Updated: Oct 12, 2020
General Disclaimer: This guide is for educational purposes only and is not to be used as advice on trading specific currencies. Trading Forex has an inherent risk to traders including the loss of some or all of your capital. Trading using leverage consists of risks that should be taken into consideration before beginning trading. ChartAddicts is an educational platform that does not provide financial advisory services in any capacity. Please consult a professional if you are new to trading. This guide is designed to educate traders as to the realities of the markets through my personal experience. ChartAddicts is not liable for any decisions made using the information in this course.
Introduction In this guide, you will receive insight & value on how I became a consistent trader within 2 years. All the tips in this book have mostly been from my personal experience in the financial markets, strategies that have worked for me which shaped me into a disciplined profitable trader. In this guide, I will mainly focus on technicals, though I will provide some insight on psychology which I believe is one of the most important aspects of trading followed by risk management and last technicals. You can also hope to find my journey and how I started, setups, and videos of trades I took. Keep in mind this is what has worked for me and helped me get to where I am. Not everything in this guide will apply or resonate with you “so take what is useful and discard the rest” - Bruce Lee
My Journey Growing up I never thought I would be investing or doing anything I am now. The idea of investing first came into my mind when I saw my best friend learning about stocks back in 2015-2016. I never really thought anything much at the time considering I was focused on my academics. In 2017 about one year later I decided I was going to start learning about the foreign exchange market. I began reading articles, but I did not officially make the full commitment.
A few months later I made my first investment into a basket of cryptos and along with the commitment to start forex. When I started, I invested about $6000, $2000 on courses, $3000 on money I lost in the market, and $1000 on books/other learning material.
Six months into my journey I began to start learning on my own with a few friends I kept in contact with. However, I felt like I was in the jungle as I had no idea what I was doing. Year by year I started to pick up the pieces which helped me finally see the light at the end of the tunnel. I will share these pieces with you along with the blueprint to help build some structure in your system.
Importance of a System Technicals takes up 20% of what it takes to be profitable. Though, why is this guide dedicated to it, some of you may ask? Some of you may answer, well because without a truly tested system, (which encompasses your strategy, pairs, schedule, and more) you will never reach your fullest potential as it will feel like you’re gambling as you’re taking random unorganized trades.
I feel trading is two parts you the trader/driver and the system/car. First, you need a car to get on the road and build that experience just like you need a strategy to test your system. Like driving a car, if you don’t feel comfortable driving, you’re nervous about crashing, or worried that the car might break down on you, your psychology won’t be at its peak just like your performance. Without a reliable car or trading plan, your psychology will never be where it should be to perform in any market.
Importance of Psychology & Risk However, I believe any trader with proper risk management and psychology (attitudes, mindset, beliefs) can acquire any system and take it way beyond its capabilities. Just like any professional driver/mechanic knows how to drive/fix up any car that might not be operating to its fullest capacity. However, a trader that does not know how to drive or even leave a parking lot will eventually damage his vehicle just like taking a trading system that has a proven consistent track record and blowing the account.
As a trader in this industry, I’ve seen many individuals master this skill set. Some in a few months and many in 3-4 years. But what have they mastered and how that have they mastered it you may ask? Well, that topic is for a different time, though it did have to do with:
- Having a system/plan/strategy
- Discipline, control, and patience to follow the system
- Positive attitudes and way of thinking
- Dealing with losses
- Proper risk management
Once you guys have your system and strategy it’s then up to you to get on the road and test it. To build your own experiences and lessons, which are essential moments you will have to face on this journey. You can’t learn to drive by letting someone else do it for you. Sure, you can pick up some tips and methods, but the true learning/feeling won’t be there. The real experience/learning comes from hands-on. Keep in mind the goal is to be self-sufficient and this is how we are going to get there.
Diving in When viewing the markets, it is safe to say that it trends in three ways, in general terms up, down, and sideways. With that being said there are only two ways to make money, buy or sell. When you decide that you want to get into a market, there are only going to be two buttons you can click, buy, or sell. So, in reality, the market can only continue or reverse in a direction. It is our job to exploit these opportunities. “When is it time to enter.” you may ask and that is when an opportunity presents itself.
As a trader, you must be able to do many things and think in different ways. To someone starting, it may feel very contradicting. The most important aspect is to stay in the flow/now, not thinking but doing. “Doing what, “one, perceive an opportunity, two execute on that opportunity, and three, hold until otherwise.
Otherwise would be price action, reading price: structure, candles, wicks, bodies, & levels. In the rest of this guide, I will show you some examples of continuation & reversal formations that have yielded others and myself high returns. Why is this significant you may ask? Because once you’re in a trade you have to be aware of reversals so you can secure, trail, scale-out or if it continues so you can hold or potentially scale in/renter.
I will show you a few examples of live trades called this year that have yielded profits. These examples will be focused on continuation and reversal formations in an uptrend, downtrend, and sideways trend.
Before we begin, keep in mind there is no secret formula or magical indicator that works every time. The markets are too complex, with that being said I will show you how to utilize these formations with confluence.
My Strategy In this short series, you can hope to gain insight into what has worked for me in the financial markets, with live examples. This is such a vital aspect for any trader as it is significant to understand market cycles so we know when to enter and exit.
Continuations & Reversals
Once you know what cycle/phase of the trend you are in, you can take advantage of the opportunities with a strategy as demonstrated above.
Tips for Improvement
- Having a trading plan/system/strategy
- Journaling trades
- Documenting before & after screenshots
- Evaluating trades/progress
- Utilizing Myfxbook
By simply applying these into your system, you will start to see improvements in your trading. As a trader there aren’t too many things, we can do right, we see an opportunity and we take it. However, there are so many things we can do wrong. By implementing any of the acts on our list we will gain more structure and discipline with our trading.