Major Changes – Part 2 of 2

Okaaay… I’m feeling quite intimidated writing this post because somehow ‘Part 1’ generated 380+ page views and I’ve just gained my 200th follower on twitter. So no pressure there then!

Honestly I’m somewhat mystified by this (especially related to twitter) but never the less I really appreciate the interest, comments and support. Thanks ๐Ÿ˜€

You are all awesome.

—– At this point I paused to make tea and then got completely distracted by passiveaggressivenotes.com —–

and we’re back in the room…

Part 1 of this post closed with me making the point that to be truly successful you need to trade your own personality in the market.

You need to go through the process of breaking down what charts are telling you and then re-building a trading approach that you can connect with technically and emotionally.

I finally realised this in/around the same time as stumbling blindly across a Canadian trader called Chris Lori. Now I’m going to point out from the get-go that I’m not affiliated to Chris (or anyone) and what follows is my own entirely independent opinion.

I’m also going to stick my neck out a little and say that my intention is to get ridiculously good at this skill. If this wasn’t clear before from reading my blog it’s now in black and white. There’s a sector of my personality which doesn’t do half measures and it’s worth being aware of this in respect to the next part(s) below.

What I’ve not found anywhere is an explanation or framework for improving as a trader.

I know this may seem a little hard to believe but really, think about it for a moment… Who’s out there teaching the process of how to improve as a trader? How do you go about the process of learning without burning tons of cash? More importantly – How do you make sure that instead of learning at random what you’re gaining is targetedย experience?

I feel compelled to make another ‘gym’ analogy here to help explain this last point…

In the last month it’s finally dawned on me that I need to slim down and change my body composition. I’ve lifted weights for years now but I’ve still got a bit of a spare tyre. Finally I’ve finally found out what to eat, the type, frequency and the amount of exercise I need to do. BUT I only discovered this after what’s essentially been years of random experimentation.

Just think about if I’d gone about trying different diets and workout routines in a structured manner? I’d have been there (where I want to be) years ago already. Guess what? It requires me to do exercises I dislike and to have way more self discipline – LOL

Now you need to follow me on this. The reason I flew all the way to Ft Lauderdale for a workshop was that Chris had put a slide up in a webinar that broke down the process of learning to trade in a extremely structured way. An outline that directly relates experience to feedback and building a discretionary trading model linked to ones own individual personality.

This is a scientific approach I can use!

I can teach myself to fish without having to radically re-shape my personality or to try to become something/someone I’m not.ย In addition this wasn’t based on indicators or even specific setups but more on an entirely price driven view of the market.

At this point readers who know about price action trading willย assume I am talking about pin bars or specific candle patterns etc… or will think ‘yeah, I trade price action too…’

Nope, sorry. The point I’m going to really labor here is that most of the 4 day session was spent with Chris explaining the conceptual framework he’s built up about how price moves which is essentially irrelevant of the fact that you’ve got candle ‘x’ or shape ‘y’. This was all about what’s happening to price behind the fact that it’s represented by a candle which is linked to a time period. If you want to get more from this post then a good place to start is at Chris’s site where you can sign up to a whole bunch of very decent information/videos for free.

Other than that it’s worth pointing out that almost half of the 36(?) attendees had also previously been at one of his workshops. Some had paid to come back three/four times already. That’s really a great recommendation in itself

Now if you’ve aย cynical disposition you’d assume that it was because they didn’t ‘get it’ in the first place. However it was clear to me they were back because, like any expert, it was worth learning even more from the depth of Chris’s forensic view of how price moves. Personally I believe Chris’s take on the market is exceptional – he is a very, very good trader.

It was also great fun talking to a bunch of relatively new (and some very experienced) traders and I can honestly say there weren’t any idiots there. Not one.

I picked up so much in Ft Lauderdale but crucially I learned to see the market in a way which actually makes sense to me. There’s so much depth and information there – when you know what to look for!

I now know how to use what I’m seeing so that I can come up with trades of my own that match my outlook. All of these things rely on a conceptual framework and not a bunch of setups from someone else which I myself may or may not be successful at trading.

So what am I currently doing with all this new-found knowledge?

  • Creating a structured learning plan based on taking apart one aspect of trading at a time and thoroughly understanding it
  • Building my own trading model just for GBPUSD

Now if you think about the detail behind just these two points you can see that we’re now very, very far from looking for short-cuts. It’s not quick, it’s not sexy and it requires hard work.

It may though be the only way to succeed and then to remain consistently profitable long term. No-one else can really tell you when to get in ๐Ÿ˜‰

I hope you’ve enjoyed this post and got something out of it. If you’re feeling disappointed that I didn’t give away more specific information about Chris and his approach then I really recommend you check out his site which is really the tip of the iceberg.

Beyond that I can’t recommend enough that you actually come to a workshop. Barring the advent of the zombie apocalypse I’ll be going to the next one whenever/wherever it happens to be.

Thanks for reading.

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23 thoughts on “Major Changes – Part 2 of 2

  1. Simon Massey

    Hello Robert. How lovely was the weather in Florida? I am missing it lots. You should have seen the steaks I ate. Anyway…
    I don’t think you can conclude you can’t use someone else’s strategy. I believe it is possible to find ones that suit one’s trading personality. I’d also suggest that no matter what you end up doing, if it’s consistent and successful, someone else has and will be doing it. Although that’s not the point as you’ve not taken it from them. It’s the journey to find a strategy that you feel is your own. But that’s down to each individual. I fully agree nearly every trader will tweak a taught strategy and business plan, but I think they can easily keep the macro elements in tact. There’s a great risk we can over-think and over-complicate trading. It’s interesting to really drill into the underlying dynamics of psychology, and as you know I am a huge fan of Mark Douglas. But for me, I am happy to think in probabilities, have faith in the simple FTSEday strategies and do my best to avoid what Douglas describes as fear based errors. I am desperately trying not to ‘care’ about any aspect of trading too much. I don’t mean that in an unprofessional way, but investing too much energy and emotion distracts us from the emotionless trading state we want to find ourselves in.
    I suspect you and I have slightly different personalities as you have described having a part of you that won’t let this go and sounds a very competitiveness side. I fear there may be a few negative consequences to this, the worst being that one could find themselves quite highly-strung and over think things (I am not suggesting you are – you didn’t come across like that when we had a conversation on Skype). Different personalities require a different path to learning, and I guess that’s what you’re really getting into now.
    I truly hope the Chris Lori is the key to you achieving what you want. Let me know if I can do anything to assist.

    Simon,
    http://www.FTSEday.co.uk

    Reply
    1. robertsweetman Post author

      Hi Simon – good to hear from you and yeah, Florida is definitely the place to be I reckon ๐Ÿ˜‰

      Thanks for the awesome comments and best wishes as always. I think we actually agree with regards to strategy adoption/tweaking and it’s quite possible I’ve explained myself poorly. I’ll try to clear this up!

      My point is essentially that copying blind doesn’t work. I think you’ve also said this above. Other than a few people out there in the market I’d suggest then most ‘vendors’ are asking people to do exactly that. If you’re going to adopt someone else’s very specific setup then you need to have checked/tested it out for yourself thoroughly before really being able to work it.

      Up until 6 weeks ago I didn’t even know that there were programs/data out there that enabled you to do this and gain experience of different approaches outside of the live market. Not as ‘realistic’ but certainly not a waste of time either. If you’re looking to trade in a discretionary way I think this should really speed up the learning/feedback loop so faster improvements are possible

      I also rate Mark Douglas very highly. As I’ve written elsewhere I’m prepared to read anything on trading psychology but regret having wasted a lot of time reading anything else regards systems or approaches ๐Ÿ˜‰

      As far as fear/trading errors you can simply read through posts from 2011 and laugh your ass off – lol. You know I’ve been there… You may be correct in that my personality requires more ‘certainty’ or understanding in the face of un-certainty. I’m prepared to concede this point and will address it directly in a future post. If that makes the journey harder for me then it’s pointless avoiding this fact, right?

      Back to the macro and the point I was trying to make in my blog… My opinion is that Chris’s way of explaining the dynamics behind a bunch of candles makes complete sense and really resonated with me. On this basis I’ve gained an operating framework with which to build my own ‘model’ for trading.

      I’m rambling now but really I think the key is to get enough experience to internalise what works and develop a real feel for when a trade isn’t going to work. Again, this was covered in some depth by Chris and was the main reason I ended up on a plane. The blog is purely for me to share what I’m doing rather than directly try to influence anyone in a particular direction.

      As you point out the paths may be different but as long as we both get there then who really cares, right?!

      Thanks again for the comment!

      Reply
      1. Simon Massey

        Indeed, hopefully we’ll both get there through whichever paths we take.

        Your needing certainty has to be addressed if it’s a characteristic which may have a disproportional negative impact on your trading. Self-reflection is an essential skill. The only certainty in trading is uncertainty.

        When you say you are wanting to develop a feel of when a trade isn’t going to work, what do you specifically mean? What jumps out for me there is the risk that means you think you know what will happen next, which is at the heart of not accepting risk, not thinking in probabilities and making fear based errors. Unless Chris was referring to being ‘in the zone’ and in-tune with the market in a way that someone who has truly accepted risk can be.

        I take it you’ve not found it this hard to come back from Florida time? I need some sleep! Take care,

        Simon,
        http://www.ftseday.co.uk

      2. robertsweetman Post author

        Hi Simon

        One thing I’m blessed with is an ability to sleep anywhere at any time. It’s the waking up part I really struggle with ๐Ÿ˜‰

        Having been meditating regularly for almost a year I’m now the ‘boss’ of self reflection – lol. Seriously though I’d not have got even to this point without that. The next ‘target’ for my trading is to address my relationship with the wavy line on the screen by doing a bit of mental reprogramming. It’ll be interesting to see how long this takes/what’s involved and hopefully I can post something about this in a couple of months.

        I’m not talking about trying to predict anything – more that by building up experience and ‘chart time’ you should be able to relate price moves when you’re in a trade to ‘gut feel’ about whether what you’re seeing is going to work out or (having got a instinctual kick in the nuts) it’s time to get out. This is what I reckon professionals build up over time – maybe this fits Mark Douglas definition of being ‘In the zone’.

        What I’m really trying to get across is that there are two ways to gain experience. Targeted – where you focus on just a single aspect at a time in order to incrementally improve and random where you’re essentially hoping for a lightbulb moment to bring it all together (which logically should take far longer). This is another major part of what I got from Chris’s workshop.

        Cheers for the comment

  2. mark

    Hi Robert

    First off let me say that i have read your blog form the start and enjoy reading it,but I have to disagree with you about going to these type of seminars

    I know from reading previous posts that you dont want to copy other peoples strategies and try to adapt them to yourself this seminar will show you how to make your own.You say its a scientific approach.One thing I have learned from trading is that it is totally unpredictable and that there is no scientific formula out there.

    People like Chris Lori talk alot of psycho babble in my opinion and make you think their way is the right way.36 people paying $2000 a pop so $72000 for 4 days work aint bad is it .he doesnt need to trade at all when he can sit back and talk for a few days
    I see that you tried out Mike Lucas`room and that he has commented on your previous post ,so I dont know why you could not learn even what he has to teach.(now im not affiliated with MIke nor have ever been a member but I have seen how he trades and like he says its not rocket science)

    I do wish you luck but personally i think you have wasted an awful amount of money on that course

    Mark

    Reply
    1. robertsweetman Post author

      Hi Mark

      Thanks for following the blog as I stumble about in the dark learning this stuff – your interest and support/comments are sincerely appreciated.

      I am going to take issue with the tone of your post though because your comment about going to ‘these types of seminars’ shows you’ve not approached what I wrote with an open mind.

      Secondly it’s clear you have a dislike of ‘trading guru’s’ but lumping someone you’ve never met into a particular box is simply not done. What you’ve written are basically your own prejudices since I’d guess you’ve never met, spoken to Chris or properly researched his stuff.

      You know what? I’ve got a REALLY FR**KING big issue with trading guru’s too – having been completely conned out of way more than the cost of Chris’s workshop in the early days when I started looking at trading I can absolutely assure you that attending was very, very good value.

      I learnt a ridiculous amount of useful and applicable stuff. If you want a comparison as far as trading seminars and value then do some more research about what’s on offer. You’ll be mortified. Chris’s workshop is a steal by comparison and imho unparalleled in depth/quality. My point about half(ish) the class paying to come back should have made this point really.

      It’s quite possible I miss-communicated regards the ‘science’ point. What I was trying to get across was that there’s a scientific approach to learning a skill and a random one. I’ve not seen anything resembling a focussed, structured approach discussed anywhere else. My gym analogy doesn’t seem to have managed to get the point across so I might have to think of a better one. Sorry if that’s unclear.

      With respect to Mike and the approach he’s got I think he’s bang on – his trading room is great. Again you’re assuming I couldn’t/can’t learn from Mike. Talking to Mike helped me realise that it was/is simpler than I though in some respects so I think maybe the reason I’m still struggling isn’t covered by what Mike had to say. Or maybe it was but it didn’t get through the first time! Sadly I can’t sit in Mike’s trading room all day so that’s one of the main reasons I didn’t go down that route in the end.

      For me Chris’s workshop was simply the best investment I’ve made in myself towards becoming a consistent and successful trader. At this point now it’s a case of implementation, practice and feedback. It’s taken me 18 months to get here but I now feel equipped to succeed rather than I’m about to be fed to the sharks ๐Ÿ˜‰

      Thanks again for the comment and very best wishes to you too!

      Reply
  3. chris

    Hey Rob. Don’t know if you noticed but my interview with you went up on my blog the other day. Turned out to be a very popular post. ๐Ÿ™‚

    As for the topic in hand, I’m using someone else’s strategy. I spent a long time messing around with different forms of daytrading techniques and indicators but I never really felt in control. I came across a strategy that someone else had created and found it worked nicely for me. It was perfect for type of trader I wanted to be.

    If you recall i’m following an end of day technique following long term trends. I’m not cut out for daytrading, I also don’t have the time, and don’t need the pressure. Even still I still struggle with the psychology of trading. Into my 2nd year now and i’ve stopped tampering with my trades, or opening positions on trades that don’t fit my strategy, just because I liked the sound of them etc. I’ve got all that out of my system. A good example of that was Facebook floating recently. With all the hype the old me would have jumped on that just to “be part of it”. The new me took a look at the chart, looked at my diversification rules, my % risk per trade formula and in the end I walked away as it didn’t fit what I was looking for.

    I think you can follow someone else’s strategy, but I 100% agree with your comments that the strategy has to mirror your own personality and trading style. I’m a much more confident and consistent trader now i’ve found something that works for me.

    Reply
    1. robertsweetman Post author

      Hi Chris

      Yes I saw that – somewhat concerned that I got a bit ‘ranty’ in the middle there but I’ll have to leave it ๐Ÿ˜‰

      I’m the first person to say ‘If it ain’t broke then don’t fix it’ and since you’ve found what works for you then that’s just awesome. I remember you were going great guns right off the bat since you started and my first reaction was honestly ‘WTF?!’

      I’ve managed to confuse a few people (possibly with my crap explanation) about not being able to trade someone else’s strategy. To qualify this further it’s something I can’t seem to do and wasn’t really a generalization although it maybe came across as one…

      Anyway, I’ll get there in the end.

      As ‘Gok’ would say – “It’s all about the CONFIDENCE”

      Cheers

      Robert

      Reply
  4. Jonathan Scott

    Robert,

    I have been a keen reader of your site and would like to congratulate and thank you for writing with such honesty, transparency and dedication. I sympathise with you on many levels regarding your journey to becoming a trader as I’m in the same position as you right now. My situation is that I’m a full-time worker like yourself but that is due to change at the end of June as I relocate back to the UK.

    I have experimented with many different strategies and there are some that I prefer and some that I don’t. I think this has something to do with my personality much like as you’ve written about in previous articles.

    I signed up as a member of Nial Fuller’s Trading Community and as far as I can tell so far, it’s a fantastic way to trade the markets as it relies on simple price action analysis in conjunction with key support and resistance levels. Nial favours forex over stock indices and other types of financial markets due to the larger levels of liquidity abundant in the currency markets. However he does comment on the DOW every now and then and so it’ not just about forex.

    Now then, on to my main point and this may strike a chord with you Robert. Of all the things I have seen, read about and tried, Nial Fuller’s price action approach is the best. It’s simple and pure and the trading focuses solely upon price. How easier a concept can you have? I simply cannot knock his approach.

    However, this is my issue. There are two problems I have which I need to deal with actually. The first one being trade time-frames and the second one being the number of markets to concentrate on.

    Let’s look at trading time-frames first. Nial promotes trading from Daily charts only. Daily charts have less noise, paint a truer picture of the market behaviour and reflect the overall trend in a more accurate manner. The thing is for me is that I don’t like trading off daily charts as the price ranges are larger meaning that stop losses have to be wider leading to larger potential losses if trades don’t work out. Also, I really do not like holding trades over weekends as many news events can and have happened resulting in prices reverses on the following Monday, often with huge gaps. This type of trading is perfect if you have a day job but it just hasn’t happened for me. More importantly, I feel uncomfortable just leaving trades open blind and often feeling frustrated when ‘classic’ price action trades have been stopped out. I have had more success with live trading, on days of f work, using Nial’s principles but on lower time-frames such as the 15-minute or hourly but always trading in the direction of the trend on the daily charts. I can be in and out of the market within hours and happy to take 40-50 pip profits. If you can do this twice a week, you can earn a decent living.

    Now onto markets. One experienced trader always told me that it’s best to concentrate on one market at first. You should get to know that market, its behaviour, its mannerisms, temper, and all the rest. The problem again with Nial’s Community, for me, is that the cover all Forex markets and so it’s impossible to focus on one thing in particular. Priority is given to the ‘Majors’ but still there are eight or nine of these and I’m often facing a dilemma which one to trade when you consider they all often provide opportunities at the same time as they are paired with the $US. For me the scatter-gun approach can be confusing so what I’m trying to do at the moment is focus one one market and take it from there.

    I would like to take this one market and trade it ‘live’ intra-day but using Nial’s teachings which I believe are through. Now I have a couple of questions for you which I hope you won’t feel are too direct? You mentioned in your last post that you are building a framework for trading GBP/USD. So…..

    Can ask why you have chosen this currency pair in general and have not gone with EUR/USD or the FTSE for example?

    I am often torn between the three of them but they are all relatively correlated.

    And in addition,

    How do you approach the time-frames that I discussed? Are you trading of longer term charts like the Daily or 4-hour or do you prefer to use intra-day charts like the hourly or 15-minutes?

    I would be so grateful to hear you opinion on this post, as like you, I’m finding that you cannot copy other people’s approaches. Instead, and at the very most, you can copy somebody’s framework but you need to adapt it to suit you own needs, personality, time available, etc.

    Thanks in advance Robert,

    Best Regards,

    Jon
    http://www.ftsefreedom.com

    Reply
    1. robertsweetman Post author

      Hi Jon

      I loved your blog (went off to have a poke about) especially your comments regards ‘why’ or ‘about’ in relation to Marx, work and religion. I happen to agree with your perspective.

      In line with your opening comment I’m going to be honest. I’ve studied Nial’s course and I was tremendously disappointed. What really got me hooked initially is that he writes with great authority and conviction regards trading. Nial definitely has an opinion. Unfortunately once you remove the great marketing/self promotion I don’t think you’re left with much other than the message ‘trading like me is the only way to be successful so buy my course’… Hey, I fell for it so why not?! ๐Ÿ˜‰

      ‘If it works for you then that’s freaking great’ is now my first rule for trading systems/my opinion of other peoples setups and methods. There are as many ways to trade as there are traders so sadly Nial’s ‘my way or the highway’ approach is a big STOP! sign now for me.

      The other major problem here is that what he describes as ‘price action’ references maybe 10% of the information available on any timeframe. It’s great marketing and is easy to sell/package but I’d have to really disagree that it’s price action in comparison to what I’ve learnt from Chris Lori or even @Trader_Dante who posts a lot of stuff on Twitter and gives away a stack of free info/training.

      The fact that you’re having more success with a MODIFIED version of what’s on Nial’s site basically makes my point for me I think, right? If you mean ‘take every wavy line of the chart’ and actually try to ‘see’ what price is doing then I completely agree with you. This is the way forward. If you mean looking for pin bars or setups that are in the course (which I’ve read) then hey, as long as this works for you (see rule 1) that’s also great ๐Ÿ˜€ but there’s much more info available. I’m not going to argue but defer to rule 1 instead ๐Ÿ˜‰

      I completely agree (now) about focussing on one market/pair. A single pair has it’s own characteristics, reactions to big numbers, ATR, volatility, reaction to news events and so on and on and on. Let me be really clear on this – I don’t think there is such a thing as a ‘one size fits all’ strategy, certainly not for a beginner. IF you can’t make money from one pair then why should you be able to do it across the whole market?

      Why am I focussing on GBPUSD first?

      1. I’m pretty sure both will be around for a long time to come – maybe the EUR won’t??
      2. At the moment the EUR is the bitch of whichever European politician opens his/her mouth
      3. I’ve not spent very much time at all looking at AUD or other commodity related currencies so I’m not as familiar with how this relates to global macro/China as I should be
      4. The FTSE is an aggregate so it’s (imho) a risk on/off play on market sentiment rather than being based on something transactional. I feel more comfortable with this and ‘relate’ more to the psychology at play there

      I’m still battling with the timeframe issue (i.e. which one) since really I’ve got time between 06:00 – 08:30 and 18:00 – 22:00. In some ways this means my only ‘real’ opportunity is on M5 charts while being aware of what’s happening on hourly/daily but again this comes back to learning a proper appreciation of how price moves. I could use alerts for intra-day levels but I’m going to have to find a lot more self discipline to implement this. I’m going to look at this again.

      Everyone worries about entries while no-one seems concerned about how to properly manage a trade. This is really the mark of an exceptional trader I think. There’s a point just tickling at the back of my mind about actually ignoring chart timeframes and concentrating on how price moved towards a particular number. On this basis you should be able to ‘see’ whether it’s probably moving up, around or down from this point. Depending on how price continues to move once you’re in what you classify as a high probability trade then your success/failure is entirely about managing the changing environment/data.

      The point I’m struggling to make (to myself also) is really eluding me right now. Probably ’cause I’m knackered from hammering along and back down the M4 today. I’ll have to figure this out for another post… Price exists in the ‘now’ on a D1, H4, H1, M5, M1 chart simultaneously so it seems slightly backwards to only look at one timeframe, right? I’ve also got a slight issue with trends right now (I’m in therapy) in so far as I don’t really see much evidence of these working in FX. Currently my opinion is that macro factors drive daily trends in FX (and indices) with price reacting to news/events and previous price moves. Looking at trends in FX just seems to screw me up.

      Channels? Yes. These are awesome. Trends? No…

      I hope I’ve not put too big a dent in anything regards my personal opinion of what Nial’s offering. See ‘rule one’ above all with respect to any comments I make. I definitely agree that taking all the crap/indicators off your charts will help you see what’s occurring. By building familiarity/repetition in a controlled way I’m looking to create a positive experience of trading one pair only (to start).

      Hope this answers your questions. Thanks for taking the time to ask them – I’m going to have to come back to this in relation to a couple of things but right now my brain is mush ๐Ÿ™‚

      Cheers

      Robert

      Reply
    2. Hera

      2:33 avoid indicators on chtars Words of wisdom indeed. I have been building and testing EA’s for a couple of years now, gettting some success using Pivot Points, i doubled an account in a month, only to give it all back in a week! .. Anyway, i could๏ปฟ see that the indicators i was using: MA’s, MACD, Bolly Bands etc were just adding confusion to the chart. (some may argue i dont know how to use indicators.. maybe) But removing all indicators has opened a new chapter for me.

      Reply
  5. The HOVIS Trader

    Great blog, well written and researched.

    The best investment I ever made in my trading career was paying ยฃ2k ish to attend the Traders Expo in Las Vegas a few years back (The London Expo is getting there but still miles behind imho). The event itself was free, the flights, accomodation etc cost the money. But the real education was listening to all the pro traders in the free seminars and realising that there was no secret way.

    Reply
    1. robertsweetman Post author

      Hi Hovis ๐Ÿ˜€

      Thanks for the comment and yes after 18 months of nonsense finally the (one) lightbulb has finally come on. At this point do I get to leave the ‘slow of learning’ group? LOL – Wish I’d actually done some proper research before I dived into this but hey, now the serious work begins, right?!

      Cheers

      Rob

      Reply
      1. The HOVIS Trader

        We never stop learning Rob – I don’t think any of us learn first and then apply the knowledge! Takes the fun out of the losses and trying to work out how and why the markets are against us personally!

  6. Jonathan Scott

    Robert,

    Thanks for the super response. I sat on the metro on the way to work this morning reading over your response a couple of times actually and it has had me thinking all day. You know something, despite learning a lot about price action from the Nial Fuller course (and forum postings from the regulars), whilst still being somewhat critical of the ‘one size fits all’ approach he has, you are right about the limitations.

    I’m trying to break down the things that I have learned over the past 6 months and list them below. These are things that have been beneficial to my trading:

    1. I’m always aware of the general trend using ‘daily’ charts with the 8 and 21 EMA’s to aid visualisation. ALWAYS TRADE IN THE DIRECTION OF THE TREND. For example, I have only been taking short trades on the FTSE, DOW, GBP/USD, AUD/USD, and EUR/USD over the past 10-14 days.
    2. Use the 4-hour chart to recognise intra-day trends such as reversals (retracements) against the main trend which may present an opportunity to take a position. 4-Hour charts often illustrate clear trading levels.
    3. Use always use 1 hour charts only for taking trades and ignore the noise on lower time-frames. However, I have recently been using 15-minute charts more and more for actually placing my trades. But I can recognise price rejection more easily at key levels especially on faster moveing instruments like the FTSE. Nial would not approve of this.
    4 I only trade at, or very close to, key levels of support and resistance. I don’t wait too long for price to test the levels. If I feel price wont penetrate a level and go beyond I take the trade quickly and use my SL to get me out of any possible price movements going the wrong way. I always like to be in at the start of price movements rather than enter 20-30 points into a move. The early bird usually catches the worm after all.
    5. All my trades are price retracements in the direction of the general daily trend… for example 50% Fibonacci retracements
    5. I only trade intra-day and not at the end of the day as Nial suggests.
    6. I am only trying to trade one currency pair and one index. Nothing more. Nial’s generic ‘any FX pair’ approach is too much for a beginner/junior to focus on.
    7. I always document my trades even though I find this laborious. It often prevents me from being rash and helps me identify the successful trades from the unsuccessful trades and understand the reasons for both successes and failures.
    8. I’m not a big fan of reading the candlestick shapes or placing too much confidence in them. For example, I have noticed that there are often bullish ‘doji’ reversal candles on many markets on Fridays which would signal a possible rejection of key levels and hence impending price reversals. However, many traders close down their positions before the weekend only to open them again on Mondays. So that reversal never comes off and I have often been stopped out to the tune of 100 pips or so come Monday morning when price continues in the same way as it did the previous week. This is another reason why I don’t like trading the daily’s. Losses can be large. I prefer to see lots of smaller time-frames rejection candles at a major level than one daily candle.

    I liken trading to learning a foreign language. Everything at first is overwhelming but little by little the penny starts to drop. I should know, I’ve been living in Madrid for 5 years and only in the last year or two have I realised that my command of the language has become quite strong. I refer to reading, writing, listening and most importantly, speaking. I work with Spaniards so I’ve done the toughest shifts in terms of educating myself. Trading, I believe, like languages are long roads we must take and it takes a thick skin, making plenty of mistakes along the way, determination, study and practice. You never feel like you’re going to get there but eventually you do and you then start to work on the finer skills such as accent and pronunciation in order to hide the Scottish sounds ๐Ÿ™‚

    Trading, like language learning requires tweaks along the way but I believe (and hope!) I will get there in the end. If you love doing something, it’s 50% of the battle done I guess.

    My biggest problem with trading is discipline and patience. But the trading journal is helping me conquer this. I may only make one trade per day or every two days but they have usually ended up being, lately, good ones. I have started to realise I only need to make two or three trades per week and wait for the best ones to come along…… retracements of the main Daily trend at or close to levels or resistance or support depending upon the trend direction. This concept for me is so simple to understand but my trigger finger often overpowers this understanding and thus I enter trades which are not part of my plan. One I get some time off in the summer, I wont rush my trades. I hope anyway.

    Like you Robert, I want to find my own way. I am keen to read about the approaches of others and thank you for pointing me to Dante Trader. I read some of his stuff last night and found it very useful to read about his stop loss philosophy. I have often moved my SL to breakeven as quickly as possible in order to protect my account. But it costs me the trade on many occasions. Dante Trader often suggests it’s best to leave your SL wherever it started out and allow price to breathe and head in the direction that you believed it was going to go. If you have no confidence in the trade whilst it is in process, perhaps you should not have entered it in the first place. Again… the importance of trading plans. Trade your plan and and don’t bottleneck the trade with a tight stop loss. I think this will help me enormously and might stop 30% of my trades being stopped out at B/E before reaching my planned profit targets anyway.

    Enough for now. My brain is turning to mush much like your’s was last night. Too much wine and tapas. Sleepy sleep time.

    Keep writing mate. It’s wonderful. I’ll keep you posted on my progress too.

    Que tengas un buen noche!

    Jon

    Reply
    1. robertsweetman Post author

      Hi Jon

      Based on your reply (and the detail therein) I reckon you’re well on the way to consistent success – also having mastered something else (Spanish) means you’ve got a realistic expectation as to how long something ‘could’ take to get really good at.

      Thanks for the positive comments and encouragement

      Vamos! (google is awesome)

      Cheers

      Rob

      Reply
    2. robertsweetman Post author

      OK – reply number two since I re-read your comment and realised there were loads of good points in there that I should have come back on… I think I was a little bit knackered at the time, so here goes!

      1. I can see the appeal but for me the rule has become ‘always enter a trade where the market is highly likely to react’ which means going against the trend is perfectly valid as long as you’ve got a reason to do so.
      2. Use whatever chart time-frame you need to in order to figure out what’s likely to happen. It’s the same actual price whether it appears on a H8, H1, or M1 chart.
      3. See point 2
      4. All the professional/successful traders I’m aware of do this. Repeat after me ‘do not trade breakouts’ and ‘do not chase price’.
      5. Completely appreciate why you would do this given your trend bias
      6. Agreed – I can’t keep track of more than two at a time either. One day…
      7. Yes, and I really need to tighten this up myself – thanks for the reminder!
      8. Candles are just a representation really so I agree with this. There’s a lot to learn looking at smaller time-frames.

      I’ll probably steal your ‘learning a language’ metaphor at some point since I’m also rubbish at those ๐Ÿ˜‰ but yes, as time goes by and with study that’s structured I think it’s possible to pick up an skill. As long as you don’t give up you’ll get there eventually….

      Discipline is a characteristic or personality trait which can absolutely be developed – even outside of trading. Here’s a personal example… I’m trying to improve my body composition which essentially means I need to exercise more and not eat junk. Meeting this target is basically practising developing discipline. I’d suggest that this ‘falls over’ into all areas of your life. Choose a character trait you lack then develop it in a structured way.

      Patience is again a simple application of practice in all sorts of situations.

      One thing I realised the other day though regards entries. I believe every new trader probably looks at the market and what’s happening with about 50% (max!) attention before they get in a trade versus the 100% they focus on a trade as soon as they’re in. This is obviously backwards!!

      Concentrate a huge amount more on what the price movement is telling you before you get in. There are several wins from this. You’ll have more confidence and conviction in your idea and you’ll already have a clear idea of what you DON’T want to see that will get you out early. This also means you can put your stop further away initially then bring it closer when the trade appears to be ‘behaving’ as you’d anticipate.

      As with all things this stuff needs practising ๐Ÿ˜‰

      Cheers

      Rob

      Reply
      1. Jonathan Scott

        Hi Robert

        I have been musing over your reply this evening and trying to note down some more of my own observations from last week’s trading session. I have taken a step back from markets at the moment โ€“ due to my workload with my day job โ€“ and also just to keep an objective eye over my preferred strategy. Also with all the volatility and worsening conditions, I’d rather be on the outside looking in for now so avoiding all forex pairs and stock indices. I have shut my FTSE shorts as I feel we may get a bounce this week.

        Over the last month, I have probably had my greatest trading successes to date but I’ll be the first to admit you also need a little luck in making the right calls etc. In order to break my last email down a little bit more, this is what I’ve been doing:

        1. Trading only in the direction of the daily trend as I have previously discussed on this site. Why do I do this? Well, I guess there are a couple of reasons. The trend is your friend and it’s a lot less likely to stick a sudden knife in you and haemorrhage your trading account. The biggest moves also come with trading in the direction of the trend so risk:reward tends to be better. This is in my opinion of course the second reason for trading with the trend is that it forces me to trade less frequently and focus more on higher probability ‘winner’ trades with the trend. Therefore, I’m only interested in opening trades at resistance and support after retracements against the trend. This tends to provide more obvious exhaustion points and thus less risky entry points
        2. The 1 hour chart is the only chart I tend to have on my screen. I actually use the advanced charting package with IG Index and therefore I have access to the the Pro-Trends charting technology which automatically plots horizontal and diagonal (hence channels) levels of support and resistance. I only use the horizontal levels as they are far more reliable in my experience. The professionals use Pro-Trends and therefore the levels tend to be respected especially on larger time-frames such as hourly, 4-hourly and daily charts. By having perhaps 6-8 markets on my screen, all in 1-hour charts, at the same time I am quickly able to identify opportunities on most days to trade from notable levels which may actually be weekly, daily or hourly support. I rely on this quite a lot and it rarely let’s me down. At times there may be an obvious level missing on some charts but you can easily add this manually. The advanced charting package also allows me to set price alarms so I have been quietly working away on other things then heard the bell sound and gone back to my PC. The less screen time the better for me.
        3. This week, I made five trades based on Hourly price action (and with the trend) and all we successful respecting the levels present on my charts. The most spectacular trade came on Friday as I shorted the FTSE from the obvious 5,350 level all the way down to 5,250. This was a risk:reward of 1:8 or 1:9 for me. This was so obvious trading from the hourly chart.
        4. I have started to realise that I’m actually combining Nial Fuller’s formula with Trader Dante’s formula, which are, in fact very very similar. Only Nial likes to additionally focus on 4-hour charts whereas Dante prefers just the Daily for recognition and the hourly for execution. I think two time-frames suffice. The more simple, the better.
        5. Sticking to higher time-frames as opposed to the 5,15 and 30 minute time-frames encourages you to leave your PC more often thus less screen time. Excellent. The charts on the hourly are much clearer, yet still detailed showing intra-day trends and I can really see why Dante swears by them. On any given day, with 8-10 hourly charts on my screen covering different markets whether they be forex, commodities or stock indices, there can be 4 or 5 possible trading opportunities. I have also identified that many occur between London open and US open. Therefore, there is no need to spend more than 4-5 hours trading each day. I have recognised the possible price entries early in the morning by relying on the Pro-Trends levels, I have set the alarm then reacted when I heard the cue. Simple.
        6. Simplicity. This is what I’m striving for. Simple = less noise = profitability. I have stripped the 4 hour charts out of my strategy and this now relying on two: Daily for trend, 1hourly for execution. I recognise my risk:reward and decide whether I’m happy with it. It has to be at least 1:2. If so, I enter a trade and document why I entered it in my trading plan.
        7. I then wait patiently and either accept my stop loss protecting me against a wayward move or book my profits either manually or when my limit kicks in. SIMPLICITY IS BEAUTIFUL. I LIKE SIMPLE. SIMPLE WORKS.
        8. Stop losses…. I have stopped moving them to break even so quickly. I like to get to at least 1:1 or even 1:2 before I move them to break even. Already this really helps especially on he Stock indices which whipsaw back and forth more, not to mention the precious metals too. Thank you Trader Dante for your wonderful views and educational material on this. The moral of this strategy is that if you are sure you’re entering a high probability trade, at an important price action ‘event’ level, with the trend… I shouldn’t be so hung up about the stop loss. Give the trade room to breathe and be patient. Donald, a regular poster over at ftsedaytrader.com is also benefitting from this. Wider stop levels with reduced trade exposure if you wish.

        Your various points are incredibly valid. You are right that price is simply just price and nothing more. Therefore it is the same on whatever time-frame you’re looking at. However, in my own experience I have confused myself on many occasions by loosing track of the actual trend direction and entering trades in between support and resistance levels โ€“ or no mans’ land โ€“ as I like to call it. A 15 minute chart may have convinced me there is clear support and an upward trend so I have gone with the long. Only then, price has gone against me and I’m deep into a losing trade. Then when reverting to the daily or hourly, I have identified that he trend is down and I have entered a trade at a level that was totally insignificant. Using various time-frames distorts the picture for me. Keep it simple, stupid is something I adhere to and this includes sticking to two time-frames. Dumping the 4-hour chart has reduced this blurriness even more for me.

        I think we are on the right wavelength about stops. I will continue being a little more relaxed about these and have more faith in my simple, less frequent, higher-probability trades. Will still always use stops. Always! But they will be wider and allow the trade to breath and accommodate potential fake breaks. Or ‘fakeys’ as Nial calls them.

        I don’t think it really matters Robert whether we talk about learning languages or getting into shape, and improving body composition. Make no mistake about these journeys…. they are no easy feats and I think inspiration can be drawn from successes in these projects and transferred to trading. Whether we are referring to trading, learning Spanish as strong second language or improving your body, mind and general health, key ingredients are required:

        1. Discipline
        2. Motivation
        3. Determination
        4. Study
        5. Acceptance to learn from mistakes
        6. Accept those mistakes and get back on the saddle but recognise what went wrong
        7. Disregard emotions and stick only to a pre-designed plan. And adhere to the plan. Believe in the plan
        8. We can achieve anything we set out to do with positive affirmations
        9. Strive for simplicity. Strip out as much as possible then adhere to it as your strategy
        10. My strategy: Consider the key liquid markets only (Major pairs Forex, FTSE, Dow, Oil etc). Trade in direction of daily trend. Enter and exit trades using key levels clearly evident on hourly charts. Document every trade. Review my trades every weekend.
        11. Notes to myself… don’t get too hung up about moving stops, don’t over-leverage, don’t over-trade (my strategy controls this), never be greedy, let trades run, and remember the adage…. ‘litle by little’ or ‘poco a poco’ (en espaรฑol)

        The more I think about this trading business, the more I realise the importance of simplicity. Study price action and important S and R levels, completely forget indicators and remember that the only friend you have is the trend. He may let you down every now and then but on the whole, he’s reliable, loyal, sturdy and he protects you. Never cross him or go against him. Because he’s your friend and every now and then he’ll gift you with something big. One or two glasses of Rioja too many on this sultry Madrid evening but I hope you see where I’m coming from. Writing this response has really helped me clarify one or two things Robert. So a big thank you to you once again!

        Que tengas un buen noche! Salud!

        P.S. London โ€“ good Idea. I will keep you up to speed with my movements. I’ve got a bit of a relocation to see to first ๐Ÿ™‚

  7. Diane

    Hi, Rob
    Your blog is making interesting reading. All new traders are experiencing your journey and the whole area can be so confusing as there is so much information and opinions. Learning to trade is like doing a degree with no syllabus unless you happen to find an honest trader/trainer to provide you with a starting point and a way to progress or work it out for yourself. I don’t know Chris Lori and his techniques but following a quick search around the net, he has a good reputation. It is important to find a ‘fit’ for your personality and if you have found this, I believe your money was well spent.

    Psychology: As you are aware, 70-80% of trading is down to psychology and a useful tool can be a trader personality test There is a free one available on Van Tharps website.You do the test online and you will be able to download the results in a report format from the site. It makes interesting reading! A book and website I would also recommend Is Steve Wards ‘High Performance Trading’ book and website. http://www.highperformanceglobal.com
    I have bought and used the book recently to address an issue I had. Unfortunately, it doesn’t matter how long you have been trading or how successful, psych issues can appear at any time!

    Backtesting: I am not sure if this has been mentioned in your blog or blog replies anywhere, but new traders are too quick to put money into the market without determining if the strategy actually works! If you are using one of Chris’s strategies, it will have already been backtested and proved to work. However, it is always advisable to carry out your own tests. One of the advantages of doing this is you get to know the trade setup very well.

    Trading part time: It is difficult to find something that will fit with a job. I run a business and I trade the 5 minute charts in the morning (6-8am) using a trend system on Euro and Aud. In the evenings, I trade Wall Street using the same strategy. When I have time, I trade timeframes from 5min to 4 hourly and don’t trade the daily charts as I like to close all trades by the end of the day which is my personal preference. As a suggestion, there is an option of trading the US share markets as they close at 9pm.

    The one quality that is important above all else is Determination. Without it, no one makes it as a trader. In your blog, this is a quality that shows through each time. You will make it, it is just how long will it take! Nobody knows!
    .
    I wish you luck in your new part of your journey(since you went on Chris’s course) and I will read your blog with interest.

    Diane

    Reply
    1. robertsweetman Post author

      Thanks very much Diane for the awesome comments ๐Ÿ˜€

      I actually did the full on ‘trader personality’ test on Vann’s site at the beginning of this so will go dig it out since you’ve reminded me. Could be quite interesting to do it again and see whether anything has changed! At the time the result was very positive as far as aptitude went although I was still completely in the dark as to the amount of determination involved.

      I’ve read Steve’s book but prefer Brett N Steenbarger and Mark Douglas – however even these sort of pale in comparison with proper ‘targeted’ time spent watching charts. I suspect that huge amounts of familiarity should address a lot of psychology issues. It’s on my mind to write a book myself at the end of this (when I’m trading full time) called ‘The boring, un-sexy, un-exciting, no-shortcut way to learn to trade the Forx’. The first five pages will simply have the words LOOK AT CHARTS repeated over and over and over in various typefaces and fonts. Page six will simply state ‘Go back to page 1’… so yes, back-testing… finally got my head around that – only took 18 months for me to realise what everyone else was on about ๐Ÿ˜‰

      Attempting to do what you’re doing with timeframes and trading around a job have led me to perfectly understand one thing… My self discipline level (which I thought was pretty stellar) is actually rubbish. This is now the one area that I’m very much focussed on right now and feeds into all sorts of other interesting psychological points about self regard/confidence and so on. Psychology is kicking my arse at the moment so it’s not all about staring at charts – bugger.

      The ‘results’ page on the blog is up for some more comments/changes next so keep an eye out for this. This should show that things are moving slowly in the right direction… emphasis on slowly there though.

      Will dig out Steve’s book again though.

      Thanks again for the really useful input

      Cheers

      Rob

      Reply
      1. Diane

        Hi, Rob
        Following on from your comments about a book, I am writing a book as we speak. It will not be teaching any trading strategies etc. Broadly, It will provide a structure for research into trading with lots of reliable resources and a syllabus to follow. All in plain English! I have written 100 pages so far and as this is not a full time endeavour, it will probably take at least another 6-9 months. I am hoping that I can persuade some volunteers to critique it when it is in final draft.

        Di

      2. robertsweetman Post author

        Hi Diane

        It sounds exactly what the ‘community’ of people properly looking at this topic needs. I’m dead serious when I say that I’ve not seen anything out there that properly fills this niche.

        Very happy to volunteer and provide feedback when you’ve got something together

        Cheers

        Robert

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