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Journey of 1000 psychological trading hacks.Join me - to boldly go where 'no man' has gone before. This is the Final Frontier. I take on the big issue - head on. This is the one that is more likely to make the biggest difference to achieving consistent profitability. I assert that it technical and fundamental analysis are not most important issues in trading - at all! If 'everybody' could simply do proper technical and fundamental analysis and make load of money, then everybody would be rich. It's never happened. It ain't gonna happen! I say that our enemies lie within. I say that dealing with the enemies within - by self-analysis, is the path to unlimited gains. AND - it's not just me saying so. Could this be your 'Mission Improbable' or your 'Mission Possible'? The choice is yours. This post is in keeping with Tradingview's text-based analysis guidance
BITSTAMP:BTCUSDEducation
by Captain_Walker
Creating your own Trading StrategySELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Creating your own Trading Strategy "In finance, a trading strategy is a fixed plan that is designed to achieve a profitable return by going long or short in markets".Whats your Trading Plan/Strategy? Some of the questions you need to ask yourself when creating your own strategy are as follows; How much time during the day/night do you have to devote to trading? How much money do you need to live on each year and how much of that must come out of trading profits? How many distractions can you expect during the day/night? Specify the markets and times of the day you will trade Do i want to trade multiple systems? Will you short sell? or go long? Where will you place your entry/stop loss and target line? How will i monitor my trading results/outcomes? Will i use software or just a simple excel document? Will i need a mentor or will I be self taught? How do I handle losing money? Can i handle being in a trade for more then an Minute/Hour, Day, Week etc? Will i use a phone, tablet or desktop computer to place, check or cancel my trade? How will i improve my trading performance? How did you go about creating your strategy? What steps did you take or follow?
Education
by SMPTrader
USDTRY - Be wary of Intervention ex-post Rapid MovesTraders layering into TRY potentially got burnt last week as the Turkish Central Bank intervened to halt the local currency's worrying devaluation by raising interest rates by a whopping 3% Whilst i tend to let the majority of fundamental data pass me by , it often pays to atleast maintain a health awareness of key macro factors that might have a direct impact on any currency pairs you are trading or tracking (this is different to following any random commentator's subjective opinion) While I do not like setting upside targets , it can pay to trail stops at healthy profit levels during large abnormal moves so as not to give back profits (we saw this in crypto in Dec 17) adn if we miss the big move initially wait for natural pullbacks / consolidations rather than chase an entry. There will ALWAYS be a pullback or another instruments that will offer the next big move. Worst thing to do is chase an entry through FOMO , get burnt and then be paralysed the next time a big opportunity presents itself. Stay rational, stay calm and nimble
Education
by TJP_Trader
How 2 Maximize the Profit & Minimize the Loss Using ElliotwavesThis is based on the Bitcoin Market Cycle 2017 - 2018. Please note that this for Uptrend Market and it's totally Opposite for Downtrend Market if you are able to Short. Also note that you can apply the same for any Market not just for Bitcoin. - In a Uptrend We have 5 Waves followed by 3 Corrective Waves - In that 5 Waves 1,3 & 5 are Impulsive Waves Going up and 2 & 4 Corrective Waves going down. - We only buy in the beginning of the above waves 1,3 & 5 and sell in the top of those waves - Wave (1) (2) (3) (4) (5) are Intermediate Waves - Wave 1 2 3 4 5 are Minor Waves which is Sub waves of each (1) (2) (3) (4) (5) - Wave (1) price movement can take upto ~2months or more - Wave (3) price movement can take upto ~4months or more - Wave (5) price movement can take upto ~3months or more - Use Daily Chart see the big picture and 4hr to check and confirm the Waves (1) (2) (3) (4) (5) Now lets assume that you are going to invest 1000$ You can adjust this to match your investment amount Start of the Uptrend is Point 0 and End of Uptrend is Point T To find the Entry Point or Point 0 we need to find a new market cycle by doing the following in Daily Chart & 4hr Chart to confirm the trend change -Using Wave 5 channelling technique of the previous market cycle -Reversal chart patterns (wedges, double/triple bottoms, broken trendlines etc) stockcharts.com -8,13,21, and 34 day Fibanacci Ema filter investorji.in After finding the Entry Point 0 then its time to find the Targets for Buy, Sell and Stop Loss Entry Points (Buying Targets)- Wave (1): Buy 300$ @ Wave 1 of Wave (1) Retrace 50% to Wave 2 Wave (3): Entry 1: Buy 500$ @ Wave (1) Retrace 50% to Wave (2) Entry 2: Buy 400$ @ Wave 2 of Wave (3) pass Wave 1 level going up. Wave (5): Buy 200$ @ Wave (4) Retrace 38.6% of Wave (3) See the highlighted boxes for the 4 Entry Points Stop Loss (Protecting Investment)- Wave (1): Sell all if the Price goes below Point 0. You can reverse and go Short if your exchange allow to do so. Wave (3): Stoploss 1: Sell all if the Price moves below Point 0. Stoploss 2: Sell all if the Price moves below Intermediate Wave (2) Wave (5): Stoploss 1: Sell all if the Price moves below Intermediate Wave (4) Stoploss 2: Sell all if the Minor Wave 4 moves below Minor Wave 1 of Intermediate Wave (5) See the highlighted boxes for the 5 Stop loss Points Exit Points (Selling Targets)- Wave (1): Sell 200$ @ End of Wave (1). Do 2.618 Fibonacci Extension of Wave 1 of Wave (1) to find end of Wave (1) Project Wave (3) with 3.618 - 4.618 of Wave (1) Wave (3): Sell 700$ @ End of Wave (3). Do 3.618 - 4.618 Fibonacci Extension of Wave 1 of Wave (3) to find end of Wave (3) If Wave (3) is extended then End of Wave (3) is closer to 4.618 Wave (5): Sell 500$ @ End of Wave (5). Do 1.618 - 2.618 Fibonacci Extension of Wave 1 of Wave (5) to find end of Wave (5) If Wave (3) is extended then End of Wave (5) is closer to 1.618 See the highlighted boxes for the 3 Exit Points Ideas & Comments are welcome to make this Idea much better. Thanks RISK DISCLOSURE: Please note that this is purely Educational purposes only and not as Individual Investment Advice. If you choose to follow the above techniques you do so at your own risk after giving thorough and reasonable thought and consideration to your actions and their potential consequences
BITSTAMP:BTCUSDEducation
by surangadesilva
3
The torture of equity gainsI'm exploring the psychological torture of managing equity gains - mostly in trend-following. I shall not go into methods. I wish to distinguish trend-following from trend-continuation trading. Those who do not know the difference can read up on the net, or start here . At the outset traders will have watched their positions move into much positive equity in a trend-following trade, and would have felt a strong urge to 'take the money'. They may not have felt fear of losing out, or even anxiety - though the urge could well be driven by unconscious emotional factors. In all this I'm considering long positions for easy understanding. Trend-following is where the big money. However it is more challenging as there are no predefined targets, though there are exit events or criteria (in any strategy). In some markets that are pretty volatile one has to be prepared to give back as much as 50-60% at a moment in time, in order to milk a trend that could realise a 500-1000% gain. I'm giving some of my own thoughts and feelings - from when I was much younger in this business. So for example I'm watching say the equivalent of $1200 in equity on a position. Something inside is driving me to take the money. But cognitively I know this is not any part of my strategy or method. I know in advance that I can expect that equity to fall off and stay with my chosen trend envelope. It's a real battle and it's painful (torture). In other words 'feelings' of some sort are trying to direct my mind to do what it shouldn't. On reflection over many of those situations, where I've stupidly taken the money and not followed by trend indicator, I came to realise that my methodology was sound. When I did take the money I might have been relieved when the price fell back as it would but stayed within trend parameters. That then brings relief in the form of self-talk such as " Yes - it's a good thing I took the money ." But then comes another problem of trying to re-enter the trend. In attempting to do so, there is niggling anxiety about losing what I've got and wrestling with fear of missing out (at the same time). So, on some of those occasions 'happy' with my stash I didn't re-enter. Then - lo and behold the market takes off, follows the trend from my very first assessment - and I feel pretty stupid that I've missed out on 300% more over say 4 days. More torture! I theorise that some of the above behaviour is driven at least in part by the most subtle of human instincts - that of survival . We have been programmed by nature to 'take the food or water' when we see it, as that's our survival right there. That taking of gains is probably hard-wired into all of us. Nature didn't envisage that we'd want to cope with trading environments. Money also translates into 'food', other basic needs and comforts - it's the very reason why we're in this business. As I think about it more I recognise that quite a few of the enemies are derived from the survival instinct. All of trading is a battle in the mind and not nearly so much about battling with markets. Now with the benefit of hindsight I take 'technical analysis' and other types to be just 'tools'. The outcome of using those tools depends far more on skill in manage my mind (aka self-management). It may be that it's never a battle one can 'finally win'. All I can do is to catch impulses that might drive me to stray outside of my methodology, and overcome them. This sounds simple but it's not easy. It takes time and much practice. From what I see out there, most traders talk about their successes and probabilities for gains in the market. Sharing of the really more important stuff in the realm of the psychological is uncommon. It would be nice if new traders especially, can share stories that are resemble any of the above.
Education
by Captain_Walker
Amazing S&P strategy, high % of winnersS&P 500 Oanda Hello Dear followers, last week was a great start but we have far more fun in stalled for you this week. Here is something a little different for those wanting to see how simple trading can be, and make some money in different areas. MY S & P strategy is simple, and wins a lot I only trade the S&P 9-12 days a year. I use the same order, strategy and Stop loss. In the last three years I have won over 90% of the time. If you would like to see the trades, which have been profitable for years then follow me quick as one of those days is early this week. Quote of the day "The stock market is filled with individuals who know the price of everything, but the value of nothing." - Phillip Fisher Another testament to the fact that investing without an education and research will ultimately lead to regrettable investment decisions. Research is much more than just listening to popular opinion.
OANDA:SPX500USDEducation
by DollarsAndSense
Expectancy Revisited: Improving your ProfitabilityTEST YOUR TRADING SYSTEM I will not go deep into this, because it quickly becomes a shouting match on who has the best system, which is usually more about ego than fact. It is sufficient to say that I have seen / know of profitable traders who use fundamentals, price patterns, Elliot waves, renko, moving averages, structure levels, pitchforks, trend rules and custom indicators. I will not get into which system is the best, because I have not back tested them all personally. This does not imply that it does not matter what system you use. Far from it. You need a system that gives you an edge. And the only way to know if it does, is to back test it against a relevant amount of data. ADD FILTERS Adding filters to your strategy aims at improving your win rate by eliminating losers. It’s a way to get the odds on your side over a larger number of trades. Examples of filters you could add are: trade with the daily trend, trade with the fundamental direction, filter out unprofitable patterns, don’t trade during news events, only trade reversal patterns that complete at a key structure level, only trade breakouts after a retest of the trend line, add an extra indicator (e.g. stoch or sma line crossover or rsi divergence) or use a particular candlestick as a final entry signal. There might be a price to pay: if a particular filter delays your entry point, it can improve your win rate while reducing your reward – risk. INCREASE THE OPPORTUNITY FACTOR The opportunity factor relates to how many trades your method allows you to take per day / week / month. If by adding filters you are left with just a few possible trades a week, your win rate can go up, but your overall profit might suffer because there would be fewer trade candidates passing through to your filters. This will leave you with fewer trades to contribute to your overall profitability. You can increase this factor by adding more currency pairs to your portfolio or by adding trading hours to your schedule. When adding pairs, be aware of the correlation to the ones already in your portfolio. IMPROVE YOUR TRADE MANAGEMENT RULES Trade management relates to profiting from the trades you decide to enter. It aims at maximising your average winner while minimizing your average loser. The key is having rules that let winners run and exit losing trades without hesitation. Aim for realistic profit targets by reviewing the profit logic of your trades. Predefine a risk that you accept and don’t exceed. One of the ways you can do this, is by managing your trades in a multi-position manner, aiming for several profit targets. Take profit at various stages, as the market makes it available to you and roll your stop loss to break even or a profit protection point as the trade progresses. DISCILPLINE AND CONSISTENCY Once you have the right system, rules and filters in place, you just need to trade your plan consistently day in and day out. Monitor your susceptibility for making errors and eliminate them one by one. Relaxed, concentrated and mindful like a Zen Monk. Don’t overtrade by chasing entries. Don’t under-trade by arbitrarily skipping valid opportunities. Be organized and prepared. A random, inconsistent approach to trading leads to random, inconsistent results that will never be optimal. So plan your trade and trade your plan. TYING IT ALL TOGETHER Simply put, your expectancy per month is the opportunity factor multiplied by both the win rate and the average winner less the opportunity factor multiplied by both the lose rate and the average loser. For the example from my prior topic (see the link under Related Ideas), we know that the calculation was as follows: expectancy per month = 90 x 55% x €120,00 – 90 x 45% x €80,00 = €2.700,00. I have tried to give some tips and trick on how to influence each of the variables in this calculation with the aim to arrive at an improved mix, leading to an improved profitability.
Education
by JazzForex
21
Expectancy: How Profitable is your Trading Strategy?As we all know, when we open a trade, there is no guarantee it will be a winner. Given the win rate of a certain trading strategy, there is a random distribution between wins and losses. We trade to make money over a larger number of trades, not to win every individual trade, which would simply be unrealistic. That is why it’s important to be confident when we place a trade. So we don’t “panic close” the trade when the market goes against us, or exit too soon when we are in profit. If you know the expectancy of your trading strategy, you will be able to deal with these situations better. There is a psychological aspect here: knowing the predictable profitability of a larger number of trades you undertake will build your confidence, which in turn reduces your tendency to shortcut winners and to let losers run too long. Having this confidence will thereby improve your overall results. In December I developed a spreadsheet for myself, linked to my trading records, where I calculate several performance indicators, among which expectancy. How to determine the expectancy of your trading system? Assuming you keep records of your trades, you should go back and look at all your trades that were profitable versus all your losing trades. Do this over a period of at least 3 months and at least 100 trades. The more data you can use, the more accurate the result. We only need 4 pieces of information: number of winning trades, number of losing trades, amount of money won and amount of money lost. From this data we can calculate the following: Net profit = amount of money won - amount of money lost Win rate = number of winning trades / total number of trades Lose rate = 1 - win rate Average winner = amount of money won / total number of winners Average loser = amount of money lost / total number of losers Average reward / risk = average winner / average loser Expectancy per trade = win rate x average winner – lose rate x average loser Or, alternatively, expectancy per trade = net profit / total # trades Expectancy per month (profit forecast) = expectancy per trade x average # trades per month Expectancy per amount of money risked = win rate x (average reward / risk + 1) – 1 Or, alternatively, expectancy per amount of money risked = net profit / average loser / total # trades I will illustrate this with an example for a euro account. Lets assume we have been trading for 6 months and made a total of 540 trades. 297 of them were profitable and 243 were not, with €35.640,00 profit coming from the winning trades and €19.440,00 loss stemming from the losing trades. Lets make the calculations: Net profit = €35.640,00 - €19.440,00 = €16.200,00 Win rate = 297 / 540 = 55% Lose rate = 1 - 55% = 45% Average winner = €35.640,00 / 297 = €120,00 Average loser = €19.440,00 / 243 = €80,00 Average reward / risk = €120,00 / €80,00 = 1,5 Expectancy per trade = 55% x €120,00 – 45% x €80,00 = €30,00 Or, alternatively, expectancy per trade = €16.200,00 / 540 = €30,00 In our example the expectancy per trade is €30,00. This means, on average (over many trades), each trade will contribute €30,00 to the overall P&L. Expectancy per month = €30,00 x 540 / 6 = €2.700,00 In our example we can forecast a monthly profit of €2.700,00 based on prior performance. Expectancy per € risked = 55% x (1,5 + 1) – 1 = 38% Or, alternatively, expectancy per € risked = €16.200,00 / €80,00 / 540 = 0,38 In our example the expectancy of the trading strategy is 38%. That means the trading strategy will eventually (over many trades) return 38 eurocents for each euro risked. Once you know your expectancy, as a function of your own trading statistics, you can forecast how much you could make per week, per month and per year.
Education
by JazzForex
35