(This is an mini article series to encourage traders to learn how to be a better trader written by Eric Lye)
All traders like to be right, but at the same time they are worried that they are right when they are not in any position (missing of trades). This is a constant struggle that a Forex trader faces every trading day.
Chances are when we do not have a clear thought process, we start ourselves on the road of random trading (where most indicators traders would set themselves up if they do not have the fundamental skills of trading)
When we are in our ebb, losses keep coming back. There is nothing wrong with facing adversity and we need to do is to learn how to bounce back when we face losses.
Eric
Sunday, April 25, 2010
Friday, April 23, 2010
Trading is a Waiting Game
(This is an mini article series to encourage traders to learn how to be a better trader written by Eric Lye)
I was just describing to another Forex trader the other day. Trading is a waiting game, you would need to have the training of a sniper. Wait for the target (setup) to approach, wait for the right time to trigger (price). When we say sniper, we are not referring to the "accuracy" where a lot of people like to boast about their trading, we are referring to the patience of waiting, where most traders hate it. Trading can be counter intuitive.
If you trade like a guerrilla, in and out of the market as you react to the fluctuations of the market, you are likely not to succeed in trading. I do not mean you can't scalp, as scalping also require the trader to assess the market condition to look for the right moment to begin their battle. It is by no means to be random. Trading cannot be random. The time frame of trade is not as important if you know your basis of analysis. I use all time frames, as each time frame would provide me different information for different purposes.
Trade with a purpose, trade with a plan, trade with a right trading philosophy.
Eric Lye
I was just describing to another Forex trader the other day. Trading is a waiting game, you would need to have the training of a sniper. Wait for the target (setup) to approach, wait for the right time to trigger (price). When we say sniper, we are not referring to the "accuracy" where a lot of people like to boast about their trading, we are referring to the patience of waiting, where most traders hate it. Trading can be counter intuitive.
If you trade like a guerrilla, in and out of the market as you react to the fluctuations of the market, you are likely not to succeed in trading. I do not mean you can't scalp, as scalping also require the trader to assess the market condition to look for the right moment to begin their battle. It is by no means to be random. Trading cannot be random. The time frame of trade is not as important if you know your basis of analysis. I use all time frames, as each time frame would provide me different information for different purposes.
Trade with a purpose, trade with a plan, trade with a right trading philosophy.
Eric Lye
Wednesday, April 21, 2010
Bouncing Back
Many "gurus" out there claimed that to be a good trader, a strong psychology is needed. I do not dispute with this statement made, but I doubt they themselves understand what it means.
To truly appreciate the above statement, you need to be a real trader and experience the ups and downs, day in day out. Trader's psychology is not a physical thing, it is just the mental strength and mindset that is required to help traders sustain through the down period without giving up or do more damages.
In order to bounce back from losses (or the ebb state), you would still require your knowledge and skills to make the right trades and get back your trading form. And you would keep experiencing this cycle throughout your trader's life.
I just shared with some of my traders. I did not do well last week, but I kept cool about it and continued to encourage them as the market was a little difficult for the first few days. By Thursday, the clear signals appeared and I started my string of good runs, carried through this Monday and Tuesday. I managed to recovered all losses and add on with an extra 2% (ROE). The 2% is no big deal, but this is what we required from time to time - bouncing back.
To truly appreciate the above statement, you need to be a real trader and experience the ups and downs, day in day out. Trader's psychology is not a physical thing, it is just the mental strength and mindset that is required to help traders sustain through the down period without giving up or do more damages.
In order to bounce back from losses (or the ebb state), you would still require your knowledge and skills to make the right trades and get back your trading form. And you would keep experiencing this cycle throughout your trader's life.
I just shared with some of my traders. I did not do well last week, but I kept cool about it and continued to encourage them as the market was a little difficult for the first few days. By Thursday, the clear signals appeared and I started my string of good runs, carried through this Monday and Tuesday. I managed to recovered all losses and add on with an extra 2% (ROE). The 2% is no big deal, but this is what we required from time to time - bouncing back.
Monday, April 12, 2010
GBPUSD 2010-04-12 Analysis
Technical analysis on GBPUSD done by Eric Lye in our Forex Trading Room
[Monday]
[Tuesday]
Since there was no base form yesterday, there was no opportunity to go long. Trade what you see is exactly what we need. Price action tells us there is no support formed, thus there won't be any setup for entry. Remember, we do not have to trade all opportunities. If you miss, that is part of trading, learn to let it go. This was said by one of our full time traders who has gone through the ups and downs when we met up yesterday for a trading session.
For today, we continue to be on the bull side as long the bear is not out of the woods. Always wait for the market to tell us which direction it is going. Too much guessing becomes gambling.
[Tuesday Evening]
Four hours after I posted above chart, the opportunity presented itself and if you managed a good price, 100pips profit was possible.
[Wednesday]
Another possibility presenting itself?
[Monday]
[Tuesday]
Since there was no base form yesterday, there was no opportunity to go long. Trade what you see is exactly what we need. Price action tells us there is no support formed, thus there won't be any setup for entry. Remember, we do not have to trade all opportunities. If you miss, that is part of trading, learn to let it go. This was said by one of our full time traders who has gone through the ups and downs when we met up yesterday for a trading session.
For today, we continue to be on the bull side as long the bear is not out of the woods. Always wait for the market to tell us which direction it is going. Too much guessing becomes gambling.
[Tuesday Evening]
Four hours after I posted above chart, the opportunity presented itself and if you managed a good price, 100pips profit was possible.
[Wednesday]
Another possibility presenting itself?
Thursday, April 8, 2010
Trading Strategies
Recently, I got a lot of the similar questions. They asked me what is my trading strategy. "Do you see price action?", "Do you trade news?", "Do you trade support and resistance?", etc.
Well, I do all... but are these trading strategies?
Most people who are learning how to trade often look for systems, but after some time they said they give up looking for the holy grail and start hunting for trading strategies, which at the end of the day did not make a difference.
In the nutshell, they are just looking at "high probability" ways to get into the market, which is not going to bring them a long way in this business. Especially for those who are taught by so called gurus who told them when they see this this this, that that that, enter... and don't break a specific set of rules. (don't forget market is random and dynamic, how would a static and specific set of rules work in this kind of environment)
I don't have a specific "trading strategy", but what I do is I have a framework to help me to approach my trading in a consistent manner.
Understanding what is MTF, analyzing the market would give us our Road Map. With the road map, we define the Setup, knowing our exact risk and reward expectation, and time ourselves into the market. When things get a bit ugly, there are always options to Trigger at the right price and the right time. Nevertheless, the key to consistency is still knowing how to Manage our trades.
Well, I do all... but are these trading strategies?
Most people who are learning how to trade often look for systems, but after some time they said they give up looking for the holy grail and start hunting for trading strategies, which at the end of the day did not make a difference.
In the nutshell, they are just looking at "high probability" ways to get into the market, which is not going to bring them a long way in this business. Especially for those who are taught by so called gurus who told them when they see this this this, that that that, enter... and don't break a specific set of rules. (don't forget market is random and dynamic, how would a static and specific set of rules work in this kind of environment)
I don't have a specific "trading strategy", but what I do is I have a framework to help me to approach my trading in a consistent manner.
Understanding what is MTF, analyzing the market would give us our Road Map. With the road map, we define the Setup, knowing our exact risk and reward expectation, and time ourselves into the market. When things get a bit ugly, there are always options to Trigger at the right price and the right time. Nevertheless, the key to consistency is still knowing how to Manage our trades.
Monday, April 5, 2010
Hexametry for Traders - Trade Call on EURJPY 2010-04-05
This is an intraday Trade Call on EURJPY done by Eric Lye in our Forex Trading Room.
The purpose of the Trade Call is not to instigate my readers to trade, but rather to give more insights of how we trade. We trade on price action, we also trade based on our Hexametry framework. The framework is not a specific system nor a method. It is how we approach the market and manage ourselves as a trader.
[Monday]
There were good opportunities to long EURJPY for the past 2 weeks. I hope some of my readers have caught some moves. Anyway, EURJPY is pretty much is on a upward move, do look for opportunity to buy.
I'd take this opportunity to answer one of the frequently asked question. If I am "so sure" about my analysis, why would I not long at this point of time and wait for the move to come? The answer is - risk. I would like to make sure every time I trade, the risk is within my risk plan. There isn't a sure thing in trading, we are always dealing with probabilities and possibilities.
The purpose of the Trade Call is not to instigate my readers to trade, but rather to give more insights of how we trade. We trade on price action, we also trade based on our Hexametry framework. The framework is not a specific system nor a method. It is how we approach the market and manage ourselves as a trader.
[Monday]
There were good opportunities to long EURJPY for the past 2 weeks. I hope some of my readers have caught some moves. Anyway, EURJPY is pretty much is on a upward move, do look for opportunity to buy.
I'd take this opportunity to answer one of the frequently asked question. If I am "so sure" about my analysis, why would I not long at this point of time and wait for the move to come? The answer is - risk. I would like to make sure every time I trade, the risk is within my risk plan. There isn't a sure thing in trading, we are always dealing with probabilities and possibilities.
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