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Three Reasons Why Most Traders FailThree Reasons Why Most Traders Fail Hello traders, I'm back with another educational post after receiving a lot of positive feedback. Today I'm going to break down three reasons why most traders fail! Traders Fail?! Yes most do, it is believed over 90% of new traders fail (this is an ongoing debate) but why is that? I personally believe it comes down to these three reasons. 1. Trading without a plan The very first step in achieving success is to create and follow a trading plan , one that is specific to your personality, lifestyle and goals. …BUT Many new traders try to rush the process and simply do not plan for success. “If you fail to plan, you are planning to fail”. - Benjamin Franklin A successful trader works within a well-structured plan, just like a business. Every plan should include trading related goals, a trading strategy and risk management rules. You need to be extremely disciplined when trading and follow your trading plan down to a T. 2. Emotionally Dictated Trading As you may know 90% of trading is purely psychological and I firmly believe this is the main reason why so many traders fail. Allowing adrenaline, fear, elation or greed to compromise their analytical ability. Traders who make emotional based decisions show indecisiveness, close positions too early and do not follow their trading plan ... *FACE PALM* Experiencing a consecutive series of losing positions will test your patience and confidence. Many traders will never overcome their inherent emotional biases, therefor you should seek to understand the range of emotions you may experience as an investor and how it affects your interactions within the market. You can learn what emotions you may face by checking out my idea "The 14 Stages of Investor Emotions". 3. Over Sizing Positions Traders should put as much focus on risk and money management as they do on developing strategy. Over sizing positions is nothing new, I see it all of the time with new and amateur traders. They cannot help themselves and want to trade big, they want the lottery win! ...BUT As you all know seeking out a lottery win in the forex market ends in disaster, accounts end up blown and dreams shattered. At this point many individuals give up and decide trading isn't for them or it doesn't work. The most effective way to deal with this problem is to lower the leverage and risk a maximum of 2% per trade. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
1
DXY - Price StructureDuring November 2016 the U.S Dollar broke out and closed above an extremely important resistance level and since then price has returned to that exact level, raising a lot of questions in terms of analysis going forward. Straight away you can see price was been stuck in consolidation since the beginning of 2015. Testing support and resistance multiple times within that 2 year time period, struggling to breakout until November! Now that we are trading above the resistance level and 200 EMA I would consider a bullish U.S Dollar short term... Pay close attention to this price structure throughout 2017.
TVC:DXY
by LewisGlasgow
4
A Simple Lesson in Risk ManagementUtilising a Risk to Reward Ratio How many of you obsess over an 80% profitability rate? You may feel the need to be right all the time and cannot accept a large amount of losing trades. OR You may think in order to become a profitable trader you need to win more than you lose. Well it's time to put that aside. You do not need to have a high profit/loss ratio or profitability rate to become a profitable trader, you can be right just 50% of the time (as shown on the chart) and still make an excellent profit by utilising a strict risk to reward ratio when trading. You can actually have a profitability rate of 40% with a 1:2 risk to reward ratio and still be in profit! The higher your risk to reward ratio the less you need to be right, many professionals use a minimum of 1:3 meaning they will risk 100 pips to make 300 pips. I personally use a minimum risk to reward ratio of 1:2... But in order for you to do the same, it has to align with your trading strategy. Do not set unrealistic profit targets in which you will not achieve! To round off this post I truly hope this explained the positive effects of applying a strict risk to reward ratio in your own trading. I am available via private message for any questions you may have. Here's to your success!!!
Education
by LewisGlasgow
17
AUD/NZD - Bullish Bat + Bearish Bat + TrendlinesHope everyone had a great weekend! Marks are about to open and I am PUMPED! Just now, we are looking at the AUD/NZD on the 4h chart. I have targeted strong trendiness in the market along with TWO bat patterns! The bullish bat has just finished completing at the end of last week. Looking at the bigger picture, price points in the bullish bat compliment a much larger bearish bat that we can look to for a completion in the days to come. Some might argue that some of the price points on these patterns are not spot on, however, the trend lines I have marked on the chart compliment the patterns shown, adding more confirmation to the prediction in price movements. The measurements for a valid bat pattern are detailed below. B: 0.382 - 0.50 C: 0.382 - 0.886 D: 1.618 - 2.618 Final X to D: 0.886
by cdschultheis15
10 Rules of Successful Trading10 Rules of Successful Trading I personally feel these are the 10 most important rules to follow, especially as a beginner in order to become a consistently profitable trader. You can refer back to these rules whenever you feel lost or confused about what’s going wrong with your trading. 1. Stick to one strategy, and master it. 2. Plan your trade, trade your plan. 3. Never trade without stops and limits. 4. Record, journal and review your trades. 5. Find a mentor. 6. Don't let your emotions dictate your trading. 7. Never risk more than 1-2% of your account. 8. Accept that losses will occur. 9. Don't focus on the money, focus on the trade. 10. Be patient, be consistent, be disciplined. Here's to your success!!!
Education
by LewisGlasgow
10
How to Trade the Head and Shoulders PatternHow to Trade the Head and Shoulders Pattern Hello traders, following up from my previous educational post I received several requests via private message for my take on the Head and Shoulders pattern. Featured on the chart is an illustration of a complete Head and Shoulders pattern including the rules I personally use to trade it. This is an easily identifiable pattern which can be traded across various timeframes which means it can be used by day traders, swing traders or even position traders. Why the Head and Shoulders pattern? It has an excellent risk:reward Appears on all timeframes and markets Easy to remember and find It has a precise entry, stop loss and take profit This formation is mainly seen at market tops. It is rarely perfect in appearance and you may need a good eye to spot one (check my head and shoulder trading ideas for an example). You can draw this pattern by using the TradingView tool found on the chart section named "Head & Shoulders" or by using trendlines. From personal experience the best performing Head and Shoulders pattern will have a right shoulder that is a 0.618 retracement of the head. The correct way to trade this pattern is to wait until the entire pattern has formed, then once price closes below the neckline... You can enter your position :) To round off this post I truly hope this explained how to trade the Head and Shoulders pattern so you can use this for your own trading. I am available via private message for any questions you may have.
Education
by LewisGlasgow
3
The 14 Stages of Investor Emotions"Master your emotions and you'll master the market" Hello traders, after receiving a lot of positive feedback from my TradingView educational posts I thought today I would break down a subject on trading psychology with the 14 stages of investor emotions. Learning how market cycles operate can be extremely beneficial to your trading, understanding the true influence of fear and greed. But... Controlling your emotions within the market is your main 'personal' objective, becoming an emotionless trader. It's what we're all told from day one right? 90% of trading is purely psychology. It is the main reason why so many traders fail as they let their trading become over-ruled by their emotions, thus making irrational decisions. Many traders will never overcome their inherent emotional biases, therefor you should seek to understand the range of emotions we may experience as investors and how it affects our interactions within the market. 1. Optimism: A positive outlook encourages us about the future, leading us to buy assets. 2. Excitement: Having seen some of our initial ideas work, we begin considering what our market success could allow us to accomplish. 3. Thrill: At this point we investors cannot believe our success and begin to comment on how smart we are. 4. Euphoria: This marks the point of maximum financial risk. Having seen every decision result in quick, easy profits, we begin to ignore risk and expect every trade to become profitable. 5. Anxiety: For the first time the market moves against us. Having never stared at unrealised losses, we tell ourselves we are long-term investors and that all our ideas will eventually work. 6. Denial: When markets have not rebounded, yet we do not know how to respond, we begin denying that we made poor choices. Our "long-term" view now shortens to a near-term hope of an improvement. 7. Fear: The market realities become confusing. We believe our positions in the market will never move in our favour. 8. Desperation: Not knowing how to act, we grasp at any idea that will allow us to get back to breakeven. 9. Panic: Having exhausted all ideas, we are at a loss for what to do next. 10. Capitulation: Deciding our assets will never increase again, we close all of our positions to avoid any future losses. 11. Despondency: After exiting the markets we do not want to trade ever again. This often marks the moment of greatest financial opportunity. 12. Depression: Not knowing how we could be so foolish, we are left trying to understand our actions. 13. Hope: Eventually we return to the realisation that markets move in cycles, and we begin looking for our next opportunity. 14. Relief: Having bought an asset that turned profitable, we renew our faith that there is a future in investing. To round off this post I truly hope this provided a more in-depth insight to the emotions which can occur during trading. I am available via private message for any questions you may have.
Education
by LewisGlasgow
33
NZD/JPY - Bearish 5-0 & Bearish Deep CrabI hope everyone had a great weekend! The markets are looking as good as ever! Today, to start off the week, we have NZD/JPY on the 1W chart. This is looking great for the long term! In the up turn of the market, we have been hitting some resistance the past couple weeks. At this point, we are seeing the completion of a BULLISH 5-0 and a BULLISH DEEP CRAB pattern. With the two harmonic patterns completing at this point, along with the market hitting the resistance of this current trend line, we can expect a HUGE price reversal VERY SOON. This will be a good one to hold onto for the weeks to come! The measurements for a valid 5-0 pattern are detailed below. B: 1.13 - 1.618 C: 1.618 - 2.24 D: 0.50 The measurements for a valid deep crab pattern are detailed below. B: 0.886 C: 0.382 - 0.886 D: 2.0 - 3.618 Final X to D: 1.618
Short
by cdschultheis15
1
AUD/USD - BEARISH 5-0 ----TITLE CORRECTIONLots of opportunity on the charts to start off they year! Here at Six Figure Capital, we are all taking advantage of all the opportunities!!! Today, we are looking at AUD/USD on the 4h chart. Price seems to be trending down, and within the down trend a BEARISH 5-0 seems to have completed in the 0.7360 zone. Throughout my studies of this pattern, it seems to be very common for price to hit the 0.5 mark and then flirt between the 0.5 and 0.618 before the price reversal actually hits. When price breaks below the 0.5 mark, then we can look to enter a position. Referring to @Lewglasgow analysis of this pattern, price is also hitting a trend line in the down trend of this pair. Now, we just play the waiting game... The measurements for a valid 5-0 pattern are detailed below. B: 1.13 - 1.618 C: 1.618 - 2.24 D: 0.50
Short
by cdschultheis15
AUD/USD - Bullish 5-0Lots of opportunity on the charts to start off they year! Here at Six Figure Capital, we are all taking advantage of all the opportunities!!! Today, we are looking at AUD/USD on the 4h chart. Price seems to be trending down, and within the down trend a bullish 5-0 seems to have completed in the 0.7360 zone. Throughout my studies of this pattern, it seems to be very common for price to hit the 0.5 mark and then flirt between the 0.5 and 0.618 before the price reversal actually hits. Referring to @Lewglasgow analysis of this pattern, price is also hitting a trend line in the down trend of this pair. Now, we just play the waiting game... The measurements for a valid 5-0 pattern are detailed below. B: 1.13 - 1.618 C: 1.618 - 2.24 D: 0.50
Short
by cdschultheis15
2
NZD/USD - Bullish Bat + Descending Channel **ANOTHER ONE**WE GOT ANOTHER ONE! Today, we have the NZD/USD -1.02% on the 1W chart. It looks like we have potential for ANOTHER bullish bat! LOTS of confirmation on this analysis! The pattern is forming within the ascending and descending channel . For all you fundamentals out there, the U.S. will be raising rates 3 more times this year. That means price will be going down, which explains the descending channel The measurements for a valid bat pattern are detailed below. B: 0.382 - 0.50 C: 0.382 - 0.886 D: 1.618 - 2.618 Final X to D: 0.886
Long
by cdschultheis15
NZD/USD - Bullish Bat + Descending ChannelHello, everyone! Happy New Year!!! Coming into the new year is looking good! So much potential in the markets!!! Today, we have the NZD/USD on the 1D chart. Here in the months to come, it looks like we have a bullish bat pattern forming. LOTS of confirmation on this analysis! The pattern is hitting critical points on trend lines within the ascending and descending channel. For all you fundamentals out there, the U.S. will be raising rates 3 more times this year. That means price will be going down, which explains the descending channel The measurements for a valid bat pattern are detailed below. B: 0.382 - 0.50 C: 0.382 - 0.886 D: 1.618 - 2.618 Final X to D: 0.886
Long
by cdschultheis15
CAD/CHF Bullish 5-0 400+ pips!!!Here we have the CAD/CHF on the 1D chart. We are looking for price to hit and reverse at either C point, then touch at the respective D point to complete the bullish 5-0 pattern. It should be noted that price has the potential to bounce in between either C point. In that case, we can adjust our D point accordingly. This one is looking good for the weeks ahead! Definitely one to keep an eye on! The measurements for a valid 5-0 pattern are detailed below. B: 1.13 - 1.618 C: 1.618 - 2.24 D: 0.50 I would really appreciate any feedback on this trade. Other ideas are more than welcome as well! Comment below! vv
Long
by cdschultheis15
USD/CAD - Bullish Crab 200+ move!!!Hope everyone has a great weekend! Weekends are always a good time to analyze the markets, along with preparing a game plan for the week to come! Today, we have USD/CAD on the 4H chart. Price has just broken the ascending channel and we have the potential for a bullish crab pattern. If price does reverse at D point, this could end up being a 200+ trade!! The measurements for a valid crab pattern are detailed below. B: 0.382 - 0.618 C: 0.382 - 0.886 D: 2.618 - 3.618 Final X to D: 1.618 I would really appreciate any feedback on this trade. Other ideas are more than welcome as well! Comment below! vv
Long
by cdschultheis15
Support & Resistance for Beginners Support and resistance acts as a barrier from preventing the price of an asset from getting pushed in a certain direction. It is one of the more difficult concepts within Technical Analysis, there are various ways to identify these price levels, and even after identified, there are plenty of ways of integrating and trading with them. Today I'm going to simplify it for all of the beginners on the platform (please remember to read the note provided). What is support? Support is the price level at which buying is thought to be strong enough to prevent the price from declining further. What is resistance? Resistance is the price level at which selling is thought to be strong enough to prevent the price from rising further. The most common way to trade it is breakouts, this is when you buy or sell whenever price passes through a support or resistance level. As you may know support and resistance levels won't hold forever even though they can hold for a long time but the reality is... Eventually they will break and as a result of a breakout the moves can be really powerful. However there are some implications with this, many traders get in too quick. You may be thinking what should I be waiting for? Validation. As a key pointer wait until the candlestick has closed above resistance or below support until entering the trade, this way it will validate the price move up or down.
TVC:USOILEducation
by LewisGlasgow
9