Dont Trade The News - Trade Price Action
Many traders get stuck in the trap of trading the news by over analyzing every single economic report that comes out and trying to guess what the market will do in response to it. It is very easy to develop this bad habit if you do not have a clear understanding of why trading the news is dangerous and essentially pointless. If you are basing your trading decisions off what you think will happen after an economic report comes out than you are just guessing and really have no better chance at a winning trade than if you were to flip a coin. Let’s discuss the reasons why trading the news can be one of the worst things you can do for your trading account.
First off, markets move on expectations of future events, often when the actual event or news release happens the move is either over or ready to come roaring back the opposite direction that the news report implied. This is why you may have heard the term “buy the rumor sell the fact”. However, it is very easy to get sucked into the trap of fixating yourself on one specific economic report that looks like it could really move the market in a certain direction. Once you convince yourself that what you expect to happen based on a news event is what most likely will happen, you have basically dug your own grave for your trading account.
You can avoid this entire trading pitfall of trading the news by remembering two things; price action reflects everything that is happening in the markets, and prices are contrarian. Price action analysis will show you the likely direction the market is expecting before any economic report is released. My forex trading course will give you specific setups and a unique way of looking at the market via price action analysis that will allow you to make your trading decisions based off the real and solid data reflected on the chart. Price action contains all the information you need to be a successful forex trader. You do not need to over analyze every single economic indicator and pull your hair out with frustration by trying to figure out what will happen next. The only thing you need is price action analysis. I have been consistently profiting from price action for years without even so much as a thought about economic releases.
Prices in any market are inherently contrarian. This means that usually price will do the opposite of what it appears should logically happen next. This is why many beginning traders have so much trouble and lose all their money and then some. You really need to understand that often when it looks safe to enter a trade, or a market is breaking to new highs or new lows, this is the exact time the amateurs are getting on board because they feel safe about entering. They are trading off of emotion because have they have no real game plan or trading strategy. Price action will tip you off when a move has run its course or when the dominant trend is ready to resume. There are specific price action strategies that I demonstrate in my forex trading course that will give you the edge you need to survive and thrive in the contrarian world of forex trading. I can tell you from personal experience if you try to trade based off emotion with no real education in price action you will end up buying tops and selling bottoms. Markets are by nature extremely contrarian and the only real way to read what the charts are telling you is by analyzing and developing a trading method around price action.
My trading course is designed to give you the knowledge you need to trade the markets. We have all heard the acronym KISS; keep it simple stupid, well this is extremely relevant and applicable to trading. There is so much misinformation out there and so many people trying to sell you crap that you do not need to be a successful trader that it’s no wonder most people lose all their trading money and end up quitting. Price action analysis will be you’re inside guide to the markets, often over looked and under used, it is really all you need to consistently profit in the markets. Stop losing your money, turn off CNBC, and stop giving yourself analysis paralysis by trying to keep up with every little economic news release. Instead, get yourself a solid education in price action analysis and it is all you will ever need to unlock your potential in the market.
Thursday, December 24, 2009
Price Action - Price Action Explained
What is price action?
Price action is the behavior of price of a specific currency, commodity, stock or other trading instrument over a specified period of time. Price action analysis deals with the predictive capacity of specific price patterns that occur on a semi-regular basis over a given period of time. Certain price patterns re-occur in the markets and can be used to develop a rule-based system.
Price action analysis allows you to see exactly what is happening in any given market. Price action is the visual trail of the supply and demand situation of the given trading instrument over a specified period of time. Price reflects the expectations and beliefs of all market players; the bigger more informed players obviously leave a more noticeable trail, so by analyzing the behavior of price over a specified period of time we can make an educated guess as to what those “in the know” are doing in the markets.
As retail forex traders, our goal is to jump aboard the price trail left by bigger players who have the power to move the market. By building our price action trading system around a few time tested and repetitive setups we give our selves the best shot at riding the momentum of the market to consistent profits. There are certain things that happen over and over in the markets as a function of their very nature.
Most people who have traded actively for any length of time will attest to the fact that trading is about 80 or 90 percent psychological and 10 to 20 percent method. Most traders start off by thinking it is the other way around and thus end up losing money and finding themselves losing what seems like a constant fight against the market. What price action analysis provides for you is a simple, straight forward, and most of all, effective method that allows you to focus your energy and time on the more important psychological side of trading. If we as technical traders are primarily basing all of our trading ideas off of charts then why would we confuse and frustrate ourselves with anything but what the chart is made of which is of course price action?
In order to master the markets we need to root our methods of trading in consistency. In fact, all of our trading activities need to be consistent if we are to truly be consistently profitable traders. Price action analysis gives you the know how to recognize specific price patterns that happen over and over in the market. This gives you the key to consistency that so many traders desire yet so few ever attain. Excellence in any profession is most often accompanied by great training and mentoring. To learn consistently profitable price action trading strategies you should learn from someone who trades with the exact same methods they teach. So get yourself a sold education in specific price action patterns and I promise that you will be well on the path to trading consistently.
Price action is the behavior of price of a specific currency, commodity, stock or other trading instrument over a specified period of time. Price action analysis deals with the predictive capacity of specific price patterns that occur on a semi-regular basis over a given period of time. Certain price patterns re-occur in the markets and can be used to develop a rule-based system.
Price action analysis allows you to see exactly what is happening in any given market. Price action is the visual trail of the supply and demand situation of the given trading instrument over a specified period of time. Price reflects the expectations and beliefs of all market players; the bigger more informed players obviously leave a more noticeable trail, so by analyzing the behavior of price over a specified period of time we can make an educated guess as to what those “in the know” are doing in the markets.
As retail forex traders, our goal is to jump aboard the price trail left by bigger players who have the power to move the market. By building our price action trading system around a few time tested and repetitive setups we give our selves the best shot at riding the momentum of the market to consistent profits. There are certain things that happen over and over in the markets as a function of their very nature.
Most people who have traded actively for any length of time will attest to the fact that trading is about 80 or 90 percent psychological and 10 to 20 percent method. Most traders start off by thinking it is the other way around and thus end up losing money and finding themselves losing what seems like a constant fight against the market. What price action analysis provides for you is a simple, straight forward, and most of all, effective method that allows you to focus your energy and time on the more important psychological side of trading. If we as technical traders are primarily basing all of our trading ideas off of charts then why would we confuse and frustrate ourselves with anything but what the chart is made of which is of course price action?
In order to master the markets we need to root our methods of trading in consistency. In fact, all of our trading activities need to be consistent if we are to truly be consistently profitable traders. Price action analysis gives you the know how to recognize specific price patterns that happen over and over in the market. This gives you the key to consistency that so many traders desire yet so few ever attain. Excellence in any profession is most often accompanied by great training and mentoring. To learn consistently profitable price action trading strategies you should learn from someone who trades with the exact same methods they teach. So get yourself a sold education in specific price action patterns and I promise that you will be well on the path to trading consistently.
Working
Hehehe.....working lei, same for tomorrow X'mas day and next week friday...which is on New Year day. That is life. I have no problem with that frankly since I don't have much of a life btw to bitch about. So...working is a norm to me be it on Chinese New Year day itself...no problem since both my parents are gone and the children also big now and they have plans of their own. Wife....same same as me, no life to talk about. Most likely to find us sitting and watching Korean drama and eating tit-bits hehehe.
To those....having a ball of a time during these busy time, cheers....do not over drink and have fun!
To those....having a ball of a time during these busy time, cheers....do not over drink and have fun!
Wednesday, December 23, 2009
How to Get Rich in 10-15 Years
What Does it Mean to be Wealthy?
Being wealthy has nothing to do with a set dollar amount or what car you drive or which labels you sport.
If the income and/or returns of your investments are more than twice the amount of your annual living costs, then you, my friend, are wealthy.
If you own a business and make millions of dollars, but the business will fail if you are not in it, then all you have is a very highly paid job.
Real wealth is about securing a stream of income for yourself that consistently throws off returns that are at least double your annual living expenses.
A Big Salary Doesn't Automatically Make You Rich
Getting rich takes a lot more than just securing a big income. Many who aspire to be multimillionaires stumble at this point.
They work hard, get promoted or build their businesses and start earning large amounts of money. but these "would-be" millionaires fail to fulfill their true wealth-building potential at this point.
You see, they get seduced by the illusions of wealth as portrayed by the aforementioned luxury-goods marketing machine that they see in magazines and on television.
Don't get me wrong; if you have a large income, you have a huge leg up over the person earning an average income. But if the odds hold true, then you are could blow that big advantage by overspending.
Are You an Aspirational Spender?
Aspirational spenders are above-average-income earners who yearn to possess the lifestyle of the truly wealthy but do not earn enough money to do so.
Instead, they employ credit card and home equity loan debt to acquire the trappings of wealth -- fancy cars, vacation homes, designer purses, designer suits etc.. They actively pretend (self-delude is a better word) that they are rich. This becomes an all-consuming pantomime of self-delusion, as more and more money is required to fuel this facade of wealth.
The aspirational spender typically earns between $100,000 and $150,000 per year. This is 2 1/2 to 4 times greater than the national average income.
In fact, it is more than enough of an income to get wealthy on within a 10-15 year period.
But these people never do develop real wealth.
Their incomes continue to grow, and they make terrific employees and are usually very good at their jobs, but their desires are always one step ahead of their income.
The Key to Developing Real Wealth
Many years ago, I read a book titled "The Richest Man in Babylon" by George S. Clason. In that book, I learned that I would never be able to satiate every single material desire that I have.
So, instead of trying to fulfill as many of my "wants" as possible, I started getting very picky about which "wants" I chose to indulge ... which "wants" I chose to postpone and which "wants" I chose to abandon.
Once I fully accepted that I'll never have every single thing that I may wish to possess, it was like a great weight was lifted off my shoulders; it was very freeing. It also allowed me to better appreciate what I already possessed.
But the most important thing it did was get me off the spending carousel and onto the road to living beneath my means ... and start saving and investing, which is the real route to obtaining large-scale sustainable wealth.
Your Desired Future is Just a Decade Away
Wealth can be created from any starting level; it is not income-dependent. However, in this article I want to highlight how much easier it is to get rich if you already have a large income.
It really doesn't matter which vehicle you use to create your wealth -- whether it be real estate, stocks, commodities, options or your own business. Any success that you find in any investment endeavor will be meaningless if you continue to spend more than you earn.
It is only when you start living beneath your means that you will truly be on the road to real wealth-creation.
If you earn over $150,000 a year, you have absolutely no excuse for not being rich!
What's the secret? All you have to do is live on 30% of your gross income and invest the rest.
Your 15-Year Plan to a Lifetime of Riches
At $150,000, assuming a 35% tax rate, your take-home pay would be a shade under $100,000.
If you want to get rich, start by simply living on $50,000 and investing the other $50,000. Do that for 10-15 years and you will be rich, period.
If you can average just a 12% compounded annual growth rate over 10 years, you'll have a shade under a million dollars.
Over 15 years, you'll have over $2 million -- two million dollars that is growing at 12% per year is more than enough money to last a lifetime.
That's it; pretty simple right?
Are You Ready to Sacrifice What You Want Now for What You'll Need Later?
So, what is the real way to measure personal wealth? The yardstick is whether our investment income covers our living expenses.
If it does, then you are well-off. If your investment income is 2x or more greater than your annual income, then you are well and truly rich!
I know I have now lost 99% of you. The thought of the relative deprivation that such living would require is probably too difficult for many of you to face squarely.
And that's OK; not everyone possesses the necessary discipline that it takes to acquire true wealth.
Don't beat yourself up about it. But, by the same token, don't fool yourself into thinking that you are rich just because you have a big salary, a shiny Benz and a nice sprawling McMansion.
We both know you are one pink slip away from financial Armageddon.
I'm here to tell you that you don't have to live that way anymore.
Downsizing is only painful when you are not emotionally prepared for it. Once you make the decision to be "for real" rich instead of "pretend" rich, the decision to downsize instead of "super-size" will be an easy one.
Downsizing Your Spending = Super-Sizing Your Wealth
Don't squander the opportunity that you've been given by being blessed with the ability to earn a large income. You have a huge edge over every other person earning less than you. You blow that edge when you over-spend and under-save.
Remember -- even if you win the lottery or increase your income dramatically, but refuse to spend less than you earn and refuse to save and invest surplus capital -- you will never be rich.
You will never experience true financial freedom, and you will always be at the mercy of your spending habits, your employer and the economy.
It's always a good time to re-evaluate your financial plan, but especially with the dawn of a new decade just around the corner, there's no time like the present to plan to become a millionaire. You'll thank yourself in 2020!
Being wealthy has nothing to do with a set dollar amount or what car you drive or which labels you sport.
If the income and/or returns of your investments are more than twice the amount of your annual living costs, then you, my friend, are wealthy.
If you own a business and make millions of dollars, but the business will fail if you are not in it, then all you have is a very highly paid job.
Real wealth is about securing a stream of income for yourself that consistently throws off returns that are at least double your annual living expenses.
A Big Salary Doesn't Automatically Make You Rich
Getting rich takes a lot more than just securing a big income. Many who aspire to be multimillionaires stumble at this point.
They work hard, get promoted or build their businesses and start earning large amounts of money. but these "would-be" millionaires fail to fulfill their true wealth-building potential at this point.
You see, they get seduced by the illusions of wealth as portrayed by the aforementioned luxury-goods marketing machine that they see in magazines and on television.
Don't get me wrong; if you have a large income, you have a huge leg up over the person earning an average income. But if the odds hold true, then you are could blow that big advantage by overspending.
Are You an Aspirational Spender?
Aspirational spenders are above-average-income earners who yearn to possess the lifestyle of the truly wealthy but do not earn enough money to do so.
Instead, they employ credit card and home equity loan debt to acquire the trappings of wealth -- fancy cars, vacation homes, designer purses, designer suits etc.. They actively pretend (self-delude is a better word) that they are rich. This becomes an all-consuming pantomime of self-delusion, as more and more money is required to fuel this facade of wealth.
The aspirational spender typically earns between $100,000 and $150,000 per year. This is 2 1/2 to 4 times greater than the national average income.
In fact, it is more than enough of an income to get wealthy on within a 10-15 year period.
But these people never do develop real wealth.
Their incomes continue to grow, and they make terrific employees and are usually very good at their jobs, but their desires are always one step ahead of their income.
The Key to Developing Real Wealth
Many years ago, I read a book titled "The Richest Man in Babylon" by George S. Clason. In that book, I learned that I would never be able to satiate every single material desire that I have.
So, instead of trying to fulfill as many of my "wants" as possible, I started getting very picky about which "wants" I chose to indulge ... which "wants" I chose to postpone and which "wants" I chose to abandon.
Once I fully accepted that I'll never have every single thing that I may wish to possess, it was like a great weight was lifted off my shoulders; it was very freeing. It also allowed me to better appreciate what I already possessed.
But the most important thing it did was get me off the spending carousel and onto the road to living beneath my means ... and start saving and investing, which is the real route to obtaining large-scale sustainable wealth.
Your Desired Future is Just a Decade Away
Wealth can be created from any starting level; it is not income-dependent. However, in this article I want to highlight how much easier it is to get rich if you already have a large income.
It really doesn't matter which vehicle you use to create your wealth -- whether it be real estate, stocks, commodities, options or your own business. Any success that you find in any investment endeavor will be meaningless if you continue to spend more than you earn.
It is only when you start living beneath your means that you will truly be on the road to real wealth-creation.
If you earn over $150,000 a year, you have absolutely no excuse for not being rich!
What's the secret? All you have to do is live on 30% of your gross income and invest the rest.
Your 15-Year Plan to a Lifetime of Riches
At $150,000, assuming a 35% tax rate, your take-home pay would be a shade under $100,000.
If you want to get rich, start by simply living on $50,000 and investing the other $50,000. Do that for 10-15 years and you will be rich, period.
If you can average just a 12% compounded annual growth rate over 10 years, you'll have a shade under a million dollars.
Over 15 years, you'll have over $2 million -- two million dollars that is growing at 12% per year is more than enough money to last a lifetime.
That's it; pretty simple right?
Are You Ready to Sacrifice What You Want Now for What You'll Need Later?
So, what is the real way to measure personal wealth? The yardstick is whether our investment income covers our living expenses.
If it does, then you are well-off. If your investment income is 2x or more greater than your annual income, then you are well and truly rich!
I know I have now lost 99% of you. The thought of the relative deprivation that such living would require is probably too difficult for many of you to face squarely.
And that's OK; not everyone possesses the necessary discipline that it takes to acquire true wealth.
Don't beat yourself up about it. But, by the same token, don't fool yourself into thinking that you are rich just because you have a big salary, a shiny Benz and a nice sprawling McMansion.
We both know you are one pink slip away from financial Armageddon.
I'm here to tell you that you don't have to live that way anymore.
Downsizing is only painful when you are not emotionally prepared for it. Once you make the decision to be "for real" rich instead of "pretend" rich, the decision to downsize instead of "super-size" will be an easy one.
Downsizing Your Spending = Super-Sizing Your Wealth
Don't squander the opportunity that you've been given by being blessed with the ability to earn a large income. You have a huge edge over every other person earning less than you. You blow that edge when you over-spend and under-save.
Remember -- even if you win the lottery or increase your income dramatically, but refuse to spend less than you earn and refuse to save and invest surplus capital -- you will never be rich.
You will never experience true financial freedom, and you will always be at the mercy of your spending habits, your employer and the economy.
It's always a good time to re-evaluate your financial plan, but especially with the dawn of a new decade just around the corner, there's no time like the present to plan to become a millionaire. You'll thank yourself in 2020!
Saturday, December 19, 2009
Holiday period is coming
Well....I am happy for those lucky souls having fun and going oversea for their holiday, that is the way to go in life. But for me....well, maybe next year if things go as plan....I might also enjoy this period. Until then....I will just have to envy other people.
Since I have said that I shall treat my present place as my fun place esp the pools, sauna, gym, makan places and Bt Timah hill....so be it for now lor. Now also ramp-up time at work. Nothing to complain about...since at most I will be doing this for the next 9 mths before the whole place shut-down! Not likely there will be a last minute change of plan too. I might as well enjoy the time and work....together with the rest of the crew.
For the Forex and Stock trading thingy....no trading for Forex for the week but lost in the stocks esp HK stocks due to the fact that it is winding down for the year. I have no experience with the market there, the lucky thing was that I am just starting out as the bets were not too much....therefore same with the losses too.
4D....no luck too, anyway I have also cut down on it too. So it is manageable.
Looking forward to my bonus hehehe and the "return of my pay cut for Oct to Dec" that is 30% of my pay. Then....by Jan 2010, it is back to normal for my pay. Things are really looking great for the company too....the share price has gone from US$3+ to present US$17+. Hehehe....I still have some option shares left plus this year employee's one. Wow....should be a nice bonus in time for Chinese New Year if I sell them by then.
For the family....well, things are going on fine. All are in good health and busy with their own stuff. For the other thingy....well, I am already used to the idea it's in the past. So I shall let the sleeping dog rests....no point to rekindle the passion and whatever!
Since I have said that I shall treat my present place as my fun place esp the pools, sauna, gym, makan places and Bt Timah hill....so be it for now lor. Now also ramp-up time at work. Nothing to complain about...since at most I will be doing this for the next 9 mths before the whole place shut-down! Not likely there will be a last minute change of plan too. I might as well enjoy the time and work....together with the rest of the crew.
For the Forex and Stock trading thingy....no trading for Forex for the week but lost in the stocks esp HK stocks due to the fact that it is winding down for the year. I have no experience with the market there, the lucky thing was that I am just starting out as the bets were not too much....therefore same with the losses too.
4D....no luck too, anyway I have also cut down on it too. So it is manageable.
Looking forward to my bonus hehehe and the "return of my pay cut for Oct to Dec" that is 30% of my pay. Then....by Jan 2010, it is back to normal for my pay. Things are really looking great for the company too....the share price has gone from US$3+ to present US$17+. Hehehe....I still have some option shares left plus this year employee's one. Wow....should be a nice bonus in time for Chinese New Year if I sell them by then.
For the family....well, things are going on fine. All are in good health and busy with their own stuff. For the other thingy....well, I am already used to the idea it's in the past. So I shall let the sleeping dog rests....no point to rekindle the passion and whatever!
Friday, December 18, 2009
Seem like the Asian markets are having correction now
Yes....esp HK, SSE and Kospi are having a correction. People are taking out the money to park away from the markets. Esp the fund managers....and those who had already earned their keep for this year. They can close down for the year....to go on holiday with family since it's the school holiday time or just to relax at home.
Not having a great time for my trading....already suffer losses on over the past few days. Today....again already stopped out for all of my trades total 4 counters.
Not having a great time for my trading....already suffer losses on over the past few days. Today....again already stopped out for all of my trades total 4 counters.
Thursday, December 17, 2009
The story of the baby whale
Yes....I went to Waterloo Temple to pray pray and also to ask for guidance for my luck. Got a chaim see....No 2 and it was about the story of the baby whale.
POWER.....really understand what the story is all about esp in relationship with my stock / forex trading. How the baby whale is dependent on the mother whale and to better protect itself....it must swim in shallow water and not to venture too far out and away from the mother whale. Must always remember that since it's a baby, it has not enough experience to deal with dangers from other bigger fishes eg killer whales & sharks and men!!! esp from Japan hehehe!
In it....is the warning about losing money if doing any form of gambling /investment esp if have not proper understanding of the whole situation. And true....to it, immediately the Hong Kong stock market went south. In fact....I had time to react but I didn't do anything. In the end....I lost!
By today....I lost back what I made last week plus 20% more. Just in 2 days....lost a total of 28+% of my total funding. Well....at least, this made me realised that it is also possible to make the same if I do the right trade. One of my mistakes...was to open too many counters and that made it hard to monitor. The thing is....when the market turns down....even the good counters went down with it, yes...maybe in small %age. Same thing for up market....even rubbish stocks will go up too in bullish market.
Now that I understand this....I will do my trade accordingly to market condition for that day. Also to trade up to max 3 counters.....easily to monitor and to re-act accordingly to situation faster. Trading right is all about fast decision and no regret. In fact....if can trade with no emotion then, half the battle is won!
Now it's time back to the drawing board and to re-think what I should improve my trading better and to pick the right stock.
POWER.....really understand what the story is all about esp in relationship with my stock / forex trading. How the baby whale is dependent on the mother whale and to better protect itself....it must swim in shallow water and not to venture too far out and away from the mother whale. Must always remember that since it's a baby, it has not enough experience to deal with dangers from other bigger fishes eg killer whales & sharks and men!!! esp from Japan hehehe!
In it....is the warning about losing money if doing any form of gambling /investment esp if have not proper understanding of the whole situation. And true....to it, immediately the Hong Kong stock market went south. In fact....I had time to react but I didn't do anything. In the end....I lost!
By today....I lost back what I made last week plus 20% more. Just in 2 days....lost a total of 28+% of my total funding. Well....at least, this made me realised that it is also possible to make the same if I do the right trade. One of my mistakes...was to open too many counters and that made it hard to monitor. The thing is....when the market turns down....even the good counters went down with it, yes...maybe in small %age. Same thing for up market....even rubbish stocks will go up too in bullish market.
Now that I understand this....I will do my trade accordingly to market condition for that day. Also to trade up to max 3 counters.....easily to monitor and to re-act accordingly to situation faster. Trading right is all about fast decision and no regret. In fact....if can trade with no emotion then, half the battle is won!
Now it's time back to the drawing board and to re-think what I should improve my trading better and to pick the right stock.
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