The Checklist Paradox We are taught to create checklists in trading to identify our best trade set-ups. But that alone is insufficient because we are missing a key step. Imagine a doctor who has a checklist to account for process such as washing ...

Zhu's Forex Thoughts

Gamifying Life Gamification is a really hot thing right now. A simple google search brings up this definition gamification ˌɡeɪmɪfɪˈkeɪʃ(ə)n/ noun noun: gamification the application of typical elements of game playing (e.g. point scoring, ...

Zhu's Forex Thoughts

The Playbook You should read The Playbook written by Mike Bellafiore if you haven't. But here's the main reasons why you want to have one. A Playbook is the collection of your best set-ups you see in the market each day. They don't even have to be ...

Zhu's Forex Thoughts

The Little Things Add Up video This is especially true in FX. If there's one thing I've heard successful traders (and people) repeat over and over, it is this. Being successful is not about doing one big thing right, it is about doing the thousand ...

Zhu's Forex Thoughts

Profitable Forex Traders Assuming people are actually honest about their track record, it would seem to me that the majority of traders who are making money on a somewhat consistent basis in FX are employing a variation of the following: - Fund a ...

Zhu's Forex Thoughts

The delusional trader Mike Bellafiore talks about the delusional trader in his book One Good Trade. The trader who thinks that he can go from consistently blowing accounts or consistently losing money to making huge profits on a consistent basis ...

Zhu's Forex Thoughts

Thanks Tashkent. Any specific ideas you want to add to the posts please do Disagreement is much welcomed. "In fact, in science, the best evidence that a hypothesis is true is often an experiment designed to prove the hypothesis is false, but ...

Zhu's Forex Thoughts

My mentors I don't have any real-life mentor to teach me, but there are some people, books, resources and courses that I consider to be my mentors and they have had a huge impact on my trading. I am going to share some of them here. - Mike ...

Zhu's Forex Thoughts

When does System 1 Thinking/Intuition really flourish? The short answer: when all information relevant to the problem are immediately available/in front of our eyes. Read Thinking Fast and Slow by Daniel Kahneman. In the context of trading, this ...

Zhu's Forex Thoughts

What defines the state of the market? I think there are four parameters that define the kind of market we face. It is the changes in one of these four that cause systems to lose their edge over time. Failure to adjust to changes to the market is ...

Zhu's Forex Thoughts

My views on leverage and some personal experience In a liquid market, leverage is a very powerful tool for intraday traders. It's as if you are getting funded by a proprietary trading firm, except there's no profit sharing and you take on potential ...

Zhu's Forex Thoughts

If I think there's a 90% chance price is going to hit a 30 pip price target within 4 hours, shouldn't I just enter at market price? Why wait? What about the 10% of the time that price doesn't and goes 100 pips against you? What about the price ...

Zhu's Forex Thoughts

What does it really mean to pre-define risk? I speak from the perspective of an intraday trader. I think it's important to predefine risks in at least the following ways. 1. Hidden market risks and black swans This is particularly relevant for ...

Zhu's Forex Thoughts

The two layers of technical analysis From my experience I have found that there are two layers of technical analysis in the market. The first is what 99.9% of the threads here address. That is technical analysis at the broader/macro level. This is ...

Zhu's Forex Thoughts

Demand and Supply The most practical definition of demand and supply I have heard is the following: Demand is when emotional sellers meet technical support. Supply is when emotional buyers meet technical resistance. There are two parts to the ...

Zhu's Forex Thoughts

Trading in the zone versus trading rationally In mark Douglas's classic, he highlights that imposing rational thought can interfere with trading in the zone. I fully agree. Some of my best entries have come when I was trading in the zone and when I ...

Zhu's Forex Thoughts

How to compute probabilities We first look at base odds. We can compute the absolute value of open to high/low (pick the larger one) during our trading timings for the past 60 days and then see what proportion of them fall within the range we are ...

Zhu's Forex Thoughts

The reason why most suck at trading By default our brain operates in three settings: 1. Certain it will happen. 2. Certain it will not happen. 3. Maybe (50-50) When traders search for technical indicators, they are craving for the certainty, and ...

Zhu's Forex Thoughts

Just Observe 99% of the time the correct thing to do in the market is to just observe. Feel the emotions coursing through you as the market makes its volatile movements that attempt to scare you our of the trade. Know that these are perfectly ...

Zhu's Forex Thoughts

What is going on through my mind when I am actually trading? Before entering a trade: What is the bias? Am I trying to go long or short today? Or am I scalping? Is the market forming any new levels on the micro-timeframes or any specific chart ...

Zhu's Forex Thoughts