Follow Bouncing Pips
So as you can see I look for confirmation on all 3 charts. You can always take it off the 1Hr if you like but I prefer the 4 HR. When you see all 3 its a super strong indicator that it will go in that direction. Thats how I trade it. Simple & straight forward.
As for exits & stoploss. To make it simple if you use a 1HR GBP/JPY I reccomend at least 75 pip SL. on the 4 HR a 200 pip SL. As for exits you can use the next signal or a profit point of your choosing. As for me I use the MFI to see how close its being overbought/oversold, look for upcoming news that my affect your trade & to make sure my risk reward is at least 2-1. Never risk more that what you will gain. Put bluntly its stupid.
Indicators Setting :
Non Lag Zigzag : Price 0 , Length 100, PctFilter 2.0
Zigzag Pointer : ExtDepth 100, ExtDeviation 75, ExtBackstep 15
I have 3 charts set up. A 30M, 1HR & 4HR.
source: http://www.pipsmaker.com
Attribution and Bias Among Traders
Much of how we process the world consists of attributions: qualities that we attribute to ourselves and explanations that we attribute to events. As human beings, we are driven to make sense of our world, and attributions are an important element of that sense-making.
One of the most basic attributions traders make is to their gains or losses. Are profits and drawdowns attributable to the self; the result of positive or negative actions that we take? Alternatively, do we attribute gains and losses to outside forces or to sheer chance? How we attribute the outcomes of our trading performances will necessarily play a large role in what we do about those performances. If, for instance, we tend to attribute gains to the self, but losses to bad luck, we might stick with faulty trade ideas, exacerbating initial losses.
In point of fact, research finds that people are reliably biased in their attributions, a situation that cannot help but affect traders. Football fans, for instance, tend to attribute their team's successes to skill, but their opponent's victories to luck. When CEOs successfully complete acquisitions and attribute the success to their own skill, they tend to become overconfident and make further acquisitions--which then realize lower returns. CEOs also tend to be paid more money when the share price for their firms increase, as boards (falsely) attribute the price move to the executive's skill. This, too, is reliably associated with subsequent CEO underperformance.
It is when we indulge in self-serving attributional biases, however, that trading results are put most at jeopardy. Social psychologists refer to the "fundamental attribution error", which is the tendency to over-emphasize personality-based explanations for other people's behaviors and minimize situational influences. When we're subject to the "actor-observer bias", we tend to attribute our own outcomes to situational forces, rather than to fundamental personality traits.
How does this affect traders? Traders with a self-serving bias tend to give themselves too much credit when trades go their way and rationalize situations that lose money. As a result, they are likely to become overconfident after a string of winning trades, raise their trading size/frequency, and place themselves at risk.
Indeed, a consistent predictor of trader failure in my own experience is the tendency to attribute losses to a shadowy "them": the large traders and institutions that supposedly manipulate the markets. In years of working with traders, I have never seen one succeed over the long haul who reliably blamed outside forces for losses. Those traders, in fact, are subject to considerable anger and frustration, which leads them to become impulsive--the well-known phenomenon of "revenge trading".
Reason dictates that there is a difference between a good trade (one placed with an edge in one's favor) and a winning trade (one that makes money), just as there is a difference between a bad trade (one that lacks an objective, positive set of expectations) and a trade that loses money. Sheer chance alone can create situations in which good trades lose money and bad ones happen to get lucky. The self-serving trader who overemphasizes the role of chance in losses creates a situation in which learning from experience becomes impossible.
But there is another kind of trader--one with an overinclusive attributional style--that tends to own losses and gains with equal fervor. By minimizing the role of chance, the trader attributes all outcomes to the self, feeling good when the profits are rolling in and becoming discouraged during (inevitable) periods of drawdown. This is the "illusion of control" documented in the research of a London Business School research team, who found that traders who thought they could predict markets shown to them (which were actually random price series) performed worse than less confident traders. The result is that you can reliably track traders' moods by their P/L statements.
Traders tend to blame their losses on such factors as "loss of discipline" and "overtrading" when, in fact, these are frequently the results of attributional biases. The majority of traders spend more time trying to understand market movements than trying to understand their own thinking about markets. An interesting line of research finds that individuals who experience increased emotion tend to shift their attributional styles, reducing their tendency to own negative outcomes. Successful traders not only need to be able to think about markets, but also think about their thinking. Awareness of a tendency toward bias can be a powerful antidote to biased decision-making.
Brett N. Steenbarger, Ph.D.
www.brettsteenbarger.com
Assessing Your Personal Strengths: What They Mean for Trading
It's only been fairly recently--with the rise of "positive psychology"--that research has taken a hard look at strengths and subjective well-being. One excellent compilation of this research is the large text "Character Strengths and Virtues" by Christopher Peterson and Martin E. P. Seligman. It is an attempt to pull together everything we know about such qualities as wisdom, courage, love, kindness, justice, leadership, modesty, optimism, spirituality, and much more.
Another effort to study strengths are the Values in Action questionnaires that evaluate 24 positive personal qualities. (Interested readers can register on the research site and take the questionnaires for themselves).
My experience is that many trading problems occur, not because of traders' weaknesses, but because their strengths do not align properly with their trading. In an upcoming post, I will update the Trading Coach project and illustrate this concept. Interestingly, very few trading coaches/psychologists seem to spend a great deal of time assessing specific trading and personal strengths. The assumption seems to be that, if you address a weakness, you'll then succeed.
The opposite approach is that, if you build strengths, you can work around your shortcomings.
Let's try a little exercise. Below is a list of strengths from the VIA survey. Identify what you consider to be your five greatest strengths from this list and jot them down:
creativity, curiosity, open-mindedness, love of learning, wisdom, bravery, persistence, integrity, vitality, love, kindness, social intelligence, citizenship, fairness, leadership, forgiveness, modesty, prudence, self-control, appreciation of beauty, gratitude, optimism, humor, spirituality
Once you've written down what you believe to be your five greatest strengths, now--next to each of these strengths--write down how you specifically employ that strength in your day to day trading.
What I find is that, sometimes, how a trader is trading does not make concrete use of his or her greatest strengths. As a result, the trader is pulled two ways: toward what he or she "should" do according to the chosen trading style and toward what comes most naturally as a personal interest and strength. This is not a problem with discipline per se; it is a problem of a lack of fit between trading approach and personal competencies.
It is not necessary for trading to actively engage all your strengths. If many of your top strengths are not regularly utilized in your trading, however, two consequences are likely to result: a) you will not be as successful as you could otherwise be; and b) you will likely find trading less than fully satisfying and will not sustain the motivation to develop yourself fully.
In our Trading Coach project, Trader C. is running into some difficulties that have reduced his profitability. As we shall shortly see, it is his strengths that are getting in his way. In an upcoming post, I'll show what we're doing to remedy that situation.
Brett N. Steenbarger, Ph.D.
www.brettsteenbarger.com
Automated Trading
Are you a disciplined individual? According to expert Forex traders, the only ones who succeed in the Forex market are those people who stay disciplined despite their success or failure. Automated Forex trading has changed the way traders make their transactions. If you’re a savvy Forex trader, you can definitely benefit from using these automated systems.
There are simple trading systems offered online which can yield higher returns when used properly and consistently. The simpler the automated trading system, the easier it is to use; you see, complicated systems do not guarantee success at all times so be very careful when choosing the appropriate Forex system.
For example, if you think that a certain currency is going to maintain four weeks high standing, buy it. If you have a low-standing currency, you can sell it before the price goes down further. This system is also called breakout wherein all your moves within the Forex market is based on the highs and lows. Soon, you will be able to penetrate the market’s big trends.
Big trends usually last for several weeks, months, or even years. Take a look at the Forex chart and study it. The whole system is automatic and the rules are quite objective. This system is also known as a Forex robot and it can operate fifteen minutes everyday. The creator of this Forex robot was Richard Donchian, a Forex trader.
If you want a simple system, the Forex robot may work for you. Traders who prefer complex trading systems often expect more from this system and so they would rather opt for another system which can meet their expectations. The Forex robot is not fussy and it can help you in identifying the top picks and the bottom picks.
Successful Forex traders spend enough time and effort to make informed trading decisions. As a wise trader, you should not rush things. Allow the system to work. Don’t believe in the myth that complex and expensive systems are more efficient. If you’re serious in Forex trading, you can earn lots of profits with minimal effort.
Observe today’s market trends. If you think that the Forex robot will work for you, considering the existing trends in the Forex market, you can use it because it is logical, very simple, and continuously works. the automated trading system can be obtained for free online just case you want to see how it works. If you think that the Forex robot is another junk like all other systems, check its background. Try to review ratings and testimonials to find out more about this excellent and efficient system.
The modern world is very different from that of long ago. Many of today’s basic tasks are now handled automatically. If you want an automated Forex system, you can make use of the Forex robot. Hurry and look for this system online; if you want, you can also check Richard Donchian to find more info about it. You will greatly benefit from this system over the long run. Don’t overexert yourself in studying the Forex market because with the aid of the automated system, you can go a long way.
