As a result of several requests I have decided to offer a basic mentoring service designed to help you understand the basics of Support and Resistance and how to set up the charts.
I cannot offer a signal service as my style of trading is very discretionary but what I hope to do is set you on the road to a profitable future by teaching the most fundamental of all trading strategies.
As I use a combination of Skype and a screen sharing program there are no additional telephone costs involved for you during each lesson.
The course will involve initially 5 x 1-hour sessions over a period of one week. The time of each of these sessions will be set to suit your schedule but I would prefer that they take place in the evening (GMT) as that coincides with the quietest time in the market. However, you are free to choose the time that suits you best.
I realise that for many of you this may not be sufficient time to fully understand the important lessons that I teach and I am prepared to offer a maximum of three free follow-up lessons to answer any questions you may have. Should you require further help then you may choose to sign up for a second course at the same price.
The details of the course's structure are contained in a PDF and I am happy to answer any of your questions before you commit to any payments. If you would like to see this overview then please email me. You will find my email address in my profile.
I will not be offering group sessions at this time as I prefer working one-on-one with each student as this gives me the best opportunity of uninterrupted tuition, to each student's benefit.
Thursday 10 December 2009
Sunday 4 October 2009
Trading Trends inside Ranges
I mentioned about looking for trends in the previous post and I want to touch on that in this one. There are long-term trends and med- to short-term trends. Which of these you trade is a personal decision but I am convinced that unless you have taken a firm stance on where the market is moving, relative to the trade you're considering at this moment, the greater the likelihood that you may fail. My approach is quite simple; if I see the long- to medium-term charts in a pair are pointing up, I tend only to trade Long; if I see, in a different pair, the same type of charts pointing down, I tend only to trade Short. This way I feel I'm always swimming with the tide. Occasionally I will trade against the major trend but only if I can determine a reasonably defined range that offers the appearance of a strong move down to Support or up to Resistance.
The importance of choosing when to go Long and when to go Short - knowing if price is moving up to Resistance or down to Support - is key to survival. Many of you will trade your short -term charts with only a cursory look at, maybe, the next higher time frame (TF) or two. Even if you think that scalping is the way to go (and I don't), a proper understanding of how to apply S/R in higher TFs will benefit your current methods. Often, you will be in and out in seconds, maybe minutes, as you try and keep one step ahead of the market. How much easier your life would be if you knew you were taking a Sell signal as price was bouncing off Resistance in an overall downtrend.
Marking S/R isn't that hard; it just takes a bit of screen time and selectivity. The rewards are huge; I can promise you that once you have developed a feel for it, you will be able to mark up any chart in a matter of minutes. Here's a shortish video that will show you that looking back into the history of a chart can provide very strong clues as to where and when price might react at a certain point.
The one thing to be aware of is this: no Support/Resistance area, no Moving Average, no Trend line, no Fib level, no Oscillator nor any other indicator is infallible. They only show the Potential to provide you with a trade opportunity; at times of real stress in the market, price will blow straight through whatever lines you've marked on your chart. Even having said that it is amazing how the steepest fall in price will find a Support level somewhere; it just depends whether you are still in business to take advantage of it.
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Unfortunately, this video was too long to fit on YouTube but I hope it will show how history repeats itself, despite what you may hear to the contrary.
The importance of choosing when to go Long and when to go Short - knowing if price is moving up to Resistance or down to Support - is key to survival. Many of you will trade your short -term charts with only a cursory look at, maybe, the next higher time frame (TF) or two. Even if you think that scalping is the way to go (and I don't), a proper understanding of how to apply S/R in higher TFs will benefit your current methods. Often, you will be in and out in seconds, maybe minutes, as you try and keep one step ahead of the market. How much easier your life would be if you knew you were taking a Sell signal as price was bouncing off Resistance in an overall downtrend.
Marking S/R isn't that hard; it just takes a bit of screen time and selectivity. The rewards are huge; I can promise you that once you have developed a feel for it, you will be able to mark up any chart in a matter of minutes. Here's a shortish video that will show you that looking back into the history of a chart can provide very strong clues as to where and when price might react at a certain point.
The one thing to be aware of is this: no Support/Resistance area, no Moving Average, no Trend line, no Fib level, no Oscillator nor any other indicator is infallible. They only show the Potential to provide you with a trade opportunity; at times of real stress in the market, price will blow straight through whatever lines you've marked on your chart. Even having said that it is amazing how the steepest fall in price will find a Support level somewhere; it just depends whether you are still in business to take advantage of it.
----------
Unfortunately, this video was too long to fit on YouTube but I hope it will show how history repeats itself, despite what you may hear to the contrary.
Sunday 27 September 2009
What else is important, apart from Support & Resistance?
Another factor that comes into the trading equation is whether the pair or instrument you are looking at is in a trending phase or a consolidation phase. You will see various percentages spoken about this; some say that currencies will trend only 30% of the time so we'll stick with that. The actual numbers are irrelevant for S/R traders, because our aim is to make money whatever the chart is doing.
In fact, it is the ability to survive and make a profit during periods of consolidation that determines whether you will last as a trader, long term. New traders who do not understand the concept of S/R are, as a rule, entering Long (Buying) when price is just about to meet Resistance or going Short (Selling) when price is just about to meet Support. With the tight 10-15 pip stops that most use, it's no wonder that the continuous, rapid up-and-down movement typically seen at these significant points on any chart quickly eats away at their accounts.
Support & Resistance (S/R), on its own, can be a viable way of trading but the decision to go Long or Short becomes much easier when you have found a solid way to identify the dominant trend.
Every chart has a trend that should be obvious but I have noticed a tendency for new traders to focus too much on the immediate price action, typically on 5- or 10-minute charts, without the benefit of zooming out to see the big picture. For them, every Green candle/bar is an invitation to go Long and, conversely, every Red candle/bar is an invitation to go Short. Zooming out will give you at least the chance to spot whether you are trading against the dominant trend on your chart or with it.
In my experience, trades with the trend have a greater chance of success and the potential for a greater pip count. If I do trade against the trend then my profit targets are much closer and my stops closer. As a rule, I am a trend trader and rarely take trades which are trying to swim against the tide.
In fact, it is the ability to survive and make a profit during periods of consolidation that determines whether you will last as a trader, long term. New traders who do not understand the concept of S/R are, as a rule, entering Long (Buying) when price is just about to meet Resistance or going Short (Selling) when price is just about to meet Support. With the tight 10-15 pip stops that most use, it's no wonder that the continuous, rapid up-and-down movement typically seen at these significant points on any chart quickly eats away at their accounts.
Support & Resistance (S/R), on its own, can be a viable way of trading but the decision to go Long or Short becomes much easier when you have found a solid way to identify the dominant trend.
Every chart has a trend that should be obvious but I have noticed a tendency for new traders to focus too much on the immediate price action, typically on 5- or 10-minute charts, without the benefit of zooming out to see the big picture. For them, every Green candle/bar is an invitation to go Long and, conversely, every Red candle/bar is an invitation to go Short. Zooming out will give you at least the chance to spot whether you are trading against the dominant trend on your chart or with it.
In my experience, trades with the trend have a greater chance of success and the potential for a greater pip count. If I do trade against the trend then my profit targets are much closer and my stops closer. As a rule, I am a trend trader and rarely take trades which are trying to swim against the tide.
Saturday 26 September 2009
So, what is Support and Resistance?
When you are looking at a chart, Support and Resistance is simply a visual representation of Demand (Support) and Supply (Resistance).
In simple terms we can say that when there are more traders ready to buy an instrument (Long) than there are traders ready to sell (Short) we have an excess of Demand. When your chart registers a change in direction from down to up this is the point where that excess Demand creates the Support area.
Conversely, when price reaches a point where there are no more traders interested in buying we reach a situation where there is an over-supply in that instrument and price will start to fall. This excess of Supply creates the Resistance area.
At every stage of a move plotted on a chart you have traders all round the world trying to establish at what point price represents fair value. When the majority of the largest traders have reached a point where they reckon this has arrived you get one of the many periods of consolidation so common in any arena of trading.
Sunday 13 September 2009
Trading Support & Resistance
Welcome to my little corner of the BloggerSphere!
If you are interested in how to trade Forex (or other types of instruments) then maybe I can help.
Please don't ask me whether using a Moving Average, MACD or any other indicator will improve my results as I won't reply. I don't like them and it's a long time since I relied on them to tell me when to trade.
Nor will I offer trading signals. All I hope to do is educate you on the value of using Support and Resistance in your day-to-day activities. If you feel that adding additional indicators to your screen will help you, go ahead. All I will say is that you don't need them.
OK, let's get to it.
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