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5 QUESTIONS Before you Take your TradeWith each trade you take… There are these 5 standard questions you’ll need to ask an answer. Jot these down and have them ready… Do I Have a Trade Lined Up? When you go through your watchlist. You need to see any opportunities in the market that align with your trading strategy. These should stick out like a sore thumb. If it’s not, then it’s probably not a high probability trade. It’s important to analyze the market trends and indicators to identify potential trades. This will help you to make informed decisions and avoid taking unnecessary risks. Do I Have a Trading Strategy? Once you have identified a potential trade, it’s important to have a solid trading strategy in place. Your strategy should outline the rules for entering and exiting trades, as well as risk management guidelines. Follow your strategy and avoid making impulsive decisions based on emotions or market rumors. Where Should I Place My Trading Levels? You got the strategy so now you have to set up your trading levels. (Entry, Stop loss, Ghost level, Take profit levels) Are you using Order Blocks, key support and resistance levels, patterns, indicators or trend lines? Whatever you use, keep consistent to determine where to place your trading levels. This will help you to choose your trading levels based on the R:R for each trade. How Much Am I Trading? Trade size is crucial. You need your calculator to work out your risk per trade. This will help you to manage your risk effectively and avoid making emotional decisions. Your risk management plan should outline the maximum amount you are willing to lose on any given trade, as well as the maximum percentage of your trading account you are willing to risk. What Is My Exit Strategy? exit strategy should outline the conditions under which you will exit a trade. So you’ll know where to cut your small losses, ride your winners, lock in profits, or even adjust your take profit levels when the markets move well in your favour. Also, make sure you stick to your exit strategy and avoid making emotional decisions based on market fluctuations. THEN YOU’RE READY TO EXECUTE! Once you have gone through the five questions… It’s time to ask yourself whether you are truly ready to take the trade. Focus your mind, clear the distractions, confirm everything is ready to go… That takes emotional discipline. You got the questions, now go start asking and answering them with your trading…
JSE:J200Education
by Timonrosso
When you’ve taken a trade – Let It Go!One of the key principles of successful trading is… Once you have taken the trade to just let it go and allow it to run its course. The system lined up – tick. The entry orders are all in place – tick. It matches your risk and reward criteria – tick. You know your trade size – tick. Now let it go. You may get the urge to interfere, change the levels and lock in profits early or limit losses even more. You need to resist the urge. Here are some factors to consider… Don’t Interfere… When you’ve taken a trade, it’s important to have a plan in place for how you will manage it. This means you’ve got your entry, stop loss and take profit in place. These actions may seem like a good idea at the time. But they can often lead to bigger losses, smaller profits and even missed opportunities. But then there are times where you need to adjust the course. You might even have a time stop loss. Or a strategic and mechanical criteria for when to adjust your levels. But other than that, you need to have the discipline to stick to it and resist the temptation to interfere with your trades. Don’t Get Excited When It’s in the Money One of the most common mistakes that traders make is getting too excited when they’re in the money. You might feel overconfident and “know-better” about a trade. Or you might have this irrational decision-making idea to quickly move your stops and take profits, which can quickly erase any gains that you’ve made. It’s essential to remain level-headed and stick to your plan, even when your trades are performing well. To avoid getting too excited when you’re in the money, go back to your journal and look at how your trades have played in the past. It’s important to have a clear idea of your risk tolerance and profit targets before you enter a trade. This will stop you from making any quick and unnecessary decisions along the way. Don’t Fear When It’s Going Against You Another common mistake that traders make is letting fear dictate their decisions when a trade is going against them. It’s natural to feel anxious when you’re losing money. But it’s important to remember that losses are a normal part of trading. We all take them and we are all bound to take them more times than we wish to think. To overcome the fear of losses, it’s important to focus on the long-term goals of your trading strategy. One way to do this is to maintain a positive mindset and view losses as “costs of business” and as learning opportunities rather than failures. Stay calm and level headed. Also stop risking so much that it interferes with your psychology. When you feel emotional take a step back or it could lead to even bigger losses. Don’t Watch Every Tick Finally, it’s important to resist the urge to obsessively watch every tick of the market. This can lead to overtrading and emotional decision-making. And you’ll find it will quickly derail your trading strategy. Instead, it’s important to focus on the big picture and have a long-term perspective on your trades. Close your computer once you’ve taken a trade. Or close your trading platform and move onto something else. You’ve done your job now stop watching every tick the market moves. By doing so, you’ll be less likely to make rash decisions based on short-term fluctuations in the market. I hope this helps and if there is one thing to remember out of them all. When you’ve taken a trade, just let it go and let it run its course.
JSE:J200Education
by Timonrosso
1
When to FEEL THRILL when Trading - It may surprise you!First let me tell you. NO you should not feel thrill when you take a profit. NO you should not feel thrill when you are on a winning streak. NO you should not feel thrill after a day, week or month of upside. But I’m not going to be a wet blanket. As a trader, including me, there are times to feel thrill. Trading is a process, it’s a lifestyle, it’s a game, it’s your control of your financial future. So let’s explore the times you should feel thrill. #1: Analyse the markets A major part of trading is assessing the current state of the markets and identifying potential opportunities. This involves creating your strategy, finding the indicators that work best and identifying the different systems (chart patterns, trend lines, Smart Money Concepts) etc… This process is super exciting part on the journey to becoming a trader. #2: Optimise your strategies Creating a strategy is one thing. But optimising and maximising your system is an ongoing thing. It’s crucial to continuously fine-tune your strategies and adapt to the ever-changing market conditions. When you identify areas for improvement and make changes that lead to better performance, the thrill of knowing that you’re on the path to success can be awesome. #3: Search for high probability trades One of the keys to success in trading is finding high probability trades. It’s these trades that will offer a favorable risk-reward ratio and a high chance of success (regardless whether they win or lose). The hunt for these opportunities is always fun and it’s almost like going on a daily treasure hunt. And spotting the highest probability trades, require a deep understanding of the markets and the ability to spot subtle patterns that others might miss. When you uncover a high probability trade and execute it successfully, the feeling of accomplishment is also a great feel. #4: Reading Fundamentals Sure your strategy might not comprise of fundamentals or news. But still learning about the markets, companies, indices and other micro and macro aspects, is interesting. A solid grasp of fundamental analysis is essential for any serious trader. This involves assessing the financial health of companies, industries, and economies to identify why markets move the way they do. When you can successfully combine technical and fundamental analysis to make informed decisions, the thrill of knowing you have an edge in the market is undeniable. #5: Monitor your results and stats As a trading boss… You need to track, analyse and assess your trading performance. You don’t get more power and thrill as a trader, when you have control of your financial markets. When you see your strategies paying off and your account balance growing, the thrill of your hard work and dedication materializing into tangible results is incredibly rewarding. Conversely, it’s also thrilling when you analyse your losses where you can gain valuable learning experiences. And this will help provide insights into areas for improvement and will motivate you to refine your approach. #6: Find new markets to trade Do you think I was looking at AI, VR, Metaverse type companies to trade 10 years ago? Nope! These markets weren’t in fruition with trading as they are today. So as a trader, this is always an exciting and thrilling venture with trading. To explore, adapt and add on new markets into your watch list. When you add and enter these new markets to your strategy, this can expose you to a whole new set of opportunities and challenges. And this will help broaden your horizons and deepen your understanding of the financial markets. So now you know when to embrace thrill as a trader. Use them to fuel and propel you toward achieving your goals. When else do you feel thrill?
JSE:J200Education
by Timonrosso
Gym Well - Trade Well!When you gym well, it’s like trading well. You gym to tone, to lose weight to build muscle and to build discipline. With trading you trade to build your portfolio, build confidence, create a secured financial future and work on your mindset for life. Both pursuits require consistent effort, perseverance, and a strategic approach. Gym is an important element in my life and so I want to explore the similarities between trading and gymming, and how each can lead to success in their respective domains. You Put in the Work Every Day: Gymming and Trading Like a regular gym routine, successful trading requires dedication and consistency. You can’t expect to see results overnight – you need to put in the work every day. As a trader you must constantly educate yourself on market trends, stay informed about global events, and analyze past performance to make informed decisions. Just as gym-goers must adhere to their workout schedules, traders should establish a daily routine that involves researching and analyzing the market. You Pick Up the Portfolio (Weights) as You Make More Money When you gym, you gradually increase the weights you’re lifting to build strength and endurance. Similarly, as you become more experienced and successful in trading, you can gradually increase your investment portfolio. As your confidence and financial gains grow, you may choose to diversify your portfolio and take on a variety of different assets to spread risk, lower risk, optimise and maximize your returns. Don’t Overtrain – Don’t Overtrade Overtraining at the gym can lead to injury and burnout. And if you over trade in the market, it can result in financial losses and emotional exhaustion. It’s essential to strike a balance between staying active and giving yourself time to rest and recover. In trading, this might mean you: Set your limits on the number of trades you make each day or week Identify the goldilocks zone risk per trade Know when to hault trading or lower risks during a drawdown period. And most importantly. Remember, trading is a marathon, not a sprint. So pace yourself accordingly which is crucial to long-term success. It’s a Forever Process (Takes Time) Both gymming and trading are long-term commitments. You won’t see immediate results in either pursuit. It takes time and dedication to achieve your goals and to identify your trading risk and personality. In the gym, you can expect to see gradual improvements in your strength, endurance, and overall fitness. In trading, you’ll gain experience, knowledge, and a more refined strategy as time goes on. So stay dedicated, and you’ll be well on your way to achieving your goals. Let me know if you gym and if it helps your trading :)
JSE:J200Education
by Timonrosso
2
STOP Impulse Trading at once – 5 Actions to takeOne of the most dangerous traits a trader can adopt is… Impulse Trading. This is where they take trades mainly on emotions and gut rather than sound financial analysis. This means, more risk, more irrational choices and that can lead to steering away from what works. Your proven trading strategy! And the end result, you’ll lose in the long term and end up with less confidence for your future endeavours as a trader. So let’s come up with certain ways for you to STOP the impulse trading. ACTION #1: Give it an hour When you feel the urge to make a trade based on emotions, it can be helpful to step back and take a break. One great way is to wait for an hour before you make any decisions. Go get something to eat, grab a beer, go walk your crocodile or go do something other than trading. Close your computer if you feel you’re about to impulse trade. This break can help you regain a sense of perspective and avoid making impulsive decisions that you may later regret. ACTION #2: Remember your long term goal I always say… Financial trading is a long-term game. You need to have a clear and specific long-term goal in mind that guides your decisions. When you feel the urge to make an impulsive trade, take a moment remember your trading record, journal and what works. Also, remember it’s not about the one trade but the hundreds of trades later… Ask yourself whether this trade aligns with your overall strategy or whether it’s just a momentary impulse. This can help you stay focused and disciplined in your trading. ACTION #3: Revisit your journal Your journal is pretty much your game-plan. It foretells of the most probable outcome when you follow it. And it should include a record of all your trades, your thoughts and feelings at the time of the trade, and the results of the trade. When you feel the urge to make an impulsive trade, take some time to revisit your journal. Look at your past trades and the results they produced. My favourite… Go look at your drawdowns. Go look at your biggest drawdowns. Then go see how you came out of the drawdowns and your portfolio headed to NEW all time highs. There is no better feeling than that. Do this and I doubt you’ll want to take any impulse trades again. ACTION #4: Read more trading psychology Mind is everything with trading. It’s a great way to develop your discipline and avoid impulse trading. Either go read trading books, articles, watch YouTubes or just save this article. I can almost guarantee… If you read this article, when you feel like taking an impulse trade – You will stop that primitive way of thinking. You’ll stop that inner conscience from trying to ruin your trading performance. ACTION #5: Avoid Overtrading If you find you take MANY trades at a time… You’ll be more inclined of taking impulse trades, because you feel you need to take more. Try and have a cap when it comes to the number of trades you hold. I used to never hold more than 5 trades. But over time, with adopting into new markets and evolved markets – that number gone up. Now I make sure I never have more than 12 trades opened at any one time. Remember to give yourself time to reflect, keep your long-term goals in mind, revisit your journal, and read more about trading psychology. Let’s bring back the 5 actions to avoid taking any impulse trades. ACTION #1: Give it an hour ACTION #2: Remember your long term goal ACTION #3: Revisit your journal ACTION #4: Read more trading psychology ACTION #5: Avoid Overtrading Let me know if this was useful in the comments.
Editors' picks
JSE:J200Education
by Timonrosso
7
Don't listen to your inner NINNY! I can't swear on TV :(Traders have 1 JOB!. To just take the trade. All the other stuff is semantics. But most times you’ll find your inner B I mean Ninny takes over. And it tells you: ~ Don’t take the trade. ~ You’ll lose money. ~ The stars are not aligned! ~ Blah blah fish paste! You need to stop listening to your inner F - inny, or it will destroy your chances of success. So let’s talk about the 4 common excuses traders make and how to overcome them. Excuse #1: I’m not in the mood The markets are awake with or without you. People are making money and doing things in this world. Others are taking ice baths, cold showers, hitting the gym twice a day. They are doing the hard. You need to stop the excuses of not in the mood, get off the couch and take action for your life. You are in control of your life, what you do and what you make. Do what you need to. Create a schedule that includes time for exercise, meditation, and of course trading. Excuse #2: External news event kicked in Financial markets are subject to external events that can impact trading decisions. These events can include political developments, natural disasters, or major economic announcements. The problem is. These events come daily. Every day there are new news announcements, GDP numbers, employment and jobs reports, Interest rates, inflation rates etc…If you’re not taking a trade because of one of these announcements, I’m sorry but. That’s just an excuse! If you must. Write down a few IMPORTANT news announcements that you want to watch for when you trade. Maybe interest rates in America. Maybe NFP reports, Maybe during FOMC meetings. But do the research and find out what news events are worthy to NOT take a trade. I’ve been in the markets for 20 years and I haven’t found one worthy news announcement other than NFP for Forex trading. Excuse #3: Market doesn’t feel right To you it doesn’t feel right. To you, you think the market is some sentimental machine that feels healthy or sick. To me, I see prices, risks and probabilities. I see a robot and mechanical processes with billions of dollars streaming in and out at any one second, the market is opened. You need to develop an objective criteria for assessing market conditions. Have tunnel vision and stop trying to predict the temperature of the market. It’s not human. There is buying. There is selling. There is a repetition of that every day. Market doesn’t feel right, is an excuse. Excuse #4: System lined up but it’s not perfect Ok so you have a system good. You have a strict strategy to follow, great. But the system lined up and it’s not perfect. As I mentioned before. You need to write down the rules and criteria that you can use to identify opportunities and risks. There are only three types of trades in this world. HIGH probability trade – Market lined up perfectly according to the system. MEDIUM probability trade – Market almost lined up perfectly but I will still take the trade and risk a little less. NO trade – Market did NOT line up and therefore I’m not taking a trade. So, are you going to continue to listen to your inner Busy Ninny or are you going to start making money the right way?
TVC:SA40Education
by Timonrosso
GLOSSARY Smart Money Concepts - Complete Terms!It's taking the world by a storm. Smart Money Concepts is what has become famous lately. Now I've been trading for 20 years and even I have learnt to adapt and adjust SMC to my trading strategy. I guess we have to evolve and adapt with what there is. Anyways, Today, I've written a complete Glossary on Smart Money Concepts terms for you. Enjoy! SMART MONEY CONCEPTS GLOSSARY Break Of Structure (BOS) (CONTINUATION) A BOS is when the price breaks above or below, and continues in the direction of the trend. (CONTINUATION). Break Of Structure Down When the price breaks and closes BELOW the wick of the previous LOW in a DOWNTREND. Break Of Structure Up When the price breaks and closes ABOVE the wick of the previous HIGH in an UPTREND. Buy Side Liquidity (Smart Money SELLS) Where an Order Block forms where Smart Money SELLS into retailers (dumb money) BUYING orders - Pushing the price DOWN. Change of Character (CHoCH) (REVERSAL) Refers to a much larger shift in the underlying market trend, dynamic or sentiment. This is where the price moves to the point where there is a change in the overall trend. (REVERSAL) Change of Character Down When the price breaks and closes below the previous uptrend. Change of Character Up When the price breaks and closes above the previous downtrend. Daily bias Tells us which direction, trend and environment the market is in and what we are looking to trade. Daily bias Bearish When the market environment is DOWN and the trend is DOWN - we look for shorts (sells) in the market. Daily bias Bullish When the market environment is UP and the trend is UP - we look for long positions (buys) in the market. Discount market <50% The market is at a discount when the price trades BELOW the equilibrium level. We say the price is at a discount (low price). Equilibrium Equilibrium is a state of the market where the demand and supply are in balance with the price. We say the price of the market is at fair value. Fair Value Gap (FVG) A 3 candle structure with an up or down impulse candle that indicates and creates an imbalance or an inefficiency in the market. Fair Value Gap Bearish A 3 candle structure with a DOWN impulse candle that indicates and creates an imbalance or an inefficiency in the market. Between candle 1 and 3, do NOT show common prices. The price needs to move back up to rebalance and fill the gap. Fair Value Gap Bullish A 3 candle structure with an UP impulse candle that indicates and creates an imbalance or an inefficiency in the market. Between candle 1 and 3, do NOT show common prices. The price needs to come back down to rebalance and fill the gap. Levels of liquidity The area of prices where smart money players, identify and choose to BUY or SELL large quantities. E.g. Supports, resistances, highs, lows, key levels, trend lines, volume, indicators, psychological levels. Liquidity The degree, rate and ability for an asset or security to be easily bought (flow in) or sold (flow out) in the market at a specific price. Liquidity sweep (Liquidity grab) Smart money buys or sells (and sweeps or grabs liquidity) from traders who enter, exit or get stopped. Market down structure When the price makes lower lows and lower highs. Market structure Indicates what a market is doing, which direction it’s in and where it is more likely to go. Market Structure Shift (MSS) MSS shows you when the price is breaking a structure or changing the direction in the market. Market up structure When the price makes higher lows and higher highs. Order block Large market orders (big block of orders) where smart money buys or sells from different levels of liquidity. Order Block Bearish A strong selling or a supply zone for smart money. Order Block Bullish A strong buying or a demand zone for smart money. Order block events Large market orders where smart money buys or sells from certain events i.e. High volume, supports, resistances, highs, lows, key levels, Break Of Structure, Change of Character, News or economic event. Point Of Interest (POI) POI is an area or level in the market where there is expected to be a large amount of buying or selling activity i.e. Order blocks. Premium market >50% The market is at a premium when the price trades ABOVE the equilibrium level. We say the price is at a premium (high price). Sell Side Liquidity (Smart Money BUYS) Where an Order Block forms where the Smart Money BUYS into the retail (dumb money traders orders - Pushing the price UP. Smart Money These are the smart, informed, and savvy financial institutions that invest (buy and sell) their large capital into different financial markets. Smart Money Concepts SMC is a more sophisticated method of price action to spot, identify and locate where smart money is buying and selling their positions Sweep Buy Side Liquidity (Smart Money SELLS) Smart Money SELLS into positions (and sweeps liquidity) from retail traders who are short (get stopped) and for long traders who buy and enter their trades. Sweep Sell Side Liquidity (Smart Money BUYS) Smart Money BUYS into positions (and sweeps liquidity) from traders who are long (get stopped) and for short traders who enter their trades. Feel free to print this out and have it as a guide to your Smart Money Concepts trading journey. All the best!
SP:SPXEducation
by Timonrosso
Trading Success Stoppers Part 2 Trading can be an excellent way to grow your wealth. But as you may know by now, it’s not a straightforward path without obstacles. In fact, several challenges can hinder traders from achieving success in the field. Here are four more significant success stoppers that traders face in their trading efforts. No Support from Anyone Trading can be a lonely and isolating field. Once you have the strategy, rules and mindset in place – it’s all on you. Initially you may want strong support from a community of traders or confirmation ideas that you’re on the right path. My situation is different. Because I have traded for the last 20 years, it did become very lonely and it felt like I had more to offer. With TradingView at least I have a community to talk to and help out where I can. So you see, having a support system can make all the difference. Without support, it can be challenging to stay motivated and focused on your goals. And in the end you’ll realise there is more to trading than just making money. Solution: The key is to find a mentor or a community of traders who can support and guide you. Join online trading forums or attending trading events can be an excellent way to connect with other traders and build a support system. You can also consider hiring a coach or mentor to guide you and provide feedback on your trading strategies. Success stopper #2: Laziness Look! Trading requires discipline, focus, and hard work, and without these qualities, it can be difficult to achieve your goals. Lazy traders are the worst. They lack the motivation, drive, and discipline that’s necessary to research, analyse, journal and trade in order make informed decisions. You also need to be able to get up off your ass and trade each week. Sure, you can take off a few days a week – that’s the beauty. But don’t let laziness stop you for more than a few days! Solution: The key to overcoming laziness is to set clear goals and create a routine that supports your trading activities. Set aside specific times each day or week to research the markets, analyze charts, and execute trades. It can also be helpful to create a trading plan that outlines your goals and strategies, which can help keep you focused and motivated. Success stopper #3: No Money to Trade This is more of an excuse than a success stopper. You know you can paper trade until you nail the trading game, until you can start putting in capital. And when you do save money, you’ll be able to learn the real world of trading and understand the slippage, costs, liquidity, margin trading etc… Solution: The key to overcoming this challenge is to start small and build your way up. Consider opening a demo account to practice trading without risking real money. You can also start by trading with a small amount of capital and gradually increase your investment as you become more comfortable and confident in your abilities. Success stopper #4: No Skills and Talents That’s what you think. But I honestly believe I can take just about anyone with a bit of computer experience and show them how to make a consistent income trading the markets. Trading requires a specific set of skills, such as market analysis, risk management, and technical analysis. And these skills CAN be taught. Whether you’re a slow learner or a fast learner, you can learn the ways. Solution: The key to overcoming this challenge is to invest in your education and development. Take courses or attend seminars to learn the necessary skills and techniques for successful trading. You can also consider working with a mentor or coach to help you improve your trading skills and develop your talents. So what is stopping you from your trading success? I can only think of 1 thing. Go look at the mirror.
JSE:J200Education
by Timonrosso
Trading Success Stoppers Part 1Trading as you know is a fantastic alternative to grow your wealth. However, it is not without its challenges. In fact, there are several success stoppers that traders face that can derail their trading efforts. Let’s look at four of them. STOPPER #1: Same Old Routine One of the biggest success stoppers for a trader is falling into the same old routine. It is easy to get into a rut and continue doing the same things day in and day out. However, this can lead to a lack of progress and stagnant trading results. Yes you need the same ‘ol strategy, risk management rules and criteria for a consistent track record. But you also need to be open to try new things and adapting to changing market conditions. You can do this by: ~ Backtesting and forward testing other strategies. ~ Adapting new markets into your trading ~ Identifying new market environments ~ Even improving your current indicators and chart layouts Always looking out for better brokers, chart platforms and sources to help your trading Improving your calculators and trading tools. STOPPER #2: Self-Doubt This can cripple a trader’s confidence and ability to make sound trading decisions. It is natural to experience doubts and fears when trading. But make sure you don’t let it take over and lead you to emotional decisions, doubting during drawdowns and missed trading opportunities because of how you feel rather than what the charts say. To overcome this success stopper, you should focus on building your confidence and self-belief through trusting your proven track record. You can do this by keeping a trading journal to track your successes and failure. Also seek out the advice of a mentor or coach, and regularly review their trading plan to ensure they are on the right track – to help with your own confidence. STOPPER #3: Procrastination Procrastination is a common success stopper for traders. It is easy to put off making trading decisions or taking action on a new trading strategy. However, procrastination can lead to you never taking action which means: No trades No consistency No growth No results To overcome this success stopper, traders should develop a sense of urgency and take action quickly. Adapt the 1,2,3 JUST DO IT mentality as I mentioned in the previous video. Break down larger tasks into bite sized and more manageable ones and set deadlines to complete on time. STOPPER #4: No Big Idea Finally, having no big idea or vision for their trading can be a major success stopper for traders. You need to know your goals, strategy, risk profile and trading personality. When you do this you will have the BIG idea on what you need to progress and thrive. Stop these stoppers before they stop you from achieving trading greatness. Tune in tomorrow for Part 2!
TVC:SA40Education
by Timonrosso
5 TIF Trading Orders You need to KnowQ. What are the 5 common TIF (Time In Force) Trading Orders to know? GTC: “Good Till Cancelled” Where the order remains active until you manually cancel it. FOK: “Fill or Kill” This type of order requires immediate execution of the entire order quantity. If the full amount is not executed, it is then cancelled. GTD: “Good Till Date” Where you can specify a specific date until which the order is valid. MIT: “Market if Touched” This order is triggered when the market price reaches a specified level (trigger price). It then becomes a market order and is executed at the best available price. LIT: “Limit if Touched” If a Limit if Touched order is triggered when the market price reaches a chosen or trigger price. GTC (Good Till Cancelled). This way you’ll know that your position (order) will stay in the market until you cancel it manually. What trading question do you have? Let me know in the comments. Can you think of anymore?
TVC:SA40Education
by Timonrosso
Revenge Trading is Catastrophic - Here's why!Do you feel it in your bones. Where do you want to: Take trades to make up for losses? Take trades for the sake of trading? Take trades out of emotions and gut (gat feel)? Take trades to make a quick buck? If so, you have felt the power and dangers of Revenge Trading. TO put it blunt. Revenge trading is detrimental, dangerous and just plain stupid for any traders to succumb to. I feel like I can finish the article already as I have said what I needed to. Not just yet! You need to understand why Revenge Trading is to your downfall. Let’s start with these: #1: Impulsive decisions are dangerous In the heat of the moment, you just want to take an impulsive trade. This can lead to disastrous outcomes. Revenge trading happens when you want to try recoup losses quickly. And so traders abandon their strategies, systems and rules. And they take on unwarranted risks. This will stop you from making good, calculated, logical and well-informed decisions based on sound reasoning and market research. Don’t do it! #2: Trading on emotions is deadly Emotions such as fear, greed, and frustration have no place in trading. Revenge trading is fueled by these emotions. And this causes traders to deviate and steer way from their plans by instead acting irrationally. What then? Bigger losses, unnecessary risks to the portfolio and skewed results on your trackrecord. Your hard earned and timely worked on journal! Is it worth it? I think not. Cut out your emotions and work at being calm and take on the more logical approach, devoid of emotional interference. #3: Violating trading rules is damaging Every trader should have a set of well-defined trading rules in place. Not just rules but also a list of criteria. Revenge trading typically involves disregarding these rules and just going against everything you should do. Basically, what the average dumb retail trader does which results in 98% of traders losing in this financial endeavour. Violate your rules and there will be severe consequences. Loss of confidence. Bigger losses More losses Erratic wins (which make you want to do it again and again and again) Not worth it. Don’t do it. #4: Too much unnecessary risk You know you’re using your hard earned cash to trade and build a portfolio right? So why are you burning it and cutting it up like it’s nothing? This reckless behavior can lead to bigger drawdowns and can even wipe out trading accounts entirely. Don’t do it! #5: Creates an ongoing cycle of doing it again Great! Once you have violated your rules, gone against your strategy and pretty much gone ape or rogue on trading – it takes a lot to gain ones integrity and discipline back. One of the most dangerous aspects of revenge trading is its cyclical nature. Break the rule, you’ll break it again. Cheat, you’ll cheat again. Enter a gambling mentality and you’re beeped. Bank a winning rogue trade and you’ll succumb to the trading world of discretionary action. However, if these subsequent trades result in further losses, the cycle repeats, trapping traders in a never-ending loop of revenge trading. Breaking free from this destructive pattern will then need a ton of discipline, self-awareness, and a commitment to sticking to one’s trading plan. So please be careful.
JSE:J200Education
by Timonrosso
16 Trading Mistakes you’re still MakingIf you’re still failing as a trader. You could be making one or more of these common and lethal mistakes. #1: No Structured Approach If you’re not following a structured approach to evaluate potential trades, you’re likely to make mistakes. It’s essential to have a well-defined plan that takes into account your personality, risk tolerance and trading goals. #2: You trade on Emotions Trading decisions should be based on facts and analysis, not emotions or hunches. If you’re relying solely on your gut feeling, you may miss important information and make poor trading decisions. Trust the chart not your heart. (I like that!) #3: Not researching each market per strategy Even if you have a trading strategy, you need to research, back test and forward test EACH market to see if they are conducive with your trading. For example. I have traded Forex since the get-go and yet the EUR/USD (Euro Versus US Dollar) is still the one currency that NEVER works for my system. This is the kind of research you should know, before you make a trade or risk a trade. Lack of research can lead to costly mistakes and missed opportunities. #4: No Specific Trade Setup It’s important to identify a specific trade setup before making a trade. You need to determine and pinpoint your exact entry and exit points, stop loss level, and price targets volume and margin requirements. #5: Not waiting for your high probability setup It’s important to wait for a clear trade trigger before making a trade. This way you’ll know what the right market, at the right time is and what you need to do to minimize your risk and maximise your profit potential. #6: Not putting in your stop loss When you trade you need to remember something. You need to set your stop loss to limit your losses. You need to set your stop loss to follow a plan. You need to set your stop loss to prevent an emotional reaction to your trading where you can take significant losses. Always, always always set a stop loss level with each trade and stick to it. #7: Setting a tight stop loss If you set your stop loss level too close to the entry price, it will increase your chance of getting stopped out. It’s important to set a stop loss level that considers market volatility and your risk tolerance. #8: No clear exit price target Yes, a stop loss is more important than a take profit price. But a take profit price is VERY important when it comes to following your Risk to Reward strategy. You need to set the take profits so you can calculate your potential gains, to lock in gains and to have a mechanical plan to follow in the future. #9: Forgetting your Reward-to-Risk Ratio If you ignore your risk to reward level rule with trading, you might as well give up trading. The key is to always make sure that your potential gains are more than your losses. If you ignore your risk to reward you will make poor trading decisions and your performance will not be stable and consistent. These are losing traits. #10: You forget the anomalies! There are times where you might need to exit out of a trade prematurely. There are other market conditions that are wile and can impact your trade negatively. Whether they are black swans, market announcements, threats, dangers, fat fingers or even news events. Don’t forget to consider the anomalies to reduce a catastrophe. #11: You buy however much you want on margin When you trade derivatives you need to remember. You will be exposed to more money than what you deposit. You can LOSE way more money that you anticipated if things don’t go your way. You need to seriously understand the risks involved with margin and gearing trading before you even commit to trading derivatives. #12: You don’t diversify Some traders ONLY trade one index or one currency or one commodity. I believe this is not very good for the future. There are times where these markets enter into a stagnant period for months upon months on end. You need to find a way to diversify and trade a few more markets, to make up for the dangers of idling markets. It’s important to diversify your portfolio and spread your risk across multiple markets. #13: You chase the next best penny thing Chasing ‘hot’ penny stocks or penny cryptos is lethal. You’ll end up emotionally involved in them and you’ll find every reason (fundamentally and technically) to hold on because they are going to the moon. Remember, you need to research the markets that work with your trading strategy over at least 5 years. Any other markets, are dangerous and can lead to you blowing your account. #14: Not Emotional control Not managing your emotions appropriately and making impulsive trading decisions can lead to poor outcomes. When you lose you’ll feel like it’s the end of the world. When you win, you’ll feel you have trading down and life. Problem is these uppers and downers with trading will have an effect in your life negatively and will end up with you making very emotionally driven and triggering trading decisions. Then POOF. All will be gone. It’s important to stay calm and focused when making trading decisions. #15: No Trading Journal What are you basing your success on? A strategy you don’t even have proof whether it works or not. If you are Not using a trading journal to track your trades and evaluate your strategy over time, it can lead to a losing performance, unnecessary losses, missed opportunities for improvement and will leave you blinded to your potential. It’s important to keep a record of your trades and evaluate your performance regularly. #16: Not Learning from Mistakes Trading is a forever learning journey. You need to learn from EVERY mistake you make and move on. If you don’t learn you’ll continue to have a poor performance. It’s important to evaluate your mistakes and make changes to improve your strategy. Maybe even document every trading mistake you make in your trading journal. This way you’ll reflect and work on them for the future. Was that helpful?
JSE:J200Education
by Timonrosso
8 Most Important Trading Levels of EntryThere are over 30 different elements you can add to your trading journal. But if you want to start off light and easier, then there are only a few KEY levels you’ll need to get into your trade and track them. 8 to be exact. These include: #1: Market (Stocks, Indices, Forex, Commodities, Crypto) What market are you trading? There are many different markets to choose from, including stocks, indices, forex, commodities, and crypto. Each of these markets has its own unique characteristics, including volatility, liquidity, and risk factors. When you specify what market you’re trading you’ll know which account to measure your portfolio. #2: Date of Entry This information will allow you to track your trades over time and evaluate the success of their strategies. Also, something not many people think about is when you’re profitable and in the money. It is also useful for tax purposes, as you might need to report your gains and losses to the relevant authorities. #3: Entry Price The entry price is the price at which a trader enters a trade. This information is critical for calculating potential profits and losses, as well as for setting stop loss and take profit levels. You’ll also know how the market is moving relative to their position and make certain adjustments to your trades (following your strategy) as needed. #4: Type Buy (Go long) or Sell (Go Short) The type of trade, whether it is a buy or a sell short, is important because it determines the direction of the trade. If a trader buys a security, they are betting that the price will go up, while a sell short trade is a bet that the price will go down. This information is important for setting stop loss and take profit levels, as well as for understanding the risk profile of the trade. #5: Stop Loss (Risk level) A stop loss is an order to close a trade if the price reaches a certain level. This is a key risk management tool that helps traders limit their losses in case the market moves against them. Also, it’s used to lock in profits when the trade is going in your favour. #6: Take Profit (Reward level) Take profit is the opposite of a stop loss. It is an order to close a trade when the price reaches a certain level of profit. This allows traders to lock in their gains and exit the trade at a predetermined level. #7: Margin (Initial deposit) Margin is the amount of money a trader needs to deposit in order to open a position. This is important because it determines the amount of leverage the trader is using and the potential risk exposure. By recording the margin requirements for each trade, you’ll be able to monitor your overall risk exposure and adjust your positions if needed. #8: Reason of Entry The reason for entering a trade is important because it helps traders evaluate the success of their strategy and make adjustments as needed. This depends on your trading strategy. Are you trading because of a breakout pattern, Moving Averages, Range bounded, Order blocks, Liquidity Sweeps, Volume Spread analyses or indicator analysis – you’ll be able to jot your entry reason for each trade. So if you’re new to trading or not worried about the extras when plotting in your journal. You now have the most important elements of a trading: Markets, the date of entry, entry price, type of trade, stop loss, take profit, margin, reason. Hope that helps.
JSE:J200Education
by Timonrosso
EXPLAINED: Calculation for CFD Brokerage with Anheuser ExampleHow do I calculate the brokerage I'll pay on a local CFD trade? You’ll need to calculate the brokerage you’ll pay to enter your trade and the brokerage you’ll need to pay to exit your trade. We’ll first need to lay out all the necessary information to calculate what brokerages you’ll pay… For this example, we’re going to use a trade example with Anheuser Busch InBev. And we’ll use the brokerage of 0.30% leg in (entry) and 0.30% leg out (exit) to pay. Here are all the specifics needed for this trade: Portfolio value: R40,000 Trade: JSE:ANH Type: Long (buy) Brokerage rate in: 0.30% Brokerage rate out: 0.30% Entry: R1,184.00 Stop loss: R1,143.00 Take profit: R1,215.00 Calculation #1: Calculating your ENTRY brokerage with CFDs Step #1: Know what your max portfolio risk is per trade Max % risk = (Portfolio value X 2%) = (R40,000 X 2%) = R800 Step #2: Find out the rands risked in trade Rands risked = (Entry – Stop loss) = (R1,184.00 – R1,143) = R41.00 Step #3: Calculate the number of CFD contracts to trade No. CFDs = (Max % risk ÷ Rands risked) = (R800 ÷ R41.00) = 19.51 SIDE NOTE: We always round down the number of CFDs, so that we risk less than what we choose to risk instead of more. Therefore, we will buy 19 CFDs in this specific trade. Step #4: Calculate your ENTRY exposure for the CFD trade Entry exposure = (Entry price X No. CFDs) = (R1,184 X 19 CFDs) = R22,496 Brokerage in = (Entry exposure X Broker rate in) = (R22,496 X 0.30%) = R67.48 This means, you’ll need to pay a brokerage of R67.48 in order to buy (go long) 9 Anheuser CFDs. Now we can move onto the next brokerage leg. Calculation #2: Calculating your EXIT brokerage with CFDs Step #1: Work out your EXIT exposure for the CFD trade Exit exposure = (Exit price X No. CFDs) = (R1,215 X 19 CFDs) = R23,085 Step #2: Calculate your brokerage leg out Brokerage out = (Exit exposure X Broker rate out) = (R23,085 X 0.30%) = R69.25 Step #3: Calculate the total brokerage for the CFD trade Total brokerage = (brokerage leg in + Brokerage leg out) = (R67.48+ R69.25) = R136.73 This means, if the trade hit your take profit level you would have ended up paying a total brokerage of R136.73 for your Anheuser CFD long trade.
JSE:ANHEducation
by Timonrosso
4 EXTRAS to add to your Trading Journal TODAYI’m sure you know by now. That every successful trader needs a trading journal. This is an essential tool to track, monitor, evaluate, record, and measure your trading success. However, I’ve come up with 4 EXTRA Journal Items that you can add to your journal that could help improve your trading, win rate and overall performance. We can call these the “Trading Journal Extras.” Let me know if you think any of these will be helpful to add to your journal. EXTRA Journal Item #1: MY EMOTIONS Emotional State When Taking Trades Trading can be an emotional rollercoaster. When you lose, it feels like everything is out to get you. When you win, it can feel like you’ve nailed life in a bag and you can do this for the rest of your life. But what if you actually journaled your emotions? Every time you take a trade or you bank a loss or gain, document it in a section saying “EMOTIONS. This element to your Trading Journal can help you identify patterns in your emotional state that may impact your decision-making abilities in the future. You will also see who you are personally and how you emotionally handle trades. Watch it improve over time. For instance, if you find that you’re more likely to make impulsive trades when you’re feeling anxious or stressed, you can take steps to manage your emotions before taking trades. This can help you make better decisions and minimize the risks of impulsive trades. EXTRA Journal Item #2: MISTAKES LEARNED Mistakes Made and Lessons Learned As a trader, you’re bound to make mistakes, and it’s essential to learn from them. So why not write them down. Incorporate the mistakes you made in your Trading Journal. This way, it can help you avoid making the same errors in the future. For example, if you realize that you lost way more than 2% for a trade. Write down where you went wrong. Did you over capitalise? Did you extend your stop loss? Did you hold on longer than you should (which the costs added up)? Did you follow your strategy and risk management rules? Write down the mistake and you’ll have a better chance of avoiding it in the future. EXTRA Journal Item #3: NEWS REACTION Market Reaction to News Events You won’t find this in my journal. But I know many traders who trade using market fundamentals and news analyses. And if you’re a day trader, Forex trader or a high frequency trader – then this item might be imperative to your trading journal. The market’s reaction to news events can cause major whipsaws, fakeouts and shakeouts. You might find it interesting and educational track how the market behaves before and after a news release. E.g. NFP (Non Farm Payrolls). Unemployment numbers Interest and Inflation rates announcements Quantitative Easing Earnings Reports and so on… For instance, if you notice that the market reacts positively to news about a particular sector or asset, you can make an informed decision to invest in that asset or sector. Similarly, if you notice a trend of negative market reactions to news events, you can use that information to minimize your losses. EXTRA Journal Item #3: TRADING LESSON Trading Lessons and Strategies Finally, as a trader, you must keep learning and growing. If you learnt something about trading, WRITE it down in a journal entry. Adding a section in your Trading Journal called LESSON OF THE DAY. Then record the trading lesson/s and strategies you learnt which can jog back your member and it can help you improve your skills, application and knowledge. The FOUR extra Trading Journal Entries A Trading Journal with these EXTRA items can help you excel as a trader. Thins like emotional state to identify patterns, writing down mistakes to avoid repeating them, tracking market reactions to news events to inform decisions, and recording trading lessons and strategies to continuously learn and improve. So here’s a sum up of the FOUR EXTRAS that you can apply to your journal. MY EMOTIONS Document emotions every time you take a trade or bank a loss/gain MISTAKES LEARNED Write down mistakes made and where you went wrong in your Trading Journal NEWS REACTION Track the market’s behaviour before and after news releases TRADING LESSON Record lessons and strategies learnt that will help with your trading Let me know if this helps and which out of the FOUR you’ll add to your trading journal?
TVC:SA40Education
by Timonrosso
Maximise your trading success with market analysisWhen it comes to trading, one of the most important skills to develop is market analysis. When you know how to read the market and make informed decisions, it can be the difference between spotting high, medium and low probability trades. Here are some ideas to analyse the market and maximise your chance of success. Start with the Main Indices The first step in market analysis is to take a look at the main indices. These indices, such as the JSE ALSI, SP500, Nasdaq, FTSE100, and others, are a good indication of the overall market direction. Once you have seen the indices, you’ll get a sense of how the market is moving as a whole, and what kinds of opportunities might be available. Identify the major Trends Once you’ve looked at the main indices, it’s time to: Identify any market trends (Market environment) If the market is showing a strong uptrend (trend, momentum, moving averages analysis) Then it’s best to ONLY look for longs or buys. On the other hand, if your indicators suggest that the market has confirmed a downtrend, it’s best to look for sells or shorts. Look for Breakouts Sometimes the market doesn’t confirm an up or down trend. If you see the market is moving in a sideways manner, there’s still an opportunity to profit. In this case, it’s a good idea to write down the levels of breakouts you’d expect. If the market breaks up, you’ll expect longs, and if it breaks down, you’ll look for shorts. This way you’ll prepare for both outcomes And you’ll be able to capitalize on whichever direction the market takes. Final Thoughts Market analysis is a critical skill for any trader to master. When you start with the main indices, to identify trends, and looking for breakouts, you’ll be able to make informed decisions about your trades and get a good idea of where they’re more likely to head.
TVC:SA40Education
by Timonrosso
4 Ways to STOP Impulse TradingHow do I STOP Impulse Trading? Just a reminder. An impulse trader is one who makes quick, irrational decisions to take a trade (long or short) for some form of immediate satisfaction it may bring in the short run. Impulse trading might occasionally work. But it's risky and can damage your trading confidence and psychology in the long run. That’s because when you win, you’ll take more impulse trades that go against your strategy. But then the winning streak will end and the losing streak will come. And that’s where you’ll blow your portfolio eventually. So, to help you overcome impulse trading, I suggest these three solutions: Solution #1: Take a break When you feel the urge to make an impulsive trade, step away from your computer for an hour. Use the time to go cook a meal, go for a walk, or do something else that helps you relax. Then when you’re feeling more relaxed and in tune, you can come back to trade the markets with a refreshed, rational mindset to see what has or is lining up. Solution #2: Reflect on your trading history Review your trading track record. It is your game plan. It shows you the potential of what is to come. And it allows you to look at your past data and trend of your portfolio. Consider the gains and losses you've experienced and remind yourself of why it is super important to stick to your trading strategy. This alone should help you resist impulsive trades. Solution #3: Set specific conditions for impulse trading If you still struggle to control your impulsive trading instincts, then this might be the best idea. Open a separate trading account with disposable funds. This way, you can indulge and take your impulse trades without jeopardizing your primary trading strategy and account. Maybe it’s a R10,000 or even a R50,000 account. Or if you just want to trade for trading sake it, it might be a R5,000 account. Whatever it is. When you feel impulsive, trade using your impulse trading account. And then when it comes to your main account, you’ll be able to follow your specific trading strategy according to your track record. Remember, trading should be approached and seen like running a business, not like playing a slot machine. Keep this in mind, and this should help save your portfolio.
TVC:SA40Education
by Timonrosso
1
May the Fourth Be With You - And your Stop losses!Star Wars has been around since 1977 which was written and directed by George Lucas. During that time, there have been phenomenal quotes, lessons and adventures that have been shared. Instead of telling you different lessons Star Wars can teach you about trading. How about I share some quotes and how you can apply them? Here are the ones I find are the most applicable. #1: "I find your lack of faith disturbing." Use this as a reminder to stay confident in your trades, even when the market is unpredictable. Have faith in your strategy. Have faith in your commitment. Have faith in your strong mindset. #2: "Your focus determines your reality." Stay focused on your trading goals and strategy. It’s not about what others see. It’s not about what others feel. It’s about you in your own work station, planning, preparing and executing accordingly. #3: "Do or do not, there is no try." Commit fully to your trades, rather than hesitating or second-guessing. When it’s lined up, ACTION. When you see a trade setups, write them down and prepare for execution. Don’t try… DO! #4: "Fear is the path to the dark side." Stay level-headed and not let fear or panic drive your trading decisions. Fear doesn’t exist. Only danger does. We are fearful most times in our head when there is no apparent danger. Remember this when you feel fear. #5: "In my experience, there's no such thing as luck." Successful trading is based on skill, probabilities and strategy, not luck. #"6: The Force will be with you, always." Here’s a reminder that your skills and strategy will guide you through both good and bad trading times. In this case the force is your proven strategy, your will, your commitment and your strong mind. #7: "You must unlearn what you have learned." Be open-minded and flexible when it comes to adapting your trading strategy. We learn as sheeple to buy low sell high. While I have gone against the idea and instead BUY HIGH, SELL HIGHER. Also, when everyone buys, is normally where the Smart Money offloads theirs. And when retail dumb money sells, that’s where Smart money BUYS. Did you find these useful? Which one resonated the most with you?
Editors' picks
TVC:SA40Education
by Timonrosso
13
Q. Why when the FED raises interest rates does the rand weaken?A. Whenever you think about a country raising interest rates, we need to consider what happens to investors and where they are more likely to deposit their money. So, as we are expecting an increase in interest rates this month from the FED, there are a few reasons why we can expect the rand to weaken further: Here are three to consider… Reason #1: Investors flock to the US Dollar When the US Federal Reserve raises interest rates, it becomes more attractive for investors to hold or buy US-dollar denominated assets. That’s because they know they’ll receive a higher rate when they invest in it. This will also lead to a rise in the US dollar and a drop in smaller currencies (like the rand). Reason #2: US Dollar is still the fat cat of reserve currencies A rise in US interest rates may lead to higher borrowing costs globally. This is because the US dollar is still the world's primary reserve currency. When we think of gold, Bitcoin and other precious metals, we think of how it’s priced in US dollars. The problem with this, is that emerging market countries, like South Africa, will face higher debt-servicing costs as the US interest rates continue to move up. And this could continue to put pressure on their economies which will lead to a depreciation in the rand. Reason #3: South Africa is still a big exporter Also, South Africa remains one of the major exporters of commodities. And the value of the rand is linked to fluctuations in commodity prices. So, when US interest rates rise, this leads to a stronger US dollar. And can cause commodity prices to drop (as they are generally priced in US dollars). As South Africa is a major commodity exporter, the lower commodity prices would have a negative impact in SA’s export revenue – which can in turn weaken the rand further.
Education
by Timonrosso
1
RISK less with Drawdowns and more with Winning StreaksA drawdown is a period of decline in the value of a portfolio. This is where you take a number of trades, and the losses drop the portfolio at a marginal level (if you know what you’re doing). During these times, the market is typically more volatile (jumpy) and unpredictable. And so you have a higher chance to risk money in unfavourable times. Risk less with drawdowns When your portfolio drops 6%, 8% or even 11% – This is where you’re not sure when the market will become more favourable. This is the time where you decide to risk less money per trade. You would drop the risk from 3%, 2% to 1.5% or even 1%. Then keep trading until the markets pick up and start to favour your portfolio… Once you’re out of the drawdown then… Risk more money with the winning streak During the winning streaks, the market is typically more stable and predictable, and the chances of making a profit are higher. You can then pump up the risk back to 2% or 3% (if you’re a risky biscuit). When do you do this? When your portfolio is either BACK to an all-time-high. Or when you can see the market has broken out of the sideways consolidation and volatile period. Risk management is an important aspect of successful investing, and adjusting the amount of money being invested based on market conditions is one strategy that can help investors achieve their financial goals. By risking less money during drawdowns and more money during winning streaks, you as the trader can lower your potential losses and maximize your potential gains.
TVC:SA40Education
by Timonrosso
Why YOU NEED a Slice of Humble PieAs a trader, you must approach the market with humility and an understanding that you are at its mercy. And so you need to remember that the market, doesn’t know you, doesn’t care about you, and doesn’t work to reward you. Let’s break that down. The Market Doesn’t Know You The financial market (Mr. Market) is a complex and dynamic system that is influenced by a multitude of factors. These factors are beyond our control and are pretty much impossible to predict. As a trader, you need to remember that the market doesn’t know you, isn’t out to get you and that your success or failure is not a personal reflection of your worth. The Market Doesn’t Care About You It can be tempting to think that the market is out to get us and that every loss is a direct result of our own mistakes. However, the market doesn’t care about us as individual. They don’t have some personal vendetta against us. Every trade is simply a result of supply and demand dynamics along with risk, reward and probabilities. We must accept that sometimes the market will work against us, no matter how skilled or experienced we are. The Market Doesn’t Work to Reward You There is such high competition with trading. This environment is very high-pressured. It sometimes feels like we are in some race to make as much money as possible. However, it is important to remember that the market doesn’t work to reward us. As a trader, you must be humble and understand that success in the markets takes time, patience, and you must be willing to learn from your mistakes. Also need to approach each and every trade with a level-headed and open-minded perspective. Focus on this, and you you’ll make which will help us to make better decisions and increase our chances of success.
TVC:SA40Education
by Timonrosso
1
WHY YOU Don't always Receive INTEREST when you are short... Q. I thought that when you go short (sell) that we earn interest (swap fees) per day. But to my surprise I was actually charged interest on my open trade with AUD/NZD. Was I not meant to earn interest?” A. Unfortunately, it depends… With each market you trade, you’ll need to look at the symbol information for each trade you take. This also depends on the deal the broker has with each market. For example, when you SELL AUD/NZD you're essentially buying NZD/AUD (as they are currency pairs). So whether you go long or short, you don't earn interest with short (sell) currencies... But make sure, you always look at Symbol information and see what swaps are positive when you are short. With the AUD/NZD you can see you pay -3.35% per year. That means each day you hold, you’ll have to pay 0.009% per day. Then with some commodities and indices you’ll either earn interest or you’ll have to pay interest when you short (sell). For example, with gold you’ll receive an interest of 1.23% per year. Whereas with cotton you’ll pay 5.4% per year. With the UK 100 FTSE, you’ll pay an annual interest of -0.24%. And with the Dow Jones you’ll receive 0.74% per year. Then with local and international stocks, you’ll receive a certain % of interest (swap fees) per year. So make sure you always check to see what each swap (daily interest fee) entails. This obviously depends on the Market Maker you're using and if you're using Trading View make sure you see the information from your broker what the interest swaps (fees) are when you go long or short.
TVC:SA40Education
by Timonrosso
4 Ways to ACTION a trade - WHEN TO FIRE!You know that successful trading is… . . . . Patience. You need to wait for the setup, reason, system, lining etc… But then there is the 2% time where you actually ACTION a trade. We action a trade for three reasons. To enter To adjust To get out But we need to talk about these reasons more… Let’s do it., ACTION #1: Trade lines up – JUST TAKE THE TRADE! When your trading signal lines up with your entry, stop loss, take profit, and system: This is the most obvious time to take action. It tells you “HELLO AN OPPORTUNITY HS ARISEN” It is crucial to act quickly and decisively when this happens, as opportunities in the market can disappear just as quickly as they appear. ACTION #2: Adjust your levels – JUST CHANGE THE TRADE There are two levels you can adjust with your trades. Stop loss and Take profit. When the market is moving in your favour, and you have solid rules to move your stop loss in the favour. This is done to lock in minimum gains. For example. When my trade is 1:1 in the money, I might move my stop loss to just above breakeven. This way I have nothing to lose if it turns against me. Then when the market is shooting in your favour, you might want to adjust the take profit. This is because you can see the market wants to move further or… There is a new setup with a new take profit level in place – which happens often with my analyses. Action #3: Execute the time stop loss – JUST GET OUT When an extended period has taken place i.e. 35 days or 7 weeks. You might want to just get out of the boring trade. You are either : • Chowing (eating away at) unnecessary daily costs holding a non performing trade. • A trade setup seems null and void as a new contrary setup as formed. • Or it’s just a plain old opportunity cost where you can put your money in better places. it may be necessary to exit the trade in order to avoid incurring too much in daily fees or missing out on other better opportunities. Action #4: Exit due to unforeseen circumstances- SERIOUSLY JUST GET OUT! For example when a black swan event occurs: A black swan event is a term used to describe a market collapse (10X the standard deviationof its normal price move) that is unexpected and has a significant impact on the market. In the event of a black swan event, it is essential to exit your trade in order to protect your capital and avoid taking a bigger loss than you expected.
TVC:SA40Education
by Timonrosso