Trading Psychology

(This is an mini article series to encourage traders to learn how to be a better trader written by Eric Lye)

Trading psychology   has been a big topic in the trader's world.  However, there are too many that use it as an excuse for losing.  Like we always said, trading is a business. Do you blame on your psychology when things are not working well in your business?


Clearly, any successful business man will tell a straight "No!".  


Making losses can be due to wrong assessment of the market, bad execution, or lousy management or making decision at the wrong timing or with wrong basis.


To make good assessment (notice I didn't say right assessment) of the market, you need to have good understanding of the market and how you approach the market.


To repeat good execution, you need to know the exact mechanics of the way you trade.  Good techniques and skills come from relentless practices and training.


To manage properly, you need to understand your risk and how you should manage your money.  Know when to be aggressive and conservative.  The market is dynamic, you can't have just a single mindset to deal with it.  Adaptability becomes the key.


To make the right decisions, you need to know yourself, your own character and choose the right opportunities to make trading decisions ("choose your old battle ground, do not fight all battles") with sound basis and never (almost) by emotions.


In summary, trading psychology to me is all of the above.

Forex Trading Tips and Tricks - Managing Expectations

(This is a mini-series of Forex Trading tips and tricks by Eric Lye in his Forex Trading Blog.  Our objective is to help traders learn how to trade Forex properly, be educated and excel in their career)

I have been speaking to some of our traders lately.  One thing we noticed about the market is that there are days where the daily range is less than 100, 120...  This means when we went into some intra-day trades, we are not going to get much.


If you hang on to the risk-reward concept that is only looking at the absolute numbers, then you are going to feel miserable.


Adapt to the market, take whatever the market gives.  This would be my advice.  Or look at H4 to seek out the right level to go into intra-day trades, thus avoiding the small sub waves that can only give you 40pips reward.

GBPUSD 2010-07-20 Analysis

(Technical analysis done by Eric Lye in our Forex Trading Blog.  The purpose is to share how we analyze the market and put ourselves on the side of higher probability of things happening.)

Below link is my analysis done in a different format.

https://docs.google.com/leaf?id=0B8xsTBSOzNmjMzAzZWFkYTEtNTBmOC00ZmUyLTk2NzktYjA2OGI5ZTUyZjli&hl=en&authkey=CJDY1cAB

Forex Trading Tips and Tricks - Trade Management

(This is a mini-series of Forex Trading tips and tricks by Eric Lye in his Forex Trading Blog.  Our objective is to help traders learn how to trade Forex properly, be educated and excel in their career)

When I talked to some of my traders now, I can clearly distinguish two types of traders. One that is still learning how to trade, the other already know how to trade.


For the traders that already know how to trade, we rarely talked about how to get into entry, price, timing, whatsoever.  It's all questions revolving how to manage this trade.


This is a reason why we never blindly follow any system.  This is because trade management is the real key to profitability.

Phew...

Finally got out June's slump.  had 7 consecutive positive days since Jul-1 and managed 4.8% gain on equity....

A Market Forecast that says Take Cover

 

Published: Sunday, 4 Jul 2010 | 4:51 PM ET

By: Jeff Sommer 

A Market Forecast that says Take Cover

AUDUSD 2010-07-02 Analysis

(Technical analysis done by Eric Lye in our Forex Trading Blog.  The purpose is to share how we analyze the market and put ourselves on the side of higher probability of things happening.)

Potential morning star candlestick pattern forming on day chart.  This present opportunities for some upside