There Are No Secrets

There Are No Secrets Forex Experts share their trading tips

prices

currencies

A special report by FXstreet.com

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Prologue There are no hidden skills in currency trading – just things that lie much deeper than what most people can see. In the past I would have disagreed with this statement and talked about some secret strategies, or market insights. Today, while I won’t disagree with the idea of the existence of “inner circle” inuences, I think all the information one needs to obtain monetary gains and trading expertise is - more than ever with the internet - in plain sight. Things were certainly different in the times of Wyckoff or Gartley, Gartley, just to mention two great technicians whose theories helped to turn the uninformed u ninformed public into informed market participants. If so many trading techniques or money management methods are accessible, what is it that locks our hidden power as traders? I hope the answer won’t disappoint you. The one and only secret to trading is: practice! We just like the idea of something else being there. Something secretive and hidden. Nope. Just practice. As you will see with the experts´ tips shared in this collection, there are no hidden skills. Just ideas that aren’t easily accepted as good enough to lead you to the skills you’d gain with dedicated practice. It’s true the skills themselves are not common, but the ideas, the concepts which lead to a high-level skill, are readily available.













Don’t think a good idea or concept when shared will lose its effect, because in reality what happens is that most aspiring traders might hear them and see them, but will not value them. So don’t worry if you see good tips being published. In fact, so many people who want to beat the markets are either too unrealistic about the potential gains or just too afraid of what might happen if they lose money, that they don’t accept what is being taught. So sit down and while you read this eBook, remember: don’t force your learning curve and take it a bit more easy. easy. No one believes that just by taking things easy, easy, amazing things can happen. If there was a secret, secret, that would be one. And yet another: investing in losses. This doesn’t mean to just go where the market wants you to, and therefore continuously lose. In reality it means give up your current beliefs, listen to what the experts are telling you and how you can “win” the next time. Don’t give up the idea of winning but don’t be greedy. greedy. That is not investing in losses, that is actually actuall y losing. When it comes to mastering anything it’s true that there aren’t any secret hidden ways of doing it, you just have to do it well enough until it becomes natural.

Gonçalo Moreira, Author of FXstreet.com of FXstreet.com Learning Learning Center













INDEX Technica echnicall Catalysts Cat alysts Fundamental Catalysts Risk Control Market Behavior & Psychology Trend Following













Technical Catalysts













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n e d i e S m a S

“Focus On The Lowest Trading Activity”

n e h C s e m a J

“Knowing The Strength / Weakness Statuses Of Single Currencies”

When identifying where the next turn in the market will be, most traders focus on where the most trading activity took place on a chart. This is also what everyone is taught to do. I don’t. I focus on the opposite, where the least amount of trades took place because this is where supply and demand is most out of balance and that’s where prices turn.

Trading Trading currencies is vastly different from trading other nancial instruments. The key differentiator: currencies are traded exclusively as relative, rather than absolute, entities. Although all forex traders should be well aware of this, it warrants further emphasis that currencies are traded in pairs. What this really means is that currencies are not traded in isolation, but rather in terms of their relative values against other currencies. If the dollar is weak, one should ask what exactly it is weak against. Is it weak across the board, or just ju st against Canadian dollar, dollar, or Swiss franc, etc.? Is it i t strong against euro while weak against yen? When a signicant bearish move occurs in EUR/















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ask, and answer. Knowing the strength/weakness statuses of SINGLE currencurrencies, instead of just currency PAIRS, is key to understanding currency pair movements and inter-currency relationships. Pairing strongest currencies against weakest currencies is a high-probability approach. It is essential that traders knows at all times the relative strengths and/or weaknesses of all the single currencies that are being considered for potential trades.

n e s o R m a d A

“Time “Time Of Day - Less Is More...”

The most signicant economic data focuses around a number of basic themes including ination, employment, growth, or lack thereof. News of this nature is typically typicall y released during the rst few hours of each respective trading session. As As traders react to the news, markets tend to enjoy periods of greater volatility and volume during these morning hours which are commonly known as the “active market hours”. Active Market Hours: EUR 3: am – 5: am EST.













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a g a e c i e L . B r a s é C

“Trading “Trading with Pivot P ivot Points” I’ve found as a determining tool to apply in the foreign exchange markets, both daily and weekly pivot points.

Some basic principals frst to trading with pivots: - They act as support and resistance. - If prices accelerate and hold above its pivot point, market participants will look to buy or turn bullish. - If prices trade below a pivot point, traders will be looking to sell or short conrming the sentiment has turned bearish. Rules I apply to trade trends with pivot points - In Uptrends: Buy dips to the pivot point and add to the position in S1 and S2. Use S3 to place a stop loss order. Use R1,R2, R3 as prot targets. - In Downtrends: Sell rallies to the pivot point and add to the position in R1 and R2. Use R3 to place a stop loss order. Use S1,S2 and S3 as prot targets.













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a t i h s a m a Y s s o R

“Scan Smarter – Not Harder” When studying Elliott Wave or any other wave pattern recognition theory, theory, so many traders put too much emphasis on what the wave count is with regards to the current market.

Rather than getting so caught up in where the market is in the count, I scan the markets for only 4 “high probability” patterns – Impulse, Zig Zag, Ending Diagonal and Contracting Triangles. Triangles. Certain aspects of these 4 high probability patterns have shown high levels of probable outcomes and they all can be fairly easy to see, even without Elliott Wave indicators or software. I trade primarily 14 currency pairs and I scan all my charts within minutes. Once I see any potential high probability patterns, I then investigate further with more analysis. I’m not suggesting people should disregard all that Elliott Wave Theory has to offer – as a full understanding will help you in your trading.













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k i r a n d e B a i r e l a V

“Market volume with no technical indicators”

Determining market volume could be critical when it comes to forex trading, as we understand that technical signals have higher probabilities of success when they come along with the right volume. For example, the break of the neckline of a gure, or a support or resistance level, are always considered reliable if volume is high, while pullbacks to those areas should show a lower volume, to give our signal further support.

However, However, not everyone realizes that volume indicators tend to be tricky: several of those are just j ust providing information about the volume traded in the broker/platform that we are using to work; they can’t measure the volume of the whole market. So how can we easily determine whether there is high or low volume at a certain moment? The easiest way for me is mostly a visual trick: I turn to my 1 hour chart, or even 30 minutes one, when I see something that could be understood as a break or a sign. If that particular candle is at least twice as long as the average that the pair moves













Fundamental Catalysts















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n i a s s u H r a m a A

“Adapt and Overcome”

u o

“You have to focus on the main story...

Always be willing and ready to adapt to the market. (a) Daily Ranges, (b) Volume and (c) Fundamentals, all provide key information and clues as to which technical analysis and trading strategies will work best in a particular environment. NO strategy or analysis method will work in all environments. If you keep a close eye on the abc and make copious notes and observations how changes in each effect market dynamics you will be able to ascertain which methods and strategies are most suited to each environment. Data and Evolution are Key.













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r e t h g i l k c i K n h o J

“Know What Moves Your Trade”

One of the most valuable lessons I have learned trading in the past few years is i s to rst identify what fundamental driver or drivers the market deems most important for a particular currency or the market as a whole. It’s easy to get caught up in reviewing all the economic indicators or headlines that cross the wires and then trying to assess what kind of impact it could have on price action. Yet, Yet, if for example yield expectations are the market’s sole concern, we shouldn’t waste time monitoring growth numbers and potentially confusing an otherwise straightforward forecast. Furthermore, when looking for that primary catalyst, it is important to remember that the market always boils down to the equilibrium of risk and reward in one way or another.













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a high probability indicator exists!Institutions pay armies of analysts to determine what is the “content of last l ast prices”. What have been “factored in” in relation to a house “fundamental view”. Institutions do technical analysis under the continuous guidance of a fundamental view. If you know what is really in the price, your technical analysis becomes really predictive because you can judgethe potential action of traders with a larger time horizon and outlook than yours. Simple technical systems become effective and protprotable as part of a proper fundamental fu ndamental view. view. Ignore the fundamentals at your own risk! (And please, don’t confuse economic data releases with the real drivers behind currency prices.)













Risk Control













16

y r o g e r G h t e b a z i l E

“Plan the trade, then trade the plan”

What usually hurts novice traders is poor risk management; choosing wildly optimistic prot targets in order to justify cripplingly painful stops and staying in losing trades far beyond the original plan. It’s human nature to take prot on winning positions too early for fear of losing small accrued prots and to hold onto losing positions (and worse, doubling down!) in the vain hope that the market must surely reverse soon. One of the best ways to enforce good discipline is to ensure that when entering any trade, there are always predetermined stop and take prot orders entered and that the amount of capital you risk is AT AT LEAST as much as you aim to win. The ONLY ONLY adjustments that should be made after that should















17

z o ñ u M o t r e b l A

“Risk/Reward Ratio vs Investment Horizon”

My main discovery about trading in the last months is that risk/reward ratio should be didi rectly proportional to your investment horizon. That is, when you’re trading in very short time frames, scalping for a few pips, then you’re you’ re risk/reward ratio should be low, even lower than 1. The concept behind this is that it makes no sense to hold a position too much time wait-













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will likely yield in better results for newbies in the long run keep them away from burning their account. accou nt.

g n i l l e h c S n o R

“Never use more than 2% equity risk when I place stops.” I am in trading since 1983, a time that there was no computer or real-time data, just a













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k r o Y n a g a e K

“Head not Heart!”

It is always hard to take a loss. However, the rst rule that needs to be adhered to by a novice trader is that positions can and will go against you and that stop losses are an important part of any trading strategy. strategy. I have been in the position where I have gotten emotionally attached to a position and didn’t trade with my head. On occasion, things ended up working out. However, However, more often than not, I ended up losing more money. money. In these situations, not only do













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l l e w o P n w a h S

“Count to ten rule” If you are in that much of a hurry, you probably haven’t done your analysis or you might be chasing a move. Do you know your stop and take prot levels? One quick review, count to ten and then take the trade.















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y e r F k e r e

“Don’t think you can predict the fu- ture... because nobody can” The biggest thing that got me from a losing

























24

i k s w o l a h c

“Three’s a Crowd” Most people know the old saying “Two’s Company. Company. Three’s a Crowd”. I use that easily













25

r e e b s I d e

“Never go against the general trend” Identifying the general trend whether on the short/medium/long term is the most essential,













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to arbitrarily pick a top or bottom. The biggest fear of many traders is that they buy the top or sell the low. To avoid this, I prefer to join a trend at value. There are many ways to identify the value points through the use of my Double Bollinger Band















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There Are No Secrets

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