Tag Archives: chart
Learn How To Trade Forex Like A Professional Trader
I don’t often share trading statements on my blog, but i have decided to share this one, as it shows not only that i have the skills and market knowledge to be able to teach you how to trade like a professional trader, but it also shows some interesting statistics regarding profit and loss.
To be a successful trader.
To be a successful trader you have to have market knowledge. Knowledge is by far the biggest asset to a successful trader. Many traders say that psychology or discipline are the most important things you have to master. They say that if you are not a disciplined trader, or you do not have the correct mindset then you will not succeed.
Both of these attributes are needed to become successful, but having the correct market knowledge and understanding the forces that drive price, is the most important thing you need to learn. You can have the greatest discipline in the world, but without market knowledge you will not be successful.
The importance of profit and loss.
Profit to loss ratios can sometimes be overshadowed by win to loss ratios, but profit and loss is a key factor to long term profitability. Lots of traders are turned on by a high win to loss ratio, but winning 99% of your trades is no good if the one loser blows out your account.
The statement below shows where you need to be regarding your profit to loss ratios.
When i am hitting it out of the park i can have a win to loss ratio of above 95%. Yes that’s pretty impressive i know, but its the profit to loss ratio that really counts. As you can see from the trading statement, the win to loss ratio is 73.98%. Now while that is not particularly high, the profit to loss ratio is very good, with a gross profit of £34,763.81, against a gross loss of £3996.01. Which is a profit to loss ratio of almost 9 to 1.
How do you achieve a high profit to loss ratio?
Cut your losers quickly and let your winners run. I am sure you have heard that statement before, but its probably one of the hardest things to do in trading. No one wants to take a loss, that’s completely natural, but letting your losers run too long will kill your profit to loss ratio.
To achieve a consistently high profit to loss ratio you first have to have a great strategy. When you have developed your trading strategy you have to trade it as mechanically as possible. If the reason for entering a trade has changed, then get out of the trade as quickly as possible.
For example. You enter a trade at a specific price point as you expect the market to go in your favor. As soon as the market does not do what you expect it to do, and the reasons for entering that trade are no longer valid, then exit the trade. There is no point sitting in a losing trade hoping it will come back.
Sitting in losing trades hoping they will come back just grinds you down. It also stops you from looking at other trading opportunities, as you are glued to the chart, watching every move your losing trade is making. Just take the hit and move on. If you have a good strategy then you will soon get back that small loss.
You can see on the statement that the largest profit on a single trade was £427.60, against the largest loss on a single trade of £74.89. So even though the win to loss ratio is not that high, the profit to loss ratio is. So a consistently high profit to loss ratio will always trump a high win to loss ratio. If you can have both then that’s even better.
Learn how to trade like a professional trader.
If you want to be successful in this business you have to trade like a professional. All professional traders have sound market knowledge, and good profit to loss ratios. Forex trading is a cut throat business. This is not a Sunday afternoon kickabout in the park, its a ruthless business where only the best traders will survive.
You have to be on top of your game if you want to mix it with these sharks. If you are not the best you can be, they will eat you for breakfast. Trading at a professional level is something that i believe is almost impossible to learn on your own. Getting educated and mentored by a professional Forex trader is a must as far as i am concerned if you want to trade full time and make it your job.
Yes i would say that, as i offer education and mentoring. But listen, i am a trader first and an education provider second, and that is an important thing to remember. I am not a Forex training school, that offers the same old rubbish you can get on the internet for free. What i teach, you cannot get on the internet, or anywhere, free or paid.
My Forex training course is not cheap, but when you have the market knowledge to enable you to turn £10,000 into over £40,000 in less than 6 months, then i am sure you can see the value in what i am offering. If you cant see that, then i am sorry but i can’t help you.
For more information on my Forex training course please click here.
Thanks for visiting my blog and have a great day. 🙂
Ozzy Dollar And Cable Move Lower, Yen Moves Higher
Groundhog day again. Ozzy and Cable are moving lower and Yen is moving higher.
Yen pairs moved to new highs again in the Asian session but have been retracing for most of the day. The Yen is very weak at the moment and the selling sees no sign of letting up any time soon.
AUD made a little up move on Monday but weak numbers out last night have seen it make another leg down today.
I did mention in my post on Friday that Ozzy would continue lower this week with a target of 10225, which could get hit tomorrow or Friday if the slide continues. Unemployment figures are out for Ozzy later this evening so that should see some action in the pair.
Euro continued its move down on Monday from the sell off on Friday. We saw a strong pullback yesterday on the back of comments out of Europe saying the Euro is not high enough to warrant action from the ECB. That pushed the price up significantly but we have seen it slide again today.
The ECB rate decision is out tomorrow so we are unlikely to see much movement in Euro Dollar until that news is out. The consensus is for rates to remain the same. I think if we see the Euro above 140 we will see a rate cut, but until that happens i think they will leave rates on hold.
Cable was doing OK on Monday until poor numbers came out that saw it make a sharp move lower. I think Cable has a got a bit further to go yet before we see it come back. There is talk of QE and a possible downgrade that is weighing on Cable.
I would just like to state that i do not trade fundamentals or news. I am merely commenting on the pairs i trade to try and give you an overview of what is happening. It makes no difference to me what news comes out and when. I only trade price action. I trade what the chart is telling me to trade.
OK trades so far this week are as follows.
Monday we took Cable long at 15696 up to 15744 for 48 pips. We also took AUD short at 10437 down to 10400 for 37 pips.
Tuesday we took EJ long at 12410 up to 10480 for 70 pips.
Today we took Euro long at 13515 up to 13545 for 30 pips. We also took AUD long at 10297 up to 10329 for 32 pips.
If you are in the markets this week have a good week. 🙂
If you wish to learn how to trade Forex please consider my Forex training course.
Understanding Forex Trading – Learn Price Action
Forex trading is a big mystery to a lot of people, even Forex traders that have been trading for years struggle to understand price action, and how to profit from it.
So what do you need to know to be successful in Forex and consistently make money? The answer is very simple. You need to be able to read price action on a chart. All the information you will ever need, to enable you to be successful in Forex trading, is contained within the chart. Let me just say that again in case you missed it. All the information you will ever need, to enable you to be successful in Forex trading, is contained within the chart.
I cannot stress this enough. Forget about fundamentals, and news, and market sentiment, and what they are saying on CNBC, its all irrelevant. The only thing you need to be able to do, to be successful in Forex, is to be able to read price action on a chart. The chart will tell you where to enter, the chart will tell you where to put your stop loss, and the chart will tell you where to exit, and that is all you need to know.
Despite what a lot of traders say a Forex chart is not a random pattern generator. Forex trading has a very structured format.
Have you ever looked at one of those magic eye pictures like the one on the left. Somewhere in that picture there is a duck, some people can see it some people cant. A Forex chart is very much like that. There is a picture in there somewhere, you just have to know where to look.
Now you can spend weeks, months, years, staring at a chart, or a magic eye picture and trying to see through all the confusion, or you can take the quick route and get someone to show you how to do it. Now if you think back to the moment when you first saw the empire state building, or the statue of liberty, or whatever it was in the magic eye picture, how easy was it to look at any other magic eye picture and see the image within. A Forex chart is just the same. When you know what you are looking for, you can apply the same skill to any chart, and see what is really hiding within it.
When you are skilled at reading a chart you will be able to see the structure of it, and profit from the fact that you know what is going to happen next. Well that’s not 100% true, you cant know exactly what is going to happen next, but you can predict with the highest probability what is going to happen next, and trading Forex successfully is all about high probability trading.
This is what i do, and this is what i teach. I look for, and enter, high probability trades, and i teach my students to look for, and enter the same high probability trades. I don’t trade for fun, or because i am bored, i trade to make money, and the way i make money is by knowing what is going to happen to the price with the highest probability possible, and then by waiting for the optimum time to enter the trade. I then manage the trade, and take my profit when the chart tells me to take it. Its a pretty simple formula, but it takes chart knowledge to make it work successfully.
If you want to be a successful Forex trader, and learn my high probability Forex trading strategies, please consider my Forex training and mentoring program here.
Forex Trading When The Markets Are Moving Sideways
According to most Forex rules there are 2 basic stages of market. Trending and consolidating. When the market is going up or down its trending, and when the market is going sideways its consolidating.
Now depending on what time frame you are looking at, the market can spend quite a bit of time moving sideways or consolidating. For example if you are looking at a daily chart like the chart the left you will see that the market is moving sideways.
Now every candle on that chart represents 1 day. So within each day you will have another chart pattern. You may have a consolidation pattern, or you may have a trending pattern. The point i am trying to make is the market is never really moving sideways, it is always trending, or moving up or down.
When the market is in consolidation most traders will tell you not to trade as you don’t know which way the market is going to move, and you may get caught on the wrong side of a breakout. I will agree with that 100%. But you need to qualify which time frame you are looking at before you can make a decision on whether to trade or not. I would quite happily trade a sideways moving market on a weekly, daily, and H4 time frame, or even possibly a H1 time frame, but i would not trade a sideways consolidation on anything less than H1. All time frames are made up of trends and within those trends there are trend trading opportunities.
A good way to qualify if a consolidation is OK to trade is to measure the number of pips the consolidation covers. Basically you just draw a line at the top and the bottom of the range of the consolidation, as per the above chart, and measure the pips in between. The tighter the range the more risk will be associated with trading that consolidation. You may have a H4 consolidation that covers 100 pips or more. This would be OK to trade on say a 15 min or H1 time frame, as it would be made up of many trends. Now if this consolidation was made up of a 20 or 30 pip range there would be far more risk associated to trading it, as a breakout of a tight range is more likely to happen than a breakout of a large range, and you don’t want to get caught on the wrong side of the breakout.
A good example of a consolidation not to trade would be the Asian session, or Tokyo channel as some people call it. The Asian session often is a period of consolidation for the markets and a 20 to 30 pip trading range is often seen. When the UK session then opens you will get the breakout. If you have ever tried trading the Asian session you will know exactly how unpredictable this consolidation period is.
So to recap. Trading Forex when the markets are moving sideways is quite acceptable if the consolidation covers a larger time frame, and a larger number of pips. As within those consolidations there will be many tradable trends. Stay away from consolidations on lower time frames that cover less than 30 pips.
I would just like to add that this article has nothing to do with how i trade. Its just a general Forex article to give you a bit of help and advice on what not to do. What i teach is a complete understanding of price action trading, and how to read a chart. When you can read a chart and understand price action at a professional level, you can enter and exit trades with complete confidence. I will teach you how the big boys play this game. And when you have the same level of understanding as the best traders in the world you will be able to trade like they do.
If you want to learn how to trade Forex like the big boys, please consider my training and mentoring program here.