Live Trade Using Market Dynamics 30th Oct + Weekly Results

'Professional' Traders Who Don't Make a Living from Trading

Reading Time - 5 Minutes

This is a BIG problem in the trading community. What makes it all the worse, is that it is so difficult to spot, especially if you’re new to trading… And even when you’ve been trading for some time!

So what do I mean by ‘professional’ traders who don’t make their living from trading? Quite simply, these people - and some of them have become quite wealthy using this tactic - make the vast majority of their money from selling courses, seminars, one-on-one training, trading rooms etc. If all of that dropped away and they were left with only trading as an income, they would go broke.

This is very dangerous because they advertise themselves heavily over YouTube, websites, blogs and every other medium they can think of. People get lured in and think they are joining something which will earn them a living ‘once they get their account up to £250,000’ or something equally crazy.

So how do you spot these people? There’s a few methods you can use to figure out who isn’t really making their income from trading (they are most likely profitable at trading, but not enough to live on).

The first one is their advertising. They advertise their services ALL the time. This could be the annoying YouTube adverts that play before your video or it could be traders who plug over and over and over in their actual videos about how well their clients are doing. Some of them will say things to entice you like ‘I don’t need more people in my room, but I’m going to give this offer right here anyway…’

The second one I see all the time. Traders will promote themselves on HOW MANY PIPS THEY MAKE. This is a big no no for anyone who understands trading and has been trading long term. You shouldn’t care if someone makes 500 pips per month or 1000 pips or whatever it may be. The higher the timeframe, the more pips you are likely to win at any trade. But more than that, if someone is risking enormous amounts of capital to make these returns then it isn’t a sustainable business plan. What is much more important is – Return On Investment. This figure will show you in a percentage form what they are returning on capital per month. So if the account is £10,000 and they make £1,000 for the month, then their return on capital for the month is 10%

The very best returns, from the very best traders, are 20% per month but this will likely drop lower as the results average out over the year. Return on investment matters, NOT how many pips someone makes.

Thirdly you need to know the risk they are taking per trade. Professional traders wont risk more than 2% per trade. They just wont do it, because they know the risks are too high. So if someone is telling you they’re making 1000 pips per month, or perhaps 15% Return on Investment, but are risking 10% per trade then guess what – they have no idea what they are doing. One bad month will destroy their accounts.

Fourthly, for the real con artists, they will do lots of YouTube videos or have plenty on their website evaluating markets. They will take you through their system pointing out all of the winners but none of the losers. There will also be very little proof – think live trades, P&L info etc.

Hopefully this helps you guide your way through the minefield that is sadly out there. I fell for lots of the rubbish on offer at the very start so don’t worry if you have also.

If you want someone as a mentor or for accurate information then look for the ones who provide the proper information. Lots of people have become rich from teaching trading but a lot less from actual trading itself.

I hope you’ve had a great trading week!

Competition Results + Ftse Review and Subsequent Trade Results for 27th October, including my results

How to Deal with Boredom When Trading - Beamed to you from a train en route to London

I’m London bound for the London Investment Seminar which is taking place tomorrow. Unfortunately that means I can’t trade today. The free WiFi in first class manages to run IG but the Pro Real Time charts are cutting out and freezing. On a plus note, isn’t it a nice way to live whereby you’re actually annoyed that you’re having to miss work? If you can find your passion, work really doesn’t need to be a chore – and since you’re reading this blog post, I can only assume that your passion, like mine, is trading.

On the previous video I posted which gives information on how to enter the competition to win absolutely free access to my training course, I asked people to comment with what they struggle with in trading or what they would like to learn more about. One of the comments I received related to something that is often overlooked when trading – boredom and frustration. Unfortunately I can’t check who wrote this comment because YouTube is also blocked on this WiFi.

However, boredom and frustration are a very common part of trading. Beginner traders expect excitement. In my experience, this usually leads to them dropping down timeframes until they reach the 1 minute charts. It’s difficult to comprehend that trading – the realm of bad boy bankers, the subject of intense films like ‘Wall Street’, can be boring. But for 90% of the time – it is.

You wait for the setup you want. On the 5 minute timeframe that might happen twice a day. Once every 4 hours! On the one hour timeframe it might be once every couple of days. 4 hour timeframe – once a week. What do you do for the rest of your time? Well, hopefully you don’t just sit and screen watch. I set alarms and if the market reaches my zones, only then do I take notice. Screen watching is fairly dangerous. It can turn boredom into frustration and before you know it you’re entering silly trades.

Ill just scalp a couple of points whilst I’m waiting.

Sound familiar? I bet it does. Avoid it at all costs. Accept that trading can be very slow and yes, boring. But reframe it! It frees up your day. Remember all those times you sat in an office or at school and thought ‘I’d give anything not to have to be here right now.’ Well with trading, you don’t. What’s your passion? Reading? Writing? Painting? Box Set marathons? Online educational courses? Learning a new language?

You can do any of them and all of them. It’s difficult to accept that you don’t need to sit at your desk and focus on every movement of every candlestick. But you don’t. Let everyone else work hard whilst you work smart.

The commenter also mentioned that it was difficult to make his family understand that this is what he wanted to do instead of getting a ‘real job’. Without sounding rude, I want to say that it doesn’t matter a damn what anyone else thinks. If you love trading and you are willing to put the time and effort into learning, then do it. It’s your life and there is no roadmap, no matter what people try and tell you.

Check YouTube tomorrow where I’ll post my trading results for this week to show you that the last video wasn’t just ‘some fluke’. I’ve only worked three days this week (due to me heading to London now) and banked over £1,000. Hopefully this will assure all of the people who are unsure that trading the 5 minute timeframe is a viable business.

I hope you’ve had a great trading week!

Competition - Win FREE access to my training course

Enter the competition for a chance to win free access to my training course. I also show you my trading results so you can see how well these methods work. And I review the Ftse 100 + break down the trading day from 20th October for you

Wednesday Quote Hour

(Yes, I'm reading Warren Buffett's Biography!)

1,000 YouTube Subscribers - Competition for Free Training this Wednesday!

Reading Time - 2 Minutes

When I started this YouTube channel, my expectations were to have somewhere around 200 subscribers by Christmas. And then, over the weekend, the number of subscribers rose above 1,000. I’m fairly surprised and also delighted. I really enjoy receiving messages from people telling me that they have either started learning about trading or have finally become profitable by using the videos and methods I post.

There’s also a lot of spam comments and more than a fair share of hate too, which is also appreciated and rather amusing (not the spam, the spam is just plain annoying!). I always find it funny when someone takes the time to tell me that the free videos and blog posts are of no use and I don’t know what I’m talking about. As a full time, profitable trader, I don’t really know how to reply most of the time!

The training course has also been very well received, and thank you for all the feedback on that. I’m glad it has been what you were looking for and I hope it helps you make the step into trading full time or simply teaches you enough to be consistent in profit making.

The  special offer on the course is now finished, however I’m going to run a competition giving away access to two people for absolutely free. I’ll post details about that in the review video that will be on YouTube this Wednesday (21st October).

Fairly short post, mainly just to say thank you again for the support. 

I hope you all have a great trading week!

Live Trade 16th October - 5 Minute Timeframe - How to Trade Conservatively

Morning AUD/USD Review and Subsequent Trade Opportunities 13th October

AUD/USD Morning Review and Subsequent trade opportunities 13th October. Note the expectation of sell opportunities due to the trend line and also how well the zones worked throughout the day.

Wednesday Quote Hour

Protect Yourself First and Foremost

Reading Time - 3 Minutes

 

This is an unscheduled post. I usually post up blog pieces on a Monday and a Thursday, but I wanted to touch on something I get asked about quite frequently. I often get emails or messages through the Facebook page that go something like this:

''I keep losing money when I’m trading. I have a good plan and the back testing showed that it is profitable. But when I trade live I make mistakes and let the position run against me and I end up with lots of losses. How do you deal with this?''

It’s very common. And it’s surprisingly easy to combat. Use your stop. That’s what it is there for. It’s a safety net. And on the lower timeframes especially, it is incredibly useful. Until you’re very confident in your trading and know you can control your decision making and emotions, use your stop like a watchful instructor on your shoulder, always there to yank you out of trouble.

How do you do this? Get the stop to breakeven early. On markets with low spreads (1 – 2 points/pips) you can often bring your stop to breakeven anywhere between 5 and 8 points/pips into profit. This is exactly what I used to do when I was learning – well, after I had suffered a lot of losses for the reasons mentioned in the message above!

 

The downside is that you will get stopped at breakeven more than is strictly necessary. But this far outweighs taking lots of full losses. And trust me, you can still be very profitable using this method. It protects you and your capital, which is the most important part in trading.

After that, consider removing your profits in stages. Perhaps close 50% of your position when you get to 10 points/pips, or 15, 20, whatever. This allows you a certain detachment if the market then starts heading for your breakeven stop, because you’ve already locked in some profit.

Trade cautiously when you’re learning and you’ll be trading long term.

I hope this helps and I hope you’re having a great trading week!

Recommended Reading List

Reading Time - 4 Minutes

 

I’ve been asked a few times to recommend a reading list to help people with their trading. I do have a few books I would advise you to read if you’re hoping to become a trader, however I think the titles will surprise you somewhat. There are no ‘trading’ books in the list. Every trading book is essentially the same – they teach you how to identify setups, how to pinpoint trends, how to make your millions. You’ll see plenty of pinbars, arguments over what timeframe to trade, in depth research into money management strategies and so much more trading related.

So why are there none of those books on my reading list? Quite simply, because they aren’t enough. Hopefully you’ve got a basic understanding of trading, whereby you can read charts, spot reversal opportunities, identify the common patterns and so on. If not then have a look at the beginner playlist on my YouTube channel, or watch some of the countless other videos out there… And by all means, read some of the trading books. I’ve read countless. My bookshelves are jam packed with them.

I’m sure you’ve read the statistic that 95% of traders fail, usually within their first year (failure tends to mean you go broke!) What do you think the vast majority of these people are reading? Trading books. Specifically, they’re looking for secret formulas, magical candlestick patterns and the ultimate trading plan. They think that when they find the right plan, everything else will fall into place. So why do so many fail? If everyone has easy access to the same material, why is it so difficult?

I’ll give you a clue. The tagline for Decisive Trading is ‘Master Yourself. Master the Market’. That’s the tagline for a very good reason – trading is easily 80% a mental game (war is probably a better word!) If one hundred people were given a successful strategy, a proven method for making money in the markets, 85 – 95 of them would still fail to consistently make money. That’s a hard fact. And it’s because they don’t work on themselves.

You need to focus on building mental discipline. The ability to remain calm and clear headed, to make rational decisions under pressure and a strong determination to succeed are key to success. And so, the reading list I’m going to recommend are all aimed at improving YOU, rather than your trading knowledge. Trading is simple, but it is not easy. And it is not easy because of the emotional attachment.

 

So here are a few of the books I would recommend  –

- Think and Grow Rich by Napoleon Hill

- The Alchemist by Paulo Coelho

- Rich Dad Poor Day by Robert T Kiyosaki

- The Miracle Morning by Hal Elrod

- As A Man Thinketh by James Allen

- The 7 Habits of Highly Effective People by Stephen R. Covey

That should be enough to get you started!

I hope you have a great trading week!

Live Trade - 9th October - 5 Minute Timeframe

Mistakes Happen When Trading Forex and Indices

Reading Time – 4 Minutes

Everyone makes mistakes when they are trading. Even the trader who has been at it for fifteen to twenty years. Mistakes happen and you need to learn to deal with them. Hedge funds have an enormous staff including some of the ‘best’ minds in the community and decisions are made only when numerous people agree on them…and they still make mistakes.

I made a mistake on Monday of this week. I had a losing trade. My concentration slipped and I entered a reversal against the trade. It was emotional trading, yes, sometimes it still pops up. I took a loss of 3% on the account instead of the 1% which was normal and all part of trading. It was an emotional mistake. But guess what? We’re emotional creatures!

The important aspect of the mistake was that it didn’t spiral out and continue its wrecking ball rampage. I caught it after the mistake, I chided myself, and I stepped away from the computer. A lot of people wont walk away but rather become determined to make the money back, usually by taking trades outwith their plan, or increasing risk. This is the main difference between professionals and amateurs – they both make mistakes  (the professional a lot less than the amateur), but the professional accepts the mistake and moves on. The amateur lets one mistake snowball into something that is very difficult to come back from.

So what did I do? Well, I already said I walked away from the computer. Next day I was back at the desk. I had analysed the mistake and determined not to allow it to happen again. I have methods for eliminating emotional trading as much as possible and guess what – during the mistake I didn’t follow the rules! Go figure.

It’s now Thursday and the mistake has been rectified in a financial sense as well as a mental one. I was angry with myself, of course, but the key thing is that I let it go. You cant dwell on it and take it into the next day of trading or you will be faced with disaster.

Have you ever seen a professional footballer, basketballer, rugby player or tennis player make a mistake? I’m talking about the ones at the very top of their game. The people on the big money who receive wages most people can only dream of. I’m sure you have. Because mistakes happen and are outwith your control. How you react to them is very much in your control.

Training site to learn how to trade the 5 minute timeframe, including emotional control – decisivetrading.usefedora.com

Morning Dow Jones Review + Subsequent Trade Opportunities 6th October

This week I review the Dow Jones in order to show how these trading methods are easily transferable. Note the identification of the key zone in the morning and how important it was throughout the trading day.

Wednesday Quote Hour

Intraday Trading Paired with Longer Term Trades

Reading Time - 4 Minutes

I mainly trade the five minute time frame, and my preferred market is the FTSE 100. However, I like to approach trading from two different angles. On the five minute time frame I'm always with the charts, evaluating positions, deciding on adjustments, altering position size. I do this full time.

But I also invest longer term. The way I look at it, my intraday trading (5 minute time frame on the FTSE 100) is my income. What I earn is how I live, pay for holidays, a new car, trips to the cinema...whatever it may be. Longer term investing - think Daily time frame and 4 hour time frame is what I consider 'wealth creation'.

I read about this method a long time ago and I think it's a great way to trade. Consider your longer term investments as something like a savings account. You let it accumulate and build your wealth over time. It's also great because it can be done by people who work full time. On the daily time frame, you're only checking your charts once per day. You can do it after dinner or before you set off for work in the morning. Trades can then be set with buy or sell orders which will automatically trigger you in if the markets behaves how you expected.

Nice, right? It's no more difficult than intraday trading. In fact, it's actually easier in my opinion. You don't get as many signals clearly, since each candlestick takes a full day to form, however there are a lot less false signals. If you align your trades with the overall trend of the market, you can get some excellent risk/reward trades which can run for weeks, sometimes even months, making you money whilst you sleep, whilst you work and whilst you play.

I found that focusing my effort on the lower time frames - when I started I traded the 1 minute, 5 minute and 15 minute before settling on the 5 minute as my preferred time frame - it made trading on the daily time frame easier. I could already spot great setups on the lower time frames and on the daily time frame I would have at least a full day to identify the setup, often times even longer.

If you enjoy trading the lower time frames then great. If you're good at it then even better. But it can be good to diversify. Never have all of your eggs in one basket, as they say!

I hope you have a great trading week!

Great Post if you Struggle with Emotional Trading

Instead of a live trade today I'm posting a link to an article which is great if you suffer from emotional trading and rash decisions under pressure. Owen Fitzpatrick also has some great videos on YouTube which can be useful in your trading journey. I hope you had a great trading week!

blog.owenfitzpatrick.com/building-better-emotional-control/

Don't Fight The Trend

Reading Time - 3 Minutes

This is one of the biggest challenges I faced as a trader. It plagued me for a long time and was not helped by the fact that I traded reversals. On ranging days all was fine and the account would grow. But on trending days? I would get eaten alive.

For some reason my mind just wouldn’t accept that the market was in a powerful trend and I continued to enter into reversals. It was almost as though after every losing trade, I would convince myself that the next one HAD to be the end of the rally and I would just need to hold the position for longer.

If I go way back to the very beginning, when I thought I had found the ‘Holy Grail’ when I stumbled across stochastics, I suppose that’s where it started. I found a technique that worked well… until trending days came along. And no matter how hard I tried, I just could seem to break the habit of entering into trades against trends.

You can get perfect signals on trending days, however they are much less likely to work. On very strong trending days, the reversal candle you identify can quite literally be the pullback before the continued surge.  Even when I could see that it was trending, I would enter into reversals because the signal was good and I convinced myself that I had spotted the ‘bend at the end of the trend’.

I didn’t like to be wrong, which is a problem shared by most traders as they learn. So each time I entered into the losing reversal on a trending day I would convince myself that it was just a temporary setback, the trend would end at the next signal.

Silly, right?

The best thing to do on trending days is to get out of the way of the trend. Jump on and join it rather than fight it. I now employ the eight exponential moving average to help me spot when a trend is weakening and even then I am wary. There’s a video on the YouTube channel that goes into how I use the moving average and also a lot more information on the training course.

If you find yourself being caught out on trending days then I would highly advise you find a way to identify trends and also a method of saving yourself from entering against them. I know it was one of the main areas that improved me as a trader.

I hope you’ve had a great trading week!

Training Site – decisivetrading.usefedora.com or just click the training button on the blog site for more information.