Hi Forex Nation!!

I have returned! Sometimes you need a vacation from your vacation, if you know what I mean! While I was enjoying beautiful Southern Califoria I had time to reflect on my trading. I had some good points and some ... well, let's just say some not so good points. Instead of getting down about what I felt were flaws in my trading game I thought I would list them out and embrace them.

I had no problem listing my top five areas of trading psychology that required attention. I did this in order to identify strategies to counter these feelings and allow me better overall trade execution. That's what it's all about after all.

Before I continue, remember that I am a flawed individual, so be kind! I also recognize that these flaws serve me well in life and in trading I simply need to understand that they are present and devise methods for incorporating them into my trading plan so they have a positive effect.

Here they are!!

1. Afraid of Failure
This is presetn in almost every traders life.
Counter - read trading plan and mission statement before every trading session.

2. Lack of Discipline
I still find myself occasionally chasing trades.
Counter - I maintain a detailed trading journal that reminds me of how effective I am when deciplined.

3. Impulsive
My arch enemy!
Counter - I find I am more impulsive when tired. If I do not have enough rest I do not trade.

4. Competetive
The old athlete in me. In the past I have joined the herd.
Counter - I trade live in a focus environment with CNBC off and ensure that I make all decisions based on my trading plan and what the market is willing to allow me to take.

5. Greed
It cannot be a true list without fear AND greed.
Counter - Ironically, I employ discipline to maintain a rigid pip goal in my compounding account. Another trait that usually raises it's ugly head when I did not get enough rest.

Kowing what these negative trading traits are and when they are triggered will allow you too to manage your mind-set and turn these into positive currency trades!

Happy Trading!!

Trade to be great and not just good.
Trade to be profitable
Don’t trade not to lose.
Embrace the challenges of the day.
Dismiss the distractions.
Be decisive.
Know your expected outcome before executing the trade.
Don’t focus on the results.
Focus on the execution.
Take responsibility for the outcome.
Be realistic and committed.
Believe in yourself without doubt.
Focus on the pips and not the balance.
Become your own coach and cheering section.

Happy Trading!!

Hi Forex Nation!!

I have a little tip to help with the dark side of trading.

All traders find themselves from time to time violating some of their own trading rules. There are legitimate times when it is OK for rules to be broken. For the beginner trader, this last rule should never be explored! If are relatively new to trading or you find yourself repeatedly make emotionally bad decisions while you are hanging on to a trade, this tip is for you!

Try this… (Especially if your technical exit has been reached (profit or loss) or you hear that inner voice going “get out, get out and you don’t!!).

When trading, place a large rubber band around your wrist. Anytime you violate one of your trading rules give it a good snap!! On exit rule violations give it 2 snaps!!

That will interrupt your bad thought process and break your habit of violating your plan. No, I am not sadistic, but trust me it will work!!

Happy (Ouch) Trading!!

FX Trainer Financial Services Inc, Creating Success in FX

A book review….

Hi Forex Nation!!

I have just read The Power of Full Engagement by Jim Loehr and Tony Schwartz. This is good stuff! The book challenges the most commonly held principal that the key to high performance is not through superior time management, but through superior energy management.

The authors focus on both physical and mental energy as they lead you down their theory through a series of real-life examples of past clients. The authors got there start as performance coaches of professional athletes. These athletes spend most of there time practicing their trade, managing their energy and developing mental and physical routines to ensure superior performance at the most critical moments of competition.

The author carries those traits into the corporate world. Recommending that high performance in the business world requires the same approach as an athlete. Managing energy and performance/personal renewal routines translates to peak performance and benefits well beyond your trading station.

I read this book and am now recommending it to you, the Forex Trader. Although this book has no mention of the markets or trading (I think that that is for the good!), these principals can be easily applied to our trading world. We need to be at our peak performance at the moment of truth also.

When we are executing trades is where we need to be at our peak performance. Ensure you are always at your peak during your trading sessions!


Happy Trading!!


Click here for this and other trading enhancement books.

Hi Forex Nation!!

Did anyone see the Da Vinci code this weekend?? I did! No, I have not read the book, but every time I got on an airplane the past 2 years there was always someone reading this book!

Did you notice the references to Fibonacci all over the movie? I did, and was counting the sequence right along with John Langdon (aka Tom Hanks)! That got me thinking a little more about one of my favorite trading tools and what it all means. So I went hunting for some facts and this is what I found.

Leonardo Fibonacci was the Italian mathematician who was born around the year 1170 AD. His real name was Leonardo Pisano, but was better known by his nickname Fibonacci (“son of Bonnacci”). Fibonacci’s father was a diplomat and his son traveled with him during his formidable years studying mathematics and accounting.

In 1202, Fibonacci wrote Libre Abaci, a book about the mathematics he had learned on the road with his father. That book led to his famous number sequencing when measuring the ratios for which rabbits reproduce.

His sequence 0,1,1,2,3,5,8,13,21,34,55,… is that each number is the sum of the two preceding numbers. The interesting thing is that each of the successive numbers is equal to 1.168 of the prior number.

Check this out!

When looking at this geometrically you find that when you measure a triangle by 1.00 as the hypotenuse the opposing side ratios are .786 and .618. Hey, I have seen those ratios before!

When we make .786 the hypotenuse than the opposing side ratios are .618 and .486. No way!!

If we make .618 the hypotenuse then the opposing side ratios are .486 and .382. Right on!!

The Fibonacci ratios that I always focus on in my trading are:

Retracements:
38.2%
50.0%
61.8%
78.6%

Extensions and Expansion:
61.8%
100%
127% (note that INDU turned almost on this extension last week!!)
162%

Want some more or have you had enough? I thought you would want one more example of FIBOs in nature!

Look at your own hand:
You have...
2 hands each of which has ...
5 fingers, each of which has ...
3 parts separated by ...
2 knuckles

All Fibonacci numbers! How about this, the bones in your finger are all in Fibonacci ratios to each other too! Is this just a coincidence or not??

OK, OK I think I just gave everyone a headache. You are all probably thinking that I need to get away from my trade station more often! Bottom line is that you don’t really need to know the details of Fibonacci’s life or all the examples in nature.

The bottom line is that we all know how important these ratios are to our trading and it will pay huge dividends to learn how to apply these principals to our trading!!

Happy Trading!!

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More information on trading with Fibonacci can be found at FX Trade Central or Fib Master!!
If you have not checked out my Lens or don’t know what a Lens even is click on the links below and you will be on your way!!

Forex Journey Lens

Success in FX Lens

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No, I am not blogging about an aviation accident investigation.

I got a call from a friend of mine the other day and he asked me if I was still trading Forex?

Uh, yah!!!

After catching up for a little bit he came to the real reason for his call. He had gone to a free seminar in town last weekend about a company touting their automated forex trading platform. He described the event and I vaguely remember getting something in the mail about it. It ended up in the shredder with the rest of my junk mail.

He described how cool it was to see the green lights to trade and red lights to exit and that it was much easier than looking at charts and studying the market.

He asked me for my opinion and I gave it to him and now I am about to give it to you!

I am not a big fan of those ‘black box’ trading systems. Quite honestly I have never traded with them, but have spoken to plenty of people who have. I am not here to discourage anyone from using them in their investment plans; I just want to explain why I prefer discretionary trading systems.

From what I found out the big disadvantage to those black box systems is that you can experience large draw downs in your account balances. If I am going to take a draw down (and we all will at some point) I want to understand why and implement corrective actions!

So much for compounding!

I am sure these systems work and fit into someone’s investment plan. Just not mine!

Maybe it is my upbringing, but I like to be in a little more control than that! I want to make the decisions and understand why things worked and why they don’t. That way next time I can make a better decision.

Donald Trump lost billions of dollars only to have it all back and more just a few years later. Why? Because his ‘block box’ investment system was between his ears.

Education is King!!

Let’s stop looking for the easy way and focus! You will get through the learning curve and never look back.

But my most compelling reason to stay with the discretionary trading systems is that the market is controlled by humans and human emotions still rule. To round out your trading tool bag study Fibonacci and Elliott Wave trading techniques, and utilize these strategies and others in your discretionary trading systems which are based on naturally occurring instances in nature. The same process that controls human emotion.


Happy Trading!

Visit FX Trade Central’s Forex Courses for beginners and advanced course reviews including recommendations and more information on Fibonacci and Elliott Wave.

Hi Forex Nation!!

On my last posting I mentioned that I was working on setting up a series of Lenses.

What is a Lens?

Well, I have recently come across the concept of a Lens provided by Squidoo. The idea behind it is great as it is like a one stop shop for something that you are passionate about (Forex!!) giving useful information and links. Some examples of a lens could include:

Your hobby

Your business / industry

Favorite celebrity

Favorite recipes

I am a huge Sopranos fan and there was even a Lens dedicated to the show!
Back to business…

The list really is endless, you talk about what you want to and it is opportunity to educate people! And you know I am all about education! Well I have created two Forex related Lenses. The links are provided below (just clock on the icons) and on the sidebar of this blog. I also have two icons on the side bar and they are linked to the two different FX Lenses.

Forex Journey – The Lens

Success in FX

You can help my ranking by visiting my Lenses and giving them a 5-star ranking!! You have to register, but it is FREE! (Thanks in advance!!)

Keep this in your back pocket, because soon you will be hearing about this concept all over the Internet!!

Happy Trading!