Forex Trading Tips and Tricks - Recognizing Consolidations

(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 really busy for past weeks and have no time to post on my blog.  Below is an extract from my training materials which I have been busy with.

It is important to recognize market consolidations because this is where most traders lose money and because the consolidations can stretch into few months, many traders thought that their trading system do not work and give up trading entirely or went on searching for  new trading systems.  And again, the systems seem to work for a while and "stopped" working when market goes into consolidation.


The blue rectangles are the consolidation zones, but not all consolidation are trading range.  Thus, the application of your techniques need to be clear.  All these are part of learning how to understand the market.

2010-10-21 AUDUSD Live Trade

I conducted a Forex workshop yesterday and during the live market analysis, I illustrated the use of Hexametry Framework to make trade plans.  Fortunately and unfortunately, the setup came around 11pm which is after the workshop.  Unfortunate is because I could not illustrate the follow through of Hexametry.  Fortunate is because I get to trade when I came back home.  :-)

Below is the chart for the trade

Free Workshop

I would be conducting a workshop at Traders Round Table on 21st of Oct, 7pm.

In this workshop I would share our Hexametry Framework.  How it helped with my trading and at the same time helped me to self learn along the way.  In the workshop I am going to illustrate how to put Hexametry Framework at work using Oct's NFP news as an example.

Register for free using the below link through Traders Round Table's website

Register for the workshop


What: FX Trader’s Framework by Eric Lye

When: Thursday, October 21, 2010 7:00 PM

Where: POMO Mall (Fomerly Paradiz Centre)
#03-04/05/06,1 Selegie Road, (S) 188306
Singapore

GBPUSD 2010-10-04 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.)

I am still bullish on GBP/USD

2010-10-01 GBPUSD Live Trade

(This is a live trade shared by Eric Lye in his Forex Trading Blog.  The purpose is to share how we trade and provide the learning points.  Note that there is no absolute right or wrong about a trade, it is all about managing it well)

After being sabotaged by someone from UK on  Tue, avoid the pair till today which has a much wider range, i.e. greater potential.

Trading Price Action Workshop on 6th Oct

Date / Time : 6th Oct, Wednesday, 7:00pm - 10:00pm
Venue : SMU - School of Econs and Social Science (Seminar Room 2.10) -
Opp. Hotel Rendezvous
Fees : US$30 per person (via Credit Card or PayPal upon RSVP)
RSVP here : http://www.meetup.com/forextrading-152/calendar/14944986

Workshop Outline :
* Price moves in WAVES!
* Understanding of Price Action through Multiple Time Frames (MTF)
* Finding the Flow
* Identifying Setups
* Timing yourself into the market with Reasonable Risks
* Hands-on Practice (IMPT : Bring your laptops!)

Let the market do its job???

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

There is a saying of after you have put in your entry, let the market do its job.  I can't possibly argue that this statement is wrong, however we can't be applying it blindly as well, especially when you are not trading well.


I have seen traders lost control because of this kind of thoughts.  Especially when they have recent losses, the 2nd voice in the head would say something like "arrggh... why am I wrong, why I didn't take the 30pips first...".  

Then next thing that happens, they see the usual setup, went for the entry and close their computer and let the market do its job.  I can't say much for people that are trading part time and do not rely on trading for a living, but for those are doing it for a living or trying to make trading a full time career, I do not think that market has a job to do.  The trader should do his/her job - i.e. manage your trades and yourself.


Trying to trade with your eyes closed is no different from driving on the road with your eyes closed.  It is suicidal.  Then again, I would hear traders saying they have to stay away from the computer so that their psychology won't be affected.  And to me that is really a lame and lousy excuse.  Most successful business did well not because they have a unique product or in our case a special, reliable trading strategy or system; they did well because the manage their operations and risks well.  Thus, as traders we need manage our trades and risks well in order to make this business of us profitable.




Written by
Eric Lye