Many traders ask me what Forex Resources they should keep an eye on. While this is really personal preference, my belief is to keep it simple.
Sure, you can sign up for newsletters, webinars, magazines, and get active in forums and social Forex sites, BUT will it really improve your trading? Seriously.... if you rely on others then you are not self sufficient. Worse yet, you are prone to become inundated with too much data. Analysis Paralysis.
Sure, there are many experts out there giving brilliant analysis... or are they? Lets face it, it's always easy to review the market after the fact.
The only resources that a good trader really needs it the Forex Factory Economic Calendar and his brain.
So do yourself a favor and get rid of any so called "resources" that are nothing but clutter and noise.
Monday 27 October 2014
Sunday 26 October 2014
The Week Ahead
I remember back when I was working as a management consultant. The weekend seemed to always just fly by. Nowadays I sometimes forget what day of the week it is. There is however one ritual that remains the same. It wasn't always this way, but I realized it's important to stick to it.
Every Sunday I plan "The Week Ahead". As a management consultant I would do a quick stock take of what clients I'm going to see. Will I be going to the office or driving to my client site, how far is it, what is my goal. Sunday night for that reason was somewhat depressing, haha, the weekend had just arrived and already I had to try and get to bed early.
That routine seemed to be the same flying all over Canada, the US, as well as living in the Netherlands, Belgium, and Switzerland. I think we all have that dreaded Sunday routine.
When you start trading full time you tend to have more time on your hands and one constant stays the same. The Week Ahead.
Sure you could do without it. You could just get up Monday morning and wing it. You might even do well. Mentally preparing the week ahead gives you an edge, a piece of mind. And it lets you plan your week somewhat.
The most important thing to plan ahead is the Economic Calendar. What's coming up on Monday and all the days after that. It's also a good time to do technical analysis on your favorite pair(s). I try to stick to one or two. Sure I can trade them all however I find focusing on just one keeps my mind clear and focused. And of course I can still dabble on some other trades on the fly.
Monday I typically view as my getting back into trading mode day. Back in the day as a management consultant this was typically the day I would shake hands, kiss babies, have some meetings, and plan the week ahead. Nowadays I do Yoga first thing Monday morning, then surf the net, do some research, download some TV shows, and tune into the market just to see what's going on. My trading I like to keep to Tuesday, Wednesday, and Thursday. You've probably heard the saying "Don't Buy a Car that was made on a Monday or Friday" or "Never fire someone on a Monday or Friday". It's psychology. Monday's are getting back into the swing of thing days, not much gets done and we aren't at our peak until Tue/Wed/Thr and once Friday roles around we are already approaching weekend mode.
The Market is no different. Mondays typically set the direction. Like a race horse out of the gates, you can't gauge it's potential just yet. You have to wait until a lap and see how it stacks up with the others. Depending on the News and Market Sentiment Tuesday typically confirms the direction and then one is able to get a better feel of where the market is headed and if it's trade-able. Friday is somewhat of a write off as most people close their positions and that creates some volatility that can make you think twice about ever trading again on Friday.
That's the way I see it. Perhaps Mondays and Fridays are your best times to trade. To each their own. All that matters is that you're planning for the week ahead and you're consistently making profitable trades.
Have a great week ahead!
Every Sunday I plan "The Week Ahead". As a management consultant I would do a quick stock take of what clients I'm going to see. Will I be going to the office or driving to my client site, how far is it, what is my goal. Sunday night for that reason was somewhat depressing, haha, the weekend had just arrived and already I had to try and get to bed early.
That routine seemed to be the same flying all over Canada, the US, as well as living in the Netherlands, Belgium, and Switzerland. I think we all have that dreaded Sunday routine.
When you start trading full time you tend to have more time on your hands and one constant stays the same. The Week Ahead.
Sure you could do without it. You could just get up Monday morning and wing it. You might even do well. Mentally preparing the week ahead gives you an edge, a piece of mind. And it lets you plan your week somewhat.
The most important thing to plan ahead is the Economic Calendar. What's coming up on Monday and all the days after that. It's also a good time to do technical analysis on your favorite pair(s). I try to stick to one or two. Sure I can trade them all however I find focusing on just one keeps my mind clear and focused. And of course I can still dabble on some other trades on the fly.
Monday I typically view as my getting back into trading mode day. Back in the day as a management consultant this was typically the day I would shake hands, kiss babies, have some meetings, and plan the week ahead. Nowadays I do Yoga first thing Monday morning, then surf the net, do some research, download some TV shows, and tune into the market just to see what's going on. My trading I like to keep to Tuesday, Wednesday, and Thursday. You've probably heard the saying "Don't Buy a Car that was made on a Monday or Friday" or "Never fire someone on a Monday or Friday". It's psychology. Monday's are getting back into the swing of thing days, not much gets done and we aren't at our peak until Tue/Wed/Thr and once Friday roles around we are already approaching weekend mode.
The Market is no different. Mondays typically set the direction. Like a race horse out of the gates, you can't gauge it's potential just yet. You have to wait until a lap and see how it stacks up with the others. Depending on the News and Market Sentiment Tuesday typically confirms the direction and then one is able to get a better feel of where the market is headed and if it's trade-able. Friday is somewhat of a write off as most people close their positions and that creates some volatility that can make you think twice about ever trading again on Friday.
That's the way I see it. Perhaps Mondays and Fridays are your best times to trade. To each their own. All that matters is that you're planning for the week ahead and you're consistently making profitable trades.
Have a great week ahead!
Friday 24 October 2014
Two Things That Will Kill Your Account
There are two things that you need to control. Two things that in trading as well as in life will kill you. These two things will kill your forex account. Guaranteed.
Fear
More likely to affect seasoned traders. Newbies will be somewhat fearless like young kids thinking they are invincible. Too many action movies perhaps. Too many daredevil friends that got lucky and didn't hurt themselves. Yet.
Once you have traded for a while, especially if you had a great start, when that bad trade hits, it's like monsoon season. When it rains, it rains good. Your life will suddenly spin out of control and that confidence you had is in an instance gone. Just like when you are a fairly good boxer and suddenly you face an opponent that is always a couple steps ahead, you can't even get in a punch and you are left on the defensive time and time again.
Fear is a Bitch. Sure you gotta get back on that horse and get up every time you fall down. Chinese proverb: Fall down 7 times. Stand up 8. Easier said than done. If you're reading this and you say "whatever" "won't happen to me" then book mark this page for when that day comes. It will come. I guarantee it. It's like a bad action movie where the hero suddenly can't fight anymore. Like an NHL goalie suddenly not being able to stop pucks anymore.
At this point F.E.A.R. stands for Fuck Everything And Run. You are in a bad spot and before you fix it, you need to acknowledge it. You need to sit back. Stop your trading. Take a deep breath (more on a great breathing exercise later) and rewind to the good memories of trading. How you are good at what you do and you just have been beaten by the market, and rather than getting up only to get knocked down again, you are going to fight smarter, not harder, get up and figure out what's going on before you enter another trade. What you need to do is Face Everything And Rise.
Face your mistakes. Study, analyze, and don't you dare make another trade until you have truly faced and figured it out. Better drop your lot size, heck even go back to a demo account. And then Face your Fear and prove to yourself you still got it. Take your time. And if you have to then reach out to someone that can help you. Tiger Woods has a coach. Not one but several. He makes mistakes. He comes back. Who's right there behind him? His coach. His mentor. It pays to have someone in your corner.
Greed
Many traders are in it for the money. The good traders are in it for the lifestyle and freedom. Money isn't everything but it sure helps a lot. But it can also be the death of you. That greed of always wanting more is like a gambler with an addiction. He wins at slots and instead of walking away keeps playing only to lose it again and again. Itching for that next win.
Just like with fear, greed you can sense. You will feel yourself not being your usual calm self but instead you feel this need to make money, more money, always more.
For a lot of traders it's all about the money when they should be counting pips. And you have to be satisfied with the pips you make. Don't let emotions take over. Stick to your trading plan and Take Profit. Sure you made 50 pips and the market kept moving for another 30. That's half glass thinking. You made 50 pips. End of story. It's a good day. Who cares if the market kept moving for 200 pips. If your trading strategy didn't have a signal then it's not worth the risk. The reward is big, but so can be the risk. You don't need an emotional rollercoaster ride. So do yourself a favor and stick to your take profits and your trading plan. Your coach should be there slapping you on the fingers everytime you do something silly. Impulse trades are the worst.
Fear and Greed are the great demise for many people. In life. In Business. In Trading. Keep your emotions in check and be happy with what you have. There will always be someone smarter, taller, better looking, and funnier. There will always be someone making better trades. Who cares. All that matters is who you are and that you are happy with yourself and your trades. Happiness is making good trades consistently and making profit consistently. End of story.
Fear
More likely to affect seasoned traders. Newbies will be somewhat fearless like young kids thinking they are invincible. Too many action movies perhaps. Too many daredevil friends that got lucky and didn't hurt themselves. Yet.
Once you have traded for a while, especially if you had a great start, when that bad trade hits, it's like monsoon season. When it rains, it rains good. Your life will suddenly spin out of control and that confidence you had is in an instance gone. Just like when you are a fairly good boxer and suddenly you face an opponent that is always a couple steps ahead, you can't even get in a punch and you are left on the defensive time and time again.
Fear is a Bitch. Sure you gotta get back on that horse and get up every time you fall down. Chinese proverb: Fall down 7 times. Stand up 8. Easier said than done. If you're reading this and you say "whatever" "won't happen to me" then book mark this page for when that day comes. It will come. I guarantee it. It's like a bad action movie where the hero suddenly can't fight anymore. Like an NHL goalie suddenly not being able to stop pucks anymore.
At this point F.E.A.R. stands for Fuck Everything And Run. You are in a bad spot and before you fix it, you need to acknowledge it. You need to sit back. Stop your trading. Take a deep breath (more on a great breathing exercise later) and rewind to the good memories of trading. How you are good at what you do and you just have been beaten by the market, and rather than getting up only to get knocked down again, you are going to fight smarter, not harder, get up and figure out what's going on before you enter another trade. What you need to do is Face Everything And Rise.
Face your mistakes. Study, analyze, and don't you dare make another trade until you have truly faced and figured it out. Better drop your lot size, heck even go back to a demo account. And then Face your Fear and prove to yourself you still got it. Take your time. And if you have to then reach out to someone that can help you. Tiger Woods has a coach. Not one but several. He makes mistakes. He comes back. Who's right there behind him? His coach. His mentor. It pays to have someone in your corner.
Greed
Many traders are in it for the money. The good traders are in it for the lifestyle and freedom. Money isn't everything but it sure helps a lot. But it can also be the death of you. That greed of always wanting more is like a gambler with an addiction. He wins at slots and instead of walking away keeps playing only to lose it again and again. Itching for that next win.
Just like with fear, greed you can sense. You will feel yourself not being your usual calm self but instead you feel this need to make money, more money, always more.
For a lot of traders it's all about the money when they should be counting pips. And you have to be satisfied with the pips you make. Don't let emotions take over. Stick to your trading plan and Take Profit. Sure you made 50 pips and the market kept moving for another 30. That's half glass thinking. You made 50 pips. End of story. It's a good day. Who cares if the market kept moving for 200 pips. If your trading strategy didn't have a signal then it's not worth the risk. The reward is big, but so can be the risk. You don't need an emotional rollercoaster ride. So do yourself a favor and stick to your take profits and your trading plan. Your coach should be there slapping you on the fingers everytime you do something silly. Impulse trades are the worst.
Fear and Greed are the great demise for many people. In life. In Business. In Trading. Keep your emotions in check and be happy with what you have. There will always be someone smarter, taller, better looking, and funnier. There will always be someone making better trades. Who cares. All that matters is who you are and that you are happy with yourself and your trades. Happiness is making good trades consistently and making profit consistently. End of story.
Wednesday 22 October 2014
Trading is like Dating
Even if you are married you will remember the time you were single. For some it was awkward, for others it was fun, and for some people it was a period of ups and downs until you met that one. For me "Single Life is Happy Life". Needless to say I still do a lot of dating. And yes it's a lot like trading.
There are some dating mistakes that most of us will shake their head at but some of you will remember making. Like falling head over heels for a girl and trying way too hard.
#1 Trying Too Hard
Life, trading, and dating is all about moderation. Try too hard and you will not get a second date or worse you'll be taken advantage of. Don't try too hard. Relax. Take it easy. While it doesn't hurt to make a good first impression, you don't have to bend over backwards. Don't trade too much, don't stay up 24x7. Don't read every book out there. Take your time. Good things will come to you.
Lets face it, if you are carrying the girl's school books home then she might lose interest and go for the guy that just doesn't care.
#2 Absence Makes the Heart Grow Fonder
The jock that never helped carry her books, in other words didn't give her all the attention she wanted and was distant. He had it right. Either by sure dumb luck or by pure genius. Women want to date a real man. They don't want to date their friend, chauffeur, and butler. They want someone that will tell them No. Why? Because women are drawn to leaders. Leaders have higher mating potential, because they take risks and are considered more dominant, more of a survivor, and hence the female body perceives that their sperm will swim the distance. Women love jerks.
The market will eat you up alive if you devote your life to it. Take a break, enjoy life, find another hobby, and for every minute you spend away from "temptation" you will be closer to getting what you want. Be a leader and control the market. Don't let the market control you. Make solid plans, know when to walk away for some breathing room, and don't let a bad trade consume you. Likewise don't let a good trade give you false confidence. That girl that you have "wrapped around your finger" can turn on you anytime.
#3 Don't Be Too Cocky
There is confidence and arrogance (cockiness). Sure she might laugh at your arrogance and cockiness but don't be fouled. Women are always (over) analyzing you. Before, during, and after they met you. Tell some good jokes, talk a little bit about yourself, with confidence tell her about your passions but don't get overly cocky. Be confident. Trade with confidence.
Don't start increasing your lot size and prancing around the room telling people how much money you made. Don't make messy trades because you think you own the market. Know your limits. Know when to take a time out and real back into reality.
#4 Be Real
Women can smell bullshit. And even if you are speaking the truth, there was a line of bullshit men that have given them reason to doubt you. Don't over exaggerate. Don't embellish. Don't pretend you are someone you are not. Women can tell. Or they will find out. And when they do, it's not pretty. The market smells your bullshit too.
Don't tell yourself you are a superstar because you had a few lucky trades. On a demo account... Don't quit your day job thinking you have what it takes. Not just yet. Be real. You need to live the life of a trader. For at least one year. First on a demo account and then another year on a real account. Then and only then you have a real feel of the market. No "oh yeah with a real account I wouldn't have done that" bullshit. And no "oh yeah I just need to use 5 times as much equity next year" wishful thinking. Be real. With yourself.
#5 Baby Steps
You're not going to show up with a bouquet of flowers, a box of chocolates, and a diamond engagement ring on the first date. And if you do then she will RUN! Get a grip on yourself, be real and pace of yourself.
Have a plan. First date, get to know her. Second date, make a move. Third date, if you haven't made a move yet you better make one quick or you'll end up in the friend zone... The point is you need to have some sort of idea in your head of what your goal is and then plan out the steps to get there. Or at least pace yourself and not skip any steps.
Same goes for trading. Month 1. Get to Know the Market. Month 2. Make some moves, place some trades. Month 3. If you still haven't made some trades then you better think about just sitting on the sidelines and watching the market as an observer and get stuck in the F-Zone.
#6 The F Zone
The most dreaded word. FRIENDS. Do what you can to stay out of the Friend Zone. You don't want to be sitting on the sidelines watching her as she dates other guys and comes crying on your shoulder about them. Just like you don't want to sit and just watch the market. You need to grab the bulls by the horns and make sure you know how to stay out.
For one, never ever do lunch or coffee dates during the day. She's just killing time. You aren't her favorite choice. Make sure it's drinks (and only drinks). No dinners. You need to have an escape plan before she starts ordering a 5 course meal and she tells you about her crazy ex boyfriend and 5 kids. Same in trading.
Take trading serious and don't be an observer. Take the lead and schedule the time to trade. Commit to an hour a day. Schedule it in your calendar like a doctor's appointment. Don't try and squeeze it in on your lunch or coffee breaks. Be serious about trading. Just like you want to be serious about going on a date and not be picked as her friend. Let her find a gay friend for that. Stay out of the friend zone by being a man, not her friend.
#7 Know When to Walk Away
Know when to put your foot down. Know your limits. Know when to walk away. When you're dating you need to weed out all the crazies and incompatibles. Don't let "love" blind you. There is a difference between being "in love" and "loving" someone. And if you're just starting to date then you are likely just "in lust".
Know when to walk away. Do so when knowing that the risks are just not worth the reward. Like waking up with your testicles chopped off. When you're trading "walking away" is the most important skill you have. Think of the market as dating opportunities 24 hours a day, 5 days a week, with opportunities almost every hour. You need to know when to walk away and sit out a trade. Sure the Moving Averages look good, the MACD looks good, but there is news coming up and the trend analysis doesn't look good. Walk away. Save yourself the headache.
The minute she wants to be friends... When her ex is back in the picture... When she starts showing some real emotional issues... When you just don't feel the connection...
#8 The Routine
I have been on countless dates. It's really down to a routine. I meet for coffee, always after sunset, so it's more intimate, and I never go for dinner. I get to know the girl, what she does for work, for fun, her family, what she's looking for. I crack some jokes. Tease her a little. See how her body language responds. Is she smiling, giggling. Touching me. Then I ask her to come back to my place for a night cap or to watch a movie. Maybe a bit aggressive but why bother with date 2 or 3 when there is no chemistry and trust on the first date. And as for just coffee, well I find dinners overrated, time consuming, and boring. I don't like to eat out and find when a girl is more interested in how much money you spend on her than she is in just having a conversation in a neutral setting, then she isn't worth my attention. That's me, that's my routine. I am happy.
When it comes to trading my routine is not dissimilar. I get up in the morning, drink a glass of water, then make Strong Espresso. If and only if I'm fully awake then I glimpse at the market. Get to know the market. I do the same basic checks, what's the big picture, where is the market moving now, what news is coming up, what are my indicators telling me. Are the indicators favorable. Am I liking the situation. What is the risk, what is the reward? Sometimes I walk away, sometimes I make a move. If I have made a trade I will keep an eye on it. Around lunch and dinner times (they happen to coincide with Europe Open and US Open Times), I have another look and see what is developing. If I don't see anything I'm usually happy. Just like I'm happy to ditch a date from hell by taking that emergency phone call "Oh my god, what happened? I'll be right there" "Sorry gotta go". I know far to well that waking up next to a basket case is just as bad as hitting a Big Fat Stop Loss. I either go out on a real date at this point, do sports, or watch a movie. Eventually bed time hits and the next morning I repeat my routine.
I keep a normal routine. I don't believe in working late. I don't believe in trading all hours of the day. I believe in trading around your lifestyle and schedule. Integrating trading with my lifestyle. Of course there are times you have to make trading a priority, just like you make that hottie with the hourglass shape a priority when she smiles and asks you what you're doing later tonight.
All in all trading is like dating. A lot of gotchas. A lot of lessons learned. Eventually you will have it down to a routine and enjoy that routine.
Happy Dating. ;)
There are some dating mistakes that most of us will shake their head at but some of you will remember making. Like falling head over heels for a girl and trying way too hard.
#1 Trying Too Hard
Life, trading, and dating is all about moderation. Try too hard and you will not get a second date or worse you'll be taken advantage of. Don't try too hard. Relax. Take it easy. While it doesn't hurt to make a good first impression, you don't have to bend over backwards. Don't trade too much, don't stay up 24x7. Don't read every book out there. Take your time. Good things will come to you.
Lets face it, if you are carrying the girl's school books home then she might lose interest and go for the guy that just doesn't care.
#2 Absence Makes the Heart Grow Fonder
The jock that never helped carry her books, in other words didn't give her all the attention she wanted and was distant. He had it right. Either by sure dumb luck or by pure genius. Women want to date a real man. They don't want to date their friend, chauffeur, and butler. They want someone that will tell them No. Why? Because women are drawn to leaders. Leaders have higher mating potential, because they take risks and are considered more dominant, more of a survivor, and hence the female body perceives that their sperm will swim the distance. Women love jerks.
The market will eat you up alive if you devote your life to it. Take a break, enjoy life, find another hobby, and for every minute you spend away from "temptation" you will be closer to getting what you want. Be a leader and control the market. Don't let the market control you. Make solid plans, know when to walk away for some breathing room, and don't let a bad trade consume you. Likewise don't let a good trade give you false confidence. That girl that you have "wrapped around your finger" can turn on you anytime.
#3 Don't Be Too Cocky
There is confidence and arrogance (cockiness). Sure she might laugh at your arrogance and cockiness but don't be fouled. Women are always (over) analyzing you. Before, during, and after they met you. Tell some good jokes, talk a little bit about yourself, with confidence tell her about your passions but don't get overly cocky. Be confident. Trade with confidence.
Don't start increasing your lot size and prancing around the room telling people how much money you made. Don't make messy trades because you think you own the market. Know your limits. Know when to take a time out and real back into reality.
#4 Be Real
Women can smell bullshit. And even if you are speaking the truth, there was a line of bullshit men that have given them reason to doubt you. Don't over exaggerate. Don't embellish. Don't pretend you are someone you are not. Women can tell. Or they will find out. And when they do, it's not pretty. The market smells your bullshit too.
Don't tell yourself you are a superstar because you had a few lucky trades. On a demo account... Don't quit your day job thinking you have what it takes. Not just yet. Be real. You need to live the life of a trader. For at least one year. First on a demo account and then another year on a real account. Then and only then you have a real feel of the market. No "oh yeah with a real account I wouldn't have done that" bullshit. And no "oh yeah I just need to use 5 times as much equity next year" wishful thinking. Be real. With yourself.
#5 Baby Steps
You're not going to show up with a bouquet of flowers, a box of chocolates, and a diamond engagement ring on the first date. And if you do then she will RUN! Get a grip on yourself, be real and pace of yourself.
Have a plan. First date, get to know her. Second date, make a move. Third date, if you haven't made a move yet you better make one quick or you'll end up in the friend zone... The point is you need to have some sort of idea in your head of what your goal is and then plan out the steps to get there. Or at least pace yourself and not skip any steps.
Same goes for trading. Month 1. Get to Know the Market. Month 2. Make some moves, place some trades. Month 3. If you still haven't made some trades then you better think about just sitting on the sidelines and watching the market as an observer and get stuck in the F-Zone.
#6 The F Zone
The most dreaded word. FRIENDS. Do what you can to stay out of the Friend Zone. You don't want to be sitting on the sidelines watching her as she dates other guys and comes crying on your shoulder about them. Just like you don't want to sit and just watch the market. You need to grab the bulls by the horns and make sure you know how to stay out.
For one, never ever do lunch or coffee dates during the day. She's just killing time. You aren't her favorite choice. Make sure it's drinks (and only drinks). No dinners. You need to have an escape plan before she starts ordering a 5 course meal and she tells you about her crazy ex boyfriend and 5 kids. Same in trading.
Take trading serious and don't be an observer. Take the lead and schedule the time to trade. Commit to an hour a day. Schedule it in your calendar like a doctor's appointment. Don't try and squeeze it in on your lunch or coffee breaks. Be serious about trading. Just like you want to be serious about going on a date and not be picked as her friend. Let her find a gay friend for that. Stay out of the friend zone by being a man, not her friend.
#7 Know When to Walk Away
Know when to put your foot down. Know your limits. Know when to walk away. When you're dating you need to weed out all the crazies and incompatibles. Don't let "love" blind you. There is a difference between being "in love" and "loving" someone. And if you're just starting to date then you are likely just "in lust".
Know when to walk away. Do so when knowing that the risks are just not worth the reward. Like waking up with your testicles chopped off. When you're trading "walking away" is the most important skill you have. Think of the market as dating opportunities 24 hours a day, 5 days a week, with opportunities almost every hour. You need to know when to walk away and sit out a trade. Sure the Moving Averages look good, the MACD looks good, but there is news coming up and the trend analysis doesn't look good. Walk away. Save yourself the headache.
The minute she wants to be friends... When her ex is back in the picture... When she starts showing some real emotional issues... When you just don't feel the connection...
#8 The Routine
I have been on countless dates. It's really down to a routine. I meet for coffee, always after sunset, so it's more intimate, and I never go for dinner. I get to know the girl, what she does for work, for fun, her family, what she's looking for. I crack some jokes. Tease her a little. See how her body language responds. Is she smiling, giggling. Touching me. Then I ask her to come back to my place for a night cap or to watch a movie. Maybe a bit aggressive but why bother with date 2 or 3 when there is no chemistry and trust on the first date. And as for just coffee, well I find dinners overrated, time consuming, and boring. I don't like to eat out and find when a girl is more interested in how much money you spend on her than she is in just having a conversation in a neutral setting, then she isn't worth my attention. That's me, that's my routine. I am happy.
When it comes to trading my routine is not dissimilar. I get up in the morning, drink a glass of water, then make Strong Espresso. If and only if I'm fully awake then I glimpse at the market. Get to know the market. I do the same basic checks, what's the big picture, where is the market moving now, what news is coming up, what are my indicators telling me. Are the indicators favorable. Am I liking the situation. What is the risk, what is the reward? Sometimes I walk away, sometimes I make a move. If I have made a trade I will keep an eye on it. Around lunch and dinner times (they happen to coincide with Europe Open and US Open Times), I have another look and see what is developing. If I don't see anything I'm usually happy. Just like I'm happy to ditch a date from hell by taking that emergency phone call "Oh my god, what happened? I'll be right there" "Sorry gotta go". I know far to well that waking up next to a basket case is just as bad as hitting a Big Fat Stop Loss. I either go out on a real date at this point, do sports, or watch a movie. Eventually bed time hits and the next morning I repeat my routine.
I keep a normal routine. I don't believe in working late. I don't believe in trading all hours of the day. I believe in trading around your lifestyle and schedule. Integrating trading with my lifestyle. Of course there are times you have to make trading a priority, just like you make that hottie with the hourglass shape a priority when she smiles and asks you what you're doing later tonight.
All in all trading is like dating. A lot of gotchas. A lot of lessons learned. Eventually you will have it down to a routine and enjoy that routine.
Happy Dating. ;)
Friday 17 October 2014
Bad Trades are Good
Another week of trading is coming to an end. Here in Thailand I'm already relaxing at +35C. If you're in Europe the trading day just started while in the US it's middle of the night. I typically stick to the saying Don't Trade on Monday's or Friday's and today it sure looks like it's time to call it a day. I've made my pips this week already. I hope you have too!
I hope you've had a good week. And if you've had a bad trade then this article is for you! You see Bad Trades are Good! Bad trades are a learning experience.
The worst thing that can happen to you is making too many positive trades when you start trading. It gives you false confidence. I know because it happened to me. When I first started trading I made nothing but positive trades. I think 79 in a row was my record. It gave me a false confidence. I made some bad trades here and there but by far I felt unstoppable and on top of the world. Positive time and time again. Until one day I had back to back losses.
I couldn't believe it. Back to back losses. Big losses. What was wrong? I had been a rising star and now I'm in the minus for the day. The week. For the month! What the hell?
Well it was the best thing that happened to me and I wish it would have happened sooner because you learn the most from your mistakes.
So if you've had a bad trade. Shake it off. Go on with life. Stop trading for the day. Then when you have a clear mindset, maybe after you slept on it, then go back and retrace your reasons for going into the trade. Then determine what went wrong and what you can do in the future to not make the same mistake again.
The most common mistakes are:
- Trading shortly before, during, or shortly after news. The market is too volatile. Like that high wind crashing wave after wave into the ocean shore. Wait to ride a good wave when things settle down.
- Trading before Market Open times. Make a note when the Europe, US, and Asian Markets open. Try not to trade shortly before that time.
- You feel the market is turning. Unless you are a seasoned trainer or can predict the future, don't get caught up in trading potential reversals. Trust me, you'll know when a currency has reversed direction.
- Your analysis wasn't thorough. Always get a feel of trend and market conditions on ALL timeframes. Monthly, Weekly, Daily. Technical analysis on the bigger time frames is key to taking calculated risks. If all the major timeframes say down and you are going long based on a signal on a 5m chart you are asking for trouble.
- Your lots size was too big. Bigger isn't always better. If you are sweating just a little bit when the market isn't moving the way you thought it would, well then you are using a lot size that's too big for your comfort level. You can minimize your risk and maximize your reward by using a lot size that's proportional to the "strength" of the signal and your analysis. The more certainty the bigger the lot size. For example, I will trade a full lot if several indicators confirm my signal. If the confirmation isn't strong then I'll half the lot size.
- You can't stay out. Many people will be somewhat addicted to trading and want to place a trade every day either because they want to prove to themselves they can do it or because they feel this need to trade all the time. It's like overeating. You get thirsty and instead of drinking water you opt for a Big Mac. And after you're done with the meal you didn't really need you hit up a coffee shop and suck back an iced latte and a couple donuts. Self control is a must in trading. All those calories add up. All those trades out of boredom or lack of discipline will add up too.
- No confirmation. Some people see an entry but jump the gun too quick and place their trade before waiting for the confirmation.. For example CCI or RSI are great indicators for confirmations. Candle closes and opens are too. MACD.is another great oscillator for confirmation. You need to wait for a candle close before your signal is valid.
One of my students has a big problem with this and hence she is struggling. She just wants to place a trade and make money. When she makes a bad trade she throws her hands in the air and complains, instead of analyzing her mistake. And when she does analysis it's only for the signal and not for the confirmation or "red flags" like a major trend line or upcoming ECB or FOMC News Event.
You will learn more from your bad trades than your good trades. So don't be afraid to make mistakes, just be committed to analyzing your bad trades.
Wednesday 15 October 2014
Skin In The Game
I recently met someone that was struggling to make ends meet. He wanted to start a business yet wasn't well grounded and worse he was unwilling to put any skin in the game. In other words he wanted to have no risk and all the reward. No plan, just results. No negative (his words, my words "realistic") feedback, and just positive thoughts. While I agree that positive thinking brings positive outcomes, there is a time to be realistic and consider the worst case scenarios. Or just bad scenarios. He didn't want to hear it. In his mind he had it all figured out. Yet he changed his mind so many times it showed he had a lack of commitment. Why? Because he had no skin in the game. To him it was just a free ride, let an investor pay for his business (good luck on that one) and have him run it. No commitment on this part. There is a reason why some people struggle while others make success look easy. Remember, the professionals always make it look easy!
The risks you take should be directly proportional with the rewards you are looking to attain. No risk, no reward. Foolish risk. Foolish reward.
Putting "skin in the game" changes the game entirely. Using your own hard earned money to start a business is some serious skin for example. Your mind set changes and you are (hopefully) more careful making decisions that impact your bottom line.
Trading is no different. You need to put some skin in the game. I'm not talking about money either. Sure you need money to get started. A lot less than most people think or will tell you. I'm talking about serious commitment. Time. Effort. A willingness to learn. A willingness to make mistakes. A willingness to learn from you mistakes. And the ability to persevere.
Some people believe in throwing money at a problem. You know "money fixes everything". Well to an extent perhaps. But to an extent it's like the drugs you take to mask the root cause of the problem you're having. For example if you have a headache your body tells you have a dis-ease. Something is wrong and your body is saying fix it. Your body isn't telling you to pop aspirins... Unfortunately most people want the quick fix and just start swallowing pill after pill. The better approach is to look at the root cause. Why do you have a headache? Is it from something you ate? Stress? Perhaps your spine is off balance (think nervous system)? Are you getting enough sleep? Exercising enough? Relaxing enough? Sure you can pop that aspirin, in the short term it will help mask the symptom but in the long term ignoring (masking) those symptoms will do nothing but make the problem worse. So does throwing money at problems. You need to understand what's going on. Why are you making bad trades? Why aren't you profitable from your trades? Why do you constantly blow your account (and hard earned money) after successfully trading for months?
When you have skin in the game, the game changes, and you change. If you are new to trading you should have someone teach you and coach you about the "game" you are about to play. If you have been trading for a while and want to make the most out of your trading you should consider doing the same to protect your skin and maximize the profits.
If you are not willing to put skin in the game then do yourself a favor and do not trade the Forex market.
And you have to be sure you can afford to walk away from the money you are about to invest. Especially new traders. I see it far to often. New trader thinks he has found the holy grail. Puts a few thousand dollars into an account. Loses it. Business man trades for a little bit and then puts big money into an account, loses it. Managed accounts in my opinion are the worst. Seriously if anyone is so good that they can make you profit trading with your money, why are they doing it? Why don't they just retire on an island? Why they don't put a risk free guarantee on it? Simple. Managed accounts don't work either. If it's too good to be true, it seldom is.
The risks you take should be directly proportional with the rewards you are looking to attain. No risk, no reward. Foolish risk. Foolish reward.
Putting "skin in the game" changes the game entirely. Using your own hard earned money to start a business is some serious skin for example. Your mind set changes and you are (hopefully) more careful making decisions that impact your bottom line.
Trading is no different. You need to put some skin in the game. I'm not talking about money either. Sure you need money to get started. A lot less than most people think or will tell you. I'm talking about serious commitment. Time. Effort. A willingness to learn. A willingness to make mistakes. A willingness to learn from you mistakes. And the ability to persevere.
Some people believe in throwing money at a problem. You know "money fixes everything". Well to an extent perhaps. But to an extent it's like the drugs you take to mask the root cause of the problem you're having. For example if you have a headache your body tells you have a dis-ease. Something is wrong and your body is saying fix it. Your body isn't telling you to pop aspirins... Unfortunately most people want the quick fix and just start swallowing pill after pill. The better approach is to look at the root cause. Why do you have a headache? Is it from something you ate? Stress? Perhaps your spine is off balance (think nervous system)? Are you getting enough sleep? Exercising enough? Relaxing enough? Sure you can pop that aspirin, in the short term it will help mask the symptom but in the long term ignoring (masking) those symptoms will do nothing but make the problem worse. So does throwing money at problems. You need to understand what's going on. Why are you making bad trades? Why aren't you profitable from your trades? Why do you constantly blow your account (and hard earned money) after successfully trading for months?
When you have skin in the game, the game changes, and you change. If you are new to trading you should have someone teach you and coach you about the "game" you are about to play. If you have been trading for a while and want to make the most out of your trading you should consider doing the same to protect your skin and maximize the profits.
If you are not willing to put skin in the game then do yourself a favor and do not trade the Forex market.
And you have to be sure you can afford to walk away from the money you are about to invest. Especially new traders. I see it far to often. New trader thinks he has found the holy grail. Puts a few thousand dollars into an account. Loses it. Business man trades for a little bit and then puts big money into an account, loses it. Managed accounts in my opinion are the worst. Seriously if anyone is so good that they can make you profit trading with your money, why are they doing it? Why don't they just retire on an island? Why they don't put a risk free guarantee on it? Simple. Managed accounts don't work either. If it's too good to be true, it seldom is.
Tuesday 14 October 2014
Motivation
Motivation can be a positive, however it can also be detriment. "Motivate an idiot and they will do stupid things faster." (Brad Sugar)
Lets face it, if you meet someone that just isn't switched on, and they are asking you to help them, be it in business, life, or trading, if they are clueless or just don't get it, then you are motivating an idiot. Sounds harsh but it's the reality. Don't confuse negativity with being realistic.
I met with someone recently who wanted to start a business, and as a business builder and business coach I wanted to help them, however the more I talked to them and wanted to help them become successful with money making strategies, they just didn't get it. They still had an employee mentality with big dreams but absolutely no strategy or plan to get it. Worse yet, they didn't want to plan or change any of their bad habits. Motivating them unfortunately would backfire. Not only would they in all likelihood fail, miserably, but then more than likely blame everyone but themselves.
For this reason I don't take on many business partners, clients, or students. Why deal with the headache and drama when I can just trade on my own and make great ROI? The thought of making maybe 10% ROI from a business doesn't excite me. Even if that's every month. Why? The headaches and drama just aren't worth it. I can easily trade and make that. In a month, in a week, in a day.
This is the reason why I don't take on many traders as my students. There are too many idiots that want to be making big money without risking anything. They just have this idea in their mind that they are owed big money for doing nothing. Motivate an idiot and they do stupid things quicker....
Sorry if this sounds harsh, but sometimes you need to hear the hard reality. That in itself is motivation. And lets face it, if you are not offended and still reading this then you know where I'm coming from.
Lets face it, if you meet someone that just isn't switched on, and they are asking you to help them, be it in business, life, or trading, if they are clueless or just don't get it, then you are motivating an idiot. Sounds harsh but it's the reality. Don't confuse negativity with being realistic.
I met with someone recently who wanted to start a business, and as a business builder and business coach I wanted to help them, however the more I talked to them and wanted to help them become successful with money making strategies, they just didn't get it. They still had an employee mentality with big dreams but absolutely no strategy or plan to get it. Worse yet, they didn't want to plan or change any of their bad habits. Motivating them unfortunately would backfire. Not only would they in all likelihood fail, miserably, but then more than likely blame everyone but themselves.
For this reason I don't take on many business partners, clients, or students. Why deal with the headache and drama when I can just trade on my own and make great ROI? The thought of making maybe 10% ROI from a business doesn't excite me. Even if that's every month. Why? The headaches and drama just aren't worth it. I can easily trade and make that. In a month, in a week, in a day.
This is the reason why I don't take on many traders as my students. There are too many idiots that want to be making big money without risking anything. They just have this idea in their mind that they are owed big money for doing nothing. Motivate an idiot and they do stupid things quicker....
Sorry if this sounds harsh, but sometimes you need to hear the hard reality. That in itself is motivation. And lets face it, if you are not offended and still reading this then you know where I'm coming from.
Monday 13 October 2014
Counting Pips or Dollars?
Don't count your dollars before you have made pips. Measuring your goal and success in dollars can be a serious mistake for traders. Sure you are in it to make money. You are also in it to make profit. That profit you should count in pips. Just like you don't count your chickens before they hatch. You don't count your dollars before you can make pips.
Pips are scalable (to an extent, more on that later). Money is not. If you are thinking constantly about money then you are developing a bad habit. It's the wrong mindset to have. It can be very damaging. Not everything is about money. Sure money helps a lot but it isn't everything. You need to focus on profit, in pips. Then and only then can you truly analyze your performance. In Pips. Over the month. Over the quarter. Over the year. And then and only then can you put some dollar figures to it BUT you need to also keep your risk reward ratio in check and know your emotional threshold. You don't want to overextend yourself.
Pips are scalable (to an extent, more on that later). Money is not. If you are thinking constantly about money then you are developing a bad habit. It's the wrong mindset to have. It can be very damaging. Not everything is about money. Sure money helps a lot but it isn't everything. You need to focus on profit, in pips. Then and only then can you truly analyze your performance. In Pips. Over the month. Over the quarter. Over the year. And then and only then can you put some dollar figures to it BUT you need to also keep your risk reward ratio in check and know your emotional threshold. You don't want to overextend yourself.
Sunday 12 October 2014
Smart Goals
When I was building businesses for a living one of the most important aspects of owning a business was to have goals. And not just any goals, but Smart Goals. Without them you don't have a business and you don't have a trading plan, you're just winging it Gambling per se. I can tell you here and now that any business owner that had Smart Goals did 10 times better than business owners without. Having me coach them and hold them accountable helped too. ;)
S.M.A.R.T. Goals are Specific. Measureable. Attainable. Realistic. Time lined.
S.M.A.R.T. Goals are Specific. Measureable. Attainable. Realistic. Time lined.
- Specific. General goals like "I want to make money from trading" are too vague. You need to be precise and concise. Know what you want and be specific. Ask yourself, Who, What, Where, When, Which, Why. A specific goal would be "I will start trading a demo account and trade every weekday for at least 15 minutes."
- Measurable. Without a sense of urgency or commitment, goals can be like your New Years Resolutions. They're there but have no substance. You have to hold yourself accountable and set yourself up for success. You need to be able to measure your success and put some numbers to them. How long will you trade per day? How many trades will you make? How much money do you need to make? (Read Pips versus Dollars tomorrow). When will you know you have hit your goal?
- Attainable. When you set goals, start thinking about the possibilities, obviously those opportunities should be attainable. So be honest with yourself and know what you can and can not do, in what timeframe. What skills do you need to develop. What preparations need to be done. Will you do it on your own? Do you need help from someone to coach you through it?
- Realistic. Don't be afraid to dream big BUT make sure it's attainable and realistic. Your goals must be realistic. Your goals should be high enough to motivate you and give you a little bit of struggle. Low goals don't motivate and give you little in return. Financial Freedom, sure. Leave your job tomorrow and start trading with your life savings. NO. Trade part time, study, learn, improve your skills, first using a demo account, then if certain goals are met, with a real account. Again ask yourself if you want to travel the road by yourself or have an experienced professional, a coach, available to guide you through it.
- Time lined. ASAP (As Soon As Possible) or PDQ (Pretty Damn Quick) isn't good enough. You might as well just say "I will do it someday". You need to have specific time lines in place. Your goals have to be timely or tangible.
For example, I will trade a demo account for one year, with the help of a professional, while learning the fundamentals and basic, 4 hours a week to start, and then 2 hours per week after the first month, and 1 hour per week after the first 3 months. As my learning curve goes up, my time and effort goes down. I intend to make 10% ROI (return on investment) on my demo account in the first 3 months and re-evaluate my ROI once I have had 3 months experience. In one year I intend to have made more positive than negative trades, and more positive pips than negative pips. I will have weathered the four season of the forex market, made mistakes, learned from them, and I intend to update my trading plan every month and adjust it where necessary, with the help of my coach. I will have enough free time to spend with family and friends, and not overcommit my time to trading. Family. Friends. Work. Come first. At the end of the year I will revisit my trading plan and with the new knowledge and experience I have gained I will plan the next year, 3 years, and 5 years. I will have completed my goals when I am making sufficient money from trading where it is more than just extra income and will consider trading full-time. Or part-time. Depending how I feel about my job, finances, and family time. Trading will help me live the life-style that I choose.
A Chick in the Hand is Better Than Two in The Bush
My Thai Tutor was by the other day. He is a Yoga Teacher and has been out of a job for quite a few months. He needed some money "for a friend" so I made a deal for him to tutor me in Thai. He speaks Thai fluently and being a Farang (Foreigner) like me it helps to have someone that speaks fluent English.
Just last week the topic of him needing work came up and I had asked why he didn't open a studio. I suppose my previous life as a business coach got the better of me and I started running some numbers on what it would take for him to open a place and started quizzing him on what is required and gave him some suggestions on what is needed to run a business.
Wouldn't you know it he is now looking to raise money to pursue his dream. As we got talking his sales instinct kicked in, and he started to try and sell me on investing with him. I made it quite clear that what he needed was a business partner and the risk of investing was too great for me. The funny thing is he doesn't see it that way (of course). He only sees the upside. Why wouldn't he. He is looking for me to finance the studio 100% and put money in his pocket so he can afford to pay rent and put food on the table for him and his wife. All the while adamant that he carries the risk. I told him to give his head a shake but I suppose his stubbornness just doesn't see the forest for all the trees are blocking his view.
A couple days ago he came by again trying to sell me. At this point I had already given him more business advice than he was able to retain. So we touched on the partnership agreement again and I made it quite clear that there was no chance of me financing 100% of the venture to get only 49% ownership. In other words he would have complete control of my money and the company. His reasoning was that if he wasn't the majority shareholder he would be still an employee. Which of course isn't the case. The conversation shifted somehow to the potential of the company and reeling him back into reality I said look, "A chick in hand is better than two in the bush". A phrase that implies that a guaranteed profit is better than two potential leads. At this stage I'm not sure if he was just stubborn, or wanted to prove out of the box thinking, or simply didn't get it but he wanted to argue that the possibility of catching 2 chickens is better than having one in the hand.
In any event he clearly still has the mind set of an employee. Employees want no risk and just the rewards, they want a steady paycheck, a 9 to 5 gig, and the ability to just shut off when they feel like it. If you have owned a business you know that as a business owner you work harder than all your employees, carry all the risk, and you are not guaranteed a pay check. You also know that a chick in hand is better than two in the bush. Better an egg today than a hen tomorrow.
As a day trader you have to know your risk, your reward, and not let go of good trades because you are chasing more trades. As a trader you don't have a steady paycheck. Just like a business owner you have to be careful not to chase rainbows. You need to be very well grounded and take baby steps in your trading. Risk. Reward. How many pips are you willing to risk to make your take profit? When you've made a good trade and you're in the plus, don't get tempted to look for more trades. You have a chick in hand. Hang on to it and don't trade it for two in the bush.
You have probably been there where you are just itching to make a trade. Waiting for conditions to be just right. Maybe you missed a good trade and now you are kicking yourself and dying to make up for it. Or your ego is getting the better of you as you're reviewing your account history and you say to yourself a couple more trades and I'm done for the day. When you should be focusing on the one and only thing that matters. The chick in hand. Don't chase dreams.
Ground yourself and be realistic. You should have a trading plan and some rules about when you will and will not trade. When you will and will not cash out. You need to look yourself in the mirror and tell yourself that you cannot trade every day. You might have to wait a week or two to make a trade. So be it.
Just last week the topic of him needing work came up and I had asked why he didn't open a studio. I suppose my previous life as a business coach got the better of me and I started running some numbers on what it would take for him to open a place and started quizzing him on what is required and gave him some suggestions on what is needed to run a business.
Wouldn't you know it he is now looking to raise money to pursue his dream. As we got talking his sales instinct kicked in, and he started to try and sell me on investing with him. I made it quite clear that what he needed was a business partner and the risk of investing was too great for me. The funny thing is he doesn't see it that way (of course). He only sees the upside. Why wouldn't he. He is looking for me to finance the studio 100% and put money in his pocket so he can afford to pay rent and put food on the table for him and his wife. All the while adamant that he carries the risk. I told him to give his head a shake but I suppose his stubbornness just doesn't see the forest for all the trees are blocking his view.
A couple days ago he came by again trying to sell me. At this point I had already given him more business advice than he was able to retain. So we touched on the partnership agreement again and I made it quite clear that there was no chance of me financing 100% of the venture to get only 49% ownership. In other words he would have complete control of my money and the company. His reasoning was that if he wasn't the majority shareholder he would be still an employee. Which of course isn't the case. The conversation shifted somehow to the potential of the company and reeling him back into reality I said look, "A chick in hand is better than two in the bush". A phrase that implies that a guaranteed profit is better than two potential leads. At this stage I'm not sure if he was just stubborn, or wanted to prove out of the box thinking, or simply didn't get it but he wanted to argue that the possibility of catching 2 chickens is better than having one in the hand.
In any event he clearly still has the mind set of an employee. Employees want no risk and just the rewards, they want a steady paycheck, a 9 to 5 gig, and the ability to just shut off when they feel like it. If you have owned a business you know that as a business owner you work harder than all your employees, carry all the risk, and you are not guaranteed a pay check. You also know that a chick in hand is better than two in the bush. Better an egg today than a hen tomorrow.
As a day trader you have to know your risk, your reward, and not let go of good trades because you are chasing more trades. As a trader you don't have a steady paycheck. Just like a business owner you have to be careful not to chase rainbows. You need to be very well grounded and take baby steps in your trading. Risk. Reward. How many pips are you willing to risk to make your take profit? When you've made a good trade and you're in the plus, don't get tempted to look for more trades. You have a chick in hand. Hang on to it and don't trade it for two in the bush.
You have probably been there where you are just itching to make a trade. Waiting for conditions to be just right. Maybe you missed a good trade and now you are kicking yourself and dying to make up for it. Or your ego is getting the better of you as you're reviewing your account history and you say to yourself a couple more trades and I'm done for the day. When you should be focusing on the one and only thing that matters. The chick in hand. Don't chase dreams.
Ground yourself and be realistic. You should have a trading plan and some rules about when you will and will not trade. When you will and will not cash out. You need to look yourself in the mirror and tell yourself that you cannot trade every day. You might have to wait a week or two to make a trade. So be it.
Saturday 11 October 2014
Stop the Insanity
Yesterday I wrote about Insanity being a full time job. Today I'm going to give you some tips in the event you have gotten of course and are struggling with trading or perhaps in life in general.
- Change is the only constant. First and foremost realize you have the ability to change. When you want to change the outcome of your trading or life, you need to change your approach. Is that Starbuck's employee constantly in a bad mood? Smile at them first. It's sometimes hard to be friendly first but when you are then others will usually return the favor. By changing your approach you are changing your outcome. Having a bad trade? Stop, think back, and analyze what you did wrong. And perhaps it's time for a new strategy. (new approach)
- Short Term = Tactics. Don't think just short term. Even if you are a scalper or prefer short term (day) trades. You need to think like the general and plan ahead. You don't want to be the foot soldier in the trenches. You want to think strategy. Long term. What is the trend. Today, this week, this month, this year. Where is the market moving to. From. How long has it been moving in this direction. What has, historically, happened in the past (think major trend lines). Sometimes it's as simple as thinking when do the bullets stop coming, I'll take a break then, or in Forex terms, when does the market volatility (news) stop and I can ride the remaining wave. Just like in surfing, you want to catch a good wave. But when the waters aren't choppy and too intense.
- Long Term = Peace of Mind. If you are constantly thinking short term and trading on a whim, on the seat of your pants, or better put, you are "gambling" and "making quick decisions" then you need to stop the insanity and calm your mind. It's all fine if you make a good short term trade. (Catch a good wave) But when you make a bad trade, and you end up in a dangerous wave then the undercurrents pull you down, you will panic and regret that decision. So instead of making quick decisions, make smart decisions. Think ahead. Analyze the trend. Analyze the market. Analyze the news. And like a trip to the mountains, plan ahead, what will you take with you, how long will it be, if it rains what is your alternate plan. When do you return, etc.
Friday 10 October 2014
Insanity is a Full Time Job
In all likelihood you are familiar with Albert Einstein's quote: "Insanity: doing the same thing over and over again and expecting different results."
Insanity truly is a full-time job. On so many levels.
....to be continued
Insanity truly is a full-time job. On so many levels.
- Making mistakes over and over again will keep you busy all day long. Without desired results. So you keep on repeating and spending more time, energy, and focus on something that is likely to fail again.
- Full-time trading is overkill. Sure there are traders that live for being glued in front of their computer screen 24 hours a day, 5 days a week, and perhaps even keeping busy somehow with analyzing trades on the weekend. It is fun for sure. When I first go into trading that's how it was for me. BUT and this is a biggie, in my opinion, it's like a sport. You don't want to over-exhaust yourself and play Badminton 4 hours per day, lift weights 4 hours a day, and then go for a 20K run. Every day. Your body needs rest. So does your mind. And if you get hooked on a sport, say running, and you love that runner's high, you can get away with running every day for a while but soon enough your body will tell you that you need to pace yourself. Run every other day. Or just run a little every day but rest once or twice a week. Sometimes your body (and your mind!) needs rest every couple months for a week or two. So don't overtrade. Pace yourself. Sports may be a "healthy" addiction, Trading is not. Either way even healthy addictions can bite you in the ass. Do everything in moderation.
- A full-time job does drive me insane. I just don't have the time and energy to deal with all the b.s. for little pay. Or even great pay for that matter. Making $200,000 / year is great. But if it doesn't fit your lifestyle and you are not happy then you are going to insane trying to fit in and "ride it out". Sure in 5 years you have made a million, and in 10 years you will have saved a million from the 2 million you made. BUT life has gone by and you will never get that time back. If you are unhappy and rich, you are still unhappy. If you are happy then it doesn't matter how much you make, every day is a gift, and you realize that you don't need much to survive. I have learnt this the hard way but now I am in Thailand living it. Don't get me wrong, I still make good money, I don't make $200,000 a year. Because I don't need it. I make more than I need to live. If I want to go to Europe then I just make the money I need and then go. It's similar to planting a garden. Why plant more than you can eat? Sure you'll have some extras to give to neighbours but why plant a field of Basil when you just need a couple bushes.
- Lifestyle. Sit back and ask yourself "Why was I born?" "What is life's purpose?" "What makes me happy?" "Where do I want to be in 1 year, 3 years, 5 years?" "When it's time for me to move on and leave this world, what will I look back on?" Chances are you don't think working is your life's mission. My motto is "Work to live, not live to work!"
- Not all day's can be sunny days. You are going to drive yourself insane thinking you need to trade every day. Life isn't all sunshine and lollipops. There will be rain, there will be bad weather, life will happen. So don't expect to be trading every day. The sun is brightest after darkness. Find other things to do on "rainy days".
....to be continued
Tuesday 7 October 2014
Rotten Fruit
Arriving home from Thai Language class I went to grab a banana and had ants and fruit flies everywhere due to the bananas' ripening. Don't you hate it when you have to throw out food? All the best intentions in the world justify your decision to buy fruits, vegetables, and other food with expiry dates. And for whatever reason you then are faced with having to throw out rotten food.
Once in a while we need "rotten fruit" as reminders. Growing up in a world where there is a surplus of food, we take it for granted and don't realize how good we have it. Others are starving. My parents often told me about their experience growing up in Post World War 2 where they counted how many peas one could have for dinner. And that was the only dinner. Potatoes and other vegetables were traded on the black market. Not only do we not appreciate today's abundance of food, but it hinders our creative thought process and drive. Arnold Schwarzenegger when asked what made him successful said "Stay Hungry". Overfed hunters lose their ability to hunt. The well fed are not hungry enough to strive for more. When you are constantly hungry you strive to do better, to do more with less. So in a way when it comes to shopping and cooking, today's meals aren't as creative as they used to be. In the post world war 2 days one had to come up with creative way to make do with what they had. Don't be fooled by so called "peasant foods". They are nutritious, delicious, and filling. Here in Thailand I get more satisfaction from cheap food rich in herbs and taste, say Pad Kaprao, than from a meal that costs me 10 times as much, perhaps Thai but mostly Western.
Shopping only for the next dinner is far more rewarding. It eliminates waste. Your ingredients are fresh. And if you are in a bind because your fridge is somewhat bare, suddenly that one vegetable, fruit, or food item, that would have been overlooked in a full fridge, becomes inspiration for creativity. You tend to think more about what you are going to cook and how, rather than think about eating, and perhaps eat more because you just have to have the pudding, crepes, and yogurt because it's there looking at you. And after you are full and over nourished. Intoxicated by overstimulation. If you had to go hunting again, you'd have not will or interest. Worse yet you are going to get fat and your body and mind will be stressed.
Trading is not dissimilar. There are plenty of trade opportunities. Plenty of pairs. The market is open 24 hours a day, 5 days week. You can go long on EURUSD, short on USDJPY, heck you can hedge your trades if you feel the market will swing either way. Is that a good thing? Or are you juggling too many balls? Too many moving parts. Too many eggs in the basket. Bitten off too much to chew. You might get lucky and all your trades go well. Or you could choke on that big bite and with more at risk, you lose more.
Stay hungry. Go for low hanging fruit and only pick what you need to eat today. There will be low hanging fruit again. Don't over trade. Trade only when the market conditions are strongly in your favor and you have minimized your risk.
Once in a while we need "rotten fruit" as reminders. Growing up in a world where there is a surplus of food, we take it for granted and don't realize how good we have it. Others are starving. My parents often told me about their experience growing up in Post World War 2 where they counted how many peas one could have for dinner. And that was the only dinner. Potatoes and other vegetables were traded on the black market. Not only do we not appreciate today's abundance of food, but it hinders our creative thought process and drive. Arnold Schwarzenegger when asked what made him successful said "Stay Hungry". Overfed hunters lose their ability to hunt. The well fed are not hungry enough to strive for more. When you are constantly hungry you strive to do better, to do more with less. So in a way when it comes to shopping and cooking, today's meals aren't as creative as they used to be. In the post world war 2 days one had to come up with creative way to make do with what they had. Don't be fooled by so called "peasant foods". They are nutritious, delicious, and filling. Here in Thailand I get more satisfaction from cheap food rich in herbs and taste, say Pad Kaprao, than from a meal that costs me 10 times as much, perhaps Thai but mostly Western.
Shopping only for the next dinner is far more rewarding. It eliminates waste. Your ingredients are fresh. And if you are in a bind because your fridge is somewhat bare, suddenly that one vegetable, fruit, or food item, that would have been overlooked in a full fridge, becomes inspiration for creativity. You tend to think more about what you are going to cook and how, rather than think about eating, and perhaps eat more because you just have to have the pudding, crepes, and yogurt because it's there looking at you. And after you are full and over nourished. Intoxicated by overstimulation. If you had to go hunting again, you'd have not will or interest. Worse yet you are going to get fat and your body and mind will be stressed.
Trading is not dissimilar. There are plenty of trade opportunities. Plenty of pairs. The market is open 24 hours a day, 5 days week. You can go long on EURUSD, short on USDJPY, heck you can hedge your trades if you feel the market will swing either way. Is that a good thing? Or are you juggling too many balls? Too many moving parts. Too many eggs in the basket. Bitten off too much to chew. You might get lucky and all your trades go well. Or you could choke on that big bite and with more at risk, you lose more.
Stay hungry. Go for low hanging fruit and only pick what you need to eat today. There will be low hanging fruit again. Don't over trade. Trade only when the market conditions are strongly in your favor and you have minimized your risk.
Sunday 5 October 2014
Passion
When it comes to life, to relationships, business, and yes, surprise surprise, the Forex Market and Day Trading you need passion. You need drive. If you don't have it, you better get it back, quickly.
A lot of traders and wanna-be-traders fail because they lose their passion. They start throwing up their hands, look to lay blame saying "It's not working". When in fact the only thing that changed is the passion. The passion to learn the market, understand the market, and the passion to fine tune your strategy or look for a new strategy all together.
If you have lost the passion then you better sit back and analyze what happened. Why were you passionate before? What has changed? Go back to the roots and start reviving that passion. In relationships you can seek counseling or start by dating again. In the forex market you either find someone that can help and coach you through it or you figure it out on your own and retrace your steps.
A lot of traders and wanna-be-traders fail because they lose their passion. They start throwing up their hands, look to lay blame saying "It's not working". When in fact the only thing that changed is the passion. The passion to learn the market, understand the market, and the passion to fine tune your strategy or look for a new strategy all together.
If you have lost the passion then you better sit back and analyze what happened. Why were you passionate before? What has changed? Go back to the roots and start reviving that passion. In relationships you can seek counseling or start by dating again. In the forex market you either find someone that can help and coach you through it or you figure it out on your own and retrace your steps.
Saturday 4 October 2014
Learning Thai
Learning to trade Forex is a lot like learning Thai. There are many schools, many teachers, yet there are few that actually do a good job at teaching. The language schools here in Thailand are for the most part a joke. There are two types of schools, the ones that have pretty girls and the other type that actually is serious about teaching. Yet neither one does a good job.
The school I go to is probably above average, yet it is a real struggle to learn Thai when the teachers are just so bad at teaching. Some of them are new to teaching, others are not new to teaching but teach old outdated ways that don't even work well on kids, let alone on educated foreign adults.
There are some basics in any language that one has to master before being able to master the language, heck even before being able to hold a conversation. At the same time some basic vocabulary is needed to make small talk or hold a simple conversation. I remember when I grew up we started learning English in first grade. With pictures. Apple, Orange, Lemon, Table, Chair, Teacher, Student.... You'd think it would be this easy to learn Thai? Nope.... The teachers insist on using a self written book that is full of mistakes, poorly organized, and to teach you the most important principle, the 5 tones (mid, low, high, falling, raising) they don't use actual words but just made up words. Then you are supposed to go home and practice these made up words and are expected to come back the next lesson and have mastered the tones..... Funny isn't it how some expectations are just not realistic.
Same goes with trading. You can go to many fancy schools, find yourself a well dressed teacher, and be left learning absolutely nothing, or worse yet you are left with a false hope of understanding trading. Luckily with the Thai language the worst that may happen, and it will, no one will understand you. With trading your false confidence will end you losing money.
My point is that there are many holy grail schools, courses, etc that are being offered. Even big names that you see on CNBC on a regular basis will try and suck you into their course, program, or social site. And my experience has been it's so disappointing. Sometimes you are just better off learning on your own and then getting a tutor or coach to focus on the items you need help with.
The best advice I can give you when learning a new language or learning to trade is to find someone that can coach you properly. That works at your speed, and is able to motivate you and inspire you to learn. It's not all gonna be rainbows and lollipops. It's hard work, but with the right coach you can make it happen.
The school I go to is probably above average, yet it is a real struggle to learn Thai when the teachers are just so bad at teaching. Some of them are new to teaching, others are not new to teaching but teach old outdated ways that don't even work well on kids, let alone on educated foreign adults.
There are some basics in any language that one has to master before being able to master the language, heck even before being able to hold a conversation. At the same time some basic vocabulary is needed to make small talk or hold a simple conversation. I remember when I grew up we started learning English in first grade. With pictures. Apple, Orange, Lemon, Table, Chair, Teacher, Student.... You'd think it would be this easy to learn Thai? Nope.... The teachers insist on using a self written book that is full of mistakes, poorly organized, and to teach you the most important principle, the 5 tones (mid, low, high, falling, raising) they don't use actual words but just made up words. Then you are supposed to go home and practice these made up words and are expected to come back the next lesson and have mastered the tones..... Funny isn't it how some expectations are just not realistic.
Same goes with trading. You can go to many fancy schools, find yourself a well dressed teacher, and be left learning absolutely nothing, or worse yet you are left with a false hope of understanding trading. Luckily with the Thai language the worst that may happen, and it will, no one will understand you. With trading your false confidence will end you losing money.
My point is that there are many holy grail schools, courses, etc that are being offered. Even big names that you see on CNBC on a regular basis will try and suck you into their course, program, or social site. And my experience has been it's so disappointing. Sometimes you are just better off learning on your own and then getting a tutor or coach to focus on the items you need help with.
The best advice I can give you when learning a new language or learning to trade is to find someone that can coach you properly. That works at your speed, and is able to motivate you and inspire you to learn. It's not all gonna be rainbows and lollipops. It's hard work, but with the right coach you can make it happen.
Friday 3 October 2014
Forex and Your Health
We tend to focus on work, the market, making money and are too busy to focus on our health. It's pretty easy to develop bad habits. Smoking, drinking, junk food, GMO food, and other guilty pleasures.
When you are a day trader you have a wonderful opportunity to focus on your health. In turn you will be rewarded with a clear mind, energy, and ability to better handle stressful situations. Plus who really enjoys trading from the hospital bed or feeling like crap, right?
Health is so important. We put premium fuel in our cars yet we put junk food in our bodies. If you put bad fuel in your car you'll notice it pretty much within driving a few kilometers. Perhaps in a week at most. However if you put bad food in your body or neglect your healthy it can take weeks, months, or years to catch up. If you are "lucky" enough it won't catch up till you are old and your bones are brittle because your body had to get it's nutrients from your bones.
I'm no health expert but I have read up on the subject quite a bit and met many people with all sorts of illnesses like MS who have turned their life around, without medication or drugs, and gone on to become healthy or healthier. That is what triggered my interest in health. Plus I have had some personal experiences that made me a believer in keeping healthy.
Keeping healthy to me means I can trade with a clear mind, feel great, and have no medical issues.
My Health Tips:
When you are a day trader you have a wonderful opportunity to focus on your health. In turn you will be rewarded with a clear mind, energy, and ability to better handle stressful situations. Plus who really enjoys trading from the hospital bed or feeling like crap, right?
Health is so important. We put premium fuel in our cars yet we put junk food in our bodies. If you put bad fuel in your car you'll notice it pretty much within driving a few kilometers. Perhaps in a week at most. However if you put bad food in your body or neglect your healthy it can take weeks, months, or years to catch up. If you are "lucky" enough it won't catch up till you are old and your bones are brittle because your body had to get it's nutrients from your bones.
I'm no health expert but I have read up on the subject quite a bit and met many people with all sorts of illnesses like MS who have turned their life around, without medication or drugs, and gone on to become healthy or healthier. That is what triggered my interest in health. Plus I have had some personal experiences that made me a believer in keeping healthy.
Keeping healthy to me means I can trade with a clear mind, feel great, and have no medical issues.
My Health Tips:
- Drink 3 glasses of water first thing in the morning before brushing teeth
- Drink Lemon Water (freshly squeezed)
- Don't drink pop. Coke, Pepsi etc.
- Stay away from artificial sweeteners
- Drink carbonated water (with lemon) if you crave something more than water
- Drink Kombucha - read more about Kombucha here
- Stay away from wheat (gluten), white sugar, white rice, processed foods, cereals, microwaves
- Read the ingredients, if they are not all natural and contain too many chemicals and long words, they are likely bad.
- Know your good sugars (fruits, vegetables) and bad sugars (corn, fructose, glucose, etc)
- Know your good fats (greek yogurt, olive oil, coconut oil) and bad fats (vegetable oil, hydrogenated)
- Butter not Margarine
- NON GMO - Genetically Modified Foods are just evil. Read more here
- Most Milk and Dairy Products are bad for you. Look for Non GMO, non pasteurized, no antibiotics, free range, etc. Again read more on non gmo above.
- Eat lots of vegetables and fruits. Fresh from the market.
- Limit your meat intake.
- Follow the 80/20 rule. 80% vegetables/fruits/brown rice 20% meat (except fish can be 100%)
- Make your own chocolate, breakfast, etc, it's easier than you think! see my health tip collection below
- Sunday declare "free day", allow yourself to eat anything you want. Even junk food.
- Exercise at least 3 times a week. Try Yoga. Badminton/Squash. Swimming. Walking.
- Easy on the alcohol. See "free day".
- Find natural alternatives to any medicine. The word disease comes from dis-ease. Meaning something is uncomfortable. Your body's way of saying you need to do a self diagnosis. For example, if you have a headache your body doesn't say I need an aspirin. It's a sign that you need rest or water.
- Surround yourself with positive people that make you happy. Do not associate with any negative, unhealthy people. Cut out drama, negativity, and stress from your life.
- Sex every day (S)leep lots, (E)at Healthy, e(X)ercise
- For more Health Tips see this collection of pictures
Thursday 2 October 2014
Fat Finger Trade
Source BBC World News: A "fat finger" blunder rattled Japan's stock market, causing $617bn in orders to be accidentally traded: http://bbc.in/1oCqZfc :http://bbc.in/1oCqZfc
Great, just when I enter in AUDJPY someone has to do a fat finger trade! It's funny how simple mistakes can make such as an impact isn't it?
Always stay on top of important world news that could impact your currency trades. While sometimes you can't really foresee some impacts like this one, at least it gives you an explanation of why your trade has gone up or down and why the market is moving in perhaps an unexpected direction. Volatility gotta love it.
Great, just when I enter in AUDJPY someone has to do a fat finger trade! It's funny how simple mistakes can make such as an impact isn't it?
Always stay on top of important world news that could impact your currency trades. While sometimes you can't really foresee some impacts like this one, at least it gives you an explanation of why your trade has gone up or down and why the market is moving in perhaps an unexpected direction. Volatility gotta love it.
Wednesday 1 October 2014
Visa Rules
When you start traveling more and stay for longer periods of time then you need to start getting familiar with Visa Rules. I never used to pay much attention to be honest, I have a Canadian Passport and most countries will issue visa on arrival. Even when I lived and worked in Europe for a couple years I never ran into any issues even though visa rules say I can only spend 6 months out of the year in Europe. Perhaps having been born in Europe helped and speaking German fluently. It sure helped when getting pulled over doing 220km/h in a 120km/h zone, but that's another story.
Now that I live in Thailand I have to pay closer attention to Visa Rules. The Thai Visa Rules just changed and now you can only get 30 days on arrival (via plane) and renew 1 time for another 30 days. Thereafter you have to leave again and re-enter. Entry by land can get you less time, 15 days. And border guards now check for proof of at least 20,000 Baht.
Some other visa options are a work-visa. No thanks! :) Retirement visa, age 50 and up. (Still have a few years to wait on that one) which gives you a 1 year visa that is renewable every year. Or in my case an education visa which gives you one year and can be renewed once, maybe twice, but you have to leave the country and come back. Since I want to learn the language and have time on my hands this is what I chose. Traveling every 60 days and re-entering is another option but to be honest I don't want to go because I have to, but rather travel when I feel like it. With an education visa (as with work and retirement visas) you can also buy motorbikes, cars, and get Thai driver's licenses).
Lately I have been getting the travel itch again and I'm starting to miss some aspects of Western lifestyle. So I'm considering going back home to Vienna Austria again for a couple weeks and potentially set up shop for 6 months out of the year. There or in Malta. Or perhaps Spain. Somewhere warm would be nice with European food and culture. Only downfall is that the food, although very good, isn't as healthy as Thai cuisine, and sure is more expensive to dine out.
Oh one visa I forgot is the family visa, if you are married to a Thai or have Thai children then you also have one year renewable visas without needing to re-enter Thailand.
When it comes to Visa Rules you are best off checking your destinations visa laws if you plan on staying for 30 days or longer. Some countries like Russia, China, Vietnam, and Cambodia are tougher too and you need all sorts of paperwork.
You have heard of first world country problems. Well I suppose you can call these Day Trader problems. I don't know about you but I like to stay in a place for more than a few weeks and set up some sort of a comfortable trading environment. Budget-wise being able to rent long term has it's benefits too. 1 week in a hotel is the equivalent to 1 month's rent in a house. So it pays to stay longer.
Now that I live in Thailand I have to pay closer attention to Visa Rules. The Thai Visa Rules just changed and now you can only get 30 days on arrival (via plane) and renew 1 time for another 30 days. Thereafter you have to leave again and re-enter. Entry by land can get you less time, 15 days. And border guards now check for proof of at least 20,000 Baht.
Some other visa options are a work-visa. No thanks! :) Retirement visa, age 50 and up. (Still have a few years to wait on that one) which gives you a 1 year visa that is renewable every year. Or in my case an education visa which gives you one year and can be renewed once, maybe twice, but you have to leave the country and come back. Since I want to learn the language and have time on my hands this is what I chose. Traveling every 60 days and re-entering is another option but to be honest I don't want to go because I have to, but rather travel when I feel like it. With an education visa (as with work and retirement visas) you can also buy motorbikes, cars, and get Thai driver's licenses).
Lately I have been getting the travel itch again and I'm starting to miss some aspects of Western lifestyle. So I'm considering going back home to Vienna Austria again for a couple weeks and potentially set up shop for 6 months out of the year. There or in Malta. Or perhaps Spain. Somewhere warm would be nice with European food and culture. Only downfall is that the food, although very good, isn't as healthy as Thai cuisine, and sure is more expensive to dine out.
Oh one visa I forgot is the family visa, if you are married to a Thai or have Thai children then you also have one year renewable visas without needing to re-enter Thailand.
When it comes to Visa Rules you are best off checking your destinations visa laws if you plan on staying for 30 days or longer. Some countries like Russia, China, Vietnam, and Cambodia are tougher too and you need all sorts of paperwork.
You have heard of first world country problems. Well I suppose you can call these Day Trader problems. I don't know about you but I like to stay in a place for more than a few weeks and set up some sort of a comfortable trading environment. Budget-wise being able to rent long term has it's benefits too. 1 week in a hotel is the equivalent to 1 month's rent in a house. So it pays to stay longer.
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