Earlier this week I promised that I would be releasing an update to my trading method. Well the update is finally here!

As you probably know my key goal in Forex is to keep things as simple as possible. With this update of my method I have further streamlined and simplified things. So far this year I have taken 20 trades with this trading method and won 19 of them. So the method is fresh, simple, and highly profitable!

Traditionally I released my method as an e-Book but this version is laid out over several webpages. I will be compiling the method into an e-Book soon and will be adding it as a free download.

Check out the method in the Forex Trading Strategy section.

Next week I will be holding a free webinar and Q&A session on my trading method.

Have any questions? Want me to expand on something? Leave a comment and let me know!

If you lose three trades in a row take a break from Forex for a few days. I call this the ‘Three Trade Rule’.

I have written about the Three Trade Rule so I wont repeat myself. Just visit the link to read about the rule and how it can help you.

Last week I spoke to a newbie who is having a tough time finding consistency in his trading. This newbie went on to tell me that he is trading four systems/methods and not a single one is working…

You can probably guess what I told said to him.

KEEP IT SIMPLE!
KEEP IT SIMPLE!
KEEP IT SIMPLE!

Especially as a newbie you need to keep your trading simple. Trying to juggle multiple trading systems/methods makes your trading complicated.

If you want to succeed in the easiest and quickest way possible you need to simplify your trading. So if you’re trading multiple systems/methods and are struggling pick your best performing system/method and trade it exclusively for 2 months. If you find the system/method you choose does not perform well consistently move on to another one. However, do not complicate your trading by using more than one method/system at a time.

I know this tip is somewhat redundant and I would wager the vast majority of people reading this already know the basics. However, last week I spoke to a newbie trader who did not know the basics, this is how the conversation went…

Newbie – I just lost on my EUR/USD trade?
Me – Hmmm I see no trade on EUR/USD, was it a long or a short?
Newbie – What do you mean by long or short?
Me – Did you buy or sell EUR/USD?
Newbie – I bought it of course, why would I sell?
Me – Well obviously if you saw a short set-up you would have sold?
Newbie – What do you mean by sell? How can you sell a pair before you buy? You only sell to close your trade.

The conversation went downhill from there. The newbie in question has been trading for 6 months and he still does not understand that you can open short positions in Forex.
Learning the basics is vital to your success as a trader. So for all of you newbies who do not know the basics…. Go through the Forex Education section.

“Even if you manage to find a good signal service -big if- you might make some money for a while but it will not last!”

If you want to make money in Forex you need to:

• Pick a method and stick with it.
• Learn to be able to do your own analysis
• Pick your own trades.

Unsustainable Trading

This all boils down to something I call unsustainable trading. Being reliant on others to make your money for you is unsustainable. Being able to do your own analysis and enter you own trades is much more sustainable.

If you blindly follow a signal service, what will happen when the signal service shuts down? What will happen when the signals stop working? You will be back at square one, you do not know how to trade, and your income stream dries up.

One of the more recent innovations is services like Zulu trader which allow you to piggy back on the trades of profitable traders. The concept sounds brilliant but again what happens if the trader you’re piggy backing on dies or retires? Unlikely right? Well, what if he gets tired of having newbies ride his coat tails?

Desires

Blindly following others is a short-term fix and gets you nowhere. As humans we all have desires, we have simple surface desires, and also deep core desires. Examples of a surface desires would be money and having no boss. A core desire is a combination of surface desires. Combining the surface desires for money and no boss gives you a core desire for FREEDOM. Most people want to trade Forex for the freedom it provides.

If you shackle yourself to another trader, with services such as Zulu or signal services, you will NEVER have freedom. You might have the appearance of freedom for a while. However, your ‘freedom’ will be completely reliant on somebody else.

Being totally and completely dependent on somebody else IS NOT FREEDOM!

Learning to trade is the safer and wiser option. So learn to do your own analysis and pick your own trades….. it will be well worth it!

To put this info-graphic together I interviewed over 20 traders. The traders interviewed have been trading from as little a few months to as long as a few years. This gave me a very good ideas of the average time it takes to become a successful Forex trader.

Fast Track Success in Forex

While interviewing traders for this info-graphic I uncovered some very interesting facts about common mistakes new traders make.:

1. Waiting too long to write a trading plan. Over 80% of the traders I interviewed had waited longer than 10 months to write out a trading plan. Not having a plan before you start trading is a critical mistake! In the Free VIP video course I explain how to write the perfect Forex trading plan.
2. Not keeping a proper trading journal. Over 60% of the traders I interviewed have never kept or do not keep a proper trading journal. Trading journals are invaluable for spotting mistakes you’re making and rectifying them before they destroy your account. I will be adding a new section about trading journals to the free video course soon.
3. Being too reliant on indicators. New traders rely too much on indicators and indicator based methods. Trading methods based solely on indicators ignore price action and rarely if ever work in the long run.
4. Wasting money on Forex Robots and other rubbish. This is quite common, there are a lot of scammers out in the Forex world and many new traders throw money away on rubbish products such as e-Books, bots and basic courses.
5. Demo trading for too long. A lot of people disagree with me on this one but demo trading gives new traders a false sense of proficiency. Demo trades do not carry the same pressure real trades do.Being profitable in demo does not mean you will be profitable in live trading. So trading a demo account for too long can have a negative impact on your success as a trader.

Check out the info graphic below.

Please note that the average profit column indicates the average profit for the 6 month period indicated. This is based on averaging out the percentage of profit/loss given to me by the traders I interviewed. This values listed are based on less than 20 data points each.

The indicator turns every line on your chart (including trend lines) into an alarm. You can of course deactivate any lines you do not want to act as alarms. You can grab the indicator by clicking here and logging in.

Do you have any cool ideas for MT4 indicators/plugins you want me to develop? If so leave a comment below and let me know.

Today is day 2 of the Jackson Hole Symposium and the big event of the day is the highly anticipated speech from Bernanke.

The markets have shown a lot of indecision this week, as you see on the 4hr chart below, EUR/USD has tightened up into a wedge. In my opinion this is because traders are just waiting to hear what Bernanke has to say today.

If Bernanke keeps with his track record of destroying the US economy and devaluing the dollar you should expect to see a nice long breakout on EUR/USD. There are a lot of opinions on what Bernanke will say and the kind of impact it will have on the market. With so many different opinions it is almost impossible to predict what will happen. My money is on EUR/USD rocketing up but I am certainly not sure enough in my opinion to trade it.

I read an article this morning in which ING analyst Rob Carnell set out the possible options on what we can expect to hear from Bernanke today.

Remember always that the Jackson Hole speech is not a policy setting speech, and at best, can serve as a useful conduit for Fed sentiment in advance of an FOMC meeting. But just weeks after one of the most riven-with dissent FOMC meetings in history, this seems highly unlikely. However, Bernanke could re-iterate some of the options available to the Fed, noting that they will do “whatever is necessary” to ensure the smooth functioning of markets and return to growth of the economy.

Option 1: Hinting at more QE. Fairly unlikely, at least not until headline inflation begins to dip, as it surely will with energy prices in full retreat. But any actual change in policy would be unlikely until November at the earliest. Further economic weakness and market fragility would be required.

Option 2: The “Twist”. Actually, what is being called a “twist” operation is nothing of the sort. That involved trying to push up short rates whilst bringing long rates down, whilst the Fed would on this occasion merely try to bring long rates down. The Fed’s Bullard has noted that such policies would not ve very effective.

Option 3: Specify targets for longer dated maturities – so for example, say that they will keep the 10Y treasury yield at 2% for 12 months. Achieving that, however, might involve more QE, so unlikely for the same reasons.

Option 4: Specify a price level target – this might require inflation to rise above the normal levels associated with price stability for a short period in order to achieve the target. However, it would be more useful as a tool to combat deflation – which doesn’t exist in the US. Moreover, how to achieve the target? More QE…? Same problems as option 1.

Option 5: Cutting the rate of interest paid on excess reserves: Might help to free up liquidity, especially if a negative rate were employed. Bernanke has in the past suggested that technical difficulties with such an approach make it an unlikely choice.

Option 6: Provide explicit guidance about the continuation of short term policy accommodation. This is already being used. It didn’t seem too effective when the Bank of Canada tried it though. Moreover, when push comes to shove, such commitments are contingent on conditions, and can be broken, as the BoC commitment was.

All in all, we take the view that this speech will not provide the clear guidance for policy that some market participants wish to see, and at best, will contain some general words of comfort and support, without anything material to back them up.

Does that sound like a safe trading environment to you? Trading today is a gamble, so I am taking the day off and enjoying a long weekend.

My tip for today is to stay out the market.

I cost myself 70 pips last week on a E/U trade because I was trading tired. I had a very late night and woke up to my chart alarm going off after only 2 hours sleep. In my tired stupor I somehow stumbled to my computer and entered a E/U long after which I went straight back to bed. When I woke up I saw that my trade had hit it’s target and then reversed significantly.

I was just about to pat myself on the back when I noticed the trade was still open ARGHHHHHHHHHHHHHHH!! It turns out I was so tired that I had forgotten to set a stop loss and limit order.

After I made this mistake I asked a few traders I know and I heard similar horror stories. So, learn from my stupid mistake and do not trade tired!

Getting accustomed to using hotkeys can be a little annoying but it can potentially improve your trading. Being able to navigate your platform faster and use it more efficiently will definitely give you a little bit more of an edge. Think about it like a carpenter who knows how to use a hammer properly!

So below I have put together a list of the most useful Metatrader hotkeys. Check them out, harness the power of Metatrader, and begin to use MT4 like a pro!

Navigate Chart

<- (left arrow)— Scroll chart left.
-> (right arrow)— Scroll chart right.
Page Up — Scroll chart left fast.
Page Down — Scroll chart right fast.
Home — Move chart to the start point.
End — Move chart to the end point.
F12 — Move chart left one bar at a time.
Shift+F12 — Move chart right one bar at a time.

Chart Zooms

“-” (minus) — Zoom chart out.
“+” (plus) — Zoom chart in.

Chart Tools

Ctrl+F (or middle mouse button) – Enable Crosshair.
Ctrl+P — Print chart.
Ctrl+S — Save chart to a CSV file.

Open Windows/Panes

Ctrl+I — Open/close the “Indicators List” window.
Ctrl+D — Open/close the “Data” window.
Ctrl+M — Open/close the “Market Watch” window.
Ctrl+N — Open/close the “Navigator” window.
Ctrl+O — Open the “Setup” window.
Ctrl+R — Open/close the “Tester” window.
Ctrl+T — Open/close the “Terminal” window.

Like this post? Then leave a comment and let me know.