Staying On the Fresh Trail
I heard a very interesting story this weekend from a very good friend of mine while sitting around a late autumn campfire. He told of a time when he was younger and was on a mountain lion hunt in southern Utah. The group had chased two large cats down into a canyon. From his vantage point he watched the hound dogs try and pick up the scent of one of the cats. After approximately thirty minutes of watching the hounds search in a nearly single file line and in the shape of a figure eight. He came to the conclusion that the lion was not there.
Well five more minutes went by and he observed that one of the dogs the leader of the pack broke rank and started searching outside the path they had been on. And within moments he singled with a howl that he was on the scent trail again and sped off away from the rest of the pack. It wasn’t for quite some time later that the other dogs one by one brake the figure eight and headed off in the direction of the leader.
“Ham and Eggs: A days work for a chicken, a life lost commitment for a pig.”
For the record I love ham and eggs. This is not a plea for pita. I saw this quote and had Awe ha! Moment, I wanted to share.
Let me ask a personal question. How do you trade? Like a pig or like a chicken? A pig trader is one who jumps into the market unaware of the risks the conditions of the environment inexperienced in the navigational skills of forging the waters. They foolishly throw all they have at it with no thought of the consequences. They feel that the market owes them something after all the market was made for them just like the farmer’s slop. They fail to see the end result because they are caught up in the moment. They become all consumed by the moment that they fail to see that they are losing everything. The end of this road leads to a bleak end, nothing to show for it, and worse off than when they started out.
The chicken on the other hand produced small results every other day or so. Only because they developed the ability over time practiced and perfected do they lay an egg. Each time they do it does take effort properly selecting the right position to begin and knowing the outcome before entering the next box. The chicken trader understands the importance of process, effort and repetition. After each day a perfect little packaged, a record of the fruits of its labor. A little effort everyday results in a life of productivity.
Letter From Our Strategy User- Part 2
Traders response to my “any losses” question,
Jed,
Yes, I have sustained losses on this particular demo account, and in many other accounts as well. Not sure what you meant by the question. The losses are few, but they still come. As I briefly look over this demo, I am seeing roughly 15 wins for every 18 to 19 trades. So, about 75%, which could be better, but we’ll work on that.
I have played with several demo accounts, and one live account. Currently, my live account is now a 1:100 leveraged account while my demos are 1:100, 1:200, and 1:400. My numbers are fairly consistent on all accounts, and I am following the rules of the technique.
(My Advice)
Dear Trader
Good, I just want to make sure that you are having a real experience. This just helps to solidify the fact that this is a realistic strategy and not pie in the sky.
To further add to your question about the natural laws of economics. I have found an example from nature that I think will shed some light on my philosophy about investing and returns on said investments.
Letter From Our Strategy User- Part 1
This is a letter we’ve received from a strategy user and we thought it brought powerful insight that we would like to share with all of you.
Jed
Also, just to let you know, I find it quite amazing that two moving averages and the so-called “mao” can produce so many positive results. It is truly incredible, to say the least! So simple yet so powerful.
Please do share with me your thoughts regarding the natural laws of economics in relation to a personal account growing with such massive momentum. Let me explain what I mean.
I have taken this current MINI demo account from $10,000 to over $19,000 since yesterday morning by ONLY using your system. It is a 1:400 leveraged account, but I am only trading 1.5 to 2 percent of the capital per position. All trades are placed based off of H1, H4, and Daily trends while most entries are placed in the M5, M15, and M30 in order to take advantage of the immediate shift in trend. Currently, I have five positions open on GBPJPY with only 4.1 percent of my capital in the market (there are three very small positions open with two positions open of 1.2 percent each). This position, only counting the current equity held, has yielded over $2,800, which takes the total profit to nearly $22,000.
BUSINESS INSURANCE… When Trading?
When you have a typical business you buy all kinds of insurance. Examples might be:
1. Workers compensation
2. Property Insurance
3. General Liability Coverage
4. Business owners policies
5. Vehicle insurance
6. Employment Practice Liability Insurance
7. Business Interruption Insurance
8. Key man Insurance
9. Errors and Omissions Insurance
10. Directors and Officers Liability
Making a claim:
Here are some tips for making sure you come out ahead in any squabbles over how much your insurer will cover.
1. Keep Detailed Records
2. Be Prompt
3. Follow Up
4. Know Your rights
5. Hire a Lawyer
Here are some examples of Currency Trading Insurances:
1. Stop Loss
2. Only trading a small set % or your account 1%, 2%, 3%, 5% on any one trade
3. Only trading a total amount of your account at any one time. 5%, 10% … your choice
4. Keeping the Margin level % above 1000% ( you chose the level of coverage you want)
5. If your Margin Level % drops down to 500% close all of your open trades.
6. Take the total amount you have for trading and put ½ in a savings account then put the other ½ in you trading account. This way you will have some money to trade with if you lose you trading account.
7. Never add money to your account to cover a margin call.
8. If your account has a drawdown of 10% you stop trading until you figure out what you are doing wrong, or what you have changed from when you were making money.
Dealing With Your Broker
When we refer to our broker we are referring to the people we talk to when we contact that broker. It may be someone in the funding department, the accounts department, the client services department, or a person placing a trade for us. In any event they are people.
Yes the broker should be there to serve the client or trader after all it is the trader who keep the broker in business. Since we are dealing with people we will always get better service if we show a little tact and politeness toward the person helping us. If we are rude we may still get our concerns taken care of but how much better would it be if we treat the person helping us with a little kindness and respect. Little do we know that that person may have the answer to a question that we didn’t even think to ask.
Client Service people are more helpful, more flexible and more respectful to their customers if they are treated with respect. Show a little courtesy and be polite, see if that helps. You may not have any problems with your PR skills we just thought it would be good to know that employees a
Another Way To Stay In Control
I once heard a trader say that after he made some money in his account he would take out the original investment. Then he was only playing with money he didn’t originally have making the losses not hurt as much. It became easier to make money because he had taken the pressure off himself.
By doing this he was better able to stay in control of his emotions and not get caught up in trading the money. He was just trading period. He was better able to follow the rules and not get caught up with the placing of the stop loss, getting out early, letting the news bother him and listening to others. He could just concentrate on trading.
Find a way to forget the money and just think about the mechanics of trading and see what a difference it makes. When you are trading your demo account you don’t get as involved with the money, you can concentrate on following the rules and you make money and wonder why you cannot make money when trading your live account.
Just relax and read the market. Trading will become fun again.
How The Currency Market Stacks Up
I was reading an article in e-FOREX magazine. It was talking about a survey that was taken that highlights the activity of the foreign currency market. It said “Did you know that the market in daily Foreign Exchange volume is bigger than those of OTC Interest Rates, Us Treasuries, Us Equities and Europe, Middle East and Africa Equities put together?” WOW that is big.
The Daily traded FX volume has more than doubled between 2001 and 2007 but an increase by some 50% between 2007 and 2010 might once again still be expected. This will be largely due to the growing importance of Foreign Exchange as an asset class.
The article went on to say besides classical FX trading there is a growing importance of emerging market currencies. The most important emerging market currencies are the Hong Kong Dollar, Polish Zloty and South African Rand.
What we gathered from the Article is that the currency market is well and strong. We already know that it is a fun trade. So Learn and trade well.
Best or Worst trader Or Be The Best You Can Be
When studying traders that seem to have it all together learn concepts do not try to copy exact. We want to know what they did and exactly what happened. That is good in trying to learn but do not compare yourself to other people; Just compare yourself to your own efforts.
Yoga students do not compare them selves to the other yoga students that is detrimental. The same goes for trading. If we compare ourselves to other traders we may not know the real story. They may only be trading demo accounts. We hear people talk about how they made all these pips and it starts to make us feel like we do not know anything. But we do not know anything about the truth of that trader.
We ask how someone trades and no matter how much I am told about it I will not be able to do exactly what that trader did or does. The market moves and may not do what it did the last time. So I will not be able to create the same results. We need to learn concepts and read them for ourselves to be the best trader we can be.
Time Conversions
We get asked all the time about converting times, trading times, and market hours.
Here are two sites to help with GMT conversions and FX market hours:
www.timeanddate.com (see the ‘World Clock’ function)
Hope you enjoy and find a use for these two sites.
Jed