The Novice Trader
1.They tend to follow the crowd.Watch what others are doing
Comfort in numbers
2.They avoid taking risk unless others are sharing the risk as well.
3.They feel that if others are buying then it is "ok" for them to buy, too.
4.They act on the advice of so called "experts", i.e. the advice of market gurus, CNBC, analysts, and their brokers.
5.As humans, they tend to complicate the trading process and ignore the important simplicity of markets.
6.They always make the same two mistakes: They buy and sell after a move in price is well underway (late and high risk) and they buy into resistance and sell into support (low probability).
The Consistently Profitable Trader
1.They lead the herd.2.They tune out all the subjective noise that can get in the way of making proper trading decisions. They don’t care what others are doing and make decisions based on a very mechanical and unemotional set of criteria based solely on the laws and principles of supply and demand.
3.They learn to identify the proper entry that most people never see.
4.They buy after a period of selling and into support. They buy fear.
5.They sell after a period of buying and into resistance. They sell greed.
6.Successful traders:
Can identify opportunity before others.
Execute trading plans mechanically.
Successful Trading
1) Having the ability to find two sets of ill-informed individuals in the markets in any time frame.Those willing to sell their stock or futures to you at a price you know is too cheap. You know by objectively assessing supply and demand.
Those willing to buy your stock or futures at a price that you know is too expensive. You know by objectively assessing supply and demand.
2) Having the tools, knowledge, and ability to take the proper action when these two groups appear.
3) Play the bandwagon correctlyâ¦
Proper trading is knowing how other market participants think and react when they are correct and, more importantly, when they are wrong. Price patterns are thought patterns.
Mental Musts
1)Confidence2)Discipline
3)Patience
How to get these
1) Reduce and eliminate subjective analysis.2) Learn to fight the urge to do what others are doing and make decisions based on a very mechanical and unemotional set of rules and criteria.
The Proper Entry
Know Where To Enter, Support and Resistance.- Smart money enters here.
Entry Must Be Low Risk.
- Most important part of the trade.
Enter Before Others.
- This is how we get paid.
One of the most important things to understand about proper trading and investing is that visible confirmation and opportunity are completely inversely related in trading. In class, this is a point I focus on more than any other.
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.
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