forex trading dynamics - thinslice trading, · pdf filehave an entry strategy. ... trading...

Thinslice Trading Dynamics: 3 CRITICAL ELEMENTS YOU MUST MASTER TO SUCCEED

Introduction ____________________________________________ 2

So you want to become a daytrader? _________________________ 4

Process First, Performance Second ___________________________ 6

In Search of the Holy Grail ________________________________ 10

The 50/50 Trader _______________________________________ 20

FREE Live Online Forex Training Seminar

See what success looks like! Whether you're new to Forex or a seasoned Pro, you won't want to miss one of our free 70-minute super informative online seminars.

Discover the power of our "Thinslice" trading methodology as we reveal what it takes to achieve consistent, predictable, and successful trading results. LIVE! - while you watch.

WE'RE LOOKING FORWARD TO YOUR SUCCESS!

Join Live Webinar: http://www.theforextradinginstitute.com/join/

Disclaimer: Federal and international law provides severe civil and criminal penalties for the unauthorized reproduction, distribution or exhibition of all copyrighted video, text, and audio materials contained in The Thinslice Trading training program. Criminal copyright infringement is investigated by the FBI and may constitute a felony with maximum penalty of up to five years in prison and/or a US $250.000.00 fine.

Thinslice Trading, Inc.

2 - http://www.theforextradingintitute.com

Introduction

It has been said the genius is the ability to make the complex simple. If ever

there were a catch phrase to be a guide in trading decisions, this would be the

one.

The principle known as Occam’s Razor is believed to be an appropriate

consideration to a trader. “One should not increase beyond what is necessary,

the number of entities required to achieve a solution,” or, the simplest solution

tends to be the best one. Stated in another form, the explanation that requires

the fewest assumptions has the higher probability of being the correct one.

It is astounding to observe the volumes of irrelevant information individuals

digest trying to create greater accuracy in their trading decisions. In fact, this

quest for more information is one key reason individuals cannot consistently

make effective and accurate trading decisions.

In the last two and a half decades that I have been personally involved in the

markets, I have learned there really are only three key elements one needs to

consider when trading the FOREX.

Time

Price

Trading Range

Finding a trading set-up requires three simple steps.

Determine the market direction; up, down or sideways.

Have an entry strategy.

Have an exit strategy.

That’s it!


When trading, one wants to eliminate the unnecessary in order to see the

necessary. However, there is a problem with this concept. Simple is no longer

popular, yet complexity is. The perception in today’s world is complexity creates

greater accuracy and efficiency.

The bottom line is complexity has a greater value because it is worth more. If

ten is good, 20 is better, and 30 is best. The mindset is to want to buy what only

is complex, or costs more. When making a decision, which is easier, considering

three things or 30? Accuracy comes with simplicity. In trading, accuracy equates

to profit.

In trading, there are two types of traders. Day-traders are those who enter and

exit the market within the same day, and position traders are those who

maintain a position in the market for an extended period of time. Now there are

sub-sets under each of these categories; swing traders and scalpers.

Swing traders hold a position for a few days. Scalpers are in a trade for a few

minutes or possibly a few hours. In the purest sense, a scalper is one who

actively trades for a very small profit objective, trading 30-50 times per day on

average and is looking for fractional profit.

When one uses the term scalper, the “spirit” of the term is being used. A scalper

is an individual who day trades and spends a minimal amount of time in a trade,

which is typically less than two hours.

Scalpers have the goal of taking a section of a price move, which usually is 10-20

pips. In other words, they go for a fixed profit objective.


So you want to become a day trader?

Have you established the right criteria?

Selecting the correct market.

Selecting the correct trading methodology.

Getting the right training.

Did you know that online trading is one of the most accessible opportunities for

an individual to create wealth?

With the tremendous popularity of online trading, it has become a greater

advantage for investors to take short-term positions. Technology, high-speed

Internet connectivity, electronic order placement platforms, and real time

charting are tools that have created an environment that is conducive to intraday

trading.

Due to this, investors need to be aware that selecting the right market is a factor

for their success - in other words, using all of these tools in a market that doesn’t

offer the most favorable conditions, defeats efficiencies that these tools offer.

The elements required are, ease of access, volume, and leverage. Did you know

that the FOREX surpasses all of the other markets in consistently offering these

key attributes?

The ease of access is the primary element of importance. The FOREX is the most

accessible market in the world with access 24 hours a day, five days a week. The

market opens Sunday afternoon EST and closes Friday afternoon EST.


All transactions are done entirely electronically via a global network of over 4,500

banks. These banks around the globe are trading currencies in this electronic

market place which one can access directly from a home PC.

The second most important element is the volume of the market. The FOREX is

the largest market in the world. The daily volume often surpasses over two

trillion dollars a day.

If all the major exchanges around the globe were combined, the FOREX would

still surpass them in volume. The volume is consistently robust, one does not

need to use volume as an indicator.

The final important element in FOREX trading is leverage. Leverage is to an

individual’s benefit. Leverage allows one to use a small amount of individual

capital to realize a large profit potential.

In the equities market, one would compare $1 controlling up to $3 in the

marketplace. The futures market is slightly better at a 1:20 ratio and in the

FOREX, it’s possible to get a 1:200 ratio.

Once the right market has been selected, what is the next step?


Process First, Performance Second

The reality is people can achieve practically any goal they establish if they are

realistic about the process of what it is going to take to achieve it. Becoming a

successful Forex trader is a goal that most anyone can accomplish.

Obviously, if an individual has some physical limitations, such as impaired vision,

this certainly is a factor that could impede his trading success. However, this

once again falls under the category of being realistic. This point of being realistic

must be stressed; the single biggest reason individuals do not become successful

as a trader is due to unrealistic expectations.

In general, individuals who initially become involved in trading pursue and

evaluate products based solely on either performance or potential profit.

Regrettably, they do not attend to the process of what it takes to achieve that

performance objective. It is rather unfortunate to interact with naïve individuals

who believe success will be accomplished in 30 days or less. At The Forex

Trading Institute, primary emphasis is placed on the importance of the process

because success undoubtedly follows any pragmatic approach. But once again,

the course of action must be sensible.

Consider the analogy of those who train for a marathon compared to the training

of a trader. Each year, many amateur runners commit to the decision to

complete a major metropolitan marathon. As amateurs, they are already active

and athletic, yet are not conditioned to running such a long distance during a

single event. The first necessary step for any amateur, regardless of endeavor, is

to establish a practical time frame to train.

A common reason people fail to achieve their goal, especially traders, is

impatience and not allocating a realistic period of time to achieve the goal.


The training process is a simple formula for a marathon runner: small realistic

objectives, repeating over and over until they are both physically and mentally

conditioned to obtain those objectives as a part of a regular routine. Once

conditioned to the point of habit, the size of the objective is increased.

It is this continuous weekly repetition that is the foundation to assuring

achievement of the goal. Marathon trainers must prepare mentally while

continuing to run at regular intervals. Through the passage of time, the process

allows the body to become physically conditioned. The process is two-fold with a

built in allowance for abilities to come up to par.

Each time distance is increased, the true obstacle is not physical but rather

mental. For example, if the amateur increases to a few more miles, he may be

capable of adding mileage, but may still be mentally fatigued at the task. Adding

small increments of distance is not unrealistic, and may actually develop

naturally.

Changing mental outlook is central to the success of the goal.

A fundamental process is the key to success. The ability to continue to improve

performance and setting realistic objectives that are increased over a realistic

period of time are critical. In fact, runners often know intuitively when to

increase distance. It is effortless for someone who is conditioned to discern when

it is appropriate in the process to raise the bar.

Notice an amateur runner never sets the bar so high that they cannot reach the

finish line. The process is all the runner will focus on. The goal (performance) is

achieved as a result of the process.

During the course of an individual’s training, all elements are considered to reach

the goal, such as dieting, stride technique, and proper vitamin consumption.


There is a clear foundation of the why’s and how’s of what is needed to be done

to become successful, and then it is applied in a sensible time to achieve the

goal. The process to reach the goal is never rushed, this way, no setbacks arise.

Becoming a successful Forex trader is no different. A foundation and

understanding of price movement is needed. After a firm foundation is set, the

trader needs to allow enough time to become conditioned to see the good setups

versus the bad set-ups. Performance will continue to improve and so too will the

profits.

At The Forex Trading Institute, we promote our training process first. Our

competitors promote large profits in a short period of time. As we always say, “If

you follow our training process as recommended, you will be successful. In fact,

we guarantee it.”

The process mentioned above is practice, practice, practice. Train, train, train.

This process takes a combination of two things. Our students must accept the

discipline of training and practice on a regular basis. Through the passage of

time, their success will naturally follow, just like in the case of the runner.

Typical questions that are asked are performance based, such as, “How many

trades a day? How much can I make a week?” etc… With the correct training,

and most importantly mental conditioning, all of these issues become moot

because individuals learn that market conditions are ever changing.

Some weeks yield more profit than others but, it does not matter because if an

individual is focused on the process, continually improving their trading acumen,

their success will expectedly improve as well. This is the primary reason we offer

unlimited access to our program for one fee.


In closing, the challenge to those who want to go the distance is to take a

moment and shift viewpoints. Look at the process first, and then realize that

performance simply becomes a result of a sound process.


In Search of the Holy Grail

Technology has revolutionized trading. There are systems, programs,

applications, add-ons, plug-ins, indicators, every bell, buzzer, and whistle one

could possibly imagine to assist and/or actually trade for oneself. It has become

relatively astonishing to observe.

A simple rule to stick to when reviewing technology to assist in trading is, “If it

sounds too good to be true, it probably is.”

Conversely, there are several fantastic packages out there to assist in identifying

potential market opportunities. However, identifiers used to assist in an

individual’s trading can be more effective - If one uses it to trade verbatim, one

will not be successful over the long run.

It is important to remember that the absolute best trading system is, the trader

himself. Examine this concept a little closer.

In reality, the reason most traders fail is that they fall into two distinct

categories: the trial and error trader or the technology trader.

Category #1. The trial and error trader is a trader that makes the decision to learn to trade via

trial and error. This individual will spend countless hours scouring the Internet

for as much free information as possible.

They will diligently try to piece all of this information together into a successful

trading strategy and try to determine what works and what does not. This is a

long and painful journey.

The real problem with this process is that it is not uncommon for the trader to

make a small profit. Once a profit is made, the trader is reinforced that this


process will give them success. Inevitably, this trader always gives the profit

back at some point in time.

This trader gets an understanding of what makes price move in the market place

but never develops a sound trading strategy. Finally, they give up with the belief

that the market is rigged.

Category #2. The technology trader is one that is solely reliant on systems and/or indicators.

The individual is lured in with a fantastic performance pro-forma. This

performance is typically all based on “hypothetical” results.

This trader believes that they simply need to load the program, sit back, and let

the system determine where the profit is.

Similar to the trial and error trader, a profit is made only to be given back to the

market further down the road. This trader will then move on to the next new

program.

Both traders failed for the same reason. Time was never invested to receive

proper education. Trading is a business. Individuals who take the time to first

become educated; have a greater chance of success than those who do not.

With the proper training, one can then decide what trading strategy, coupled

with technology, makes sense for one’s own personality.

As stated in the introduction, there are some fantastic tools available to make

one’s trading more efficient.

However, training will give an individual the knowledge to decide what is right

and what makes most sense.


Remember these two aspects:

If you know not yourself and know not the market, you will win very few of your trades.

If you know yourself and you don’t know how the market works, you will win about half your trades. If you know not yourself and get emotional, yet you know how the market works, you will win about half your trades.

If you know yourself and the market, you can succeed and win at most all your trades.

The first step is to become trained on how the market works. The second step is

getting to know one’s self.

It is heard very often that a trader was doing fine and now nothing seems to

work. Why? Usually this occurs because the trader was diligent in getting training

and an understanding of how the market works, but never took the time to

identify their own characteristics of his personality, which may impede his trading

career.

Below are the top three reasons why a trader fails. To start, the trader has a lack of patience. Trading can often be a boring

experience while, for example, waiting for the right entry point. The trader sees

price movement but their trading rules that have been taught do not allow them

to enter.

The trader becomes impatient, breaks the rules, and enters in the middle of a

price move only to get stopped out. Patience is imperative in trading.

It is important to learn a couple of techniques, master them, wait until they

occur, and then trade only when they do. This is how an individual can

consistently grow their account balance.


A second reason a trader will fail is having unrealistic expectations. Trading is the

same as any other discipline. Over time, with the correct training and application

of the training, the trader will get better.

Unfortunately, it is natural for a trader to seek immediate gratification and to

believe one will become a trading master over night. When success is not

immediate, the trader often gives up.

In the beginning, it is important to set small realistic goals and over time, grow

those goals, keeping in mind to stay realistic. Most traders quit only because

they lacked the required patience and set unrealistic goals.

The third reason a trader fails is due to their greed exceeding their need. A

common belief is that a trader’s goal is to find the top and bottom of every price

move. Typically, the beginner trader will exit taking profit as instructed per their

trading rules.

After exiting the trade, price will continue to move in the expected direction and

the trader becomes frustrated believing that it was a missed opportunity. The

mind set then becomes, there should be a way to capture every price move in

the market to its full extent.

As time progresses, the trader then decides to stay in a trade for a longer period

of time, achieves a profit, stays in the trade, market retraces, the trader

becomes frustrated, exits the trade at a loss and a vicious cycle begins.

The trader then begins to doubt their abilities and will stay in losing trades longer

than necessary and exit winning trades too early.

Good trading is a discipline. Take for example, professional athletes. They all

follow a simple formula to achieve success.


1. They seek training and continue to access coaching and mentoring. They

thrive on having someone else evaluate what they are doing and feed on

constructive feedback on how to get better.

2. They constantly practice the fundamentals to the point that their actions

become mechanical, eliminating all emotion.

3. They establish goals, stay focused on their goals, and when they are

defeated, they never quit.

We are in a time of many incredible opportunities. One can become empowered

to control one’s own financial destiny. The information, training, and technology

available today are a powerful resource when applied correctly.

The FOREX market is opened 24 hours a day, with access five days a week and

an entry cost as little as $250 to get started. The FOREX is the only market with

the attributes necessary for an individual trader to become successful.

Remember to seek training, be patient, realistic, and if it sounds too good to be

true, it probably is.

A Simple Strategy

The Forex is a prime market in which to day trade. Noticeably, many of the

currency pairs are range bound on a daily basis.

A tried and true favorite Forex trading strategy is a combination of range trading

and looking for the reversal using a 10-minute candlestick chart. These ranges

are easy to identify.

On the average day, the daily trading ranges will end with price having a double

zero value. This strategy is termed the range and reversal trade.


Authors who write articles specifically about trends note that it's easy to identify

the trend because it is so obvious. It is not the complexity of the trade, but it is

the trader himself that often tends to over-complicate the process. Remember

this simple rule of thumb:

The trading range should be obvious. If this rule is kept in mind, and price is

used as a leading indicator, then most available trading opportunities will be

obvious.

Take some time to examine the process closer.

The first step is to look at a daily chart. As shown, one can see on this recent

chart of GBP/USD the range of the current week is 100 pips and trading between

to key values 1.8900 and 1.900. Remember, traders are to look for ranges that

end in double zero values.


Also remember it will be obvious. It is only necessary for traders to look at the

previous activity from the last 2-3 days. It is recommended to prepare for the

range/reversal trade at 7am EDT (or EST based on time of year). One of best

times of day to trade the Forex is between 7am-11am EDT.

Here are the ideal conditions traders are looking for as evident on the chart

below.

1. Price starts to consolidate for a couple of hours prior to the beginning of

the morning session.

2. The consolidation is occurring at the bottom of the range at a double zero

value which is identified on the daily chart - In this case 1.8900.

3. Price has established support on the double zero value. It is the beginning

of the trading session and at the bottom of the range.


Once price breaks through support traders can now anticipate the reversal. The

entry point is established 10 pips above the high of the previous short-term

consolidation.

Here is an example.

Once price breaks through the resistance @ 1.8950 traders can look to take the

trade to the top of the range which was 1.9000 as can be discovered on the daily

chart.

The chart following illustrates this.


The exit point is 5 pips inside the top of the range. Once traders enter the trade,

they should use a 15 pip auto trailing stop from the entry price.

It is a simple and obvious set up. The key factors are as follows:

Price was at the bottom of the range at the beginning of the trading session -

Price had consolidated and established support at the bottom of the range on a

double zero value.

Price dipped, retraced, and then cleared the top of the consolidation. This is the

entry point.

Price runs and breaks the next level of resistance indicating the extent of the

price move will later carry to the top of the range.

Do not over analyze or try and make this simple opportunity too complex.

Practice the trade first, then execute.


Remember, a common fault for most traders is they constantly try and

complicate the process. This need to add complexity stems from traders’ inability

to use price as a leading indicator.

Trading should be enjoyable and fun, not a stress intensive exercise. Enjoy this

simple strategy.


The 50/50 Trader

Denial is a powerful state of mind. It is always amazing to see how many traders feel

they are proficient at trading, however they do not consistently yield a profit.

Money is made, and in turn, given right back to the market.

The same probing questions arise consistently when traders are considering

learning how to trade the Forex, and, more often than not, the trader is adamant

about receiving any training or assistance. Below is a typical traders dialog.

“How is your trading going?”

“Okay.”

“Are you making money?”

“Sometimes.”

The story unfolds about one trade that yielded a fantastic profit. The ending

point is always, “Then I made a stupid mistake and gave it all back.” It is heard

over and over.

It has been said, that repeating the same actions and expecting different results

is insanity. This holds true in trading as well.

The 50/50 trader makes a profit and gives it back over and over and over. It is

always one step forward, then one step back.

It is a proven fact that those who obtain training, perform better than those who

do not. Ongoing training will increase an individual’s performance and push him

to the next level.


Finally, training that occurs using the real world as a classroom (a form of

internship) insures the individual is correctly applying the techniques.

At The Forex Trading Institute, we offer unlimited training for one fee. All

training is provided in a real-time market. We are so confident in our training

process that we offer a full money back guarantee.

forex trading dynamics - thinslice trading, · pdf filehave an entry strategy. ... trading...

Documents