Back in the day, I used to meet with a number of couples in counseling. Not infrequently, infidelity was a major issue bringing them to see me. In a surprising number of cases, the signs of infidelity were present long before the affair was caught. Indeed, many times there were explicit warnings from others who saw what was going on. Denial is a powerful human motivation. We have a drive to know the world around us; less commonly appreciated is our capacity to sustain ignorance. Many times, we just don't want to know the truth, whether it's what happens in a military prison or what keeps our spouse out so late. One particularly uncomfortable truth for traders is that their lack of profits is simply due to trading randomness. It's not a lack of discipline, a lack of trade planning, or a lack of tweaking the right indicators that create losses--all of those are relatively easy to address.
It's much easier to simply not think about it.
No, losses are caused by trading strategies that simply do not work, and that's not so easily remedied. It's pretty threatening to think that what you're devoting time and money to has no grounding in reality. It's much easier to simply not think about it. Like the spouse who manufactures one excuse after another in the face of a partner's erratic behavior, we construct all sorts of explanations for our shortcomings. Or we just put the blinders on. When I started working with traders some years back, I asked them to indicate their profitability over the past year. I was shocked that most could not give me (or would not give me) a response other than a hesitant, "I'm coming close to break even." Many had simply stopped looking at their account statements. The idea of actually drilling down into their trade data and extracting information about what they were doing right and wrong was quite threatening for them.
Sadly, there are plenty of willing accomplices in this denial. Coaches eagerly assure you that "psychology" is the difference between winning and losing in markets; gurus promise you hidden market secrets that will enable you to unlock your potential; publishers crank out books on how you can succeed at trading. No one wants to hear all the first-hand stories I can tell about lives and relationships harmed and even destroyed by false hopes and promises. That's too uncomfortable. No one can make money from it. So we don't look at it; we choose to not know. But I'm telling you truthfully: I've seen just as many lives hurt or ruined by trading as enhanced. A while back, I was asked to submit a proposal for a workshop hosted by one of the major financial exchanges. I thought a real public service would be to present research and first-hand observations pertaining to addictive patterns among day traders: how to recognize trading addiction, and what to do about it.
People, after all, come to hear about trading as a dream, not as a nightmare.
The idea was shot down immediately. As it turns out, it wasn't the conference coordinator that pulled the plug, but the corporate sponsor of the event. Sponsors don't make money when people don't trade or when they trade in a more controlled fashion. People, after all, come to hear about trading as a dream, not as a nightmare. A little while back a trader begged me to talk with him over the phone and help him with his "self-defeating" emotional patterns. In an unguarded moment, I agreed. He told me about his anger and frustration during trading and how those had led him to violate his risk management rules. I asked the trader to give me examples of what was going on during these periods of frustration. Many of the occasions boiled down to times when he was profitable on trades, but then saw those profits reverse. I drilled down further to get examples of those trades and discovered that, even though he called himself a daytrader, many of his reversals occurred on positions held overnight.
He seemed stunned that I asked.
Indeed, he proudly told me his rule that limited his overnight exposure to only his most profitable daytrades. A bit skeptical, I asked him what he based the rule on. How did he know that profitable positions intraday would become further profitable if held into the next day? He seemed stunned that I asked. I guess we're all supposed to know that "the trend is your friend" and that you should always trade with the trend. 159 trading days), the next day's open averaged a loss of -.02% (79 up, 80 down). Similarly, when SPY was up on the day, the next full trading day averaged a loss of -.13% (75 up, 84 down). 146), the next day's open averaged a gain of .03% (86 up, 60 down). When SPY was down for the day, the next trading session as a whole averaged a gain of .11% (85 up, 61 down).
So, in other words, the trader's rule had absolutely no grounding in reality. If anything, he would have been better off fading the prior day's direction. He was becoming frustrated and angry because he was losing his profits. He was losing his profits because he was trading a setup that had no validity. Frustration wasn't causing his trading problems; his bad trading was generating (understandable) frustration. But, for me, the eye-opener was that he had never thought to check out his rule. Even if he didn't want to crack an Excel primer and learn how to find answers for himself, he could have simply kept records of his overnight trades vs. But he didn't do that. My caller was not happy with my analysis and did not seek me out further. I didn't deliver what he wanted. He wanted a self-help psychological technique to keep him disciplined, so that his rules would make him money.
He didn't want someone pointing out that his rules were invalid and that following invalid rules with discipline will simply lead to ruthless consistency in drawdowns. As our conversation wound down, he defensively explained that he had plenty of other patterns that he traded that were valid. One of his favorites were opening gaps. Long story short, I examined the spreadsheet and told him that this, too, was coming up blank. To recapitulate, upside opening gaps led to 83 wins and 82 losses for the coming trading day; downside gaps led to 71 wins and 69 losses. There were no significant differences in the sizes of winners and losers. There was no edge there at all. I asked. He said no thanks; he didn't need the data. But the analysis wasn't the point. The point was that he was trading a belief in an edge, not an edge that he had independently validated. His entire trading strategy rested on (blind) trust in these patterns. I recently started work with a trader who wrote to me in elaborate detail of recent trading losses. He immediately offered to share his account statements with me so that I could help him change what he was doing. No denial. No defensiveness. No willing blindness. Just an open kimono. I confidently predict that this trader will be successful. He's doing the hard work right now: he's facing shortcomings with eyes wide open. By owning what's worst with his trading, he'll discover the best within him.
This means that you earned 0.6 US dollars.
You can buy or sell a currency pair. This means that you can buy or sell the first part of the pair and sell or buy the other simultaneously. For example let's say that the price for EUR/USD is 1.2640. You can give a buy order for 100 Euros in EUR/USD currency pair. This means that you can buy 100 Euros and sell 126.40 US dollars. After some time the currency pair value is 1.2700. Then you can give a sell order. You sell the 100 euros that you have bought previously and now you can buy 127 dollars. This means that you earned 0.6 US dollars. Let's say that after some time the pair value is 1.2600. What happens now? You can give a sell order for 100 euros but now you can buy 126 dollars. You lost 0.4 dollars when the deal was closed. A deal in Forex is comprised by a full buy and sell or sell and buy cycle in a currency pair.
When you are long you want the currency pair to appreciate in order to make profit.
Let's play more: Say the price for EUR/USD is now 1.2650. Sell 10,000 Euros. Have you found the answer? You sold 10,000 euros and bought 12,650 dollars. You bought 10,000 euros back when the price was 1.27 so you sold 12,700 dollars. That's how you lost 50 dollars. On the other hand if you have bought 10,000 euros back with 12,600 dollars you would earn 50 dollars. Notice that the more money you trade the more profit or loss you realize. Make some examples of your own. Be sure to understand these transactions well before reading more. When you buy you are "long" in Forex language. When you are long you want the currency pair to appreciate in order to make profit. When you sell you are "short". When you are short you want the currency pair to depreciate in order to make profit. The last digit of the price in a currency pair is called pip.
Remember the examples of the currency pairs we used before.
In EUR/USD 1.2640 the 0 digit is called pip. More specifically the change of the last digit in one unit is called one pip change. The pip numbers in forex is the indicator of your profit or loss. In Forex you trade the last decimal change in the price of currency pair so it is important to trade big amount of money to realize a nice profit. If you have tried to understand Forex you should have heard the word "margin". What is meant by margin? Well, margin is the amount you deposit for trading. The trading company uses this amount as insurance while you trade. Remember the examples of the currency pairs we used before. In order to make a sufficient profit per pip you have to trade at least 10,000 United State Dollars. With margin you only have to trade 100 USD. The remaining 9,900 are forex brokers' money. When you realize loss while you are trading you lose only from your 100 USD trading money and forex broker does not lose anything of its 9,900 USD.
By the use of margin accounts Forex trader can experience great profits will small amounts of money. Beware: Forex trader can also experience great loss with margin accounts. A forex trader opens an account with a forex broker and deposits 1.000 USD. 100,000 USD. The trader chooses to trade EUR/USD pair at 1,2600. He sells. 10.000 USD for this trade (100 of trader's money, 9.900 broker's). After a while the trader experienced 100 pip loss. These 100 pips accounts for 100 USD which are taken from his account. The rest 9,900 USD of the forex broker account are remaining untouched. If the trader closed his position in 1,2450 he would have lost 150 USD taken from his account. 9,900 USD of the forex company remaining as it was. The trader would have lost 150 usd which are used as insurance or collateral from the forex broker to allow him to sustain loss.
By this way you can get leverage for your deals.
If the trader bought again in 1,2700 he would have a profit of 100 USD. The profit is always yours. Your money is used by the brokers as collateral for the extra money they put in trade in order to allow you to make more profit with less money. By this way you can get leverage for your deals. REMEMBER: Margin is the money of your account that broker uses as collateral to trade more money in order to get more profit from your trades with less money. This way you can trade e.g. 10,000 USD for only 100 USD as margin. If you have any thoughts relating to where and how to use Forex Currency Rates, you can call us at our page. It is as if you temporally borrow money for investment 100 times the value of your invested money using as insurance the money you invest. One trading contract is called lot. Lot sizes can vary depending on your account. If you have a mini account the lot size could be 10,000 USD. If you open a standard account the lot size can be 100,000 USD. You can trade multiple lots as long as you have the money in the account to be used as collaterals for the margin. In a mini account of 1000usd initial deposit, you can trade a maximum of 10 lots for 10,000 USD per lot.
There is also a 9-year cycle due although the current nominal 7-year cycle may have expanded into the 9-year cycle. The current 4 year cycle for the SP500 started on Feb 11, 2016. We should be looking for a 15.5 month cycle low. There are typically 3 - 15.5 month cycles in the 4 year cycles. The 4 year may have 3 -15.5 month cycles and / or 2 - 23 month cycles (a half cycle). The following weekly chart of the SP500 shows the 4 year cycle (blue) and the ½ cycle of 23 months (red). The following weekly chart of the DJIA shows the 4 year cycle (blue) and the 15.5 month (red). There are approx. 3 - 15.5 month in the Primary cycle. The Primary cycle that started on Feb 9th may form an ending trough near the middle of June. We may be trending down into a low in that mid June timeframe.
Starting now be prepared for more serious events from now through June 2018. These could be violent events in the mid-East and events involving Russia, China and the US.. This may involve Syria and quite possibly other war like activity in Pakistan and India. We may also see increased earthquakes and volcanic activity. North Korea does not appear to be a problem. Cheerful mood and fluency in speech. Lucky mood, easily acquired money or the reverse, shortage of money and money losses. In addition transiting Saturn is opposing Trump’s natal Mercury this week. This can result in confused thought or worry. It’s a function of the nerves that is affected. This is a signature which would fit well with Trump being interrogated by Mueller. The 15 day sma is below price and above the 45 day sma.. The SP500 may be looking at a turn down. The SP500 seems to be weakening.
It hit the 38.2%, starting on May 14th and has since been moving down. If the SP500 is going to retest the Feb 9th low and move lower we may see a more dramatic move over the next few weeks. War like activity is going to have a negative effect on stocks but probably a beneficial effect on precious metals. I’m looking for a more dramatic move in mid-June (June 21, 2018) where we have Pluto conjunct the heliocentric nodes of Pluto. This is the second of a 3-pass. This is also getting close to a lunar and solar eclipses. More on the eclipses in a future post. Mid July may be another dramatic event. On a shorter term basis I track a 27 cd (calendar day) cycle which will be due May 3rd. The 27 cd cycle is the red vertical lines. As an example of the DJIA following is a weekly chart of the Dow Jones and the 9 year cycle. As we’ve said many times longer term cycles coming due often distorts the faster moving cycles. The above chart shows the 9 month or 39 week cycle (blue vertical lines).
It was due and appears to have formed in late January. The 20 week cycle was added as well (red vertical lines). Any green lines are a combination of the 20 and 40 week cycles. There has been a number of volcano’s erupting as well. On a longer term basis the following monthly chart of the DJIA shows the 15 year cycle (red vertical lines) and the 45 year cycle (blue lines). The 15 year is due now, the 45 year due in Sept 2019. This is another example of a longer term cycle possibly distorting shorter term cycles. Bear in mind they need a broad orb. In follow up to Uranus above. Uranus will go retrograde and then move backward into Aries before Uranus enters Taurus for good. This may also be a problem in currencies and rates. The above combination, with Saturn, could be defining problems / restrictions for the general population, particularly the mature population (pensions?) and with the Sun could affect the President or other leaders. This combination could affect a number of years in the future as Saturn is in a sign for approx.
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2 ½ years. Other conditions this may highlight are State funerals, public sorrow and disappointment in general. State assets could be affected as well as industries connected to metals and mining. The following monthly chart of the DJIA shows when Saturn has been in Capricorn (red x’s). Notice they have all had significant drops. There could be some type of surprise coming in 2018 from the government or exposing something from the past. There could also be a major breakdown in world affairs or leaders. The following daily chart of the SP500 shows the Jupiter price line (blue) and the Sun/Earth price line (green). Both of these price lines have a history of providing support and resistance. When the two lines cross we often see a big range day or reversal. Note how price went down and stopped on the Sun / Earth Price Line. I continue to watch the 24th harmonic cycle (360 / 24) cycles for short term turns.
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Topic title: 159 Trading Days)
Topic covered: fibonacci trading forex, forex auto pilot system, forex rate, forexmarket, fx o
