Deep practice rules that every new Forex trader should follow

This post is inspired by Danial Coyle in his famous book “talent code”. He visited every country around the world to find places he referred to as talent hotbeds. His findings were that talent isn’t born but it’s grown. Danial Coyle’s research got more popularity among the sport industry but it was intended for all high performance industries including trading.

Before jumping to the rules I’d like to discuss some of the major key trading differences from other mainstream businesses today, the reason is that in my personal experience it was very difficult to switch from believing that “trading is easy money” to believing that trading is “smart money”:

  • Time: Traders don’t get a fixed rate of return i.e singers get paid per gig & sales, soccer players get paid per month. The market is highly volatile for traders making it impossible to predict future results. A 20 point profit can be archived in less than 60 seconds, netting $200 in a 100k  volume respectively.
  • Activity: Trading isn’t like any other business, it is completely unstructured. No formal education  guarantees success, no obligations, no refunds and no insurance. At the same time it is highly competitive considering that in each and every point there’s transactions occurring between parties.

To create structure for this type of environment new traders need to follow the following rules:

Rule One – Chuck it up

Deep practice feels like a bit like exploring a dark and unfamiliar room. You start slowly, you bump into furniture, stop, think and start again. Slowly and a little bit painfully, you explore the space over and over again, attending to errors, expanding your reach in to the room a bit further each time, building a mental map until you move through it quickly and intuitively. The instinct to slow down is universal… In the talent hotbeds I visited, the chunking takes place in three dimensions. First, the participants look at the task as a whole as one big chunk, the mega-circuit. Second, they divide it into it’s simplest possible chunks. Third, they play with the time, slowing the action down, then speeding it up to learn it’s inner architecture.(Page 79-80)

Absorb the whole thing 

This means spending time staring at or listening to the desired skill-the song, the move, the swing-as a single coherent entity. People in the hotbeds stare and listen in this way quite a lot… “We’re prewired to imitate”, Anders Ericsson says ” When you put yourself in the same situation as an outstanding person and attack a task that they took on, it has a big effect on your skill.” (Page  80)

Break it into chunks

The goal is always the same: to break a skill into its component pieces (circuits), memorize those pieces individually, then link them together into progressively larger grouping (new, interconnected circuits).(Page 84)

 Slow it down

Why does slowing down work so well? The myelin model offers two reasons. First, going slow allows you to attend more closely to errors, creating a higher degree of precision with each firing – and when it comes to growing myelin, precision is everything… Second, going slow helps develop something even more important: a working perception of the skills internal blueprints-the shape and rhythm of the interlocking skill circuit.(Page 85)

Rule two: Repeat it

There is biologically speaking, no substitute for attentive repetition. Nothing you can do-talking, reading, imagining-is more effective in building skill than executing the action, firing the impulse down the nerve fibre, fixing errors, honing the circuit… what’s the simplest way to diminish the skills of a super star talent (short of inflicting an injury?)… The answer: Don’t let them practice for a month … It only requires that you stop a skilled person from systematically firing his or her circuit for a mere thirty days… Myelin is living tissue. Like everything else in the body, it’s in a constant cycle of breakdown and repair.

That’s why daily practice matters, particularly as we get older…. Repetition is invaluable and irreplaceable… deep practice… spending more time is effective-but only if you’re still in the sweet spot at the edge of your capabilities, attentively building and honing circuits. There seems to be a universal limit for how much deep practice human beings can do in a day… between three and five hours of the day, no matter what skill they pursue. People at most of the hotbeds I visited practiced less than three hours a day.(Page 87-89)

Rule Three: Learn to feel it

The point is to get a balance point where you can sense the errors when they come. To avoid the mistakes, first you have to feel them immediately…(page 90) Deep practice is not simply about struggling: it’s about seeking a particular struggle, which involves a cycle of distinct actions.

  1. Pick a target
  2. Reach for it
  3. Evaluate the gap between the target and the reach
  4. Return to step one (page 92)

This procedural mindset does in some way provide structure to effectively behave positively in an unstructured environment. For more information about the secrets of talent purchase you a copy of “talent code” on amazon or download below.

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Trend line trading strategy

Have you ever wondered why all trading strategies never forget to consider the significance of trend lines? It is because the system works.

Now the question is, how do you use them as your basis for every day trading?

First of all you have to identify the highs and lows of price action. A high is a price bar/candle that is preceded by two bars/candles with lower highs and followed by two bars/candles with lower highs. A low is a price bar/candle that is preceded by two bars/candles with higher lows and followed by two bars/candles with higher lows.

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When these highs and lows are identified the next step is to connect these price peaks with a line.

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The battlefield is  now complete now it is the time to play smart. Most players look for setups. Below is a fully annotated chart showing how to place orders using trend lines, also how stops are place in the context.

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For more in-depth insight on how to use trend lines  as your basis for trading download a free ebook titled “Trendline breakout forex trading strategy” below. The most important benefit of using clean charts is the reduction of stress and confusion, that’s because clouding your charts with indicators doesn’t make the market certain. The only way to make your trading certain is to discipline your risk management/money management, use one volume for a period of time for accurate results.

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Did you gain anything? please comment below and share with your fb friends, cheers!

The Gartley Trading Method

Does the harmonic patterns initially produced by Scot Carney inspire you? They inspire a lot of traders around the market community. Take a look at how Ross Beck trades the Gartley pattern.

On top of all trading strategies and systems, book writers never forget to mention the psychological aspect of trading. The very first chapter in this book separates trading myths from reality, perhaps the most important chapter out of the whole book.

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This definitive guide skillfully explains how to utilize the proven methods of H.M Gartley to capture consistent profits in the financial markets. With-in every page you’ll become familiar with Gartley’s original work, how his patterns can be adapted to today’s fast moving markets and what it takes to make them work for you.

When you are done reading this book expect to be able to identify and profit from the most powerful formation in the financial markets. You will also be able to apply filters to Gartley patterns effectively increasing probability of success.

Did you find this info useful? please share it with your friends or leave us a comment to let us know your thought.

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Forex Trading Secrets

It is obvious that traders are not the same, there are traders who make $1000,00’s each and every day while others lose $1000,00’s each day. The popular statistic states that over 90% of the trading community lose money implying that less than 10% make money. Is that even true? in 2015 FXCM released a report of their profitable clients based on the equity range below:

Equity Range                        % Profitable

$0-$999                                  27.89%

$1000-$4,999                        40.52%

$5000-$9,999                         42.36%

$10,000                                   47.74%

Notice here that traders with capital less than $1000 are generally losing money, losing traders make up 72.11% for the whole community in this equity range. Traders who have huge accounts are more likely to make money, but in all of these equity range’s the majority is losing. Why do clever marketers give us an impression  that we will get rich quick? what are we missing? Do these  few profitable traders hide information from us?

The DAILYFX research team has studied why most traders lose money on a 40 million real trades sample. They found out that traders closed at a profit more than 50% of the time and still lost money. If these traders were right 50% of the time, why did they lose money?

what-is-the-number-one-mistake-forex-traders-make_body_Picture_4.png To uncover the correct answer take a look at “Forex trading secrets” written by James Dicks. He has a full scope on how the market works starting from the basics, money management, trading psychology, fundamental analysis, technical analysis up to building your own portfolio.

The statistic provided by FXCM proves that there are thousands of profitable traders out there, at the same time providing confidence of assurance that indeed it is possible to make money trading.

Have you got any question on the subject? Do you need a book that we haven’t yet shared? Do you need a broker? Please leave us a comment and let us help.

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Master The Markets: Become Smart Money!

Volume spread analysis is a good start to becoming smart money. Unlike fundamental analysis VSA seeks to find the cause of price movement. In any business where there is money involved and profits to be made, there are professionals. Medical practitioners are collectively known as professionals, but specialize in certain areas of medicine. Financial markets are no different, they have professionals that specialize in certain instruments e.g stocks, grains, forex e.t.c. The activity of these professional operators and most importantly their true intentions are clearly shown on a price chart. Volume is the major indicator for the professional trader.

The ’cause’ is the imbalance between supply and demand in the market, which is created by activity of professional traders (Smart money). VSA looks at the relationship between three variables on the chart in order to determine the balance of supply & demand as well as the probable near term trend direction of the market. Volume always indicates the amount of activity going on and the corresponding price spread shows the price movement on that volume.

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The effect is either a bullish or bearish move according to the prevailing market condition (Most indicators lead most market participants to trade the effect). Smart money operating in the markets are very much aware of the emotion that drive novice.

Advance your current method of analysis by reading VSA created by Tom Williams. Leave us a reply and let us know what you think.

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Harmonic Trading: Volume One

This book was written by Scott Carney, President and founder of harmonictrader.com, has defined a system of price pattern recognition and Fibonacci measurement techniques that comprise the harmonic trading approach. He has named and defined harmonic patterns such as the bat pattern, the ideal gartley pattern and the crab pattern. In 2005 Carney joined AIG Financial Advisors as a registered investment advisor. He has since left A.I.G Financial Advisors after two years to start his own firm. In addition, Carney is a full member of the Market Technicians Association(www.mta.org) and the American Association of Professional Technical Analysts (www.aapta.us). He has been a regular columnist on several know websites such as stockcharts.com, tradingmarkets.com and signal.com. Carney is a featured guest on CNNfn and he presents seminars nationally.

Unlike traditional technical analysis patterns e.g head & shoulders, double top & bottoms e.t.c harmonic trading aims to measure precise harmonic ratios: 1.618, 0.618 with every other ratio derived from the primary ratios.

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Harmonic Patterns are determined from these precise harmonic ratios.

Among all the books on trading psychology, Scott Carney has good advice to improve the mental aspect of trading:

Keep it simple: This is the most popular advice around the web mentioned by publishers such as Al Brooks, Lens Berg and a lot of professional traders.

Stick to a winning plan:  This may be difficult for novice traders because there is no signs proving profitability for a particular strategy, another confusion is that even the best strategies have losing positions.

I hope you will find value in this book, please leave us a comment below to let us know what you think.

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The Disciplined Trader

Let me tell you my story. I began trading by December 2015, starting off with harmonic pattern trading strategy. I sucked too much in that strategy, my conflict was that competitors are making money while I wait for bats and sharks, suddenly missing them all because I didn’t trust.

Now I rock with an intra-day price action strategy learned from Al Brooks and Lens Berg. By September 2016 I had completed studying this strategy but sadly I did not make money. Something was missing and that something was “Discipline”. It was so easy for me to increase volume in each and every next trade. I rated most of my trade’s risk based on how I feel about a setup, when a chart prints a wedge I bet half of my account automatically.

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Boom!! The account went broke again, it is possible that nothing was wrong with the harmonic trading strategy just as there is no problem with price action trading strategy. Clearly the problem is my lack of discipline, reckless, ignoring money management.

I get it people have different issues , so if yours prohibit your profitability download this book here. Mark Douglas will teach you the nature of your brain and how you can control it. Please let me know what you think and leave a comment.

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Reading Price Charts Bar By Bar

New Technology, specialised theories and so called managers promise to take your investments to the next level, the truth is that long term success requires you to do what the professionals are doing.

This book take’s you into deeper understanding of price action and how to trade it like a pro. My favorite chapter is “chapter 15-Best trades”. I learned here how to pick the best setups of the day, from major reversals and with-trend setups.

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The Author is Al Brooks, an independent trader and technical analyst for futures magazine. The philosophy of trading is minimize risk and maximize opportunity, this book teaches just that.

Download this book here for free, leave a comment to let us know what you think.

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The Ultimate Trading Guide

You will learn how to spot short term trends, trading systems that work, money management techniques and turning patterns to profit.

Be the Ultimate trader you want to be!

This is your opportunity to get what every trader wants but few have : knowing how to develop and correctly use a logic based, reliable and profitable methodology for successful buying and selling-now.

Based on decades of research and actual trading, this book will teach you how to make money trading the markets using a system designed by you.

Person’s at all levels will benefit from this book

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Cash Flow Quadrant

How do people earn money? where does money come from?

Mr Robert Kiyosaki explains it using the “cash flow quadrant”

S – Self Employed

E – Employee

I – Investor

B – Business Owner

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Income comes from any of those four letters above. This book coupled with TAGR is compulsory before starting any business.
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