TraderGav.com

Gav's trading blog - Perseverance, Consistency, Confidence

Gav

What do you really need to learn about trading

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Lately, I have been spending my time working on my ATS (automated trading system), developing strategies and risk management models. I visited few forums, reading some brilliant ideas, and of course, unavoidable, some junks.

While reading the postings by some new/struggling traders, I have some thoughts.

What do you really need to learn about trading?

Technical analysis? Fundamental analysis? Risk management? trading psychology? Well, yes, yes, yes, I hear you. These are important. Very important. But, the essential skill one should really learn is the skill of learning. Learning the market condition.

Market is constantly changing. Or should I say market behaviour is consistently inconsistent. Your holy grail setup that works today might, or most likely, will fail later. Getting back to text books, forums trying to find new setups is just not the most effective route.

Learning to adjust your mindset, to accept the change, to really understand your battle field, with these, start to enhance or alter your strategies.

This is when your skills (technical analysis, fundamental analysis, etc) come into picture.

But bear in mind the fact: Technical analysis is a lagging tool, as it is based on what happened in the past, and forecast what is likely to happen in the future.

Fundamental analysis is a product of idealism. Ideally, the market should move according to its fundamentals. But, more often than not, the reality negates this. During bull markets, the high will get higher, regardless of how much the stock really worth. During the bear market like now, cheap can always get cheaper.

If you were to live trading the market, start developing a sense of market. Developing the ability to Know where you are, what you are facing, are far more valuable than watching MACD uptick and go Long(go wrong)… 🙂

Just another piece of rant from Trader Gav.

Weekly Wrap up

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It was a chaotic week. Mentally. I was not troubled by trading, but my day job.  I am not sure what is my next move, and there are just too many uncertainties around. These also crippled my ability to trade last week. I found myself losing the ability to think clearly. I closed all my positions with tiny profit. No position was established. In fact, I did not even look at chart. That also explains why I have not been posting last few days.

I hope things will become clearer soon. Though I have adjusted myself, and trying to convince myself to accept certain unpleasant facts. Anyway, I am back to trading desk now with a clearer mind. I will start my trading again.

Pivot play example

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Here is an example of how you can use pivot and Fibonacci to trade currency. Pretty straight foward. We sell short at resistance levels.  As a rule of thumb, don’t look for a specific price level, instead, we are playing with the price zone, or some say price range. No magic level in the market, but resistance zone. blah blah blah….you got the point, didn’t you?  Probably, I shall make a video later to show you some trade example…

Here is the chart….oh, in case you wanna know, this is AUDUSD…

audusd_pivot_play

Many Australian cruising through the crisis….REALLY?….

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“For Gen-Y type staff, they are just scratching their heads to work out how the global financial crisis is really impacting them,” he says.

“If they’re not paying off a home loan, if they haven’t got substantial share market investments but they’re in secure employment, then they’re probably not seeing a great impact.

“If anything it’s a positive.”

Full article here

The biggest assumption here is “..but they’re in secure employment”.  SECURE?  These group of people are just not the first ones being affected. What is a “secure employment” anyway?

Weekly Wrap up

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Before I start writting about trading, I would like to let you know…I HATE SUMMER!!!!! I HATE SuMMER!!! I am baked in over 100 F or 40 degree Celsius for the whole week. And , the best situation is..I do not have air conditioner in my apartment.Well, … I HATE SUMMER!!

Alright, let’s get back to business. Another busy week for me. Trading front, I opened few trades from IHF(read: I-Hate-Forex) system, new sDT (read: Spot-Da-Trend) system. What is the main problem of the week? Trade management. I should admit that I felt lost looking at the positions. To make it worse, I started my mulitple entries method (i.e dividing the risk level, and getting into a trade in different point, tell you what, I just love this strategy). I have plans for everything, but, I was kind of over estimating myself. I was monitoring different systems, positions, figuring out position size, moving stops blah blah blah…etc. And making mistakes here and there. Everything was a mess. Messing up with my plans. See, with a plan is not enough.

Anyway, the solution is simple. Cutting down the number of trades next week. Now, it is not only about making good trades, I gotta make sure I am managing my trades well. This is a different skill set. Brothers, trading is really not only about entry and exit.

OK, in case you are interested to know, I am holding Long positions of NzDJPY, USDJPY, and Short position of EURCHF at the moment. I can see the bloody future of my NZDJPY position. 😆 Rally of Yen is killing my positions now. I will just need to bite the bullets now.

Btw, I thought Million dollar traders by BBC is pretty interesting. Check it out.