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In this article I'm going to outline the key elements of my trading philosophy, share my background and how my trading style has developed over the years. It is based on my +5 years of experience in the market , my own research, back-testing and forward-testing, and also the insights learned from countless books reading about the markets. My trading philosophy is based on my own interpretation of price movements during a long process of trial and error, and also my interpretation of how great traders like Jesse Livermore, Paul Tudor Jones, Ray Dalio, George Soros, Ed Seykota, Michael Marcus, Marty Schwarts, Nicolas Darvas and many more, are trading the markets.
This was definitely the most challenging thing I've done in my life, if you take in consideration the rate of success in this business you soon realize this is a tough business. Jesse Livermore one of the greatest traders who ever lived noted that:"The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, or for the get-rich-quick adventurer. They will die poor." I have to say that my greatest inspiration, i…
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luke1973 avatar
luke1973 22 Apr.

I like it very much i only disagree with the most important thing in trading money management.On figure 3 for account 5000-10000$  trading with 2 lots even 1 lot is too much.With such size of trading you will be out in a very short time

luke1973 avatar
luke1973 22 Apr.

If you use tight stop you need to trade with very small size this way you will let yourself do many trades.It will not destroy your psychology in case you get caught in a losing streak.

Daytrader21 avatar

luke1973 Thanks. Well, trading only 1 lot on a 10k account with a tight stop of 30 pips(that's my case)is just a 3% loss($300). I have to disagree on the tight SL, as this is quite contrary it gives you the opportunity to increase your position size and also gives you a better RR if you time the market right. You're right on the pshichology as your state of mind is an important component for your success

Airmike avatar
Airmike 23 Apr.

Hi D21. I just want to say that article is awesome :).

Daytrader21 avatar

Airmike Thanks, appreciate your kind words.

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24/35
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Successful traders of philosophy As a successful trader, we must first consider the safety of the funds, and can bear how much loss. 1. Placing stop loss is to guarantee the safety of the funds is the most effective and direct way. 2. The light warehouse trade is the biggest can ensure traders head effectively keep trading system operation. If you order the loss, begin to affect your trading psychological mood, it will affect your judgement. The largest is probably illegal trading system operation. 3. The dealer is the profit and loss of trade for a long time by the dealer to win the number of times plus the number of profit points less loss and loss of points to calculate and measure. 4, effective capital management and the risk of loss control but also the biggest guarantee successful traders. 5, to analysis the market in a consolidation phase, rising trend, still drop trend. To do more, do empty strategy, 6, to check the order is correct, including the order number, stop position, direction of order. 7, to understand different currency fluctuation properties of size, suitable for take trend band operation or to take consolidation operation strategy. 8, must b…
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ZHOU avatar
ZHOU 8 Jan.

My English is not good, please carefully read the article hope to be able to read my article. Thank you for the support and love

captain avatar
captain 17 Jan.

Agreed. If the market takes your funds, you cannot continue trading. We have to protect our capital.

ante777 avatar
ante777 21 Jan.

Good article.

SpecialFX avatar
SpecialFX 24 Jan.

Zhou, one suggestion I'd give would be to divide big blocks of text into smaller paragraphs, so that it makes it easier to read and you also get more "Quality" points from Dukascopy :)

ZHOU avatar
ZHOU 25 Jan.

Thank you, your advice. I really like your advice :)

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19/68
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I would like to share my favorite trend following method.  This method is suitable for traders who prefer a high R (return on risk) at the expense of a lower hit rate;  winners are often 2 or 3 times the risk but only around 50% of the trades that the method generates are winners.This method is extremely simple.  Here is what you need to get started.Pull up a naked chart and apply the following moving averages:a)  50-period SMA (dark red)b)  21-period EMA (dark blue)c ) 6-period smoothed moving average applied to highs (dark grey, dotted line)d)  6-period smoothed moving average applied to lows (dark grey, dotted line)Here is how I trade the method:a) the 50-period SMA is my long term (strategic) buy/sell line.  When price trades above the 50-SMA, I only look for long setups. When price trades below the 50-SMA, I only look for short setups. In other words, I use the 50-SMA to determine the directional bias.b) the 21-EMA is my short-term (tactical) filter.  As with the 50-SMA, I must be on the right side of the 21-EMA to take a trade (below for shorts, above for longs). In addition, the 21-EMA must not point against me; if I am looking for a short, the 21-EMA must not point up (it c…
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TBFX avatar
TBFX 22 Apr.

@Comenium88 I will send you a PM with additional examples (not sure how I can post them here).The method can be applied to any time frame according to your own comfort level. I would highlight 3 key points to this method: 1) Simplicity. These filters are enough to give you an edge. 2) the 50-SMA buy/sell line, in my mind, is the same as upper time-frame agreement (ex. you short on the H1 when the H4 shows bearish bias). 3) the tunnel of 6 gives you some, though not definite, signs that big players are participating; it takes a certain amount of cash to move a pair outside the tunnel.

belman avatar
belman 26 Apr.

Good luck my friend +3 like to you

nicadams avatar
nicadams 26 Apr.

Good concept tbfx, i like the tunnel of 5 "filter" idea +1

pmeyer avatar
pmeyer 26 Apr.

pretty cool system +1 for you

Comenium88 avatar
Comenium88 27 Apr.

thx TBFX ;) Looking forward to hear from you soon. Good luck!

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6/68
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Have you been trading for long enough to realize that the dream of trading from a laptop on a beach in Thailand surrounded by drinks and young women is just that, a dream?Trading is hard. You need to study charts, you need to keep up with news, you need to make decisions that drain you both emotionally and physically.But perhaps there is a way to achieve that dream, after all.  Consider the following:Which of the following two statements to you agree with THE MOST?a) It is easy to find a trader who is consistently profitable.b) It is easy to find a trader who is consistently unprofitable.While there are plenty of profitable, consistent traders out there -  and I have been fortunate to meet and learn from a couple -  they are certainly a rare commodity. It is much easier to find a consistently unprofitable trader.Now assume for a moment that you are interested in making money off other traders' calls (you know where I am going with this).  Why bother to search for a profitable trader?  Most of the "vendors" out there don't show their trading results, so in most cases you won't know anyway if they are actually profitable.But you can find a loser in just about every forex chat room or…
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jjens avatar
jjens 19 Apr.

good article there

TBFX avatar
TBFX 22 Apr.

Folks, I won’t make further comments on my own article after this (happy to chat via PM). Some have asked me if this is a really a valid method. I believe that ANY method can be traded profitably if the trader has trained his brain to see price through the lenses of that method- or in this case, through the eyes of other traders. I’m not a trading wizard by any standard but I have noticed this: If you think like the majority of traders, you are not likely to last. You need to do things differently, and this includes thinking about where the weak hands are entering and exiting a trade.

rh6899 avatar
rh6899 24 Apr.

no 1, good strategy, 100% agree, out of the box!!! lol

belman avatar
belman 26 Apr.

Good all, you are welcome

Paulito avatar
Paulito 27 Apr.

I have already thought about this. Problem is that it does not matter where you enter the market but where you get out and losers are not necessarily wrong with the direction but they close it at the wrong time either SL or PT but both at the wrong time. Great article, I like it

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