Monday, 26 December 2011

Trendline dan kaitannya dengan support dan resistance, fibonacci. Pelbagai variasi bagaimana trendline di lukis. Yang paling popular ialah variasi demark yang juga dipromoasikan secara meluas oleh Moutaki dengan breakout strateginya dalam buku Thomas Demark iaitu The New Science of Technical Analysis atau DeMark Indicators(Bloomberg Market Essentials: Technical Analysis). Thomas telah berjaya mengubah trendline ini dengan lebih kemas dan berobjektif. Mengikut pendapatnya trendline ini dilukis dengan cara mengetahui Suppy dan Demand. Dengan menghubungkan 2 point dari kanan ke kiri.
Walau bagaimanapun Moutaki hanya membenarkan fungsi trendline lebih kepada breakout trading sahaja. Sebenarnya trendline juga berfungsi sebagai support resistance, RBS / SBR iaitu breakout atau bounce.Cuba lihat gambarajah di bawah.Name:  trendlinepatern.JPG
Views: 126
Size:  13.2 KBBulatan merah pertama merupakan kawasan breakout setelah berjaya menembusi TL, manakala bulatan merah yg kedua merupakan area bounce yg menyerupai peranan RBS !!
Seperti yang dinyatakan pada awal tadi, TL ini membenarkan fungsinya lebih kepada “breakout strategy”. Beliau telah meletakkan sesuatu yg lebih objektif berdasarkan TL ini, kita mampu membuat pengiraan berapa banyak pips yg akan bergerak selepas berlakunya sesuatu breakout. Syarat UTAMA ialah harga yg dibuka selepas breakout MESTILAH berada DI ATAS / DI BAWAH trendline tersebut dan hanya VALID berlaku di Time Frame 4 jam.
Kita perhatikan contoh di bawah bagaimana pengiraan dibuat dengan menggunakan trendline ini sebagai sasaran pergerakan pips berikutnya selepas berlaku breakout.Name:  trendlinepatern1.JPG
Views: 124
Size:  13.5 KBDapatkan harga tertinggi dan terendah yg diperolehi - 2 garisan putus.
Pengiraannya adalah seperti berikut :
Harga pertemuan TL dan garisan menegak : 131.25 - Harga paling bawah : 129.25 = 002.00
Ini bermakna perbezaan yg terdapat ialah sebanyak 200pips. SUNGUH MUDAH DAN TEPAT.

info from : abdulhalim2274 cg

Wednesday, 12 October 2011

Monday, 26 September 2011

Comfortable Lies and Uncomfortable Truths

Lying comfortably hold you back from making progress as a trader?
Are time and effort is focused at the present time towards the comfortable, and probably better spent in learning to accept some uncomfortable truth?
Lie is simple: The stock market in the extraordinary success secrets. There are only five copies. Being one of the few fortunate to have the Forex Orgasmatron.
Uncomfortable truth: There is no secret internal exchange market. There is no secret. Orgasmatron Forex will not make you satisfied! There is no holy grail system of magic that can make all your dreams. Success requires talent. Talent needs time and effort to develop them.
Lie is simple: I only have this type of trade with discipline and I will succeed.
Uncomfortable truth: Trade is not about to take the listing style of blind. Trading is to know when to take the pattern of entry, and when you to avoid it. And on those occasions when you do not take the input, so it knows when to hold your position, and when it is zero.
Lie is simple: If you only set a target of three times the risk to me, so I just need to correct 25% of the time.
Uncomfortable truth: As you improve your target, and will reduce your percentage of wins as well. You not only can increase your target, and we expect to maintain the same percentage to win. Very likely could end up getting close to winning 25%. And how it can affect your mind? The objective should be suitable for the market environment. Sometimes, in some environments, the market does not offer three times the risk.
Lie is simple: I just need to trade without emotion, and I will be fine.
Uncomfortable truth: You can not! You people! Emotions are part of being who you are. You can not block them out. You need to understand them and learn to work with them.
Lie is simple: I stopped taking the middle of the country.
Uncomfortable truth: Maybe you stopped and put in the place is really stupid!
There are many more just.
Review all your beliefs on trade, particularly in the development of a dealer.
Ask yourself seriously ... Is really just a simple lie?
Here are some inconvenient facts ... To replace some of your lies:
Will be available when you start working with reality, and learning to operate and manage the risks in an uncertain environment.
Develop strategies based on the realities of the market environment - the identification of areas on the chart for the price of other possible sources orderflow merchant. And then learn how to exploit these areas.
Examine the structure of the market!
Management studies!
The study of theories of learning!
Study of decision-making, especially as it relates to the certainty!
Psychological studies peak performance!
And the implementation of deliberate practice, and learn to trust strategy and your ability to trade that notwithstanding any doubts and fears, through a process of trial and error.
It's not about learning some of the rules of entry and circulation, such as robots. But the "transformation" dealer.
Truth hurts. And it does not sell e-books. But it's still the truth! The sooner one receives it, the faster can start the journey towards true "to" merchant.

Monday, 12 September 2011

Support and Resistance

Despite all the hype from the internet marketers who try to sell you the latest trading ‘secrets’, the fact is there are NO secrets.
Identify setups which provide the potential for lower risk and/or higher probability trades.
Enter and manage those trades in a consistent and disciplined manner.
Minimize risk.
Manage your money.
Manage your emotions.
Journal your results, and review them to identify what’s working and what’s not working.
Keep doing what is working, and
Improve what is not working.

If you’re not trading successfully, it’s because you’re not doing one (or perhaps all) of these things. There are no secrets!

So, it’s time to stop searching for this holy-grail solution and get down to some good old-fashioned work.

And where better to start than the first item on the above list - a setup which provides the potential for a lower risk and/or higher probability trade.

Every technical analysis book on the market shows a number of charts with horizontal lines, and labels them support or resistance. Why is that? Because they look cool, and you can show your friends how clever you are at analyzing the market? Well, yeah, perhaps that’s part of it. But have you ever really stopped and asked why you should care if the price action can be bounded by a line? What does it really mean if price has been unable to break through a particular level in the past? Why should you care if price consistently rallies every time it falls to a certain level?

The reason we care is because support and resistance are providing you with setup areas with the potential for lower risk and/or higher probability trades. While there are numerous ways to define an area of low risk and/or higher probability trading, I have not personally found one that works for me as well as the concept of support and resistance.

So, how do support and resistance work?

Price moves due to an imbalance between supply and demand. When there is more demand than supply, price rises until they are once again balanced. When there is more supply than demand, price falls until once again the supply/demand balance is restored. We can also use this concept to explain support or resistance areas.

Let’s first consider resistance.

Price rises while demand is greater than supply. As price rises though, it will become less attractive to the buyers, leading to reduced demand. And it will become more attractive to sellers, leading to increased supply. If the supply/demand ratio can be tipped in favor of supply, price will fall.

Resistance is simply an area which has shown past evidence of halting a price rise. Price hits the resistance zone, and turns around to fall again. If it helps, think of resistance as a ceiling that resists any further price rise.

Support works much the same. Price falls while supply is greater than demand. As price falls though, it will become less attractive to sellers, leading to reduced supply. And it will become more attractive to buyers, leading to increased demand. If the supply/demand ratio can be tipped in favor of demand, price will rally.

Support, then, is simply an area which has shown past evidence of stopping a price fall, and leading to a price rally. If it helps, think of support as a floor that supports price.

At this point you might have two questions.

(1) Just because we can identify support and resistance in the past, how does that help us with our trading right now? After all, we don’t trade history; we trade the hard right edge of the charts; and

(2) How does this provide us with the opportunity for a higher probability and lower risk trades?

Previous support and resistance can be found in a number of areas – previous swing highs or lows, areas of congestion, round numbers and gaps. When price returns to these areas, there is a good chance that they will once again act as support or resistance. This occurs for one of the following two reasons:

(a) Traders expect it to act as support or resistance, and so trade accordingly, thereby creating support or resistance; or
(b) Traders have a psychological need to trade in this area, which once again creates the support or resistance zone.

The simple fact that we can now expect these areas to provide support or resistance again, and therefore stall and possibly turn price, provides us with a higher probability trade.

And the closer we can get our entry to the point of support or resistance, the lower our risk on that particular trade, because our stop can typically be placed just beyond that support or resistance zone.

Till then, review your setups, and ask yourself whether you’re planning your trades in an area which provides a low risk and/or high probability trade.

And please remember, although support and resistance allow a trader to identify areas in which price is likely to stall and possibly reverse, there are no guarantees. You need to always ensure proper application of risk and money management.

Friday, 5 August 2011

The Greatest Trading Loss

What is the greatest risk you face in trading?Is it loss of money?

Certainly, that's what most traders believe. I tend to disagree though. In my opinion we have something much greater at risk, that very few of us consider during the 'learning phase'. The American political journalist and author, Norman Cousins, is quoted as saying, 'Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.'

Along similar lines, I would argue that loss of capital is not the greatest loss in trading. The greatest loss is what we lose from within. Loss of funds is recoverable. Losses of self-esteem, self-belief, or passion for the process of trading, are not so easy to recover. So, think about that next time you feel tempted to widen your stop, or remove your stop. Think about it before you enter your next impulsive, emotion based trade. Think about it if you’re trading without a clearly defined trading plan.

If you suffer financial losses at these times, how will it affect your mindset? Will the losses that result from your amateur and undisciplined actions allow you to move forward to the next trade with greater confidence, or will they feed the forces of frustration, anger, depression and fear, further damaging your chances at consistent, confident and disciplined application of your trading plan.

Drawdown in your psychological capital is much harder to recover, than is drawdown in your equity balance.

So, manage your risk! Not so much to protect your finances, but in order to protect your much more valuable psychological capital.

Your whole trading future depends on it.

Friday, 10 June 2011

Dealing with Market Uncertainty

The nature of the markets is uncertainty. Human beings do not like uncertainty. In fact we fear it at the very depths of our soul. Much of our society has evolved in an effort to reduce the uncertainty we face in day to day life, through controlling the environment, and implementing a structure of laws, rules and regulations. This has been largely successful. Although uncertainty in life cannot be totally removed, we have managed to create a structure in which people can live with relative safety and generally a higher standard of living compared with previous generations.

The markets though are different. Unlike society, where we can influence the actions of other people, and where we have some level of influence over the environment, the typical retail trader will have no influence over the action of the market. None, at all!

When you enter a trade, no matter how skilled you are at analysis, there is no certainty in outcome.

So how do we, as technical analysts, attempt to work within the uncertainty of price action?

Generally the first step, because we’re human, is to create structure where there is none. The preferred approach is through a framework of support and resistance lines, but there’s certainly no shortage of other approaches - whether through an indicator based approach, trendlines and classic charting patterns, wave patterns, or cycles of lunar and planetary movement. Whatever approach people choose, they’re overlaying price with an approximation of market movement that provides structure.

The purpose of this structure is to provide a framework within which the trader can identify low risk and/or high probability trades.

That’s where a problem occurs for most novice traders. Not used to accepting uncertainty, these traders mistake the structure they’ve applied to the market, and the entry trigger they’ve chosen to get into trades, for the truth. They say they understand the probabilistic nature of the markets, but their actions do not show that. Rather, the novice trader trades as if their approximation of the market is actually the reality of the market. They act surprised when the trade goes against them, and wish and hope and pray for the trade to turn out profitable, rather than acting quickly to minimize risk. The novice trader consistently demonstrates poor risk control, poor money management and poor trade management.

Knowledge of technical analysis, whether indicator based or via classic charting patterns, is not the same as knowing the future direction of price.

The structure you apply to the markets does not, and was never meant to, provide certainty. Rather it simply provides a framework within which you can understand past market movement, and hopefully identify low risk and/or high probability trades.

Note that we did not say zero risk, or guaranteed 100% profitable trades. No matter how certain you are, you’re dealing with probabilities, and some trades will lose. Even a 99.9% profitable system will lose 1 out of a thousand times, and if you’re betting everything on each trade it’s only a matter of time till you’re account is wiped out.

Successful traders have not found some magic system that provides certainty in the markets. Rather, they’ve learnt to live with the uncertainty.

How do they do this?

a. They have developed and tested a positive expectancy system.

b. They trade that positive expectancy system in a consistent manner, secure in the knowledge and understanding that the outcome of any single trade is not important. Success comes from consistent trading over a long series of trades.

c. They manage risk. No single trade is EVER allowed to place their future survival at risk.

d. And so they trade with confidence that the market cannot hurt them, and a confidence that they will take the correct actions to ensure consistent implementation of their trading plan.

So, if you’re stuck in the never-ending cycle of going from course to course, STOP NOW. Ask yourself if you’re trying to find certainty in the markets. Certainty doesn’t exist – your approach is wrong. You’re looking in the wrong place.

Rather than continuing to look for a better way to define market structure or enter your trades, just find one system that others are trading successfully, learn it, and learn how to manage risk, and improve your trading edge through better trade management and exits.

Do not confuse knowledge with knowing!

You may be a master analyst, but you cannot ever know future direction of the price.

Stop searching for certainty. Stop trading as if you can know the future. And just manage your risk.

Tuesday, 7 June 2011

Match Your Trading Style With Your Personality

Have you ever noticed that traders with seemingly the same skills are not making the same amount of money?

Have you ever attributed success to being in the right place, at the right time, or just being lucky?

Well, there is a lot more to it than that. What if I told you, that your own thought patterns affect your success as a trader?

Since birth, our parents, friends, families, places we’ve lived and TV, among other things, have influenced the way we think. Some of these thoughts and behaviors are so deeply ingrained that they’ve now become habits.

A lot of the time, we are not conscious of what we are doing. This is where each person is drastically different from another.

So how does this impact you? You might have heard that you are not trading markets, you are trading your beliefs. Why would that be true? It’s because we all have our points of view (our filters) and we view things through them.

Think about four people watching an accident from different corners of a street. Their stories have some similarities and some differences. Where do the differences come in? Are they lying? No. They are viewing things and running them through their own point of view. That is where the differences come in.

So what are beliefs? Beliefs are your internal programming. They are similar to the operating system of your computer.

There is good news and bad news. The good news is that you know it is a program and that you can change it. The bad news is that you might not even be aware of your programming.

Your program may have served a purpose when you adopted it, however you might not have reviewed it for a long time. Now that your needs have changed, it is time for a review and possibly an upgrade to serve your current needs.

If you don’t, consider how much your outdated program is costing you.

Let’s take a closer look at your programming and see what kind of trader you might be.

Why do you suppose this information might be useful? There are many reasons. You will be able to:

* Discover what kind of market best suits you.
* Learn what kind of system best suits you.
* Identify whom you should follow.
* Make a lot more money.
* Experience less stress.
* joy a better life. 

So, what kind of trader are you? Answer the following questions as honestly as you can.

* Are you a bench warmer or a player?
* Are you an offensive trader or a defensive one?
* How much information do you need before making a decision?
* For capturing your P&L do you follow your system, or do you let your emotions dictate it?
* Do you have a hard time pulling the trigger?
* Can you make your decisions quickly, or do you need to really think it through?
* When you’re trading, what is your number one outcome?
o Capital preservation
o Making money 
* Are you playing to win or playing not to lose?
* Do you have a risk tolerance? If so, is it firm or is it ruled by your emotions?
* Do you cut your losses quickly or let it run?
* Are you taking your profits too fast, or would you let it run longer?
* Are you letting your ego influence the game? 

Well, we all go through these emotions at some point. What would be beneficial is to find out what our primary mode of operation is.

There are 4 primary types of traders. The following questions will help you identify which category best describes your primary mode of operation.

1. Risk taker
* Are you an offensive trader?
* Are you a calculated risk taker?
* Are you an aggressive trader?
* Are you determined / focused?
* Are you competitive?
* Are you results oriented?
* Can you make decisions quickly and decisively? 

2. Perfectionist
* Are you a cautious trader?
* Is capital preservation your first priority?
* Are you playing defensively?
* Do you need all of your data before making any decisions?
* When you come to your conclusions, do you still hesitate to pull the trigger?
* Do you feel like you are missing something?
* Do you second guess yourself?
* Are you a perfectionist?
* Are you critical of yourself?
* Do you suffer from “analysis paralysis” and never pull the trigger?
* Are you missing the boat because you are thinking too much? 

3. Starter, not a Finisher
* Are you an “idea” person?
* Do you get distracted easily?
* Do you have a hard time with follow-ups?
* Do you get overwhelmed?
* Do you have a lot of enthusiasm, but do not take that many actions?
* Do you have a hard time pulling the trigger? 

4. Emotional
* Are you easily persuaded by other people’s opinions?
* Do you let your emotions run your trades?
* Do you have any systems in place? If so, do you follow them?
* Are you losing money because you either do not have a plan or do not follow your plan?
* Do you seek others’ approval?
* Do you get out a trade at the first sign of trouble?
* Do you linger longer than you should with the hope that things will get better?
* Do you freeze because you are not sure how to react? 

As mentioned before, you could be a combination of all of these types at one time or another. However, once you understand your primary mode of operation, you can make better decisions about what kinds of markets you want to be in and what kind of team you need around you. Pick the style and the market that best suits your personality.

Remember, you always have a choice. Once you know what your program is, you can reprogram your mind to become the type of trader that you want to be.

Sunday, 5 June 2011

Fear of being Wrong

Focusing on being right rather than making money comes from the traders’ ego. It is the ego that equates the trader’s net worth with his/self-worth which leads to profits being taken too quickly or to exit at break even.

Trading throws up many issues regarding one’s relationship to money. An internal conflict with making money or needing to be perfect can make it difficult to exit a trade at a loss because it damages your self-image of perfection. Or you may have grown up feeling guilty about having money so you subconsciously find a way to give it back to the market. To avoid self-sabotage, the ego has to stop protecting these versions of the self.

Trading is a probability game and there will always be losses. Being a perfectionist is only setting oneself up for failure. If you cannot take a loss when it is small because you have to be perfect, then this loss will often grow and grow into a much larger one.

Making mistakes has different effects on individuals. Bad grades might have caused parental disapproval and you felt small and worthless. We are so susceptible to the feedback from others. When we are children, feedback can have long-lasting and unforeseen consequences. Many of us never fully recover from the emotional effects of being punished for making mistakes. Neural pathways become ingrained in the brain which attach emotions to learning experiences. When these emotions are negative, they interfere with our ability to learn in a healthy and constructive manner.

Your trading plan must account for the emotions you are likely to experience, particularly those related to fear. As a trader you must move from a fearful, apprehensive mindset to one of confidence, one which enables you to learn from your mistakes. You have to believe in your ability to make more money than your losses. That makes it easier to continue to place trades after a string of losing positions.

Successful forex trading is about overcoming the major fears, gain confidence in your trading method and even more confidence in yourself. If the different manifestations of fear can be understood, the trader is well-equipped to turn fear from a destructive force into one of our most vital assets when operating in the market.

Thursday, 2 June 2011

Fear of Loss

Trading is like any other business in that losses are a part of the game. But losing over and over again can lead to psychological scarring that can paralyze, and fill the trader with dread when approaching the trading table. As Mark Douglas explains in his classic book ‘The Disciplined Trader’, fear of losing actually leads to losing. Stops are placed too tight, not allowing price action to develop. Trades often pull-back after entry which causes the fearful trader to panic and exit with a small loss to prevent a larger loss. A series of small losing trades will eventually empty the account.

The focus should be on avoiding large losses not on small ones. If you cannot cope emotionally with a small loss, you will miss out on potential large moves because every trade you enter has the risk of turning against you. It is vital to know how much you are prepared to lose in any trade. Another catastrophic action is hoping a losing trade will retrace to exit at breakeven. So often however, this leads to even greater losses.

When fear of loss prevents the execution of trades, the trader’s focus may be largely on results rather than following the forex trading plan. This causes doubt about the reliability of the trading plan which gets in the way of pulling the trigger. And thus, a vicious cycle of self-doubt develops.
To combat the fear of losing, paper trading or trading with small amounts enables you to concentrate on execution of your trading system rather than profit and loss. I advise the latter for if you trade with small amounts of real money you will experience the emotions of the market but at a lower level, and you can gradually accustom yourself to them.

The money you put up is money you can afford to lose, and can be viewed as the cost of education like a college degree.

Pure paper trading does not pull up emotions as nothing is at stake.

When you can trust yourself to execute your trading plan without exception and when you can enter and exit the market with decisiveness and without hesitation, then you can consider going live.