The Ultimate Secret to Forex Currency Trading Success
1. It is widely accepted that 90-95% of traders lose and if you want to be among the 5-10% that win you will have to change the way you think.
2. You must realize that almost all indicators lag and that brokers want you to lose, so they give you all the indicators your heart could ever desire, knowing that you’re going to be a loser. So stop using them!
3. Keep it simple; support, resistance and fibs and some simple moving averages… that is it.
4. Keep it even simpler. Do you remember the old adage: buy low and sell high? Sell high and buy back lower? You may not like this, but you need to understand fear and greed a bit better. You need to recognize when the shorts are getting squeezed and when even the longs are getting a beating. There does come a time when euphoria and capitulation end and you really want to be there for that moment.
5. For the gazillionth time, if you’re trading on 1 or 2 monitors you’re a blind man! You are feeling the butt of the elephant and trying to figure it out. You need 6-8 screens and 30+ charts of all the major and crosses. I don’t know how else to say this to you. Don’t be a fool. Don’t be a brain surgeon trying to work with rusty 18th century technology. You will not see the “flow” of the market unless you do this:
Place charts for EURUSD, GBPUSD, USDCHF, USDCAD, NZDUSD and AUDUSD on one monitor; six charts. Duplicate this on your next monitor with Yen crosses. On a third monitor put up charts for GBP and EUR crossed by CAD, AUD, NZD and CHF. On a fourth monitor place a chart for AUDNZD and CADCHF as well as NZDCAD, AUDCAD, NZDCHF and AUDCHF. Just trust me! Do it! I don’t care if you ever trade them. On a fifth monitor place USD cross exotics charts like TRY, ZAR, NOK, DKK, SEK and MXN. Great, now you can see the dollar index without looking. Ok, last monitor; Gold and Oil and some stock market indexes… or the dollar index if you want to.
Congratulations! You’re no longer a blind man. How does it feel to see? If you do this for a few months and make 30,000+ pips and you’re going to be like “Holy Mackerel, what have I been missing?!”
6. Keep it simple some more, understand time frames. Buy MT4 Floating Charts for half price here and float those babies so that you can toggle all day long between all time frames!
7. Keep it simple yet again; understand what a candle is saying. Are the bulls in charge? Are the bears in charge? Is this an uptrend? A downtrend? Is a reversal imminent? Etc.
8. Add the .786 and.886 levels to your Fibonacci tool. Use them.
9. Look for confirmations and what I mean by that is something like this:
Do you see GBPAUD up really big on the day? Great. Do you see AUDUSD down hard on the day? Great. Are you sensing a reversal at some point because you put in your fibs and support levels for AUDUSD and resistance levels for GBPAUD and price is getting there? Great. Then look for 5 or 15 minute sell signals on the GBPAUD and GBPNZD and GBPCAD all at the same time. Look for 15 minute buy signals on AUDUSD at the same time. This is a good confirmation. It’s better than taking it alone and you will have a hard time seeing this on 1 or 2 monitors only.
10. Trade like a wee little tiny baby! I mean it. Trading ultra-small gives you freedom from all fear. You’re not scared or worried one bit. I traded at a laughable .05 lots for months this year. I just upgraded to .10 lots two weeks ago; that is per bullet fired off.
11. Add to losing trades and thank God for the chance. I see a trade! Oh! It looks so good! Do I go “all in?” Heck no! That is a killer. Trade small and trade free. Trade small, relax and breathe. Freedom. Yeah baby!…
…Oh crap! That trade just went against me. Darn. I thought I had the top. Oh well. 20 pips later a signal comes again! Bam! In with another bullet fired off. I spent two bullets. I’ve got 8 more (per pair). Hurray! I love having a big clip.
12. Have a plan. 10-20% of the time this will not work out for you. Have a plan. Take the hit and move on or work it out. Watch my YouTube video on the GBPCAD. I talk about it there.
13. Look at all time frames at once when placing the trade. You should have one set of charts dedicated to M1, M5, M15 and H1 and under that, an H4, a daily, a weekly and a monthly chart all visible in one shot. Push a button, change the currency and you see it all. You want to assess how something is trading; its manner. Is it up, down or sideways? Is it rocking or drifting? Is it slow steady or is it POWER TREND. You need to be able to see this.
14. Choose your time frame! When you place the trade, is it a scalp taken on M1 charts for something tiny like 5 to 9 pips… or is it a scalp on a M5 buy or M5 sell and you plan on being in the trade for 3 to 8 bars? Is your trade a 15 minute 100% reversal bar (aka elephant bar)? That is an intraday swing trade then, so stick to your guns. Don’t catch a top or a bottom and get out for 10 pips when it goes 100! Bad, bad, bad. If you’re taking a trade on a 4 hour buy or sell you better plan to be in that trade for days if given the opportunity to do so.
15. Don’t be stupid. Don’t be so rigid that you set hard targets and refuse to correct yourself. The market doesn’t give a rat’s arse about your targets. You took a 15 minute reversal bar and might see a good target for 90 pips. Great. What if the market goes 80 pips and spits in your face? Learn to scale out just like you scale in! If you see something go 50-60-70 pips in your direction and put in a smaller time frame reversal bar and start pulling away… are you’re going to give it all up? Are you crazy? Book half! Set an ITM stop for +5 in case that bar fails and if it explodes back in your direction then great. If not, who cares? You got paid half. Stop complaining.
16. Learn to raise or lower your ITM stops based on specific candles. Sometimes it pays big to forget about a target and let a closed candle stop you out for 137 pips. Oh boo hoo! Go cry to your mother. Every time you move your stop you are booking profits on your trade and yet magically also leaving room for it to run further if it wants to. Everyone loved a free ride.
Let me finish with this.
#1 Trade DEMO until you can consistently make 400 pips (or more!) as a bare minimum every week.
#2 Open a REAL account and put in something small like $1,000 or maybe $5,000. You do not need more than this! Ever! Ok? You’re not going to be depositing. Your job is to withdraw money. Deposits are for suckers.
#3 Trade your little butt off. No one ever died of hard work. Work 12-16 hours a day if you have to. You’re a trader, darn it! Get in there and take money!
#4 Trade small and if you have to start at .01 lots, fine. Don’t go beyond .10 for any one currency pair. If you ever reach 10 bullets, you’re screwed. There are no more and you will need to work on your damage control.
#5 Upon every week or so of good success, go up the ladder to .02 then .03 lots. In 10 weeks or maybe a bit more you should be at .10… and if you’re good… you’re not just making 400 lousy pips any more. You’re doing thousands a week.
#6 Set up a plan for yourself and go to .15 lots someday and .20 lots and on and on.
#7 Every time you double your account (3 months? 5 months? Whatever! Don’t put a time limit on it and be flexible), treat yourself to something. Every time you double, celebrate with a reward for your performance! Do not forget this! Learn to buy yourself a treat.
#8 Sit down with a calculator starting with $1,000. How many doubles do you need to get to a million? The answer is 10. Next question: How long does it take you to double $1,000 to get to $2,000? Answer: it might take 7 weeks it might take 3 months. Heck it might take a year if you’re not trading well with a good plan. The correct answer is that it’s up to you how long it takes to double an account trading like a baby trader; really small and really safe!
#9 If you decide to punish yourself for poor performance go easy. I have done this. Sometimes I would just eat a peanut butter and jelly sandwich for trading like a dope head. Other times I would eat toast if I was really bad. Steak dinners are reserved for awesome 800 pip days for me. Come up with a system of rewards and punishments but just go easy.