Trading Less Will Bring You More Profits

Hello and welcome to another edition of the bulls vs the bears. This week I want to throw another suggestion you:Trading less will bring you more profits. Some of you are looking at me like”This guy has lost his marbles.” News Flash! All my marbles are intact. Listen, it makes  absolutely no sense trading 40 times a month. You run the risk of slipping into an emotional roller coaster-not to mention blowing your account into smithereens. What am I trying to stay?  Less is more. If you show your face too many times on the charts, you’ll get breadcrumbs in return.

However, if you show up every once in a while, you will surely reap in huge dividends. Of course your trading edge has to be in full effect on the market for you to reap those dividends So what’re we going to do? We are going to take a look at three trade setups you could use starting this month. If you’re not sure which trade setups to look up, try these suggestions. You should see major improvements in your trading fortunes.

So first up:

Pin Bar Sell Signal Image result for pin bar sell signal at resistance level Now take a look at this juicy pin bar. sell signal along the trendline athe level of resistance. Now  this took a few weeks for this sell signal to materialize. It takes patience to to trade like this. And you need patience to make money as a trader. The last thing you want to do is to jump in and out of trades as if your pants are on fire.  When you do that you lose a lot of money.

And  your emotions end up scattered all over the laptop screen.Even worse, you lose your beauty sleep. you don’t want that. Do you? Just put in your sell bid below the the bearish pin bar as indicated by the red arrow. For more information on trading look up  Pin Bar Strategy –  How to Trade it

Bullish Tailed Reversal Bar Image result for bullish tailed reversal bar after pull back Now as you can see this is a bullish tailed reversal bar, popularly known as the engulfed candle. As you can see this formation occurred following a brief pullback. And if you’ve noticed,  the bulls have set up a nice looking trend. This should set you up for a hefty profit. To put in your trade entry just place it above the high end if the bullish candle as indicated by the red arrow. You don’t need to make an appearance on the market every day. So long as you  concentrate on high probability setups  such the one above, prosperity will be your portion forever.

In fact,you should be able to win more than half of your trades assuming you know what you’re doing. Jut make sure you don’t risk too much and stray from your trading plan. For more information on using candlestick patterns to identify potential market moves look up How To Read Candlestick Patterns to Identify Potential Market Moves

Finally

Inside Bar Breakout

Image result for Inside Bar Breakout  - higher low and higher high

Now here  is the Inside bar breakout nicely illustrated here using the GBP/USD pair.  The higher high is the the tall candle known as the mother candle  and the lower high(right in front of the higher high) known as the baby candle. Luckily for you  price breaks through resistance without  any resistance.So this should make for a cool bumper harvest. Sometimes it makes sense to head for the exits with your cash ahead of the appearance of the resistance level. In other words it’s better safe than sorry.

But you don’t to do that too often if there is an opportunity to make more money off the trade. If you miss out on that opportunity it will mean you having to compensate by winning more trades just to make money. For more information on how to trade inside the inside bar pattern Look up Trading The Inside Bar

That’s a wrap for ”Trading Less Will Bring You More Profits.”  I’m only going  to say this.  Start using just these three trades every month and your life will never be the same. Even more important, your trading results will improve, and your you will have developed a completely different trading mindset.You will no longer experience the urge to stress yourself out with 60 trades a month.  Who does that? Give your screen a break. Go to the beach if you have to. Til next time take care.

 

 

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Allow The Forex Market to Hit Your Targets

Hello and Welcome to another edition of the bulls vs the bears. Today I have an important nugget of trading wisdom. And it is “Allow The Forex Market Hit Your Targets.” Now I can hear somebody saying”What do you mean by that?” Well all I am saying is allow the market to hit your stop loss or your profit target without you compulsively closing the trade yourself.  Don’t exit your trades too soon before price hits your stop loss or take profit targets.

When you do that you hurt your chances of making huge profits. You are basically settling for breadcrumbs. And you end up racking up huge losses by taking up small losses So to get started I’m going to show you a little illustration. Then I’ll show you some examples of allowing the market to hit your targets as opposed to compulsive closing your trades. I will also show you an illustration when it actually makes sense to head for the exits.

I guess the question of the day is:

Why Should I Not Compulsively Close My Trade?

Because if you compulsively  close a trade that is turning against you, you end up taking a loss.You see forex trading is about making profits to offset your losing trades. Sure you are going to have losing trades.But you have don’t have to close them by force all the time. All these small losses eventually add up, and they may end up wiping out your  trading account. Now we don’t want that.Do we?

Now let’s look at a little example: Say you enter a trade on your demo account, and it goes sideways for a week. The following week it heads downwards, almost stopping you out for a loss. At this point you are staring at a huge loss. The following week, the trade makes a dramatic U-turn to shoot upwards like a space shuttle and hits your profit target. You ‘re so excited you end up screaming “BULLS EYE!” You’re probably saying to yourself”Well,what has that got to do with anything?” Well  A LOT.

You see with a demo account you are thinking logically by allowing the trade to sort itself out. You feel no reason to interfere with the trade. The last thing you want to  do is to compulsively exit a trade  that could turn out to be a humongous winner. Fortunately you allowed a losing trade to transform into a winning trade because you chose to do nothing. What’s the moral of the story? Let the trade find its level.

You need to give the trade oxygen to breathe. You’re probably saying”But I want to make money NOW!” sorry, but  you can’t control the market by remote control. Just hang tight for a few weeks while the trade tries to find its level. The question is can you stay calm this way on a live account? That’s something you will have to figure out if you want to prosper as a forex trader.

With that out of the way let’s take a look at examples of the forex market hitting your targets versus you compulsively closing your trades. Image result for forex market hit profit target Ladies and gentlemen here is a classic example of how to stay in the trade using the GBP/USD pair.  If you didn’t know already  this is range trading with pivot  points. The bluish circle indicates  S1(Support level) surviving a  major hit by price. By that you’d have put your stop loss just below S1.  That’s because S1 managed to hold back price.

Now a little further up you set your profit at 1.4537. And guess what, your profit target takes a positive hit. See what a little patience does for your soul?  you waited for the market to take you out of  your trade, and you ran all the way to the bank laughing and smiling. Had you bailed out of the trade  you would have left a lot of money on the table and ended up with breadcrumbs instead. Here is a price setup  of a counter trend pin bar signal. rewward to risk trading exit strategy Take a close look at the bearish pin bar at  the 48 pip target. Now just because a pin bar goes bearish doesn’t mean you should jump ship immediately. As you can see, the bear immediately changed to a bull, sparking a huge surge. Just because a countertrend appears does not mean you immediately jump ship. Just use key levels as indicators of whether to decide whether to make your exit. So what’s the moral of the story? Don’t play Russian Roulette with your trades and avoid compulsive exits.

Instead let the forex market hit your targets. If you need help with how to take profits and stop losses look up  A Few Rules on Taking Profits and How to Place Stop Losses the Right Way. I can hear somebody asking…..

Are there Exceptions to This Rule?

Sure there are exceptions to this rule. In fact there comes a time in a man/woman’s life when you do have to exit your trade for dear life hen the tide turns against you. However the following conditions have to exist for you to run for dear life

  • Counter Trend – The formation of a reversal trend should be your queue to head for the border- FAST!
  • Pay the attention to the data on the price chart. It tells its own story… How did you close on resistance/support level? Or  moving average.These are important clues to consider when planning your exit
  • When the price signal you entered is not on the same page with the market as the market does a 360 closes  above or below the price pattern.

Now let’s look at an illustration of a trade where it really makes sense to run for dear life An_Easy_Way_to_Exit_Trades_body_Picture_4.png, An Easy Way to Exit Trades

Ladies and gentlemen  I present you a high probability  trade setup using an upward channel using  the NZD/USD pair. As you can see Take Profit has been set at 300 pips at .8140 mark. whereas a stop loss has ben set at 150 pips at ,7990 mark. The key here is setting these values prior to making these entries on the market. In deciding where you are going to place your trades, you have no doubt in your mind what to do once price hits these targets. RUN FOR DEAR LIFE

This concept is fairly straight forward.Why?Because you decide on these values prior to entering the trade. Once  you decide where you in advance where you are going to place these values ,you should be in no doubt as to what to do when  price massages  your targets.

That’s a wrap for ”Allow The Forex Market to Hit Your Targets.” As you can see, it’s possible to prosper as a forex trader by doing ABSOLUTELY NOTHING! By that I mean cutting down on playing Russian Roulette with your trades and compulsively exiting from potentially profitable trades.When you cut down on these two negative habits, you give your account a massive chance to grow.

That’s not to say you’ll never experience losses. Because the losses will come. All I’m saying is STOP TAKING THOSE COMPULSIVE LOSSES FOR NO REASON!They will slowly kill your trading account softly. And before you know it, you will have nothing left to trade with.  

There are three key components you need to have in your trading makeup.They are: accurate stop loss placement, accurate reading of price data on the charts and keeping a check on those    raw emotions. Those raw emotions,in particular, could cause you crash horribly,if you don’t put a leash on them. Some of you may be asking” How do I avoid compulsive losing?” First cut down on your risk per trade so that your emotions are not torn to shreds  when the price takes a swipe at your  stop  loss position. If it means learning stop loss placement,  and how to trade with price action by all means do that. But whatever,you do, stop taking compulsive losses just because you’re scared price is moving against your position or the market skewed sideways.

Til next time take care.

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Do Not Exit Your Trades Too Early

Hello and welcome to another edition of the bulls vs the bears. Today I have a little piece of advise for you:”Don’t Be Too Quick To Hit The Exit Button On Your Forex Trades” Why?because exiting early could cost you a hefty pay day. So many traders exit the market for mere breadcrumbs only to watch with horror as their trades become huge bumper harvests. To be brutally honest I’ve fallen victim to this trap a few times. Why do people fall for this trap?  It’s usually out of fear They are scared  the market will do a sudden 360 and put a tsunami-sized hit on their trading position. So they settle for breadcrumb profits or small loss.

Later, they start pulling their hair in disgust as they watch profits slip through their fingers. It’s like leaving  too much money on the table.When you don’t trust your trading plan well enough, you hit the panic button every chance you get. Unfortunately we all know that hitting the panic button throws all logical thought out the window.

So we are going to look why panicky traders head for the exits  too soon. And of course we’ll look at how avoid  heading for the exits and allowing your trade room to work.

First off,  what causes traders to head for the exits too early?

Poor Trading Process and Poor Understanding of Forex Market

Some traders head for the exits too soon because of a poor trading process and poor understanding of the forex market. They are basically saying “We don’t know what the heck we’re doing.” They trade without much of a trading plan with regards to entries, exits and  what to do after they enter a trade. Even worse, they’re so attached to their trades that they do the watchman routine by staring at their laptop screens all day hunting  for trades. How about applying the set and forget strategy and get on with life?

Even worse, they risk too much money on the trade. And when you do that,  you tend to hit the panic button even quicker than Speedy Gonzalez. In so doing,you over-leverage on your trading account which makes you more nervous and jumpy every time your trading position goes positive or negative. Whenever  the forex market makes  a move you’re like “This is it for me.” Or you feel  every little profit you make you have to take the money and run before the market turns around and devours your cash. You’ve made the forex market to be this two-headed monster;which shouldn’t be the case at all.

Previous Trading Losses

Yep, previous trading losses  can impact your decision to exit your trades too early. Not only that, they reinforce  an unhealthy sense of fear you may have cultivated about the forex markets.(Remember the two headed monster?) So  two quick losses may lead you to think “Hmmm….I think I may have bitten more than I can chew with this forex trading adventure.” All of sudden you start losing faith in your trading edge. This is suicidal because your trading edge is the eyes and ears  for your trades. It tells you whether conditions are right for you to enter your trades.

It’s also important that you realize that your trading edge  covers a sample of trades. In other words, you have to give the trades room to operate until they run out of steam.  So letting your last trade loss affect your feelings about the forex market has no rhyme nor reason.

Terrible Trading Mindset

A terrible trading mindset will most certainly influence your habit of exiting your  trades too soon. A lot of traders come  into the trading game thinking “I’m going to  make a lot of money quick, And I’m going to quit my job in a few months.” Well news flash! Forex trading is not a get rich quick scheme. But if you want to be rich from forex trading, then you will need to change your mental approach towards forex trading.

Some of you are probably thinking ” How in the world do I do that?”  Well, psychologists say behavior  stems from mindset.Your mindset kickstarts your bad habits,and those habits you exhibit on the forex market could be the difference between prosperity and poverty. You also need to understand that forex trading is a marathon, not a sprint.You have to treat it like any other business.By that you have to start slowly and grow your  trading account. And you have to show consistency in your trades.

The whole idea is to be steady and solid in your trading performance. Once you accomplish that, then your mindset changes from positive to negative . Not to mention the fact that  your profits will start rolling and  you can laugh all the way to the bank.

Harboring Negative Thoughts

Harboring negative thoughts can also cause you to lose big on your trades. Those negative  thoughts can eat you up big time  especially when you lose two to three   trades in a row. Of course when you start losing trades, negative emotions start kicking in.Once the negative emotions kick in, then bad trading habits follow. And when the bad trading habits become permanent, you incur more trading losses.

Even, worse,those trading losses also cause you to exit your trades at the speed of light. Then all of a sudden you’re thinking like”There is no way I can make money trading forex.I t’s just not possible.” Well,  if you are think thinking this way, you can forget about turning your trades into mega profits. Because it’s just not going to happen with you thinking this way. Often times these negative thoughts are buried in your sub-conscious and they get in the way of you making substantial profits.

Just allow your trades room to breath,and you will be laughing all the way to the bank. Now that we’ve established  the causes of exit trades too soon, I guess our next question is

How Do We Prevent Exiting Trades Too Early?

First thing you need to is:

Create a Trading Plan

You absolutely have to create a trading plan if you want to avoid exiting your trades too soon. Your trading plan is your war plan. You lay out your exit strategy and then stick to it regardless of  how hard the demons in your head  try to get you to do otherwise. You could also apply the set and forget strategy. Instead of siting in front of your screen all day hunting for trades,you set your trades and  go and chill outside. The market does the heavy lifting for you. You don’t need to be in front of the screen all day staring at your trades.

Once you hit your profit target, the money is credited into your account. Everything is programmed for your profit success. Just go to the beach while your trades rack in the profits.

Avoid Common Early Trade Exit Situations 

here are certain trade exit situations you absolutely have to avoid.  So what we’re going to do is to look at specific  situations that may affect you the trader with respect to exiting the trades. These solutions are not exactly etched in stone. Bu they should go a long way to keep you on the straight and narrow.

Situation 1 You exit a trade because you are  scared the market will turn around and drop a tsunami-sized  ton on you.

What’s The Way Out?

You need first to get one thing straight about the forex trade.You are going to lose trades. You just need to decide on how much money you can afford to part company with. However don’t make it a habit of losing too many trades or your trading account will be in a world of hurt. Probably the important thing you need to understand about trading is that you can’t be in a constant state of fear. Fear causes people to do illogical things including exiting trades a the speed of light.If that’s your trading line of thought, you could end up losing out on huge profits.

I can hear some saying”So how do I protect my losing trade?”well  you place a wide stop loss. In so doing you give your trade oxygen to breathe. I can hear another person saying  How do I set up the wide stop loss?”Well first decide how much money you can afford to lose. Next you tweak your position size to protect your initial risk. This way when the trade goes against you (And we hope it doesn’t happen), you can then say”I’m fine with my loss. Next trade please!”

You can also exit at  breakeven to avoid a loss. But in  exiting so soon you risk leaving a  lot of money on the table. Which is why you need to leave your trade and your screen alone and let the market  do its work. forex trading comes with a risk. You just have to manage your risk properly.

Situation 2

You exit a trade for breadcrumbs well before your initial profit target hits.

What’s The Way Out?

Get this straight.You cannot get by on breadcrumbs.You have to hit huge home runs (profits)  if you want to be a successful trader- just because you see a 1 hr pin bar against  your trading position. You have to say to yourself”May I not fall into quick exit temptation for breadcrumbs.” If it’s a 4hr trading frame  you’re working with you should not be looking at a 1 hr trading frame. Keep your focus on.  Stand by  your trading plan religiously and  do not panic! When you panic you don’t give your trades room to grow. Just be patient and the huge profits will come rolling in.

For information on trading time frames look up Multiple Time Frame Analysis

I’m not saying breadcrumbs don’t always makes sense. There make come a time when breadcrumbs may be all you have, depending on the trade setup. But if you adopt breadcrumbs as your trading template, you end up dying a slow painful death.

Situation 3

Exiting  a trade for a partial loss without any reason at all.

What’s The Way Out?

You know you may say to yourself” Let me take a small loss now so I don’t suffer  a tsunami-sized loss later.” But what you don’t realize is that you are slowly   killing  your trading account by taking multiple small losses. The losses may look small,but they all add up later. You need to allow the market to show you through your initial stop loss whether your stop loss placement was wrong or right. Why? Because the market is very unpredictable.And the only thing you have going for you is your trading edge which is a reflection of your initial trade.

What the stop loss does is  prove that your initial trade was wrong.  What am I trying to say here? Don’t let your emotions  force you to head for the exit. Just stick to your trading plan.

Situation 4

You can’t add to winning positions fearing the market will do a 360 on you

Solution

Just take advantage of strong trends that just keep going and going with no pullbacks at all. That’s the best way to create wealth as a trader. I know you’re probably thinking”This  is too good to be true.” Well, these trends do happen. You just need to take full advantage of these phenomena,grow  your trading  account and give your head a break. Don’t overthink the process. and don’t be scared either. These two negatives could cause you to miss out on huge money-making moves on the charts

That’s a wrap for ”Do Not Exit Your Trades Too Early.”  It’s very important that you know how to properly exit trades and also how to manage these trades. Even more important let the market do the talking for you rather over-analyzing trades and spraying your ego all over the place.

And please don’t even think about telling the market what to do. The forex market has a mind of its own and can pretty much decide to throw your trade into the Atlantic Ocean if it feels like doing so.

If you want to prosper as a forex trader, let go and let the forex market. The best way to employ this strategy is get out of the way and let your trading edge do the talking. Just set, forget and end enjoy life. This way you trade according to the dictates of the forex market instead of you trying to control the market.

Til next time take care.

 

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