I know lots of traders who trade with out SL. You dont trade with high lot versus margin. Again my example was a dime versus a 1000 dollars. It would take 10,000 pip loss to wipe out your account. Once you learn counter trade techniques you understand why. As far as I know I am the only one who teaches these publically but they are used by many big time traders. They dont take losses they zero out trades with counter trades. It is a trading skill. Anyway here is the thread and it will violate most of what you have been taught publically.
It is a tricky market right now and you need to know some basic fundamentals. For example all the European currencies are weak to some degree, so matched up against each other they make good trades. GBP/CHF, EUR/GBP, EUR/CHF (I dont trade this one too slow). I would avoid any European currency with the USD unless you are going strong on the USD. I would trade minors with minors like aud/cad, aud/nzd, etc. JPY is very tricky because the Bank of Japan likes to intervene but the new PM of Japan strongly supports a weaker Yen to get exports going again so you want to trade that way. But matched up with EURO currencies really makes is a crap shoot. I am poor on fundamentals but I will stay with basics, like interest rate changes and very strong news like we have in Europe right now. Still there are trades out there and I will try to tell what I know. So tread lightly, but it is giving me ideas for version 5 that I hope will protect us in these type of markets also.
Very simply without going into detail, after one year of trading the so called magical trend I stopped trading, threw out all of what had been taught and I just studied blank charts. I saw something that was 100% true all the time. What goes up, must come down and what goes down, must come up. Now I trade those changes in direction, found it much easier than trying to follow a magical trend that noone seems to know exactly when it starts or when it ends until after the fact. You will see I will post, this is what I am going to do tomorrow (before every JPY session) not this is what I did or you should have done yesterday which is what almost every so called guru does in every post, book, chart, you name it, I have seen. I will say this is what I am trading this day and why. Countertrend trading is much more succesful than trend trading. I rarely take a loss, I do successfully zero most of my bad trades. Once you master the skill of zeroing out your bad trades you look at Forex so much differently than everyone else.
Retail Internet FX trading is only 8 years old. Very few FX companies have been around more than 5 years, which means that most are startups, many with startupitivitis. I would suggest looking for USA firms that have been around longer and have high equity (for your liquidity). The following May 24, 2004 Futures Magazine article lists major brokers, capital, years in business, etc.
You should also check their registration and history of cases filed against them and arbitration awards. For USA firms, consult the NFA web site:
In the USA, also check the local Better Business Bureau, and the State Attorney's Office. In most developing countries, we can only go by SEC registrations and word-of-mouth. For those who speak English in any country, if you have no other solid broker data, use a major USA- or UK- or Australia-based broker mainly because they have high liquidity. Then you should check whether they are registered with central regulatory agencies (such as U.S. National Futures Association (NFA), U.S. Commodity Futures Trading Commission (CFTC), U.K. Financial Services Authority etc.), and hopefully have a long history of ethical business. By the way, the Chicago Mercantile Exchange now has retail FX trading accounts with high equity, extreme longevity, but may not be suitable for most.
After you have narrowed your search to ethical companies with good reputations to protect, examine terms of business, including commissions and other charges, spreads, and withdrawal procedures, costs, and waiting period.
Beware of companies that are too anxious to sell you on the profitability of FX trading and downplay the risks involved. There are actually many companies in USA that operate without registration. I think most FX companies in developing countries do not operate for the benefit of their clients.
Next, determine whether the trading system software fits your level of knowlege, experience, and trading style, but has some room for your growth. Most have a free demo program. I look for capacity for me to add my own indicators and prefer stations that can also do backtesting. Such an ensemble is hard to find. TradeStation, CMS Virtual Terminal, MetaTrader are the only ones I've found so far.
Finally, what does the trading community say about your prospective broker? Visit a lot of Web forums, including those sponsored by brokers.
As your experience increases (and hopefully your profitability, feel free to transfer to other brokers that better fit your needs.
May the Trend be with you,
Paul Y. Shimada
Anything is possible, but here are a few points worth considering.
1. Many traders have extraordinary luck with demo accounts, partly due to their lack of fear when real money is not involved. I also did extraordinarily well with my demo account and couldn't wait to trade real dollars. I was too bold when I should have been cautious, and too fearful when I should have been bold. I knew about "plan the trade and trade the plan," but I had not yet studied risk management, so I obediently followed my plans and burned a $2K mini account in a week. I certainly do wish you and all traders the best of luck with your live accounts, but sadly, luck usually has little to do with long-term success.
2. Unless you are a very skillful trader, your long-term odds of winning are no better than 50% (that high only if you can control greed and fear). Now consider that the probability of a losing run of 6 in a row has exactly the same probability as a winning run of 6 in a row (both 1/2^6=1/64=1.56%), regardless of previous win/loss history. So your 2 wins in a row were just as likely as 2 losses in a row. So do you think you can extend your winning streak to 5 days? Of course, anything is possible, but what is probable?
3. Your use of 200:1 leverage is extremely risky. Remember that leverage cuts 2-ways--leveraged gains and leveraged losses. 200:1 looks really good when you win, how would 200:1 look with a string of losses?
4. Putting it all together, the coldness of probability, the difficulty of learning to win 50%, the difficulty of achieving risk:reward>=1/2, the ego inflation of a string of wins, and the sting of a string of losses--the greatest difficultly is controlling the rollercoaster of our emotions
May the Trend be with you
Paul Y. Shimada
PLEASE TAKE THE TIME TO READ THIS ENTIRE FIRST POST SLOWLY AND WITH FOCUS. MANY OF YOU ARE DAUNTED ABOUT TRYING TO READ THIS ENTIRE THREAD. IF YOU WILL READ THIS FIRST POST AND THEN GET INVOLVED WITH THE CURRENT POSTING THE OLD TIMERS CAN GET YOU UP TO SPEED IN SEVERAL WEEKS. FOR THOSE THAT DECIDE TO READ THE WHOLE THING IT WILL CERTAINLY NOT HURT YOU. TAKE YOUR TIME AND ENJOY THE RIDE. IM HERE VIA EMAIL AT ANYTIME.
This is an update to the first post of this thread on 1/14/09. This thread was started long ago when Forex Factory was a much smaller place. It was unusual at that time to see more than 20 people online at any given time. My how times have changed.
This thread has changed my life in many many ways and it has changed many others as well if my email inbox is any indication. This thread is about helping people learn to trade with a simple method BUT MORE IMPORTANTLY its about providing a kind and non-threatening place for beginners. There is literally an army of old timers here that, along with me, make sure of it.
The single biggest reason this thread continues to produce winners is it constantly pounds home that this is a business and must be treated as such. Your going to get to read about that in a minute but first i want to thank someone.
Forex Factory is what it is due to the vision and care of one person, my friend Merlin. Merlin no longer carries the torch here but he is a hero to me and i am truly blessed to know and call him my friend.
Ok are you ready to read the truth? are you ready to face what no beginner to this business wants to read or hear? of course its just my opinion but it comes from 26 years of blood,sweat, tears and experience. thats all i really teach here anyway...experience. Follow it and join the multitudes here that are succesful traders or dont and go thru hell like most do in this business early on including myself for 8 grueling years.
To succeed in this business you need a sound method (notice i did not say system), common sense, discipline and a rock solid understanding that if you do not treat this as a business you have a ZERO CHANCE of long term success. 95 percent of new businesses fail even when the owner knows what they are doing. Do you really think this business is going to work for you after 3 months practice or less?
Whats interesting about this business is it affords the person that chooses to use common sense a way to learn it without losing a ton of money or any for that matter. Below is the outline i used 20 years ago to finally find some success and i have become almost mental about it. To this day any new method im testing or any refinement to existing methods goes thru the same process. Also remember this. small accounts could never keep me focused to be ultra picky about my entries and you will almost surely find the same thing. small accounts = over trading and YOU SIMPLY MUST LEARN TO BE PICKY ABOUT YOUR ENTRIES. Solution? Force yourself to be ultra picky (virtually impossible) or follow the plan below while your saving.
Before the plan i want those of you that are new or struggling to read one sentence from someone that has come before you. Just a regular person just like you. This person followed the plan, got involved and stuck with it for half a year. Here are his words and they should tell you something. There are no free lunches in this business. Give it your best here for 6 months and see if you can do the same.
"Words can't describe where my trading was 6 months ago compared to where it is now"
If you are new to trading and/or you have had difficulty finding some consistent success, you must understand something. This is not a game and it's not a way to get rich quick. I suppose there is the odd exception of the person with a ton of money to play with, but if you approach this business without a business plan and the willingness to follow it, you are almost certainly doomed to failure. A doctor spends ten plus years in a grueling learning curve to be successful and earn a six figure income; anyone who thinks that their pot of gold in this business is a couple of months down the road is in for a rude awakening.
Below is a minimum requirement (in my opinion) to find out without losing your @#!@#$%$# if this business is for you. By following these recommendations, you will be treating trading like a business and you will be learning and gaining confidence. I think this is so important, I am going to make the following statement: If you start out in this business using no common sense, you have no one to blame other than yourself when you lose all your money. There is no reason to ever lose a dime of your money while learning to trade. A well thought-out business plan, common sense and hard work is required for anyone who wants a chance at success. Many people meet those requirements and still fail, but it does not mean you have to watch your bank account go to zero.
MINIMUM REQUIREMENTS / THIS IS A BUSINESS
WHATEVER / WHICHEVER WAY YOU DECIDE TO TRADE YOU MUST (AT A MINIMUM):
1.ON DAILY AND WEEKLY TIME-FRAMES, YOU ONLY DEMO-TRADE FOR THREE CONSECUTIVE PROFITABLE MONTHS IN A ROW. YOU DO NOT PROCEED TO STEP TWO UNTIL COMPLETED.
2.OPEN AN ACCOUNT WITH HALF OF THE INVESTMENT YOU INTENDED TO GO FULL WITH AND CONTINUE TO ONLY TRADE DAILY AND WEEKLY TIME-FRAMES UNTIL YOU ARE PROFITABLE THREE MONTHS IN A ROW MINIMUM. YOU NEVER RISK MORE THAN TWO PERCENT OF YOUR ACCOUNT ON ANY ONE TRADE. YOU DO NOT PROCEED TO STEP THREE UNTIL STEP TWO IS COMPLETED.
3.FUND A FULL ACCOUNT AND CONTINUE TO ONLY TRADE DAILY AND WEEKLY TIME-FRAMES UNTIL YOU ARE CONSISTENTLY BUILDING YOUR ACCOUNT FOR AT LEAST SIX MONTHS. YOU NEVER RISK MORE THAN 2 OR 3 PERCENT OF YOUR ACCOUNT ON ANY ONE TRADE.
4.IF AND WHEN YOU DECIDE TO DAYTRADE ON A SMALL TIME-FRAME AND YOU DON'T FOLLOW THIS TEMPLATE, AT A MINIMUM, YOU ARE ALMOST CERTAINLY GOING TO FIND YOURSELFE IN TROUBLE. IF YOU ARE GOING TO FOLLOW A SYSTEM OR ANY TRADING STYLE AND YOU DON'T FOLLOW THIS TEMPLATE AS FAR AS THE DEMO PROCESS, YOU ARE NOT TREATING IT AS A BUSINESS AND YOU HAVE NO ONE TO BLAME OTHER THAN YOURSELF IF YOU LOSE YOUR MONEY.
5.IF YOU EVER SUFFER THE LOSS OF 30 TO 35 PERCENT OF YOUR ACCOUNT, YOU STOP TRADING. PERIOD-PARAGRAPH. YOU GO BACK TO DEMO AND FIGURE OUT WHAT WENT WRONG. WHILE DOING THIS, YOU REFUND YOUR ACCOUNT BACK TO ITS ORIGINAL AMOUNT. YOU DO NOT GO BACK TO LIVE TRADING AGAIN UNTIL YOUR DEMO HAS SHOWN YOU WHAT WENT WRONG AND YOUR ACCOUNT IS BACK TO FULL STRENGTH BY WHATEVER MEANS. IF IT TAKES ONE MONTH OR SIX MONTHS, IT DOES NOT MATTER. YOU MUST FOLLOW THIS APPROACH IF YOU DON'T WANT BLOWN ACCOUNT AFTER BLOWN ACCOUNT.
Your goal should be this. Learn, learn and learn some more and don't do anything stupid while your getting your feet on the ground. The ultimate goal of any trader is to build an account to a size where just a few good trades a month produces a staggering income. Hardly anyone ever gets there because they don't treat it as a business. They do stupid things that they would never do in any other area of their life and it's because of the money that can be made. If it takes you a couple of years or even five or ten to reach the level of a staggering income, is it worth it? The choice is yours.
Here is a post from early 2009. It says in short form what im always trying to say and cant seem to keep short.
Every question that you could probably think of has been answered several times by now. The PF (www.james16group.com) is good because it has all the material in one place, it's concentrated, without a lot of the "external noise" that you might get on a public forum. You definately just need to listen to certain voices especially in this thread (If you read the thread from the start you will just start skipping some peoples posts after a while lol, and get to the good , that's what I did
I say if you are cash strapped then just read this thread and follow it and demo, backtest. . Work. . . No need to put yourself under financial pressure my friend. ALL of the material in the PF, ALL the excellent traders in the PF (Instructors, Senior members and traders alike) Still will not on their own make you profitable, that is up to you.
That is up to you my friend, be steadfast, brace yourself and work hard and victory will be yours . . Now, or in the future.
This thread is like a series of signposts in the RIGHT DIRECTION (To profitability ) Signposts constructed by people who have navigated the dangerous and inherently confusing jungle of forex before. I have only come to appreciate this recently, but each single line that is said by certain people in this thread, has literally hours of experience, backtesting and work behind it. To give it a seal of authority that only experience can give. . . It's a jungle out there . . But we are lucky enough to have signposts erected for us here . . . Set in stone, by the people who have navigated their way through the jungle before us. . .
Just some of my thought's . . .
UPDATE 11/25/09 - ABOUT THE JAMES16 GROUP PAID SERVICE
For those of you that are new to this thread i have finally decided to post something about our group in post #1. For 5 years this thread has been located in the general forum and we have had a policy OF NOT pushing people to join that group. In fact we have been mental about it. You could go weeks reading this thread and not know of the paid service. Thats really not going to change EVEN THOUGH we are now located in a commercial area of the forum WHERE WE CAN IF WE CHOOSE TO DO SO.
I HATE BEING IN THIS AREA BUT I RESPECT THE DECISION BY FF TO DO THIS.
Since i am here and although i am sure there are a few good people here im sure it will become a breeding ground for the very people i have sought to seperate myself from for 5 years.
How have i tried to seperate myself you ask? In many ways and i wanted to give you a list. This list was developed by trying to treat new traders the way i would want to be treated and not just to get in your pockets.
THE JAMES16 GROUP IS THE GOLD STANDARD IN THIS BUSINESS FOR ETHICAL BEHAVIOR AND PRODUCING SUCCESFUL STUDENTS.
I am proud of this list and i can say with pride...
1. HOW MANY EDUCATIONAL SITES ASKING FOR YOUR MONEY DO NO ADVERTISING? NONE. NEVER A DIME.
2. HOW MANY EDUCATIONAL SITES HAVE BEEN ASKED BY EVERY MAJOR BROKER IN THE WORLD TO PARTNER WITH THEM AND THE SITE HAS SAID NO TO EVERY ONE OF THEM?
3. HOW MANY EDUCATIONAL SITES HAVE NO AFFILIATES BY CHOICE?
4. HOW MANY EDUCATIONAL SITES WERE CREATED BY REQUEST?
5. WHAT EDUCATIONAL SITE IS SO RESPECTED FOR ITS HONESTY AND GOOD CHARACTER TO BE ASKED BY THE WORLDS LARGEST FOREX COMMUNITY TO BE ITS ONLY OFFICIAL PARTNER?
6. HOW MANY EDUCATIONAL SITES PUPOSELY CHOSE TO NOT USE A URL THAT WOULD BE CONSIDERED MARKETING ORIENTED?
7. HOW MANY EDUCATIONAL SITES HAVE AS MANY POSTED UNSOLICITED TESTOMONIALS?
8. HOW MANY EDUCATIONAL SITES USE NO FORM OF FREE ADVERTISING SUCH AS YOU TUBE BY CHOICE?
9. HOW MANY EDUCATIONAL SITES ARE HONEST ENOUGH TO GIVE YOU REASONS NOT TO JOIN
10. HOW MANY EDUCATIONAL SITES COULD SURVIVE AND PROSPER FOR 5 YEARS THRU VIRTUALLY NO OTHER MEANS OTHER THAN WORD OF MOUTH AND POSITIVE RESULTS WITH THERE STUDENTS?
11. HOW MANY EDUCATIONAL SITES STATE CLEARLY THAT IF YOU CANT AFFORD US WE WILL HELP YOU FOR FREE?
12. HOW MANY EDUCATIONAL SITES HAVE HELPED 1000 TIMES MORE PEOPLE FOR FREE THAN PAID MEMBERS?
13. HOW MANY EDUCATIONAL SITES TELL PEOPLE TO SPEND A COUPLE OF MONTHS IN THERE FREE AREA FIRST BEFORE MAKING THE DECISION TO JOIN?
14. HOW MANY EDUCATIONAL SITES TELL PEOPLE NO WHEN THET TRY TO PAY FOR A FULL YEAR UPFRONT SO AS TO MAKE SURE THEY DONT REGRET A LARGE PURCHASE? ( i do this only for people without credit cards and after they have spent time in this free thread)
Honestly i could go on but the bottom line is this. I dont need income from the group to pay my bills like 99.999% of every other site on the net (THAT SHOULD TELL YOU SOMETHING) but thats not why i do things the way i do.
After 26 years in this business i know how hard it is to find truly decent people.
THE JAMES16 GROUP IS ABOUT TREATING YOU WITH DECENCY AND RESPECT AND TRYING TO GIVE YOU A CHANCE AT SUCCESS INSTEAD OF TREATING YOU LIKE A DOLLAR SIGN.
YES THE JAMES16 GROUP IS THE GOLD STANDARD AND WHEN I LOOK OVER MY SHOULDER I SEE NO COMPETITION. IS THE ABOVE HYPE OR EMPTY PROMISES? IS IT VANITY OR EGO? NO ITS THE TRUTH.
NOTE: In over 25 years of trading and learning its important for me to give credit where credit is due.
virtually all of my methods are original but some of the ingredients are often things i have learned from others and use in my own way. This is true for all of us that truly put in time and effort to find success in this business.
I want to thank the following people and as i remember others i will add them. I think all of these people are honest and good at what they do and teach.
The guy i played golf with in 1982 that had a rolex and a vette and could play golf everyday if he wanted. 4 hours with him is what started it all for me and i never saw him again. For many years i would have strangled him if i could have found him. I truly believe that guy was put in my life that day for a purpose and much of it may have been this thread. Life is funny like that isnt it? If you havnt lived long enough to understand what i just said you will som