Mark McRae Forex Trading - Forex Trading Mechanics

Momentum Trader - Momentum Trader Dr Barry Burns -Top Dog Trading Method

noreply@blogger.com (C Tuzzles) — Mon, 30 Jul 2012 22:41:00 +0000

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Trend Lines- Enormous Profits Small Risk by Mark McRae

noreply@blogger.com (C Tuzzles) — Wed, 14 Dec 2011 06:09:00 +0000

This particular technique requires a little practice and it is something that is well worth looking out for. I call it roofing and flooring. It is best done using a large time scale like a weekly or monthly chart and then lowering the time scale for entry.

It works like this. First bring up a weekly chart of the market you are following. We are only looking at two bars, any two bars which, we shall call bar 1 and bar 2. You then draw a trend line connecting the bottom of bar 1 and bar 2. From there you extend the trend line into the future (the week coming) and that shall be know as bar 3.

The idea is that in an up trend price will often come back to that very short trend line. As it approaches the trend line of bar 3 you can enter the market with very little risk and massive potential.

In the example of the Japanese Yen/US Dollar the low of the bar was 122.57. The trend line came in around 122.60. You could either have entered long at the trend line of 122.60 with a top loss below the trend line at say 122.40 or you could have dropped down to a 5 minute or 15 minute intraday chart to watch price action at this level.

The idea is you are only in the trade for 1 bar so you would close out at the end of business on the Friday. In this case the close was 124.50 which, was a gain of 190 pips (Approximately $1526).

The reverse of this is true for a down trend. Draw a trend line along the highs of bar 1 and bar 2. Extend the line one week forward to find an entry level. The trend line in this case was around 123.00 and the actual high of bar 3 was 123.19. A stop could have been placed at around 123.40 or you could have dropped down to an intraday chart to look for an entry. The actual close of bar 3 in this example was 120.24 if you had entered at 123.00 you would have made 276 pips (Approximately $2295).

If you drop down your time frame you can wait for price to hit the trend line on bar 3 and when it starts to move in your direction jump on board. In an uptrend once you are in you can place your stop below the low of bar 3 and in a down trend you can place your stop above the high of bar 3. See chart below.

Good Trading

Mark McRae

PS. Don't for get to check out our bookstore at http://www.surefire-trading.com/

Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our disclaimer.

How To Nail The Market When Everyone Else Is Wrong by Mark McRae

noreply@blogger.com (C Tuzzles) — Sun, 04 Dec 2011 00:35:00 +0000

Picture the scene - you have done your analysis and have been waiting for the breakout of a range. You might even have identified a head and shoulders or double bottom. So anyway, you have a trade all set up and you are just waiting for the move. Let's say you have identified a rectangle and are waiting for the breakout. You have your orders set up so that if it breaks up you are automatically taken long. You're trading an hourly chart so you are checking it frequently to see if there has been any movement.

Suddenly- bang- the market starts motoring up. Your buy stop takes you long and you are sitting pretty. You start to watch the market and check to see that your stop loss is in place. Then suddenly without warning the same bar that made you feel like you should start counting your money turns around and heads back down.

As it heads back down you just know it's going to take your stop - and it does. Now you no longer have a position. You start to look around for another entry or setup to get a trade on: but wait - we just missed a huge opportunity.

In this lesson I want to explain a great way to benefit when everyone else is wrong. Here's the theory. Most trader are very single minded when they trade. They get an idea into their head and it stays there.

Once they have decided they are going to go long on a breakout they generally stick with it. This is particularly true of well-defined technical levels like the 52-week high or low. It could even be a trend line or chart pattern. The thing is, it could be anything.

If you follow only one or two markets you will know what I am taking about. Even though you shouldn't listen to other traders you will probably have a fair idea of where the major support and resistance levels everyone is watching.

Remember also that trading is as much about the study of human behavior as anything else. Once one of those big levels breaks everybody and their dog will try and get on the right side of the move. This is where we come in - listen up, this is important.

When The Market Doesn't Do What You Expected It To Do, Chances Are It's Probably Doing The Opposite.

For example - lets look at our greedy little friends who went long on the breakout and got wrong footed. Some of their stops will have been taken and some of the kamikaze crowd without stops will be filling their pants. This is exactly where we jump in - when everybody else is exercising damage control.

To take advantage of this we need two plans. Plan A and Plan B. As you probably guessed, Plan A is to go with the crowed: if the market breaks in the direction you first assumed it might, then you are there. You have an entry point, a stop loss level and a probable target already worked out.

Plan B is where we excel. If the market breaks the other way, we also have a plan.

In the chart above you can see that we had a down trend followed by some consolidation. The market first went down to form support and then headed back up to the upper trend line.

Now very often consolidation will break in the same direction as the trend, so it wouldn't be unreasonable to expect the market to break down, which it did. This would have taken us short, with a stop probably at the previous resistance and a measured target on the down side of the difference between the support and resistance.

This is what happened next.

Instead of continuing down the very next bar became a reversal bar.

Side Note: For the two period reversals up, the first period should be at the end of a strong down move. The close should be near the low of that period and it is preferable that this low is a new recent low. The second period should open near the close of the first period and should regain most if not all of the first period's losses and close near the high of the first period. There does not need to be a reversal bar for this to work. It just so happens there was one in this example.

So now the market is doing exactly the opposite of what we expected. Being the opportunists that all good traders should be - we close the short position and open a long position with a stop below the low of the failed breakout.

We are now long the market with a stop loss in place - but we need a target. The first target I would head for would be the previous resistance. The reason I would choose this is simple. We may be headed into a long period of consolidation and the price might start oscillating between support and resistance.

However as the failed breakout also happened to be a two period reversal, I might keep the long and just monitor what happens at the resistance level. Depending on market conditions I might also have an order to add to my long position.

The important thing here good buddies, is to always be ready to exploit what the market is doing. When you see an obvious failure of a - trend line, support/resistance or a chart pattern, have a plan in place to take action. Don't just watch it - exploit it.

I know some traders who only trade this way. They watch for easily identifiable patterns, which everyone is watching and exploit the failed move.

Good Trading

Best Regards
Mark McRae

Intraday Trading Tactics by Mark McRae

noreply@blogger.com (C Tuzzles) — Sat, 03 Dec 2011 22:20:00 +0000

In this lesson I want to discuss intraday tactics that you should be aware of when you start to trade intraday.

By intraday I mean very short time frames such as 1 minute, 5 minute and 15 minute charts. This will apply to traders who actively trade and probably trade frequently during the course of the day.

Regardless of what technique you use to enter and exit the market this approach will aid you in deciding if you are on the wrong or right side of the market.

The first thing you should do when trading intraday regardless of the security is to have some general idea of where the market has been recently. You cannot of course start the day with a strong directional bias. The reason you cannot start the day with a strong bias is that intraday the markets can be very volatile and if you have stubbornly decided the market will go one way and it starts to go another you will find it difficult to change direction. This is because you will try and convince yourself that the move against you is temporary.

To overcome this directional bias I use the following discipline to help tell me when the market is doing something different from what I expect. To analyze the market first think of what happens in a typical up trend or down trend.

Let's say that in an up trend the last two-day have made higher highs and higher lows. The close has also been higher for the last two days. In order for that little up trend to continue what should happen?

For the up trend to continue on day 3 you would expect a higher low, a higher high and a higher close right! So lets look at what should happen on the third day.

On day 3 I would first like to see a low in place in the early part of the day. I often find that when an up trend is continuing the low is made first. In a down trend I like to see the high of the day made in the early part of the session.

As you can see from the chart above of day 3. We had the open then early in the day a low was made. As the day progressed the high of the day was made towards the later part of the day and then finally the close.

So how does this information help me? Well, if for example the low of day three continued lower than the low of day 2 I would begin to wonder if the market was retracing or reversing.

If the low of day three took out the low of day 2 when I expected it not too I would stand aside until I had a clearer picture of where the market was headed. It may just be that the market will continue up after making a low lower than day 2 but why take the risk.

I also like to see the low of day 3 tested in some way. As you can see from the chart the low was made then the market made some progress upward and then came back down to near the newly formed low where it found support (buyers).

This for me is a great indication that there is some demand at that level and gives me an opportunity to enter the market with very little risk as I can place my stop under the newly formed low.

As openings can be volatile I like to watch the first 30 minutes to 60 minutes to see how the market is shaping up before taking a position. I start with no definite directional bias but I am aware of what has been happening in the last few days and if it does what I assume it will do then I am ready to take action.

If it does not do what I assume it will do then I know that I may have miss-read the market and am ready to rethink my tactics for the rest of the day. As you should know by now the market is always right so its OK to have an opinion but don't get married to it.

If the market takes out the low of day 2, stand aside and rethink your approach for the rest of the day particularly if the move is a strong move in the opposite direction from where you thought the market would go.

The one thing you shouldn't do is wake up thinking that the market is going up (or down) and just keeps trading in that direction. Don't fight the market, it will always win. Just go with the flow and realize when you are not going your way.

Good Trading

Best Regards
Mark McRae

Symmetrical Triangles by Mark McRae

noreply@blogger.com (C Tuzzles) — Sat, 26 Nov 2011 21:06:00 +0000

Symmetrical chart patterns can be found in almost any market and any time frame. They normally signify some indecision in the market and as the pattern develops it is common to see a decrease in volume. The pattern forms as the bar's highs and lows inside the triangle converge so as to outline the shape of a triangle.

Symmetrical triangles have a tendency to break in the direction of the preceding trend and are often accompanied by heavy volume. Although this is often the case it is not a given and regardless of the direction of the break there are normally good opportunities to trade the breakout.

The fast way to tell if it's a bullish or bearish triangle is to find the first point of contact farthest to the left inside the triangle (see chart example). If the first point of the triangle is at the top left then it is a bullish triangle. If the first point in the triangle is in the bottom left then it is a bearish triangle.

To find a potential target of a triangle you can measure the base of the triangle and then add or subtract that from the breakout point. Lets assume that point 1 in our bullish triangle is 95 and point 2 in the triangle is 80. If you take 80 from 95 you get 15. Now lets assume the breakout point is 88. You add 15 to the breakout point to get 103. Therefore 103 is the target area for the breakout. The same applies to the bearish triangle. If point 1 were 80 and point 2 were 95 you would still deduct 80 from 95 to get 15. If you get a breakout point of 85 you would now deduct 15 from 85 to get 70 as a potential target point.

In the example of the Japanese Yen (see second chart) point 1 was 111.71 and point 2 was 102.00 which gave us a base of 9.71. The breakout occurred at approximately 108.90. If we add 9.71 to 108.90 it gave us a target of 118.61.

Although symmetrical triangle can often mean continuation of the trend this particular triangle (second chart) formed at the end of a downtrend and broke up.

Good Trading

Mark McRae

PS. Don't for get to check out our bookstore at http://www.surefire-trading.com/

Did You Know? by Mark Crisp

noreply@blogger.com (C Tuzzles) — Sat, 26 Nov 2011 21:00:00 +0000

Trading For Beginners is really fortunate to have interviewed Mark Crisp recognized as one of the industries top traders. If you have ever tried to get a top trader to spend some time with you then you will know how difficult it is. Mark graciously agreed to give some tips and insight into what's really happening in today's trading world.

Did You Know?
by Mark Crisp

A number of years ago I did a survey of over 1,000 people who had replied to adds I placed in local newspapers advertising various stock market information. This is what I found out:

Did you know?

1) Over 84% of traders have never read a book on the stock market
2) 76% do not have a set of rules (a system)
3) Over 80% do, or have, relied on their broker for advice.
4) Over 84% have, or do, trade on news stories
5) 84% rely on technical analysis
6) Over 60% have, or do, use options.
7) 89% have never shorted a stock
8) 93% have, or do, use an advisory service.
9) 72% consider themselves short-term traders.
10) 68% consider themselves "good" traders
11) 94% have never practiced money management simulations
12) 44% have attended a seminar on trading.
13) 54% have, or do, subscribe to a trading periodical.
14) When asked for three trading principles they live by here were the most popular ones:

1) Trade good shares
2) Trade with the trend
3) Buy low

15) Over 73% admitted they were losing money trading their own accounts.

DID you know?

1) Over 95% of private traders lose money trading?
2) It takes on average 6 months for a trader to either lose their account or give up.
3) Over 80% of private traders admit they trade as a hobby and not as a business.
4) Over 90% of traders say entry is THE most important element in trading success.
5) When given this list and told to place it in order of importance this is how it came out:

1) Entry
2) Discipline
3) Exit
4) Make a plan
5) Money Management

Is it any wonder 95% of private traders lose money? It shouldn't!

Now Lets Look At 33 Rules That Will Dramatically Help Your Trading

Rule 1

If you are a beginner or have no market profits to your credit, trade only in an imaginary way rather than with actual money; if after reading Momentum Share Trader, you think that you have learned a great deal, prove it to yourself by buying and selling stocks but without money. Enter every purchase in a ledger, as though you had given an order to your broker. Add a half point for commission and taxes. Execute your buying and setting at a time you think most appropriate, as though you were playing for real money. Neither fool yourself nor your ledger. "Know thyself and unto thyself be true." After a few months of this type of trading, strike a balance sheet. Learn how many times you were right and how many times wrong. If the times you were right exceed the times wrong (not how much money you won or lost), go ahead and trade with money, but not with very much at the beginning. Ten shares are quite sufficient and if you profit, confidence in yourself will be built up. Thereafter you may increase your trading within your means.

Rule 2

Should you trade without first laying the foundation by a few years study of the scientific aspects of the market, you might as well set your mind to the inevitable result that a good part of your capital will be lost before you succeed. (That is Wall Street's usual charge for "breaking you in".) It is either by practice or study that you will learn how to trade. Naturally, in angling for experience, you will make plenty of mistakes, especially so if you are inadequately prepared. Therefore, if you have, let us say $1 0,000 at the time of your initiation; figure that you may lose a good part of it before you will make much headway, That is why I strongly urge preparatory study and training and to trade only in ten share lots in the beginning. Learn the market at the lowest possible tuition fee. You have time to play in 100 or 1,000 share lots after you have learned how to trade; and that may mean a few years. Should you start with 100 or 1,000 share lots, you may not have enough money left after you have learned. So start low and grow as you go along- Still better study first and trade later.

Rule 3

Do not deal in inactive stocks. Trade in live ones.

Rule 4

Do not hold on to a stock if the trend is against you. You may be able to buy more stock later for the same money.

Rule 5

Do not be overly enthusiastic about your prospective profits, they may never come, or when they do may disappear because of "pride of opinion" or "hope, "Hope is your worst enemy in the market.

Rule 6

Do not trade with someone else's money, whether your brokers or your friend's. Do not trade with money, which you can ill-afford to lose. Before attempting to trade, make certain that all your obligations are taken care of.

Rule 7

If you attempt to make money in a hurry, you will not succeed'. 'There is money in Wall Street for you - If you do not get it today, it is there for you a week or month hence. You have a better chance to get it, however, if you wait'. Trade when the TIME is ripe. (Patience is a prime requisite for successful trading.)

Rule 8

Do not be discouraged if you make a mistake. The best traders make them. But learn to profit from those mistakes and try never to repeat them. Attempt to find out the underlying cause. When you have thoroughly reasoned out what you did or failed to do, resolve not to repeat the same error again. Do not place faith in luck. If you think it is luck that makes the market fluctuate, you will never be a successful trader. There are reasons why the market goes up and down, and it is up to you to find them out. (We all make mistakes but only a fool or a weakling repeats them.)

Rule 9

Be skeptical about any trade that appears to be a dead-sure winner. When you are one hundred per cent certain that you will come out ahead that is just the time to look about with a critical eye. The market may have many surprises in store for you. (More people get stung by sure things"' than by bees.)

Rule 10

Do not guess the market. Trade only AFTER you have come to definite conclusions. By an analysis of the situation. Do not arrive at these conclusions hastily. Measure every possible angle first, such as fundamental economic and political conditions-the trend, Dow theory, and the signals from your charts. When these are in your favor, determine if it is the psychological moment to act.

Rule 11

Bear in mind that the market is in the strongest technical position when it is 'Weak' with Prices down and news gloomy. It is in an, extremely weak position when it appears to be strongest, as when prices are up, business booming, and newspapers full of prosperity psychology. Following the theory of cycles, it works out thus- the strong factors have potential weaknesses, which must assert themselves sooner or later;

Forces, which are momentarily weak, possess potential strength. Following logic, it works out thus: When the market is strong, and the press is filled with rosy prospects (indicating prosperity), the news or happenings, which influenced the market to go up, has already materialized. Therefore it is most unlikely that the market will go higher. On the other hand, when the market is weak, from the standpoint of price, it is in a position to discount good news, which may be in the making.

Remember then that when good news is out, and the market high, the combination of "cause and effect' has completed its mission. Because the news was good the market went up. Likewise, when the market is down the combination of "cause and effect' has reached the end of the effect. Because news was bad the market went down. To profit by stock market action you should buy before the "cause is known-that is, before news is out. You will then be in a position to realize on the effect to come-namely, higher prices (Remember what Jesus said about the strength of those who are weak and about the weakness of those

Rule 12

If you want to come out ahead, do not repeat your mistakes. In that way you will eventually succeed. Remember, also, that the market always gives you a thousand and one opportunities for new errors. So be on guard!

Rule 13

It is advisable to trade in not more than ten stocks. Study these stocks painstakingly, their actions for months back, there resistance points, and their behavior, so that you may know exactly what they are capable of doing
.

Rule 14

Do not "average" your stock if it goes against you. Do not buy more of the same stock at a lower price if it has already dropped. Close it out instead.

Rule 15

Place your "stops" so that they will be 1/4 below even figures on a "long" buy, and a 1/4 above even figures on a "short." Place your stops below resistance points on a "long" buy and above resistance points on a "short' sale. The study of resistance points on individual stocks and on the Averages is of utmost importance.

Purchase or short sale when that point is reached, sit* sell out. In all probability you would be doing better than "'they." Do not confuse this procedure with stop-losses placed to protect profits on a stock purchased or shorted. In such cases, place your stop loss orders with your broker and move them up gradually as the stock advances so as to protect the additional profits, which have accrued.

Rule 16

Success in speculative operations on the Exchange is based on the following. First, on your ability to determine economic and political conditions, not as they are today, but as they will be three to six months hence. Second, on your ability to determine what "they' in Wall Street are doing or intend to do with the stocks they have on hand or with the stocks in the hands of the public.

If, after a thorough -study of the situation, you decide that they are interested in buying, then do the same as if you suspect they are disposing of their holdings. Do likewise. Go short if you detect the move at the top. Follow them and you will succeed. Buck them and you wilt fail.

Rule 17

Begin a trade with the expectation that your profits shall be four or five times your risk. If you anticipate only a two-point rise, do not buy. Wait until your analysis shows a possible advance of 8 to 10 points. Then risk two points on a five to one shot. This is much better than a one to one chance. Theoretically, it means that you should trade only on intermediate trends and not on minor trends.

Rule 18

Money can best be made when buying on the down of a move and then selling close to the top. If you have predetermined by analysis the resistance points on the particular stock you are dealing in and on the Averages, the possibility of error is limited.

Rule 19

Purchase stocks in the strongest groups only. As a general rule some groups are stronger than others. At a time tech may be strong and oil weak. Trade in the strongest groups for a rise. This you determine from the market action its-self. In each sector there are always a small number of stocks that perform the best. Your job is to recognize these stocks and profit from them.

Rule 20

Trade evenly. Always keep your risk the same in every trade. It's tempting after a number of wins to really go for it. Yet this is when you are most likely to have a loss. Taking a loss when you are over extended is not good money management.

Rule 21

The most important thing to know about the market is the "trend." Do not attempt to trade until you are certain of the direction of the trend by a thorough analysis. Always trade with the trend and not against the trend. If the trend is doubtful, stay out of the market entirely until it is visible, even if it should take weeks or months. You will be well compensated by not trading in a market of which you are in doubt. Money is not made by being in the market on all turns. (In fact that is a good way of losing it.) A few selective trades per year by thoroughgoing analysis will net you more than trading day in and day out by guesswork in other stocks, which are in their technical up-move. The study of "technical" positions of individual issues is both vital and interesting.

Rule 22

Learn to be patient Guard against hurry-skurry (get rich quick). If you have calculated
that your stock will move up a certain number of points and you think that you are correct in your analysis, have the patience to wait. Your opportunity may arrive a few days after you have sold out your stocks at a lower figure. The test of a good trader is the degree of PATIENCE he can muster. (The world might very well have been destroyed in the days of Lot if the good Lord were without Patience. So says the Book of Books.)

Rate 23

Do not permit your opinions about political matters to influence your market judgment. You may have a soft spot for the underdog and sympathize with the New Deal. But during market hours consider President Roosevelt's speeches and actions objectively so that you may gauge every possibility and reaction. 'Learn to exercise professional judgment. Do not allow political wish fulfillment to interfere with your stock
.

Rule 24

When the tape has been going in a certain direction, either up, or down, and it comes to a stop for a few days that usually signifies that a new chapter is starting. Sometimes it may be a stronger continuation in the same direction. More often, however, it indicates that the market may soon turn in the opposite direction. (For "tape readers" only.)

Rule 25

Remember that the reason stocks go up and down is basically because of supply and demand, If there are more buyers than sellers, stocks will go up, even though they were heading downward. Some may wish to sell, but if those who buy are more numerous or have more purchasing power, stocks naturally will go up. When stocks do go up, it is because people went to pay the higher price. In other words, the demand is greater than the supply. When a point is reached where there are no more buyers at the prices asked, then the demand has diminished. From that point on a decline will take place. With this in mind, act accordingly. When you notice that the supply is greater than the demand, sell. You cannot be certain how for they might go down, because you cannot measure how great the supply is and whether the demand shall be strong enough to stop this supply. The time to replace your stocks is when you are certain that demand has overcome supply. (For "tape readers" only.)

Rule 26

Do not ride up and down with a stock indefinitely. You may have bought with the idea that it will go up ten points. But that is no reason why you should not take profits beforehand. If they are available. If you bought at 100 with the object of selling at 110 and followed up to 105, (half way) a corrective reaction may be in order, as it may wish to test the 102-103 level. Is there any reason why you should let it ride down on you? Since the commissions are, approximately only a half point, the wisest thing then to do is to sell at 105, buy back at 102-103-104 or even 105. Do not stay on while it is reacting as it may go below 100. This gives the in-and-out trader the following advantages:

1. An opportunity to buy for less, thereby making additional profits.

2. Taking no chances while it is slipping on the way down

3. If the stock should react to 103-104 and then shoots up to 106, it is a safer buy at 106. It has already gone through the reaction and consequently has a clear road ahead. (Remember, you cannot marry a stock on buying, nor do you pay alimony on parting.)

Rule 27

Watch commodity prices especially wheat and cotton. Take particular note of bank issues. If they go down, most likely all other stocks will go down, a sharp drop in commodity prices usually foretells a drop in stock prices. Another item to watch is foreign selling. During 1937 there was considerable foreign buying and selling. The buying was during the beginning of the year and the selling during the latter part. Many breaks in the market were attributed to foreign sailing.

Rule 28

It is advisable to place, a time limit on stocks. If a stock does not come up to your expectations within a certain time, sell, even at a loss. You cannot afford to have your capital tied up for too long a period. Meanwhile you may be losing out on opportunities if you had invested. Especially true in momentum trading. If your stock does not show you a profit after THREE weeks get out! Something is not right.

Rule 29

Do not take money out of your business for trading on the market unless your business can unquestionably do without it. Do not trade if it will
cause you too great anxiety. You will never succeed in that state of mind

Rule 30

Do not try to squeeze your stock for the last quarter or half Point. If You have made a substantial profit, it is best to cash it.

When the market reaches the stage where you think it is forming a top, it is then advisable to actually place a stop-loss order with your broker
fractionally below the last sale. In this way you take no chances. Should it

Happen that the stock moves higher-a procedure most likely, since at that level the public usually enters the market to give the stock a further
push-up-you will gain the additional point or two that the stock may make. At the same time your paper profits will be protected.

Rule 31

When you decide to take profits by selling, do it on the up-move, while the stock is climbing. Do not wait until the movement exhausts itself, as you will then have to sell for one-half or one point less. (Strike while the iron is hot)

Rule 32

When the market is in an up-trend and you wish to take advantage of a little shakeout to come, trade short, but only with a small % of your profits from the long trades
.

Rule 33

When buying on a reaction, it is best to place orders at stipulated prices
under the market instead of "at market." When buying while the market is advancing it is best to buy "at market," as otherwise you may not get stocks at your price and an opportunity may be lost.

Rule 34

It is very important that you know before buying or selling where the resistance point is on the Averages (Dow-Jones or others) and on the stock you are trading in. For instance- if your records show that there was a good deal of resistance at 102 on Steel, you should not buy Steel at 101, as it may sell off at 102. You should buy at 95, by following it up to 102 and then selling, you can make a profit. The same is true for the Dow-Jones Averages. If on previous occasions there was a resistance at 190 on the Dow-Jones Averages, sell at 189.

To Learn More About Mark Crisp And His Unique Trading Methods
Click Here

Good Trading

Mark McRae

PS. Don't for get to check out our bookstore at http://www.surefire-trading.com/

High Probability Spikes

noreply@blogger.com (C Tuzzles) — Sat, 26 Nov 2011 20:55:00 +0000

Trading spikes in any time frame can be a very high probability trade with low risk relative to reward if our unique set up is followed. Spikes fall under exhaust patterns and signal that the market is ready to reverse.

Traditionally the spike or ''V pattern'' as it is sometimes known will reverse very quickly and is difficult to trade because by the time you identify that it is a Spike it is normally to late.

The type of Spikes we will trade will allow us sufficient time to identify the pattern and enter the market with relatively low risk. This requires some patience to let the pattern develop but it will be worth it once you see the results.

As with all trades the first thing you are going to do is figure out where you will get out of the trade before you put the trade on. You must always have some kind of money management in place when trading.

If you refer to the charts below you will see that there is 4 parts to the spike trade. At point 1 you may or may not see an extended trading range. At point two you may have identified the pattern as a spike. We however wait to confirm that we have a spike until we see the retracement to point 3. This is the set up and we are now ready to trade.

The breakout happens at point 4. Once we have identified that we have a spike at point 3 we place a sell stop order just below point 4. As soon as the order is hit at point 4 we place our stop loss order just above point 3. This immediately limits your risk. The reverse is true for long trades.

The minimum target I would expect to see would be the distance from point 2 to point 3 extended up or down depending on the direction you are trading. If traded in this manner you can expect as high 75% winners.

You will also notice that this type of trade tends to work quickly. If it is taking a long time to get going (more than three or four bars) after you have entered at point 4 you may wish to lock in any profits and close the trade. Another technique you cam employ is to use a trailing stop and at the first sign that the market might reverse, you can close the position.

Good Trading

Mark McRae

PS. Don't for get to check out our bookstore at http://www.surefire-trading.com/

Inside Days by Mark McRae

noreply@blogger.com (C Tuzzles) — Thu, 17 Nov 2011 22:42:00 +0000

Inside days can be very profitable if traded correctly. First of all it is necessary to identify an inside day.

At the close of the market you are following take a note of the high and low for that day (day two). For it to qualify for an inside day the high must be lower than the high of the previous day (day one) and the low of the day must be higher than that of the previous day.

In other words the bar (day 2) must be inside that of the previous day (day one). This is the set up. I like to trade this in two ways.

The first method is to place a buy order a few ticks above the high of day 2 and a sell order below the low of day 2. Once your orders have been placed it doesn't matter which direction the market goes you will have a position.

You can place your stop loss order in one of two ways. You can use a dollar amount or if the inside day (day 2) is not too large you can place a stop loss a few ticks above the high of the inside day. If you are taken short or a stop loss a few ticks below the low of the inside day if you are taken long.

I like this trade to work on day 3 only. If it has not worked on day 3 I cancel the trade. It may still work after day 3 but in my research it tends to make the most gains if it works in day 3.

The second method is to first identify an inside day on a daily chart and then trade it intraday. If you are trading intraday you can monitor price action at the low or the high of day 2 and either enter the market as the high or low of day 2 is taken or enter on the first rally or dip as the case may be on a smaller time frame.

Good Trading

Mark McRae

Outside Days by Mark McRae

noreply@blogger.com (C Tuzzles) — Thu, 17 Nov 2011 22:29:00 +0000

Outside days can occur frequently on daily charts. The secret of the outside day is the bigger the better and it has more meaning if found at the end of a trend.

They can be short lived and I always take my profit quickly. The outside day (OD) should completely encompass the previous day. It must have a higher high than the previous day and a lower low than the previous day.

One of the most important things about this pattern is that the bar closes in the opposite direction of the trend. If the trend is down the close on the OD must be near the high or in the upper part of the bar. The opposite is true of the up trend. The OD may still work if this is not the case but my research show that it is more effective if it does close in the opposite direction.

A great example of this happened on the cash Dow only a few days ago (24th July 02, refer to chart). I like to trade this in two ways. First, depending on what the market has been doing prior to the outside day I will place a entry order a few ticks above the high of the OD if the trend has been down and I am looking to get long. Once I am in the market I will place my stop loss either as a dollar amount or at the .618 fibonacci retracement of the OD.

If you don't know anything about fibonacci don't worry, we will cover that in future lessons. The same applies to the short trade. If the OD occurred at the end of an up trend and I am trying to get short, I will place my entry order a few ticks below the low of the OD. Once taken short I will place my stop loss order in the same way as the long trade, either as a dollar amount or as the .618 fibonacci retracement.

The second way I like to trade this pattern is to trade it intraday. I closely monitor what happens at the high of the OD if I intend to go long and the low of the OD if I intend to go short.

Once the high or low has been taken as the case may be I will then enter the market on a 5 minute or 1 minute chart. For long position I will buy the first retracement with a tight stop loss order under an intraday support and if trying to get short I will sell the first rally with a stop loss order above an intraday resistance.

Below are two examples of Outside Days. The first occurred at the end of a down trend (First Chart) and the second occurred at the end of an up trend (Second Chart).

Good Trading

Mark McRae

PS. Don't for get to check out our bookstore at http://www.surefire-trading.com/

Forex 1-2-3 Method by Mark McRae

noreply@blogger.com (C Tuzzles) — Sun, 06 Nov 2011 23:30:00 +0000

This particular technique has been around for a long time and I first saw it used in the futures market. Since then I have seen traders using it on just about every market and when applied well, can give amazingly accurate entry levels.

Lets first start with the basic concept. During the course of any trend, either up or down, the market will form little peaks and valleys. see the chart below:

The problem is, how do you know when to enter the market and where do you get out. This is where the 1-2-3 method comes in. First let's look at a typical 1-2-3 set up:

Nice and simple, but it still doesn't tell us if we should take the trade. For this we add an indictor. You could use just about any indictor with this method but my preferred indictor is MACD with the standard settings of 12,26,9. With the indictor added, it now looks like this:

Now here is where it gets interesting. The rules for the trade are as follows: Uptrend

This works best as a reversal pattern so identify a previous downtrend.
Wait for the MACD to signal a buy and for the 1-2-3 set up to
be in place.
As the market pulls back to point 3, the MACD should remain in
buy mode or just slightly dip into sell.
Place a buy entry order 1 pip above point 2
Place a stop loss order 1 pip below point 3
Measure the distance between point 2 and 3 and project that
forward for your exit.
Point 3, should not be lower than point 1

The reverse is true for short trades. As the market progresses you can trail your stop to 1 pip below the most recent low (Valley in an uptrend). You can also use a break in a trend line as an exit.
Some examples:

There are a lot of variations on the 1-2-3 setup but the basic concept is always the same. Try experimenting with it on your favorite time frame.

Good Trading

Best Regards
Mark McRae

Being A Technical Analyst

noreply@blogger.com (C Tuzzles) — Sun, 06 Nov 2011 23:23:00 +0000

One of the main ways traders approach the market is that of technical analysis. A technical analyst doesn't look at income statements, balance sheets, company policies, or anything fundamental about the company. The technician looks at the actual history of trading and price of a security or index.

This is usually done in the form of a chart. The security can be a stock, future, index, currency or a sector. It is flexible enough to work on anything that is traded in the financial markets.

The technical analyst believes that the market price reflects all known information about the individual security. It includes all public and insider information and reflects all the different investor opinions regarding that security.

Just as fundamental analysis looks at the past to help make a decision, technical analysis also incorporates the past to aid in the decision making process.

However, the technical analyst believes that securities move in trends and these trends continue until something happens to change that trend. With trends, patterns and levels are detectable.

The tools of the technical analyst are indicators, patterns and systems. These tools are applied to charts. Moving averages, support and resistance lines, envelopes, Bollinger bands and momentum are all examples of indicators.

These indicators help tell a story and just as a doctor looks at x-rays to help him make a decision, an analyst looks at charts to help him make a decision.

Many people believe that to buy and hold is the right strategy for owning securities and this is fine in some circumstances. It can also be beneficial to buy and sell the same security many times in a given period.

ABC.inc might be a company you want to own for the long term and that's fine. However, there's nothing wrong with buying at 50, selling at 67 and buying it back at 55.

There's also nothing wrong with buying at 50, selling at 67, shorting the security at about 67 then closing your short at 55 and buying it back.

In the previous example you have made your money work a little more efficiently. In the case of buying and holding you only make money when the security goes up.

Why not make money when the security goes up, comes down, and goes back up again. This way, your money has worked harder for you. Technical analysis can help in predicting turning points and direction in prices.

Before applying technical analysis make sure you thoroughly understand the principals that you are applying.

Read as much as you can and find a few forms of technical analysis that you feel comfortable with. Remember you only need to find one thing that works in order to make money.

Good Trading

Best Regards
Mark McRae

10% Of Traders Go Bankrupt

noreply@blogger.com (C Tuzzles) — Sun, 06 Nov 2011 23:13:00 +0000

by Mark McRae of SureFire-Forex-Trading.com

I was thinking about an article I read some time ago that 90% of traders who ever trade lose their account and that 10% actually go bankrupt. If the first number doesn't scare you then the second definitely should.
Why is it then that there is such a large number of traders failing? It is not because they are stupid; in fact most traders have an above average IQ and are above average in most categories such as education and income. So why do they fail?
Lack of trading education!
By education I don't just mean learning how RSI works or drawing lines on a chart. I mean thoroughly educating yourself in all aspects of your chosen profession. Educating yourself on the correct psychological approach to the market! Educating yourself in the correct risk management techniques relative to your account size. Educating yourself in the correct entry and exit methods for the trading style that suits you.
This, my friend, is where I hope to be of some help. I don't have all the answers nor do I profess to be some kind of guru but I will do my best to point you in the right direction.
Common Misconceptions Of New Traders

They think they can trade consistently with an 80% accuracy.
They think they can turn $1000 into $100,000 in six months.
They think they can predict turning points in their given
markets to within minutes.
They think they can buy a system that is 100% accurate.
They think they will quit their jobs and make a living full
time after a few months of trading.

What's the reason that so many new traders believe that trading is an easy way to make big profits? Propaganda!
We are continually bombarded in magazines, emails and the general media with claims of making astronomical amounts, just by applying the vendor's latest method or system.
Don't get me wrong, there is good stuff out there but the vast majority is not worth the price you pay. At www.surefire-forex-trading.com I also recommend products but I have at least read the ebooks or courses and think they have some value to my subscribers and they all have a refund guarantee.
Fundamentals Of Trading
Trading is not an exact science. You can't do X and get Y every time. It is as much an art as it is anything else. There is no magic formula. Trading is all about probability. It is the art of correctly applying a set of carefully thought out rules and allocating the probability of that event to result in success.
Each trade is an independent event. The market does not remember if you lost or made dollars the last time you traded.
The way you approach the market psychologically has as much to do with your success as any trading plan.
Risk management is crucial if you want to have any hope of becoming a successful trader.
Matching a method of trading with your personality is the only way you will ever feel comfortable in the markets.
An adequately funded account is necessary - not only to be able to take the trades you want, but also so you don't feel every trade is a live or die situation.
The journey to the road of successful trading will make you confront your deepest fears. Your armor on this journey will be confidence, knowledge and belief in yourself that you can achieve your dreams.
Never, equate your success or failure in the markets with who you are as a person!
The Flaw In Our Emotions
As humans we have a natural tendency to try and influence our surroundings and events we take part in. This is one reason we, as a species, have succeeded but it is also one of the fundamental flaws we all have when trying to achieve success as a traders.
As traders we have to realize we have no control over the market and if we accept that then we have to accept that we can not influence the direction of the market.
The problem of course is we have a tendency to try and succeed and when inevitable losses come, it is easy to let those losses effect us emotionally. Becoming euphoric when you hit a winning streak is almost as detrimental as becoming depressed when you have a string of losses.
We as traders have to try and achieve the state of impartiality. We have to accept that we will have losses as readily as we will have wins. Reaching the stage where you can comfortably accept loss in the knowledge that your method of trading will produce profits in the longer term is the state we have to aspire to.
Risk Management
Whenever I think of risk management I always think of an article I read on 925 CTA programs between 1974-1995. It essentially confirmed what I have long held to be true. To summarize the report, of all the CTA's who managed funds, the most consistently profitable were the ones with the best risk management systems.

To trade successfully you have to take a long look at yourself. Ask and answer the following questions.
How much equity do I need to start? How much should I risk on any one trade? Am I undercapitalized?
Entry And Exit
As a trader you will probably fall into two main categories, traders who like to trade the breakout and traders who like to join the trend once established. We could also add congestion traders, reversal type traders and mechanical signal traders but for the vast majority of traders you are going to fall into one of the two categories.
If you are a trend trader, you like to define a trend and then find a way in. This may be with the aid of fibonacci retracement levels, moving averages, Gann or one of the other many indicators available today. Your goal is to enter the trend as early as possible with the least amount of risk.
Breakout traders like to enter the market on the breakout of a previously identified range. This may be support/resistance areas, rectangles, triangles or one of the many other chart patterns. The secret to this type of trading is to determine a valid break.
In future lessons we shall begin to look at the more technical side of trading and how you can apply technical analysis to the markets to increase your probability of success.
Conclusion
During this lesson I have tried to give you a glimpse into the world of trading. I have also taken a slightly negative stance, as I don't want you to get unrealistic expectations of what to expect.
On the more positive side, trading is a fascinating world, which will allow you to really exercise your brain. There is no other arena where you get to play with some of the best minds in the world on a level playing field.
Once mastered, if you can ever use that term then the possibilities are endless. Hopefully I can help you achieve your goals.
Best Regards

Is your computer a good broker?

noreply@blogger.com (C Tuzzles) — Sun, 06 Nov 2011 23:00:00 +0000

I

By Mark Mcrae Posted: October 25, 2010
Experienced traders in Forex and stock markets will tell you there is no substitute for the gut and long standing market instinct of, well, the experienced trader. This is not necessarily much of the mark, as the world of Forex trading, especially day trading continues to be predominantly a limited player’s game.
However, as the basic patterns of business change with developments in the virtual portals and ways of doing business, so do the patterns in Forex trade. Experienced traders, especially those willing to save precious brokerage fees, are now moving much of their trading to online Forex sites and stock trading sites. Many of these, offering the complete security and assurance of speed once offered by the more human face of the broker, are becoming key factors in transforming the essence of trading.
Online trading is gaining popularity amongst novice or new comers to the Forex game as well, since most come with some basic Forex learning and practice tools and software. Not only are these sites becoming informative and enticing for new investors, they are also fast realizing the value of ensuring the online trading system is user friendly, and importantly, free of excessive use of jargon and ‘pro language’. Maintaining accessibility for new entrants to the Forex market remains the top priority of most online trading portals, however, is access the only thing you look for an investor?
For many Forex traders, brokers offer more than a humanized way to trade, they offer a somewhat personal medium for trading. Though mostly a more expensive enterprise trade on trade, brokers bring with them experience and, depending on your relationship, some level of comfort and understanding while undertaking the Forex trading for investors looking for a diversified level of activity, often not being able to watch the day’s trade as effectively as their broker can. As intermediaries, brokers also a face that cushions the ravages of the market; stress and high levels of risk taking come with the arena of Forex and stock trading. The broker, though not able to mitigate the risk, can ease some of the natural inherent stress for the investor. The online trading system, impersonal and computerized as it is, cannot offer the same.
Brokers are also savvy and experienced in so far as they are looking to maintain a long-term relationship with their client. They will look to offer gains and when needed, some cursory advice. This is real and proactive; something that online trading may be somewhat far from achieving given the limitations of artificial intelligence.
While no clear conclusion can be drawn, each investor having his or her own appetite for brokerage services and their benefits, or online trading and the higher demands for market knowledge, we need to appreciate their limitations and the intense competition between the two. Both are looking to make trading accessible, affordable and easy for both the experienced and not so experienced Forex trader.
In the long run, there is no clear cut answer to ensuring your trades are easy, the market will ensure that they never are. However for now, both your computer and your broker would be quite justified in positioning themselves as each other’s substitutes.
http://www.onlineforexdaytrading.com
Article Directory: ArticleSlash.net

Steve Nison's Market Update 10/26/2011

noreply@blogger.com (C Tuzzles) — Wed, 26 Oct 2011 15:53:00 +0000

Pivot Point Trading by Mark McRae - Surefire Forex Trading

noreply@blogger.com (C Tuzzles) — Sat, 22 Oct 2011 19:14:00 +0000

Pivot Point Trading by Mark McRae - Surefire Forex Trading

Outlook for Forex

noreply@blogger.com (C Tuzzles) — Fri, 21 Oct 2011 18:30:00 +0000

Articles DirectoryAZ | Weekly Snapshot – Outlook for Forex

Weekly Snapshot – Outlook for Forex

By: Mark Mcrae

Experienced traders in Forex and stock markets will tell you there is no substitute for the gut and long standing market instinct of, well, the experienced trader. This is not necessarily much of the mark, as the world of Forex trading, especially day trading continues to be predominantly a limited player’s game.

However, as the basic patterns of business change with developments in the virtual portals and ways of doing business, so do the patterns in Forex trade. Experienced traders, especially those willing to save precious brokerage fees, are now moving much of their trading to online Forex sites and stock trading sites. Many of these, offering the complete security and assurance of speed once offered by the more human face of the broker, are becoming key factors in transforming the essence of trading.
Online trading is gaining popularity amongst novice or new comers to the Forex game as well, since most come with some basic Forex learning and practice tools and software. Not only are these sites becoming informative and enticing for new investors, they are also fast realizing the value of ensuring the online trading system is user friendly, and importantly, free of excessive use of jargon and ‘pro language’. Maintaining accessibility for new entrants to the Forex market remains the top priority of most online trading portals, however, is access the only thing you look for an investor?

For many Forex traders, brokers offer more than a humanized way to trade, they offer a somewhat personal medium for trading. Though mostly a more expensive enterprise trade on trade, brokers bring with them experience and, depending on your relationship, some level of comfort and understanding while undertaking the Forex trading for investors looking for a diversified level of activity, often not being able to watch the day’s trade as effectively as their broker can. As intermediaries, brokers also a face that cushions the ravages of the market; stress and high levels of risk taking come with the arena of Forex and stock trading. The broker, though not able to mitigate the risk, can ease some of the natural inherent stress for the investor. The online trading system, impersonal and computerized as it is, cannot offer the same.

Brokers are also savvy and experienced in so far as they are looking to maintain a long-term relationship with their client. They will look to offer gains and when needed, some cursory advice. This is real and proactive; something that online trading may be somewhat far from achieving given the limitations of artificial intelligence.

While no clear conclusion can be drawn, each investor having his or her own appetite for brokerage services and their benefits, or online trading and the higher demands for market knowledge, we need to appreciate their limitations and the intense competition between the two. Both are looking to make trading accessible, affordable and easy for both the experienced and not so experienced Forex trader. In the long run, there is no clear cut answer to ensuring your trades are easy, the market will ensure that they never are. However for now, both your computer and your broker would be quite justified in positioning themselves as each other’s substitutes. http://www.onlineforexdaytrading.com

Author Resource:-> http://www.onlineforexdaytrading.com

Article From Articles DirectoryAZ

Forex Trading Strategies: Part 3

noreply@blogger.com (C Tuzzles) — Fri, 21 Oct 2011 01:05:00 +0000

Forex Strategy: Part 4

noreply@blogger.com (C Tuzzles) — Fri, 21 Oct 2011 00:54:00 +0000

Forex Trader Mark McRae: Part 2

noreply@blogger.com (C Tuzzles) — Fri, 21 Oct 2011 00:45:00 +0000

Who is Mark McRae?: Part 1

noreply@blogger.com (C Tuzzles) — Fri, 21 Oct 2011 00:37:00 +0000