective to learn to “manage” emotions in order to maintain focus when you are in the trader trenches.  Managing emotions is not easy, it means that when you get to that fork in the road and you have a choice between going left (falling off the cliff and essentially giving in to ego-driven tendencies while reaching for temporary relief) or choosing right ( doing what is in the highest and best interests of your A-Game).  When you are trading from this proactive position and you are engaging in a mindset that is fiercely focused on what matters most in the trade, you are “trading to win.”  The alternative is to “trade not to lose.”  Let’s examine the differences in these two concepts a little more closely.

Larry Wilson in his book Play to Win asks whether your orientation to life is a play to win strategy or playing not to lose.  A playing not to lose strategy is based on the need to remain in your comfort zone and constantly look for temporary emotional relief by giving in to impulsive behavior and hoping you get the results you want. Things must come easily when playing not to lose. People with this strategy are constantly looking for the magic bullet or the quick fix that will create results out of thin air with no regard for their development.  The philosophy of playing to win on the other hand is about the notion that life is growth, that courage and meeting the challenge are the harbingers of success.  It is about commitment to excellence and a belief that learning (both about the market and your unconscious faulty ego driven beliefs) is critical for both professional and personal effectiveness.  The core maps (your mental models and paradigms that filter perceptions) of playing not to lose are driven by fear, greed and other negative emotions.  These emotions are attached to deep seated limiting beliefs about yourself and out of these limiting beliefs come thoughts.  Thoughts similar to the following; “…I must make this trade, I can’t possibly allow any trades to slip by, that is money lost; and losses are for losers.  Conversely, the core maps of a person playing to win which is trading to win when in the markets reflect a belief that there is an abundance of opportunities, that they don’t have to chase every trade impulsively because there will be another, and another after that – she knows that there is power in patience and stalking the high-probability trade like a hungry lion.  When you are playing not to lose you are trading not to lose and it also means that you are tentative and unwilling to “put it on the line” so-to-speak; making your effort your best effort.

Trading to win also entails the search for objective reality and, holding on as you would a life jacket in a stormy sea.  A trading not to lose strategy is closed with limited alternatives; it blames others or outside influences first and seldom looks inside to identify issues that are negatively affecting results; this strategy promotes irrational thinking.   The trade to win strategy owns all results by using techniques like journaling to find out what is and is not working.  The trade to win trader is prepared to use protocols and effective routines in order to ensure sustainable success.  This strategy is intellectually and emotionally honest along with garnering the enthusiasm and energy necessary to vigorously address trading weaknesses, but you can’t address a weakness that you either don’t know or don’t understand.  Trading not to lose encourages erratic and illogical behaviors while looking for the easy win, often putting large positions at risk thereby simply gambling, and by reneging on commitments to established rules – if they have rules at all.  The trade to win strategy recognizes that trading necessitates losses and that effective long-term winning means managing risk, having an iron clad commitment to rules, goal-setting, planning and methodical, smart trading.  The trade to win strategy is winning the psychological war one battle at a time – “going as far as I can with all that I’ve got” in a growth oriented, fun, honest and healthy way.

Your issues, obstacles, and problems that plague your trading must be treated like an infestation in your home, you want to know that the cockroaches are there so you can weed them out and get rid of them.  That’s why documenting your trades and incorporating a feedback loop by using a “Thought Journal” and a trade log are critically important parts of your tool box.  Most of you already know that smart trading means tracking and documenting your trades in order to get data on how well your trade plan is working.  Similarly, you must also gain data on what you are thinking and feeling because this is how you uncover the unconscious issues that act as drivers to bad behaviors that bring on unwanted results.  You’ve got to be willing to dig deeply to find out; you must pull back the layers of the mental onion and face your issues so that with the right mental and emotional tools you can successfully resolve them.  A “don’t bring me no bad news” outlook is going to turn you into a Sisyphus, the Greek mythological character that was doomed to roll a boulder up a mountain only to never reach the top.  You’ll never reach the top of your trading goals but will be doomed to push that boulder (your issues) until you run out of either energy or money and it’s usually the latter first; that is if you are unwilling to look at your ego driven unconscious faulty beliefs.  The smart trader accepts the challenge and realizes that trading to win is about the long haul.

So, you must decide which life strategy you are willing to undertake in the service of your trading.  Will it be the courageous and comfort-zone expanding trading to win, where you are committed to growth and excellence?  Or, will you reach for the easy button with a strategy based on not wanting to get outside of your comfort zone; avoiding challenging yourself and living by default with blinders on.  The choice is always yours.  Remember, trading to win is where you are going as far as you can with all that you’ve got!

Happy Trading

http://lessons.tradingacademy.com/article/are-you-trading-to-win/

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff 



Are You Getting to First Base?

By Rick Wright


Hello traders! In honor of the baseball season, this week’s newsletter will reference America’s favorite pastime.  The main point of this letter is setting realistic expectations on your trades and managing your winners properly. After speaking to several students over the years, there has been a relatively consistent topic that comes up, which sounds something like this: “I get into a trade and it goes my direction, but after a while it goes against me and I get stopped out.” My next question is always “How far does it go your direction?” Usually the answer is something like “20 pips” or “the distance of my stop loss” or some other metric that they are using.

Guess how far these traders are getting on the diamond in baseball? That would be “first base”! In trading, very often experienced traders  will have multiple targets for their trade. If you are trading 3 lots, basically you could have three potential targets to exit this trade, perhaps 20 pips for one lot, 50 pips for the second, and 100 pips on the third. If you are consistently hitting your first target before price retraces, you are hitting consistent “singles” in baseball, getting you to first base! Many new traders only want to hit the “home runs” with their trades, making dozens if not hundreds of pips on a trade. In our current market volatility, not everyone is good at hitting these home runs. You would be surprised how many traders I’ve spoken to who stubbornly watch a 20-50 pip winner turn into a losing trade, by letting it retrace all the way back to their stop loss! Instead of going for only the home run, if these traders would take part of their trade off at a smaller first target (a single) and moved their stop to break even, there would be many more dollars in their account today!

Have you seen the movie “Moneyball”? Brad Pitt and Jonah Hill played the general manager and “consultant” to the Oakland Athletics baseball team in this film. They took the uncommon view that hitting percentages were less important than on base percentages. This means that instead of looking at big name, expensive players who hit a lot of homeruns, they looked at players who got to first base consistently. If you are a fan of baseball, you know these numbers can be wildly different!  When a team is trying to score runs, having people on base is a lot better than waiting around for some slugger to hit a home run every other inning! The point is, getting to first base consistently is more important than trying to hit big home runs every time you are at the plate!

So how can we relate this to becoming a better trader? When you find a trading style that you like, be it scalping, momentum, swing, or position trading, you will probably find that you are going to be “in the money” a few pips on most of your trades after a period of time. For example, if you find yourself as an intraday momentum trader, you may be going for 20, 50, and 70 pips on your trades. Should you stubbornly hold on to your entire position until it hits your 70 pip target? In my opinion, no. This would be considered a home run! First things first, let’s lock in the “single”-perhaps take one lot off at the 20 pip target and move your stop loss to break even. If price retraces, you still made a few pips. If not, then perhaps you will get a double (getting to second base)at your 50 pip target! One way that people move their stop is to wait for the price action to move in their direction the distance of the stop loss-with a 10 pip stop, when in the money 10 pips the stop is moved to break even. My personal preference is to wait until my first target is hit. Try both techniques and see which works better for you.

Imagine a batter who hits the ball, and doesn’t start immediately running to first base. Instead he stands there at home plate, waiting for the ball to drop before he starts running. As far as I’m concerned, this is like letting the trade work without moving your stop and locking in profits! Everyone in the ballpark would be screaming at this batter to start running if he just stood there, waiting for the ball to land! Doing that, it had better be a home run! Otherwise, he will get thrown out not even getting his single. Trading is the same way. Take those singles, then doubles, even triples, and if a homerun shows up, congratulations! There is a reason that homers are not hit at every at bat by every player. They aren’t very easy to do! Let’s concentrate on getting on base and managing our winning trades by moving our stops when price goes our direction. If you consider yourself the general manager of the baseball team, moving your stop is like managing your players properly. Four singles by four batters in a row will add up to a home run! 

Please be aware that I am not going against the idea that you should have at least a 3:1 reward to risk ratio on your trades, or to ignore our previously discussed supply and demand zones. These should be the cornerstones to your trading plan! I am only suggesting that because of these volatile times, managing your trades in a slightly different fashion may put more pips in your account.




http://lessons.tradingacademy.com/article/are-you-getting-first-base/

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff

Simon Denham's Daily Market Comment

As the US earnings season gets underway and ahead of companies in Europe who commence shortly investors will have a chance to reflect back on a quarter that has disappointed on many a macro economic data front.  With all the major economies slowing more than many had predicted those firms that had been gearing up to take advantage of the predicted recovery will have reined in projects and investments and will also be looking at other ways to reduce costs. The biggest cost to firms of course are its people and whilst we’ve seen unemployment in the UK peak and even in the US it has declined in the last few months the chances of more people losing their jobs is becoming ever more possible.

Expectations for the up and coming earnings season had already been reduced and so far in the US a few disappointments have emerged which have already contributed to a couple of poor sessions for the Dow.  Yesterday’s figures from M & S also didn’t make for good reading and highlighted not only the effect that the dire weather is having on retailers but it is adding to yet another headwind that consumers are facing.

Despite the surprise jump in UK industrial production yesterday it’s unlikely that we will see the UK return to growth again in the second quarter.  Across the pond growth is slowing and the labour market stalling and whilst over there another recession may not be quite on the cards yet, it’s touch and go.  All this makes the possibility of further QE more likely as central banks become addicted to the idea that further stimulus is the solution to our economic woes and at some point they will really completely run our of fire power at which point the short termism is likely to result in an even worse and prolonged downturn in economic activity.

So tonight’s FOMC minutes will be interesting to read following their extension of Operation Twist and their willingness to let the markets know that they are keeping the door very much open in terms of more QE.  With their remit being focused on the labour market it’s clear to all that things there are not as rosy as they would like and so it’s seen as only a matter of time before they pull the trigger again and tonight might shed more light on just when that could be.

Due to the weakness in US markets overnight the FTSE is in the process of erasing yesterday’s gains and is trading at 5630 at the time of writing.  With little in the way of economic data ahead of tonight’s FOMC minutes we could see yet another dull trading session and narrow trading ranges.

The euro made a new 2 year low yesterday, touching 1.2234 against the dollar, as concerns over the reports that the ESM fund may have hit a road block in the German courts has thrown already agreed upon bailouts into doubt.  Although making back some ground since the 2 year low, little likelihood of any positive cues leaves sentiment remaining heavily bearish.  This morning however a little bit of opportunistic buyers are trying to pick the bottom with EUR/USD up a little at 1.2275.

Gold eased as a bearish outlook on equity markets and a stronger US dollar sapped appetite for the precious metal.  After touching $1,600.9 earlier in the session, gold did an about face and plummeted $34 to touch $1565.9 before recovering modestly and this morning that recovery looks to be continuing taking the yellow brink to 1578.

Crude oil prices declined over 2% as the expected supply disruptions from a strike at a Norwegian oil field didn’t materialise and sentiment surrounding the global economy looks set to deteriorate, further reducing demand.  Despite the negative trajectory, traders are likely to be on the sidelines until today’s crude oil inventories shed more light on the supply situation.

http://www.capitalspreads.com/simon-denhams-daily-market-comment 

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',

Cliff 

How to Treat Forex Trading Like a Business

By Johnathon Fox


Many people come to Forex trading looking for the ultimate lifestyle of wealth and freedom. Whilst this level is by no means unattainable it is these exact thoughts that tend to bring the trader undone. Instead of treating their trading like a business the trader is too busy committing all the errors that will lead to money being lost rather than money being made consistently.

What does treating your trading like a business mean?

Trading like any other sort of business is designed to yield a profit at the end of the month and year. Setting up and treating your trading as a business is all about doing the things that will give you the best chance to make a profit.
Whilst most traders would like to think they treat trading as a business they are still committing critical errors such as outdated equipment, not following a business plan and continuing to search for a holy grail instead of perfecting just one method.

Have the correct equipment

To give yourself the best chance to succeed you must use the best equipment available to you at the time. This includes;

A solid trading platform that has minimal slippage

A broker with a long standing good record

A good computer to carry out your trading

A back up platform such as a Tablet, Ipad or Mobile Phone with the correct charting equipment

The great thing about Forex is you don’t have to spend a massive amount of money to purchase the equipment you’ll need - but skimping on the essentials will put you behind all the other traders trading the same markets.

Find a method that gives you an edge over the market

When traders have the basic equipment for their business set up they need to decide on the method they are going to use to trade with. Changing from strategy to strategy will only take attention away from becoming profitable at the method of choice.

Make a business plan

A business plan is essential to any viable business and this is no different to trading Forex. Most traders don’t use a business plan but it is also true that most traders do not treat their trading like a business and most traders don’t make money.

Just a few things your trading plan should have are;

What you look for to enter the market and take a trade

The money management technique you use. Ex – how much money or % of your account you risk per trade

How you manage your trades

How you exit your trade or trail your stop

Ongoing Education

Like any other business once you become profitable the education does not stop there. The markets are changing and evolving all the time and like all good businesses you must move with the times. Continually seeking further education and market knowledge will help you stay abreast of any changes to the market.

http://www.dailyforex.com/forex-articles/2012/02/How-to-Treat-Forex-Trading-Like-a-Business/11048

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff 



Forex Trading Can Be Simple (If You Let)

By Christopher Lewis


One of the biggest issues that can rear its ugly head in the world of the newbie trader is over complication. In fact, making things much more difficult than necessary is a staple of every budding trader’s early career it seems.

The biggest catalyst for this is twofold. The first issue is a lack of self-confidence. This makes sense, because by being new to the trading world it is easy to feel that you know almost nothing. The average new trader is constantly looking for “hints”, “tips”, and “tricks” when it comes to trading. This is easily understandable as they will know little about currency trading. After all, sound trading decisions are the result of experience, and they will have very little of that. What many people don’t understand is that experience is often the result of bad decisions!

The lack of confidence will lead to system-hopping, and the constant switching of indicators and timeframes. The thing that is risky at this point is the trader very rarely understands how an indicator works. They just simply know that you “buy when this line crosses the other one”, or something like that. The understanding of the mathematics involved makes using these indicators more effective in theory, because at least the trader knows what they are seeing. Of course, at this point in time, they may have several indicators on their charts and this can lead to what is known as “paralysis by analysis”, which leads me to the other catalyst.

The other catalyst is simply a fear or losing money. Most traders go into the Forex markets looking to get rich, and not understanding that you can’t always win. Yes, they understand that a 100% win ratio is a bit much to ask for, but they don’t emotionally understand that. It is one thing to understand something from an intellectual level, and quite a different one to understand it from a gut level. Taking a loss isn’t fun, but it is something we all do.

The “paralysis by analysis” syndrome comes about because of this. There is a point in the new trader’s career that they will pile on the indicators in order to “read the markets.” They may start with a moving average, and add an M.A.C.D. indicator as time goes on. Perhaps they have attended a webinar that featured the trader using the ADX and Keltner Channels. At this point in time, they are starting to add the indicators to the chart, and not seeing the most important thing: where price is going!

With a ton of indicators, it isn’t easy to understand where to go. You could have three indicators saying sell, while another two are saying buy. It is at this point the trader understands how difficult this is getting for them. They have made it overly complicated, and now it is getting to be frustrating – and that can lead to really stupid trading decisions over time.

Hopefully, they reach the point where one day they look at a chart and say something like, “Wow, if I only had sold USD/CHF over the last few years. It has gone straight down over that time.” While there are pullbacks, the trader sees that in general, they could have made a fortune selling this pair over the last several years. This is where the idea of trading with the trend comes into play. There are traders out there that will only trade in the direction of the overall trend, and refuse to take set ups in the other direction. Of course, this takes a bit of patience when the pullbacks come – but it does work in the end. While there are many different ways to trade, those who choose this method simplify a lot of the decisions they are forced to make as they already know what direction they want to be in. Their entries may vary from trader to trader, but they all tend to sleep a little easier at night as well.

There are those who will debate the whole “the trend is up on the 15 minute, down on the hourly, but also up on the weekly timeframes.” Nonsense. Currency pairs only have one trend, and that is the major one. The rest is noise, and if you focus on that – you can avoid a lot of trouble. If you are trying to figure out the trend, simply look at a weekly chart and see if the market is going from lower left to upper right. If it is, you are in an uptrend. If it is going from the upper left to the lower right, you are in a downtrend. Anything that isn’t easily identified isn’t worth bothering with, as there are plenty of pairs to trade.

By approaching the markets in this manner, trading really can be as simple as you let it be.




http://www.dailyforex.com/forex-articles/2011/09/Trading-Can-Be-Simple/8738

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff

Simon Denham's Daily Market Comment

Markets are in much better shape following the EU summit at the end of last week but there is unquestionably still some scepticism regarding the viability of what was agreed and whether it will be enough to pull the eurozone back from the brink. For starters, even though the Dow put on an impressive near 300 point gain on Friday, US investors’ confidence dropped to the lowest level for 2012 despite ongoing improvements in the housing sector. The last session of the month culminated in the index posting its best monthly gains for the year, and so certainly across the pond investors seem to be more confident that this European sticky plaster is going to work. Not only is confidence still taking a dent but Spanish borrowing costs remain well above the 6% level and so have barely improved things for the country. Finally, the risk on trade from the last couple of sessions has been rather muted to say the least. Many of the riskier stocks like the miners have simply not joined in the party and continue to remain a drag on the indices, in particular the FTSE due to its heavy weighting in the sector.

So as the doubts remain it will be interesting to see how things pan out through the summer months. With July underway we look back at how the month has panned out for the FTSE since the mid 1980s and see that there have been as many up months as down months, so there isn’t any clear bias for the bulls or the bears. But the months that have seen gains are on average much stronger than the months where losses have occurred. The month has also been quite a volatile one in the past so maybe we’ll get more of the same this time round, but with the Olympics only a few days away volumes could suffer.

The FTSE is adding to Friday’s gains this morning but with no real great conviction. At the time of writing we are higher by 15 points to 5586 just below the resistance seen at 5600 and 5640. This has attracted some sellers who think that the resistance will win over and we could head back down again, but a break above here might see a test of 5715 and 5760. To the downside 5530, 5470 and 5430 are all seen as support levels.

Economic data comes in the form of lots of manufacturing numbers. PMI surveys from the US, Europe and UK will all be watched to see how the sector is getting on as it continues to perform significantly under par. There’s also the EU unemployment figure which is expected to tick higher this morning and then for the rest of the week we gear up for the BOE and ECB rate decisions on Thursday and the non-farm payroll on Friday.

The euro rebounded 226 pips against the US dollar to 1.2666 as the deal by the EU officials managed to calm the markets, easing fears of an escalation in the sovereign debt crisis. Expectations of an interest rate cut by the ECB at its meeting this Thursday also might have supported the shared currency. Usually a rate cut is a bearish feature but this time it could be seen as an indication the so far reluctant European leaders are ready to take action. This morning the single currency is at 1.2635.

The global markets cheered the EU decision to ease the bailout rules for banks and the feel good factor also sparked a sharp recovery in precious metals. As the risk appetite made a comeback gold prices gained $46 to $1597, even breaking above the $1600 mark briefly.

A commitment by Europe to use funds for bailing out banks directly was met with a sigh of relief by energy investors who pushed the WTI crude prices $6.50 higher to $84.96. Crude prices were the best performers in the commodities class; nevertheless, the climb in WTI prices was accentuated by returning fears over Iran’s threats to close the Strait of Hormuz.

http://www.capitalspreads.com/simon-denhams-daily-market-comment 

Hi and welcome to the 'Which Forex System?' blog.

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Inspirational Video – Will Smith's Wisdom

Watch this video all the way to the end. Trust me, you'll love it. This will really help you stay motivated about your trading...

http://www.youtube.com/watch?v=pfWGoLj1JCM

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

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Cliff 



Drawing Support and Resistance on Forex Charts

By Niall Fuller


This video discusses how to draw support and resistance levels on your charts in order to plan for the upcoming trading week. Every Sunday afternoon I take the time to go through the charts and plot my key support and resistance levels, look for any relevant price action, turning points or swing points. The best thing you can do is plot your levels out on the daily chart before the week begins and every day after the markets close in New York.

The chart in this video is the EURUSD daily chart, one of the first things I do when drawing S & R levels is to mark the major turning or swing points in the market, these are the obvious “pointy” parts on the chart where the market made an obvious change of direction. I marked 6 key levels or swing points on the chart in this video, however that’s not enough, we also need to draw in horizontal lines to connect these key market swing points.

It is best to think of these support and resistance levels as “areas” instead of exact price levels, this allows you to have some leeway with your stop placement. I also draw in the “interim” levels on the chart after drawing in the major S&R levels, these “interim” levels are smaller or perhaps less significant support and resistance levels on the chart.

This video was meant to explain how to draw support and resistance on a forex chart and also how I go a little bit deeper to draw the less obvious “interim” or in-between levels in the market.

http://www.learntotradethemarket.com/trading-videos/drawing-support-and-resistance-s-and-r-levels

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I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

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Simon Denham's Daily Market Comment

Our reliance on the internet is being highlighted in the most frustrating way by the tens of thousands of RBS and Natwest customers who have suffered from days of faulty banking services. As a financial services company ourselves that makes almost 100% of our trades online or on mobile devices a technical glitch of such magnitude would cause no end of problems and worries for our customers, but it’s not dependence on the internet that is so worrying about the debacle, it is banking itself.

As if banks hadn’t had enough bad PR in the past few years the last few days have really put their customers resolve severely to the test. The payments system has always been part of our everyday life as salaries, bills and mortgages all need to be paid on time to keep the wheels turning, but the back log of hundreds of thousands of transactions that this must have caused doesn’t warrant thinking about. What didn’t help matters either was the weekend openings, with branches opening on Sunday for their first time in history, yet staff were unable to help customers due to the computer systems having frozen up.

Unfortunately for RBS the damage is irreparable for the customers that they will lose as a result and the problems will only feed anti-banking rhetoric further. For the few people in this country that still don’t have a bank account they’ll be wondering what all the fuss is about.

For the markets we start the week just as we left off, in selling mode, as the crisis in Europe continues to dominate the headlines. With the new Greek Prime Minister and finance minster being incapacitated, important meetings with EU and IMF leaders to discuss the results of their election and how the country will continue to deal with its bailout package have been cancelled. The impending EU summit this week is also going to be under attended by Greek delegates, which isn’t settling for many investors’ nerves.

At the time of writing the FTSE is around 25 points lower at 5485, meanwhile the Dax is in even worse shape already down over one percentage point as equity markets signal to EU politicians, something that they’ve been doing for far too long now, that time is fast running out if there is to be a proper solution to the crisis.

Economic data today is thin on the ground and throughout the week there isn’t a huge amount for us to significantly focus on. Today at least there is new home sales from the US which can still move the markets if it’s way off expectations.

The euro climbed against the US dollar last Friday ahead of the EU summit on the back of speculation the European Central Bank will step in and announce another package of longer term loans. The gains were limited, 22 pips to 1.2570, a sign that easing the terms for collateral by the ECB was not enough and that the markets are asking for a lot more. This morning’s negativity however is hurting the single currency taking it back below 1.2500 to 1.2490 at the time of writing.

Gold interrupted a string of three straight declines, recouping $7.60 to $1571.70, as a worsening debt crisis in Europe spurs demand for precious metals as an alternative asset. However, gold prices remain under the $1600.00 mark as a deflationary environment works against it on the short term. But one could ask how long until the next round of monetary easing?

The WTI crude prices rallied back $1.65 to $79.76 a barrel driven by a slightly weaker greenback and a modest recovery in the stock markets. The bounce was assisted by tropical storm Debby threatening oil refineries on the US Gulf Coast, possibly adding a premium in the WTI crude prices, but in line with the risk aversion crude prices are dipping this morning too.

http://www.capitalspreads.com/simon-denhams-daily-market-comment

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

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Yours 'Forexly',
Cliff 



Have You Been Brainwashed?

By Sam Seiden


The world of market speculating is made up of everyone from the active day trader to the longer term investor, speculating in all kinds of markets and asset classes. People all around the globe push buy and sell buttons each day in hopes of achieving income and wealth. Never in history have there been so many books written on how to speculate in markets for traders and investors. Each weekend in many cities around the world, there are educational seminars given on how to “get rich” from trading. With so much education on how to properly speculate in markets out there, why is it that most people lose money? How can this be? The answer is twofold and is the focus of this piece.

First, it’s because of the content of most of the books and seminars. Most books and seminars are loaded with conventional Technical and Fundamental analysis which tends to teach you how to buy when everyone else buys and sell when everyone else sells (herd mentality), which is high risk, low reward, and low probability. Conventional Technical analysis is based on pattern recognition that has people buying after price has rallied and also offers buy and sell signals based on indicators and oscillators that always lag price, which means high risk buying and selling. Conventional Fundamental analysis offers buy signals only after good news is present and company numbers are solid. Where do you think the price of a stock is by the time this good news is offered to you? If you guessed high, you’re correct almost always. Remember, the only way to be consistently profitable when buying and selling in markets is to have a strategy that has people buying after you buy, at higher prices than you paid and selling after you sell, at lower prices than you sold at. Conventional Technical and Fundamental analysis does not help us in this regard; the basic principles of these two ways of thinking ensure you will buy and sell with the herd, when it’s too late, which means high risk and NO EDGE. Come on, if proper market speculating were as easy as reading a book, wouldn’t everyone be a millionaires?

The second reason most people lose money in the global trading markets, which is really part of reason number one, is that they throw all simple logic out the window. Let’s say you go to buy a car and you’re at the dealership and see the car you have your heart set on, and you see the price is $20,000. Do you go to the dealer and say; “I like this $20,000 car so much, I want to pay you $30,000 for it?” Of course you don’t do that; you likely offer $17,000 or some amount lower. In trading, most people wait for confirmation of higher prices and then buy, which is the opposite of how they buy things outside of trading. This makes no sense. I once had a gentleman go through my training program and I will never forget the day I met him and spoke to him about the program. He approached me and said he wanted to learn how to trade and join my program. I said, “Before we commit to this, let’s have a conversation or two and make sure this is right for you.” You see, I always want to make sure whoever is coming into the training program has the best chance of succeeding. I don’t want to waste their time or mine. My first question was, “What do you do for a living now?” He happened to own and run a pizza chain that he had just sold. As soon as he said that, I knew he had the best chance at doing this because he already knew how to make money buying and selling. In fact, there was nothing about buying and selling in a market that I could teach him that he didn’t already know, I will explain this in a minute.  Our first lesson went like this… I asked him to tell me about his business and he did. He explained that the whole business comes down to the price of cheese. I asked him three simple questions: 1) what is the average price of cheese? “Around $2.00 a pound,” he said. 2) If the cheese you buy is selling at $4.00 a pound, how much will you buy? He said, “as much as I need.”  3) If the cheese is selling at $1.00 a pound, how much will you buy? “As much as I can and store it,”, he said. I then told him that he was already a great trader and that there was nothing I could teach him about trading that he didn’t already know. What I could teach him, however, was EXACLTY what this proper buying and selling looks like on a price chart. He was already buying and selling in a market properly, he just didn’t know what that looked like on a price chart. This was an easy task for me because he already had the foundation of how you make money buying and selling anything down, and had made plenty of money from it. The most important part of today’s article for you to understand is this:

The more you can bring the mindset and rules that you use each day to purchase everyday items at the grocery store, appliance store, and so on into your market speculating, the better you will do. Do you ever use coupons to save some money? If you do, you already know how to buy at a low price. Take that same exact mind set and action into your trading world. The mass illusion is that proper trading is somehow different than how we properly buy things in everyday life. Truth is, there is no difference.

Many so-called professionals like to complicate the process with smoke, mirrors, curtains, and slight of hand. They do this to trick you so that you will transfer some of your account into theirs, without you realizing it. The key for you is to keep everything “real.” Use your simple logic filter to ensure you will not lose some or all of your account to illusion. For your review, let’s walk through a real trade we took at Online Trading Academy.

In the upper left corner of this screen shot, we see a market that is falling fast and reaching what our strategy determined to be an objective demand zone (wholesale prices). Most people would not want to buy in that circled area because there is a downtrend and every book says to never by in a downtrend. There was also some bad news causing price to crash which would make people very nervous when buying at that level. So, most people would not only not buy, some actually sold in that circled area. That is a chart of the Euro. What if I changed the market and made it the market for Samsung Smart (very smart) TV’s like you see on the right. If you saw price decline like that would you be more inclined to buy or not? Would you be afraid to buy on that decline or would you be very excited? Of course we would all be thrilled to buy that TV at a discount. Why then does just about everyone on the planet have opposite feelings or emotions with these two examples. The answer is simple, one is a financial market and the other is an example of anything else we buy and sell in life. Furthermore, you have been brainwashed to think that how you make money buying and selling in a financial market as a trader or investor is somehow different from how you make money buying and selling anything in life.

The chart in the middle, on the bottom is the result of that trade. Price turned higher, giving us a low risk profit on that trading opportunity. The reality is that the Euro was on sale for a short period of time and there was only a small amount for sale at that price meaning once they were all bought, price would rise. The chart gives us all this information if you understand our supply and demand strategy.

There is nothing wrong with following the rules of a trading book, just make sure you are the author and that your strategy has you buying at wholesale prices and selling at retail prices. To do this, start with using all the powerful buying and selling knowledge you already possess and use on a daily basis outside of the trading world. Bring this key but simple strategy into trading and you will soon be spotting “blue light specials” all over the place. Never forget, how you make money buying and selling anything in life is EXACTLY how you make money buying and selling in the financial markets.

Hope this was helpful. Have a great day.




http://lessons.tradingacademy.com/article/have-you-been-brainwashed/

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

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Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff 

How Do Pivot Points Work?

By Christopher Lewis


Pivot points are one of the more common indicators that traders use in the Forex markets. This is especially true if the trader is an intraday trader, but loses a bit of importance for the longer-term trader. The main reason why they are so popular is because they are a quick way to figure out potential support and resistance in a market.

The potential areas are based loosely upon the idea of expected volatility in a pair, and got their start in the futures pits as a quick way to look for trading opportunities during a trading session. There are people that will figure out pivots on a longer time frame, but whenever you come across them, it is almost always on a short term chart. In fact, there are short-term traders that use nothing but pivot points.

Some platforms support Pivot Points but if you use a platform that doesn’t support it, you can easily calculate and plot them. For those of you using MetaTrader 4, there are plenty of indicators available for download on the forums around the Internet that will automatically calculate them, and some brokers will also offer tools to do it for you.

Pivot Levels are calculated using three types of information from the previous trading day:

High price
Low price
Close price

Obviously, to find the high, low and close price of the previous day you simply need to check the candlestick from the previous session. Many traders will plot the pivot points on shorter time frame charts like the hourly and fifteen minute version. Pivot levels can tell you when the market will reverse and change the direction as the other short term traders follow them as well. Obviously, these aren’t 100% predictive, but they can give you a good idea as to when the day traders may be looking to reverse the market for the immediate future.

In order to calculate these pivot points, use the following formula:

Pivot Point = ( Yesterday High + Yesterday Close + Yesterday Low )/3

Resistance 1 = ( Pivot Point x 2 ) - Yesterday Low

Support 1 = ( Pivot Point x 2 ) - Yesterday High

Resistance 2 = Pivot Point + ( Yesterday High - Yesterday Low )

Support 2 = Pivot Point - ( Yesterday High - Yesterday Low )


These are potential areas of support and resistance in the short term markets that may be a guide for the day. Often, traders will also use something like a candlestick in order to confirm the reactions that could be happening at these areas as well.

Attached is a chart showing the daily pivot points on a 15 minute chart. Notice how price has reacted to these levels as traders step in and out of the market:





As you can see, these are good “guides” as the where the markets may move and react to. However, it is suggested that pivot points simply be part of your system, not the entire system.



http://www.dailyforex.com/forex-articles/2012/06/How-Do-Pivot-Points-Work/12519 

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

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Simon Denham's Daily Market Comment

So the Greeks went for the hair shirt rather than risk the unknown of the ‘wasteland’ outside the Eurozone.  For all of the horror stories of Greece’s potential in a non-euro arena it must be pointed out that quite a few countries across the globe manage to exist without it !

Our clients are initially wondering if the overnight move is going to repeat the events of last Monday when the Spanish ‘wonder bailout’ euphoria lasted all of two hours. The early indications are not good as the FTSE was called up at 5695 at 2300 last night but is now trading over 100 points lower at 5485/86. The Dax has performed similarly with the market now 130 points from the highs of the ‘Dead Greek Bounce’. 

Unfortunately, underlying all of this is the unpalatable fact that Greece is just an extreme instance of a general European problem. The developed world just has too many liabilities and too little income to pay for them.  Germany (virtually the only major solvent economy in the West) must be wondering what it has tied itself to. The simple fact is that Europe (and the UK for that matter) has calls on its purse built up over the last 30 – 40 years that cannot possibly be afforded. We all know this but attempt to tinker around the edges to somehow make the numbers work for one more turn of the wheel. Unfortunately with aging populations, a more dynamic and younger competitor out of the developing world, a reliance on imported energy needs, a huge weight of social benefits and the dead hand of regulation (amongst many other factors) all holding back investment there is just no easy route out of the problems.  And the one thing that democracies are bad at is taking hard decisions.

Whilst the Germans have proved themselves in the longer term to be the best Europeans there must be some limit as to how much they will sell their own future to support the present of other people.

With Governments looking for extra sources of revenue the corporate cash pile must be looking very attractive just around now. There is something of a limit as to how much head office relocation can reduce your local liabilities and so the Irish 12% corporation tax centre is unlikely to prove a haven for too many corporates. The left leaning Greek opposition indicated that company tax levels were a target, I fear that this is not going to be an isolated attempt. The fact is that most tax payers do not own stock and so so not really care where the markets go. Taxing the major conglomerates for revenue made within their borders (and disallowing any offsetting ‘investment’) must be high on the list of targets. Analysts and investors are well aware of this possibility which could well act as a dead weight in the medium term.

Markets

Markets today are still actually UP even after the early sell off with the DAX at 6264/65 putting on 30 points.  Indicating how much higher we were looking last night. There are some pretty solid resistance levels above us at this point at 6345/55 and 6435/45 coupled with the fact that we are unlikely to see much in the way of economic well being in the near term. Support is at 6220/30 and below here is the volume area of the last few weeks all the way down to 6070/80. Below here traders will be fearful of a return to the recent lows near to 5900.

The FTSE (since I started writing this article) has slipped into negative territory for the day and is looking pretty sick to be truthful. It is down on short term support at the 5460/65 level but the sentiment does not seem conducive to a rally just now. As mentioned in previous comments the current level is just about mid point for the last two and a half years and the 5500 region is generally seen as a short term point on the way to somewhere else. If we can actually manage to get above 5500 and hold it then the technicals may begin to turn positive. Unfortunately we have been ‘just visiting’ every time the market pops up over this mark.

The currencies have matched the indices pip for pip with the Euro rallying 100 points early on only to give it all back this morning. I tend to find myself in a very small camp over this. In the long run I think that the Euro would rally if the Greeks had been kicked out. Not the other way round. Keeping them in weakens everyone else this can be seen from the truism that a structure is only as strong as its weakest point. With Geek default and bailout other nations will know that they will always have a lender of last resort and so will shy away from the really critical reforms. For all of Germany’s power it is only one nation amongst many and ‘the many’ will eventually drag down ‘the one’.

The Euro is now at 1.2625/26 and is on a solid support level as I write at 1.2610/20. Below here is 1.2580/90 and far down 1.2435/45. On the upside we can see 1.2670/75 and 1.2745/55. Today though may well be a case of damage limitation and ‘sitting on hands’ as traders try to get a handle on sentiment and support.

The pound had a great Friday as funds flowed away from the Euro prior to the Weekend. We are back up to 1.5660 at the moment a level not seen since late May, having visited 1.5270 in the meantime. As mentioned previously Cable has oscillated around (approximately) 1.57 for the last three years and there seems no real reason for us to believe that this will change. The economic problems for the UK are the same problems for the world (and the US) and so the attraction of one currency over another is hard to evaluate. Yes we can point to various items (inflation/deficits/growth/tax/interest rates etc) but the major currencies all seem to have their fair share. Technically we can see resistance at 1.5690/00 and 1.5745/55 and support at 1.5640/50 and then down at 1.5600 but currently it does not look as though we are trying to pressure either end.

Gold is weak as the end of the world failed to happen and so the short term reasons for being long have evaporated. As mentioned before traders must be wary that for the last few months the falls have been rather more violent than the rallies and so caution in the event of a sharp sell off should be the watchword. As forecast on Friday there was a nice bit of activity between 1300 and 1400 as the US traders looked to position themselves and we might get a similar reaction today as they move to reverse these positions. In the wee small hours a big stop order was triggered (2345 London time) as someone who had presumably bought protection on Friday was closed out taking the price down to 1606 followed by the inevitable rally all the way back up to 1629 (where we started from). Now we are at 1622 looking at the resistance of 1626/28. The market is struggling to close above 1626 and so attention should be paid to this level if we look like achieving an overnight settlement north of it. Above here is major resistance at 1638/40. On the downside there is little near term aside from the natural support at the 1600 level. Minor support is also at 1582/84. But long term the support below 1545 (and especially at 1528/30) is looking very hard to beat.

http://www.capitalspreads.com/simon-denhams-daily-market-comment 

Hi and welcome to the 'Which Forex System?' blog.

I'll be posting regular market updates from well respected Forex experts and showcasing the best Forex advice and systems, so you don't have to waste fruitless hours searching for it yourself!

Add me to your 'Favourites' now and as a special thank you, I'd like to give you 4 fantastic FREE gifts by simply entering your details on the right of this page >>>

You'll receive my 3 Part Ebook series 'The Forex Decoder' which covers everything from the history of Forex, to revealing the most consistently profitable indicators you'll need in your Forex arsenal. I've sorted the 'wheat' from the 'chaff' so you don't have to make the same mistakes as I did when I first started.

You'll also receive a copy of Mark Nelson's famous '7 Habits Of A Highly Successful Trader' which will prove an indispensible aid in your Forex career, as it has done in mine.

Just enter your details on the right and get these 4 fantastic gifts absolutely for FREE >>>

Yours 'Forexly',
Cliff 



(My Secret Trading Weapon) – The Most Important Ingredient to Trading Success 

By Niall Fuller


Today I want to share with you one of my ‘secret trading weapons’. This is something very real and practical … Something that, if applied, can make a positive change in both your trading results and your personal life. There is one thing that I consider to be my ‘secret weapon’ for trading the markets successfully. It is something that all of us have the ability to develop and employ in the markets, it does not cost any money and it’s the single most important ingredient to trading success…

What am I talking about here? Well, in all areas of life there is something that separates winners from losers, achievers from underachievers, and those that reach their goals from those that don’t. The ability to plan ahead and not let emotional decision-making rule your life is something that allows people to excel in their personal relationships and in their professional lives. One of the most important and prevalent defining characteristics of people who achieve success in their lives is that they have patience. Patience is perhaps the MOST important habit that a Forex trader can develop.

It is the patience to sit on your hands and wait for only the best trade setups that separates the winning traders from the losing traders. Patience is the defining characteristic of what sets humans apart from all other species in the world. When we employ patience we are using the most advanced frontal-lobe area of our brains that is responsible for planning and forward-thinking, and when we employ emotion we are using the older and more primitive limbic system area of the brain which evolved for use in fight or flight situations. So, which trader will you be; a patient trader who uses the more highly evolved areas of their brain, or an emotional trader who essentially trades like a monkey?

Patient Forex traders make money faster than impatient traders

Want to make money as fast as possible in the markets? Stupid question? Maybe. But, most traders do the exact opposite of what they should do to make money in the markets. The problem is that most traders trade with little or no patience because they want to make money now and have a skewed concept of what ‘making money fast’ actually means. They do not think about 1 year from now or 2 years from now. What good are you doing if you trade now with little or no patience and as a result your trading account value increases and decreases like a roller coaster of emotion only to end up negative at year’s end?

What you need to do is think about trading as a year-long process. Think about how you can build your trading account over the course of a year, not over the course of one day or one week. By slowing down and realizing that you need to have patience to trade only the most obvious setups and thus to not over-trade, you will inevitably build your account faster than if you enter numerous trades each day in a futile attempt to ‘force’ the market to make you money. You see, the market does not care about you, so you have to care about it by taking what it gives you and waiting until it shows you its cards by forming an obvious price action trading setup. If you can do this consistently for one year I promise you that your trading account will be larger than if you trade every day and over-analyze the markets for hours all day and night.

Allow your trading edge to work in your favor by employing patience

Having patience to let your trades play out in order to see the true probability of your trading edge is something most traders don’t do because they voluntarily lower the probability of their trading edge by meddling with their trades too much. Let me explain that in simpler terms…

Do you move your stop losses and targets around multiple times after entering a trade? Do you get stopped out at breakeven all the time only to see the trade take off in your favor? If you are doing these things you are likely trying to control the market and by doing so you are voluntarily decreasing the probability of your trading edge.

This is a concept that is a little difficult to grasp because most traders feel the need to move to breakeven or manually close out a trade that is moving against them instead of letting the market run its course. But, think about this, if you simply set and forget all your trades and let the market play out by either hitting your stop loss or your target, you are allowing your trading edge to work and after a large enough samples of trades you will see your trading edge pay off. Most traders take smaller profits than what they had pre-determined before entering, or they make the huge mistake of moving their stop loss further from entry and taking a larger loss than they had pre-determined. (Note: there are times when moving your stop or target is warranted, see my article on 'Forex trade management' for more)

All of these mistakes are born out of a lack of patience, and until you understand that you do not need to meddle with your trades after they are live, you are going to lower the probability of your trading edge. Consider this; if you save yourself 2 losses by moving to breakeven and then you decide to move the next two trades to breakeven after getting up a small profit, but then these two trades also got stopped at breakeven when they would have been winners, you have just lowered the probability of your trading edge…even if you would have taken the 2 losses. Look here:

Risk = $100, Reward = $200

2 potential losing trades stopped at breakeven = $0
2 potential winning trades stopped at breakeven = $0

2 losing trades = -$200
2 winning trades = $400
Net profit of just ‘setting and forgetting’ and letting the market play-out by having patience to not meddle in your trades = $200

Now, this is a small example, but it shows you why moving your stops around and getting out at breakeven all the time or even manually closing your trades for small losses or gains BEFORE they hit your pre-determined stop loss or target can and will lower the overall probability of your trading edge and will thus cause you to have a very difficult time making money. The underlying point here is that you need to always make sure your actions in the market are in-line with the FACT that you never know for sure what is going to happen. By pre-defining your entry and exits and letting the market then play-out you are trading in-line with the fact that you do not know what will happen. But, when you move your stops and targets all around after the trade is live you are ignoring the fact that you do not know what will happen and you are acting as if your actions in the market will somehow cause the market to do what you want it to. Here’s the point: master your Forex trading strategy, develop a trading plan, then trade your plan and let the market do the work.

Patient traders know exactly what they are looking for in the markets

If you know exactly what your trading edge looks like and how to trade it there is no reason to not be a patient trader. In fact, by thoroughly mastering an effective trading edge like price action trading, you will find that you naturally increase your patience in the markets because you will know what constitutes a high-probability trade setup and what does not. Some traders decide to trade with no patience and thus gamble all their money away, other traders become skilled trading ‘snipers’ and perfect their trading strategy and trade the markets with a high-probability trading edge that is realized through the consistent application of patience. Remember, this is only possible if you are totally clear on exactly what your Forex trading edge looks like and how to trade it. For more on trading like a sniper check out my 'trade forex like a sniper not a machine gunner' article.

Patience is critical before, during, and after a trade

We have talked about having patience while your trade is live and briefly about having the patience to pre-define your entries and exits. We have not talked about patience after a trade however, and it is at this time that you really need a lot of patience. Most traders feel some level of emotion after a winning or losing trade, the emotions are different of course, but no matter how much money you put on the line you probably feel either euphoria or disappointment, depending on whether you won or lost on the trade.

It is at this time, directly after a trade closes out, that you really need to step back and separate yourself from the market. You need to have the patience to not jump right back into the market on the emotion you are most likely feeling after a winning or losing trade. This is something you can write into your Forex trading plan. At the very end of your trading plan you can include a line that says something like “I will close down my trading platform and remove myself from the markets for 12 to 24 hours after any trade closes out”, or something similar. This will help to make this a habit and will work to reduce the amount of emotion-based trades you make.

Learn to enjoy and embrace being a patient trader

Sitting on the sidelines is a profitable position….by having patience and not trading, you are further ahead than you would be had you traded and lost…never be in a rush to trade because the market will always be there tomorrow…when in doubt stay out because it is a much more lucrative position to be in than to lose money.

Learn to enjoy and embrace the patience that is necessary to trade successfully. Once you begin to think of patience as the ‘most important ingredient’ to trading success, and actually understand how and why being a patient trader can actually make you money faster, you will have no problem waiting for the best trade setups, because you will feel like you are actually making money by not trading, which technically you are if it means you are avoiding low-probability / losing trades. So, you need to ‘trick’ your brain into believing that patience is how you make money…not trading a lot, because as humans we are naturally wired to want to trade a lot, thus you need to use your frontal lobe / planning part of your brain to allow logic and common sense to develop the positive habit of patience into your wiring, then it will become second nature and your trading will be relaxed and profitable.




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