Don't you think the term 'price action' has become a cliché or over estimated? I ask the question as i don't know of any public method of reading price action that is simple. To be sure, just consider Al Brook's approach to reading price action.
I think it has similarities, but realistically, it's more like being an used car salesman. You acquire a used car, somebody wants a car, you sell 'em a car(at the negotiated price), somebody else(or the same person) wanna buy one, you sell 'em one(again, at the negotiated price).
I think that analogy is a bit tame though. What about trading as Financial Warfare? You have to TAKE what's yours from someone else that just don't wanna give it to ya. A little conquering/raping/pillaging of the landscape, or getting your ass handed to you *if you are not prepared.*
However, you don't know who's on the other end of your trade(in general at a retail level) or what their viewpoint of the situation is. They could be someone who is getting out in fantastic profit, or maybe it's a devastating stop, or a scalper that will take a fraction of a pip and get out, or some corporation that needs Yen to buy widgets from Tokyo.
Whoa, WAY off topic!
I think it is good advice to step back, leverage down, trade less, smarter, easier, webinar, etc. as a growth tool, but eventually to be successful, you have to become the warrior. This will require more failure before you are done, you will need to learn to cope or be defeated.
One thing that really helped me was when I made the shift from trying to make as much money as possible to trying to lose as little as possible. A VERY distinct difference between the two.
I don't suggest sim trading to anyone but the greenest newbie. Once you learn the basics and think you have the desire to trade, you should use real money so it is real all the time. If you can't afford to invest a few bucks and trade micro-minis, then I'm going to go out on a limb and say that you are not ready to begin your trading journey in earnest. You have to figure out how to handle the emotions(fear and all the other ones) and using real money adds the emotional component that doesn't exist in sim as well as the reality of live market action and execution.
Also, after sim trading(especially ones where you step through candles) your time perception is often skewed to making trades on the wrong timeframe because it's easy to live with drawdown when you hit the spacebar and it jumps to the next candle, but what about that 3-4 hour period(in real time) that you were down 250 pips before that 4 hour candle reverses and comes back to where you are barely in profit(before dumping again, further). Those are the times you will be shitting your pants in real life, but not so much on sim. You have to learn how you will react in those situations, and know that you will be able to make the right choice, or stick with the micro-mini account until you know you are ready to risk more. But there should always be risk. No risk, no reward.
One can only be afraid of losing when he knows that chances to win are not high.
Let me tell you this: When you place an order, are you afraid? See, when you place an order, the real feeling must be this: you've done the 100 meter sprint right? On the start, you feel all confident and ready. Now, imagine yourself feeling afraid at the start of the 100 meter run. What are your chances to win then? You have to feel very confident, prepared and that feeling does not come from washing your face with cold water, it comes from practice and experience. If you are afraid placing an order, then you are gambling. You have no idea what you are doing and you are not trading, you are gambling without a plan.
If you feel afraid, DO NOT PLACE THE ORDER!
I am trading forex and I use LFH simulator all the time. I place thousands of orders each week on the simulator, as I know where I need to put the stoploss, where to take profits, where to enter. If I lose, then it is a statistical loss, which means, there is always a loss and you can't do nothing about it. If you are afraid, don't place the order.
One of the biggest mistakes someone can do is not have enough practice. Many spend too much time on theory. They read stuff like head and shoulders and they start finding the pattern all over the place on M1 chart... This is just wrong. You need to trade, not to look for shampoo.
Try the simulator and if you can't double your account each time, don't go live. Place hundreds and hundreds orders until you get confident, until you place them emotionless, it should be an automatic process, like a button push. When you finally get confident, you can go live.
When I began with the simulator, I had the feeling of being afraid to place an order, I skipped valid signals (like I used to do on live trading), or used lower position sizes and thanks to the simulator I understood that it's all bullshit. How can one know that the trade you are looking at is a bad one if you don't know which way the market will move and for how much? I ended up winning many times in a row with smaller position until I wiped out my wins with one big loss. This is gambling and the way out this kind of fear where your confidence is wiped out with one loss is the simulator. There you see your results and you will soon find things that you will never ever find anywhere in forums, it's the experience. You will get very confident once you find out things for yourself and when you go live, it will be not much different. Placing orders will be a standard procedure, no feelings, no nothing. By that time you will know how many dollars you will lose for each dollar earned (profit factor), you will feel like you have finally done it.
Things like partial close and not turning a winner into a loser is discovered during trading, not reading.
You know right: don't turn a winner into a loser, but do you know how to do that? No guide will tell you how... At least, I have not met one.
The following 3 users say Thank You to ReaM for this post:
What are the ways that will lead to trade in the most safest way as far as possible ?
There may be ways by which the losses can be decreased or not be occurred at all . Can anyone suggest me about that ?
There is no way you can trade, and not have losing trades. There are no systems that don't have losing trades. There are 2 key success factors to trading, 'Win Percentage' and 'Sharpe Ratio'. a high Win Percentage means you are winning a very high percentage of your trades, and losing only a small percentage. A high Sharpe Ratio means the average amount that you make on winners, exceeds the average amount you lose on losers.
In other words, have many more winners then losers, or have small losers big winners. The simplest way to achieve that, is to only take trades with reward/risk ratio greater then 1:1, or have a high win percentage. The smaller your reward/risk ratio is, the higher your win percentage has to be. The higher your Sharpe Ratio and/or Reward/Risk is, the lower your win percentage needs to be. If you have a really high Sharpe Ratio and/or Reward/Risk ratio, you can be profitable even if you have more losers then winners.
The following 3 users say Thank You to monpere for this post:
The question is a good one and the answer is straightforward and simple: trade only based on the empirical evidence the produces a probability for a successful outcome that you and only you are comfortable with, regardless of what anybody else thinks about it.
Whether or not one should trade, is not supposed to be about blind guesswork. It is supposed to be an educated guess based on mathematical probability. Anything else is not Trading, its Speculating. As Traders, by definition we are Technical Engineers of Market Data - pure and simple. Thus, the trader's Stop, Limit and Entry locations are not based upon fundamentals, rather the data that has been researched to show a tendency towards a particular outcome 'X' percent of the time with 'Y' probability under 'Z' conditions.
Put that together and the vast majority of the fear will be mitigated.
Now, the question is - how does the trader get high-probability trade scenarios under recognition on a regular and routine basis. That comes from research, testing and analysis - which could take years to map out for some people before they 'see the light' and realize that its a probability business from the word go. The fear comes from the uncertainty, but empirical data does not lie. High-probability gets its name because the data has demonstrated itself to be of a certain quality under certain 'Z' conditions (whatever indicators or set-ups you have researched).
Thus, when you make the move to executing on the probabilities and not the "market," you move from rank speculator to trader and the fear drops in direct proportion to the degree with which the empirical research shows the justification for the probability itself. So, if:
Fear = 100%
'Z' conditions exist = Yes
'Y' probability = 87%
You now have a 13% Fear factor, all based on empirical evidence. That's no guarantee, but that's an 87% reduction in the amount of money you spend on Nexium pills, which is money that can now go back into your trading cost basis. The key is in producing good "Y." And, that is accomplished by setting an expectation of profitability that is based in the reality of what your trading system or methodology is actually producing in terms of results - not what you might hope it would produce. And, that can only be determined with hard-core research that produces data to back-up the "Y" value.
At that point, you are a Technical Engineer of Market Data first, and a trader, second.
The following 2 users say Thank You to JetTrader for this post:
I was in the same situation for a long time like 2 years ago!
every day a desolution, every day losses.
I had a good job that paid well, so I could afford to have a few losses.
Every time I went into a trade I came on a bit of profit and it fell back and I chickened out
with a loss.
but then I started with the COG center of gravity indicator on 5 min chart.
And I take 10/20 pips profit, I only added contracts when it was getting better.
And since then I go greener and greener.
Now I stopped working, I am still not the best trader but little trades here and there
and hv a autoprogram that gives me very good profit every month.
So keep on going! one day you will succseed!
never give upp and dont be greedy!
The following user says Thank You to Lamboo for this post:
The best advice I've heard is to use only risk capital. Don't let your risk capital exceed 1 or 2% of your total assets or you'll end up gambling everything. Keeping track of personal statistics is also a good idea. If you know your history and your numbers are positive in the long term it is easier to trust yourself.
I believe psychology is the single most important consideration deserving attention for struggling traders. If you are looking to improve your trading, you often need to look at yourself -- not directly at your method, indicators or tools.
Please join us for a special futures.io (formerly BMT) webinar on Trading Psychology, presented by Dr. Gary Dayton, for more info.
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
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