Trading Problems - Maintaining Focus

I once heard a statement by Rebecca Fine from 'Science of Getting Rich' that says something along the lines of "If what you're thinking about isn't something that you want to have happen in the next three minutes... get rid of the thought and think something else."

While that's a great way to live your whole life, and I certainly try to do so, it equally applies to the process of trading, specifically ensuring that we maintain focus during the conduct of our analysis.

Maintaining focus can be difficult. Not only will you face distractions from external sources, such as the phone ringing right during a prime setup, or your partner asking for a lightbulb to be changed, or your children asking for help with their homework, but you also face internal distractions from your negative fear-based trading mindset. These internal distractions may be less obvious to the novice trader, but the results can be devastating for your profitability.

If you have not yet mastered your negative fear-based trading psychology, then you are going to face never ending distractions that divert your focus from the job at hand - consistent implementation of your trading plan.

Regardless of how these fears manifest within your trading - complacency, boredom, doubt, procrastination, denial - they will lead only to inconsistent and unprofessional application of your trading plan. And that cannot lead to long term consistent profits.

How do we deal with this negative fear-based trading psychology? Well, that subject cannot be addressed in one article. I'm currently working on a complete home-study program on the mastery of trading psychology, which will provide you with the tools, strategies and techniques for overcoming these issues.

However in the meantime this statement from Ms Fine provides you with a really simple tool to add to your trading toolkit, to ensure you maintain focus during your analysis despite any internal or external distractions.

The process is similar for both long term traders and short term traders. But let's talk short term first, because that's primarily what I do.

As a day trader, your success comes from consistent application of your trading plan. Success comes from conducting analysis on a regular basis throughout the trading session, either on the close of each candle or on a price-alert as price reaches a certain preset level, and then acting appropriately to enter, manage or exit your trades.

What do you need to do to ensure that your focus remains on the process of trading?

Here's what I do:

1. Document the analysis and decision making process. Have clearly defined actionable steps that you need to carry out every candle to reach your decision to hold, enter, exit, or adjust your stop loss or profit targets.

2. Set an alarm to go off prior to every candle. If I trade off 5 minute charts, I have an alarm go off 30 seconds before the close of each candle to allow me to pause and check my thoughts. If my thoughts are not related to the objective analysis of the market and the correct implementation of my plan, then they're discarded. My focus is then returned to the documented trading process.

This works regardless of timeframe. If I was trading off one hour charts, I'd set an alarm to activate just prior to the close of each one hour candle. If I was trading off one minute charts, I'd still set an alarm to go off just before the close of each one minute candle. If I was just waiting for a price setup at a particular price level, and had no intentions of trading until price hit that level, then I'd just set an alarm for price hitting that target.

Setting an alarm for timeframes of 15 minutes upwards is certainly a great idea, as you won't necessarily be sitting watching the screen the whole time in-between candles. However, you might ask whether it's really necessary for very short timeframes, such as one minute charts. The fact is though, that it is necessary, and it does work. It is amazing how often I find my mind wandering elsewhere. More often than not, it's thinking about something unrelated to my trading plan. The alarm interrupts this thought pattern, and allows a return of thought and focus to what's important.

Try it, and if you find yourself suddenly wondering what the MACD shows, and it's not part of your plan, discard that thought - it's irrelevant to this trade. If you find yourself suddenly thinking that you need to win this next trade to get back to breakeven, discard that thought - it's irrelevant to this trade. If you find yourself wondering where you should go next holidays, discard the thought. Once again, it's irrelevant. Interrupt any unwanted thoughts, and think something else that will help you trade your plan in a consistent manner.

Oh, and so that you don't burn out through having an alarm go off every minute for an eight hour trading session, let's add a step 3:

3. If you are trading a very short timeframe, program breaks into your session, to get away from the markets. Relax, recharge and refresh yourself, so that you can keep up this pace.

For longer term traders, let's say someone trading off daily charts, the problems are the same. In your case, you have a process that needs to be followed to come up with your decisions to enter a trade, exit a trade, or modify target or stop levels.

In this case, you still need to implement step one, documented actionable steps that allow for consistent application of your plan. Consider something like a checklist, or flowchart.

You can probably dispense with the alarms, as you only need to complete the process once. However for longer term traders, I'd recommend including statements within your documented process to remind you to check your thoughts, and return them to the process of trading.

Perhaps prefix every step with a documented reminder such as, "I am a professional trader, and a professional trader trades their plan in a consistent manner". Then, the act of commencing each step of your nightly analysis, will serve as a regular interrupt to unwanted thoughts, and a return of your focus to the job at hand.

This way, there's no need to be going and checking other indicators for further confirmation, when it's not part of your plan. There's no need to be checking other news sources for further justification of your decisions, when it's not part of your plan. There's no need to be emailing or phoning your friends to seek their thoughts on a particular stock or chart, when it's not part of your documented process. These are actions of people who have lost focus, and whose trading destiny is being led by their fear and greed.

As a professional trader, you simply follow your steps. And use your alarms, or documented checklist steps, to interrupt any unwanted thoughts, and return your focus to the business of trading.

So, if you don't already have a checklist or flowchart set up for all actions that must be carried out during your analysis, then create one. And place in it reminders to monitor your thoughts, and reject anything that is unrelated to the current task at hand.

And if you day trade, set up an alarm, either price based if you simply wait for price to hit certain levels before making trading decisions, or a countdown timer if your decisions are time-based. Then reject any thoughts that are unrelated to the process of trading. And follow your plan with consistency.

Wishing you happy, and focused, trading,

Lance Beggs.

Copyright 2008. Lance Beggs. All Rights Reserved.

Spread Betting Silver, Gold and Other Metals

I've been making reasonable sums from spreadbetting on silver and other metals such as platinum, mainly to get the practice - starting from a very small position I've quadrupled my money, but have 'lost' a good few on downswings in the process. I'm now considering taking a large position.

Narrating my Strategy - Spread Betting Silver

In the early days I opened a few positions...things went well. Then I increased my positions, and having read up a little more, I put stops in place. Then two things happened:

1. A few markets I was invested in moved against me, losing me money.
   
2. Some of my stops tripped during swings, losing me money.

At one point, having been smugly sitting on about 1000 of profit, I was over 4000 in the red. I received margin calls - and rapidly had to shovel several thousand pounds into my accounts to keep my positions open. And that's the key - keeping them open.

You really have to stand back and think "am I confident my predictions are right?" ... if you are, then you MUST NOT sell on the falls. You'll only kick yourself when you walk away saying 'spread betting is dangerous' only to then see the price go through the roof over the coming months.

Since then, I've adopted this approach and to-date it's working very well:

1. Open positions to a level at which you're comfortable.
   
   
2. Don't use stops. Especially in a market as volatile as silver, selling on dips is a bad move and you'll get shaken out quite often.
   
   
3. Instead, set up limit orders to BUY small amounts when the price drops significantly. I do this so that IG Index send me a text and it alerts me to the drop. I can then log in and make a decision on what to do.
   
   
4. When the price then rises above its previous average, sell a few of those positions that you bought on the dip. If your long-term view is correct, this method WORKS.
   
   
5. Remain professional and unemotional in your dealing. Don't monitor the market too closely or you'll have days when you see your "net worth" drop by several thousand pounds in a day. It can also affect your job if you're constantly logged into your account wheeling and dealing.
   
   
6. In general, I'm convinced that a "hands-off" approach is generally better than a "hands-on" one. Follow the same approach that the long-term physical holders use. You don't hear of Goldfinger sloping off to sell his bullion if the price dips, so why should you do the same? You're using financial instruments instead of physical because it's easier and has less margin, however you should adopt the same strategy. As I say: avoid stops.

I'm aware that this system will be absolutely useless in the event that my predictions are wrong. If you follow this system to the letter and the price consistently falls you'll end up chasing the market down and burn all your cash faster than Bernanke's been burning the dollar. Similar to today's young bankers who've only ever worked in a credit-fueled bull market, you need to spare a thought for what might happen. However, as long as you're convinced that the price WILL rise, hold onto those positions.

Silver and Platinum are quite volatile and you can make good money playing the moves. But honestly I've made far more from my long gold and short GBP positions - with next-to-zero (daytime trading) effort.

Offshore Online Trading Methods

Online trading platforms first came into being in the 1990s and have now taken a firm hold on the trading of Shares, Foreign Exchange, Futures, Options and Commodities. Volume and turnover has increased considerably since the introduction of online trading.

Indeed, at Berkeley we have seen a tenfold surge in business over recent years, and this is expected to continue well into the future. In this article I will explain how this has been achieved.

In the past, trading was conducted over the telephone and transacted in an "open-outcry" pit; no doubt you have seen the boys in bright jackets shouting at each other in films such as Eddie Murphy's Trading Places.

This was an exciting, if slightly chaotic method of trading which was often open to abuse. Modern technology and the arrival of the Internet have now made it possible for online trading to be conducted in futures, options and equity exchanges. It is now possible to show prices, bids and offers on dealing platforms and for online traders to access prices and trade them over the internet.

As an online trader, you will need to open an account with a broker, as you can not deal directly with the exchange. Before you look for a broker, make sure that they are regulated by an appropriate body, such as the Securities Commission of the Bahamas or the Financial Services Authority. It is strongly recommended that you only trade through regulated brokers such as Berkeley (Bahamas) Limited.

Online traders can trade through any broker in the world and this means that if they wish to use offshore trading brokers such as Berkeley (Bahamas) Limited, they can enjoy the benefits of a tax free environment.

Online trading platforms enable traders to access futures, options and foreign exchange prices at any time when markets are open, which can be 24hrs per day. It also allows you to trade from anywhere in the world, whether you are on an isolated sheep station in the middle of Australia or in the City of London.

There are many different online trading platforms and software packages available, however one of the most effective is offered by Berkeley and is called IQtrader. This includes charts, back data with many technical aids and allows online traders to place orders in to most world futures and options exchanges.

Foreign Exchange platforms are different from those offered to futures and options traders in that there is no physical exchange to access. Therefore, you have the choice of using a proprietary platform which will show you the prices offered by a single company. Alternatively, you can access a dealing pool where a number of banks will show you prices, the best of which you can trade. Clearly, this is the best way for you to get fair prices, but very few companies offer such a service. "Berkeley Currenex" is one such platform.

Options Trading Explained - Is Options Trading Really For You?

As an investment professional who has extensive experience dealing with stock options, I am often approached by friends and family members who want to learn more about options trading. After all, the prospect of making quick money is alluring. Although many of my colleagues are institutional traders who have made an obscene amount of money for their trading desks either selling or buying options, I kept on refusing to teach my enthusiastic cousin in college the fundamentals of options trading.

Why? Because options trading is not for everybody. In fact, I would go as far as saying it's not for the average investors as they don't have the required knowledge and mindset. Without first learning the basics, you'll be hard put to make any real money in the world of options. Misjudging the market direction or choosing the wrong option strategy might even cost you thousands of dollars. My cousin is, for example, financially unprepared to deal with the potential losses. He doesn't have the market acumen to spot trends that might affect the value of options. Unlike stocks, options will expire and there is always a possibility that all your contracts expire worthless on the expiration date.

You can make tens of thousands of dollars in options trading. Using football as an analogy, if you are fast, well prepared and have a burning desire to win, you will. However, you must still know the rules of the game very well. To be truly effective, you need to know what are the drivers of option prices. If you are willing to invest the money and time to educate yourself it is entirely possible to make massive profit in the options market. However, most people I met don't want to spend the time to learn the rules of the game, they just want quick money.

In my opinion, options trading is not suitable for retirees, as the investment goal of retirees should be capital preservation and current income. Bonds and Treasury notes are more appropriate. If you're in your 20s to 50s, options can give you the financial leverage you need.

Most retail investors lose money trading options while institutional investors pocket the big profit. Success comes from experience, instead of risking your own money, I will give you all the help you need to be successful in options trading. The sooner you begin, the faster you'll get where you want to go.

Do You Have Trading Analysis Paralysis?

A man has been going to the horse races for 25 years. Before he goes, he researches everything he can find about the horses and the jockeys - their age, weight, wins, and losses. He knows what the weather will be and if the condition of the track will be affected. He knows the odds on each race. Confidently, he places his bet. Next to him is a young man who is attending his first horse race. In fact, he just arrived 15 minutes ago. Placing his bet next to the old timer, he picks a horse from random. Lo and behold, the new kid's horse wins. The old timer, with a tone of frustration mutters, "Beginner's Luck."

As a novice trader, you probably have had your fair share of "lucky breaks." You've probably also had times when you have pored over endless amounts of market information and made a "sure trade" - and then lost your investment. Either way, it's not a good way to approach the game of trading. There needs to be a healthy balance of analysis and just trading. Sure, if you make a mistake, you can lose your money - on that trade. But if you are a prepared trader, those losses should be rare, and besides, a loss helps you learn for the next time.

Analysis paralysis is an informal phrase applied when the opportunity cost of decision analysis exceeds the benefits. When your hard-earned money is on the line, there's a strong urge to be extremely careful. But, if you constantly search for more statistics, reports, studies, evaluations and data, you will come to little real decision-making because more "study" or "research" always needs to be done!

One trader we know says, "For a while I couldn't come up with a trading plan because at first I was making it too simple and I thought there was more to it. Well I found out that being simple was right to begin with. I know that I am a good technical analyst and I know that I am right a good portion of the time. I have begun to embrace uncertainty and admit that I don't need to know where the market will go next. If I stick with my trading plan and setups then I will survive. There are thousands of tools ranging from market profile, to candlestick analysis that will aid me to figure out what will happen next but at the end of the day it could be one trader that changes all of it and makes me wrong. The more I accept this reality the clearer I see the markets and the opportunities presented to me every day."

Most traders are not worried about losing all of their money, but instead have a fear of being wrong. They expect perfection of themselves, and when they do not achieve it (as they never will), they feel like a failure.

Research has shown that it is actually detrimental to fall into "analysis paralysis" when making a decision. Dr. David Armor and Dr. Shelly Taylor found that it might be wise to just quickly choose an alternative and focus all your energy on achieving an objective.

So when you start to see yourself over-analyzing and becoming paralyzed, stop! Just make the trade. You will feel free, and will trade more profitably in the end.

In the mean time, Good Luck on your journey to success...

If you would like to immensely improve your trading and investing results, check out

Day Trading and Its Psychology

If you start day trading and your heart starts pounding with nervousness, then you are not ready to begin trading. Day trading psychology plays a very important role in trading and many books have been written about it to prepare traders for this event. However, most books do not offer a practical solution to the nervous which eggs you to make so many other mistakes.

In order to be successful in day trading, you must have confidence in your strategy. Unfortunately, most traders are not at all confident and this is especially true for novice traders. On the other hand, if your trading strategy is not making money consistently, it is rather difficult to be confident about it. The best way to gain confidence in your trading strategy is to practice trading in simulation mode and then judge it. Most novice traders and the ones with few years experience are afraid of losing money. This fear can be done away with by using a trading simulation tool.

Day trading psychology is all about building up your confidence and nothing works better than consistent profitable results.

Many so-called professional traders might tell that using simulation trading is an utter waste of time. However, it depends on how and why you use it. The idea is to take a simulation strategy that has a defined number of setups, specific strategy for limiting your losses and then sticking to the strategy no matter what happens. This is the best way of testing your strategy and it will help you tremendously in real time.

Forex Trading Made Easy!

How to trade with pivot point: pivot point in my own opinion represent the best and most reliable way to trade this market as it is only when price gets or come close to a pivot line that all professional traders in the world will be looking to take action so in my own opinion pivot point is the best trading style or strategy to trade the foreign exchange market profitably.

So the question of all questions is when to buy and when to sell,and my answer is when you see price break through a pivot point going up for example only at that point should you wait for price to go back to the broken pivot point that was recently penetrated ,plus of course the secondary inputs of the other indicators to clarify and support your decision that you were right then if the other indicators confirm an upward continuation as in this example then you will seek to enter close to the pivot point that was penetrated as possible and then take your profit by targeting the next pivot point in your calculated pivot points or you can move your stop loss to the next pivot point to take more profit in the trade.

Foreign exchange trading can be very profitable and may mark the end of your 9 to 5 job with little time to spend in front of your computer, because if one is to consider the size of the market it will give a well trained and tutored trader the opportunity to make a huge profit not to talk of the leverage the market gives you, learn all you can and demo trade, before going live and you will surely quit your 9 to 5 job.

happy trading!

Don't Be One of Pavlov's Dogs When Trading!

Ivan Pavlov was a Russian physiologist renowned for his famous study on conditioned reflexes. While studying the physiological effects of eating in dogs, Pavlov began to observe that the salivation of the dogs was very curious. He would place meat powder or some other food morsel on the dog's tongue, waiting for the salivation to occur. He began to see that the dogs were salivating as soon as he entered the room, which was before any food was even in sight. Since salivation in any animal is a reflex, Pavlov decided to probe deeper into the conditioning of the dogs.

Pavlov began ringing a bell before placing the meat powder or item on the dog's tongue. Each time that the bell was rung, meat powder or food was given to the dog. Pavlov repeated these experiments many, many times. Eventually, the bell alone was enough to make the dogs salivate. This proved that a neutral stimulus that elicited no response whatsoever from the dogs before was now causing a response- salivation.

This later became known as classical conditioning. Conditioning is a type of learning. His experiment proved that all animals could be trained or conditioned to expect a consequence on the results of previous experience.

If you are a new trader, you might relate. No, you're not a dog, but often those with less experience have conditioned themselves to expect certain market actions and react in the same way every time. These can also be described as "knee-jerk reactions."

When we react emotionally rather than logically, we are doing so based on our conditioning or interpretation. These are powerful reflexes, and if you are not careful, you will find it difficult to break away from what you have conditioned your mind - and your body - to do.

In your role as trader, the emotion created during a market sell-off for example, may be fear. When we are afraid, we think and react differently than when we are calm, cool, and collected. Don't underestimate its power!

So how do you refrain from becoming one of Pavlov's dogs? Be conscious of your emotions, remember the past, and create new ways for the future. When you see huge market fluctuations, don't panic. Did that panic do you well in the last situation? It's doubtful. Use your critical thinking skills and you will learn to control your emotions making you more likely to trade in the calm, deliberate mindset of a winning trader.

In the mean time, Good Luck on your journey to success...

OR if you would like to immensely improve your trading and investing results, check out

Is Trading Dumb?

Trading is the buying and selling of stocks or other financial instruments over short periods with a view to making a profit between the opening and closing of a position. By contrast, investing is the accumulation of assets over the long term. Although investors adjust their portfolios, this is part of a longer strategy rather than creaming-off short-term profits.

Investments consistently grow over the long term, investing is rational. But trading is closer to an afternoon at the races.

Wall St traders rank among the highest paid members of society, out-earning doctors, engineers, teachers and countless other seemingly more useful occupations. Trading is perceived as lucrative and glamorous.

Trading has become available to the little guy since the onset of the Internet.

There's no shortage of cut-price brokers clamoring to execute your trades, computerized platforms offering to put your system on auto-pilot, and courses promising untold wealth for just a few hours a day in front of the screen. There's all kinds of strategies - swing trading, day trading, momentum trading, scalping... in all kinds of markets - stocks, forex, options, future, commodities...

It all sounds too good to be true. But is it?

Markets are supposed to be efficient. That means that the price of any stock, currency etc is the right price taking account of everything that's publicly known about it. If that's so, how come the big boys can make big bucks? Maybe it's because they know just a little more than you or me, or maybe because they can take advantage of any new facts that little bit quicker.

Trading is basically a zero-sum game. The act of trading doesn't generate value in itself. Every dollar gained by someone is a dollar lost by someone else. Although historically cheap, commissions still take a chunk out of every trade. These can soon mount up if you're making many trades a day, and remember every trade carries a commission going in and another coming out.

All this doesn't mean trading isn't for the small player, but it does mean s/he should proceed with extreme caution. There are individuals out there doing very well from trading, but there's a good many that have lost their shirts.

If you're still interested, accumulate knowledge, read widely, get involved in Internet forums... Decide what you're going to trade and adopt, adapt or create a system.

Then open one or more practice accounts. Get to know the platform. Test your system. Tweak it until you're confident you can make a consistent profit. Then, and only then, consider doing it for real. If you take the plunge, remember the psychology differs when you're playing with real money - your money. Stay disciplined.

Learn to Follow a 5 Step Trading System Rather Than Your Emotions

A five step trading program is the best way to maintain your composure during wild markets, while allowing enough room to fit in all the variables you need.

Step #1 - Check All Chart Timeframes

The best way to boost trading profits, while limiting losses, is to be aware of your surroundings - and that includes other time frames. Financial freedom comes from making quality trades, not quick trades based on your emotions. You'll have to survey all timeframes and keep on the lookout for developments on a larger scale that may affect small scale profits. Technical analysis is much more efficient for finding problems on other time frames, as fundamental analysis usually only covers a very specific time frame.

Step #2 - Trading Execution

Establish a point at which you are ready to place a position. This can be tricky, as placing it too far away from the current price means you might not ever get in the market, while too close means that you could be in for a whipsaw ride up and down. Support and resistance levels should be checked to avoid any dangerous positions.

Step # 3 - Find Your Place to Profit

Day traders and swing traders will have two completely different zones to take a profit, even after seeing the same established chart patterns. This part varies greatly with the kind of trader you are. The key here is to have a customized plan that will take more in profits than you will statistically lose. Setting a take profit at 1.5 times your stop loss will give you a statistical advantage.

Step #4 - Place Your Trade

Trading success only comes from making quality trades. After considering the above steps, you are now ready to place your trade and get into the markets. You should immediately set your stop losses and take profits and prepare for the market to work its magic.

Step # 5 - Set and Forget

After a trade is placed, do not start modifying it. The worst thing you can do to a good trade is micromanage it. When you've a stop loss in place, you have already accepted a predetermined amount of risk and an acceptable profit; let the market do what it needs to do without changing your exit points. Many traders cut into profits by selling too soon or lose more trades by accepting heavier losses.

Find Your Trading Comfort Zone - And Step Outside It!

Most of us love the familiar. It's that soothing feeling of security and calm. When you feel comfort without a sense of impending risk, you are in your "comfort zone." Your trading success depends on your ability to find that balance between "organized chaos" and confidence in what you do. Many thriving traders believe that you must step outside your comfort zone and feel a bit of anxiety to become truly successful.

By definition, a comfort zone represents that set of behaviors that a person will engage in without becoming anxious. Comfort zones are individual things; your personality, in fact, can be described by your comfort zone. Highly successful traders may routinely step outside their comfort zones, to take risks and accomplish what they wish. To step outside their comfort zone, seasoned traders often experiment with new and different behaviors or activities, and then experience the new and different responses that then occur within the trading environment.

Often, novice traders recognize the need to take risks, but fear doing so as it would result in losing the sense of security he or she derives from the job. As they move closer to the edges of that zone, they begin to feel uneasy and anxious. But those edges are where new traders grow. And by stretching those boundaries, they increase their ability to succeed.

Despite all the mentoring from experienced traders, each new trader must make their own way in the world, doing the best they can. And, quite often, mistakes are made when someone is outside of their comfort zone.

To stay in your comfort zone through mere habit will cause you to avoid all mistakes by sticking with the "tried and true." You'll miss many exciting trading opportunities. That is when you will be stuck in a trading "rut"; by avoiding risk, you dig yourself a hole from which it is hard to emerge.

Here are just a few suggestions to step outside of your comfort zone:

1. Get your market news from different sources.

2. Use 15-minutes a day for positive affirmations.

3. Ask a seasoned trader you admire to be your mentor.

4. Take responsibility for something you didn't do.

5. Give a public talk on trading to a local investing group or college class.

6. Join a trading networking group.

7. Ask for help.

8. Start an internet blog on trading.

9. Read a book in a genre you don't usually read.

10. Delegate more of your work.

In the mean time, Good Luck on your journey to success...

OR if you would like to immensely improve your trading and investing results, check out

Don't Be Afraid to Cut Your Trading Losses

Tony Loton, author of "Don't Lose Money in the Stock Markets," says "If your investment falls by 50% you'll need a 100% rise just to get you back where you started. So when speculating in the stock markets, protecting the money you do have is just as important as making some more."

How true. We all know that - hard as we may try to predict the future - trading is a game of chance. We try to put the right amount of money on a trade so as not to lose too much, yet enough to make out in the end. Of course, the tough part is that we have no idea what will happen in the future, so we must rely on our own analysis.

If you trade a lot, you will be wrong and right a multiple of times. Hopefully, right more than wrong, but again - no guarantees! But without cutting your losses, that one time you are very wrong could end up costing a lot of money.

The best way to cut your losses is to use stop loss orders and trailing stop loss orders if you accrue some profits. Select an exit point before you enter a trade and stick to it. Remember - you can always get back into a market if the trade looks good again. Of course, you will no doubt experience a time with you exit with a loss, only to see the market turn around, only to see that if you stayed in you would have made even more money. Just accept the fact that we are not perfect and move on. In the end, you will be rewarded for having the discipline to stick with a plan that puts you in the best position for success.

Successful traders almost always attribute their success to one thing - cutting their losses.

In the mean time, Good Luck on your journey to success...

If you would like to immensely improve your trading and investing results, check out

How to Get Added Value and Confirmation

Accuracy is an important characteristic in a growing, profitable portfolio. There are several strategies to be positive with your investments and make winning trades. Professional traders use many indicators to pick a position.

Profitable traders are able to look at a trade, find which position they would like to take, and then use their own technical indicators to confirm a movement. The duo of forward and lagging indicators makes trading very profitable. There are different mixes for different time frames and scenarios.

Downtrend

In a downtrend, professional traders will look for a forward indicator, and then confirm it with a lagging indicator. A downtrend is easy to break, as short sellers have to cover their positions. Unlike a sideways trend, a downtrend has a definite pattern: down. Proven strategies for downtrends include moving average crosses and divergence on momentum indicators.

Uptrends

Uptrends work similarly to downtrends, but just opposite. An uptrend is hard to break without a strong catalyst, as many traders get the fever to fuel the fire with new investment. Profitable traders know that a news report or a short term trendline can break a long term trend. In these cases, the RSI is a good indication of when profit taking will occur and push the value back down.

Uptrends are most likely to break in a market that is selling off universally, thus going against the trend is most profitable when the market "gravity" affect kicks in full gear. Watch the tick numbers and only bet on a downward movement when the numbers are swaying towards sellers.

Sideways Trends

Sideways trends are hard to predict as there is no general consensus on where the market is headed. The ups and downs in a sideways trend are best predicted with your own trading discipline and a mix of fundamental and technical analysis.

Confirmation in a sideways trend should be short interest. The amount of short interest can tell you how many investors have pulled for the trend to continue. These trends are more prone to breakout than a downtrend or an uptrend, but come with added profitability.

Creative techniques of your own will help you get the most out of a trading system. The number one goal should be to preserve trading capital and second to generate a profit. Losing money is worse than no gain at all.

My Favorite Trading Strategy

What I'd like to do in this very short article is give you an overview, looking at the strategic level, of how I trade my favorite setup, which will be the one referred to in most of the analysis on my website. We're talking, 'the big picture'.

Too many people make a critical error in focusing exclusively on their entry triggers, and trying to enter on every occurrence of that signal, without ANY consideration for where that trigger is occurring within the bigger picture market structure.

Too many novice traders spend far too long trapped in this stage of learning. They discover a new trigger and a part of their mind then becomes excited that maybe they've found the holy grail of trading. It doesn't matter if it's an EMA 10/20 crossover, or perhaps a MACD crossing above zero, with stochastic rising, and RSI above 50. It is NOT the holy grail. It is just an entry trigger.

The fact is:

* Market Structure tells you where to trade.

* Entry triggers tell you when to get in and out of your trades.

Focus on defining the structure of the market first, and then look for a trigger.

Let's say for example that our entry trigger is a candlestick reversal pattern... in this case a Bullish Engulfing Candle. Where would you find the higher probability trade?

Would it be at the top of an extended rally, where the Bullish Engulfing pattern is pushing straight up into the overhead resistance?

Or is the higher probability trade where the Bullish Engulfing pattern shows that a major support level has held and there is significant profit potential still available from the entry point to a projected target at the overhead resistance level.

It's exactly the same entry trigger, but obviously the market structure tells us that the second entry is the higher probability trade.

REMEMBER: The market structure (in this case Support & Resistance) tells you where you should trade. The trigger tells you when to get in or out.

Now, market structure doesn't need to be just support and resistance. YOU need to consider, 'what is the reality of price action as you see it? What do you believe causes price to move?'

Have a look at a number of charts... What do you see?

Is it perhaps a framework of support and resistance levels defining areas of price stall or reversal in the market?

Do you see a "rubber band" type concept, with the market reaching extremes and then reverting to the mean, or centerline moving average? Moving back and forward between the upper channel line, the centerline, and the lower channel line.

Do you see swings? Higher highs & higher lows, lower highs and lower lows, with impulses of momentum in between?

Define how you see the bigger picture of market movement. What is it that you see when you look at charts? What is the market structure? And only then should you look for an entry trigger that gives you a low risk and/or high probability trade within the context of your bigger picture.

So, what do I see as the reality of price movement? How do I trade? What is my strategy?

Well, in this short article I can't go into the tactical level - I can't talk about my entry and exit triggers, and trade management strategies. It would take a whole book because it's not just a simple indicator based entry or exit. It's based on price action - on an understanding of the nature of movement of price. That takes a long time to develop, and it's something I'll cover in my website in a lot more detail.

However, for now I can share a very broad overview of my strategic level trading concept. At least my favorite one anyway.

The reality of price movement for me is supply and demand. And that supply and demand leaves footprints that can be read in a price chart.

All price movement, all turn points, and all areas of support and resistance are a function of the balance or imbalance of supply and demand.

In particular, the key areas which allow for low risk or high probability entries, are areas of support and resistance.

I trade within a framework of support and resistance.

I define all major support and resistance based on a higher timeframe, and then look to profit from movement between these areas on a smaller timeframe.

For me, my markets of choice are forex & equity indices. The longer timeframe for defining major support and resistance, is an hourly chart, and the trading timeframe is anywhere from a 1 to 5 minute chart.

The strategy works with other markets as well, because it's based on the truth of price movement. And because markets are largely fractal in nature, you can adjust the timeframe to suit. Say you wanted to trade the daily charts - then you just get your major support and resistance off the higher timeframes - being weekly or monthly charts.

So, the major support and resistance areas are placed on the chart, and I'm looking for any low risk or high probability trades (based on my entry triggers as defined in my trading plan), going long off major support or going short off major resistance.

And for the price movement in-between major support and resistance?

If it's an uptrend I look for low risk or higher probability entries at areas of minor support.

If it's a downtrend I look to go short at low risk or high probability entries off minor resistance.

And if it's a sideways trend, then I aim to identify low risk or high probability entries off both minor support and resistance.

Key point though for all entries - It must be a low risk or high probability entry, based on the clearly defined criteria in my trading plan

So there you are... It sounds simple when looked at from this high level overview. The reality is though, that it's really hard. The statistics of failed traders clearly show that. Success takes a long period of time. Whether you relate to my view of the markets, or prefer some other method of defining market structure, spend a lot of time just watching price movement. Learn to 'read the tape' as it used to be called, internalizing the patterns and flow of movement of price. It takes time. Be patient, and embrace the challenge.

Stop just blindly entering at every occurrence of your entry trigger. Remember:

* Market Structure tells you where to trade.

* Entry triggers tell you when to get in and out of your trades.

Happy trading

What Is Forex Trading

Forex Trading can be easy and profitable, but not exactly simple. You must stay up to date on the latest market and economic trends in different country currencies...at the same time being alert of the different policies one country or government may be implementing.

These economic factors can have a major impact on how you trade in the foreign exchange market.

One of the simplest ways to organize your forex trading is to use a software or system that can automate your trading. Many brokers offer free trial trading accounts along with a trading platform, giving you the opportunity to test out the power of forex trading for free!

It is highly recommended that you learn the basics intially to get a better understanding of what the market is all about. Then you can move into the more complex areas and gain the knowledge necessary to become a successful trader. There are many beginner's guides, tips and books that can easily get by simply searching the web.

You must spend some time educating yourself in order to be successful at forex currency trading. I suggest this is where you will need to start! There are fortunes that can be made for the savvy trader in the currency exchange market.

Research the trends over the past months and always try to purchase currencies that are lower than usual and expected to rise. To find the winner, you should study these trading trends. Basically, the concept is to "Buy Low" and wait for the price to increase before selling, thereby earning a nice profit.

This is the whole idea behind using an automated forex system. This is a magnificent tool which can be used to automate the trading process for a popular currency pair. It provides settings for the trading platform based on known trends, so that the platform can automatically initiate or close out a trade. It also keeps very detailed records of all your trading activity. Manually organizing your data is not easy. You want a forex trading system that can provide real-time statistics and feedback, whether through email or instant SMS deliver, through mobiles and PDAs. By using the best technology available, you will realize more profit while trading in the world's largest market.