“Hi, Brasil!” “Any trades today?” This sentence makes me laugh the most. This comes across on the chat room window, and I know, usually 95% of the time, I’m dealing with someone who doesn’t understand trading. In only two words the writer indicates as much. So I’d respond,”Good morning, pipmaster!” Its usually a name like this or “bankin the pips”. You get the idea. And I would begin my sermon…

This will be that old, boring, heard it all before sermon that most traders just don’t want to hear or read. This is my cautionary tale for trading currency. Unquestionably, a tough first post, but, you don’t know me or my trading style. I am all about protecting capital FIRST, and learning to trade efficiently & consistently for profit. I give trades on twitter in real time, and will post those results.

BUT…

From my experience, to trade with success, you need to know what YOU are doing. Following someone into trades is a bad habit…the sooner you end it, the better. You will never be able to respond (note that word, more on that later) the way the person you are following does…unless you train with them … day in day out. And if you train with a trader you respect, I like to start with the following: what I see..an analysis, an educated point of view ..a news story perhaps… whatever I can bring to the table..I start there…or I just ask questions to learn more…if I just want to start trading without knowing, it is tantamount to playing golf against Tiger Woods. Even the pro’s fear him, and we SHOULD fear the pro’s in trading. If you want to follow, and not understand the ‘how’ or ‘why’ of a trade…If you just want trades… well, there are plenty of people out there that say …WELCOME!

Understand this… they want your money, and usually offer 100:1 leverage. This is a game where everyone is against you..the broker …the pro’s ..the banks..the govt’s…the pundits and teachers… in general ..they all want your money.

I am a student of trading, as we all should be who wish to learn, and look for this blog to be a serious and fun place for myself and other students to share thoughts, ideas, education, info ..and yes ..trades.

So I’ll begin sharing my 3 basic rules for trading.

1) Every trade I make in currency has an entry, limit (profit) and a stop. Three parts, always!
2) Clearly define the type of trade it is before I hit the mouse: a) scalp b) position trade c) trend trade
3) Understand my state of mind and emotions BEFORE I sit down to trade.

On number 3, I am reminded of one of my favorite movies “Ground Hog Day” …”Don’t drive angry!” says Bill Murray to the gopher driving him off a cliff. Well, I don’t trade angry …or tired…. or upset or drunk or hungry or distracted ..or with the ‘I need a trade’ gamblers itch…or the famous … “I need to make $556.22 every day” trading plan …these are mistakes I continually work to eradicate from my trading mindset.

My approach is more akin to enjoyable surfing or fishing.. not competitive surfing or fishing. Enjoyable, relaxed wait for the exact perfect moment type surfing…nothing to prove..and if the ocean’s flat ..fine  …waiting…waiting ..waiting…more waiting..and then… here comes my wave ..time to play.

I work towards treating my trading room like a temple. I want NO phone calls, visits or distractions, and do not involve myself in any negative vibe in chat rooms. I prepare myself to enter my temple in the right state of mind. In this state of mind I am not… for or against ..I am just looking to enjoy the waves and the currency market just like the ocean has waves every day. Big, medium and small ones ..and my goal is to play on them.

On responding ..I like this word ..it implies choosing to act ..or conscious action not driven by emotion…as opposed to .. React… which implies (to me anyway)…automatic below the level of conscious choice, emotional actions …I work towards responding and would love to have my money back for all those reaction trades I made…following someones trades (even the best traders) seldom works for me unless I understand the trade and style….then there is one of my favorite mistakes… chasing an entry… because its running away without me…I knew it..I was right ..damn I’m going to get click happy right here and now.

..I laugh…lots of laughs…to hide the tears of foolishness ..might as well just open the window and throw a hundred dollar bill out every time I do that…do you see good surfers chasing waves that they missed? Or surfing directly behind another surfer..

So as an exercise.. open your window and throw a hundred dollar bill out…and if you do this …you will learn something .. experientially …that may save you thousands and thousands of trading dollars… for a relatively cheap hundred bucks!…This seemingly ridiculous instruction was given to me and it was a valuable lesson…notice how you feel..while that hundred dollar bill floats to the ground…what your thinking ..ect …understand every time you get …click happy…or the …hit the mouse quick…feeling.. without a planned calm reasoned response to the market…you are just throwing money out the window…real cash. I was naive or earnest enough (you choose) to actually follow that ridiculous instruction. Yes! I threw a real hundred dollar bill out the window! No! I didn’t like it. Yet it helped my perspective.

… now go get that $100 before it blows out the yard!

ps

I am not talking about seasoned pros who intuitively see levels of support, resistance, breakouts breakdowns and reversals.. or those traders that FEEL the market ….scalping in and out effortlessly. No, No…these traders have learned the basics, and developed a style that matches who they are. They have elevated their game. That is my goal here: to elevate my game along with my readers.

I will have another post to follow this on some basic TA that I use while you digest this post. I will also have some thoughts on various currency pairs for the week to come. Thanks for the read. I know there is a lot of stuff out there and limited time, so your time is appreciated.

-Brasil-

#ooo1