Sunday, September 23, 2007

Key Timing Builds Trader Confidence

Without a doubt, trading is 90% psychological and 10% technique. Without the proper mindset and attitude, the best trading technique does not stand a chance against a mind that is uncertain, afraid or greedy. The wrong attitude, the lack of real confidence, will assert its influence on any given trade and distort reality, resulting in making bad decisions and costly mistakes.

There can be several reasons that affect how a trader sees each trade or the market overall, or how the trader sees oneself. Without a careful self-examination along with professional direction, all the reasons may never be clear.

This article will address only one aspect of trading psychology, and that is 'trader confidence' as it relates to trading techniques.

Looking at this issue from the other direction, a trader can have very little in the way of psychological baggage and is best suited to trading, only to be hampered by trading techniques that do not instill confidence in trading decisions. Traders that lack confidence in their trading decisions are just as likely to make poor trading decisions that can result in poor results.

For nearly 20 years, my work has been mostly about market TIMING. Early in my trading career, I found myself putting on trades and then immediately starting to feel that perhaps I waited too long, or maybe I was in too early. Needless to say, this did not help in trying to manage the trade. The "not knowing" had detrimentally affected my decision making process and resulted in many painful outcomes.

With a deep study in market trend patterns, market cycles, and the development of mathematical/cyclic algorithms in forecasting future market tops and bottoms across several time frames, the issue of trading confidence became a thing in the past. There is a lot to be said about being 75-80% plus certain that the market is going to do what you expect it to do. It is good to know that you don't have to be 100% dead-on to build your confidence about your trading decisions.

The better the timing method, the lower the risk and higher the profit potential. An excellent timing method should allow the trader to determine before making the trade what the initial risk is likely to be. It should help determine when and where a trade should be initiated. And for many, it should provide ample trading opportunities.

Each trader, as part of their quest to reign in the psychological barriers that inhibit trading success, should learn to trade the markets with greater precision and come to be confident in the timing approach.

Key timing will undoubtedly include adjusting how a trader sees market trends, such as looking for opportunities to trade 'with the trend' as opposed to trying to sell the very top of a bull or buy the very bottom of a bear trend.

So in order to build trader confidence, learn effective market timing techniques that encourage trading 'with-the-trend' in order to keep risk low (helps control fear) and increase profit potential (no need to be greedy), along with good money-managing.

Of course if I left this article at this point without providing some information about Key Timing, it would leave many dissatisfied. So I will include my biased opinion about precision timing. Our trading membership ( specializes in precision market timing. Our trade setups are based on FDates, a proprietary mathematical/cyclical approach to calculate when to expect the market to make swing tops and bottoms in advance, coupled with a simple procedure to determine when and where to place our trades as well as know what our initial risk will be prior to putting on the trade. As mentioned earlier in this article, these are the things we need to build our confidence in the trading decisions we make.

Rick J. Ratchford has been trading since 1989 and since 1996 is an Analyst for ProfitMax Trading Inc., a membership for traders specializing in the advance forecasting of market tops and bottoms for Precision Timing the Futures, Commodity and Forex markets.

"Know Today the Market Turns of Tomorrow!"

I Know Why So Many Traders Lose - It's The Game, Stupid!

Why do so many Traders put up with Losing? Let me tell you why.

Losers Play a Loser's Game!

Most trading we do is emotionally charged. We find themselves overwhelmed with information from all directions. In this mood, you can feel out of control, not knowing where the markets and stocks will take you or do to you next.

Unlike the tech rally days, when winning was virtually effortless and all you needed to do was get on the bus for the ride, winning in the current market is rare. Rather than winning a lot, you now experience losing a lot - for many, losing, over and over, seemingly without end.

In hopes of winning with their very next trade, losers push on and on until they begin to feel both demoralized and deenergized - with a sense of embarrassment (as they think about how they will explain their plight to others), feeling like failures as they reflect on the past months/years of books, courses, and expos they you immersed themselves in - overall producing dead-end results. Losers frequently think their dream of trading success may never be realized. Sound at all familiar?

Not a pretty picture.

The Old School Trading Game - listen carefully to what I want you to hear: the Trading Game, as you and I know it, has gone the way of the Model A (Model A Ford, that is).

Yet losers innocently, stubbornly, and arrogantly persist in playing this obsolete trading game to their detriment, with no let-up in their losing. Losers go on thinking hopefully that somehow they will be able to win again with their very next trade. They are completely unaware that their obsolete, loser's trading game is being used against them by the big money traders (hedge and other funds) who have completely changed the trading game to the little guy's guaranteed disadvantage.

The old school trading game, as you and I know it, is dead. It's a trap. And you and I know it. But, until now, you may have had no clue as to why. Now that you know. You are not likely to accept this closely held news, as you have so much at stake in being right about whatever you have been up to as a loser, expecting to be a winner. Just think about the years of study and practice you have invested. Not gonna let those go to waste. Well, you may think differently when you view your situation like the sinking ship that it is.

Don't feel alone. The old school, obsolete trading game is still being used by over 90% of the traders out there. Losers, financially, are, simply put, not profitable. Not after deducting overhead and a salary they are accustomed to. Losers are, at best, trading break even. Those losers who have never been profitable are draining themselves and those around them. No, losers are not having any fun trading stocks.

Old school trading is being offered everywhere - it's in all the day trading courses, seminars, and Web sites. Most of those who fork over their money for all this stuff will tell you, if honest, that trading for months and, yes, years this way has not been at all satisfying as they feel on the brink of failure.

You now have the sad picture of the consequences of playing a loser's trading game. The question now is why play a losers game? Why have losers been losing when everyone has been telling them their adopted system will make you rich? Well, maybe they don't say this outright, it's inferred anyway, for sure.

Here's your answer about why traders lose. Moreover, you are not going to like what I have to say.

It's all about Software. Software is king. And, software controls the game of trading and always will.

You see, big money, billionaire hedge funds and others, have been hiring and training brilliant scientist from MIT, Wharton, and other leading institutions, to design sophisticated software to take out the little guys, the crowd of losers, continuously and relentlessly. That's how they make those huge returns - on the backs of all the smart, arrogant losers, like you and me. (Well, for us, not any more.)

How is that possible? How do the big boys do their thing? Easy. They know all that you know about trading and then some. They use all your strengths and weaknesses against you by design, to your guaranteed disadvantage. Think about all those big losses you took, certain they would be winners. You think your losing was some sort of an accident or fate or bad luck? Think again. Their software is designed to trigger precisely at the point when the crowd has the greatest certainty, the most arrogance, the very point of vulnerability - and Boom!, they take you out once again. They, without the usual warning, kill you, not just financially but at a heavy emotional toll to your system and confidence. Your loss is far greater than the money you lose. I think you know what I'm referring to here.

So what's a guy or gal to do, you ask?

You now have a picture of your trading problem. The solution is the subject of my next article. Here is an overview.

It's time (actually, long overdue time) for losers to move on from what I've describe above to have a fresh and financially powerful trading approach and perspective, a new trading game (system), a game winners play.

It's time for each loser to become a winner - to begin to develop a trading career with the trading skills of a consistent winner, a champion trader. For those who qualify, and then seriously apply themselves, they can develop a lucrative career, second to none, in a matter of months - day trading stocks.

Day Traders Win, helping losers become winners for the past several years, to the extent, that those the qualify and apply themselves can, in a matter of months, develop a trading career with CEO-like income.

Trading Services:

1. Radically New Day Trading System
2. Trader Consulting and Coaching
3. Day Trading Room

Learn to Consistently Win.

FOREX Options - Solve a Major Problem For Novice FOREX Traders

A major problem that all FOREX traders face and novice traders in particular is - dealing with short term volatility, which stops them out to soon.

They get trade direction right, get stopped out and then see the currency trend the way they had thought making thousands of dollars and their not in!

FOREX options if used correctly solve this problem.

FOREX options give you unlimited profit potential with limited risk and you only risk what you pay for the premium.

You can read about the basics of options on the internet, here we want to go through some simple ways of making money buying options.


Here are some rules that will help you make money:

Rule Number 1

Dont buy out of the money options a long way from the strike price.

Many traders do this but the odds of the option making money are less, the profits are more if your price is hit or exceeded but if is the important variable.

The best way is to buy options that are at or in the money.

Rule Number 2

Make sure you buy options with plenty of time to expiry, at least a month and preferably 2 or 3

As an option comes to expiry time value will kill it.

If you follow the two rules above you will dramatically increase your chances of success.

Get the odds in your favor

Options which are a long away from the current market price and with little time value are cheap, but their cheap for a reason The odds are firmly against you.

If you use the above simple rules you can ride out short term volatility, with pre-defined risk and stay with the big trends longer.

Most people dont do the above, but its really common sense and if you do it, you will get peace of mind in terms of risk and be able to lock in to some nice trends.

FOREX options are a great tool for novice and professional traders, incorporate them in your trading and see what a great profit tool they are.


On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at

10 Steps To Professional Day Trading

Everyone trades a little differently. The trading method outlined below is MY personal approach to trading. This method has worked for me for the last 20 years, and has helped me to avoid big draw downs since the mid 1980's. My trading strategy has helped me to make a good living trading.

It takes some time to learn my method of trading because it's based on tape reading and getting a "feel" for the market. This is *not* about a fast,easy formula to "get rich quick" while you sweat out every trade. Instead, this is about developing confidence and trading consistently without fear and without big draw downs.

Here is my 10 Step Approach to Learning My Style of Trading:

1. Practice exiting trades at break-even, using a one-tick target, a two or three tick soft stop (mental stop) and a 1.5 point hard stop. Never *allow* the market hit your hard stop. Exit by moving your target toward your hard stop, not by moving your hard stop towards your target. With time, all of this must become a reflex. You won't always be able to keep your losses down to 2 ticks, but only on rare occasions should you find yourself letting the market hit your hard stop. ("Rarely" means only about once every 50-100 trades after you get the hang of it.)

Even though your entries won't be good enough in the beginning to make a profit trading these tight soft stops, your entries will gradually improve until you turn the corner and become profitable.

Learn exits and entries separately. Don't let the one influence the other.

Taking losses this way takes dedication and discipline, so stick with it. It's the key to confident trading. If you never take large losses (and rarely medium size ones), the fear of loss pretty much goes away, and your confidence grows. Especially after your entries improve enough to support a "scalping" type exit strategy.

2. Every trade *in all market conditions* begins as a scalp. Let me clarify this: if you're in a choppy market and you're looking to get small gains, like a point or so, manage your initial hard and soft stops *exactly* the same way you would in a quick trend or any other type of market. That means keeping losses as close to 2 ticks as possible, taking lots of break even trades and exiting every time the market doesn't give you *instant gratification* (within a minute or so).

No matter what the market is doing, you must demand that it moves in your favor right after you enter, otherwise you get out as close to break even as possible. This means you'll be closing a lot of trades near break-even within the first minute. This is the foundation of learning to trade for consistent gains.

3. Don't worry about the commissions on break-even trades. If you do, you'll hold on to losing positions, begging them to turn around for you. This is called *hoping.* In this business, this type of *hoping* is the kiss of death. Your money-making trades must move your way in the first minute or less. When trades don't act right in the first minute, most of them will hit your hard stops.

So don't get hung up on the fact that your broker loves you. Who cares if he/she makes a living?

Your concern is *limiting losses*. I care more about this than anything else in trading. (Well-timed entries make my tight soft stops possible, so they're almost as important as the exits.)

4. Practice your entries until your timing is so good that you can *reasonably expect* the market to go your way immediately, before it goes more than 2 ticks against you. This is not easy at first, but if you stick with it, you'll get it.

5. Practice fading the emotional extremes on your entries. (Fading means entering in the opposite direction of the market's last move.) When an extreme NYSE-Tick (often above 1000 or below -1000) occurs at the same time the market accelerates into a support or resistance area, look for a price stall or reversal and fade the move. Fade the emotion.

6. Rarely, if ever, *chase* the market on your entries. Wait for a pullback to get onboard a trend.

I favor shorts over longs... I can get out of a short position quicker than I can get out of a long position. I don't know why. I like to say that I "see gravity better than helium." In the rare strong-trending markets where I may chase an entry, it's going to be a down trend, not an uptrend. I don't trust up trends enough to chase them. Maybe it's just a personal quirk and maybe not. I honestly don't know.

But it's interesting to note that most (not all) professional traders I've met are Bears and prefer short positions over longs. You should give it some thought and find out which direction works better for you. Are your losses bigger on shorts or longs? Specialize in one direction and trade the other direction only when things are looking real good.

7. Never let a gain turn into a loss. This will mean getting out of most trades a little (or a lot) too soon. You just have to live with it. Swing for home runs (greed) will ruin your trading. There is no mechanical formula that I know of, (such as, "move your stop to break even after you get 3 ticks gain") that will work. You have to develop a feel for how the market is acting at the moment, and use your feel to reduce your target or advance your hard stop. This comes with experience.

8. Develop a feel for the big picture movements of the market, not just the intraday action. Use the end-of-day market internals to analyze the market's mood and develop a daily bias.

9. Practice does *not* make perfect. Only *perfect practice* makes perfect. I learned this in my younger years, pursuing a professional baseball career. Perfect practice will keep your losses smaller than your gains in the trading business.

There are a lot of things involved in perfect practice. When you get tired, or when the phone rings, or whatnot, *don't trade*. Always, *always* exit trades exactly the way I've outlined above on every trade in every market condition. Always *wait* for your pitch, the well-timed setup for entering. Don't practice sloppy entries just because you're bored. Only perfect practice will help you. Anything else just amounts to practicing bad habits.

10. Get a mentor. I traded for 6 years before I learned to keep my losses small. My trading turned around immediately after I met my mentor and talked to him on the phone for one week. Is there any serious profession that you can learn without a mentor? Maybe there is, but I don't know of any. It's certainly not trading.

Mike Reed is author of TradeStalker's RBI Trader's Updates. He has been trading the Market for 23 years. His support and resistance numbers have been published on the internet since 1996. Mike's nightly support and resistance zones are specific and incredibly accurate. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. He will be offering "live" training online as well.

Copyright 2005 Mike Reed

FOREX Trading 101

Welcome to the exciting and often very profitable world of foreign exchange trading or FOREX for short. Forex trading is the trading of different foreign currencies against one another, taking advantage of their ever fluctuating values to make very nice profits.

Forex trading, or currency trading, used to be out of the reach of the everyday investor until recent technological advancements took Forex out of the hands of large banks and institutional traders, and put it right in front of anyone with a computer and internet connection. Now there are dozens of Forex trading platforms available from a wide selection of brokers. Now anyone can learn to make money trading the currency market!

Although the major focus of the investment world appears to be on stocks and bonds, the currency market is the oldest and largest financial market in the world. The FOREX is a world-wide market, therefore, it is open 24 hours a day, 7 days a week. This eliminates the closing/opening gaps you see with traditional stocks ever morning. The Forex market trades approximately $1.2 trillion every day, making it a very liquid market, you'll never have a problem filling your buy or sell orders.

Forex trading is done with pairs, that is either buying or selling one currency against another currency. You profit from Forex trading when you take a position in a currency that you appreciates against the currency it is paired against. The great majority of daily Forex trading involves four major currency pairs. Currency trading usually involves the British Pound against the US dollar, the Euro against the US dollar, the US dollar against the Japanese Yen, and the US dollar against the Swiss Franc.

These four pairs are displayed on the FOREX as: GBP/USD, EUR/USD, USD/JPY, USD/CHF.

One major benefit of trading the Forex market, is leverage. Because of the liquidity of the Forex, most brokers offer the option to trade on margin with a leverage ratio as might as 400! Providing you with the opportunity to invest with a much small amount of capital and still pull in substantial profits.

The best way to get a grip on the FOREX is to educate yourself as much as possible on FOREX basics. Check out for more information on currency trading and learn how to trade like a pro!