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ME Ok, so I failed to introduce myself and I apologize. Gmantrading is my alias, Edward Goettig is my name. No, I wasn’t a former FBI agent, (but played one often as a kid!) Trading currencies is one of my passions in life that I can enjoy and have fun and have been with the Investools for the last 4 years. Another passion of mine is technical analysis and that is why I went and attained my CMT (Certified Market Technician) designation from the MTA. So, instead of a focus on fundamentals like a CFA may be, I focus on the technicals as a CMT.

I started my career in the banking industry about 14 years ago. Before becoming a PHD-level coach for Investools, I spent several years on the trading desk for First Security Bank, NA. I also handled the bank’s solvency through the Federal Reserve Bank by actively managing a large account. My background includes experience in currencies, bonds, equities, options and futures. My trading style is more of a short term approach of things, I don’t know if it is because of my attention span or just that I feel more comfortable with the quick short move and action of the trade. Either way, that is what I do and trade. I trade mostly the majors and some crosses but stick with those items that work best for me.

That is a little about me and as a coach, I could go on and on and on. But, alas, I won’t!

~ G

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interview.jpg Recently I heard that one of our students, Sharyn Greberman, had an interesting story. She ended 2007 doing well with her trading despite the usual ups & downs. How this happened was neat to hear.

Since our interviews of coaches were popular in 2006, I thought it would be a good idea to do the same thing with one of you from time to time. I’m glad I did: Sharyn has some real gems to share. This is especially meaningful for me, because I remember when she first started with us, and watching her “grow” as a trader has been very satisfying. So here she is in her own words (with mine underlined):

I understand that recently you “crunched the numbers” for your real money trading account for the last half of 2007 and you ended up doing remarkably well for 2007. Just how well (%) did you do?

sharyn2.jpg My gross profits were 18.5%; net profits were 19.3%. The net was higher due to the addition of rollover payments. Although those dates span a six-month period, I was out of the market for three of those months because I kept missing signals when I was traveling. My system is set up for trades of one to several weeks. If I miss a signal, I can be out for a long time. I was using daily charts in the beginning; the problem was greatly reduced once I switched to 8-hour charts.

Has it continued since then?

I lost money in January. I wiped out all my January losses in February, but March hasn’t begun well. I’m down -5.2% gross and -5.3% net. The March losses have nothing to do with my system. I got “creative” and tried to trade in different ways when I couldn’t use my system (like a sideways market). Those trades didn’t work out.

It will take some terrific profits in March to give me a 9% increase for the first quarter. But I’m confident that I can at least break even.

For most people it takes some time for things to begin to “click”.

How long had you been at this before this period began in the summer?

I was at this for a little over a year. I went through Basic and Advanced Forex and their trading rooms. I paper traded many of the trading systems I found in the Investools technical commentaries and in other things I read.

Finally, I realized that I needed to build my own system to get what I wanted. I did that in Advanced Forex. I developed several systems that worked well. They were all trend-following systems that got me in after the trend began and out after the trend was over. It’s just how these systems are supposed to work. But I have a small account and I wanted to enter and exit a little earlier to minimize my risk. Eventually, I found the right combination of indicators that allows me to do that.

All of this was done with paper trading. In addition to system development, I worked through a lot of trading mistakes and bad habits. I told myself I wouldn’t go to live trading until I had the right system and paper traded it at breakeven for three consecutive months. These goals made paper trading very real to me. I had to meet them if I wanted to trade live.

What have you been doing that helped most to make this happen?

This answer’s easy. The Advanced Forex trading rooms are where I learned to trade. They are the most valuable part of my Investools education.

What’s your system – what tells you it’s time to get in and out of a pair – and do you think this is your end-all system?

sharynchart.jpg I think you’ll need a chart to understand what I’m talking about, so I’ve included it. My system:

Price Channel-Market Forecast Forex Trading System.

Trading Rules:

 

  • I use 3 and 12-period price channels on 8-hour charts. I use the intermediate (green) line on the Market Forecast (MFC) for confirmation.
  • Although this system will signal contra-trend trades, I don’t enter them. Possible exception: USD/CAD – I noticed in backtesting (using daily charts) that this pair regularly had several hundred pip pullbacks. For about the past year, this pattern disappeared. Recently, it seems to be resuming the pattern. If so, I will trade contra-trend on this pair.
  • I don’t use this system in a sideways market, because it will lose money.
  • When the price channels join and form a horizontal line, I have an entry signal. A buy signal occurs when the horizontal line is under the candles; a sell signal when it is above the candles. I wait for confirmation from the green line on the MFC. The green line should be moving in the same direction as the price channels are telling me to trade.
  • I set a stop loss at 1 ATR (Average True Range) below support or above resistance, plus 10 pips for the spread. I use this number instead of trying to remember the spread for every pair.
  • After I’m in a trade, I adjust stops by watching the 1-hour chart and moving the stop when definite areas of support/resistance form.
  • I exit the trade when I get the opposite signal, with confirmation, from that of my entry.
  • Potential pitfall: During a long trend, small consolidations will form along the way. The price channels may form horizontal lines. Usually, paying attention to the MFC keeps me from exiting early.

I’ve been working at ridding the system of this flaw. Recently, (on March 5, to be exact) Josh Black (*one of the Investools coaches) asked me several questions in his Advanced Forex Capstone. I realized that, although I had been sure I was paying attention to the trend in my trading, I hadn’t doing it in a way that would help me much at certain times.

As a result of this conversation in the trading room, I added a 20 and 60-period moving average to this system as an additional filter for difficult situations. One of these is the pitfall mentioned above. Another would be for help entering after missing a signal or for entering after I followed my rule regarding contra-trend trades, only to find out that the trend reverses. After looking at a lot of charts with this new setup, I think it will work. But I haven’t backtested it yet.

I don’t know if this is my end-all system. It’s working so well for me right now that I’ll keep using it. If the day comes that it really breaks, I’ll work that out when the time comes.

Did things fall safely into place and you simply started making money, like a light switching on – now it’s all roses so to speak?

Because of the goals I required of myself in paper trading, I didn’t start out live trading with huge losses that I needed to recoup before reaching breakeven and then profitability. I stayed at breakeven for several months before reaching profitability.

This is a process – what do you feel you need to do to maintain this now?

My system is still evolving. I’m working out its flaws, as I described above. I believe that this new revision will solve a major problem with the system. Then I must trade it consistently and evaluate it.

I must also keep learning. I’ve never been very strong on fundamental analysis; I was too wrapped up in the technical analysis. I’m happy with what I’ve done in system building but feel I must gain a firmer footing in the fundamentals to help me anticipate what may happen in various currency pairs. I’ve been working on this over the last few months and will continue.

Thanks for asking me to be interviewed for the blog.

 

Thank YOU for taking the time it share this with all of us Sharyn! Now that is a kind thing to do – I know she did this out of a helpful heart, hoping something she shares may help one of you. I imagine if you have a question for her you could post it here and we could get her to answer it in another comment. And I have to say: being fairly new to trading, almost 20% in 1/2 year (40% per annum) is very commendable! Thanks again Sharyn!

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interview.jpg

Today I’m posting another currency trader interview, tell me what you think. We are interviewing one of the Investools coaches: Brett Crowther.

I’ve known Brett for a long time and apart from being a great guy, he is an excellent FX trader and has been for years. As you read what he has to say, it helps to put up a chart with the indicators he is describing, to follow along.

Brett finds success in applying a more discretionary approach to the forex market based on price patterns. Specifically he has found a niche in reversal patterns in an attempt to jump in on a move as early as possible. Here is how he does it and how he learned to get where he is:

What is your background Brett?

I don’t have a real strong trading background like a lot of the guys in the office i.e. worked at Fidelity or something. I found out I could make money trading currencies back in the early 90’s while I was in Portugal and went to exchange money just as the Rodney King beatings came out.

crowther.jpg Everyday I would walk past a bank that would post the current currency rates as I would pass by I would keep in mind what would happen and noticed different patterns evolving. As a result I would wait the dollar to reach a relative high point (later finding out that area is called resistance technically) before I would make the exchange and so forth.

Did you begin trading by doing this then when you returned home?

After I returned to the U.S. it wasn’t as easy to make the trade since I wasn’t as in touch with what was going on; remember this was all before the invention of the internet. I did do some money back and forth for the next seven years.

When did you begin trading currencies with a dealer then?

I don’t remember when exactly I got involved in trading currencies the same way we do it today, as near as I can figure it was three years ago (it was about a year before INVESTools started the forex program). My educational background is in Political Science which has worked out great for trading currencies since it involves the politics of different countries while incorporating economics, which turned out to be one of my favorite subjects in college.

How long did it take you to be consistently profitable?

After trading with charts it took me a good year to be profitable. I made some good gains only to give it back making stupid mistakes. By stupid mistakes I mean I would get into a trade without checking fundamentals and get kicked out on wild volatility due to a major news announcement. Or I wouldn’t put a stop on it as since I was watching the chart then forget and walk away only to have it lose more then I wanted.

Before you go to that point what other types of things did you struggle with and how did you overcome them?

I struggled with time frames. I am more aggressive by nature and want action so trying to trade a long term perspective was difficult, I felt like I wasn’t going anywhere. It was just a matter of trying different time frame at different time of the day till I found what I was looking for.

Learning how currency pairs move at different times also directed me on how to trade. Like most everyone I struggled with stop losses. I would get kicked out way too soon. I learned that I actually had to “risk” something to make something; part of this (getting kicked out too soon) came from an underfunded account.

When I started with a small account I didn’t want to risk very much but as a result I would place a stop too tight. Increasing the amount in my account really helped and understanding that different currency pairs have different stop loss needs. This is one reason why I wanted to introduce a “currency characteristic” segment to the AIC (live, at INVESTools headquarters in Salt Lake City) class. I was way too tight on the EUR/USD.

Without launching into your lesson on it, could you describe what you mean by “currency characteristic” since it is important to you?

Well I knew just by looking at the charts that different currency pairs acted differently and trying to understand the “personality” of a stock is something I really stress when teaching the stock classes so I knew I need to figure out why a currency pair moved so distinctly different one from another.

Could you give an example?

I found that just the EUR/USD alone comprises nearly 35% of the daily currency volume. As such it tends to be a slow mover with lots of players. Since there are so many players it tends to bounce around areas but doesn’t stick to them like the USD/JPY. Meaning it doesn’t exhibit strong support/resistance areas as well as other pairs and if it does it has a strong tendency to poke through either side often making it more difficult to short term trade with tight stop losses.

The USD/JPY exhibits better support resistance areas. Now I know that might be confusing since it too has strong volume, (yet still about half of the total currency volume as the EUR/USD), but candlesticks come form Japan, a country with deep in traditional methods therefore they tend to rely on candlesticks more so then any other country and as a result you get a self fulfilling indicator. As a result support and resistance tend to be “better” on the USD/JPY than the EUR/USD.

Some currencies are slow movers others move quickly. The GPB/USD tends to hold a position then make a move and when it makes it move, it move fast and hard.

What is the “secret to trading” if you had to pin one down?

Wow, that is a tough one. Honestly this may sound “out there” but I believe the “secret to trading” isn’t found in a chart, or indicator or anything like that. I have seen many different traders be profitable with so many different styles and approaches. I have seen traders who seem to do everything they can to “kill the trade” even when the trade is hot and continuing to do well. As a result I feel the “secret to trading” is in each one of us.

Here we go with the sentimental talk. As funny as it sounds it is true. We can all be successful and we can all do it with a different approach, but the success has to come from within. What I mean by that is almost every great athlete or practically and largely successful individual in any discipline will tell you they had to believe they could do it.

We have so many traders that want to be successful but deep down don’t really believe they can be successful as a result they find ways to kill good trades. Many times the success is in each of us and we often have to get out of our own way and let success take its course. In fact I don’t know how much room you have for this but we had one student who was the top producing individual in the country at his profession. He couldn’t believe it was him because he never honestly thought it could happen to him, so one day he “accidentally” injured himself in a manner that left him unable to continue at his profession … as a result his lifestyle changed and his belief and reality came back into harmony. He admitted to me that he feels that in a subconscious way he injured himself so his belief and reality would match. Many times as traders we do the same thing.

So again what is the secret to trading? Don’t look for it in a chart but look for it within.

Describe the system or method you use (& how long have you been using it?):

I have tried several trading systems and found most of them don’t match my style. What I really mean by that is a true system, like two moving averages crossing over. To do it I need to be at the computer when the signal appears. Since I get too impatient playing a daily chart, that leaves me playing 5 to 30 minute time frame. It was one thing I really had to learn about myself.

However there are lots of signals that pop up in the middle of the night of times when I am away from the computer and if I miss even a few trades on a pure “system”, it screws up the whole expectancy ratio. As a result I do a lot more discretionary trading.

I’m basically looking at trend and support/resistance. I will look at one time frame up to get a general idea of the trend then play to that bias. I look for a currency to either bounce or break support or resistance (in the direction of the overall tend of course) then I look at MACD for confirmation.

It is hard to really spell it out as a complete system since there is a lot of personal interpretation to it but that it generally what I am looking for.

So which time frame do you focus on for your signals telling you to get in and out, 5 or 30 minute?

Most of the time I am looking at 5 minute, it still works the same on the 30 minute and probably another time frame for that matter but I play short term.

How do you define trend?

Basically the Dow theory: you know higher highs and higher lows and so forth. Most of the time as I draw support and resistance the trend is already spelled out. Like if you draw a channel it is easy to see if the channel is head up down or sideways, well that is the trend.

How exactly does the MACD tell you to “get in”?

I like to draw lines on the histogram spelling out an overbought and oversold zone. Then when the MACD exits that “zone” I take the trade. There are times when I wake up and have missed the move out of the zone since it happened while I was asleep, then I look for the two lines to bounce off one another for another entry signal.

Two lines?

I am sorry. I use the “MACD his with two lines” so I have not only the histogram showing but also the two lines. The two lines really are the MACD with the histogram simply showing us the distance between the two lines. Many times as the currency starts to make a move the two lines with separate then come back together. At that point I am looking for them to bounce off one another. It is the same as the histogram returning to the zero line but not crossing

The bounce of the two lines shows continued momentum.

Enter discretion? The use of judgment, experience, etc. to expand upon the signals?

Yes. Like, it is really great when MACD is in an overbought area which I know is not a typical use of MACD but when it is really overextended in one direction or another is can move pretty good.

As an exit I use either hitting either support or resistance, depending on which direction I am heading, or MACD and RSI. It is amazing how accurate the RSI can be when it enters the reversal zone a SECOND time (the first doesn’t really count)! I will also use a divergence as an exit. My experience with divergences is they tend to be better indicators of a currency reverting to a prior level of support or resistance more than signaling a change in trend As such it can used to identify the top or bottom of a movement before it really reverts and by exiting at the extreme you can keep much of the profit we otherwise tend to give back.

When do you get out when wrong, usually using these methods you just mentioned? What is your stop loss?

Most of the time when it hits my stop loss, since I no longer stare at the chart all the time. I used to have a hard time stepping away from the computer — I would literally get up in the middle of the night to check my trades. Many times if I was losing on the trade I would exit it due to some concern or re-analyzing the trade only to find it making the move I originally expected the next morning.

Setting it and forgetting it“, if I can borrow a line from Ronco (the famous kitchenware manufacturer), seemed to help out. Most of my stop losses are based on past movements around areas of support and resistance, which I know are quite arbitrary, but then pretty much any support or resistance is as well …

So why did you settle in on the MACD as opposed to some other indicators? I know you know a lot about many others …

In trading stocks I got very good at picking out divergences on the MACD. After you use an indicator for a while you become comfortable with it; as such I stuck with it in currency trading. It helps that I like the fact that it not only shows short term momentum with the histogram but longer term momentum as well with the “two lines”. This gives me the more confidence in the sense that I am incorporating two time frames of momentum. It is good to look at the bigger picture, then zoom in. MACD lets me do it without actually “zooming”.

How do you do your money management?

I would like to add not only money management but psychology here. Pretty much every trader talks of how after incorporating money management they did better. Instead of walking down that beaten path, and yes I no longer swing for the fence, I would like to talk psychology (one of my other favorite topics in college).

I used to double down a lot and make “revenge trades” and then learned that each trade is independent of each other and the market isn’t out to get me personally. Once I really learned that I am going to have losses, it made it easier to experience a loss without it getting to my nerves.

It is all about the big picture, meaning you might win some or lose some but in the end of it all you should be making money. Don’t trade for pride, trade for profit, which for me was so hard to do since I hated to be wrong.

What psychological components of money management are important to you?

Risk/reward is another big thing: allowing myself to make double what I was putting a risk. Man, there is so much I could say about this subject … Not only that, but quite analyzing I would study charts for hours even after I entered the trade and would look at it on several time frames, sometimes just to see what it was doing, at others to see if I needed to change it.

Later I discovered I looked at trades differently after I entered the trade than I would before I entered even if nothing significant changed. To me it was the equivalent of those who paper trade and make money then real trade and lose money, when there are funds on the line we look for more reasons as to why or why not we should stay in the trade. There is more I can say on this subject that we can talk about it personally.

Would you mind sharing how much are you up for the month?

Sure, I am a little over even for this month. Doesn’t sound too exciting but it is important for everyone to know that we (active traders) don’t “always” have stellar months. I have had my months of making great returns but I don’t expect it all the time. I have so many students almost in tears ask me what is wrong with them because they can’t duplicate what “others’ are doing. We all have good months, bad months, and indifferent months.

Is there anything else you’d like to add?

Yeah one other thing, trading is exciting but I have found that I can get too emotional about it as well, so one thing that has helped me is calling a time out. What I mean by that is if lose a certain percentage in a week it doesn’t matter if is Monday, Wednesday, or Friday at 12:00 I stop trading, otherwise I am too tempted to go back after the money. In doing so it lets me regain my focus and see what is going on. This stops me from making rash decisions and tossing money away.

We all get caught up in it from time to time, even professional sport players get caught up and do dumb things when they get behind. Just as they call time out, so should we. By calling a time out I have been able to preserve capital and hit it fresh, now honestly I don’t have to resort to calling time out all that often but it has saved me money when I have to.

Conclusion

Brett is well-likeable and tends to smile a lot, does high energy and inspiration show here or what? Perhaps as much as anything else, Brett’s success stems from a fantastically positive attitude, and what better fuel to have in your tank that that?

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interviewsmall.jpg I’m going to start occasionally posting some interview I did with some traders who are Investools coaches. I did them for a series on our website a couple years back and people liked them. They’re honest and to the point, and I think helpful in many ways. I tried asking questions you, a student/trader, would want to ask of someone who has traded for some time and does well at it. I’m curious to see what those of you reading the blog think of these interviews, let me know; and if you have a question for Mike maybe we can get him on here too.

Mike Parks is one of the Investools coaches who finds success in applying a systematic approach to trading. Knowing Mike personally, I sometimes think of him as a scientist in a busy laboratory full of beakers and Bunsen burners, experimenting and combining all different combinations of concoctions: he is very technical in his trading, very knowledgeable about indicators and how things work together, and loves tinkering and building systems. Mike is a kind person, easy to get along with, and a lot of our students call in and ask for him directly. Here is how he does it and how he learned to get where he is:

parks.jpg

What is your background Mike?

Initially I started trading and lost money for the first 3 years in my personal account as a stock broker. As a beginning trader I made nearly every mistake you might think:

 

  • I lacked a trading plan
  • I over leveraged my account
  • I used little money management
  • I traded on hope instead of knowing from the start my exits of the trade, and finally,
  • I tried to manage the trade on the fly as it evolved my exit reason also evolved.

These are just some of the reasons that promoted my failure for the first three years of my career as a trader.

Eventually I started making money in stocks and I began day trading options. Trading options lead to trading futures and trading futures lead to trading currencies, where I am today. It took three years for me to make money consistently in stocks and options.

In trading currencies it took about 5 months until I created my own trading system that worked well for me. Until then I was constantly being surprised by the impulse waves in currencies that kicked me out of a trade before hitting my profit target.

If I could have found a mentor my time to learn how to trade successfully would have been so much shorter and less costly. That is one of the reasons I joined Investools. To help others to avoid the mistakes that I made learning to trade. To let others know that trading can be learned.

Before you got to that point what types of things did you struggle with and how did you overcome them?

Perhaps my biggest struggle learning to trade was what I call “hopium”. It is like someone addicted to opium but with hope as their drug of choice. I would start a trade and want the trade to go a particular direction. Being stubborn I would hold on to my position waiting for the market to agree with me as the market went the opposite direction than what I predicted the market would do. My drug of hope never turned the market my direction.

I took many painful losses before I learned my lesson: that all the hope in the world will not change the direction of the market. Having too much hope rather than a reality check on the market is what I call ‘hopium”… the lack of a trading plan and the desire to win but not the plan or execution of that plan to create a winning trading system.

What is the “secret to trading” if you had to pin one down?

It took a while for me to recognize that my role in trading was to understand what the market wants to do first, and second to trade accordingly. Finally I understood my problem. I needed to want what the market wants. If I could do that, then I could make money. What I needed to do was to create a system that would help me trade with what the market wants. That has been my goal in everything I trade since learning that lesson.

Isn’t that what every system does though?

I guess if that’s the truth then every system is successful right? The truth is that I could have 10 successful systems but because of my personality, risk tolerance, stop loss or simply how I’m set up to trade I could only make maybe 3 of those 10 work for me.

So it’s only if that system matches my personality. The breakout trader is not the same as the conservative bounce trader. I’ve never been a good breakout trader, I get washed out of those trades. For me being a momentum trader has been much more highly successful.

Here’s what people may think upon hearing that: “But wait, I have no idea which of those I am”. Where does someone go next then on that journey of discovering systems that suit them?

Good question …

Where do you go to nail down, if there are 10 say, which are the 3 for them?

It’s kind of tough, to give an analogy all different cars can get us to the store yet we have all different vehicles – cars, trucks, and so on and with our personality we choose a certain vehicle. I may only risk 10 pips to make 40 but that may not come along often so I have to be patient to find it, etc. I’m not sure how people answer that unless they explore “what would make me happier: this kind of reward from this system or that one” Like would paying $600 a month be ok for a Mercedes Benz, some would be ok with that and some not but would want a $200 payment, or none at all. I think talking with some experienced traders would help, and say look, explore 2-3 different scenarios of trading and decide which one you are more inclined toward and paper trade it. From my experience the more I trade the more obvious it is.

So it sounds like talking with someone further down the road, but also just personal experience.

Personal experience but also if I don’t know what car I want, I do two things: talk to someone to find out why they like or hate them, and go try it out for myself.

Describe the system or method you use (& how long have you been using it?):

The method I trade is momentum trading. I use probabilities of linear regression and smoothed momentum (the “StochasticsRSI” indicator) to get the best idea of the direction of the trade and its duration. Price prediction is usually made by an expected range but I will adapt if my indicator says I need to get out before it hits my price target. This trading method is serving me well, and while I created this trading system for trading futures on my own time, I have found that it works well in currencies.

My entry is made on an upward trend with a temporary downward exhaustion of momentum. Usually the momentum resumes in the direction of the trend and makes me profitable. The moves follow quickly from the entry with the exception of the EUR/USD for which I waited nearly a week for the move to take place. The Euro did move in my direction eventually and it did work out well in the past week.

Linear Regression channel 50%, StochasticsRSI. I usually trade 3 lots, I also use Fibonacci projections. The idea is there is a price target for the exits.

How do you define the trend?

Linear regression: whether the middle line is trending up or down.

So what exactly are your buy and sell signals for the system you use?

mikeparkschart.jpg Yeah, good question. When I get a StochasicsRSI line which falls beneath the 50% linear regression. It’s an exhaustion of the momentum upward, think of it as like trading flags of momentum (like the price pattern) – that’s a signal to go long (click chart to enlarge, entry signals in yellow bubbles.)

Exiting will be when the StochasticsRSI momentum hits above the 50% and then I have trending indicators to help me get out … I usually trade 3 lots so I didn’t want to get too in depth … when my momentum gets above the 50% linear regression.

I guess this is how I try and explain it all: If I took a hill that was going down and took a ball and bounced it at the top going down, wouldn’t we expect the ball to bounce an average height as it’s going down. So what the momentum does it try to anticipate that high peak exactly when to get in as that peak continues. Every time it bounces it should return back to the center of the linear regression. I don’t know how you get a ball to bounce upward so gravity threw me out of that analogy!

I assume you use some discretion?

That’s basically it I’d have to get into more elaborates for other items. I actually do not use discretion. But it is a very tight system. That’s why I sweated for years to find a system to not have discretion on.

Why sweat for years to find a system without discretion?

Because I’m not one of those traders who could trade by … I call variance, they will say chart formation, etc. but I couldn’t duplicate it. It’s like going to the bakery and someone’s made a masterful cake but they won’t tell you what ingredients went into it. I needed something with replicable results and I’ve found it highly rewarding — but very difficult.

When do you get out when wrong? What is your stop loss?

While I have and do trade intra-day sometimes, most of trading has had to revert to a daily chart. The stop loss is usually around 60 pips and my first profit target is 120 pips. I get our earlier if my indicator tells me to but generally if that happens I have a 30 pip profit.

Why has your trading reverted to the daily chart?

Just because of work projects. Trades come and go in a matter of 1-2 candlesticks. I could easily miss that if I was a few minutes late.

You said your first profit target is 120 pips – where is your second, third, etc.? Do you scale in?

Depends on the price action of the currency and the Fibonacci projections. I do not scale in.

How do you do your money management?

For money management I prefer to use 2-3 lots at one time. All lots have the same entry with different exits if the trade progress as I think the market wants. I have a short term bounce trade for lot one, a continuing trend trade for lot two, and a longer term price target based on fibs for price level three. For me this works best. I have fewer trades, they last longer, and I am more in tune for the duration of the trade because of the 3 lots I have involved. Money management risk levels are contained by the one stop for all 3 lots. If I can get the price target on lot one then I can raise the stops on the other two lots and look forward for a small profit even if the other two lots are stopped out. And there is still a good chance that the two lots remaining will hit their profit targets.

What risking no more than 2%, do you do that?

Yeah no more than 2%, sometimes up to 3%. It allows me to take fewer trades and get better returns. Because I have a good chunk of money in one trade it allows me to concentrate on that rather than have three trades all over the place.

Would you mind sharing how much are you up for the month?

For the month, good question … about I guess based on what I’m doing right now it’s giving me about 3% a week. I risked 1% of my account last week and am up 3.2% for the week. You can see I don’t always risk as much as 2%.

Is that typical month to month?

Yeah I expect it typically, historically that is typical.

Is there anything else you’d like to add?

Trading is simple but not easy. Trading tests the trader in many ways. Do you have the right system? Did you enter right? Did you use the right stop loss level? All these things make the trader question himself. If he makes a profit he feels like a genius. If it does not he may feel like a fool. The truth is simply in the middle. Many a trader can have a successful trading system and still fail at trading because the fault of not following the trading system is in them … not the trading system. So find a good trading system and follow it precisely. Good luck in all your trading.

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