Think Like A Trader Blog

Thursday, 30 March 2017

Them Times Are a Changin'

Hello Traders.
T-Model Trader is back with his 11th blog post for the beginner series. I hope you all enjoy.
James Orr

Them times are a changin’
A few weeks back, I was at the local Indian grocery store stocking up on some supplies. As I have been shopping at this place for many years now, I have got to know the family that owns and runs the place.
While walking the isles, I could hear this rather animated discussion taking place out back, between their twin boys aged 14. I could tell it was the brothers, rather than a friend, simply because siblings have this way of communication that can be totally devoid of any compassion what so ever.
It sounded to me as though they were trying to convince each other of something. Amidst this discussion, I caught what I thought was some trading lingo dispersed amongst the barbed words and less than disguised insults. From time to time their father would look at me and roll his eyes and shake his head.
Eventually I asked him what was happening out in the back room. He told me that they were trading. You can understand my interest, so I asked him if I could go out back and see what they were doing. I had met the boys several times before as they work in the shop from time to time. However I had to knowledge of this trading interest.
So I stick my head around the corner and say hi to the twins. Momentarily they pause and then immediately start again trying to convince the other of their point of view. I sat down and looked to the computer to see what it was that they were doing. Lo and behold, it was the Eur/Usd forex pair.
I had mentioned in an earlier blog that I wanted to find a market to trade during my daytime here as the Ftse is an evening affair for me. After much looking I decided to go with the Eur/Usd pair as it seemed to have the greatest movement during the Asian session, which can be slow going at times. There is a nice time slot between 11am to around 2pm in the afternoon when there is some good price action happening. I have been doing this daytime trading now since the beginning of February this year.
I turned to the boys and said “I trade this pair as well”. As soon as those words moved beyond my mouth I knew that I should have kept quiet as they both went at me attempting to get me to take sides. At one point the father walked past and said “Good luck”.
My brain went into survival mode and I said to them that they can each present their thoughts on which way the market may move and try to convince me with their insights.
I knew that I was in a dammed if you do, dammed if you don’t situation, however I was really interested to know their thinking. So, to avoid inflaming the conflict any further, I got out a coin to toss as to who goes first. Their mother, who had been out back in another room (obviously aware of what was happening) walked in momentarily and with a rather mischievous grin said, “Boys, leave some meat on him…he needs to get home”. I think my smile must have been shaking around the edges from the look she gave me. A few minutes later she walked from the room and said “Passion they have, tolerance they don’t”, with a knowing rise of the eyebrow.
So, they each had their turn.
At the time I recall that the market was at a key zone and I was waiting for further insight myself as to what direction it could possibly go. I could have made an argument for either way as well. So it wasn’t surprising to hear these two sides being presented.
After listening to their respective positions, I told them that in my view, I thought both had really good and insightful observations and that personally I was waiting for further information from the market in order to see the direction. I don’t think that either of them were expecting that answer as they remained momentarily quiet for a second or so, before that inevitable teenager look that alluded to “what use are you”!

Listening to them bickering and arguing was like objectively experiencing the noise in my head at times when I am attempting to analyze this market. The euro$ is solely my own trading project. In making the decision to trade this pair, I wanted to do so without any outside input what so ever. As such, I don’t read anyone else’s views etc.
It has been a mixture of demo-land and live trading thus far. Just as I explained in an earlier blog, if there are a few too many losses then I go back to demo until I settle it all down again and rack up some wins.
All in all it has been a most wonderful experience. After wanting to have a daytime market for quite some time, to finally engage in it is great. That daytime slot around my midday has a really nice pace to it. It’s much slower than the London or US sessions, but it can equally put in some nice rallies as well.
It is that aspect of doing it alone thou, which has been the best part of it all, as I sink or swim purely on my own merits. Many a time I have felt like the two brothers at each other, attempting to convince the other part of me that the market is going this way or that. Although no one can hear my mind hammering out the analysis, from within it sounded just like the boys….loud and furious. From that experience of the brothers, I realized that I needed to quieten down the internal racket as it really was non-productive (not to mention exhausting at times).
I then realized something important not long after, when in a state of total indecision I finally just let go of it all and acknowledged that I had no idea. At that moment, it was like a massive weight had been removed from on top of me. I realized that there are times when it is necessary to just sit back and wait for further information to print in the market, and that it is okay to not instantaneously know. I guess this is what is meant by the phrase “Sitting on ones hands”.

I cannot help but think regarding the brothers and their trading, how radical the changes that have taken place on this planet. At their age I was building tree houses or knee deep in the mud at the local creek, after I got home from school. As their father explained to me, they have a small account of money from their shop work. They are allowed 2 trades per week….which is one each. If they blow the account then they have to work again to get some capital. And importantly, the parents are not involved in anyway. It is purely the boys own project.
Taking responsibility is a profound means in which to progress.
As their Mother said, the passion is there. It would be interesting to see them in a decade to find how they have fared.
It really is a journey this trading reality.
Till next time

Thursday, 23 March 2017

Trading is DIFFICULT no Matter What Fishhook Advertisers Say!

Hello Traders.

I realised something recently whilst working with students and also through the numerous emails I receive from people struggling with trading – it is very rare for someone in the trading community to come out and say:


There is plenty of fishhook advertising with things like:

‘Financial freedom in three months.’

‘You can make 100% per month.’

‘Our client turned 27 pence into £200,000 in six months!’

The problem is that it is invariably the latter, fishhook style advertising that brings people to the markets. Although we know inherently that this type of advertising is simply there to catch our attention and reel us in, people are prone to listen to it all the same. The reason is that these messages are very effective at worming their way into your mind. They stick there and the more often you see them, the louder they seem to speak –

Well, what if it is possible? I could quit the job I hate and I could go and do all the things I’ve always wanted to do. I don’t even need that much starting capital. This could be my way out!

And then as with the fishhook that sinks into the fishes mouth and shows its true form as a barb designed to haul said fish from the water, so do your dreams come crashing down around your ears.

Because –


I am sick of hearing from people who have lost the majority of their savings, or who have invested thousands with these imbeciles promising the world and then not delivering.


A trading educator can only show you the way and give you the best tools that will set you up with the best chance of making it as a trader. After that? You bet your ass it’s going to be a lot of hard work. There will still be low periods, times when you want to cry and give up and walk away. There is still a very high chance that you wont make it as a trader.

There you have it. The truth.

As educators, our aim is to make things easier for you. Scrape away all of the nonsense that we had to suffer through and only provide quality, effective and usable information. We also offer support, advice and help. But no educator can promise you those ridiculous fishhook claims. The work lands on your own shoulders, and it is going to take time. Think 1 to 2 years at an absolute minimum before you can consider yourself not only consistent, but also confident enough to even consider trading full time.

Approach trading with caution. Understand that there are no guarantees and your best option is to have a long term view of things.

1) You will learn how to trade.

2) You will then try a demo account. You may grow and do very well on the demo account.

3) You will go live. You will realise that trading live is vastly different from trading a demo account.

4) You will have mistakes, you will lose money, you will want to give up…

5) Now here you get to the crossroads. You either throw more money at it and follow the high risk attitude suggested by those fishhook advertisers and go bust… or you continue with the slowly slowly, steady steady approach.

Because becoming a trader is possible. But you need to be willing to work at it and take your time. Start off as a disciplined trader at the very beginning and you are setting a solid foundation to carry you forward. Don’t allow yourself to be suckered in by fishhook advertising.

People can make 100% per month, they can even do it for 6 months, heck, a year if they are lucky… but it always ends in tears. Want proof? Do some very simple math and work out how much they would have starting with a meagre £2,000 account, making 100% per month after only 2 years… I’ll give you a clue… it’s into the BILLIONS… and why don’t we see them on the rich lists? Why don’t these educators own the entire planet along with their students? Because it doesn’t happen!

If you want to be successful at trading or anything in life, it is possible. I have never met you and I believe it is possible for you. I know this because I am a ‘normal’ person (my sister disagrees!) and I have proven to myself over and over again that if I just work at something with enough determination and commitment, I can achieve what I set my mind to. You are no different.

Approach your goals with common sense as well as passion. Don’t let the ‘get rich quick’ brigade hamper your dreams and set you back.

As always, I hope you’ve all had a great trading week!

James Orr

Thursday, 16 March 2017

T-Model Trader - Working Around a Problem

Hello Traders.
I have been quiet of late, focusing on getting Pro Trend Trader ready. I will be getting back to normal from next week, adding in a live trade alongside the regular Sunday Analysis videos. I am also working hard on some new projects, including a trading cartoon following the adventures (and misadventures) of a beginner trader. It's just for fun, but I hope to have episode one ready before long!
Back to the beginner trader series now. And here we see T-Model working around some everyday issues (and I am happy to know it is not only my internet provider who is only a little better than useless!)
I hope you've all had a great trading week.
James Orr
T-Model Trader  -  Working Around a Problem
Here in Australia, I live in the metropolis of Melbourne, which has been voted the world’s most livable city on many occasions. If I have it right, I believe that it has been number 1 more times than any other place in the world. In making this decision, I am assuming that a judging panel spends time in the cities on their list assessing for the poll on a variety of merits or lack thereof. Having not lived in every city on the planet that they judge, it is hard to say whether this is a fair call or not, however it does have many wonderful qualities and is a lovely place to live.
I am also thinking that the judging panel either is not here in late spring, or they don’t suffer from hay fever. The entire city has been planted out with wonderfully big and beautiful tree’s lining the streets, which sadly are also totally allergenic. It is like a collective sob-fest at that time of the year, with so many raw red eyes walking around in sneezing frenzies.
Whatever they actually do, one thing is for certain and that is that they don’t take into account the internet connection where I live, which at the moment I am more than willing to call 5th world standard, if such a rating exists.

My connection has been a puzzle to every telco that I have tried. I have spent so much time talking to the various companies that I actually got to know several people due to repeat contact over the phone. No one has a clue as to what the problem is. It appears that my place is in an internet black hole.
I have constant drop outs of signal. To make in it even more of a pain in the butt, it mainly starts late afternoon here, about 2 hours before the London market open. Then for the next several hours, it is off and on. A drop out of signal can easily last for 20-40 minutes at a time, resume for 60 seconds and then drop out again for a period of time. This it can do 10 times over the course of my trading evening.
As you could well imagine, this makes placing trades and everything associated with that a rather bothersome task.
In the really early days of trading, this was a scary thing as I had no control over what was happening (nor any idea what was happening) if the signal dropped out during a trade. On those days when it was really bad, I actually chose to not trade just to be careful.
This is where the notion of “management points” became something seriously critical (beyond them being critical anyway) with an added dimension just to up the learning curve.
If a trade presented itself, then I had a couple of options if the signal was particularly dodgy that day. Firstly, I could just not trade. However, I was starting to get really frustrated by this approach. I have on so many occasions watched the end of day review thinking… “Oh that was a nice trade”, but sidelined due to connection issues.
Secondly, I could phone the trading platform company. That might sound like a possibility, however, sometimes I spent so much time listening to cheesy phone music waiting to speak to someone, that I wondered if the signal drop out was wide spread and I was one of many. Basically, that option didn’t really work (nor did I really want to be having to make a call).
So….plan C was called for.
Given that I have no idea as to when the signal could go on me, I have had to develop this constant and critical observation as to what price action has taken place and potential management points into the future. So when a trade did indeed set-up, I already had my management points fixed clearly in my mind. This I had to do, simply because a trade entry has to also have a take profit level entered at the same time. Given that some trade entries can be relatively quick processes, then I had to have the decisions on that limit order clearly defined.
In the early days, I have entered trades and promptly lost connection. When the signal is reestablished again, I had found on many occasions that price had moved in the desired direction only to have reversed, creating a loss. Frustrating as you could well imagine.
Interestingly thou, this bothersome internet connection has created an interesting by-product.
Now, I always have a limit order in place. If the signal stays connected, then I simply adjust that limit (never remove it thou) if it is that a bigger move is taking place and wish to ride it as much as possible. In this respect I am then constantly projecting forward (moment by moment) to the next level of management points, as to where price could well react and adjusting that limit order just in case the signal goes kaput.
The upside to this problem has sharpened my abilities as to trade management assessment. I say this, because in the early days, not only did I not realize that there was such a thing as “trade management”, but I was also indeed hopeless at it. This takes me back to the last blog of 2016, when I said that my initial understanding of trading was so completely naïve. In thinking about it, I had no concept of anything beyond just placing a trade. So when the notion of “trade management” appeared, I was completely at a loss regarding this process.
My internet connection goes through waves of working or not. This last week or so has been a really bad time as far as this is concerned. The positive side to this is that I have had some really great trades, all without me being present for it (which does, sadly say a lot hey).
A few days ago, I lost the connection for around 90 minutes. What is interesting about this particular trade is that in seeing what took place, I am sure that I would have most likely not allowed this trade to get to that pre-determined limit order. Putting that another way, I would have meddled with what was unfolding and exited too early.
So over the many months now that I have been adapting to this, I am seeing that there has been a very positive outcome. In having to set that limit order, I have had to trust my analysis. I have to believe in myself in this regard. So it is in the end, all about trusting myself and what I have embodied about the processes of trading.
I have lost count of the many times that I have exited a trade due to that fear or sense of lack of missing out. That underlying feeling of taking a small profit because it is “better than nothing” attitude is such a challenge to shake off in that trading development.
So, the silver lining to this connection problem has challenged me to quickly analyze and immediately set the trade parameters. In understanding that I have a tendency to get bogged down in looking at the chart with too much analysis, then this has forced me to move beyond that stagnation of thinking and act more decisively.
A month ago I entered a trade and then lost the connection about 20 seconds later. It was such a delight to not only see that the trade was successful, but also that it only moved a couple of points beyond my limit order before reversing. To have been able to successfully pick a management point as such was a real boost to the confidence levels.
Just as in life, it is interesting what challenges present and the often unseen side that goes hand in hand.

Till next time
T model.

Friday, 10 March 2017

Do it For You

Learning to trade shouldn't be about following a 'guru', throwing buckets of money at them and doing exactly what he/she says.

You should be aiming to build your knowledge, learn more every day and hone your discipline with the aim of becoming an independent, successful trader.
That is why I always promote the use of an in depth diary to all my students. Not merely recording trades, but learning from them, finding your strengths and weaknesses so you can make that improvement and transition to a trader. I am happiest when a student emails saying 'Ok, I'm going to go this alone now, thanks for the help.'

The below screenshot is from a student who has been using the diary the way I outlined, and has already started spotting things that are tricking him into trades.
Build your skills and learn to do it for yourself.

No one else cares about your well-being like you do, so there is no one else you should rely on to take care of it for you.

Have a great weekend everyone!

Thursday, 2 March 2017

Beginner Blog Series - To be... (Right)...or not to be... (Right) T-Model Trader

Hello Traders.
I am hard at work on the Pro Trend Trader course at the moment, but I always manage to find time to stop and read the blog posts from T-Model and Craig with a coffee in hand. I hope you all enjoy!
James Orr

To be… (Right)…or not to be… (Right)
I headed off on my morning pilgrimage to the local café for the daily journal writing a few days back, forgetting that I had completely filled my trading diary cover to cover the previous week. So instead of writing, I sat there flicking through the many pages, laughing mostly, cringing at times, but in general, fascinated by the many twists and turns that have taken place.
I came across an entry from mid-last year that caught my attention, to which I wanted to speak about. But firstly, I want to give a past work scenario to help explain.

A woman came to have a counseling session some years ago. After getting settled she began to explain what the issue was that brought her here and spoke clearly with insight about what was causing her problems. Added to this, her ability to see the problem from a variety of different angles was also very strong. In retrospect, I couldn’t have got a better run down of the situation.
Before I could respond in anyway at all, she then explained, again in some detail, exactly what she felt was needed to address the situation for the better. In a similar manner, she appeared to have thought it out clearly and from several differing angles of approach.
At this point and I was beginning to wonder why she was here, as it seemed clear she knew what to do. That day also happened to be my birthday and for a moment or two I thought I was about to be at the butt end of some prank, with people bursting into the room or the likes. But no. This was real.
As her accounts of the problem and solution were very through, a period of time had already passed by before she momentarily drew breath. During this pause in her descriptions and pondering upon my first response to all that I had heard, I was about to say something when she continued with….. “What if I am not right”?
It all came down to that sentence…. “What if I am not right”? In that sentence lay the paralysis. There lurked the foreboding reality that after so much thought and self-appraisal, that there was still that chance of “right” not being “right”. It was amazing to see an intelligent, articulate and capable person so completely frozen in fear and terrified to take “that” first necessary step, when it appeared that she had actually outlined what those “next” steps could be.
There is something of great interest here in what she stated about being “not right”. She didn’t use the words “get it wrong” and this I believe is most important. This is in many ways similar to what I said in an earlier blog about having spent the year trying to “not being a failure” at trading, rather than, “aiming to be a success”. Perspectives are so fundamental.
After a few sessions together, one of the themes that appeared is that it would be humiliating to be “not right”. Her high profile work also needed her to be “right” at all costs as well. She was at the time a senior advisor in the federal government at very high levels. Being “wrong” was just a human thing that happens to others, but not to her.

It was in May last year that this happened for me on the Ftse 100. I had loaded in all the zones for the day’s trading. Having listened to the analysis videos, I then checked out the different time frames to get my sense of the market. It certainly appeared that buys were definitely showing greater strength in this market.
About hour later, price had slowly wiggled down into a zone in a lack luster movement lower, which also gave me a sense that an upward move was more likely. This was also an identified buy zone as well from the morning review. To add to the picture, at the bottom of this zone was the 200 ma, sitting just above the pivot.
Then a buy pin bar formed. Price went up a little, then jiggled back down a little and formed another bullish pin, creating a nice double bottom, just to add to it all.
Then I just froze up.
I spent the next couple of hours watching price saunter upwards, bouncing off the 8 ma like a perfectly shaped stone skips over water. It went up and up and UP. Yep…..I watched the whole thing. I really can’t remember a trade set-up as juicy as that ever. It was like that “perfect storm” scenario where everything just lines up to create something profound. It was confluence on steroids.
I had been sitting there looking at the chart going…yep…yep...yep…’s all there….get ready to enter a buy position, when I just choked and couldn’t do anything. This particular trade “implosion” just hung around in my psyche for months like a benchmark of…of….well….stupidity…..dumbness….and the likes.
It wasn’t until I read about this trade again recently in the diary, that I recalled the session written above and the woman’s fear of not being “right”. I had thought previously, that it could have been because it was confluence overkill and that something inside me began to doubt the reality of what I was seeing. Or maybe it was something that was just going to happen at some point and that was the day.
What I do remember thou, was that same feeling as the woman spoke about… “What if I am not right”….creeping into my mind. Given the overwhelming confluence of several factors all lining up, then there was also every chance of being “right” on that trade. But that day, the fear of not being “right” won out.
It was like someone turning the lights off unexpectedly, and I just sat there in this suspended state. As there were a couple more signal entries that I could have taken after those two pin bars, then this wasn’t a fast moving…. “oh bugger I missed it” sort of thing. It was like my hand couldn’t move the mouse to click the buy box on the screen. I wrote in my trading journal back then… “My brain seemed unable to generate the sparks of action”.
I have experienced those feelings on many occasions that come in the early days of trading. Call it doubt. Call it nerves. Call it the… “What if I am wrong” scenario. But this was paralysis and I can now see that it was based on that sense of potentially not “being right”.
On that day the market did what it always does. It offered me information…nothing more and nothing less. Yet that day, for whatever reason, I seemed to internalize the potential outcomes as a personal thing, which it is not.
I could set off and analyze this to the cows all die of old age, but in the end, like the woman in the session, the fear of being “not right” crippled the situation. I think that underlying this reality is that I, for whatever reason again, lost perspective that there is always an “uncertainty” in trading, and that it is my task to load the probabilities in my favor.
In sitting there reading the journal, I noted that, like this situation outlined, there are benchmarks of trades that have acted like beacons in my development. Like that skipping stone, at some point it has to descend and hit the water in order for it to fly again. I guess that these trading moments are like points of friction that test the strength of the development at hand. It is also interesting to note in this regards that this “trade” was actually a “non-trade”, as nothing actually happened. Yet it still made an impact.
Till next time
T model.