More at exacttrading.com Hi all this is an end of year video to firstly thank you for all your kind words that you have sent me about individual videos and my YT channel in general and secondly to try to give something back as an end of year/New year present.
As you know the fight is against the banks and the brokers and nothing gives me more pleasure than to receive an email from someone which says that they went from being a losing trader to at least break even and then from break even to profitable.
Now as most of you know I use bank trading levels as this is what I have seen inside the banks over the years and this is what I know what works for me. When I analyze what it is that works in fact it is not only the level itself but the combination of two other factors, firstly that any ego I have was lost years ago. I take the assumption everyday when I sit down at my screen that predicting the market is impossible, it simply does not work, just look at the grave yard of traders and professional money managers who cannot beat an index or who end up going out of business. Read the small print when that happens, and you will it is because they ‘bet big’ on a certain thing happening and their account and all its billions blew up when it didn’t. Ever seen the film the Big Short? Well that guy got lucky as he had everything mortgaged including himself and had that housing trade taken a little bit longer to actually then he too would have been history. In short you can’t predict. Notice also when they use the word ‘bet’ to describe the trades these people do. Think LTCM as well they ‘bet’ and all of them including Nobel prize winners who invented the model blew up. So I repeat again prediction and ‘calling ‘ targets way out in the future does not work. If it does happen to the odd time, it is because the event was like throwing a random dart into the pages of the Financial times pink sheets with your eyes closed. Even a broken clock is right twice per day. Barclays ‘called and recommended shorting the Euro earlier this year when it was 1.14 and as I write it hit 1.19 yesterday. None of them, not even Goldman Sachs can do it, when they win it is due to trading fees collected off institutions or because the book has been rigged in their favour, for example this happened during the housing crisis when they created and invented the trade themselves then traded it.
The second reason is not waiting for confirmation before trading. When you go out in the morning if it is raining you confirm first that it is raining or looks like it is imminently about to start raining and you take your umbrella. If you see there is sun you confirm that you don’t need an umbrella.
What I have noticed is that traders most do not wait for price to confirm their theory or trade idea. Mostly they see price breakout above a level and they go long. Now bank traders understand that other traders are impatient and impulsive and so push prices to where the price will provoke those emotions. If you were a bank you would do the same just like a fighting couple sometimes provoke each other to gain a reaction and win a point. Emotion is a killer in the market as it distorts your thinking.
Now if you can understand that patience is also necessary, drop the emotion and haste and actually wait until your trades ‘confirm’ in the direction you expect then this will radically change your trading results.
Well there you have it. I wish everyone a great 2018 trading year may the banks squeal and buckle under the profits we take from them. More at exacttrading.com