ATR Bands indicator

Many traders will use ATR as a way to determine their stops. It usually works like this:

Stop loss for a short trade = high of last candle + ATR value
Stop loss for a long trade = low of last candle – ATR value

In order to make it easier to visually see where those stops would be, I’ve created an ATR bands indicator. This indicator will show an upper and lower band around the price, showing where you can put your stops (or trail them in open positions).

Since a picture is worth a thousand words, here is an example of how it looks:

Read more and download

3 Ways to Improve Your Trading in 2020

Around this time of year, we often review the past year and also look forward to the next. We look at achievements and goals and at ways to become a better trader in 2020.

Change is the only constant

There are many ways to step up my trading game but for me, 3 themes stand out. In the past, these 3 things have resulted in the biggest positive change in my own trading.

As we are moving into the new year, I wanted to share these with you.

Read More

Daily ATR indicator

For a long time, I’ve been using Trader Dante’s daily ATR (or Datr) indicator. It’s a pretty helpful indicator that shows daily average volatility using the value of the ATR indicator when plotted on a daily chart.

These levels will give you a clue on how far the price has moved on that day. Often enough, you’ll even notice that these levels will actually be used as swing points, with the price moving into a level and then reversing. A beautiful example of this can be seen on the GBPUSD 1H chart above.

Recently, however, I wanted to add some extra features to it. So as a programming exercise, I set out to re-code it in MetaTrader 4. You can download the indicator below.

Update: I’ve now also created a TradingView version. You can find the indicator here.

Read more and download

How To Trade Supply And Demand

By far, one of the most common questions I get these days is how to trade supply and demand.

Even though the concept is essential to how free markets operate, it has gotten a lot more popular as the basis for trading strategies in recent years.

And it makes sense! Using supply and demand as a part of your trading arsenal can be quite effective and potentially very profitable. So let’s figure out how to use supply and demand in your trading.

What Is Supply And Demand?

Before we discuss anything else, we should define what supply and demand actually is. In short: demand is how many buyers there are in a given market and how much they are willing to buy an instrument. Supply is how many sellers there are in a market and how much they are willing to sell an instrument.

Read More

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.

Read More

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.

Read More

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.

Read More

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.

Read More

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

Read More