Trading Price Action Using Your Intuition

Trading Price Action  is truly a game of “gut feel”  ” trading strategy” and “price action charts”

The market is one giant poker game, and not only do you need a good
knowledge of the game itself, one must learn to read the emotion of all the
players at the poker table.

As a price action forex trader, I can only offer my personal trading insights and the things I have picked up
over the years that have helped me with trading strategies and my general approach to reading charts..

I can not give you all of the “gut feel” qualities which is a larger part of the ingredient to long term success, this market intuition and emotional element will only come with learning and trading experience. Nobody will want to tell you this though.
I am here to tell you that no matter what trading strategy you learn, it will require screen time, patience and absolute discipline to trade it successfully.

There are 2 levels to be aware of.
1. Part of trading is the strategy
2. Part of trading is the emotional element, and the ability to read the market with “good intuition and feel”.

There is no mechanical approach that I am aware of that makes money long
term, all methods I trade and that others trade that I know of, use a basic
“rule set”, and basic “trading plan condition” to then use pull the trigger on price action related setups etc.

For example, a trading plan may look like the following…

One might have 3 pre conditions,

1. The chart shows a trend within the last 10 days, price has formed a 1 2 3
reversal higher, and is trading near its recent high.
2. The market has pulled back to a support point
3. The market has now formed a “price action signal” condition to confirm a
reversal which may become the entry point.

These may be criteria in a trading plan, but how do we truly filter this,
and say ” ok I will trade this setup, but I wont trade this one, because
of…etc etc.”

As I say to all my students honestly, the greatest traders are in fact, people that can
have a trading plan conditional element, but then use what I call the “gut
feel element” and the “internal emotional filter’, or put simply, they use market experience and screen time to help make quick on the spot trigger decisions.

Thats just a qucik article on the “emotional element” in trading price aciton, and indeed all trading methods, no matter what the educators say, there is always a degree of intuition and awareness that is taking place in our trading, and its time to learn to harness it correctly.

Think of Forex Trading as a Business

Many forex traders lose their shirt and this is mainly because they are not really prepared to put the time and study into their day to day trading activities.  The concept of Trading and investing in the forex market is like any other business, what you get out of it is relative to what you put into it.
In other businesses you find a market, you learn a skill or develop a product, and then develop that skill or product until it is better than other people in the same business or niche. Trading is the same - it is a business - and if you want to be one of the financially secure you will have to work at it, in the exact same manner as an astute business person. In conventional business you have to be patient, focused, disciplined, very committed, hard working, forceful, and in complete control of yourself and in control of your plans.
To be successful in your forex trading business you can’t be forceful or control the market, all you can do is identify what is happening and go with it to profit, thats not to say that you cant be confident with your trading, but you need to realise early in your career, that you are not bigger than the market, and although you run a trading business within this large market, you are never truly in control of whats happening, or what will happen in the day to day forex market movements and events.
You can never be reliant on tips or one lucky trade to secure your future, nor can you build a trading business using a mechanical autopliot kind of system. You have to continuously work at it until you have developed a trading strategy, and even when you have developed that strategy, it will require ongoing effort and monitoring.
Once you have a forex strategy that works for you don’t keep messing around with it, try to remain very consistant and subject yourself to the trading opportunites it identifies. I have read in so many articles out there on the web that you should keep searching for a different method or system to improve your trading, and I respond to that by saying, ‘ this is complete rubbish’ … rather, I strongly suggest trying to stick with what you have and see it through, you need to give things a chance to work and prove itself.
Successful forex traders know the main part of their trading business is the development of their trading skills not continually looking for the ‘Holy Grail’. When you have a set of trading rules that suit you and you are happy with what you have, you need only improve your skills to implement them, this will take much of the stress and anxiety out of trading and it will become enjoyable. That’s right, trading can become enjoyable once you have faith in your rules and your method.
When you rbegin to remain consistant and disciplined with your thinking, and of course your trading plan/rules, then you can create a dynamic forex trading business that will help secure your financial future or simply make your trading much more enjoyable and relaxing

How to Become Successful at Forex Trading

Most people’s experience in the Forex Market is relatively short and in no way profitable. They hear about the currency market and think it is an easy way to make a lot of money in a very short space of time. Now, I am not saying this can’t be done, because for some this is true, but for the majority it’s certainly not the case. Let me explain in more detail …
In the early stages of most FX trader’s career, the first trading decisions generally come from tips and recommendations from brokers, alert services, forum threads or sometimes even mutual novice trading friends. Then, at some point, traders decide to study the market and attempt to find the perfect system or method to trade with. I am sure you can relate to the following statement; for many traders, the forex market and it’s nuances truly become an obsession that takes up countless hours of searching on the internet and books, forums and DVD’s , in the hope to find the holy grail forex trading system, which they eventually find out, simply does not exist.
Traders develop or buy a system and start trading way to soon. Sometimes it is profitable, but when it has a few losing trades (which is normal), they change the system, read a new trading book, etc. or go back to looking for tips and advice, back to the forums, back to Google, searching for more information. After some time, and after more losses and frustration, most give up and stop trading altogether. Or, they go on the analysing merry-go-round, keep paper trading and never get any financial success from their trading; this is the case for 90% of newbie and intermediate traders.
A few realise that the trading method they are using is not the actually problem and the most important ingredient in their trading is actually they.
In addition, they soon realise that a sound set of trading rules is essential to trading profitably. But if the rules are not followed, they are of no value, and an average trader will have difficulty making a profit with a good trading system. Ironically, a good trader who has skill and a good mind can make a profit with even an average system. Put simply, even with a perfect system, the human mind can stop it making money!
Statistics from surveys of US traders indicate that once a trading methodology is developed by a forex trader, then 80% of the effort in trading is actually trading skills (that includes things like trading psychology and money management).
When the trading system is developed and trading skills are learned, a person starts finally trading properly. Most traders encounter a setback at some stage; either the market conditions change or they don’t follow their rules. However, if good money management is followed, this is not a serious problem. Often, even after winning for several months, after a small set back, many great traders stop trading to evaluate what has happened. This is often a mistake, and is again, the ever-present emotional element which plays in the back of our minds every day we trade. It’s a mistake to interfere with the consistent day to day trading routine, even in the face of losses, the trader has to press on and believe in what they are doing.
Here Some Common Traps Traders Fall Into:
This is where the real decision about the trader’s future is made:
1. They stop trading all together
2. They find a new system, read a new book, and do another course. This can go on forever and successful trading will never happen.
Or
3. They evaluate what really happened. Mostly it will be that market conditions had changed or they didn’t follow their rules.
Then the forex traders who go on to achieve greatness:
(a) Monitor the markets and start trading again but trade small amounts and don’t force trades, they then resume trading normally once they get back on track.
(b) Wait for market conditions that suit their trading style.
This is an important process to go through. Most traders go through this experience 2 or 3 times before they develop the skills to achieve their trading objectives.
Trading success is a result of consistency, discipline and patience and most importantly self belief… When you have a trading plan that involves clean price action strategies, and that is built on practical workable parameters and it suits your personal and financial requirements, and you stick to it, then your forex trading will become more enjoyable and more profitable.

Tips For Newbies - How to start your forex trading career.

Tips For Newbies - How to start your forex trading career.

Trading the forex market can be a very rich and rewarding experience for those who start from a solid foundation. For those that jump in head first with no previous training and no pre-defined plan to trade the forex market, disaster is only a trade a way. I mean that in the most literal sense because if you have no trading plan and no real idea of what being a successful forex trader entails, than you will quickly develop and reinforce all the wrong habits that eventually will destroy your trading account much faster than you think. This article is written out of personal experience and knowledge and will give you some idea of how to get started trading the forex market with the goal of consistent profits in mind.

The first and arguably most important factor in determining wither or not you are ready to trade forex is to sit down and take a look at your entire personal financial picture. If you are planning on funding your trading account with money that you might possibly need for any living expense than you are not ready to trade. You need to have disposable income that you are totally ok with losing; this is the first step in developing the proper habits of a successful forex trader. If you are trading with money that you need for bills or anything else in your life, you are doomed to fail because you will be overly emotional from the very beginning while trading, a sure fire recipe for disaster.

After determining that you do have enough disposal income to open a forex trading account you can then begin to develop a personal method or system for trading the market. I will save you months or even years of frustration, time, and money by telling you this; all you need to make your entry and exit decisions is a naked price chart. That’s right, you don’t need a bunch of fancy indicators and you certainly do not need to buy some two thousand dollar black box system. Trading is mostly psychological and most people over emphasize the technical analysis side of it. A good foundation in price action analysis is all you need as far as the technical side of trading goes. Once you know the basics of price action in the forex market you can then develop risk/reward strategies and concentrate on maintaining your self control and discipline.

I suggest you demo-trade for a month or two or three before trading your real money in the markets. Develop a good system for entries and exits so that you already know what to look for and what to do when you trade with real money. You need to know what you are going to do before you get into the trade because if you try to decide while the trade is happening you will inevitably make the wrong decision due to emotion. You need to have all scenarios planned out before they happen, so if x happens you will do y, if a happens you will do b, there should be no deciding while the trade is open.

Finally, learning from people who are already consistently successful in the forex market is probably the best route to go. The problem is that many people claim to be successful traders but few actually are for long periods of time. Forex trading is full of people trying to make a quick buck by selling some bogus trading systems that are overly complicated and simply don’t work. Simplicity is your friend when it comes to trading the forex markets. Remember that, it’s important.

So do your research before jumping in the forex market. Only trade money you can afford to lose, study price action and naked price charts and learn from a good mentor such as myself, demo-trade until you get your trading plan tweaked just right, then and only then should you think about diving in with real money.

The truth about Forex and Futures Trading

Introduction:
I’m not a self confessed market guru, nor am I an expert when it comes to written communication and education. I am however quite the expert at understanding price action and devising trading systems and methods. I am successful, not only at trading money, but at helping people improve their trading. The sole reason I succeed in the markets is because I am patient and I trade setups that repeat themselves over and over. Trading is a sport, like chess, billiards and poker, trading is a game of skill and strategy.
My analysis and approach is typically very simple. I use nothing more than daily and weekly price charts, not a bunch of fancy indicators, no fancy bells and whistles. Basic Maths and Price Charts are all one needs to make money in today’s markets.
It’s my aim to empower you with simple strategies, and hopefully make a difference to your future trading endeavors. I ask you to open your eyes and see what the market can realistically offer you. If you have $100 in a trading account, you’re not going to make it, $2000 and you have a fighting chance, $10,000, and your chances increase because you have the ability to handle inevitable losses.
I will not be filling these pages with useless trading content, and bore you to tears with basic market theory which is available for free on Google searches. I’m going to go straight into the meat, and divulge to you, not only a successful trading method, but help you understand what will help make you successful in the market.
The Realities of directional trading.
If there’s one thing I’ve learned in the last 5 years, when it comes the topic of wealth creation , weather it be trading share market, the currency market, real estate or even simple business, I find that failure in these fields is mainly due to a lack of discipline or planning. A trader can be given a method to enter traders but the question is, can they stick to the plan and manage the trade properly? Does successful trading depend on your personality or your approach? The short answer is both!
If you’re failing, you are a victim of subconscious inhibitions and mental in-capabilities, which all result in “fear” and “lack of personal discipline”. There’s a reason Ex Marines, Army and Navy personal make money trading, I know 2 ex military personnel that succeed in trading, and they both have the same personalities. They are trained in the art of war and discipline. Based on this information, a novice trader, or failing trader should then revert back to practicing a mechanical method which induces discipline and a step by step plan. Even is that method breaks even, you are starting good habits.
The reason the owner of a McDonalds Franchise makes money is purely because he follows a proven system with rules and restrictions. Successful trading and investing is no doubt similar to franchise in itself. If you use a method to trade with, and stick to it, manage your money correctly whilst maintaining constant discipline in your approach, the chances of your survival is increased 100 fold.
What you really need to know.
I want you to understand that before you trade or use this information, that any trading strategy should be just one part of your trading arsenal. My systems work for many, and can work for you, but you must be realistic. All methods lose money, as well as win money, the best approaches are often conservative and trade less often. You are not going to build Rome overnight with this method, but your most likely going to improve your results significantly over time, if not your discipline alone. As I continue to reiterate, a trading plan and disciplined approach is the true grail of trading.
I have often found that traders are obsessed with getting on “every move”, when all they really should be doing is mastering an approach to make “some of the moves”. My success can be attributed to the understanding that trading is a conservative game of patience and strategy. It’s a game no doubt, with many players, all whom are usually much smarter than the retail trader. As “small fish”, we must develop skills to jump on the back of the ‘larger fish’ (banks), and ride the tide for as long as possible. That in itself is precisely how trading works.

Major Economic Events in Forex Trading

Posted on November 14th, 2009

Major Economic Events in Forex:
Economic indicators are closely watched in the investment world, their release can have an immediate and volatile effect on the forex market. There are three main types of indicators; leading, coincident, and lagging. Leading indicators are believed to change in advance of changes in the economy, which can give you some idea of what might happen before it actually occurs. Coincident indicators reflect changes in the economy at about the same time they actually occur. Lagging indicators change after the overall economy changes and are of little use for prediction. Interest rates are a major driver of forex markets and each economic indicator is watched closely by the Fed as they decide on their monetary policy. For this reason many of these indicators can have substantial effects on the forex market.
Gross Domestic Product (GDP)
The GDP report is the most important of all economic indicators. It is the biggest measure of the overall state of the economy. The GDP number is released at 8:30 am EST on the last day of each quarter and it reflects the previous quarter’s activity. The GDP is the aggregate (total) monetary value of all the goods and services produced by the entire economy during the quarter being measured; this does not include international activity however. The growth rate of GDP is the important number to look for.
Consumer Price Index (CPI)
The CPI report is the most widely used measure of inflation. This report is released at 8:30 am EST around the 15th of each month and it reflects the previous month’s data. CPI measures the change in the cost of a bundle of consumer goods and services from month to month.
The Producer Price Index (PPI)
Along with the CPI, the PPI is one of the two most important measures of inflation. This report is released at 8:30 am EST during the second full week of each month and it reflects the previous month’s data. The producer price index measures the price of goods at the wholesale level. So to contrast with CPI, the PPI measures how much producers are receiving for the goods while CPI measures the cost paid by consumers for goods.

Retail Sales Index
The Retail Sales Index measures goods sold within the retail industry, from large chains to smaller local stores, it takes a sampling of a set of retail stores across the country. The Retail Sales Index is released at 8:30 am EST around the 12th of the month; it reflects data from the previous month. This report is often revised fairly significantly after the final numbers come out.

Employment Indicators
The most important employment announcement occurs on the first Friday of every month at 8:30 am EST. This announcement includes the unemployment rate; which is the percentage of the work force that is unemployed, the number of new jobs created, the average hours worked per week, and average hourly earnings. This report often results in significant market movement.
NAPM
This report is called the National Association of Purchasing Management index and it measures conditions in the manufacturing sector. The NAPM index is released on the first business day of the month at 10 am EST and it reflects the previous month’s data.
Consumer Confidence Index
The consumer confidence index is released on the last Tuesday of the month at 10 am EST, the report measures how confident consumers feel about the state of the economy as well as their spending power. Consumer confidence is considered a crucial part of the economic picture, the more confident people feel about the stability of their income the more likely they are to make purchases.
Durable Goods Orders
The durable goods orders report gives a measurement of how much people are spending on longer-term purchases, these are defined as products that are expected to last more than there years. The report is released at 8:30 am EST around the 26th of each month and is believed to provide some insight into the future of the manufacturing industry.
Beige Book
The Beige Book report is part of the FOMC’s preparations for its meetings and is published 8 times per year. The report is released two Wednesdays before each Federal Open Market Committee meeting at 2:15 pm EST. The Beige Book report summarizes economic conditions in each of the Fed’s regions. This report is seen as an indicator of how the Fed might act at its upcoming meeting.
Interest Rates
Interest rates are the main driver in forex markets; all of the above mentioned economic indicators are closely watched by the Federal Open Market Committee in order to gauge the overall health of the economy. The Fed can use the tools at its disposable to lower, raise, or leave interest rates unchanged, depending on the evidence it has gathered on the health of the economy. So while interest rates are the main driver of forex price action, all of the above economic indicators are also very important.

How to become a full time forex trader

Becoming A full Time Trader -Developing Forex Systems - Nial Fuller
You only need to master one trading setup to be a consistently profitable trader.
Screen time will allow you to master one setup.
After you have mastered one setup “own it” you can add another setup. This can be an ongoing process developing your own style.
The best setup to begin with is the one that you see and understand easiest. If you are forcing yourself to learn a setup because you believe another person is successful using it you may be taking the longer route to profitability. We are all different . Our brains and personalities will gravitate to different setups. This is also true of exit techniques. Most traders I hear from lengthen their road to profitability by trying to apply too many concepts before owning the first one. They have studied a myriad of techniques but have yet to master any. This allows them to talk about trading but unable to consistently trade profitably.
The first decision to make is; do you desire to be a counter trend trader? or a with the trend trader? Eventually, you can be both. At the beginning, or a new beginning perhaps, you will do best choosing to master a setup and follow the trend. If you have been at this game for awhile and are not yet consistently profitable you know what I am saying is correct.
This site contains trading techniques and setups with the intent that it will aid you in creating “your” trading style. My personal trading style is a combination of various styles and setups.
I trust this website will be an exercise in my personal understanding of my own style allowing all to benefit.
PICK ONE, MASTER IT, BE CONSISTENTLY PROFITABLE

Forex Fundamental Analysis Article

Basics of  Forex fundamentals

That forex analysis is a basic part of any trading method is accepted and understood by everyone. The usefulness of technical analysis for the determination of entry and exit points is also recognized by most traders. It is a pity that the other branch of forex analysis, the fundamental study of currency markets, is neglected by a significant number of beginners, and even by some experienced traders. This is an unfortunate situation. Since the invention of coinage by the Kingdom of Lydia in Anatolia, speculation has been a part of economic activity. And since those earliest days of trading, a vast number of successful traders have based their decisions on fundamental analysis, which is a fact recorded by documents thousands of years old, such as the Chinese Shi Ji.

Forex fundamental analysis is based on the notion that although market events are random in the short term, in the long-term the value of a currency pair will converge toward the theoretical value determined by economic fundamentals. In the short-term, markets move in an apparently random fashion. But examination of long-term forex trends shows the relationship between fundamentals and the markets clearly. It is, for instance, basic knowledge that interest rate differentials influence market action in an easily perceptible way. Unlike technical studies, fundamental analysis also helps us to establish the causes of market events. While technical analysis shows the how, where, and when of the markets, fundamental studies provide us the crucial “why” component necessary for linking those “where, when, how” aspects of the price action.

Fundamental analysis is certainly not news trading, nor is it a way of timing the markets. While it sometimes happens, it is rare that the dictates of forex fundamental analysis will be reflected in the market action immediately. But the later that the markets realign themselves with fundamentals, the severer the correction will be. The longer the irrationalities last, the stronger their elimination in the markets, and the greater the profits of the fundamental trader.

From the earliest days of the invention of currencies, fundamental analysis has brought countless riches to its followers. The speculators of antiquity, army contractors of the Roman era, Chinese merchants of the Warring States period, the Rotschild family in the 19th century, and the better known examples of our time like George Soros or W. Buffet have all utilized the powers of fundamental analysis to acquire wealth well beyond the imagination of those whose practice is limited to technical studies. Whether you wish to join them is up to you. But the tools of forex analysis are available to all who desire to use them, and you have only yourself to blame if you miss your opportunity.

Why Use Forex Price Action Analysis ?

Why Trade Forex with Price Action?

The forex market is a highly liquid and sometimes fast moving market that lends itself wonderfully to the trading method of price action analysis. Price action analysis is the identification and implementation of specific price action signals or setups in the market you are trading. Forex is a great market to use price action analysis on because it is open 24 hours a day 6 days a week and this means there are more price action signals for you to take advantage of. All you need to know is what to look for and you can best learn this from a professional price action trader.

I have tried about every way to trade the market you can imagine and after all the frustration, time, and money wasted I ended up realizing that the best way to trade any market is just by analyzing a naked price chart. My unique way of trading using price action setups is a result of many hours of screen time spent analyzing price movement and price action patterns.  Trading is a process of trying different methods and tweaking them and eventually ending up with your own unique trading method.

Price action analysis works very well in the forex market because it is such a dynamic and active market. The beauty about price action analysis is that it is an inherently flexible approach to trading that gives you a perspective on the market that allows you to make sense out of what is happening at any given time. I have been profitable by concentrating on just 2-3 good price action setups that have proved profitable again and again for me. If you learn how to read what the chart is telling you and focus on 1 to 3 setups that you like, eventually you will make money. Where people go wrong is using indicators and other overly complicated methods and then constantly jumping from one technique to the next. You have to find a truly consistent edge in the market and then just concentrate on that until you get it down, then you can maybe add more tools to your arsenal.

Trading is difficult enough without having an overly complicated method that tells you to look at multiple lagging indicators when you could just be looking at a simple price chart. Probably the best reason to trade forex using price action is that any indicator you use on your chart to analyze market movement is derived from price and is just showing you in a less vivid format the same thing price is showing you. Some people like indicators because they give you buy and sell signals when lines cross or whatever. The thing is, if you know what price action signals to look for you can get the same entry signals but at a much better price which gives you a better chance at profiting.

Just because your charts come with a hundred different indicators doesn’t mean its going to help your trading or make you money in the markets. We are trading financial markets here, so the core of what we are doing is trying to profit off of price movements. Why people would not naturally make their trading decisions off of pure price movement is beyond me. I promise you that if you simplify your trading method and concentrate on using price action you will wonder how you ever traded any other way.