Hey traders, I wanted to stop in and give you a quick post before I head out to a meeting. Today was a pretty boring day in the live room. I'm not sure if yesterday being Memorial Day had anything to do with it, or maybe the fact that it's the end of the month so the big dogs aren't really interested in taking any positions. Either way you look at it the market was pretty slow. With that being said we still had a chance to get involved in two trades today. The first was on the NZDUSD and the so was the second. The first trade we took was a Gartley pattern which occurred right after a nice looking ABCD completion. This trade put up a pretty good fight but was ultimately stopped out for a loss of about 13pips. Less than an hour later we got another valid trading opportunity on the same pair which ended up being a multiple target winner with tgt 1 going for 27pips and tgt 2 going for over 40. In total we managed to steal about 50pips of profit out of the market by having one winner and one loser. This is a prime example of why it's important not to have grudges in the market after a losing trade. In this case if you did, you would have missed a winner that basically doubled you loss. This just proves again, follow your plan and continue to trade through thick and thin. See you in the room tomorrow traders, and hopefully we can continue this KILLER streak that we're on!
Thousands of traders packed the room yesterday to do some harmonic and ratio based trading. No I'm not talking about my room (I wish), I'm talking about day 3 of the International Traders Workshop. Today was the day that many people were waiting for because Master Trader Jason Stapleton was going to demonstrate some of the skills that he had taught over the past few days by trading live in the markets. While this was going on, we were slowly and silently (literally) making a killing in the Live Ratio Room.
Today we were 3 for 3 in the room with one of our trades FINALLY hitting it's second target. With that being said I also missed out on 2 other trades that would have been pretty nice as well. Why did I miss out you ask? Well if you've ever been in a presentation or have heard a lesson by Jason, then you probably know that when he starts speaking you often fall into a trance. Even though I've taken his Pro Trader course, sat in a live room with him for months and have attended EVERY free seminar he's done in the past 2 years, I still find it amazing how I seem to learn something new each time he speaks. With that being said, if you're familiar with trading on lower timeframe charts then you know that all it takes is a few minutes of distractions to miss out on some potentially good moves. We were still able to make out with about 120pips in total today, but we did leave some on the table which I don't like. Oh well, you live in you learn.... and you get better.
There was a great quote said in the room today. That quote was "(the) markets are like Mother Nature, they do what they want. Sometimes you're on the wrong side of the Tsunami." This quote came after the market rallied earlier this morning after some news from Greece was released. As what often happens on the day trading time frames, when a major announcement is released the markets often make massive impulsive moves do to the public reaction to the event. Sometimes these moves work in your favor, allowing you to snag some pretty good profits, and other times they stop you out of your positions for losses. Either way, it's part of the risk that you sign up for when deciding to be a day trader. This is no different than deciding to buy a house on the beach. On one hand you get a beautiful view and the benefit of being right near the water. But on the other hand you always have the chance of being flooded or having you're house destroyed by tropical storms or whatnot. The point is that if you know and accept the risk involved before making the decision than there is nothing to get upset about.
With that being said there are a lot of you out there don't like having the chance of fundamental releases interfering with your technical analysis and say that the solution is not to trade when news is approaching. This is a fine approach and I actually take this approach during the major releases, mainly the non farms. My advice would be to make a rule saying that you're not going to trade 5-15mins before and after the release is made. That way you keep yourself out of the markets mess and give everything a chance to settle. You're also going to need a rule for what to do if you already have a position on. The only problem you don't want to run into is doing this for EVERY news event. On someday'd there may be a news event scheduled to be released every hour or half hour. If your rule says stay out of everyone then you've basically chosen to take the day off from trading. I'm not saying that it's a bad thing, I just want you to be aware. My advice would be to do your research and determine which events seem to move the market the most and make those the news events that you lock in on.
Have you ever been frustrated, mad, angry, disturbed, lonely or bored while trading? If so, then you're in the wrong place. Like yourself I have experienced many of these feeling, but since I started running the Live Trading Room al that has changed. I bring this up because today was one of the most exciting trading days I've had yet. Maybe it was the coffee, maybe it was the fact that it was a Friday, who knows. All I know is it was fun and I personally didn't enter a single trade. Although I didn't enter any trades in today's session, we did identify a bunch, they just didn't get filled. There were also two other trades that I couldn't get involved in due to a few strict rules that I follow, that ended up being two multiple target winners. Those in the room that did take those trades made an easy 120 pips while enjoying some pretty good conversation.
This conversation that I mentioned comes from the multiple questions that are asked throughout the three hour session. Every once in a while we get some traders in the room that are brand new to the Ratio based style of trading that I use. Therefore I often get a lot of questions that not only help the rookie traders out, but refresh my own skills. After all, if there is one thing that I learned from being a coach, it's that there is a big difference between knowing something and being able to teach it to others. It's also great to be able to watch a trader progress throughout their time in the room. I've only been doing this since January, but I've had traders that have gone from asking the simplest questions about an AB=CD pattern, to typing in a message that looking like this: Hey Akil, looks like we have a potential bullish gartley on the USDCAD 1hr at an 78.6 aggressive C buy."
If there is one constant in my life, it's been that I have always gotten pleasure from helping others and this is exactly why I love moderating this room. I'm also aware that a few years ago I was on the other side of the screen while my mentor and now friend Jason Stapleton provided the same service for me. One of the best things a young trader can have is a chance to just sit and watch somebody trade live day in and day out. Not only does it help fine tune your skills but it also allows you to build confidence as you begin to see similar setups.
It was almost 2 full years ago when I made the decision to become serious about trading. And with the International Trader Workshop starting in a few days, I'm really excited for the opportunity that an entire flock of traders (new and old) are going to get. I'll be running my room the entire week, so the workshop won't have my full attention, but hopefully I'll be given the chance to work with those who make the decision to continue their education in the field of trading.
Today was certainly one of those days where using another trading technique would have paid off pretty well. Don't get me wrong, we still had a good day and were able to catch a few trades, but there were an abundance of what we call Trend Continuation (TCT) or Fibonacci Failure (FF) setups today on the lower timeframes. For those of you who are not in the Live Room, I mainly use a counter-trend style when trading. This basically means that I buy the market while it's being sold off and sell the market while it's being bought. The TCT style of trade is a trend following trade where you're buying the market as it rises and selling the market as it declines. With that being said, when doing so we are still looking for pullbacks in price action and attempting to get into the market at the best possible point. When the market is trending TCT traders benefit and when the market is not, the counter trend traders usually make off good. So the obvious answer is why not just do both? Easier said than done.
The problem that comes when attempting to use both techniques happens in that thing that rests between our ears. The thing is, that whenever our trend following side gets a signal to go one way, our counter trend side is getting a signal in the exact opposite direction. I went over this during today's session, but those contradicting signals can lead an unprepared and undisciplined trader down a dark, dark road. Therefore my best advice is to chose a single way of trading and be your best at the one way. With that being said, one you do become a confident and disciplined trader, there is a way where you can get the best of both worlds. I won't go into details about how to do so but it involves strict rules along with a strong psyche that will allow you to sit back and watch certain setups occur without feeling the need to get involved.
Learning to trade successfully and consistently is a skill that has a very long learning curve. Not only does it take a good amount of time to become comfortable with analyzing a chart, I would dare to say that it takes even longer to master one's own psychology. With that being said, I don't believe that there is an end to how much we can know and how much we can learn about the markets. I also believe that as traders, we never get to the point where we are 100% bound to our robotic, emotionless form. As somebody said in the Live Room today "after all, we are human."
Today was a very rough day for me in the market. Not because I blew my account, or made a stupid trading decision. More so because I felt as if I made all the right calls yet didn't get to profit off of them. If you were in the room with me since 5am this morning you know exactly what I'm talking about, and if not well I'll briefly explain. Within the first few minutes of our session I indentified and pulled the trigger on two gartley patterns. Over the next few hours we watched the trades bounce back and forth between a slight profit and slight drawdown yet never penetrating the level that told us we would be wrong. Then came the news event at 8:30. At first it looked as if the news wouldn't have much effect on the trade as the market held while the announcement was made. However a minute or so later an aggressive candle formed on both pairs, stopping me out for losses. Now I've seen candles like this before and usually what I'll do is enter the trade again at the next bar market if it seems as if we've had strictly an impulse move based off of the news reaction. Unfortunately, I didn't get the chance to do that today since those same candles that stopped me out had already reversed and hit my would be first targets by the time they closed. To make things worse, it only took a few candles after that to reach my would be second targets. Therefore I took two losses instead of having two multiple target winners. I'll be honest, rather I'll me human, this had me a little frustrated and in order to keep my cool I forced myself to close down those two charts and forget I even took those trades. After all, looking at them would just cause me to get more aggravated (which is something we never want to be while trading). After taking some deep breaths and venting to the room a little bit, I refocused myself and got back to the charts. Nothing was setting up at the time (which was probably a good thing), but a little later I did find another potential trade entry that looked appetizing. After identifying the trade, stops and targets all that was left to do was to wait for the entry which was at next bar market. As soon as I was about to pull the trigger guess what happened this time... The market suddenly gapped down, not giving me the opportunity to get involved and again my would be first targets were hit in a matter of seconds along with the would be second targets eventually being filled a candle or so later. This was pretty much the last straw for me as I could feel myself reaching that point of trader frustration. Now a few years ago I would have shut down my computer, let out a few choice words, and who knows maybe even threatened to throw my computer out of the window. However, I'm not the same person as I was a few years ago.
Today I'm a very different trader and although none of the thoughts above entered my mind, I did for a brief second (after the Live Room Session ended) question whether or not I was a good trader. I quickly pushed those thoughts away by asking myself this one simple question: Did I follow my rules? In this case my answer was yes, therefore I immediately rid myself of any blame or self doubt, because I know that out of everything that happens in the market, following my rules is the only real thing that I have control of. I also know that as long as I continue to do so I will be profitable in the long run. However, many traders out there start to question their abilities on rough days and aren't able to shake that blow to their confidence. Just like a professional athlete, or a public speaker, the confidence level of a trader has a direct correlation to their performance. It may sound strange, but it's as if the market can sense a traders fear and vulnerability and once it does it begins to take and take and take. Aside from trading I also coach track and field athletes at a local University. I often deal with the case where one of my runners has a horrible race yet is needed for a very important relay later. This is what I tell them "I understand your ran poorly so here's what you do. Take five minutes to be upset with yourself, but after that I need you to forget about it and be ready for your next race." In trading this would be shaking off a bad trade and getting ready for the next, or shaking off a bad trading day and retooling for the next day. Either way you look at it, as a successful trader you must have a short memory. Sometimes we miss trades, sometimes we make bad trades, sometimes the market treats you like it treated me yesterday. Every successful trader at one point or another has experienced a time when they felt like quitting, or felt like they weren't good enough to survive the market. The thing that made them successful is the fact that they didn't quit. As it says in my trading plan: "I believe that the only reason people fail is because they give up before giving themselves the chance to succeed." So don't give up, don't ever give up.