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Golden Nuggets

  • Post #1
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  • First Post: Edited Jun 9, 2021 1:58pm Jun 7, 2021 2:20pm | Edited Jun 9, 2021 1:58pm
A thread for sharing wisdom to help traders become the best they can be at trading.

Quick Links to Golden Nuggets

  1. It Takes Discipline
  2. 'Impatience' - The Enemy of Every Trader
  3. A Proven Trading Strategy
  4. The Truth about Stop Loss Hunting
  5. The Perfect Strategy
  6. Technicals Matter
  7. Plan Your Trades

You don't know because you don't ask.
When it comes to trading with the trend, it takes discipline to stay on the path. There is nothing wrong with breaking away from time to time. It's not that you have disregarded the trend, but rather that opportunity has knocked elsewhere, and you are ready to seize the moment. However, such breaks must not be prolonged. If you plan to digress, then you better have valid reasons for doing so. Otherwise, the trader on the other side of your trade will win your money.
You don't know because you don't ask.
Impatience is the enemy of every trader. Impatience is the root of failure. It will take what you have and leave you with nothing if you don't overcome it. Don't let impatience get the best of you. Rise above it. Defeat impatience.
You don't know because you don't ask.
Sorry but how you can determine the length of the trend? It can last 6 month or 12 years, or 15 minutes. It is impossible to predict it. So what patience I need to have? And what for I have to wait? Fast enter, fast exit. That's all. Few bucks here, few there. "Trend is your friend" fairy tale is good for youtube or if you are teaching people picking top and bottoms from the past. In reality it is not possible to ride it. It is the same like RRR. For example today on GU it was 1:0.3 ratio. So what? Do not take that trade? Why? It is AAA setup and the probability to hit that 0.3 is >90%.

Quoting here2there
A thread for sharing wisdom to help traders become the best they can be at trading.
So the wisdom is: be a master.
Observer effect
Quoting ryuryu
Sorry but how you can determine the length of the trend? It can last 6 month or 12 years, or 15 minutes. It is impossible to predict it. So what patience I need to have? And what for I have to wait? Fast enter, fast exit. That's all. Few bucks here, few there. "Trend is your friend" fairy tale is good for youtube or if you are teaching people picking top and bottoms from the past. In reality it is not possible to ride it. It is the same like RRR. For example today on GU it was 1:0.3 ratio. So what? Do not take that trade? Why? It is AAA setup and...
I use a top down approach to trading. I look to a higher timeframe for direction, such as a 3 Day chart or Weekly chart. I look to the Daily for a buy or sell signal (sometimes the 4HR), and then to the 4HR for entry in accordance with the trend. This is a proven strategy.

If the chart is showing a pattern of higher highs and higher lows, then I am looking to buy, and vice versa. If a strong signal shows up for a selling opportunity, then I will take that. But I don't lose sight of the main trend.

If I trade against the trend, it is not without good reason. Retracements occur. As much as possible, I would look to have some of that. But if I am trading against the trend, I know I need to be extra careful when doing so.

The trend can be easily seen on the following chart.

EURUSD 3 Day Chart
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD.png Size: 59 KB
You don't know because you don't ask.
The Truth about Stop Loss Hunting

Inserted Video
You don't know because you don't ask.
Quoting here2there
{quote} I use a top down approach to trading. I look to a higher timeframe for direction, such as a 3 Day chart or Weekly chart. I look to the Daily for a buy or sell signal (sometimes the 4HR), and then to the 4HR for entry in accordance with the trend. This is a proven strategy. If the chart is showing a pattern of higher highs and higher lows, then I am looking to buy, and vice versa. If a strong signal shows up for a selling opportunity, then I will take that. But I don't lose sight of the main trend. If I trade against the trend, it is not...
There are indicators, volume etc... on your chart so what's your rule to clearly define the trend?
Thanks for your contribution.
Quoting Merka
{quote} There are indicators, volume etc... on your chart so what's your rule to clearly define the trend? Thanks for your contribution.
The Volume Profile indicator you saw on the previous image is not important here.

The lines you see represent dynamic support and resistance. They also aid in providing a quick and easy way to identify the direction of the market for that timeframe. It is best to use them on a higher timeframe and trade from a lower timeframe in accordance to the direction they give.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD1.png Size: 72 KB

Alternatively, you can use an MTF Moving average indicator for MT4. I recommend setting up an 8 period EMA for the Weekly. You may also do the same for the Daily and the Monthly. This will clearly show the direction of the market on the Daily and 4HR chart, while also providing you with key levels of dynamic support and resistance. It can also be used for stop loss placement, especially if you desire to trail your stops.

Here is the indicator I use for this. Note: it also has a button that you can enable to hide the lines when you so desire.
Attached File(s)
File Type: ex4 MA_MTF_x3_wBtn.ex4   44 KB | 202 downloads

A trend can be determined by a consistent pattern of price making higher highs and lower highs(Bullish) or lower highs and lower lows(Bearish). See colored boxes for an example on image below.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD2.png Size: 72 KB
You don't know because you don't ask.
Indeed, improvement involves practice. There is a place for demo trading. But keep in mind that development of a winning strategy could take a long time. Sometimes years. Waiting years to develop a winning strategy before using real money is unacceptable to me. There is no such thing as a perfect strategy. But there are winning strategies.

One important aspect of a winning strategy involves overcoming psychological barriers, such as fear and greed. You can't learn this from demo trading, but only when you have something to lose. When you are in a position to risk losing real money.

If you don't have a large account, and you are concerned about losing money, then don't trade like you have a large account. Limit your risk while you are learning to better yourself as a trader. There is no shame in trading 0.01 lots or less if your broker allows it.

In time, your strategy will improve and you will have more confidence to risk more. There's no hurry. Take your time. Develop your skill, and learn to become a profitable trader. When you lose a trade, take a look at what happened and ask yourself what went wrong. What could you have done to avoid losing? If you win, then also ask yourself what you could have reasonably done to walk away with more profit. Question yourself. It's an important part of learning how to better yourself.

If you aren't willing to take risks, then trading is not for you.
You don't know because you don't ask.
Quoting here2there
{quote} The Volume Profile indicator you saw on the previous image is not important here. The lines you see represent dynamic support and resistance. They also aid in providing a quick and easy way to identify the direction of the market for that timeframe. It is best to use them on a higher timeframe and trade from a lower timeframe in accordance to the direction they give. {image} Alternatively, you can use an MTF Moving average indicator for MT4. I recommend setting up...
Thanks
  • Post #11
  • Quote
  • Edited 7:06pm Jun 7, 2021 6:56pm | Edited 7:06pm
A trader's greatest asset is his or her ability to understand price action. Fundamental Analysis is important, but not as important as Technical Analysis. You don't have to go deep in understanding the technicalities of trading. Mastering the basics of Technical Analysis is enough to turn a person into a profitable trader.

Don't be fooled by people who tell you technicals don't matter. Technicals do matter. It's the technicals that aid a trader in making good trading decisions.

Inserted Video
You don't know because you don't ask.
Quoting StanGun
Seems like those are some useful links. But would you mind if I ask (albeit a little stupid, I guess lol) what golden nuggets mean? Is that a reference to something? I'm still learning a lot about the English language so this may well be beyond my comprehension. Thank you!
dictionary.com
Attached Image (click to enlarge)
Click to Enlarge Name: GN.png Size: 33 KB
You don't know because you don't ask.
When someone say nuggets I see McDonald’s
Observer effect
Quoting ryuryu
When someone say nuggets I see McDonald’s
But is it real chicken?
You don't know because you don't ask.
  • Post #15
  • Quote
  • Last Post: Jun 9, 2021 1:57pm Jun 9, 2021 1:57pm
Never place a trade without a trading plan. Whether you win or lose, at least you can walk away saying you had justifiable reasons for buying or selling, and that you stuck with your plan.

How can you discover what works or doesn't work for you without a trading plan? How can you figure out what you need to improve about yourself as a trader if you don't have a plan to reveal your strengths and weakness? A trading plan is needed!

Discipline is vital to the success of a trader. You can't develop discipline without a plan. Consistently profitable traders are disciplined traders. Create a trading plan. Stick with it. Make improvements to it where needed. Be a disciplined trader!
You don't know because you don't ask.
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