Welcome guest, why not register to get access to more of the site?

Announcements

This site is currently inactive as I have decided to move away from exclusively trading Forex in 2010 and as such will not be taking on new coaching clients in this area.

 



I have resumed my focus on coaching as a stock market mentor where I run a success guaranteed stock trading mentorship program

 



Additionally, you can now get access to what I consider to be the best stock options daily trade alert service.

 



Of course, I am biased and with a success rate fluctuating between 68.2% and 72.4% it is hard not to be biased.

 



If you do want to follow along with what I am doing every day you can get access to my daily stock market report 

 

 

You can read the step-by-step Bollinger Band Trading Strategy Guide - this is my main active trading strategy



Until next time


happy trading 


Mr Phil Newton or on LinkedIn Phil Newton trader

to be or not to be..............

Phil Newton's picture
Folks often espouse the fact that in order to succeed & or make a living from trading the markets, one requires a large account balance. To a certain degree, this is a true statement. Depending on one’s financial circumstances & ability to generate sufficient income from the working account, the required income draw down coupled with the natural trading blips an account suffers could place a large chunk of psychological damage to a traders overall well-being if he/she isn’t maintaining a consistant positive % over capital deployed. The ultimate goal most new entrants aspire to is that of full-time trader, earning a regular income from the markets. Unless one is adequately capitalised & the methods fully tested & functional, this dream either turns into a nightmare or simply never materialises. Much is spoken about the demands of capital preservation/psychological strength & positive money management. The professional has, not only a firm grasp of all three, but also operates a tight structure based around those principles. For whatever reasons one enters the trading arena, be it for pleasure/personal investment responsibility/primary or secondary income generation – those three attributes mentioned will at some point become magnified within a traders method/strat, and if found lacking, will undoubtedly be a main ingredient of eventual demise. Browsing thru the posts on the various threads of this forum, the questions/comments relating to ‘newbies & progression’ repeat themselves constantly. “what’s required?…..why can’t I progress to +ve consistency?……how long does it take to achieve consistency?……what % win loss will rocket me to F/T status?” The learning curve, as we all know, is both long & steep. Many obstacles stand in the way of success. But we often instigate the main slip-ups. By that I mean we, as individuals are naturally greed orientated. The vast majority want & need to see instant rewards. We seek & embrace success & winning as a barometer of achievement. Nothing wrong with that ideal, but in the trading world it’s a big leveller……an albatross one carries around from trade to trade. The psychological warfare, which exists daily within the market arena, is that which usually defeats the newbie before they’ve even begun to arm themselves with the necessary skills to fight the battle. Greed manifests itself by knawing away at the traders desire for instant reward. Cutting winning trades too soon & allowing losses to compound in the hope of proving the trader correct in his initial evaluation of the trade. Couple this with under capitalisation & the seeds are sown for disappointment. New traders will constantly chase losses & minimise gains under the misconception that accumulating regular small wins will build confidence. I’m not suggesting that high % intraday wins aren’t a basis for success, but to build a long term association with your chosen instrument(s) it’s paramount that some form of ‘trend maximisation’ exists to grow the account & facilitate the annoying draw downs which will surface within any strat. It’s these scenario’s which damage & prolong the new traders progression by way of “mind games” - particularly when a string of losses ensues. Often an undercapitalised trader will resort to the odd ‘increase in stake size’ on a “sure thing trade” to accelerate the recovery of said funds, only to fall into the trap of aborting their disciplined plan & unsettling their otherwise composed aura in the hope of ‘getting back on track’ Adequately capitalised traders, when faced with a blip in their armoury, will either downsize thru this temporary period, or step aside completely & observe the playground until structured order (regards their strat/trading method(s) ) returns. They will also spend far less time active in the markets (if utilising an intraday strat), mainly due to the above avg clip sizes traded. This further reduces potential losses & allows far more flexibility in undertaking quality set ups/entries. The psychological benefits of trading under these conditions are massive. Less experienced traders assume they have to trade every session & maximise their screen time in order to accelerate the learning process (fear of missing “the big mover”). Generally they’ll over extend their leverage & scale down stakes after a winning period in the hope of maintaining the capital longer (fear of relinquishing profits). They’ll also not only stretch their account resources, but also their instrument analysis (overtrading & trading too many pairs). Incorrect timeframe trading (within tested & functional methods) kills many aspiring traders. The concept of multi frame analysis is to highlight potential set ups & map the possible journey of price movement. It’s not a license to spot a trade on a 240 min chart, slip down to the 5min & punt it with expectations of a 3-4cent move. You’re either researching the trade as a possible intraweek swinger (with appropriate risk/stop/money management), or you’re looking to maximise a pop between s&r levels on an intraday punt also with adequately planned r/r – stop – money management procedures in place). If your strat dictates a scale/compounding facility, and price moves away accordingly – then maybe, that individual trade will turn into a possible swinger! Attempting to cross trade timeframes with spurious & woolly objectives compounds stress & impacts on the discipline of the traders business model. Page upon page could be written about the misconceptions & false promises related to profitable trading endeavours – however, the three main principles touched on here are more than enough to base one’s foundation on. Structured, sensible, common sense values are as meaningful in the trading world as in any other business environment. Spend as much time on exploring the foundations as we do preparing for a trade, and the bridge between part-time to full-time player might not only become more attainable, but infinitely more pleasurable!