Thursdays Trades

Started off really well today but been shaken about trading late afternnon by silly entries - tends to be my biggest problem is taking trades that arent there.

all cable trades today as follows

-10,+10,+1,+49,+20,-20,-20 = 30 pips

Grai +126 cable alone - eddy lost 46 and swissy lost 19 - makes me happy i only trade one pair with it really :)

this means that grail escaped its second losing month and actually ened up +49 pips on the month - not bad for such a crappy month and certainly better than a loss - so grail retains its 1 losing month in 3 years phew!

wont be around tomorrow as the wife is going into hospital for a proceedure at 9am - should have time to place my grail trades for the ay though but dont expect an update till mybe saturday morning.

100+ day :)

Feelin' Good!

Had another storming day today as follows

Cable Trades +8, -10, +1, +114, +5

Grail trade (cable only) +56

Total +174 pips

Looks like im finding form again.

Ive turned down the scalping commission - for me trying to tune a scalping strategy is almost impossible - Im not a scalper - havent trained for it, dont want the stress. Im a trend trader and there is always a trend somewhere - today it was on the 5 min and 15 min - tomorrow it might be another timeframe and thats what i learned to do for over 3 years now.

lets see if i can add some logic to my rather erratic system trading of late ...

I was talking to a collegue in the last few weeks and we both agreed that 2005 has been a poor year as far as short term trend goes. We agreed to try and get our heads around scalping as a system that can be done in any market.

To be honest it was time well spent. I did get into it at one point but at the end of the day i was exhausted falling asleep for hours in front of the tv before bed.

Ive realised that to get to the standard that bb and duckfu have acheived may take me many years or re-training my psyche. Im not prepared to invest that time again when i have a perfectly good methodology that makes good money.

So, from now on im working purely on trending systems - although to be honest trends exist everywhere - even on a one minute chart - hilda works fine on a one min chart for example.

Heres the problem i had with scalping. Being a trend trader i had always learned to let your winners run. scalping on the other hand involves taking profits off the table when the market is showing strength at the target area.

this was causing a severe conflict with my brain which kept on saying "you cant close on strength - are you crazy?" - thats the way ive been programmed - to eek out the maximum possible from a trend when in place and not let the wiggle dance of the currency shake me out - its something that has served me well over the last 3 1/2 years.

So thats that - im back to form trading as always - those of you who know me of old will know what that means :)

great day

had a great day yesterday

grail made a total of 82 pips on 3 pairs and i took 46 on cable short from that 15 min hidden divergence at around 12 noon yesterday (bst) closed out at 5:17pm 1.8169

the cable part of the grail was +33 just to keep track alone for the month end

good day then all told :)

Hidden Divergence

OK, been asked exactly what hidden divergence is and for those of you who dont know please have a look at the chart above.

Just right click the picture and choose 'open in new window' to make it bigger.

The indicator i used for this was the OSMA or 'moving average of ocilator - basically the histogram on a good macd. The settings are 8,12,9

The chart shows the easiest type of hidden divergence to spot and the most lucrative - there are other harder to spot ones where the lows come in the same peak so to speak but lets get the basics right first.

basically this is my definition and how to use it:

Determine the trend with some kind of moving average or whatever else you fancy - the ones above are a 34 ema and a 50 ema showing the trend as up

you will then see higher highs on price and higher highs on osma - higher lows on price and higher lows on osma.

when you see a higher low on price but which shows a lower low on osma this is hidden divergence and is used for re-entry into the prevailing trend. the trade can be exited in many ways either an osma top or a pre-determined level of support. Or you may decide to stay in the trend until some kind of regular divergence is seen.

Entry is given on the close of the first bar that makes a single higher (lower) bar on the osma. Its important that you wait for the bar to close as until it is the osma bottom is not formed.

There are ways of optimising the entry point where you can enter before osma has given the signal that its bottomed out - either by identifying some kind of support zone with pivots, murray math etc or on some other significant support such as a price channel, trendline etc.

this is the prime hidden divergence setup when above the osma zero line you get 2 or more higher highs in succession followed by a lower low. There are other forms of hidden divergence but this one is the highest probability one. If you wait all day for these and take nothing else you will make money on them overall. Hidden divergences are seen on all timeframes

Lastnights cable closed at +30 as i moved the stop up watching coronation street :)

Please let me know if this was useful or if it needs more in depth.

change of plan

well Monday began with a change of plan following a conversation on saturday

decided to continue grail on cable only which has ended up another poor trade closed for -60 - grail is now -165 for the month - still has a chance to catch up but its doubtful at this stage. time will tell

so anyway, decided to concentarate on the scalping strat again - been brain picking off bbmac and duckfu all day today - pinched a bit from here and a bit from there.

Morning results were ok but i dont really think i have the constitution for scalping - its too much like hard work!! and gives me a headache.

Ive reverted to a triple screen method this afternoon and just trying some ideas of my own again based around the Hilda Baker model - funny isnt it that no matter what someone else makes on a method if it doesnt sit well with you it just wont work.

For those asking about hilda it just isnt ready yet - i want to make sure this is easy to follow and understand before i even think about releasing it.

so, this morning i made +12, -10, +9, +1 and -11 with that scalping thingy - all that screenwatching for 1 pip! - gotta be a better way to earn a living!!

this afternoon has fared a little better since the changes - a +5 and currently long on cable +18 as we speak - this one may stay open overnight but ill check back later to see.

Once again folks thatnk for reading this - keeps me focussed on record keeping if nothing else!!

backtest data

if anyone is interested i have bought a lot of backtest data for the four major pairs

happy to share for a donation of $10 per pair

have data in various formats

lemme know

end of the week

not done much trading today apart from Grail which finished up +17

not too good a week but +ve anyway at +78 for the week

got lots of work to do next week and as its summer ive decided that im going to trade grail only probarbly till september - as this is a long period ill be trading it on 3 pairs - eddy, swissy and cable

Hopefully next week will turn grail around for the month - it's up on a 3 pair trade but still down 106 pips on cable alone.

then again its not a mega pips strategy and nor is it designed to be - thats why you have to have a sizeable account to trade it to potential. Happy to say that that is now the case so off we go on 3 pairs - still going to take it steady for a bit tho trading probarbly 2 lots on each pair.

anyway, have a great weekend - and if you are bored try this brilliant Pool game that BB Mac introduced me to - very addictive - you have been warned!!

http://www.superarcade.com/minipool.htm

Morning Traders

Helooo there

grail finished at -9 yesterday - its not having a good month but then there are 6 trading days left to the month - could this be the second losing month on record? 2005 has been crap hasnt it!

Its currently -123 on the month but then that can be gained back in a single day - time will tell but it just shows how crap 2005 has been when the first losing month in 3 years was february and june could be the second!

Anyway, in the spirit of sharing i thought you might find this ebook useful that Rob Walton wrote - get a copy here and also have a look around the forum whilst youre at it :)


http://tinyurl.com/asntq

catch you later

terrible day

had a lousy day today - did well this morning and then my internet connection went down - had to be on dialup for an hour whilst my isp sorted out the problem.

got really peeved to find i'd missed a beautiful drop today in cable.

anyway, grail is still open and ive took 49 pips scalping this morning.

the sun is shining here and it's a beautiful day so im gonna make the most of it and call it a day.

Take care y'all - going to open a can of stella and relax in the garden :)

Wednesdays trades

Ok, spent most of the day working on the new scalper so only traded grail which finished at +77 pips for the day.

whilst im working on this scalper i might trade grail on cable swssy and eddie all together - then again maybe not :) dunno yet.

so far this morning ive taken +11,+5 and +17 on the scalper

Might decide to have the afternoon off and go to chatsworth today - theyve said that the weather could break up tomorrow so might be the last good dayfor a while.

catch you later

late entry

sorry for the late entry

Tuesday was a crap day for me - ended up -39 pips standard trading and -60 on grail

grail aint a worry cos it always catches up but my usual trading was poor today. i was looking at a 30 min down channel and didnt plot the 60 min up channel which cable met just as i was shorting.

lesson learned

anyway ...

Decided today that i need to look into a scalping strategy cos when the market is like this its not good to be a trend trader.

so ive begun to put one together and managed to pinpoint some good trades this morning.

todays results dont count tho cos ive got to get used to using it yet and modify some bits to begin with - however ive opened a demo account to trade it and ill post the results here as we go along

Busy Monday!

Well, what a day !!

spent the morning trading and the afternoon designing a new website - before i get to that tho heres the results of trading for today

Ive been looking at a modification of mark thingy's hi lo channel trading - added a couple of ma's an osma and triple screened it and its looking really quite good.

Im trading it on swissy whilst the grail trades run on their own

anyway - this mornings trades were as follows - all on swissy

+6,+4,+1,+16,+18,-3,+4,-5,-10,+19,+10 total = 60 pips

hilda had 4 trades before i retired her for the day -8,-9,+5,-8 and then gave up on her for the day for -20 - first losing day for hilda for ages - but i think most systems struggled today.

Grail got -13


now then - this new site - was commissioned for it so its nothing to do with me apart from the design - tell me what you think - its for a mobile disco based in Kings Lynn

www.pulseroadshow.com

weekend at last - time for some soul :)

Trades today then - steady eddie is binned

Hilda had 3 trades +19,+32 and -10

Grail closed for +6

ive been doing some good old trading again today - need to concentrate for the next week or so as ive been system testing etc far too much lately - need to get back to my trading roots

so today ive pulled 6 trades - +41, +6, +18, -15, +5 and -7

Thursdays Trades

not such a good day - in fact was quite pissed off today

system trades were as follows

Steady eddie -2
Grail -58
Hilda +120

system trades = 60 pips

Now let me tell you why i was pissed off - i had a nice trade long from 8205 which went to +70 at one point - i let this trade slip back to +5 before being stopped - just cos i was looking at some hookey system.

very foolish and made me angry.

Anyway - i think today may well be the end of the road for steady eddie - its not doing what its supposed to do which is to make small profits most days - backtest results had a bug in them so i think that it will die a death very soon.

Maybe i should just concentrate on perfecting hilda whilst playing grail on the other account.

Oh, the life of a systems developer!!

Wednesdays Trades

Mixed

mixed bag yesterday on trades

Steady Eddie -56 pips
Grail +105 pips
Hilda +15 pips
Other +66 pips

Total system trades = +64

Total trades +130

The 66 pipper was just a hunch trade after the news, i rode the price back up after the drop.

The joys of making a fortune on Forex :)

Tuesdays results

well, good day for eddie, bad day for grail and a no trade day for hilda

Grail -56
Steady Eddie +36
Hilda - No trades

total -20 system trades

The Good Old Welsh eh?

Anyway, wow what a boring day today

results

Hilda - 87 pips
Steady Eddie - -13 pips
Grail +19 pips

Total system trades for the day 93 pips

Steady eddie will be going through a name change soon - want something dynamic like Viper or Trademaster. Gonna open this one up to you lot - any suggestions?

If one is suggested and thats the one i use then the winner gets a copy of the fst system 2 ebook for a freebie.

catch ya all tomorrow

lets chill for the weekend!

Hiya

ok, results this week

Todays first test of Steady Eddie resulted in a total of +62 for 9 trades (amended from 42 due to mistake)

Grail finished the week on -63 - shit happens! - Grail is having a hard time at the moment - but then what isnt - a swallow doesnt make a summer tho as they say. Just play the system and allo will become clear.

also took some trades on swissy today which has netted me a grand total for the week of +37 pips - hardly worth getting out of bed for!!

been a busy week for me tho and stacks of other work to do so not bad i suppose.

Have a great weekend and catch you all soon

New System Test - Steady Eddie

Well, forward testing began on a new system today

The system is autotraded from 7am to 6pm uktime and is fully automatic

might be total rubbish over forward testing but backtesting shows that it's profitable to a high degree. - time will tell of course.

Going to set up a new pc purely running that and leave it for 6 months to see how it performs

compunding is switched on for this system on a trade by trade basis

Please dont ask anymore as this could well be black boxed for retail sometime in the future

System codename is Steady Eddie and its traded on cable only for the purposes of testing.

so far today its made 56 pips.

yesterdays trades

yesterdays trades

well, was a bit of a crap days wasnt it

+2
+6
-6
-19

Daily result -17

GOT to share this!!

I know ive posted a lot today but i just gotta share this with you.

The following text represents a member of our trading circle and his first ever real money trade.

Many of you will identify with this.

MY BEST TRADE EVER

To this day, I confront the same emotions. I have learned better control and have learned the signals of impending emotional responses.

I now anticipate, control them, and put them away. They have become my friends and my teachers.

Earlier in my trading experience I had spent 18 months, five hours a day, learning and trading various platforms and methods. I treated trading as a job from the first day, no mulligans permitted. I researched, read, struggled, made error after error, modified my trading plan and finally, after 18 months I felt ready to “go live” with real money. For the record, I was making between 5 and 15 trades per trading day and over the term had made an average of 256 pips per month with a 78% correct trade record. Not a bad record. I was ready. I gathered up my $10,000 and opened my live account with a reputable brokerage.

I still laugh at my naiveté, as the broker opened my account and automatically limited my leverage to 5:1; suggesting I may want to proceed slowly in this risky market. Following my arrogant and complaining email, the leverage was quickly increased to the then normal 100:1. I still have that email containing the staple marks and blood from my forehead.

My first live trade was a success, the plan worked well and closed the day with a 35 pip profit. Whew! The first live trade behind me, my methods confirmed; my wife and I celebrated my success and I completed my homework for next days trading plan. Confident, I slept with the angels knowing full well that my well-deserved success was just a few months away.

Enter now stage left, the Fifth Emotion of FEAR along with her cousins Self-Doubt and Conviction.

The research and homework from my first day had indicated a short trend. The charts showed a strong overhead resistance. Watching for a short opportunity, I opened my second live trade, SHORT a few pips below the prior days close. With strong resistance overhead and the first support level some forty pips below, my methods confirmed, my confidence high, I saw no urgency to set a stop loss, after-all I was right there; my finger “on the trigger”.

My entry method proved successful, the market moved 25 pips to the short side. I was elated, the wind was to my back! All the hard work and lonely trading hours were paying off. Success was right here, right now! The market had given me 25 pips, not quite my intended target level of 45 pips, but close; I held my short. My enthusiasm and joy were short lived as the market stalled and began a reverse that would gobble up my “profit” over the next five minutes. Finishing that meal, the market continued LONG, heading for the overhead resistance mark.

As the market approached my break-even point, FEAR crept into my mind, I set a stop loss LONG at the resistance price and re-evaluated my trade. My method, my charts, my friends in the chat-room, all indicated; stay SHORT. I reviewed my reasoning for taking the trade and became convinced that SHORT was the correct position. After-all, the market had failed the resistance level three times, the news was good, the trend was in line. I was right; I had the conviction. The market continued LONG, now by 20 pips.

The bull run continued, as the market approached my STOP-LOSS, FEAR and SHAME walked into the room. SHAME told me that a 45 pip loss was bad and would wipe out yesterdays profit; FEAR agreed calling CONVICTION who said that my trade strategy was correct; the market would certainly turn back SHORT before it broke the resistance. GREED arrived on his black horse. He suggested that I cancel my stop loss. FEAR AND SHAME both agreed, so did I.

My stop loss cancelled, FEAR and SHAME stood on my right side,,

happy that they could help.

It was dark and chilled in my trading room, quiet and alone I searched for my friend CONVICTION. He was there, leaning on SHAME’S shoulder and told me I was right.

Suddenly, from nowhere, lightning struck! Thunder roared! The quiet became a torrential storm as the bulls took over. Within two minutes, the market moved through the resistance and the market was LONG over 100 pips.

TERROR arrived in his black robe! CONVICTION and SHAME cowered in his mighty presence.

Reality set in as I realized I was down not just the 128 pips, but $1280 real dollars. Over 10% of my trading account had been destroyed in a single trade, in less than 5 minutes.

I evaluated the numbers and searched for a solution to my dilemma.

HOPE arrived, warm and promising. HOPE smiled, whispered gently in my ear, “if you average here, you can get out even on the retrace, remember the past”. TERROR chuckled under his breath and gave a high five to CONVICTION.

CONVICTION agreed that the retrace would take the price back within an acceptable level of loss. I decided to take the average. HOPE was such a help, so warm, so friendly, so reassuring.

My reality at this point was that I now had 2 lots at risk, (twenty percent of my trading account) averaged into a 64 pip loss, hoping for a recovery on the a retracement of a 128 pip move.

Thank god it was Friday and this move would be over soon, the pain would end. If I can just get out of the trade even, life will be fine. I know my mistake, I recognize my demons and I can move on.

As dawn broke, bringing with it the warmth of the sun, HOPE and I partied as the market began a reversal pattern; back towards home, towards warmth and security; back toward my dreams.

TERROR took a chair in the far corner of my trading room. Together HOPE, CONVICTION and I had succeeded. I was right, thanks to my long practiced methods, my analysis, my friends HOPE and CONVICTION. I was being rewarded. Success was again at hand.

Suddenly, without warning the market reversed again to the LONG side. HOPE dropped her drink. TERROR jumped from his chair with the speed of lightning, “a bull run” he shouted as the market moved another 92 pips to the LONG side. TERROR was exhilarated! He immediately telephoned DESPAIR and she came running.

This rampage of unchecked emotion continued through the session.

The comedy and the tragedy of compounding errors ended with one last average 257 pips above my initial short. I was now 3 lots SHORT; averaged to 125 pips down; in a reversing market; on a Friday.

TERROR and DESPAIR partied all weekend while my wife and I made the painful decision to take the loss.

The end result of this trade was; after one more average, the market did reverse. The trade cost me $3600, 36% of my account and I’m happy it happened when it did. It was the BEST TRADE I EVER MADE. And the market didn’t care!! The lessons learned from this trade were more valuable to my trading than the entire 18 months of advance preparation.

Now, hundreds of trades later, I revisit all my friends during my trades. They are my friends, they taught me, they are my mentors. But now I control them. I tell myself daily before I enter the market that “I alone have the ability to destroy my account”.

Demo Trading ... a viewpoint

Just been reading one of the comments of someone using a demo account and wanted to share my views on this - please feel free to comment with your own (constructive of course)

To me demo accounts are the devil incarnate and lead the newbie to the false impression that trading is easy.

let me explain why.

On a demo account you never suffer from slippage or poor stop hits
on a demo account tou never have a real risk

the second one in the list is the most important. No matter how seriously you take your demo account it will never affect the amount of money in your pocket.

With a demo account your brain processes the information differently - it sees the big winners and ignores the losses and small winners. Your brain tells you - if i can get big winners on here then i can get it on a real account.

Of course this is far from reality. Your brain knows the difference even if you try to convince it that its the same.

The first time you place a trade - even for a mini lot, a whole different set of connections open in your brain. You have the anxiety at the beginning of a trade - fears as price does its little dance and fears that your gains will run away.

well, aint gonna harp on about this - but you know the story.

Let me tell you what demo accounts are good for

1. trying out a trading platform (which is not always good as live accounts often dont act the same)

2. system testing

and thats it.

My reccomendations for the newbie would be as follows:

Trade a demo account to grasp the basics of trading and then go live - preferably within 2 months of starting

open an account with a broker that allows you to trade small like oanda for example - there you can trade from as low as 1 dollar lots - but dont go that low

start trading with at least 1000 dollar lot - this equates to 10 cents a pip - not a lot of money but enough to help you feel something of what its like to really trade.


then you will lose some money. try out different systems, read stuff but keep trading

lose some more money

suddenly realise that its possible to blow your account just with 10c a pip.

Now open a new demo account and start to work on your own system.

you must trade any system to the letter or the testing is worthless

whe your system has made 3000 pips you may transfer to live again but still at 1k lots

when the system trading live has made 3000 pips you may trade 2k lots

and so on until you reach your desired level.

Thats my best advice after several years trading

ive noticed this and would appreciate your comments. I once worked with someone who said they would never trade live till his system worked - well he traded demo for 2 years and built a fair system that made money

he then went live and blew the account

why?

because although he was by that time a pretty good demo trader he could not trade live for toffee. The connections in his head had not been made in the real world and as such he had not evolved the emotional control that any trader needs. in effect he was a total newbie again.

this story is true and its not the first time ive seen it. This particular bloke took a further 2 years of live trading until he was in the same position again. and then he gave up (like so many do)

think on before you use a demo .....

Tuesdays trades

Justa single trade yesterday for +13 pips

First Training Video

Ok, done a quick video to guage your reactions - please have a look and enjoy

would like to hear your comments - ps, sorry about the accent - im a reight derbyshire lad!

Click Here To View

ps - this wont work in firefox

The 5 Steps to becoming a trader

Hi Y'all

Ive posted this on several forums before but someone asked me to post it on here for those who might come across it for the first time.

Even if youve read it before - take a second look, its been slightly added to.

One time in my life i was involved in Training people for a large international aerospace company. called Rolls-Royce.

I trained people in many things- the art of presenting to people, persuasion techniques, communications skills etc etc.

I would take people through these 5 steps no matter what they were there to learn - it applies the same whether to learning to drive or learning a new language in fact learning anything.

These are the steps that you will take as you begin your journey as a currency trader. Read this carefully, print it off and save it in your files - in a few years youll look back and laugh.

Step One: Unconscious Incompetence.

This is the first step you take when starting to look into trading. you know that its a good way of making money because you've heard so many things about it and heard of so many millionaires. Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be? Price either moves up or down - what's the big secret to that then - lets get cracking!

Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again .. and again, and again.

You may have initial success, and thats even worse - cos it tells your brain that this really is simple and you start to risk more money.

You try to turn around your losses by doubling up every time you trade. Sometimes you'll get away with it but more often than not you will come away scathed and bruised You are totally oblivious to your incompetence at trading.

This step can last for a week or two of trading but the market is usually swift and you move onth the next stage.

Step Two - Conscious Incompetence

Step two is where you realise that there is more work involved in trading and that you might actually have to work a few things out. You consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.

You now set about buying systems and e-books galore, read websites based everywhere from USA to the Ukraine. and begin your search for the holy grail. During this time you will be a system nomad - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. Every time you come upon a new indicator you'll be ecstatic that this is the one that will make all the difference.

You will test out automated systems on Metatrader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today. You'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them because you are so sure you are right.

You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be making that amount because you've studied and you don't make that, you know as much as they do and they must be lying. But they're in there day after day and their account just grows whilst yours falls.

You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and overtrade your account even though everyone says you are mad to - but you know better. You'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you either.

You might even approach a 'guru' like Rob Booker or someone on a chat board who promises to make you into a trader(usually for a fee of course). Whether the guru is good or not you wont win because there is no replacement for screen time and you still think you know best.

This step can last ages and ages - in fact in reality talking with other traders as well as personal experience confirms that it can easily last well over a year and more nearer 3 years. This is also the step when you are most likely to give up through sheer frustration.

Around 60% of new traders die out in the first 3 months - they give up and this is good - think about it - if trading was easy we would all be millionaires. another 20% keep going for a year and then in desperation take risks guaranteed to blow their account which of course it does.

What may suprise you is that of the remaining 20% all of them will last around 3 years - and they will think they are safe in the water - but even at 3 years only a further 5-10% will continue and go on to actually make money consistently.

By the way - they are real figures, not just some ive picked out of my head - so when you get to 3 years in the game dont think its plain sailing from there.

Iv had many people argue with me about these timescales - funny enough none of them have been trading for more that 3 years - if you think you know better then ask on a board for someone who's been trading 5 years and ask them how long it takes to become fully 100% proficient. Sure i guess there will be exceptions to the rle - but i havent met any yet.

Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times but now its in your blood

One day - im a split second moment you will enter stage 3.

Step 3 - The Eureka Moment

Towards the end of stage two you begin to realise that it's not the system that is making the difference. You realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right You start to read books on the psychology of trading and identify with the characters portrayed in those books and finally comes the eureka moment.

The eureka moment causes a new connection to be made in your brain. You suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.

Because of this revelation you stop taking any notice of what anyone thinks - what this news item will do, and what that event will do to the markets. You become an individual with your own method of trading

You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold.

You start to take every trade that your 'edge' shows has a good probability of winning with. When the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade or the one after it or the one after that will have higher odds of success because you know your system works.

You stop looking at trading results from a trade-to-trade perspective and start to look at weekly figures knowing that one bad trade does not a poor system make.

You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what as you know the probabilities stack in your favour.

You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile. You weren't ready then, but you are now. The eureka moment came the moment that you truly accepted that you cannot predict the market.

Step 4 - Conscious Competence

You are making trades whenever your system tells you to. You take losses just as easily as you take wins You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it looses and when you're on a loser you close it swiftly with little pain to your account

You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money. You are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away. You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

You'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again. You will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.

This lasts about 6 months

Step Five - Unconscious Competence

Now we’re cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 200 pips in a day doesnt make you any more excited that getting 1 pips.

You see the newbies in the forum shouting 'go dollar go' as if they are urging on a horse to win in the grand national and you see yourself - but many years ago now.

This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.

You're a star in the trading chat room and people listen to what you say. You recognise yourself in their questions from about two years ago. You pass on your advice but you know most of it is futile because they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two, but a few will.

Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.

Finally you grow out of the chat rooms and find a few choice people who you converse with about the markets without being influenced at all.

All the time you are honing your methods to extract the maximum profit from the market without increasing risk. Your method of trading doesnt change - it just gets better - you now have what women call 'intuition'

You can now say with your head held high "I'm a currency trader" but to be honest you dont even bother telling anyone - it's a job like any other.

I hope youve enjoyed reading this journey into a traders mind and that hopefully youve identified with some points in here.

Remember that only 5% will actually make it - but the reason for that isnt ability, its staying power and the ability to change your perceptions and paradigms as new information comes available.

The losers are those who wanted to 'get rich quick' but approached the market and within 6 months put on a pair of blinkers so they couldnt see the obvious - a kind of "this is the way i see it and thats that" scenario - refusing to assimilate new information that changes that perception.

Im happy to tell you that the reason i started trading was because of the 'get rich quick' mindset. Just that now i see it as 'get rich slow' :)

If youre thinking about giving up i have one piece of advice for you ....

Ask yourself the question "how many years would you go to college if you knew for a fact that there was a million dollars a year job at the end of it?

Take care and good trading to you all.

Mondays Update

Only one trade yesterday for +3 pips

too busy at the mo and looking at the market seems good that i kept out.

Long Weekend

With NFP Yesterday and a shedload of work i didnt manage to find any time for trading and certainly not for blogging.

Anyway, ive had a thought - would any of you lot that actually read this be interested in me doing a few training video's to share with you?

Hell, they might be crap :) - i aint the best trader in the world by any account but if youre interested in me doing some then make a comment - if there's enough then ill have a go sometime next week.

If youre interested then ill start with a simple overview (from my perspective anyway) of support and resistance and how to get it right.

lemme know in the comments.

have a great weekend!!

closed and done for the day

ok, closed the forth for -10 and now flat for the day

result +2 for the day

wow, guess ill break out the champagne!

catch you tomorrow folks :)

forth trade

forth trade +28

now long cable from 8165 on fifth

Are you a news hound?

Just having some thoughts here.

Do you do lots of news research when youre trading?

Do you try to figure out what the numbers will be?

Do you ask others opinions on how the market will react to news?

If you do, then i have some advice for you

Forget it - its all bollocks!

I can understand what youre thinking. News is what moves the markets - news is what starts and finishes trends and if i want to be a strong trader then i need to learn fundamentals.

Well, wake up and smell the coffee!!

News does NOT move the markets - the only thing that does move the markets in this crazy world is EMOTION.

Think about it - if news moved the markets then when the news was good the dollar would rise and when its bad it would fall.

dont always happen like that though does it.

How many times have you seen good news for the USD only to see the price go sailing down?

that's because all market movement is made by the emotions of those present and at that time people are scared shitless of either losing big time or missing the boat.

Analysts are paid hundreds of thousands to predict what will happen with news - and even they get it wrong 50% of the time so what chance have we got?

One analyst will say its gonna crash whilst another says go long.

At the end of the day all we can do is follow the market - trade what you see is a familiar cry among traders yet every day in the chat rooms i hear people ask - "whats your opinion on NFP this week" or "how will the market take a drop in those numbers?"

The problem here is that asking the question and getting an answer puts a bias on your trading - if evryone else thinks long then hell, just cos the chart is screaming short you wont take it.

Next time you start asking or listening to opinion on forthcoming news - just remember this ...

ITS ALL BOLLOCKS ANYWAY!!

Thursdays trades

Not such a good start today

-47 on cable for first trade
+23 cable second trade
+8 third trade

rest of the day to go yet tho

Wednesday Results

Just a quickie - wednesdays results

Cable +50
Euro +54
Swissy +21

Total for day +125

will post trades later

More great news that the Dutch said 'nah' to the EU constitution - looks like it has placed the final nail in the coffin of the superstate that no-one wants :)

maybe now we can just get back to a trading agreement which is what we all signed up for in the first place!

Well, another big day for the EU with the Dutch voting on the constitution today.

Already we are seeing the freefall expected from a no vote as if its a foregone conclusion - remember sell the rumour buy the fact is the old saying.

Ive Taken 3 trades today

short cable 8170
short euro 2281
long swissy 2504

swissy aint doing that well at the mo but the other two are rolling - not gonna sweat the action and just see where we are later today.

there was a beautiful hilda signal this morning at 1.8201 on cable which wouldve closed for 30 safe pips euro had one at 1.2324 for 49 pips and swissy long from 2459 for 37 - the swissy was preceeded with a failed one for -4 so still looking good, not a bad morning in all :)

Will report back later today with grail results