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Trading strategies

Dear trader,

This is some important tips you should know before you trade in order to build a strong trading system with the best strategies you will have.

Our active Forex trading and constant research enabled us to collect different strategies and techniques, Today our Team is glad to present a new fair Forex trading strategies  where you can explore different Forex strategies and learn trading techniques! So let's get started...

The importance of setting Stops To Close:

We feel that there is only one thing worse than not using a stop loss and that is setting the stop to close to the entry price.  We really get frustrated when we set our stop the market moves against us, stops us out then moves in the direction we had originally planned.  There is an art to setting stops you need to be far enough away to let the market breath yet close enough that you do not lose too much.  Setting a stop to close can be the result of fear of losing too much, not having a clue where to place the stop or just thinking you need to cut your losses.  Inexperienced traders place there stops where many other traders are placing stops for example near the low of a move.  Their evaluation of the market can be correct but with a poor timing on the entry and setting the stop to close they are taken out.  When the market starts to move in the original direction the trader gets back in close to the place they had entered in the first place.

Trades that could have been winning trades are missed because of stops that are placed to close.  With a large number of small losses it lowers the total profit in the account so the winners are not as effective as they should be.  More stops will be hit if they are placed in the trading range where many other traders are putting their stops.

A trader may be a good trader but he will never make any money if he places his trades to close.  You can be good at picking the direction of the trade but by not giving the market enough room to move you will end up being a losing trader.

In conclusion: Use the Trade Tracker tool (found in the Launce Pad course) to figure out what you are doing wrong correct it and move on.  So if you are always getting stopped out you might find out that it is because of one of two things, your stops are too close or you had poor entries. More likely than not you will find that your entry is good but your stop placement is wrong.

You have to accept Losing while Trading:

In trading the three most important things are: money management, timing your exits and timing your entries; in that order.  More important than how much you make on a trade is how little you lose on the losses.  When you are looking for a place to exit a trade you want to consider a location that will not cost too much.  Think of how much you will lose before you think of how much you will make.  A losing position should be exited as soon as they have reached your worst-case scenario.  By staying in a trade so you don’t lose money is not the way to make money.  For a pip saved is a pip earned.  Learning how to lose correctly is one of the most important things a trader can do.  It is important to know how to hold on to a good trade.  But if you do not know how to get out of a bad trade you will not go very far as a trader.  If you are properly capitalized no one trade will take out your account.  Sticking to trading with a stop loss is critical because a small loss does not mean very much but a large loss can end your trading career both financially and emotionally.

Every trader needs to understand that losing is different from a loss.  All traders have lots of little losses because that is part of trading.  It is when you have little losses turn into large losses is when you have lost.  Once a trader knows it is normal to lose then it is easier to get out of bad trades.  Even if you are a poor trader you will have some good trades.  And you will have a chance at success if you learn to cut your losses short.  The skill comes when you can cut a bad trade but still let the market have a chance to work so you can capture the good trade.

A trade needs to have time to develop.  But a trade needs to be closed when you know you are wrong.  A good exit strategy combines knowing when to hold em and knowing when to fold em.

"Gain or loss "which of them are you going to choose?

There are traders that make livings by making large gains with large losses.  Then there are traders that make a living with small gains and small losses.

Whichever style a trader uses they must be aware of what they are doing and keep the size of the wins and the size of the losses in relation to one another. 

Either style is great but a trader should not get them mixed up with large losses and small gains.  It would be great to have large gains and small losses and how would that be done?  The only way this can happen is by using good money management. 

The size of the winners should be relative to that of your loses. Large wins, large losses, small wins small losses.  When a trader knows when to get out if a trade is going no where and stay in when the trade is taking off then they have really developed some skills of being in tune with the market. 

Just keep studying, practicing and developing your skills for the long haul.  It can happen if a trader does not go all in for the big one and lose.  Slow and steady will win the game.

Trading As Points and Percentages:

You have to know the amount of risk a trader has in the market now it is time to talk about how you feel about money.  If you have a big attachment to money then it will cause a big emotional strain when you lose some of the money.

One of the hardest things a new trader has to learn is how to loose.  Losing is part of trading.  Losses need to be looked at as expenses, or cost of doing business.  There is no Holy Grail or magic trading system that just has to be turned on and the money will roll in. 

If you can’t change your relationship with money, then just don’t think about it.  Focus instead on numbers.  Think of a % of your account, risk-to-reward ratio, and points to be made as profit not as points to be lost.

Once you learn how to make points then the money will come.   You can accelerate the amount of money you make with good money management once you know how to make the pips.

How to Monitor a Trade?

You must know the importance of always monitoring your trade no matter how long you are going to keep the trade on.   To monitor a trade easily it is best done on time frames higher than those in which he normally trades.  A trader can see a trade more clearly when he has a larger perspective.  It is easier to spot the support and resistance levels the farther from the current time frame you are trading.  The smaller the time frame is, the harder it is to judge where a good exit point is.  That is if you want to get more than just a few pips on the trade.  A trader who is concentrating only on a short time frame will miss things that are obvious to someone who is looking at the larger time frames.

Something that I like to do is find the trend on a larger time frame.  Time the entry of the trade on a smaller time frame then move back up to a larger time frame to monitor the trade.  This technique will help to get more pips out of a trade and still allow the market to move.

The Bollinger bandit trading strategy:

Standard deviation is a number that indicates how much on average each of the values in the distribution deviates from the mean (or center) of the distribution.

Bollinger Bands, created by John Bollinger in the 1960s, is an indicator that uses this statistical measure to determine support and resistance levels.

This indicator Consists of three lines and is very simple to derive; the middle line is a simple moving average of the underlying price data and the two outside bands are equal to the moving average plus or minus one standard deviation.

Based on theory, two standard deviations equates to a 95 percent confidence level. In other words, 95 percent of the time the values used in our sampling fell within two standard deviations of the average. Initially, Bollinger Bands were used to determine the boundaries of market movements.

If a market moved to the upper band or lower band, then there was a good chance that the market would move back to its average. We have carried out numerous tests on this hypothesis and seemed to always come back with failure.

Instead of using the upper band as a resistance point, we discovered, as others have, that it worked much better as a breakout indicator.

The same goes for the lower band. The Bollinger Bandit uses one standard deviation above the 50-day moving average as a potential long entry and one standard deviation below the 50-day moving average as a potential short entry.

This system is a first cousin of King Keltner. They are similar in that they are longer-term channel breakout systems.

However, this is where the similarities end. Instead of simply liquidating a position when the market moved back to the moving average, we concocted a little twist to this exit technique.

From observing the trades on the King Keltner, we discovered that we gave back a good portion of the larger profits waiting to exit the market at the moving average.

So, for the Bollinger Bandit, we incorporated a more aggressive trailing stop mechanism. When a position is initiated, the protective stop is set at the 50-day moving average.

Every day that we are in a position, we decrement the number of days for our moving average calculation by one the longer that we are in a trade, the easier it is to exit the market with a profit.

We keep decrementing the number of days in our moving average calculation until we reach ten.

From that point on, we do not decrement. There is one more element to our exit technique: the moving average must be below the upper band if we are long and above the lower band if we are short.

We added this element to prevent the system from going back into the same trade that we just liquidated. If we hadn’t used this additional condition and we were long and the moving average was above the upper band, the long entry criteria would still be set up and a long trade would be initiated.

Scalp trading methods:

After working a trading business plan, the prospective trader by now has a very strong justification for trading, and should be looking to formulate strategies to extract consistent profits from the market. As promised, this issue looks to demonstrate an array of pit-like scalping methods with high accuracy.

Trading is a Wishing Well

How would you describe trading? In the words of motivational guru  Tony Robbins, what metaphors you use to describe your Life affects the quality of your perceptions, and ultimately your Life. So it goes with trading. Some people say it’s like a dangerous animal, waiting to pounce; others think of it as rough seas, waiting to be sailed. I like to ;think of trading as a walk in a knee-deep wishing well full of coins –be content to consistently pick up coins here and there, and avoid thetemptation to go for a chestful of coins, lest you fall and wet yourself.

(Or worse, drown in knee-deep water)

Definition of Pit scalping

By the very nature of trading in the pits, scalping is best defined by trades that are very short term in nature. This presupposes small consistent profits from trades that last no more than a few minutes .

These methods presented here are exactly that - high probability trades with extremely small risk stops and predefined profit objectives.

In the adage of the successful pit trader, it all about taking a million trades to make a million dollars.