Ray Trading Ideas

Wednesday, October 8, 2014

Currency Strength Chart

Monday, September 22, 2014

1% Risk Position Size Per Trade

A One Percent Position Size is Paramount

We always recommend that traders only ever risk 1% of their trading capital on any one trade; this protects their trading capital as well as their emotional capital. This means that, in a losing streak of, say four or five trades, they still have capital to trade another day and their trader mindset is not knocked around by the experience. We have analysed the charts, placed our order, defined and accepted the amount of the risk, then allowed the markets to determine the outcome; stop or target - whichever comes first.

However, it is also important to trade no less than 1% per trade either. This is so important yet it is often an overlooked aspect of trading that is paramount for consistent trading success.

It is important to maintain the 1% risk per trade, no more and no less, at all times. When we are consistent with our position size we will have consistent outcomes. It is very difficult to review our profitability against our win:loss rate if the position size is variable from one trade to another. Traders who are novices or beginners will often reduce their position size after a couple of losers. There are various reasons for this and are all unhelpful to profitability. One reason is that they are unsure of their strategy, another is they are unsure of how to use their trading platform in relation to calculating the correct position size.

Yet another reason to vary position size is to assume they are protecting their capital, so by reducing their position size they falsely assume they are protecting their capital. Yet it’s the following trade that is likely to be a runaway winner. At the very time they needed a full position size they only had a half, or quarter, position on it. This plays havoc with profitability as well as impacts negatively on a traders mindset.

Traders also reduce their position size due to a sense of not wanting to risk the dollar amount that a 1% position would represent. This faulty thinking can come about from not truly accepting the cost of entering the trade, i.e. not fully accepting the risk. If this is the case the trader may want to re think how much they are truly willing to risk on any individual trade.

The final reason for reducing position size can come from a sense of being unduly ‘punished’ if the trade goes to stop. The important thing to realise here is that the cost of the trade going to stop needs to be large enough that the trader takes the trade seriously i.e. the cost of a cup of coffee will not have the same learning capabilities as the cost of a small car, yet small enough that the trader will not feel unduly penalised if it goes to stop. It is very difficult to enter a trade if the consequence of a loser is so great as to affect thinking and/or lifestyle.

The best way to address all these issues is to decide in advance what size a trading loss would make us take notice of the outcome yet not impact too harshly as to affect trading decisions. This will vary from person to person, however, once this dollar figure is established then this becomes the position size. Place funds into a trading account so that this cash amount represents a 1% position size.

http://www.tradewithprecision.com/newsletter/one-percent-position-size-paramount-20140922

Tuesday, September 2, 2014

How to edit .wave file?

This is a useful tool free download for editing wave files. Simply do the cut and paste or delete by opening the exiting wave file. MixPad Multitrack Recording Software.

http://www.nch.com.au/mixpad/index.html

Friday, August 22, 2014

Daily Financial News from Radio 958

http://liveradio.mediacorp.sg/meradio/public/xinmsn/player/?station=958fm

Mon-Friday, 8.50am, 11.50am, 5.50pm

Sunday, August 17, 2014

Three Secrets about Day Trading

Abstract from DayTradingPsychology.

http://www.daytradingpsychology.com/

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There are Three Secrets you need to know about trading for a living so you don’t become a victim of circumstances.

First, trading is a profession that appears deceptively easy, but in reality aspiring traders are attempting to achieve what 90% of seasoned mutual fund managers never consistently attain; namely to “beat” the market year after year. (About 1/3 beat the market each year, but few sustain that pace the following year.)

Second, trading is a profession where one is wrong almost half the time. Furthermore, the ability to admit one is wrong is a critical asset, without which no progress can be made. Unfortunately, this is a skill few have ever practiced in the business world or in academia.

Third, trading is a profession where one’s interactions with the market are mediated 100% by one’s personality. Most traders eagerly prepare for their daily confrontation with the market, but few take the time to sufficiently prepare for the daily confrontation with their own internal reactions to price action and trading results.

EFFICIENT MARKETS

Markets are “efficient” at one thing: separating day traders from their capital. Only the top 15% of active traders make significant money in any one year and only the top 4% of day traders are consistent performers year to year.

There is a great deal of free information about online trading on this site. Take your time to browse and educate yourself. Before you leave, be sure toDownload my free 20-page report from the top of the sidebar detailing how the Top 4% of day traders make a living at the expense of the other 96%.

FREE YOUR MIND

Presumably you are visiting this site because you are aware that something about your daytrading needs fixing. It is usually a combination of one’s Method and one’s Mindset, because they are inter-dependent.

A poor Method with no real edge will quickly undermine your Mindset. Similarly, a toxic Mindset will render even the very best Methods ineffective. In my daytrading coaching program, we evaluate both elements.

Trading in the Zone is the title of one of Mark Douglas’ excellent books on the psychology of trading. “The Zone” is a state of focused attention and self-control in which we are responsive but not overly reactive; disciplined but not rigid, vigilant but not afraid.

In order to maintain this state of mind when actually day trading, a trader must master three skills.

1. MANAGE STRESS

Moderate levels of stress are stimulating, which makes trading less of a job and more of an adventure. If you exceed your “stress threshold,” however, you will get into an overload state that triggers primal emotions and defensive/aggressive behaviors.

KEY POINT: In this stressed-out state of mind, you will become re-active rather than pro-active. Your prefrontal brain function will be degraded so your ability to follow your trading plan will be impaired. You will miss the obvious and lose impulse control. Read more.

2. MAINTAIN A CONFIDENT MINDSET

Aspiring day traders pay far too much attention to what just happened in the market (the Recency Bias) and not enough attention to their own mental state.

Successful day traders actively manage their mental attitude in order to maintain confidence in the face of uncertainty; discipline in the midst of randomness. Maintaining a confident mental attitude is a skill that can be learned. Top athletes practice it. Top traders practice it. You can, too.

Even successful traders, however, are at risk of psychological wounding from a string of losses or a single large loss. Read more.

3. MASTER YOUR DAY TRADING ‘EDGE’

trading psychology - define your trading edge

Your trading ‘edge’ is the method (plan) that gives you an advantage in your trading beyond the odds of chance. Professionals day trade a defined plan, amateurs trade intuitively, instinctively and often impulsively.

Professional traders exploit amateurs who make trading decisions based on emotion. Read more.

HIGH RISK TRADERS

Some traders lack the discipline to follow a trading plan, even when they want to. These traders tend to be intelligent, creative and intuitive, but also inconsistent, disorganized and impulsive. They are High Risk Traders. Here is the true story of one High Risk Trader I worked with. Let’s call him Art.

Art was a former executive at a well-known software company. He was smart, creative, confident, strong-willed, ambitious, hard-working and very dedicated. Nevertheless, despite his CEO-like personality, Art took his trading account from $1 million down to $100k in the year before he called me. How did this happen? Read more.

RISK OF RUIN

The Risk of Ruin defines the odds of reaching a point at which you are no longer mentally, emotionally or financially able to fund (or re-fund) your account. The risk increases exponentially for those day traders who:

Enter too high for longs and too low for shorts;
Can’t stay in a winning trade;
Can’t take a loss in stride and keep losses small;
Overtrade and “revenge” trade;
Compulsively trade against the trend, and/or
Can’t seem to learn from their mistakes.

These behaviors are warning signs that you are vulnerable. You can find out more by taking my Free Daytrader Risk Profile here. The Risk Profile will help you determine whether you have some of the psychological risk factors that can lead down this path. It is free of charge.

TO MASTER THE MARKET, MASTER YOURSELF

Whatever your level of intelligence, education or success in life, learning to day trade for a living is likely to be the most difficult challenge you have ever faced.

Your business skills may not help you because the daytrading environment is completely different than the business environment. Moreover, you are likely to encounter certain things about yourself that you were not prepared to face before.

I’m a competitive tennis player. In his autobiography, Andre Agassi wrote, “For me, tennis is a vehicle to discover myself and push myself.” For many traders, trading serves the same purpose. (It does for me.) You may be driven to master trading because it holds the secret not only to your financial future, but to your own self-mastery.

Many of my coaching clients report that as their daytrading improves, the quality of their life improves along with it. If you are this type of aspiring trader, passionate about succeeding, I can coach you to achieve your goals.

YOUR DAY TRADING COACH

I have a Ph.D., but I’m not an “academic.” I daytrade everyday for my own account and I help people free themselves from the various traps that we all fall into when we put our hard-earned capital at risk.

I know the issues from the inside as well as the solutions. Chances are I have been where you are and I can help you move forward.

Whether you are an aspiring rookie, an experienced veteran who is stuck at break-even, or a successful professional daytrader looking to sharpen your edge, let me help you reach your full trading potential.

You have two choices. I offer a comprehensive 10-Module WINNING TRADER’S MINDSET Course with PDF, Audio and Video components. Find out more about ithere.

To review my 6-Week Daytrading Coaching Intensive, click here.

Schedule a FREE 15-Min. CONSULTATION