Learning the craft of trading also means: setting aside all things that give you false hope. In my blog Leaching other people's hope i make a promise to give back Pandora's box to those who trade without succes and thereby subsidize my wins. But before giving hope back, i need to be sure that this hope has the potential to become reality. So in this blog i'm going to destroy hope in winning strategies. Reason: they do not exist.
Now before you empty your Kalashnikov on me, please read on. I'm not talking rubbish here. I'm not saying you should trade without a plan. This article is about ready-cooked strategies people offer on the web and in forums all over the world. In this article i'm giving you a giant leap forward in becoming a successful trader. Even if you eat, breathe and shit strategies: read on.
Successful traders will acknowledge: give a highly successful strategy to an inexperienced trader, and he will lose money. Give any useless strategy to a successful trader, and he will make money. Why? It's the trader with his skills that makes the money. The strategy is nothing more than an excuse to open or close trades.
So, trading without a strategy?
Yes. Each and every strategy is based on the same principle: you buy (or go long) if you expect price to go up; you sell (or go short) if you expect price to go down. It's as simple as that. The only thing we have to figure out is: when can we expect price to go up or down?
In my previous blog about Indicators and the uselessness of them i took a stand against all of these magic brooms of trading. There is no indicator with more witchcraft than your own mind. So forswear all the superstition with indicators and ready-made strategies, and start using your imagination. That is where trading begins.
The curse of strategies
The major curse of ready-cooked strategies is the promise they make. Strategies always come with the promise of many wins and enormous amounts of money. If you fail, you blame yourself and that works counterproductive. So, on to the next strategy, maybe another one works better. And so you go shopping through a mall of strategies and people who make money with them. Not by trading the strategies, but by selling them to you.
Imagination is the best strategy
To become a successful trader you have to train your imagination. Your brain has the unique capacity to recognize patterns.
Like the way you recognize a Lada Niva from a kilometer distance by its unique and classic shape. Nothing can beat our brain at that quality. It is that quality that makes the difference between winning and losing a trade.
Practice changes our brain into a non-subjective modeller.
Let's get prartical with this
If you need help with this and you have jForex, then search for the ZigZag indicator and apply it to the chart.
Have you found beautiful zigzags as in the example above, then look for the same time that such a pattern occured in the H1 and D1 charts. See what these charts look like, while the pattern grew in the M15.
Discipline
Practice this during the next few weeks. Remember: trading demands discipline. Discipline is doing what you must in stead of doing what you rather want to do. The next blog will dive deeper into the way price pulsates.
From chaos to music
The patterns you look for are not the famous Candle Stick Patterns. That is quite a different story. You look for recurring patterns that show you that the apparently chaotic path in fact is a logical path of human behaviour. More about that later. Meanwhile, listen to this and find the logic.
There is no chaos, only ordening we cannot see
This image is an enormous flock of starlings that daily flies over my house. If you zoom in, it's sheer chaos. Birds seem to dive and tumble over and under each other.
But if you zoom out, the whole flock moves as one organism. Like forex price no-one manages this, but it's pure harmony and logic.
By watching this spectacle every evening, i see more and more ordening. Every day i zoom in a bit further and still see the logic.
Now before you empty your Kalashnikov on me, please read on. I'm not talking rubbish here. I'm not saying you should trade without a plan. This article is about ready-cooked strategies people offer on the web and in forums all over the world. In this article i'm giving you a giant leap forward in becoming a successful trader. Even if you eat, breathe and shit strategies: read on.
Successful traders will acknowledge: give a highly successful strategy to an inexperienced trader, and he will lose money. Give any useless strategy to a successful trader, and he will make money. Why? It's the trader with his skills that makes the money. The strategy is nothing more than an excuse to open or close trades.
So, trading without a strategy?
Yes. Each and every strategy is based on the same principle: you buy (or go long) if you expect price to go up; you sell (or go short) if you expect price to go down. It's as simple as that. The only thing we have to figure out is: when can we expect price to go up or down?In my previous blog about Indicators and the uselessness of them i took a stand against all of these magic brooms of trading. There is no indicator with more witchcraft than your own mind. So forswear all the superstition with indicators and ready-made strategies, and start using your imagination. That is where trading begins.
The curse of strategies
The major curse of ready-cooked strategies is the promise they make. Strategies always come with the promise of many wins and enormous amounts of money. If you fail, you blame yourself and that works counterproductive. So, on to the next strategy, maybe another one works better. And so you go shopping through a mall of strategies and people who make money with them. Not by trading the strategies, but by selling them to you.
Imagination is the best strategy
To become a successful trader you have to train your imagination. Your brain has the unique capacity to recognize patterns.Like the way you recognize a Lada Niva from a kilometer distance by its unique and classic shape. Nothing can beat our brain at that quality. It is that quality that makes the difference between winning and losing a trade.
Practice changes our brain into a non-subjective modeller.
Let's get prartical with this
- Open a demo-account with MT4, cTrader or jForex. This part of your training is free.
- Open three charts with in all three te same pair: EURUSD (this is for a good reason).
- Set the first of these three on a timeframe of 15 minutes.
- Set the second on a one-hour timeframe.
- Set the third on a daily timeframe.
- Use Japanese candle sticks for the charts.
If you need help with this and you have jForex, then search for the ZigZag indicator and apply it to the chart.
Have you found beautiful zigzags as in the example above, then look for the same time that such a pattern occured in the H1 and D1 charts. See what these charts look like, while the pattern grew in the M15.
Discipline
Practice this during the next few weeks. Remember: trading demands discipline. Discipline is doing what you must in stead of doing what you rather want to do. The next blog will dive deeper into the way price pulsates.
From chaos to music
The patterns you look for are not the famous Candle Stick Patterns. That is quite a different story. You look for recurring patterns that show you that the apparently chaotic path in fact is a logical path of human behaviour. More about that later. Meanwhile, listen to this and find the logic.
There is no chaos, only ordening we cannot see
This image is an enormous flock of starlings that daily flies over my house. If you zoom in, it's sheer chaos. Birds seem to dive and tumble over and under each other.
But if you zoom out, the whole flock moves as one organism. Like forex price no-one manages this, but it's pure harmony and logic.By watching this spectacle every evening, i see more and more ordening. Every day i zoom in a bit further and still see the logic.