Forex Pivot Point Trading!

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Happy New Year! Well just a couple of days short. I have found a couple of great videos on using pivots on forex trades.I have touched on pivot points before in a previous blog post. It continues to be used more and more as a strategy to identify great trades on forex pairs.

I currently use a great pivot strategy that is very consistent. The more I learn about them the better I will be at identifying better trades.

They work in trending markets as well as channeling markets, and the videos are better than the previous blog post on pivots.For a day trader pivot points are essential for identifying strong resistance and supports. Note, the amount of times he mentions discipline and money management in the first video.

So three great videos on pivot points and the use of them. The first video is split into two, and will give you a good understanding of the fundamentals, entry's and exits. The third is a bit more detailed and if you have used  pivots before? Then maybe you jump to that video. It has a strategy which is easy to pick up!







The third video is one of the best explanations I have seen of pivot points, nine minutes of great information, and I encourage you to take notes. If you do come across a pivot strategy and want more info, or would like to use  them in your trading  Click here for a free stock market DVD

 



Pivots are as discussed a very strong indicator, the amount of growing company's that are using them as trading strategy's is an example of its importance. They also work well with other indicators, to give you even more secure entry's in your forex trading!

To Your Trading Success in 2010!
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2010 Here You Come!

Merry Christmas all, the festive period has kept me busy and I have had very little time to update my blog. Trading officially ended on the 18th of December due to the lack of volatility in the markets after this period. In time honored tradition my brain in the last week in particular, has switched to festive season mode. But more importantly the master plan for 2010!

Whatever has happened to you that is negative in 2009 forget about it! Whatever has happened to you in 2009 that is positive, hold, focus and make it bigger! I caught up with twitter queen Milli Ponce this week and we discussed many topics including our love for reading. Two books that we talked about in particular were the Celestine prophecy and also the Alchemist by Paul Coelho.

Both books are story's but have a real value to life. In short one is the journey a person takes to find riches (The Alchemist) and If I had to describe the Celestine Prophecy I would say it was a combination of Think and Grow Rich and the secret. Honestly there are really no problems that any human has faced that somebody else has not faced before you. Humans are repetitive and everything is a repeat of that repetition!

What makes a person different is there ability to deal with challenges and more importantly how you choose to live your life i.e ATTITUDE. My blog was inspired through the fact that after 6 months of trading and loosing it dawned on me that I was fighting myself. Win that battle and I would win at trading. From that point on the charts and screens have looked very different.

Yet again it proved to me that no matter what you are doing in life you are responsible for what happens (Both good and Bad). While the difference between 2010 and 2009 is actually one day this can be and should be used to motivate yourself for your next journey in life.

In my discussions with Milli we also talked about Will Smith. To become the highest paid actor in Hollywood Is incredible. If you had gone back 20 years and said that a black man would be the highest paid actor grossing over 100 million on each of his last eight films...People would call you mad and probably throw you in Jail.

The video below is 9 minutes of short clips... but I encourage you to watch it all.  It is an example of what can be achieved with the correct mindset!




Remember belief mixed with actions creates results and change only comes from you! I leave you with my favourite quote form Albert Einstein:

Insanity: doing the same thing over and over again and expecting different results. 

What will you change to get ahead in 2010? I start trading again from Jan the 4th when volatility is back in the market. Until then I wish you all a fantastic Christmas and the best year ever in 2010.

To Your Trading Success in 2010

Forex Trading Diary 8th Dec 09

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Morning all, I'm in bed trading because I'm still sick as a dog (Far too much info I know) I have had flu for four days and missed my alarm this morning at 5.45am. However it has not stopped me from pimping the pips!

I did a late trade around 14.40 yesterday for 19 pips and another 7 pips later on the break of the pivot to take yesterdays total to 59 pips for the day.

So why am I sharing so much about this morning? Well Adrian  (Trading partner) was up on time and noticed that cable was making a move at 6.10am and actually took an additional 33 pips before I had even woken up! This morning I had no problems with IG and I took 30 pips again!

Date:        08 DEC 2009
Reference:    DIAAAAAEM25RSAN
Size:        Buy to close
Open Level:  16373.3
Market:      Spot FX GBP/USD 08 DEC 2009
Level:        16343.3

 

Tired and feeling lazy and so wont say much more apart from scalping an additional 10.5 pips to make 40 for the day and 100 pips in two days.

To Your Trading Success!

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Forex Day Trading Diary Mon 7th December 09

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Oohh wow what a f%^&**^ frustrating morning....I had the breakout set for 16874 and pushed the button to enter but IG refused to fill the price. I missed a good 30 pips and possibly more, have a look at the charts and you will be able to see my frustration.



I'm not sure what caused the vicious drop this morning but it was a major one! Brown announced a spending cut and the market could have reacted to that. Candles work in a 3, 5 , 8 , 13 combination on a trend.

Today it went short for 8 straight candles which tells me something spooked the market.
I did finally enter the trade when it broke a later pivot and manged to also scalp some additional points to make a total of 33 pips on the day so not too bad.

The pivot strategy which I didn't play yielded 70 pips this morning. The skype chat group was very buoyant with many people taking the most amount of pips they have ever taken in one trade. In 45 minutes cable dropped 130 points and I only took 33!I will say it again bloody IG

I was involved in the webinar yesterday for the traders that are on skype. After this finished I discussed with Marcus De Maria what people expected from the webinars. They occur monthly but I'm not sure the traders are taking full advantage of it.

The group support that we give is amazing for any novice trader. But we don't believe people come with enough questions to help them improve.

A couple of points that I would like to make for anyone trading and loosing. It is a time thing purely and simply. You will become a good trader if you stick at it and most important Master your PSYCHOLOGY. Trading with fear is the number 1 reason people are not successful in trading in my opinion.

The point I made earlier about the candle formation is a great example. I had been trading for 6 months and was getting extremely frustrated about my losses. I then went on a webinar and was given that info.

I couldn't believe that I had never noticed this before. As soon as the webinar was finished I opened up the charts and you know the saying "I was blind but now I see"

All this time I had not noticed this point and it is now an integral part of my trading. You will continue to pick up small nuggets that will refine your trading and add to your strategy and then it will take off.

To Your Trading Success!

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Forex Trading Diary Friday 4th Dec 09

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Loss of 30 pips on cable on Wednesday but gained it back in the afternoon. The trade took so long I nearly fell asleep... Nearly two hours before I got back the 30 pips I lost. Not my kind of trade....

Today is non farm day which I am very much looking forward to. I took 30 pips on cable this morning but missed many more. Knowing a forex pairing is vital to trading it. Today cable began going long at 6.45 am.

As you know, I tend not to trade this until after 7 due to the false indications you get. But on this occasion the jump was too significant. So myself and Adrian my trading partner entered the trade early. He got in at a slightly better price and took 25 pips. I held on for 30 nice ones.....



Always much debate about trading announcements...I took an additional 20 pips to take my weekly number to above 100 and my daily number of pips to 50. We have a strategy to trade announcements, so I look at it as a calculated risk.



I made the trade more difficult as I did not adjust to Ig's trading rules change. When I finally had limits etc correct it had moved past my entry point. But looking at the news that unemployment in the US was better than expected! I assessed it was good for an additional 20 pips.

If entry had been where I originally wanted I would have taken 50 pips. All in all another great week, over 100 pips again and a nice percentage growth in my account.

To Your Trading Success!

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Day Trading Diary Tues 1st Dec 09

A week of announcements ahead, in particular non farm on Thursday. I tend not to trade the announcements but non farm is an exception.

Due to this being the first week of the month you have to be cautious because sometimes the Forex pairings will channel before the non farm announcement on Thursday.

Thankfully no major channeling so far this week, the forex markets have continued to be liquid. Not sure if we have the Dubai continued speculation and issues to thank? But I am 99 pips up in two days.

I placed another two trades today, one at 7am the other around 8.05am. Both trades one of 30 pips and one of 17 pips struggled a bit at a couple of psychological levels then raced through for the pips!

(Cable trade)



(Cable second trade)



Ftse opened at 8 and the up swing in stocks also helped cable break through giving me another entry point above the pivot at 16483. The exit which is the most important part of a trade, was to get out before 16500.

To Your Trading Success!

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Forex Trading Diary Monday 30th Nov 09

I attended the forex millionaire summit this weekend. A very interesting event and featured some great speakers such as Sandy Jadeja from spreadbettingtowin. Lots of speakers offering different guaranteed systems and the promise of making big money straight away!

But only a few really making the point that without the correct psychology / mindset then systems generally will not help! Friends and fellow traders Martin and Kate also attended the event.

The first day had the usual suspects such as Knowledge to action and win investing. I have taken many courses including one from each of the companies mentioned above. I could have saved a lot of money... but you live and learn.

If I was to offer some advice...... Well for me personally win investing was the worst course I have ever paid for on trading. I admit it was over three years ago. But since I took the course, I have still to come across anyone who has given it a glowing reference!


The below video is gives you a quick look at the event.




Earlier I mentioned Sandy Jadeja who has appeared on bloomberg and many investment shows. Sandy also writes for investor chronicles the Times and many more. On Sunday I had the pleasure of having a private chat about teaching and trading the markets.

He talked a lot about tough love in his trading methods. In his presentation he gave no guarantees on his course and was very specific in our discussion that he teaches you to trade. He does not offer you a guaranteed system as many do. But his system is simple and what you get is what you put in.

I asked if he is prepared to mentor people? His answer was a straight no, this is mainly because the goal of trading for him is to free up time. He cant offer mentoring if he cannot fully commit and like wise passing you onto his team of people as others do, is not in his opinion mentorship!

He's a great guy and gave a massive amounts of value in our discussion. I have taken his e-mail address for future communication. His video of January this year is still very close to the current market conditions. It has some great nuggets that can help improve all our trading!


Sandy Jadeja - Talking about dealing with fear and more when trading!




Onto the Forex trades this morning. Two trades on cable to be precise for a nice 51 pips gain. I have pulled off the actual entry as shown by the broker and posted it below. Over the last 10 days cable has been very volatile moving on average 100 - 200 pips per day.


I just want around forty of them. I pay most attention to price action and less on psychological levels. You need to learn how each forex pair behaves as they are very different. Cable being sensitive to most news, fell massively last week due to the problems in Dubai.

The trend has continued this morning and lots of pips on offer again. The key to this trade was the aggressive drop of the candle at 7.45 am using a 5 min chart!

Date: 30 NOV 2009
Reference: DIAAAAAEJ7AQYAS
Size: Buy to close
Open Level: 16503
Market: Spot FX GBP/USD 30 NOV 2009
Level: 16476.6

Date: 30 NOV 2009
Reference: DIAAAAAEJ6RSXAJ
Size: Buy to close
Open Level: 16543.8
Market: Spot FX GBP/USD 30 NOV 2009
Level:16518.8


(Cable trade)



To Your Trading Success!


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Forex Trading Diary Friday 27th Nov 09

Five for five so.....Err high five I think!? As the Americans would say awesome! My apologise for not wishing the yanks a happy Thanks giving yesterday! I'm writing this blogg at 7.31 am in the UK and have just taken another 30 pips off Cable (Pound / Dollar)


I believe we have to thank Dubai for the downs of cable this week!Having said that virtually every pair on the pivot strategy went between 7 and 7.30am this morning! I have captured 1 pivot strategy trade and my 30 pips on cable!


(Cable Breakout 30 pips)



(Usd/Cad Pivot strategy)



I end the week with on a significant Milestone....I have got more points but never without a loss. This week there were no losses and I read the markets correctly. For that I am very pleased!

I'm am teaching the advanced Traders at Investment Mastery today. It's good to help people who are also looking to breakout of the RAT race!

I will also be at the Forex Millionaires summit this weekend. I am crewing at the event so I can keep in touch with what new developments and advances the industry may have had. Its great to also get other experts opinions on trading. You can always learn more!

Some great speakers so I will have some interesting points for the blogg.

To Your Trading Success!

Day Trading Diary Thursday Nov 26th 09

I start today's blogg with a play on the Jay Z song "I have 99 problems but trading is not one". This is because I took another 29 pips this morning to have a total of 99 so far this week. Sometimes its good to celebrate...But not too much!

A strong week of trading with potential to be my best ever. If I round up all the fractions its actually 101 pips so far.

I traded cable again at 2pm yesterday afternoon after it channeled from 12 o'clock. My entry points were 16692 and exit around 2.35pm at 16670. Similar set up to my trades in the morning. This time the volatility is created by the US market opening as opposed to the European market at 7am.

It broke below the 16700 mark and confirmation was given by the histogram showing a short trade.


On to this Morning, I had a hairy 15 minutes when my trade was channeling. I had the option of 10 pips which was offered 4 times to me!



I remained stubborn and held on for it to finally drop below 16630 and then on for 29 pips. Had I played this on the hour strategy there was 40 on offer. If this had been played on the pivot strategy there was 30 pips on offer!

I wrote on my twitter site today, could cable repeat last weeks huge drop. The Americans are on thanks given today but this did not make any difference. There was a drop of 200 points virtually the same as last week. Proving again that its the most liquid pair and how the forex market does not rely on the US!

On my point on the banks from yesterday....All I can say is the bloody £$%^&&* if this does not show how the bank cartel and money makers stick together then you are blind! Take your future into your own hands.

That's what I do with trading, if you stay in the system they will always keep you poor!

To Your Trading Success!

Forex Trading Diary Tuesday 25th Nov 09

I meditated for a bit too long this morning. I didn't open the charts up until 6.50 am, cable (Pound/Dollar) was already moving. Easily could have got in at 16,638 for a long trade, that's because the histogram had just changed to indicate going long.

But I didn't like the fact that the European markets had not opened. I then revised my entry to above 16,650. This was broken at the usual time of 7.30 am. This Morning I was joined on my skype discussion by Kate.

We talked about how myself and Adrian trade the breakout of Cable in the morning. We also looked at what indicators are best and how to read them. At the same time of our discussion cable broke through the level I had set for entry and we all entered the trade.



As the chart says my entry was 16,654, Kate took 15 pips Adrian 12 pips to add to his total of 30 pips so far this morning. I waited a bit more than normal and held on for 20 pips on break of the next pivot at 16,670. Not really my style but my stop loss was at break even so I was playing for free.

Could be a bumper week and I'm looking forward to the announcement today of bank charges. Lets hope the government do the correct thing and allow many people across the UK to claim back the rip off charges.

Even better is if they allow consumers to claim back up to 1995 instead of 2007! Martin lewis will be happy, So will I...Very happy!

To Your Trading Success!

Forex Trading Diary Tuesday 24th Nov 09

Took a nice 15 pips on my Forex pound dollar trade this morning. No bells and whistles, got in underneath the 50 level at 16,545 but I.g filled me in at 41 (Slippage) So I took 15 pips instead of 20. This was due to the pivot at 16,520.

It retracted many times from this level, I could have scalped a total of 45 pips this morning using the same entry points on retraction!



Pivot strategy on usd /cad came in with 28 pips as well as many more on the other pairings I look at. I don't have time to take screen shots so I will leave you with the two!


The weather is still miserable but trading is not thankfully, so be positive and have a great day!

To Your Trading Success!

Forex Trading Diary Monday 23rd Nov 09

No updates for a week, very sorry. The most interesting trade Last week was my loss on Monday, although I did end the week plus 40 pips. So Last Monday (16/11/09) I made a school boy error and fell asleep when trading! Yes I know, I felt so stupid but I did have a good reason.

Trading on 5 mins time frames can tend to mean I'm always watching the trades, instead of leaving it after it has been triggered to do its thing. Had I been awake on Monday I would have noticed that cable failed miserably to break the 50 level three times.

On the third occasion I would have exited the trade. But when I awoke out of my slumber there was an announcement that had sent the trade the wrong way. Not a good way to began the week, 30 pips loss to make up!

Onto this week and today at around 8.10 am I was feeling as sick as a parrot. Psychological warfare of the trading mind is always a big issue. My loss last week was still in the back of my mind. This morning the movement on pound dollar began at 7 am as soon as the markets opened.

It moved for a long trade virtually straight away.I then waited an hour while it attempted to clear 16,550, at one stage I had 16 pips but was holding out for 20. When the ftse opened at 8 am my long trade retracted significantly. This happens all the time and is why I place my stop below the ma 20.


Having loss the previous Monday and also so close to 20 pips this morning I made the subconscious decision not to lose! My stop loss was the other side of the ma 20, I really should have stayed in the trade. But I took myself out at break even.

Trading has that knack of maximizing your mistake. Soon as I exited the trade it bounced off the ma 20 and in 10 mins I would have got my maximum limit of 30 pips!



I continued to observe Pound Dollar while talking on Skype to my trading partner Adrian Clarke. We noted the long term up trend on both strategies so looked for a breakout of the channel. The 16,000 level was going to be the next significant test on the upward trend.

I waited for the retraction after the test of 16,000 and then entered the trade when I gained confirmation of the histogram change at 15,995. With how long the trend had been going for I set the limit to 15 pips only.

Although myself and Adrian had set entries I didn't declare I had entered the trade? Half way through he asked if I was in? I came clean and explained that I was nearly at my limit. At which point Adrian confessed to also being in the trade 10 pips earlier using the forex 1 hour strategy. He is a sneaky bugger Adrian.



I would have only found out about that trade after he had taken the points. We did have a good laugh about it, but in all seriousness I should have taken 45 pips today!

To Your Trading Success!

Forex Trading Diary 3rd Nov 09

The Forex markets have been buoyant for two days. All three strategies I trade made some great gains today. The announcements of the bailouts of the banks (again) I believe had an impact on the markets.

Most of the Forex pairs went into free fall. I took 10 pips on the breakout on Pound Dollar initially, but using the pivot strategy there was 27 pips available.



The Forex Pivot Strategy came through with so many points today it was stupid. You could have played all the pairs or picked which one you wanted! The Pound Dollar entry points are below using the meta trader charts.

(Pound / Dollar)


Pound Yen also had a nice trade today, there was 36 pips on offer. I don't trade pound Japanese yen due to how big the spread is. 6 - 8 pips means you are down a lot of points before you start making money!

(Pound / Yen)


I have not included the Forex trade on Euro Dollar which was also a successful trade. The dax strategy also came through with a nice 15 pips. The webinar on Sunday introduced the rolling stocks strategy that is normally taught to the beginners to the advanced trading group.

I personally did not go on the beginners course as I went for the aggressive advanced trading, which is based on spread betting. But some of the guys playing this have had some great success and huge gains applying spread betting to normal stocks.

Due to this Marcus has now made this information available to all the advanced traders. I am now looking at this because the gains have been huge for the guys applying the strategy. We are in November and the reason I have mentioned the rolling stocks is because I am planning for 2010.

I know what I want to do and achieve. The how is slowly coming because I'm focused, determined and always write my goals down:)

To Your Trading Success!

Day Trading Diary Mon Nov 1st 09

Good morning all, I hope you all had a great weekend? I have started the week well with a nice early morning drop on cable for 20 pips. No real reason but a nice drop anyway? Was actually going to wait until 16,424 to trade the breakout as that was the safe break from the morning channel.

But at 7 am cable broke the pivot point and dropped significantly to suggest it was going to drop quite a bit more. It was the first red candle and normally you get 3 histogram was not ideal but was worth the gamble..So I got in at 16,445 and out at 16,425



At 8 am with the opening of the ftse I also got in again and scalped another 10 pips when it broke the 400 level. Again many pips on offer but 30pips on Monday in total is a good start to the day and week!

To Your Trading Success!

Trading The MACD Divergence

I think this is a great article on the use of macd in your trades!

by Boris Schlossberg,
Moving average convergence divergence (MACD), invented in 1979 by Gerald Appeal, is one of the most popular technical indicators in trading. MACD is appreciated by traders the world over for its simplicity and flexibility because it can be used either as a trend or momentum indicator.

Trading divergence is a popular way to use MACD histogram (which we explain below), but, unfortunately, the divergence trade is not very accurate - it fails more than it succeeds. To explore what may be a more logical method of trading MACD divergence, we look at using the MACD histogram for both trade entry and trade exit signals (instead of only entry), and how currency traders are uniquely positioned to take advantage of such a strategy.

MACD: An Overview
The concept behind MACD is fairly straightforward. Essentially, it calculates the difference between an instrument's 26-day and 12-day exponential moving averages (EMA). Of the two moving averages that make up MACD, the 12-day EMA, is obviously the faster one, while the 26-day is slower. In the calculation of their values, both moving averages use the closing prices of whatever period is measured. On the MACD chart, a nine-day EMA of MACD itself is plotted as well, and it acts as a trigger for buy and sell decisions. MACD generates a bullish signal when it moves above its own nine-day EMA, and it sends a sell sign when it moves below its nine-day EMA.

The MACD histogram is an elegant visual representation of the difference between MACD and its nine-day EMA. The histogram is positive when MACD is above its nine-day EMA and negative when MACD is below its nine-day EMA. If prices are rising, the histogram grows larger as the speed of the price movement accelerates, and contracts as price movement decelerates. The same principle works in reverse as prices are falling. See Figure 1 for a good example of a MACD histogram in action.

Figure 1: MACD histogram. As price action (top part of the screen) accelerates to the downside, the MACD histogram (in the lower part of the screen) makes new lows

Source: FXTrek Intellicharts

The MACD histogram is the main reason why so many traders rely on this indicator to measure momentum, because it responds to the speed of price movement. Indeed, most traders use the MACD indicator more frequently to gauge the strength of the price move than to determine the direction of a trend.

Trading Divergence
As we mentioned earlier, trading divergence is a classic way in which the MACD histogram is used. One of the most common setups is to find chart points at which price makes a new swing high or a new swing low but the MACD histogram does not, indicating a divergence between price and momentum. Figure 2 illustrates a typical divergence trade.

Figure 2: a typical (negative) divergence trade using a MACD histogram. At the right-hand circle on the price chart, the price movements make a new swing high, but at the corresponding circled point on the MACD histogram, the MACD histogram is unable to exceed its previous high of 0.3307. (The histogram reached this high at the point indicated by the lower left-hand circle.) The divergence is a signal that the price is about to reverse at the new high, and as such, it is a signal for the trader to enter into a short position.

Source: Source: FXTrek Intellicharts

Unfortunately, the divergence trade is not very accurate - it fails more times than it succeeds. Prices frequently have several final bursts up or down that trigger stops and force traders out of position just before the move actually makes a sustained turn and the trade becomes profitable. Figure 3 demonstrates a typical divergence fakeout, which has frustrated scores of traders over the years.

Figure 3: A typical divergence fakeout. Strong divergence is illustrated by the right circle (at the bottom of the chart) by the vertical line, but traders who set their stops at swing highs would have been taken out of the trade before it turned in their direction.

Source: Source: FXTrek Intellicharts

One of the reasons that traders often lose with this set up is they enter a trade on a signal from the MACD indicator but exit it based on the move in price. Since the MACD histogram is a derivative of price and is not price itself, this approach is, in effect, the trading version of mixing apples and oranges.

Using the MACD Histogram for Both Entry and Exit
To resolve the inconsistency between entry and exit, a trader can use the MACD histogram for both trade entry and trade exit signals. To do so, the trader trading the negative divergence takes a partial short position at the initial point of divergence, but instead of setting the stop at the nearest swing high based on price, he or she instead stops out the trade only if the high of the MACD histogram exceeds its previous swing high, indicating that momentum is actually accelerating and the trader is truly wrong on the trade. If, on the other hand, the MACD histogram does not generate a new swing high, the trader then adds to his or her initial position, continually achieving a higher average price for the short.

Currency traders are uniquely positioned to take advantage of this strategy because with this strategy, the larger the position, the larger potential gains once the price reverses - and in FX, you can implement this strategy with any size of position and not have to worry about influencing price. (Traders can execute transactions as large as 100,000 units or as little as 1,000 units for the same typical spread of three to five points in the major pairs.)

In effect, this strategy requires the trader to average up as prices temporarily move against him or her. This, however, is typically not considered a good strategy. Many trading books have derisively dubbed such a technique as "adding to your losers". However, in this case the trader has a logical reason for doing so - the MACD histogram has shown divergence, which indicates that momentum is waning and price may soon turn. In effect, the trader is trying to call the bluff between the seeming strength of immediate price action and MACD readings that hint at weakness ahead. Still, a well-prepared trader using the advantages of fixed costs in FX, by properly averaging up the trade, can withstand the temporary drawdowns until price turns in his or her favor. Figure 4 illustrates this strategy in action.

Figure 4: The chart indicates where price makes successive highs but the MACD histogram does not - foreshadowing the decline that eventually comes. By averaging up his or her short, the trader eventually earns a handsome profit as we see the price making a sustained reversal after the final point of divergence.

Source: Source: FXTrek Intellicharts

Conclusion
Like life, trading is rarely black and white. Some rules that traders agree on blindly, such as never adding to a loser, can be successfully broken to achieve extraordinary profits. However, a logical, methodical approach for violating these important money management rules needs to be established before attempting to capture gains. In the case of the MACD histogram, trading the indicator instead of the price offers a new way to trade an old idea - divergence. Applying this method to the FX market, which allows effortless scaling up of positions, makes this idea even more intriguing to day traders and position traders alike.


To Your Trading Success!

Day Trading Diary 20th 0ct 09

I have had two classic Pound dollar trades this week. Its been very consistent and unlike yesterday I made sure I was in the trade! The skype trading group had a big difference of opinion this morning. Some played the breakout strategy while others went long using the pivot strategy also on pound dollar.

It took me 5 Min's to get my pips after the movement at 7.10am, what has made the trades classic is the way it has been channeling. It means the breakout is very clear and less risky. As I said I chose not to play the pivot strategy and took 20 pips as a breakout with limit set for 30 (Just in case).



At the time of the screen shot it looks like cable is showing in decision. It actually reversed and a few people lost. Just a question of experience really I do trust the pivot strategy but did not trust the time. I have much work to do this week, I have two trading plans to review as well as a months trading results of one of the new advanced traders.

Great news to hear that J (Wont give her real name) took action after my consultation and has created her trading plan. She is going to do very well and won her first trade! If you would like additional coaching please e-mail me at Kofi.oppong1@btinternet.com

To Your Trading Success!

Day trading diary Mon Oct 17th 09

Markets were buoyant today, unfortunately I missed all the major moves. Because of this it will only be a quick update.I only took 8 pips and really don't want to be reminded of my misses! Lots on this week with teaching on Friday and meetings booked all over the place.



The pound yen had a big move down as well this morning. I counted 4 pairs that awoke from slumber at 8am for some crazy reason. Apart from ftse opening there was nothing special that I knew of that would affect the markets at that time? It just seemed like 8 was the magic number today!



Off to do some other things today, hope the trading community had a better morning than mine!

To Your Trading Success!

Trading Diary 16th October 09

Just one of those days....Great track by Monica and I should remember the second verse "Don't take it personal" What am I on about? Well I woke up and my 3 network was down. It decided to begin working again at 7.30.

When I logged on my favourite trade which is the Pound Dollar forex breakout, was done and dusted. It was a very nice move but sadly I was not in it and missed 30 easy pips and more. I would have ended the week on 120 pips if I had placed this trade!

(Cable Breakout)


Forex Pivot Strategy

I have found the grey background seems to give a better picture so you can see the trade. I will now show more on this strategy's performance. You can now view the trades much more clearly to compare on your own charts.

Some great moves this week and very successful, I unfortunately missed the best one today on the Euro Dollar. I play this strategy by setting oto's (Order To Open) but was too late after Internet connection to place the trade.

I then ended up in a Dollar Yen trade but went out and missed break even. It went wrong so I cut my losses and ended the week up 60 pips! As I said I wont take it personal!


Its Friday again and I have Arsenal to bash Birmingham to look forward to! A good week with the highlight of meeting Brad Sugrars of Action Coach on Wednesday. You gain an understanding of why top people like him are successful. I took away lots on business that I can implement straight away.

I shall be teaching the new advanced traders next Friday. With a more mechanical ForexStrategy it is even easier to pick up.

Have a great weekend all!

Trading Diary Thurs 15th Oct 09

Did not trade yesterday as I attended the Brad Sugar event on business in Fulham. Got a nice 17 pips early morning on cable today, the nice type of in and out trade in 5 minutes. When I woke at 5.50 am gbp/usd had been channeling very nicely.

It made one attempt to break the mid pivot at 16072. It actually reached 16074 but I refused to take the trade because it was not 7 am and when Frankfurt opens it can send it anywhere.

It retracted and then dropped for two candles before going long. All signs were looking good so I entered the trade as soon as it broke the mid pivot again at16073 and exit 5 minutes later before the main resistance pivot line at 16100.



From my entry time of around 7.15am cable moved over 100 pips for the next three hours. No real reason for the move but plenty on offer.

I also traded usd/jpy for 15 pips and a sneaky trade on Eur/usd for 15 pips also. The latter two trades were using the pivot strategy that I have been testing and is now live.

Recession still on every ones mind, but if you follow the markets you will know that wall st is trying to break records. Interesting if you also follow the doom and gloom mentality of the press!

To Your Trading Success!

Dear Diary I lost Again - Shit No Trading Plan!

I have touched on this subject before, but I have recently been speaking to many traders and incredibly there are still many unaware of the importance of having a living breathing trading plan. So I thought I would revisit what it is and why you need one!

Not having a Trading Plan is as close to suicide as you can get in trading!

If you believe you can trade without one I suggest you donate your money to me or leave your front door open all night for a week! There are many ways to create a trading plan and I have included an article form investopedia which will help.

I have now really simplified my trading plan based around me. An example of this is my trading plan rule one "Mechanical Trading" I trade on set strategies which have a high success rate. Mechanical Trading means to me "Just Follow The Rules" I have a tendency to tinker with the strategy based on being a mechanic profile according to wealth Dynamics.

This also means I am not a natural at reading the markets and it could take me longer to reach a level of consistency, unlike someone like George Soros.

Because of this I tell myself everyday to follow the rules. Another example could be " When I have placed the trade I will not sit in front of the computer and watch" If you are emotional about watching money go up and down this is a must. Or switch that part of the screen off! Build some of your faults that you have into your plan.

If you are new congratulations, follow the rules below and you will save yourself a lot of pain and a hell of a lot of MONEY!

Building the Perfect Master Plan
What are the components of a good trading plan? Here are 10 essentials that every plan should include.

1. Skill assessment - Are you ready to trade? Have you tested your system by paper trading it and do you have confidence that it works? Can you follow your signals without hesitation? If not, it's a good idea to read Mark Douglas's book, "Trading in the Zone", and do the trading exercises on pages 189–201. This will teach you how to think in terms of probabilities. Trading in the markets is a battle of give and take. The real pros are prepared and they take their profits from the rest of the crowd who, lacking a plan, give their money away through costly mistakes.
   
   
2. Mental preparation – How do you feel? Did you get a good night's sleep? Do you feel up to the challenge ahead? If you are not emotionally and psychologically ready to do battle in the markets, it is better to take the day off - otherwise, you risk losing your shirt. This is guaranteed to happen if you are angry, hungover, preoccupied or otherwise distracted from the task at hand. Many traders have a market mantra they repeat before the day begins to get them ready. Create one that puts you in the trading zone.
   
   
3. Set risk level – How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things aren't going your way.
   
   
4. Set goals – Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders use will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a dollar loss per share, your goal should be a $3 profit. Set weekly, monthly and annual profit goals in dollars or as a percentage of your portfolio, and re-assess them regularly.
   
   
5. Do your homework – Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the S&P 500 or Nasdaq 100 exchange-traded funds up or down in pre-market? Index futures are a good way of gauging market mood before the market opens. What economic or earnings data is due out and when? Post a list on the wall in front of you and decide whether you want to trade ahead of an important economic report. For most traders, it is better to wait until the report is released than take unnecessary risk. Pros trade based on probabilities. They don't gamble.
   
   
6. Trade preparation – Before the trading day, reboot your computer(s) to clear the resident memory (RAM). Whatever trading system and program you use, label major and minor support and resistance levels, set alerts for entry and exit signals and make sure all signals can be easily seen or detected with a clear visual or auditory signal. Your trading area should not offer distractions. Remember, this is a business, and distractions can be costly.
   
   
7. Set exit rules – Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don't want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don't take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.
   
   Before you enter a trade, you should know where your exits are. There are at least two for every trade. First, what is your stop loss if the trade goes against you? It must be written down. Mental stops don't count. Second, each trade should have a profit target. Once you get there, sell a portion of your position and you can move your stop loss on the rest of your position to break even if you wish. As discussed above in number three, never risk
more than a set percentage of your portfolio on any trade.


8. Set entry rules – This comes after the tips for exit rules for a reason: exits are far more important than entries. A typical entry rule could be worded like this: "If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here." Your system should be complicated enough to be effective, but simple enough to facilitate snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult if not impossible to actually make trades. Computers often make better traders than people, which may explain why nearly 50% of all trades that now occur on the New York Stock Exchange are computer-program generated. Computers don't have to think or feel good to make a trade. If conditions are met, they enter. When the trade goes the wrong way or hits a profit target, they exit. They don't get angry at the market or feel invincible after making a few good trades. Each decision is based on probabilities.
   
9. Keep excellent records – All good traders are also good record keepers. If they win a trade, they want to know exactly why and how. More importantly, they want to know the same when they lose, so they don't repeat unnecessary mistakes. Write down details such as targets, the entry and exit of each trade, the time, support and resistance levels, daily opening range, market open and close for the day, and record comments about why you made the trade and lessons learned. Also, you should save your trading records so that you can go back and analyze the profit/loss for a particular system, draw-downs (which are amounts lost per trade using a trading system), average time per trade (which is necessary to calculate trade efficiency), and other important factors, and also compare them to a buy-and-hold strategy. Remember, this is a business and you are the accountant.
   
10. Perform a post-mortem – After each trading day, adding up the profit or loss is secondary to knowing the why and how. Write down your conclusions in your trading journal so that you can reference them again later.

As a tip and while you are learning I would recommend FAPTURBO to build up your pot. They are now extremely reliable and will keep you winning while you learn to trade! I know people who are doing exactly that to beat the markets while they donate to the spreadbetting funds during early years of trading.



To Your Success!

Trading Diary 13th Oct 09

After two weeks of events and meetings I finally get to update my blog with some trades. Early morning cable breakout yielded a nice 15 pips below. Had I stayed in longer there was 30 pips on offer.

My trading style means I pay less attention to the long term trends or resistance lines many of the forum guys focus on. Your comments would be appreciated if that would be useful.



The recent advanced traders have been making some really strong pips.
Mainly using the new Pivot strategy on Forex but also trading the old ftse strategy modified for the Dax by Phill.

Whats even more important is they trade without fear. The key area were trading is won or lost. Phill is now looking after most of the analysis for the group and is doing a fantastic job.

In recent analysis it has emerged that the oil trade is our most successful with only 1 loss since since April. If you follow the rules you would have gained 450 pips so far this year. I am now playing this strategy when the signs are correct!

The new pivot strategy on forex is working really well. Not happy with quality on charts so will adjust them so they are better to view the trades. Meta trader takes some getting used to.


Fantastic Trading!

Speaking At The Property Pin Event For Simon Zushi!

On Saturday the 26th September I talked at the Simon Zushi property network events for his previous graduates, about the psychology of trading.

Simon as a property entrepreneur has always used different techniques to to improve the mindset of his property students, when teaching them the various strategies to build a property portfolio.

In previous events he has used wealth dynamics to encourage team building among his students and also to identify what different qualities you may need in your own mastermind team to be successful.

(Franscois, Simon Zushi, Janine and me...Dinner and school disco event)

Trading is very similar and requires Discipline (Which means repeating the good things that you do - Not as most people believe - Hard work!) It also requires you to take action and not least to conquer your fears.

I was part of the first mastermind group that Simon began with almost two years ago and have since as you know, evolved to trading.

But the learning I gained will support where I place my profits from trading, as I build assets for my future and create additional passive income.

It was a pleasure to speak in front of other mastermind groups as well as my own. In addition I would highly recommend Simon if you you decide to take up property. He is extremely ethical and his teaching of property is the best around.

We ended the night with a reunion dinner with a school dinner theme! Very entertaining!

I ended my speech with the classic quote of Albert Einstein:

Insanity is doing the same thing over and over again and expecting different results!

What are you doing to achieve your goals? Are you on the rat wheel turning over and over again but not really going anywhere? Without asking yourself this question everyday you will find life a huge struggle to improve.

To Your Trading Success!

Trading Diary Wed 16th Sept 09

Continued testing new strategy and would have had 50 pips on USD/JPY. I am now looking at forex pairs that I stayed clear of in the past as it works even better on them. There was a huge move and it took just over 40 Min's to get 50 pips.

I am trading using half hour candles and there seems to be many more trades. This is because there are more resistance and support lines.

(Meta trader USD/JPY Chart)

Big move as you can see from chart entry at 14973. The spreads on the forex pairings are very different and this needs to be taken into account before I place my trade.

Happy Trading