The Reading List

What I’ve been reading and listening to in the trading and finance space:

House Money and the Break-even Effect:

Imagine that you are attending a convention in Las Vegas, and you walk into a casino. While passing the slot machines, you put a quarter into one machine and, surprisingly, you win $100. Now what? Will your gambling behavior for the rest of the evening be altered? Might you make a few more serious wagers, even if you usually abstain? Suppose instead that you had $100 in cash stolen from your wallet while taking a swim at the pool. How will that alter your behavior?

Market Making Myths & Truths:

Macrodesiac (David Belle) talks to Macrohedged about market making, getting to the truth about the role of the market maker and squashing the myths that appear on social media.

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The Reading List

What I’ve been reading in the trading and finance space:

The Millionth-Of-A-Second Advantage:

Traders’ quest for the slimmest sliver of advantage is as old as markets. In the 19th century, Reuters used carrier pigeons to speed the delivery of stock prices. More recently, Chicago pit traders donned platform shoes so they could see and be seen better on crowded trading floors. Today, getting an edge is all about the speed of light: 186,282 miles per second.

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The 4 Best Trading Setups For Next Week

Happy Sunday everyone! After a solid month of trading in January and a capital-preserving February, I’m up +7.5R for the year (what is R?). March has just started and I have selected 4 setups that show the most promise for the upcoming week. I hope you find the info valuable 🙂

Note: This weekly outlook is one of the cornerstones of the Trade Advisor program. If you want to know more about how I trade, including weekly setups, a swing trading strategy and a day trading strategy, an EA and a private trading room, check out my learning to trade program.

But enough about that, let’s get started with a preview of the economic news that’s planned for next week!

See the setups

My 6 Step Trade Entry Process Explained

Last week, I tweeted what I see as my trade entry process. This was the tweet:

 

 

Since then, I got so many questions that I wanted to take a moment to write in more detail how I use this process to make better trading decisions.

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Risk, R and R-multiples explained

If you ask me how much pips I made last month, I will tell you I don’t know.

 

But I will know my R-multiple of last month: a 6.1R profit. This R number often results in confused looks. What does R stand for?

 

In order to figure this out, we need to take a step back and look at our performance and its relationship with risk.

 

 

Risk and Reward To Risk

 

When you say that you made a 50 pip profit, that only tells me part of the story. The key piece of information that is missing here is how much you risked to make this profit. After all, a 50 pip profit is a good result if you had a 25 pip stop loss but if your stop loss was 200 pips, you risked a lot to get a relatively small reward.

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5 Tips To Develop Better Trading Habits

Imagine the following scenario: you’re starting the year, completely motivated. This is going to be YOUR trading year! This is the year where you will make it happen.

 

When you look at your trading, a few things need to be fixed, though. You know you should start a trading journal. You need to stop revenge trading. Cutting losses is still hard to do. And really, your trade management is pretty subjective so your trading plan needs some work.

 

 

You need some solid trading habits but more importantly, you need to look at ways to stick to those newly created habits. Everyone who has ever tried to lose weight, stop smoking or exercise knows this all too well:

 

It’s easy to start a habit but harder to stick to it

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MT4 EA Course: ATR Stops And Position Sizing

This article is part of a series. Here are the other parts:

 

Welcome to the fifth part of our MetaTrader4 Expert Advisor course! If you haven’t done so, please have a look at the previous instalments.

Forex Wall-E

 

Note: Do you have a trading strategy you want to automate using expert advisors? I can help with the development! Have a look at my MetaTrader 4 Expert Advisor development services and get in touch today to make your project a success!

 

We’ve been doing pretty well with our expert advisor. We created a fully functioning EA that can make buy and sell orders, and also can trail our stops. However, up until now, we’ve always used a fixed stop loss of 50 pips.

 

That might often be ok but what if you want a dynamic stop loss? In order to better reflect the market dynamics, we could use a volatility indicator such as ATR (Average True Range) to determine our stop-loss.

 

When we use dynamic stop loss distances, we still want to keep our risk per trade the same. We do this using dynamic position sizing. In other words, we will change the lot size per trade to reflect our desire to use a 1% stop loss. Let’s see how we can add this to our Wall-E expert advisor!

 

 

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Forex Outlook for August 26: Trade Review And 5 New Setups

Hi traders! 👋 Last week was a solid trading week and we’ve got some nice results from the setups I published. It feels like the market has come back alive this week! With a total of 9 trades, I could end the week with a 6.59R profit. Moreover, the best feeling ever is to see my Trade Advisor students make real profits too, well done! 👊

 

 

This is my performance overview for August:

  • First week: +2.82R
  • Second week: +6R
  • Third week: +0.57R
  • This week: +6.59R

 

This brings the running total for August on a 15.98R profit, with still a few trading days to go. After a couple of months with more moderate profits, it seems that the market is back with us! This goes to show that regardless of summer months, I just trade my plan and that’s it. Imagine skipping August just because of the summer months and missing out on these very nice profits!

 

Note: If you want to learn how to trade my trading strategy, get my weekly setups + EA and get access to our private group chat, have a look at my Trade Advisor program.

 

 

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Forex Outlook: 5 Top Setups For The New Week

👋 Hi traders! After another week of trading, it’s a wrap! It was quite a challenging week with a trade in USDNOK not working out but a good trade in AUDCHF that resulted in a 2R profit. However, we still managed to come out on top and end the week with a profit. 💪

 

As we prepare for the new trading week, I want to share a number of setups that are part of the Trade Advisor program. The students actually got 12 setups and this is a selection of 5 of those setups. I hope you find them useful!

 

If you want to learn everything about the strategy, including how to place stop loss and take profits and how to manage trades, check out the program (which currently has a one-week free trial)! Have a good trading week everyone!

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Trade Review And 4 Setups For The New Week

👋 Hi traders! After last week, we’re back to reviewing our trades and planning for the upcoming week. How has trading been for you in the past 5 days?

 

As we roll into June, the Trade Advisor students again had a pretty nice trading week. I closed the week with a +4.89R profit and this makes me end the month of May with a nice +8.17R profit. Let’s go over the trades I took right now in the trade review section!

 

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