In today’s article, I am going to discuss about why is it so important to learn losing in forex trading? It might sounds funny, but believe me, this is a must-learned lesson in order to become a mature trader who truly knows how to trade well. No one will be making money from the market if they do not understand the importance of losing properly and how to do it. For those who think that forex trading is all about “fast money” without any lose, you may stop reading now. For the rest of you who really look into generating consistent profit by trading, please make sure you read through this article and understand the concept behinds.
So, let’s begin.
Understand and accept that losing is part of trading
Many traders are afraid of losing or their stop loss (SL) is being triggered. Sorry to say that, losses are part of trading. If they weren’t, every trader could have generated huge profit from trading or they would be billionaire. As a trader, we must first treat trading as a business and losing is your running costs. As long as your revenue (TP) is more than ur losses (SL), you will be profitable for long run. A simple fact of trading is you are going the have losing trades no matter how skillful are you in trading the financial market. If you failed to plan your trade and calculated possible losses, you are most probably going lose all your capital eventually. However, when you able to accept that losses are actually part of trading, you will slowly learn how to manage them and reduce its probability.
Manage your risk instead of avoiding
There are many saying that a good trader will know how to avoid losing. But in my opinion, a good trader must know how to manage the risks instead of avoiding it. Do not ever try to avoid the loss or eventually it will catch up to you. Let’s say you are lucky enough to avoid this time, you will be building a bad habit of not putting stop loss and this will definitely result in a huge loss someday.
How can I manage my risks?
I personally found two common scenarios on traders who always try to avoid losses, firstly is they always expect to win on a trade but in fact they lose. Secondly, they will always lose more money from the money they planned to lose initially. All these traders share the common bad habits, i.e. not putting a stop loss or keep changing their stop loss and hope for a reversal. You have to firstly accept the fact that nothing is “for sure” in the world of trading and understand that any trade can be a losing trade. In others, do not put any expectation in your trade no matter how many confirmation you have or how nice the charts are forming.
Besides, we should only trade on market show us, but sadly to say that most of the traders are trading on their expectations and assumptions. Do not let your ego to take over you and ignore what market is trying to speak. Market always speak in its language, which is price action (check out our price action setup here) but traders tends to listen to their own. For example, when market tells us to quit by showing reversal signal, we should cut losses instead of holding our trade and praying for another reversal.
A very good example on risk management is always fix the amount of your stop loss and adjust your lot size accordingly. For example, I am going to risk USD 50 for every trade and there are 50 pips from my entry price to SL level, hence my lot size will be 0.10. Besides, it is also important to always have at least 1:2 risk reward ratio in every trade. By doing this, we will achieve long term profitability although we have more losing trades than the winning one.
After 11 Days …..
Trading is always the game of probability and we will be in long term profit as long as the wins are more than the losses. There is no such things as zero losses and the only way to achieve winning is to control and manage your losses. That’s why, it is always important to have proper trading education or practice before you start trading with real money. Majority of people still have a mindset that trading is similar to gambling as there is only “buy” or “sell”, however, with proper training provided, the probability of losing can actually be decreased. Click here to check out on our coaching services. When a trader is able to shift their mindset from avoiding losses to managing losses, and from expecting winning to accepting that they won’t win every trade no matter what, they will then begin to learn how to drive their business (trading) for long term.
Everyday I am receiving questions about things to be prepared and learned before trading live. I believe that most of the traders began to trade very well (in demo account) before they really moved into a live trading account, and when they just started live, they could easily burst their account within weeks or even days! Hence, I have an idea of compiling my experiences in trading into this article, giving new traders a better insights on what they should know and aware of before they really start trading, especially a live account. I sincerely hope that you will spend your time to read below before you start risking your hard earned money and I assure that this article will definitely save you time, money and stress.
1. Realistic expectation on Forex Trading
Putting aside those trading setups and strategies, I personally think that the most important factor in trading is the trader emotion, do you able to trade well if your emotion is always being unstable? Well, there is no doubts that you can make a boat of money by trading the markets, but, all these results require a steep cost, and I would say that it is not “mentally” easy.
I find that most of the new traders are having a unrealistic expectation. They are thinking to quit their work with just a $1000 account. I am not blaming them as there are so many scammers nowadays in the market. All these scammers will provide you an awesome expectation that you can have a fruitful return and upgrade your lifestyle if you open a trading account or deposit your fund to them. Remember, when someone approach you and give you guarantee of large profits with little or no risk, just run away from them as they are most probably scammers and no clue on what are they talking about.
2. Having basic knowledge on trading
Many traders just jump right into the market with zero knowledge on trading. Some of them are just get attracted by the so called results given by the signal providers and deposited all their hard earned money and got scammed. Sorry to say that, before you start trading, you must have a solid foundation and understandings on price action and able to analyse price charts. The basics in price action trading are always identifying support and resistance (SNR) and choosing an entry method
- Support and resistant
Before you learn any other trading strategy you must first know how to identify strong support and resistance zone. This will allow you to find high probability trade within or near the zone. Click here to read more:
Step 2 : Entry method
Now you know how determine the strong support and resistance zone. The next step is how can you spot precise entry within the zone. You can click here to read more about dominant setup:
3. The importance of risk and reward management
I always share to my students about how can we manage and control the risks well when we are trading and I always emphasize that risk and money management are much more important than trading setup. If you have a high profitable trading setup but poor money management, you might just burst your trading account in a single trade if markets go against you. In other words, successful trading is not about being right or having high winning probability. I always treat trading as a long term business and I think that the key to success in trading is not about having small amount of losses, but to minimize the probability of losing. A successful trading plan is more on capital preservation and risk management skills. For example, if you implement a ratio of at least 1:2 in risk reward into all your trades, you would be still profitable in long run.
For example, if your stop loss is 20 pips in a trade and your target is 100 pips, your risk/reward ratio will be 1:5.A
You are on the road to trading success once you start focusing on risk management. All you need to do next is combine your risk management skills with a high winning ratio strategy and maintain it with strict self discipline.
4. It actually requires longer time that you think
Same as business, trading needs time to materialize. If you think that you can probably be rich overnight when you have started trading, I would advise you to quit and back to your 9-5 work. Sad to see that, most of the new traders are not mentally prepared. or have zero idea on how long does it takes to achieve consistency in trading. When things are not going as expected, they would quickly give into temptations like over-trading as well as choosing the wrong lot size, attempted to speed up their trading result. Normally, this is the time that things get worst. Most of them will be losing money and putting themselves further behind from their target.
The only way to stay long in the market is actually very simple, which is just developing the good habits that lead to consistently profits and having passions towards trading. Traders with short-sighted approach and thinking to get rich quick will definitely not going to make it.
The only way most people can stick around long enough in the market to develop the type of habits that lead to consistently profitable trading, is by having real passion for the trading process and everything that goes with it, as I discussed previously in this lesson. Having a short-sighted approach and thinking you’ll ‘get rich quick’ in the market are recipes for losing money, not making it.
5. Make sure you really love trading
Trading is always sounds easier than do. Looking on the surface, trading seems very easy. However, people just simple cannot do these things easily. Once you have decided to start trading, you must always tell yourself that you might face losing anytime and also sometimes your strategies are just not going to work. Besides, trading requires high level of patience and discipline. Before you start risking your hard-earned money, you have to ask yourself honestly that are you able to work according to what you have planned in an environment with constant temptation? Do you have enough patient to wait for your trading setup to show itself before you execute the entry? If you are just looking for some easy money and reluctant to fix whatever psychological problems that you are encountering now, you should probably forget about trading and move on to something else. In other words, trading success needs someone with a strong passion and interest to make it happen.
In a nutshell, I truly encourage you to aware of the 5 things I mentioned before move on to trading as this will help you to save more time, money and mental energy. If you follow exactly my guidance for premium membership with strict discipline and logic thinking with patience, it will definitely works for you too. There is no need to mess up your charts and get things complicated in trading
In this article, I am going to discuss on Support and Resistance, in response to some confusions among our members. Throughout this article, you will get more examples on exactly how supports and resistances should be as well as knowing how to identify them and apply them into your daily trading.
As a price action trader, it is a must to understand what support and resistance are. They are the fundamental tools and drawing support and resistance are the key skills to be mastered for any trader, yet most of the traders do not really know how to use support and resistance to make trading decisions.
The ever first rule in trading is to always buy low and sell high, however, what constitutes “high” and what determines “low”. Markets are always fluctuating as a low in market today might be a sky-high after few weeks or even days. Hence, with support and resistance, we can benefit from trading with fake signals. The concept of support and resistance is pretty similar to supply and demand theory, where the levels are created due to influx of buyers and sellers at a particular buy level. The basic trading method of supply and resistance is to always buy at support and sell at resistance. However, majority of the traders are still unable to identify the right support and resistance level and thus making incorrect entries.
Zones or Lines
Alright, here comes the first question. Support and resistance should be in zones or lines? In my opinion, support and resistance is always a trading zone, where it falls between a certain levels of price instead of a specific price. When support and resistance are marked in lines, new traders will get scared or frustrated when price spikes through their level and bounces. Besides, when we are marking support and resistance zones, we can easily see the major turning points of price which provides us a better insights of market movement. The pictures below show reasons why I prefer drawing zones instead of lines:
How to identify strong support and resistance
The way to identify strong support and resistance is very simple. Just follow these simple concepts, the bigger movement initiated, the stronger the support/ resistance zone and if the zones are being tested more frequent, the stronger it is. The first step to identify strong support and resistance is to look for the candle which initiated a huge market movement in higher time frames like H4 and daily. Next, we have to highlight the candle body. For example, let’s say we are going to determine the valid support in an uptrend, we will be going to highlight the last bear candle before the uptrend starts and vice versa. Then, we have to check whether the highlighted zones are being tested in order to have a valid strong support zone.
The EUR/JPY daily chart below shows an example of how does a valid strong support should be.
Control your risk and reward using support and resistance
When price reaches our specific support and resistance zones, it does not mean that trades can be executed immediately. It might be enough momentum accumulated for a break out and market will start a new trend. Hence, we need a confirmation for entry and the best option would be incorporate Dominant Setup into our daily trading and trade within the confluence zone.
With the right support and resistance identified, we can easily control our risk and reward. The USD/JPY chart below shows a bearish dominant setup occurred at daily strong resistance zone and by the price managed to secure 240 pips of profit by risking only 100 pips, in other words, we would have a perfect 1:2 ratio by trading with this confluence zone.
I truly hope that this article help you to understand further on the concept of support and resistance. You are most welcome to join our telegram discussions group where we will discuss potential trading setups as well as sharing some basic technical analysis, nonetheless you will also be given a swing trading ebook for free. Click here to join our telegram community.
I believe all of you have downloaded and read our trading ebook, if you have not done so, kindly go through the book before heading here for better understanding.
Well, firstly I would like to thank you for sparing time reading our trading contents and today, I would like to share more on one of our trading setup, i.e. Dominant Setup. Before going into details, I would like to discuss more on Supply and Demand Theory in trading. Basically, supply and demand is a trading concept that analyse how financial markets move, it has been commonly practiced, from local flea markets up international capital markets. It is one of the common practice for price action traders as it reflects the market behavior, as well as buyer versus seller momentum clearly. The concept behinds supply and demand is pretty simple. For example, when a lot of people interested to buy a certain item with limited quantity, the price will be going up until the buying interest is match. On the contrary, when no one wants to buy the item, the sellers has to lower the price to find interested buyer for a successful deal.
The mechanism and fundamental of supply and demand are still similar when it comes to trading. On every price charts, there are always areas where the price makes a significant change. This was the balance shifting between buyers and sellers, or known as supply and demand areas. The concept of supply and demand theory is always the core of support and resistance areas. Think logically, an uptrend is only valid when we have buyers more than sellers and price will move up until there are enough sellers enter the market to absorb the buy orders, causing price reverse. The origin of strong uptrend will be know as demand zones, the level which most of the buyers are prefer to buy. On the other hand, in bearish trend, sellers are more than buyers. Hence, the price will fall until a specific level or previous demand zones, where the buyers are interested to buy again. The origin of the bearish trend will be know as supply zones.
Now, let’s relate back to dominant setups. The concept on dominant setup formation is much more related to supply and demand theory. Looking at the EUR/JPY chart below, the green bullish candle is our dominant candle. The beginning of the candle will be the strong demand zones where buyers are interested to buy at that specific level, while the closing price of the candle will be the supply zone, where sellers are preferred to sell. The candles that moves within the dominant candle are known as order absorption. In this case, we are able to see buy orders absorption within the bullish dominant candle. There are less and less buyers when price is near the opening price of the bullish candle and where there is no buyers left, price will fall to seek for new buyers and this is how dominant break occurs.
Other that supply and demand theory, I would also like to discuss more on candlesticks pattern. There are many types of traders and if you are trading with price action, it is mandatory for you to understand candlesticks, which is the backbone of price action analysis. Markets and charts patterns are formed by a series of candles and they will show signals in potential changes as well as market direction. Today, we will be going to review the Harami candlesticks pattern and how dominant setups derived from it.
The Harami candle is pretty much similar to Inside bar or it can be known as a derivation of it. The picture below shows a typical Bullish Harami candle pattern. If you noticed, the Harami is formed by only 2 candles while for dominant setups, we need at least 2 candles followed by 1 breakout candle and I will explain the reason behind it later. Back to Harami candle, the first candle is normally large bullish or bearish candle and followed by a second smaller candle. It is pretty easy to identify a Hamari candle, the only characteristic is as long as the second candle not close outside of the previous candles body, in other words, it forms within the body of the first candle.
The Harami candle pattern may be new to some but for many it may already be known as a derivation of an “Inside Bar”. Pictured above we can see a traditional Harami which can be defined by a few distinct characteristics. First the Harami is comprised of two candles. The first candle shoulddepicta large bullish candle such as a bullish engulfing candle. This blue candle is then followed up by a second smaller candle. The key to identifying a Harami is to have this second candle not close outside of the previous candles body. To add validity to the pattern, the second candle should close above half the traded value of the first candles body.
The significant difference between Harami candle and dominant setup is the numbers of candles within it. The minimum requirement of 3 candles (including breakout candle) in dominant setup will add on the validity of the trading setup. When the number of candles within dominant candle body increases, it means that there is more order absorption and higher momentum accumulation. Looking at the EUR/JPY chart below, the bearish dominant candle occurs after 12 candles moved within the dominant candle body and once the breakout is valid, the sellers fully take control of the market and price starts to fall down. Besides, by having at least 3 candles instead of 2, we will be able to filter fakey signals and have more precise entries. Also, in order to have a better quality trade, we always trade with pullback after signals are confirmed, click here for more information.
In conclusion, we always encourage traders to truly know and understand their trading strategy or setups instead of just following blindly. By doing so, you will be able to gauge the effectiveness of your trading plan and add in new components to enhance it. There are plenty methods on price action tradings but the concepts behind it are still the same. In other word, trading is all about logic and you have to be flexible with it to come out with a trading plan that suits your lifestyle. In you are interested on how we coach, click here.
Before I start, I would like to do a quick survey. Do you ever experience lying awake at night, unable to sleep and struggling over your trading losses or just can’t seem to make any consistent profit over your trading account? If so, this article is for you. I believe that most of you started trading account with relatively small capital, maybe it was just a USD 100 account and you are imagining you account grow over days with minimum losses. Well, I am not saying that this is not achievable, even myself started with USD 100 five years ago and I have made over USD 500 profit in just a couple of days. However, I ended up bursting my account just in the next day. In fact, trading success is not an easy goal to achieve, unless you are well disciplined enough and change the way you think about trading. In today articles, I will going to share with you my honest and insights regarding how can you achieve success in trading, even just with small capital.
Does account size really matter?
I would like to ask you all a very simple question. How do you define a successful trader? Does someone that able to earn over $10,000 just in a single trade a successful one? To be honest, he is not. In fact, the size of your trading account does not show your level of profession. Let me provide you with a better example, if you have a $300 trading account and you are consistently making $30 monthly over the months, congratulations, you are considered as a successful forex trader, although we all knew that it is impossible just to survive a month with just $30. There are people who started off with $100,000 and lose all their capital in a short period of time. There are also people who started off with $1000 and consistently making $100 every month. Also, many people think that a successful trader is equivalent to a full time trader with huge amount of capital. In fact, The determining factor of success is not about their account size but their beliefs about what successful trading should be and what they need to do to achieve it. That’s why, you shall have your mindset changed now.
After sending trading ebook on dominant setup, every day I am receiving emails and PMs from people, asking me questions like “Hi, how much money do I need in my account to make $1,000 a month?” Or other similar questions that just totally not to do with what successful trading is all about. I am not annoyed by getting those questions as most of the beginners do not truly understand the real story behind trading, thinking to quit their 9 to 5 job just be funding their trading account as minimum as $100. There are too many scammers, rumors and lies over the net about forex trading and most of the people just get attracted by the so called remunerative returns or daily profits. We have to firstly agree that forex trading is never a easy money investment. In the other hand, it requires time and effort to learn and practice with. Let me provide you with some scenarios,
- Having $100 and have a goal making $10,000 monthly?
- Having $10,000 and have a goal making $100 monthly?
Based on the options above, which one do you think is easier to achieve? If your choice is first option, I would suggest you go to the casino instead. I believe all of us will have agreed on option 2. We should focus on how can we manage our trades even with small trading account and take away all our wishful thinking of starting off with hundred bucks and turned to a wealthy trader just over the night.
Invest your time, then only your money
Something sarcastic that I found is that are quite a number of people who unwilling to spend their time or money in learning and they just deposited a large amount of money into their trading account when they just started off. Ask yourself, do you really think that giving $100,000 to someone who is really new to trading to manage your fund? If the answer is no, then why are you doing so? We have to understand that having a bigger trading account will not improve your results, in fact, it will cause you to get easily emotionally distracted during trading.
First thing first, you need to understand that in order to making profits consistently, you must first master a trading strategy, building a trading plan and manage it with strict discipline. If you can’t even manage your $100 account well, forgot about having a $10,000 account as the account will still be down within a few months. There are numerous way to learn trading and I believe most of you are digging the info all over the nets just because it is free. I am not denying that self-learning is bad as there are successful traders who started humbly and self-learned too. The problem is, do you really have the discipline and self-commitment, regardless number of failure that you are going to face along your journey. Or you can just engage a trading coach, who will definitely shorten your learning path and provide you with better insights. So, the problem is not the trading account size but you. If you still remain stagnant, you will just be continuing to face disappointment and losses in the market.
Trade like a sniper – Swing Trading
When you have small trading account, you have to learn how to trade like a sniper, instead of machine gun. Swing trading is a good choice for those who started off with small trading account. When you are in swing trading, you will not be taking a lots of trades, but only the one with highest probability. We have to accept that less is actually more in swing trading. When we are trading in higher time frames like H4 and daily, we are able to filter and think twice before our entry and I can guarantee you that the results are promising provided you follow your trading rules strictly. Below is an example of GBP/USD daily dominant dominant setup, and you will only be risking 70 pips for 300 pips reward. Lets say you have a $100 account and you entered with 0.01 lot size, you are making $30 just with one trade. Converting to percentage, your trading account has just gain a 30% growth in a single trade ! Don’t you think that this is good and stress free? In fact, when you are trading with small account, you can’t put money as your first concern as it does not really motivate you. Instead, be motivated on your gain in terms of percentage and how well you being disciplined, patient and following your trading plan.
Screenshot from our Weekly trade analysis
Further from what i captured just now, we should put our focus on percentage growth instead of amount of money made in trading as the money made with small account does not really sounds motivating to you. Below is an example of how you can tabulate your trading results using excel.
In trading, we keep things simple and swing trade will definitely be your best choice. Look at the example on GBP/JPY below, we have somehow notice that the trend is going to reverse and we have fixed our direction for sell entry. Once we entered, we will just hold it to our preset exit level, following the trading plan and we have made over 400 pips just in one single trade.
I have always been emphasizing the importance of identifying daily direction correctly before determining entry in our premium membership group. Hence, our premium members can enjoy the benefits of how to determine market direction accurately and choosing the suitable trading entry method.
So, if you are really serious in trading your small account successfully, you will need to really follow my advise and change your mindset, then only you will be able to bring your trading to the next level. That is no way that I can force you to manage your trade wisely, engaging a trading coach or remain disciplined all the time. To be frank, trading is not for everyone, there is always only a minority of traders who really succeed. If you are really passionate towards it, the passion will surely pay you back many times over, in someday. Right now, you should ask yourself what type of trader you wanna be and what is your plan with your small trading account. Feel free to share this article to your friends who think to start with small trading account, hope that you enjoy this article.
In this article, we will share about how can we apply dominant setup into our daily trading strategies, regardless which type of trader you are. If you have not read our previous article about dominant setup or still unsure about dominant setup, please leave this page and click here to know more details about the trading setup.
Trade with the confluence zone.
In trading, confluence zone indicates a region where multiple levels or signals occur near or overlapping each other. Some common confluence zones are made up of support and resistance levels, trend lines, chart patterns, indicator signals etc. Today, we will discuss about how dominant setup help in finding a better price level in trading confluence zone.
Bollinger bands and moving average (BBMA) is one of the best technical indicators combination used by majority of traders. A bollinger band consists of an upper band, bottom band and middle band. Traders normally will place their entry at either upper band or middle band and set their TP point around middle band. However, there are still a lot of false signal if you do only charting by only referring to bollinger band.
With combination of dominant setup, we can easily filter out false signal and spot the right entry point. For example, in AUD/USD chart below, we can see that price is going downtrend and stay below the middle band. Indicators traders will always look for another sell entry when price retraced to middle band. However, a bullish dominant break has showed that market is likely to go up and boom ! Strong momentum of buyers came in upon valid dominant break and sellers got trapped.
This is another example of how can we spot a better entry level with dominant break. For the first dominant setup, we can see that price is far away from its middle band and a pullback is expected. However, there will always be a common doubt among traders especially beginners, where to entry and exit ? Well, with the confirmation of dominant setup, all these doubts can be answered easily. A bearish dominant setup at BBMA upper band is a double confirmation that price is likely to go down and thus we will be placing our pending order at fibo level 78.6% and 50%. Guess what, price went down as planned and reach our TP2 level (Fibo 261.8%)
Other than Bollinger Bands, we can also combine dominant setup with moving averages. Moving averages are another popular tools used by stocks and currency traders. They normally use moving averages as a guideline to measure momentum and also support and resistance. There are different type of moving averages and some traders will analyse their charts with combination of 2 of more moving averages. Moving averages can also be used to determine market direction. For example, traders who are looking for buy entry will wait for price to cross above moving averages and those who are looking for sell will wait price to cross below moving average.
With the combination of moving averages and dominant setup, we can have lesser false entry signal. As shown in the chart below, we can see that price has started to cross the moving average before a valid dominant break was formed. This indicates that price is likely to drop down and a valid bearish dominant setup right after that will definitely gave traders more confidence to execute their sell entry.
Support, resistance and trend lines.
If you are a price action traders, you can use dominant setup as your entry confirmation too, combined with support and resistances level or even trend lines. Support and resistance is the most common price action technique practiced by most of the traders out there. These levels mark the importance area where majority of buyers and sellers trade. When the support/ resistance is broken, market will move to seek for new level of support and resistance. A support tends to act as floor by preventing price from being pushed downwards and resistance is usually known as ceiling as it prevents market from moving upwards. For more information about support and resistance, click here.
The XAU/USD chart below shows a good example of how can we combine dominant setup with support and resistance. Firstly, we have to identify the support and resistance at higher time frame. In this example, we marked the weekly support level before switching to daily chart. In daily chart, what we have to do is very simple, Since we all know to buy at support level, a daily dominant setup at weekly support level is just good to confirm the buy trend.
Besides support and resistance, price action traders will also trade with trend lines. Trend lines are simply lines that connect a series of price to provide trader a better idea of where the price is heading for. Normally, traders connect closing candle body to body in drawing a trend line. In the EUR/USD chart below, we can see that price has broken the descending trend line, indicating that downtrend might come to an end and price will reverse. A forming of dominant setup upon breaking the trend line has somehow confirmed the trend reversal assumption and we can look for buy after dominant setup.
Besides combining with indicators and price action, we can use dominant setup with chart patterns too. As show below, we can see that a strong bearish dominant setup is formed at the second bottom of the chart, we can either wait for the neckline to be broken and entry after price retrace, or we can entry right after the valid dominant setup which gives us a better ratio of risk and reward.
We can always seek for better price level using dominant setup combine with our very own trading strategy as it provides extra confirmation. A good confluence zone will show multiple signals and it is significant as most of the traders who might be working independently will be arriving at the same destination. However, despite the above, dominant setup will still work best in following market direction. A lot of traders are facing losses as they unable to determine the market direction precisely. You may need longer time to backtest and research or you may engage a good trading coach to sort this out. A good trading coach will always provide you the market insights and this you definitely shorten the duration of your learning. In you are interested in our coaching services, click here. Happy trading to all of you.
Every trader’s goal is to always being consistently profitable in their trading and putting himself away from losing his capital. In fact, not every trader can fall in this winning bracket, hence, they start to look for the best setups repetitively until they have really gain consistent profits from the market. However, the best setup does not promise a guaranteed result, trading is a game of probability with combination of technical analysis and also traders sentiment. For example, the same setup is being taught to two new traders and surprisingly, both of them will have different results despite of same setups and methodology were being applied. Today, we will be going to discuss that main reasons or the most common mistakes that being practiced by most of the traders and set them apart from the minority who consistently succeed in trading.
Lack of focus in detailing
Recalling to the first few years when i started to trade, I tends to search for the best setups as I would not want to miss any signal or entry opportunity in the market. I learned all the possible trading setups that I could ever find, from indicators and price action. However, I still end up losing my capital and after all i have found the root cause. The problem is with me as I was to eager to master the setups in the shortest time and I have indirectly ignored the concept behind each setups. There was a quote from martial artist, Bruce Lee, “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times”. The same goes to trading, we should be only adopt to few setups that we are familiar with and applying it with patience. Traders who are always fail are those who always look for signal or setups in the market, instead, we should be patient and trade on what market shows us. Trading is not a 9-5 job with fixed income, in fact, we should know when to trade and apply our setups and keep ourselves away when market is not going as per our prediction. For example, dominant setup is the most discussed and practiced setup in Forexloveu as it has high winning probability as long as you follow the ground rules, in fact, the best way to improve your skill in the shortest time is to engage an experienced trading coach which we will discuss later on. However, some traders are losing money they are not focusing on details of the setup. They usually identified the wrong dominant candle which then resulted in a wrong trade entry.
Over analyzing (Decision Paralyze)
The other common reason leading to trading failure is always being over analyzing. When a trader especially beginner is exposed to too many trading setups, they often fall in to a dilemma during trade execution. Their trading charts will be always full of indicators and lines, which easily to confuse them to over analyze and ended up missing or losing the trade. In fact, simplicity is always the secret to success in trading. Traders should always understand that less is more in trading. A chart full of trading indicators does not promise a solid signal, in fact, it will even make you more confuse. Look at the chart below, which one do you prefer ? Frankly speaking, trading is quite boring as to achieve consistently profit, you will only need to develop a good trading strategy and and stick with it despite of market movement, in other words. being self disciplined.
Over trading is another common symptom of traders especially amateur traders, it is a symptom where a trader takes a trade based on fear, greed and desperation. The main cause of over-trading is due to wanting to be profitable in a short period of time, of ego instead of a valid entry signal. It is easy to check whether are you over trading or not. If you are trading simply for the sake of trading, it is definitely you are over-trading. Movement in the market does not mean that you must trade, in fact, we must only trade when things line up for you. Professional traders are normally have high level of patience, they wait for the best setups to occur and when they do, they will take action immediately with high level of confidence. We can’t always predict where prices are going, but just learn how to let trends reward you.
Staying too long in front of your trading desk will also lead you to over-trading. New traders are easily to get tempted to make bad decisions intra-day when they are watching market for a period of time. Trading does not really reward you the time you spent watching price action of how many times have you executed the trade. The market will only reward those who are following trends, trade with right plan and great potential of risk reward action.
Having improper mindset – money and risk management
Traders are human and human creatures are always easy to get emotionally distracted especially on money matters. Many traders are thinking that they can generate a huge amount of money over a night just by trading, in fact, it is not. Having improper mindset in trading will cause traders to perform poor in money and risk management. When trading with real money, securing your capital is always the most important compared to making profits. First things first, if we can’t even protect our capital, do not ever think or talk about making huge money in the future. Sadly, most of the traders get things wrong. They tends to focus too much on how much they hope to make and causing them to have poor money and risk management. One of the common scenarios is traders who trade with improper lot size. Capital preservation is always paramount in trading but risking too much per trade will definitely lead you to failure. Everyday, there is a lot of traders PM us to ask that what is the expected or potential return of our trading method. When we tell them they will consistently generate about 10% – 20% of your capital, provided they follow exactly our trading rules, they seems to be less excited as they are expecting to double or even triple their capital in a single trading month. Professional traders will always treat trading as a long marathon and losing trades is part of it, only with proper risk management such as fixing the amount to risk or lot size and sticking to right trading plan, you will be profitable for long term. There is no guesswork in trading, but only self-disciplinary.
Besides, traders who lose money frequently also found to have an improper mindset of putting too much hope. This type of traders do not have a proper trading plan and they will just simply react to the market without further analysis. They will be over confident when they won first few of their traders and when market is moving against them, they will start to hope or pray for a reversal. They are found to rarely hold their trades when the trades are running in profit and they will always hold their losing traders and wait for the reversal. In fact, to overcome this, we have to always set and forget. Getting ourselves well prepared for what market is showing us and trade with rules. Setting stop loss and profit with a risk reward ratio of at least 1:1 or 1:2 and let market does the rest.
Lack of good coach
We strongly believe that engaging a good trading coach is a powerful shortcut to trading success. That is no denying that there is a lot of free setups and materials available over the net and you can spend time sorting and testing all the setups. The question is, how long will that take? and do you really have that time and discipline? A competent trading coach will help in formulating your personalized trading plan and strategy, sharing his past experiences and most importantly, point out your mistakes. For example, a good trading coach will help you to come out with your personalized trading checklist and what you need to do is just follow the guidelines step by step. By doing so, you will know the reasons behind for every trade entry, instead of just entry for the sake of having an entry. Also, it will also help to build up your confidence level towards your analysis if you really analyse the market step by step.
In a nutshell, the journey of never ends. Passionate traders who wish to achieve long term profitability will always look forward to learn how to improve from their mistakes and avoid repeating it again. If you are interested in knowing more about our coaching services, please click here for more information. Hope you enjoyed this articles and we would like to listen more from you, you are always welcome to join our trading community for free here. See you !
In forex trading, there are thousand of setups and strategies and today, we are going to introduce a setup which is easy to learn and be spotted, especially for beginners yet have a high winning ratio. Dominant setup is one of the entry setups with high winning probability and it is often to be used as an entry signal in swing trading. In this article, we will summarize dominant setup entry method step by step in order to provide you a clear picture of how this setup actually works!
For detailed explanation of dominant setup, you may download the full trading ebook for free here. If you have any doubts regarding this setup, you are always welcome to join our trading group in telegram. Click this for joining.
Step 1: Determining the market direction
“The trend is always your friend” Does this quote sounds familiar to you? In fact, determining the market trend is the mandatory checklist before traders proceed to their entry. Just like in warfare, we need to know what kind of environment are we in before executing the following step.
Basically, the market can be categorized into 3 different types of trend, which are:
- Sideways/ Ranging
Step 2: Determining dominant candle and valid breakout
This is the crucial part of this entry setup as we must be hunting for dominant candle once the market direction is confirmed. A dominant candle is the first candle in the pattern with long body within its defined trend and it contains a series of small bodies candlesticks that trade within the range of the dominant candle. The breakout candle with body closed above the range of dominant candle creating a new high/low means that buyers/sellers are back in control. Please take note that a dominant candle formation is only VALID with at least 2 candlesticks that trade within the body followed by one breakout candle.
bullish dominant break
Bearish dominant break
Remember that dominant setups are to be used with market trend. For example, when market is in uptrend, we will be looking for bullish breakout and vice versa.
Step 3: Placing your entry
The entry after confirmation of dominant setup can be pretty straight forward. You can either choose to place instant execution after dominant break or placing your pending orders after valid breakout. Normally, we do encourage traders to place their pending order to ensure better ratio of risk and reward. We strongly encourage you to read this for better understanding on the power of trading the pullback.
Best way to improve your trading result – Creating your own trading journal.
This would be something extra I would like to share besides the dominant setup and I hope that it helps in improving your trading result. You may also refer to our previous article on enhancing trading results. Alright, having a trading journal is like writing a diary and it is actually an important task in any performance or goal-oriented endeavor. The first step of achieving profitable trader is actually keeping your very own trading journal. Having a trading journal might sound easy and simple, in fact, it is actually to get started. Trading journals are different from logs of transaction history sent by your forex broker, information provided by brokers does not tell you why you entered and exited the trade, but a trading journal does. You will know exactly the reasons behind of entering a specific trade and also your personal emotion at that specific moment. In short, most of the profitable traders have their own trading plan and they keep their trading journal and review it consistently, hence, You can’t expect to improve your trading performance if you aren’t tracking and measuring the results.
In conclusion, dominant setups can be applied in any time frame and also be in the combination of your current trading plan. If you wish to explore more about dominant setup, click here to redeem your free trading ebook.
Have you ever consulted a trading coach ? If so, what was your experience like? In trading market nowadays, there are many different coaching options out there. Over the internet, we can easily see advertisement of coaching services in trading and how well can they do for you. The notion of engaging a trading coach always sounds interesting, in fact, you do not ever need a trading coach, unless you want to be the successful one!
Before I proceed further, let’s ask yourself a few questions:
- Are you able to be self disciplined, all the time?
- Are you the one who likes to work alone?
- Are you always able to spot your weakness and overcome it by yourself ?
- Do you have a clear direction about your trading goals and ways to achieve it?
- Are you able to trade with your own personal checklist and fulfilling the rules that you have set ?
If yes, congratulations! You do not need to engage a trading coach and you are just few steps away from successful trader.
If not, you have to start to ask yourself why and spend sometime reading on it. I would be sharing with your my real experience in engage a trading coach. Same like other new traders, I once have a thinking that “I can do it alone, there is unnecessary to waste money in engaging a coach, I would rather deposit it into my personal trading account” I started my very own trading lessons by just combining whatever I have seen and learned over the web. Just few weeks after, I blown out my own trading account and I have subscribed to some education courses. However, all these went to no avail until I enrolled in one coaching program, which really guided and lead me to the right way of trading, from technical to self development. The significant difference between trading education and trading coach is education contents will be more focusing on the trading techniques and skills while trading coach will concentrates on your understanding, spotting your mistakes and guiding you to overcome them.
Why it is important to enroll for coaching services?
- Being more focus
Most of the amateur traders are ploughing straight in with learning how to trade, without knowing their trading profile, market conditions and even the trading strategy to be focused on. The normal consequences are, majority of them ended up with trading strategies that aren’t really suitable for them ( e.g. impatient traders are learning swing trading) and the impact can be more risky as you thought. Also, the learning process will be more time consuming, dull and uninteresting.
However, all these could be avoided if you are working with a trading coach. A trading coach will guide you in identifying the key points that are crucial for you to become a trader, before you go too far down the track. The key points will help you in understanding your trading personality and determine the trading strategies that are suitable for you.
- Coach leads you to view market from different angles
Most of the new traders, including myself tend to analyse and view market subjectively based on our very own perceptions. In fact, this habit is strongly discouraged as anything can happens within the market. However, this can be eliminated by having a trading coach. A good coach will always lead you to analyse market objectively and trade on what market shows you. Majority of traders are facing losses as they have too much prediction on market movement and refused to accept what market is showing them.
- Coach tells you the Do’s and Don’ts
When we are about to learn something new or mastering a new subject, we are exposed to all the information related to it. When working with a coach, we will know things that are mandatory to be done and things that are not. We will be given a clear idea of what are we doing and upcoming challenges from the coach experiences. This can be invaluable especially in trading as you will be avoiding a lot of rookie mistakes and not ended up paying “extra tuition fee” to the market.
For example, in the USD/CAD weekly chart above, many traders will have pending buy orders at the highlighted zones as price is reaching weekly support as most of the education website says “buy at support and sell at resistance” and they would expect for a reversal at that moment. However, a trading coach will tell you to first filter and analyse the market, then only entry upon confirmation.
- Coach makes you a more self-disciplined trader
Being self disciplined is always the key in becoming a successful trader, and this is also where the majority of traders fail, e.g. not sticking to trading plan, not following rules, poor risk management and not trading according to setups etc. A good trading coach will always demand you to be more disciplined when comes to trading and make you accountable for your trades. It is important to have someone that you need to justify your actions and decision and ensure you always stay on track. For example, as a trading coach, I always demand my students to finish all my homeworks and tutorials before heading to the following chapter. This is to ensure that they have the right concept and both of us share mutual understanding so that we could have a measurable outcomes.
So, it is worth to pay for coaching services ?
Many people are doubting the needs to engage a coach, since there are so many free education contents online. In my opinion, coach is more on the supporting side. Just like athletes coaches, they will always support and work with the athletes to continuously improve their performance and encouraging to achieve their successful in their career. Based on my experience, I would say that consistency pays off more than anything. If you look at those successful athletes, you will always hear the same stories among them about how they have been coached for years and all the ups and downs of training being offered to them.
People mostly will look for a coach based on his trading result of profits generated. In fact, a good trader is not equivalent to a good coach. A good coach must be able to develop you and bring you to another level, just like the world top athletes are not trained by previously world top sportsman.
In a nutshell, having a coach is essential to your success in trading. I am not saying that without engaging a coach no one will achieve success, but it has been generally proved to be more costly and time consuming. Working alone and taking short cuts will lead us to easily fall into the traps of “rookie errors” Robert Kiyosaki had his Rich Dad as a coach and a mentor, Warren Buffett followed Benjamin Graham and George Soros had Karl Popper. Three success stories and three mentors – so having a coach adds value.
To kick start your trading with our coaching services, who will support you whenever you need, just click here.
What is the first thing that comes to your mind when you heard about Nick Vujicic ? Hope? Or overcoming challenges in life? For me, is all about Having Faith in Actions Transform Your Life.
I would like to start this article with a simple introduction about who Nick Vujicic is. Nick is an Australian inspirational speaker and evangelist. Nick was born without limbs, without any medical reasons given. Nick has faced countless of challenges and obstacles in his life journey. Despite the abnormal conditions, Nick always have faith that God has given him privilege to live without arms and legs and doors open to a man without limbs are much more easier than anyone else. Until today, he has been traveling to over 63 countries to share about his inspirational story of faith, hope, and triumph in the midst of adversity.
How Nick Motivates Me in Swing Trading?
Last year, I accidentally came across this book named “Unstoppable” written by Nick and this is the first of Nick’s books I have ever read and I am glad that I read it. It was very inspiring and encouraging, especially for those who are facing their difficult times. Nick has shared how he has endured and overcame hardships along his life despite disability concerns. I had some thoughts and relate Nick’s values to trading. Traders tend to get demotivated in trading when they faced losses, including me. We must always accept that losing is part of trading and always have faith in ourselves. Just like Nick, he has credited his success to the power that is unleashed when we put our faith in action.
Also, I also found that most of the traders are less passionate in the learning path. Always ask yourself the reasons for you to get started? Why are we choosing trading at the first place despite of other choices? From my experience of coaching students over the years, I find that about 20% of them have given up even before the finishing the education content. 30% of them manage to register a demo account or live account and trade according to what they have learn. However, majority of them give up after facing few losses, especially those who has burst their trading account.
I asked myself many times about the reasons behind traders giving up, is it because of my way of coaching not suitable ? or because of my strategies are difficult to be understood? Finally, I have found the root cause, it is all about ATTITUDE.
“If I fail, I try again, and again, and again. If YOU fail, are you going to try again? The human spirit can handle much worse than we realize. It matters HOW you are going to FINISH. Are you going to finish strong?”
― Nick Vujicic
Let me show you an example of my student, who is really passionate towards being a successful trader. He subscribed to my premium trading course and submitted his first homework after 2 hours. In all, we must always have faith on our initial passion and always bear in mind the reasons on why we started. The next step is prove it with actions as all our future results are measured on the previous action taken. In trading, doing homework and backtests are a must, especially for beginners.
Being self confidence
Another value I learned from Nick is always being self-confidence. Nick has never allowed his physical challenges to stop him from exploring the world and enjoying great adventures. The same goes to trading. Many traders are lacking of confidence and always doubt about their analysis. I found that many new traders tend to join a variety of trading groups and believe too much on other people analysis. They asked a lot of other people view before placing a trade thus missed out the entry timing and market moves accordingly to their prediction. I am not claiming that listen too much on others reviews is wrong, but traders have to understand that every own trader has their unique style of trading and understanding. They might be learning the same methods or concept but will still result differently in the market. E.g. for those who are lack of patience are not suitable in swing trading. We must always be confidence on our trading plan and trade as per our analysis.
Let me show you an example. Below is are daily and H4 chart of AUD/USD. If I am a swing trader, I will be looking on every sell opportunity in lower timeframes. However, for intraday trader, they will be more focusing on H4 and H1. H4 is showing uptrend (retracement) and they will be giving signal to go for long. If a swing trader seeks advise from intraday trader and follow blindly, they will be confused and doubt about their analysis thus making wrong decision. Also, newbie traders will always seek opinions from those who have years of experience in trading. Always remember that having more experience does not equal to having advanced trading skill, he might be repeating the same mistakes for years!
However, it is not a good sign to be over confident on ourselves. Always bear in mind to trade after market show us signal or confirmation. Every trader must has his very own checklist before executing a trade. Look at the example below, market is showing a potential of dominant break in daily but a buy trade is placed before candle closing. Look at what happened on the next day. Bang! The dominant break turned out to be a fakey and market moved down.
ALWAYS REMEMBER TO TRADE ON WHAT MARKET SHOWS US, NOT TO EVER TRADE ON YOUR EXPECTATION
Having faith in action
This is the utmost important value in trading. Actually, trading is a game of emotional control and traders are always being affected by their past trading experiences. When market start to move against their analysis, they will feel nervous and close the trade without further study and analysis. For example, below is a sell trade entered following our entry guidelines, however, the market projected up after sell entry was placed. Traders get emotionally distracted when they see negative floating amount and tend to close the trade before SL being triggered. See what happened next. The market dropped after they closed the trade and their previous analysis was right !
I always educate my students the mindset of “set and forget”. What to fear when you are having enough confidence on your trading setups and risk management ? I found that majority traders are willing to lose more and earning little. Whenever they saw profit floating, they will close the trades to secure the profit and when the trade is running in negative, they will hold it and hope for reversal. As a result, they ended losing all their capitals and give up on trading.
After reading Nick’s life story, I have learned that it does not matter how many times you fail, is how you learn from failure and how you overcome it by developing faith in yourself. The same goes to trading, we must always have the attitude of “rising from a fall”. Being humble and passionate to learn and accept is the only key to unlock successful in trading.