45 WAYS TO AVOID LOSING MONEY TRADING FOREX by Jimmy Young

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TheRumpledOne
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45 WAYS TO AVOID LOSING MONEY TRADING FOREX by Jimmy Young

Postby TheRumpledOne » Tue Jul 10, 2007 11:59 pm

45 WAYS TO AVOID LOSING MONEY TRADING FOREX

by Jimmy Young, CTA

Who is Jimmy Young?

Retired proven professional Bank FOREX trader with over 20 years of hands-on FOREX trading experience.

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IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby 4x=0 » Fri Jul 13, 2007 3:46 am

This one i like

"28 ) Avoiding the Hard Trades -- Bank FX traders have an axiom "the harder the trade is to do the better the trade". This I learned from experience. When I needed to buy EURUSD and it was hard to get them, that's when it's necessary to pay up and get the business done. When it's easy to get them, then sit back and wait for better levels. So if you are trying to get into a trade, or more importantly get out of a trade, don't putz around for a few points - get your business done."


I've noticed it myself. But maybe I interpret this different. The trades that are valid but "riskier" meaning there are some layers of support and res that will need to break -- they pay well -- for bearing the risk, for taking the trade and executing your beliefs without emotional mistakes. (I'm not talking about BZ trades. Those are microscopic and you don't want S/R in the way.) The trades that look like mouth watering playboy pinups - or that look too obvious - seem to flop hard.

Having said that, many points in the word file discount a system like buyzone.

I don't agree with several of the points in the file. For one the guy slams the use of stochastics. I don't use it, but many traders do, so saying it is garbage is arrogant/ignorant and i don't agree with that particular point. .. Just because you have 20 years trading experience doesn't mean you have sharable knowledge. But point 28 is good.

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Postby TheRumpledOne » Fri Jul 13, 2007 7:37 am

I don't agree with everything he wrote either. But there are some good points in there.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby stuart18020 » Fri Jul 13, 2007 2:57 pm

IS TRADING WITH THE FX BANDITS MOOT?

WHO IS TIM MORGE?

Timothy Morge, president of MarketGeometrics, is a regular speaker at CBOT and CME seminars and has taught hundreds of professional traders his unique trading methodology. He was a featured speaker at the 2006 Annual Canadian Society of Technical Analysts and publishes articles regularly in various trading publications. Throughout his 30-year career, Mr. Morge has been a floor trader on the CME, an institutional trader managing cash forex positions in excess of $2 billion US, a trading mentor, and the president of Blackthorne Capital, Inc., a private money management firm focusing on trading currency and stock index futures. Mr. Morge is recognized as a leading authority on trading using Median Lines, a powerful trading tool pioneered by Dr. Alan Andrews in the 1920s, and the author of the highly acclaimed Trading With Median Lines, which revealed how to unlock the full potential hidden behind the popular "pitchfork" drawing tool found on most charting packages today. Mr. Morge's new book, Market Maps: High Probability Day Trading Techniques, details how he uses median lines, Fibonacci levels, the proprietary VolForce Indicator, and energy points to pinpoint high probability turning points in all markets. His Web pages Marketgeometry.com and Medianline.com, feature regular detailed glimpses into his own trading style and strategies. Mr. Morge is host of Median Line Forum, a free forum he founded in 1997, for traders around the world to discuss trading techniques and strategies.

[highlight=red]WORD DOC ATTACHED[/highlight]
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Postby jhtumblin » Sat Jul 14, 2007 10:54 pm

12) Trading Too Short-term - If your profit target is less than 20 points don't do the trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits.

13) Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and your results will improve.



Two of the most unobvious yet most truthful statements in trading. These go against common trading mentality and may be hard to grasp but avoiding these pitfalls will take you a long way.

Disclaimer: yes I know you scalpers don't like the concept in 12 and I do know guys who make a living by scalping. However, all the big money players I know enter a position and bleed the trend near dry, coincidentally the majority of them also own multi-million dollar yachts...

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Postby Patch » Sun Jul 15, 2007 12:49 pm

Hi stuart18020

Thanks for posting Timothy Morge paper about trading CME Currency Futures in place of the Cash FX. It is a interesting notion. What do you think about trading the currency futures rather than the cash fx? The point about the largest bank's reduction from 90% to 50% catches my attention and the reason being their reducing their risk and going to consumer credit makes sense.

Patch
In VA
Last edited by Patch on Fri Oct 12, 2007 12:16 am, edited 1 time in total.

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Postby TheRumpledOne » Sun Jul 15, 2007 4:42 pm

jhtumblin wrote:
12) Trading Too Short-term - If your profit target is less than 20 points don't do the trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits.

13) Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and your results will improve.



Two of the most unobvious yet most truthful statements in trading. These go against common trading mentality and may be hard to grasp but avoiding these pitfalls will take you a long way.

Disclaimer: yes I know you scalpers don't like the concept in 12 and I do know guys who make a living by scalping. However, all the big money players I know enter a position and bleed the trend near dry, coincidentally the majority of them also own multi-million dollar yachts...



1) THERE IS NO FIXED SPREAD. The spread on the major pairs during active trading times is usually 1 pip.

2) Big money trades huge size for small pips. If you net 2 pips on $1,000,000 that's between $10,000 and $20,000 depending on the currency.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

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Postby jhtumblin » Tue Jul 17, 2007 9:27 am

1) It's not necessarily the point about the spread where the problem lies, sure he threw that in there but the key I pull from this bullet is in making your trades count. I see numerous people scalp, make a little, then give it back all the time (plus some usually). I know your style is to scalp TRO, however, i think the majority of new traders would fare far better if they could only make one trade a week. It would cause them to choose very carefully instead of the "well I made 3 pips today, tomorrow I hope i don't pay back 7" mentality. I personally cannot trade that way regardless of how sound the statistics are.

2) Any money trades big on leverage, that is what makes leverage so awesome especially in the forex market. But while your 2 winning pips are worth 20k your 4 losing pips are leveraged also. When I lose, $15,000 may disappear assuming $10,000 invested, however when I win I rarely shoot for less than 3x the amount of my stoploss. $45,000 profit on $15,000 risk certainly makes much more sense in any case than $20,000 profit with $70,000 risk. (Aside from that no amount of statistics could ever factor in a major catastrophe such as devaluation of currency, and watching the slippage on that execution could eat up 2 or 3 years worth of 2pipping profit mighty fast.)

I am not a scalper, I have tried, I can do it, but it's not my style. I know you make money TRO and that is what this game is about. However, you have experience that many of the people coming here have not yet paid tuition for. There is no substitute for that and in all reality scalping is NOT for beginners (if they want to make money anyway). I think that is what this article is geared toward and it makes good sense to me.

It is also time to write a post about tuition.

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Postby 4x=0 » Tue Jul 17, 2007 6:49 pm

"The intuition recognizes the order in chaos.

Lost your job, going through a divorce, did lightning strike in your yard? There is a Divine Intelligence behind chaos. The dance of life does not move in a straight line, it zigzags. Each detour takes us in a surprising new direction we might have not considered otherwise.
" -Michelle Anderson

"The truth is that our finest moments are most likely to occur when we are feeling deeply uncomfortable, unhappy, or unfulfilled. For it is only in such moments, propelled by our discomfort, that we are likely to step out of our ruts and start searching for different ways or truer answers." - M. Scott Peck

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Postby jerryse » Mon Oct 08, 2007 3:54 pm

Got to listen to Jimmy last Thursday and Friday at an intro Forex seminar in Kansas City. I really enjoyed his talk. I am new to Forex, so maybe have to go to another one. Plus, hanging out here.

Jerry

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