WELCOME! Daily Forex Fanatics Review. December 30, 2013

Transcription

1 WELCOME! Daily Forex Fanatics December 30, Review

2 Todd Granthem Daily Forex Fanatics Forum DFF Buddy System Forum Traders Support

3 2013 Topics Why Do You Trade Trading Well Becoming Better Evidenced Based Trading Strategy Development Routine Development Alignment Trade Back Testing Risk Management Angela s PSAR Strategy Keys to Success Being A Good Losers Trading Plan Development Todd s Strategy Getting Funded Trading Psychology

4 Why Do You Trade? Reason: 1. Money Why do we want money: 1. Take care of our needs 2. Take care of others 3. Freedom of Time 4. Freedom of Choice Who is your underlying reason for trading? 1. Yourself 2. Significant other 3. Family 4. Children 5. Those in need

5 Trading Well In order to achieve the reason why you are trading you need to learn to trade well? 1. Trading well means you have a trading plan 2. A trading plan means you have entry and exit rules 3. Trading well means you have the confidence to follow your trading plan 4. Trading well = consistent profits and consistent losses

6 What stops us from trading well? Reasons: 1. Not having a well-defined trading plan - Scale of Yourself 1. Lack of confidence 2. Fear to succeed 3. Fear to fail

7 Trading and Basketball Basketball Trading Offense Motion Offense - Entries Defense - Man on man Defense - Exits

8 Trading and Basketball Basketball Practice Offense Motion Defense - Man on man A Team will practice their offense and defense so much that it becomes a natural reaction to what they are seeing on the court. Offense - Entries Defense Exits Trading Practice At trader must practice their entries and exits so much that it becomes a natural reaction to what they are seeing in the market.

9 Trading and Basketball - Habits Basketball Team Traders Bad Must break the habit buy replacing it with correct habits Bad Must break the habit buy replacing it with correct habits Good- Must know their strengths and continue to improve upon them Good Must know their strengths and continue to improve upon them

10 Trading and Basketball Live Basketball Team Traders Will do what they have learned to do while in practice Will do what they have learned to do while in practice They will run their offense They will trade their entries They will run their defense They will trade their exits

11 Evidenced Based Trading Evidenced based trading relies on what we see happening, not on what we think or feel should happen. This is done by: 1. Having a well-defined set of rules 2. Taking action base only on what they see Example: Buy when the 50 period simple moving average is pointing higher and the price is closing above the 50 SMA

12 What is a trading plan A trading plan is more than a strategy. It includes things like: 1. Why you trade 2. What you trade 3. When you trade 4. How you trade 5. Goals for trading This is an all encompassing document that takes into consideration all conditions for trading situations.

13 Trading Plan Development Goals: 1. Get your trading plan 2. Develop your strategy 3. Trade-well 4. Profits Trading plan leads to trading well which leads to consistency and profitability

14 Main Elements of Good Trading Plan Identify our Traders Profile Self-assessment Trading Strengths/Weaknesses When we won t trade Objective Long term/short term goals Routines Daily, Weekly, Month Analysis Trade, Profit, Loss, Month Method of Journaling defined Risk Tolerance Trade risk, Portfolio risk Strategy Charts, entry, exits, etc.

15 Trading Plan Template Apiary site Search Bare Trade Plan Template

16 Strategy Development Step 1: Write down the reason for buying or selling Step 2: Write down your entry point Step 3: Write down your exit point Step 4: Write down when not to trade Step 5: Write down Money Management Rules Step 6: Write down Daily, Weekly, Monthly routines

17 Trading Plan: Strategy (Scalp, Swing, Position) Market Which pairs Time frames 1 min -1 month, Time during day Tools Indicators, Trends, Support/Resistance Entry Trigger (What we need to see on the chart to enter) Exits What we need to see to exit at a profit or loss

18 Trading Strategy Development Where do I start? 1. Take the Apiary Traders Profile. 2. Take the Apiary Courses 1-13 ( Beginning, Intermediate, Advanced Strat.) 3. Learn trading platform 4. Pick one pair to trade EURUSD 5. Pick one time frame to trade 60 min. 6. Pick one System to test (how many systems are out there? Lots)

19 Angela s PSAR Strategy (1hr and 4 hr) Long MACD (12,26,9) Must have a bullish cross Parabolic Stop And Reverse (0.02, 0.2) Trigger: When the PSAR gives a dot below price and MACD give a bullish cross - buy Short Trigger: When PSAR gives a dot above price and MACD give a bearish cross - sell Long exit Initial Stop below PSAR TP: Bearish cross of MACD Short exit Initial Stop above PSAR TP: Bullish cross of MACD

20 Alignment Strategy 4 hour chart 1 hour chart 5 min chart 60 SMA Apiary Pivots Price Cycle Bullish Alignment Price above 60 SMA on all time frames Bearish Alignment Price below 60 SMA on all time frames

21 Bullish Alignment Trade Buy stop order on the 5 min chart Last pivot high +1 pip Stop at last pivot low on 5 min. or if price moves below 60 SMA on any chart Profit target current value of price cycle from last pivot low

22 Bearish Alignment Trade Sell stop order 5 min chart Last pivot high -1 pip Stop at last pivot high on 5 min. chart or 60 SMA on any chart Profit target current value of price cycle from last pivot high

23 Alignment Trades Tip don t open when 1 hour chart has move 70 to 90 percent of it s price cycle Tip Scale out by closing out half the trade at 3 pip profit and move stop up to B/E or +1 pip

24 Todd s Strategies Trend Trades Identify the trend Identify a pull back Identify a trigger to enter

25 Todd s HMA Trading Rules 10 period HMA 200 period HMA MACD (old) 24,52,18 Trade Direction Long 200 HMA up and MACD above zero Short 200 HMA down and MACD below zero Trigger 10 HMA turning in direction of the trade direction

26 Limited Discretion I m not deciding if I should take the trade on anything other than what the chart is showing me based on my trading rules. No Discretion on Entry Limited Discretion on Exit Limited Discretion on when to trade News = no Friday afternoon = no

27 Risk Management How to control risk Reduce lot size Smaller lot size Lower lot size % Risk

28 Max. Suggested Risk? 2% - Never lose more than 2% of your account in any one single trade. Normal trading conditions = risk 2% abnormal conditions = risk 1% Crazy trading conditions = risk 0.5% Key word = MAX

29 Statistics of Successful Strategy (SSS) Win/Loss Ratio AW/AL Ratio Less concerned with = 90% WR or 10% WR Less concerned with = AW and AL More concerned about their ratio/relationship

30 Back Testing Todd s Testing Goals 1. Back tested with Positive Results 2. Initial run of 100 Trades Demo account Wins = 90%, Profitable 3. Run strategy on a live account (not for profit) 0.01 lot size Have 100 trades Look at W/L Ratio Look at AW/AL Ratio Look at DD 4. Continue To 250 trades and re-evaluate

31 What we should know about our trading 1. What is your win/loss ratio 2. What is your average win and average loss We need to trade our system 1000 trades 100 trades from system trades from system 2 30 trades from system trades from unknown system (no rules entry or exit)

32 Routine Development 1. Turn on computer 2. Look at closed trades 3. Check account balance for mistakes 4. Checked New, reports, announcement 5. Look at open trades 6. Make adjustment to open trades 7. Go to the bathroom 8. Take a shower 9. Look for new setups 10. Place new trades 11. Review any testing 12. Education 13. Listen to Todd Weekly and Monthly Routines Looking at results Analyzing what they mean Testing Save money to go to Summit to hang out with Todd

33 Daily routine 1. Check current trades 2. Check closed trades 3. Check economic report releases 4. Look at News headlines 5. Pull up Charts to look for new trades Weekly Review bad trades, looking at stats

34 The #1 Key to trading success! Having a Strategy Confidence Consistency Disciplined Successful/Profitable Question should NOT be: What is the strategy (I need to find a good/perfect strategy) Question should be: How do I develop MY strategy

35 The #1 Key to trading success! Consistency consistently bad, have to have a plan Mindset without a plan -bad Risk management - Strategy Having a plan Mindset, risk management Discipline Plan Strategy

36 Being A Good Loser I m a good loser, and I know it!

37 Fear of Losing! Root cause of our fear = loss of money Look at our Risk Parameters (2% Max) Turnover ratio What is our level of comfort with our chosen Maximum Loss? Todd (not you) is comfortable at a risk of ½ % (Chicken) If Todd (not you) takes a loss I don t care Desire to be right = not want to lose Todd (not you) know that with my trading system in order to be right I need to take losses or in other words I need to be wrong Losing is part of my success

38 Losses in proper perspective If you connect losses to your winning strategy then loosing become winning. Losses need to = a positive response from the trader Make taking a loss a good thing Motto: I m a good loser and I know it

39 Getting Funded: Why are you NOT funded yet? New Developing a System It Shouldn t take years Don t have consistency needed Confused Refining trading skill Fear Undecided on what to trade Poor R:R ratio Poor Expectancy/W/L Ratios Filtering out un-needed stuff Looking for but not finding trades

40 Why did I get funded? Positive Profit Curve Good Money Management Positive Win/Loss Ratio Positive R:R (AW vs. AL) Consistency Low Draw Down

41 Trading Psychology: Discipline Training to act in accordance with rules Can you be a disciplined trader when only follow your rules sometimes? If I m only disciplined 9 out of 10 times then I m not a Disciplined trader!

42 What would Todd make you do? Don t focus on making money If we focus on money we are trading on emotions Take away losing as a negative thing Focus on our ability to trade our System Trade the EUR/USD exclusively Focus Don t do anything just because Shawn or Todd does it. Trade the 1 hour charts No more than 2 indicators one has to be a SMA (50) Must trade a $1,000 account Must trade only 1 micro lot at a time You can only have one trade open at a time You must have a stop loss of no less than 25 pip and no more than 100 pips You must review every trade with another trader If you take a loss you must write a paper on why that trade was a loss If you take a win you must write a paper on why that trade was a win You may not take another trade until your paper has been read by another trader Before you can take your first trade you need to submit your trading plan and rules for entering and exiting your trades This plan and set of rules needs to be reviewed by another trader