Canada O Canada Update 5/31/2012

OMG incredible movement in the markets this week. UCAD has been following through quite nicely. Price action has made a new high and we have officially hit TP1 for 119 pips on our first position and 81 pips on our add.

Prop Trader wins 1st place in Futures trading competition

I would like to take the time to acknowledge Larry Wells for winning 1st place in the International Trading Competition. Larry placed first out of 300 traders pulling in a return of 99.59%. Mr. Wells is prop trader for iFundtraders.com. ifundtraders.com is a proprietary trading firm that equips traders with the skill sets necessary to capitalize on the lucrative 24 hour foreign exchange markets. I have been working very closely with Larry and I must say I am very proud of Mr. Wells and his growth as a trader and as a human being. Keep up the good work Mr Wells.

Update on last weeks Trading Picks

As my trading buddies always say “WE ARE LOOKING GOOD!!!!”

Our USD/CAD position has rewarded us quite nicely we have not taken profit yet as we are looking to take our first TP level at 1.0330 which is R1 on the daily chart. TP2 will be taken either by trailing bar by bar or price action reaching our second TP level at 1.0360 which is R2 on the daily.

EUR/YEN update

This position what more can I say but incredible. We have taken profit on our initial position and our add. We are now trailing bar by bar on the 4 hour chart on our remaining positions for this pair. We are up 358 pips and counting and look to take in more profit as price continues in the direction of the trend.

Oil update

Oil is another that has moved quite nicely in our favor. If you trade Oil and USD/CAD then you should divide your risk in half between the 2 since USD/CAD is typically a mirror image to Oil. But all in all we have had a great run on this commodity. We are currently up 38 points from our initial entry and still looking to capitalize on this commodity.

Master Traders use D.O.P.E. not HOPE

There are many characteristics and skills required by traders in order for them to be successful in the financial markets. The ability to understand fundamentals and the ability to determine the direction of the trend are a few of the key traits needed, but not one of these is as important as the ability to contain emotions and maintain discipline.

Below are the 4 key traits that I feel are nessccesary for a trader to master in order to become what is referred to as a Self Actualized Trader.

Discipline
Observation
Patience
Execution

Discipline:

“Failing to prepare is preparing to fail.”

Proper preparation is required before every open. The easiest thing to do is prepare. If you don’t, on behalf of the other market participants, we thank you.

“Never mistake activity for achievement. If you don’t have time to do it right, when will you have time to do it over?”

Perfect trading practice makes perfect trading. You learn by breaking down each trade into small pieces and reviewing each piece. Develop a plan before you trade or do it later with less cash and more frustration. (Remember to Back test, Study, Back test, Study and more Back Testing etc….)

Remember money management is required on every trade. It only takes one trade to undo months of profitable trading. So always remember, that the one trade that can undo it all is always lurking around the corner. “Control your own destiny or someone else will.”

Put yourself in the best position or you will not have a position come tomorrow.

Observation:

“A man should look for what is, and not for what he thinks should be.”
Albert Einstein

A trader should look at a chart for what it is, and not for what he wants it to be. Face reality as it is, not as it was or as you wish it to be. Bend your view to the charts, not the charts to your view.

You want to be diligent in looking for other opportunities, but still mindful and conscious of what is  currently on your plate. If you are not conscious of what is on your plate you will not see what is falling off the sides. In other words you want to manage your current positions effectively with still looking for other trading opportunities.

Patience:

“Be quick but do not hurry.”
Pull the trigger when you see the trade but not before.

“Do not let what you cannot do interfere with what you can do.”

You become a better trader by being patient and waiting for the plays that make sense to you and trading more of them with more size.

There are times when you should have positions on, and times when you should look to be flat. Knowing when to trade and knowing when to be patience and sit on your hands in cash is a necessary step towards obtaining trading mastery. Remember remaining flat in cash is a position too, a big part of trading is not just making profit but retaining it as well.

Execution:

A good plan violently executed now is better than a perfect plan executed next week.
George S. Patton

A trading plan is just words until you act on it.

I was once told by a mentor of mine “He who hesitates is poor.”

So If you are thinking about getting out, your competition is already flat.

Confine yourself to the present and always do whatever’s next. ” Stay in the now moment opportunity flow”

A trade is not connected to another, unless you let it. Move on, understand what happened in the past but do not have an emotional attachment to it.

Michael Jordan is one of the greatest athletes and competitors of our time. One of his most famous quotes is “I’ve failed over and over and over again in my life and that is why I succeed.” With that being said we are what we repeatedly do. So excellence, therefore, is not an act, but a habit.

The view of trading changes after a loss it is your job to get it back to where it was. And maintain it through periods of adversity.

Traders should periodically review and assess their performance and refine their approach. This means not only should they review their bottomline and their positions, but also how they prepared for the trading session the night before, and how they’re progressing in terms of ongoing education, among other things. This periodic assessment can help the trader correct mistakes, which in return helps to enhance their overall profitabilty. It also helps to maintain the right mindset and be more psychologically prepared to execute their plan the next morning.

In closing it’s important for a trader to be able to read a chart and devolope a directional bias, but there is often a psychological component to trading that shouldn’t be overlooked. Establishing trading rules, building a trading plan, doing research and getting experience are all simple steps that can help a trader overcome these little mind matters.

Canada O Canada: USD/CAD trade update

So far our add to our USD/CAD long position has worked out in our favor. We have been up as many as 77 pips on our first position and 40 pips on our add. We are holding both positions until our take profit levels are hit, and building on our position at every retracement into the 8 MA. If price fails to hit our target and creates a lower high, then at the first sign of the break of the 8 MA we will close out our long positions. So we are in the trade till it hits our targets, breaks the 8MA or till the trade fails and our stop loss is hit. Stay tuned next week for an update on this trade.

Canada O Canada

Today’s trade pick for the day is USD/CAD. This pair just came off of some really bullish trading last week and has shown a lot of strength from the bulls this month as a whole. Price on this pair has just broken through major resistance  on the weekly at 1.0050 after bouncing off of parity for a few months.

Trading in the direction of least resistance we are looking to add to our position by going long above the daily pivot at 1.0261 buy placing our entry at 1.0269. We are looking to place our stop loss just below the low of the previous days candle on the daily chart, which is 53 pips from your entry. You will be risking 53 pips by placing your stop loss at the low of yesterdays candle. If the low of the bottoming tail does not provide a good enough risk to reward then you can opt to drop to a smaller time frame to find a better place for your entry and your stop loss, just make sure you are trading in the direction with the overall trend.

If the bulls fail to prove themselves and price fails to break above 1.0269 then you have saved your capital and avoided lots of heartache by waiting for confirmation for price to follow through above the daily pivot to trigger you into the market at 1.0269. Our initial target for this trade is R3 which is at 1.0363 and Take Profit level 2 (TP2) is at 1.0411, for TP3 we are trailing the 8MA allowing the chart to take us out of the trade. Keep in mind to watch out for R1 on this trade at 1.02985 which could present a problem for our long position, so watch price to see how it reacts to R1. For those of you who are less aggressive and do not mind the risk to reward you can opt to place your entry above R1 at 1.02990 and wait for price action to prove it is ready to break through the resistance level at R1.

 

Daily Homework Picks spot on

Well so far today we are batting 1000, with all of our homework picks working in our favor we are up 63.4 points on our futures trades and 191 pips on our Forex trades not bad for a days work. If we counted our futures trades in pips that is equivalent to a total of 634 pips and still counting with open lots on each position.

Here are my picks for the day:

EUR/YEN: Short Sell Setup on daily

Gold: Short on 2nd red bar of daily Sell Setup

Silver: Short on 2nd red bar of daily Sell Setup

S&P 500: Short Sell Setup on daily off of 8MA

Oil: Short Daily Sell Setup

USD/CAD: Buy Setup long on daily

EUR/GBP: Short Sell Setup below 8

Silver Trade Update

We have officially hit TP1 and moved our stop loss to break even. Now remember I am more aggressive with my entries so adjust my stop loss to break even as soon as 1 R is reached in my trade. You may not be as aggressive with your reentries and if this is the case I recommend that you opt to adjust your stop loss to break even after TP2 is hit.

Daily Homework Pick: Silver Trade

My trading pick for the day is Silver. Although I feel silver is very cheap at 28.13 an ounce and should be a lot higher based on it’s use and the demand for the commodity around the world. This belief does not stop me from trading on the short side when the opportunity presents itself. With that being said I see a great opportunity to short silver on the daily chart as soon the low of yesterdays candle is taken out, the trade has already triggered and is now presenting a second chance opportunity to enter. If you are looking for a better risk to reward on this trade then you can drop down to a smaller time frame and fine tune your entry and stop loss to reflect a better risk to reward.

Obtaining Trading Mastery

One of my favorite sci-fi movies of all time is Frankenstein. It was so interesting to me how Frankenstein was put together from scratch. I always felt if I could apply this approach to my trading, by taking this trait from this trader and this trait from that trader I would become a great trader. It is my belief that a trader should always be learning and trying to improve as a trader. If we could build the ultimate market player what traits and qualities would the trader possess? Well I have done my best to compile a list of these traits.

Disciplined
Observant
Patience
Courageous
Accepting
Accountable
Amnesia
Responsible
Persistent
Open
Flexible
Relaxed
Comfortable
Competent
Diligent
Driven
Prepared
Economical
Honest

Over the years on my path to greatness and trading mastery I have diligently worked at these traits. I feel they are vital and necessary to become a MASTER TRADER. What traits do you feel are good traits to have as a trader and how have you been working to develop these traits?