The Pillars of Trading in Modern Markets (Part 1), August 18, 2014

Dear Traders,

I am starting a mini-series of 5 articles that I will complete this week. Every day I will publish a small article. The focus is going to be on the “Pillars of Trading in Modern Markets”.

20140818_pillarsoftrading

What is that?

Do you know the pillars of successful Forex and markets trading and how do you reach your trading objectives?

If you do not, you don’t remember or think you know, keep reading…

The news that I want to share with you all today is that FibStalker Trading now has a bigger team! Yes, we are now quite a bunch of enthusiastic and spirited collaborators working with the same vision- together. This expansion is for the numerous activities, including organizing and maintaining good quality educational material, as well as for working on quality and communication for new services and products.

Also, in September I plan to launch a new website and some interesting coaching programs.

My followers know how constantly and consistently I work hard to give away something new and valuable to them for their trading. Whether it is an article or a free Webinar, a piece of research or unique knowledge and information that  cannot be found elsewhere, I strive to educate my followers!

And now I am extending this knowledge and practice to my collaborators, too. These are professionals who typically do not have any practical exposure to trading: an ideal situation. In fact this is the best possible mindset and environment to “grow” the right set of beliefs that can make a person successful in trading. I will talk more about this important aspect later on in this article.

I therefore agreed to teach them successful Forex trading. My followers know that my approach is very practical, to the point and oriented towards effective and tangible trading results.

In my introduction to trading I have talked to my two new students about the three pillars of successful Forex trading, which are:
– Trading method
– Risk & Money Management
– Psychology of the Markets and of the Trader

I have also explained in more detail the Pillars and differentiated Risk from Money management, as well as the Market Psychology from the Trader psychology. Here are some definitions you might find helpful; and notes you want to keep in mind:

Trading method: is the set of rules the trader must follow to come up with a trading plan (entry, stop-loss and profits target price levels, at least, but there are more) that has a high probability of reaching the profit targets, and a low probability of hitting the stop-loss.
Generally, the less discretion in the trading system the less experienced the trader has to be in order to be successful.

Note: I still see way too many trading methods using lots of indicators and ‘traditional’ technical analysis. When I see that, I always think about how difficult is to reconcile the different readings offered by each indicator. Less is more in trading. The more indicators and the more discretion you have to put into trading decisions, it just gets more difficult for the non-experienced trader to “get it” and make recommendations actionable.

This is the main reason why a lot of trading “gurus” who are successful traders are not able to effectively transfer their skills to their students. Their method is way too discretionary and, often based on certain fixed notions about “how the market works”.

Note: If you are asking yourself whether traditional technical analysis is able to capture the fundamental ways the market works, my answer is a loud and clear “No!”. And I will be able to demonstrate and talk more on this in a future Webinar on FXStreet.com.

Till then stay tuned. Our topic for tomorrrow will be another interesting one: Risk Management.

Have a great trading week.

Giuseppe, ~FibStalker

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Filed under Articles, Education, English language, Trading Method, Trading Plan

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