Most Current and Common FAQ

Traders,

I continue to receive a slew of common and redundant questions. So, rather than answer each one individually, I thought I might take the time to post the responses in this Article.

1. I have done my back testing, but still cannot “Pull the trigger” on a trade. I am still nervous and unsure. What am I doing wrong?

While back testing is the key to acquiring data and system performance, it is only half of the equation. It is forward testing that will build the belief and remove hesitation in execution. You have to practice implementing what your back testing data has revealed about your system’s performance. This practice is the only way to get you behaving efficiently and consistently. Remember, everything we have learned to do well has taken practice and repetition. Trading is no different. You will never duplicate your back testing results 100%, but you can achieve results within a few percentage points if you are focused and diligent during your practice.

2. What’s the deal with all of the trading psychology stuff?

Your personality is your best friend and worst enemy. Clearly you can see that trading is 10% mechanical and 90% psychological. The reason I focus so much on psychology is that there are inescapable biological issues in our brain that we need to re-train and work around to be a consistent trader. Because this is so prevalent in new and struggling traders, it must be addressed before one can realistically consider trading as a viable means of income. Would you not take the same approach to any other challenge, profession or opportunity that you expect to produce a high level of financial return? Acquiring any skill takes building belief, repetitive action and constant refinement to get to the level of expert (unconscious competence.) Trading is no different, so we need to use the same approach to master our own trading psychology.

3. I have been watching the Market Structure videos and have practiced identifying Support and Resistance. What do I do from there?

Price re-tests areas of support and resistance repeatedly and as a result we are looking for price to get stuck or hung up and continue with the trend and/or possibly reverse momentum as the trend is exhausted. These levels, along with your trade plan, create potential trade set ups. After labeling key levels, put S/R in context with current price and see in the near term and long term where price might gravitate based on its current direction. Look at your trading time frame and notice candle patterns, candle color and oscillator behavior. Based on your rules, prepare for a valid signal based on these potential set ups created at areas of Market structure.

4. How do you know to stay out of trades even when you may get a valid signal?

For the most part, I stay out of trades on valid signals if the pairs providing the valid signal were not showing potential on the higher time frames in that day’s top down analysis. If there is volatility occurring because of news, I will revisit a previously ignored pair. I am looking for set-ups on higher time frames and corresponding entries on my trading time frame. That will eliminate lots of the noise and brain clutter when looking at multiple pairs. I simply commit to patterns, set-ups and price action that I easily recognize and can act upon. I will miss many winning trades. I don’t care. The important thing is that the trades I do take meet my rule set and therefore the majority of them are winners.

5. What is the secret to a high winning trade percentage?  

You will notice two key elements of my trading style. I do not over trade. I only have two intraday trades open at any given time. Once committed to a pair and trade, I wait for the trade to play out. These two techniques alone reduce my number of losing trades dramatically. I will increase lot size to increase profit size, but I am not interested in trading for trading’s sake. I trade for profit and profit alone. As a result, I am very selective, conservative and patient and have fewer losing trades. I also stick with things within my areas of expertise that I can easily recognize and act upon.

6. Where can I learn your trading system rules and strategy/trade plan?

You can’t. The thing most traders do not understand is that you must make the trading system and trade plan your own. Just as no two people are alike, no two people will trade alike. I am showing you trades and giving you the processes I use to execute them. Your process and system will differ, if ever so slightly from mine, because your back testing will be different and your forward testing will be different. I have all but published my rules and trade plan via the videos I produce. I will not formally publish them because if I do, and when they do not work out for the traders that can’t implement them or do the required work, I will l have to deal with the fallout from their negligence or incompetence and I simply do not have the time.

7. What do you mean by “break above, close above” when you are describing price action?

For a key level or price to be irrelevant or lose its relevance in the context of the time frame you are observing, price not only must break above (exceed a previous key level,) but it must close at a price higher the previous level. This is a clear sign that the collective participants are no longer captive to the previous high price level. When broken by a higher close, we can look to the next key level of price (support/resistance) for a potential re-test.

8. Do you use Pivots and can you direct me on how to use them?

I do not use Pivots but they are widely used just like Fibs. I feel it is a matter of preference as statistically they can be comparable to Fibs. I do not feel they offer any better advantage and provide more clutter to my charts. That is just my opinion. Peter Bain is the guru of pivot point trading and I’m sure you can find his training material on the web.

9. Can you recommend a good broker?

Due to constraints in the U.S., I am using currently using Forex.com. I have no other relationship with them other than as an account holder.

10. I have been looking at your trade videos and my Synergy APB candles and price action do not look the same as yours. Do you have a proprietary Synergy APB indicator?

No. I use the standard Heiken Ashi indicator that is supplied with the MT4 platform. I do not use Synergy APB candles.

11. There are so many different TDI indicators on Forex Factory. Which one do you use?

I use the very basic/original TDI indicator. You may download it from the FAQ section on the blog from question 4.

12. Why can’t I join your Skype or contact you on Facebook or LinkedIn?

I reserve Skype for only very close business contacts and a very small group of private clients. Skype is a distraction when trading and those in my list have a clear protocol and rules for usage that minimizes the distraction. We use Skype purely for business use and not as a typical “social” media tool. Facebook . . . where do I begin? Frankly, I do not have any interest or time to maintain a Facebook page because I am not that important and don’t want to entertain or share the mundane. I have the blog that is specific to traders that are serious about making money and that is about as far as I want to go in terms of being “out there.” For that same reason, I am not interested in building a network on LinkedIn. When I initially started the blog, it was recommended by a friend to join Facebook and LinkedIn. So far, they have only added to the 100+ spams I must delete everyday when I check the blog. The blog affords me plenty of exposure and interaction with the people I want to be around and by virtue of the subject matter, keeps the rest away. Old fashioned email is and will always be the best way to contact me.

13. Can I have a job with your company?

I do not have a “company” per se. It is just me and a few support teams I hire as needed. I made a conscious effort to remove myself from the “rat race” because of previously having many employees, being responsible for the livelihood of hundreds of people, and having to deal with the lack of personal responsibility that pervades the human population. I am at an age and place where I just want to pick and choose how I spend every minute of my time without the trappings and travails of the rest of the world (or more employees.) Thank you for asking. Learn how to trade and you won’t want or need a job!

Rick

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