Who is Taking Your Trades?

Who is taking your trades? Is it you or your trading method?

Every day I see traders blindly following the signals given to them by their trading method. It is almost as if they're mindless robots just jumping in because their method says get in. They throw money into the market without even thinking, and it costs them big.

What is a Traders Job?
A trader's job is not to mindlessly stare at a screen and blindly jump into a trade because their method tells them to. A trader's job is to take their trading method's signal and analyze whether or not the trade is viable.

Being a trader is so much more than having a good trading method. Conquering this market is about being able to fully analyze your trade opportunities first and deciding whether or not to enter second.

Just because you have a method that says "enter on a break of this support/resistance line" it does not mean you have to enter. If your analysis suggests that the trade has a low probability of success you should not take the trade. The issue is most traders do not analyze the market they just follow their trading method. They let their methods own them and they lose.

Before you take a trade you need to be able to look at your chart and get an idea of what is going to happen. Then, and only then, should you consider entering the trade suggested by your trading method. In my method, when I look at an upcoming line break on my chart I ask myself:

1. What happened last time it approached this line/area?
2. What does the candle movement leading up to this point suggest?
3. What does the current price movement suggest?
4. If triggered and entered what possible complications can this trade have?

After doing my analysis, and answering these questions, I ask myself the most important question of all:

"Considering all these things should I take this trade?"

It is not all black and white and you do not enter because your method says enter. The decision to enter rests with you. With every single trade, you need to analyze the market first and decide whether or not to enter second.

Inside you are the tools that will make a world of difference in your trading. With these tools humanity has conquered the world, conquered space, and even conquered nature. The most important of these tools is the human brain. Ninety-nine percent of traders do not use their brain to their full potential.

If you are afraid of using your mind and you want trading to be a 1, 2, 3 simple process then go away. I am serious because this is not the business for you. You will never make it so don't waste your time. The lottery or slot machines are more your game.

If instead you want to be a trader you better start being more inquisitive. It is human nature to ask questions. Don't suppress it in your trading question everything. Use that amazing tool you have locked away in your head and THINK!

You need to think and analyze everything on your chart and you have to learn to put your trading method in its place. You're the boss of you trading method. If it gives you a suggestion you are the one who decided whether or not to take the trade.

Originally posted on 4-13-2010



Read more: http://www.babypips.com/blogs/pipsychology/who-is-taking-your-trades.html#ixzz1rWG12JnA

Trade what the market gives you!

Markets are always changing and last week we had a ton of accouncements that really stired up the market in one way direction. Last Saturday March 31 2012 we had the Chinese Manufacturing PMI preform better than expected and really gapped the price action early Sunday morning. Then we had FOMC meeting and NFP coming out putting the market into a frenzy. With that we had a long weekened! This was the time to scale down positions and be on the sidelines. The market gives what it gives and takes what it takes. The best position during these circumstances is to wait and let the storm ease. It is important that we cannot expected winners all the time and losses are inevitable. Let the market do its thing.

Trading results April.01.12 to April.06.12

Trade results for week of April 1, 2012 to April 06, 2012

Trade 1 Short NZD/USD, -$821
Trade 2 Short NZD/USD, result -$459
Trade 3 Short GBP/USD, result -$404

Total net profit: -$1684
Total trades: 3
Winners total: $0
Losers total: -1684
Winning percentage: 0%
Risk to reward ratio: n/a

Overall a negative week. We will take what the markets gives us. No harm due.