Interesting stories along my lessons... Chapter 2

[Nikitafx]

Chapter 7. Summary so far

I hope that visitors to the forum and readers of my journal were not hoping I was going to talk about trading systems and MA's and price movements. Instead of doing those things I talked about my experience so far trading the markets and things that happened while I was learning how to trade.

So I am just going to summarize what I have talked in length in the previous chapters below.

I hope that it sticks.

1. The main aim for those who are just learning how to trade, regardless weather you are a beginner or someone who has been looking at the markets but has not had much success, is to learn how to trade. NOT TO MAKE PROFITS. That would come later.

2. You have to ask the right questions in order to get the right answer. You cannot expect the answers to fill in your blanks, if you dont even know what is the question that needs answers to.

3. Always remember, It is you who wants to learn and its you who does not have the complete body of knowledge. If your trading is not profitable or not profitable yet, its you who is missing something out. Build your questions from there.

4. When we are being thought something, try to repeat what has been thought and lets watch the outcome. When we are not getting the intended result then go back and see what is different from the profitable trades. There will be difference. Thats why it went against you. It has nothing to do with luck. It takes sometime but maybe after 20 or 30 trades you would be able to see something that you were missing.
This is how it worked for me. Once I share what I think what I was missing then Luminousfx teaches me something new. The next step. Sometimes I think when its taking a very long time to see that he shows me things that try to make me see better. See what I am suppose to see. Pushes me along.

5. An extension of point 4. Pick a mentor. Hopefully the mentor picks you too. You cannot reach a reasonable level of trading in a short time without having a mentor. You might be extremely intelligent and a very quick learner but trust me, you wont be able to teach yourself how to trade profitably without guidance from someone who has made it. You definitely are not going to learn how make your millions. ( Im willing to take a bet on this one )

6. Dont try to add things to whats being thought. It cannot be simplified and we are following someone else's lesson plan. So dont veer from the path.

7. Guys, there are no shortcut to learning properly. Without proper training and skills you wont be a profitable trader, let alone doing it for a living. With this being said, be patient when you are learning. Your mentor would know best when you are ready to receive the next level. After all this is forex. Its much more complicated. Its almost a living thing with a mind of its own. If it was so easy it would be called taking a dump. Even that is difficult for some. So as I said. Patience. And dont be silly to trade your real when you are learning. Not because your lessons are dodgy. Its because you are LEARNING and PRACTICING.

Finally, I hope we make it.

[Nikitafx]

CHAPTER 8 : What Do I do ?

So far I have talked about what happened during my first phase of learning how to trade. I expect that most of the readers read my postings thinking that I would talk about picking trades and such. Things that actually have to do with trading. So as not to disappoint those who have been reading faithfully so far, I am going to talk about somethings I do before, during and after picking trades.

I hope that this posting would be lively with feedbacks, suggestions and other terms so we can see what each of us are doing to make some pips.




1. I look for direction of market bias.
Market bias is basically what the market has been doing over a longer period of time. When I say longer time period, it means H4 or Daily TF. Some look at weekly and monthly. I dont because all Im looking for is 30 pips per trade.
Why is market bias important?.

A. So that my position will be profitable ( DUH ! )

B. It gives me the confidence to hold when I have picked an entry that is too early or goes into retracement. This happens to all of us and market bias is the safety net telling us that it will be profitable eventually. Or atleast you get to cut off the trade with a minimal loss. This is very important as otherwise you would be guessing if its worth holding on to a trade that at the moment is say 50 pips against you.

C. It helps ease my trading because I dont want to be worried about if its going to be a buy day or sell day. I rather concentrate on picking a good entry after deciding if its a buy day or a sell day. At the moment, an established market bias can last for two or three weeks. That is alot of money to be made if one has the Luminous Projection Chart.

I find my market bias daily under Luminous Direction topic. My trading has improved tremendously after I started trading by referring to bias.

Where and when do I buy or sell ? Entering a trade. I will buy as long as Luminous Direction is a buy. Sell as long as the Luminous Direction is sell. Since I am a day trader and nearly 95% of my trades are concluded on a daily basis,

A. Earlier lessons have thought me that the best place to look for a buy is at the Lowest Low ( LL ) of a particular trading period. Either Daily, H4. I usually take a buy when the market has moved from the daily opening price and has gone below it. Then when I see a possible rebound I go for a buy. If the entry is right, then my Stop Loss ( SL ) could be as small as 5 to 10 pips. How do I see possible rebounds etc?. I took the Luminous package especially the mentoring system and practice. I cannot emphasize on the practice part enough.

B. What happens when I waited for a LL or HH of the day or whatever time period I am monitoring and I entered a trade and it did not rebound but kept going contra to my entry?

Easy. I hold because I have market bias to back me up. This is especially true when market moves drastically due to news releases etc. I define market price movements as an elastic rubber band. Whenever external force is applied to the rubber band and it stretches one way or the other, its bound to bounce back to its natural state. The question is, are you carrying enough margin to hold on while it does what it does?.

A good example I can give is during the Yen Intervention period end of last year. The first intervention moved the market up by 500 over pips on GBPJPY on a single day. Its more that most people would hold for. But once that was over the market did come back to the entry price over the next couple of days. The market bias of sell was continued. No questions about that.

What about the day the market crashed over 1200 pips over a matter of hours earlier last year? This was caused by some issue in the NYSE and it overflowed into the currency market also. Well those in the know made a thousand pips solid in about 4 to 6 hours. Then they collected 800 pips or so when the market rebounded to its natural price level over the course of the following week.

Still not convinced?. Look out for NFP day. Every Friday of the first week of the month, the biggest monthly impact news would be announced. Its the US Non Farm Employment news. When the market moves in a single direction, It can sometimes hit 200 pips in a matter of 2 to 3 minutes. Watch this. Its a good opportunity to test the rubber band analogy. All you have to do is wait for the market volatility to end and take a contra trade to the direction of market movement. This is especially true when the market moved contra to the direction or bias. TP should be somewhere in the range of 30 or 40 pips from the price of market movement. The rubber band will always come back to the area where it was earlier before the news impact. Try it out.

So what has this got to do with what I was saying earlier?. Well its basically a long version of not holding on to a loosing trade and not cutting a good entry too early and with a loss. Follow Bias. Follow bias and pick a trade on the LL or HH. If you did then you can hold for big pips, if you did not then hold on for BE or 20 to 30 pips.

[TheRumpledOne]

Seems like I have heard some of this before...