Author Archives: Steve Teunis
Author Archives: Steve Teunis
Do traders deserve to lose money if they treat their trading development the same as the person who ignores healthy life choices? You will get what you give.
There appears to be a consistent effort made by traders to find the easy way to trade, via signal services, social trading, advisory services, robots, etc.
If you do, you open yourselves up to being a victim of a scam. If it all sounds easy and the return profit is very appealing, you are the target and the next easy victim!
Most of us can get caught out
Even seasoned traders can get caught out. Between my mentor who is a fund manager, another wealthy investor and myself, we diversified into a Forex fund that was showing fair returns on a weekly basis. The supplied trades gave an average of 1% - 2% return each week with the occasional small losing week in between. After
I withdrew and deposited funds testing the environment, kept in regular contact with the face of the fund. For almost 1
Then, one dreadful morning an email in my
It took over 10 years to get a portion of the funds returned via the courts. There were people who had life savings and retirement funds invested, dreams shattered.
Did we deserve to lose our money (many thousands of personal dollars)? Yes.
We all want more and think we are smart and sometimes we
Looking for the cheapest broker or high returning signal service is not where the goose has laid the golden egg. You need to invest
Your planning needs to
A desire to be open and work on your own personal development.
You will spend much of your trading time alone. Can you be alone? Can you avoid the trap of seeking
You need to work hard at trading. Trading takes many hours and dedication to
If you are in a position, find yourself a mentor. Finding random information on the web is not the answer. You are trading against the best traders in the world, do you really think you can take money off them by taking advice from some hack on the web?
Most Traders Quit
To quit is easy.
We all get to enjoy the fruits of those that have failed the most, but they refuse to quit. It is the very secret ingredient that gives us the privilege to drive a car, be a passenger in a plane, use electricity, have wireless internet, better health facilities, etc.
Never quit but learn. See every setback as an opportunity to move forward.
Build a team of reliable, trustworthy people that you can use as your development. Be vigilant with whom you let into your life.
Do new traders deserve to lose money?
Until you have found your groove and position in the market, it will be difficult to avoid losing money. You only need to find a section of the market you feel that you can perform your best. If you hope to be a short-term trader, do that. If you only have the stomach for long-term trades, do that. Do what works for you. Feel open enough to develop your own personal trading approach.
Trade well, Steve.
The quick answer is, "YES you
You will need
I think it has become more difficult to be a successful trader. This is not because there is a lack of information and options available because there is ample available and this is now a part of the problem. Before new traders even begin their real development as a
It takes time to develop
For most traders, it will take almost two years to get to the real starting line. This is where your official development begins. It is after you have had your fingers burnt from various online environments and your own sabotage.
In my very early days as a trader, I recall a conversation at the time with another newbie and he mentioned that he wanted to craft his trading skills over the next five years. At the time I thought it was a ridiculous statement to make but knowing what I know now, that was a very smart and thought out commitment. The trader had a development plan in place.
What are the trading traps?
They are all around you. Each step and trade creates a new environment to fail. Everything from money management, trade selection, and trade management can consume your thinking.
The trading world brings with it the opportunity to make money or lose money. The only way we keep score is by observing the funds in our trading account. We see this as a reflection of our own image when in fact it is a process.
We then need to identify and deal with our own psychological battles. These scars carry the most burden and are the most difficult to repair for our trading world.
Most times, the courage to deal with our trading psychology is the final frontier within the trading cycle. It should be the first issue that we deal with however that is not possible as we need to take on the battle first before we can correct them, it can only be this way.
A few ideas that might help you
First, you need to understand that the art of trading is always
Ground yourself in quality information and traders that have had many years of trading. These are the traders that have been through the school of hard knocks.
Invest into your trading. Those that think they will learn how to be a successful trader without investing some real dollars into their development need to think a little deeper about the situation.
Think and grow rich
Napoleon Hill wrote "Think and grow rich" and
If you are serious about your development as a trader, take up this book and apply it to your trading and life. I promise you it will make a huge difference to your outcomes and your thinking.
It is all on you
Nothing in life is free; there is always a price to pay.
In a world of blame, it is easy to give up but guess what? Trading is
Enjoy your development and have a look at my course on price action trading.
Let's get real
Many new traders enter the world of trading with the lure of easy money. All you need is an internet connection and a platform to place a trade. This allows you to play ball with the big boys.
A new trader
If you want to know more about the home truths, have a look at my E book. I wrote it to send the readers a very clear message. That message is, "This
Relying on signals to buy and sell, taking the trading advice from others and asking silly questions like, "Should I buy or sell today" means you are not ready to trade live.
Your responsibility is to develop and structure your learning path. Trading the markets with success is a massive undertaking, and therefore people are looking for quick, easy solutions. This is the world
As per any worthwhile endeavour, there will be those waiting with open arms to cash in on the opportunity. They will show you the easy way. Yet with trading there is no "easy way", it takes time for your own personal trading model
Your Personal Trading Model
What is your personal trading model? This will take time for you to discover. The part that traders do not want to hear is that after two years of dabbling and trying different trading approaches, you will be ready to start your personal trading model. After a few years of experimenting and following certain online gurus, you have come full circle. There are many positives to pull out of the various experiences that you have
Your personal trading model will always evolve as you engage with new trading experiences. See trading as a personal development platform rather than a moneymaking venture. From growth comes reason and from reason comes responsibility.
Three Pillars For Trading Success
Understand the market - Your development as a trader must involve you learning the functions of the market. This does not have to be at a level of an
Take the time to observe the market reactions to certain news events. You are trying to create a feel for the
Understand Price - Price is the most up-to-date indicator you will find. Price is a leading indicator and not lagging as per every other indicator on your charting software.
The study of price will give you a huge advantage to become a successful trader. Most traders never look back after they have developed an understanding of price;
Once more, it will take time to understand the workings of
Price is king.
Understand Yourself - Without the completion of understanding yourself, all the other work you have applied will become wasted. Understanding yourself allows you to work on your inner personalities. The hierarchy that does your trading for you. This will expose many of your inner demons that play out whilst trading. The need for attention, winning, to be right, greed, fear of missing out, importance and many more personalities that do your trading for you.
Trading will expose these trading issues. These are personalities that serve you well in the real world;
From where I sit, it is relatively easy to pick up on the various hierarchy issues that stand in the way of trading. If a student shows me just a few trades (win or lose), it is easy to identify the core of the situation. We can then
Discipline and Self Development
A trader will need to apply discipline and have excellent trade selection. If you jump in and out of every opportunity, you will end up in trades
As a trader,
That is not all
We have given you the three principles to a successful trading model. Each of these will get broken down into deeper components.
Your equity management protocol needs to
Serious about trading?
If you are serious about your development as a trader, we invite you to have a look at the FREE resources we offer at our website.
The knowledge center on the website will give you access to quality information. The daily insights will break down price action and the drivers of the market for the upcoming trading session.
We know that the currency market and in fact all markets are driven by future interest rates. Interest rates are a tool to manage the growth of the economy. Each piece of micro data adds to the interest rate story.
In recent years the global growth has been difficult to stimulate. The mandate for most central banks is to manage inflation and to have a stable financial system. The cash rate set by the central bank is the rate at which retail banks lend money to each other. The banks will have their profit mark up passed onto the end customer.
Understanding the Market
As volatility retail traders, we do not have to understand the inner workings of a central bank. However to understand the market we do need to have a broad brush understanding of the drivers. We need to know if the FED is hinting to raise rates again or reduce rates. When a central bank makes a shift in policy, you need to know. Understanding the market takes time and discipline. If you are reading this article then it is a way for you to improve your understanding of the market.
Keep in mind, our role is not to predict what the central bank will or will not do. Yes, an opinion is fine but do not be married to the opinion. We are also not predicting how the market will respond.
Why Negative Interest rates?
The purpose of negative interest rates is to increase inflation and growth. To increase inflation, spending is needed. People can borrow at much lower rates which encourages spending. This is known as cheap money.
If a large company can borrow at a very low rate, invest into infrastructure, expansion, create jobs etc, then this will create growth thus inflation. Naturally the biggest fear for the central bank is deflation. The central bank will do almost anything to avoid deflation of it's economy.
Negative interest rates are a sign of pure desperation from central banks. it is like the last party trick when nothing else works.
The Negative to Negative Interest Rates
Banks need to hold deposits from you and me. Banks have minimum deposit requirements which determines their ability to lend. Retail banks lend out more than what they have, this is the power of fractional banking.
This creates an interesting situation for banks. They need to attract deposits in order to lend, however negative rates means the depositor need to pay the bank to hold their money.
The entire concept of negative rates or low rates in to encourage people to spend to create growth and spur on inflation.
One Crucial Consideration
For those that are in a financial position or are in a spending cycle within their life, what must you have? You need to have confidence. You need to feel some wealth factor, certainty about your job. Confidence in your economy will encourage you to buy a new car, upgrade your property, buy an investment property, expand your business etc.
Self funded baby boomers will not want to extend their financial commitments due to the low interest rate returns offered to them from the banks due to negative interest rates. They have however been lucky enough to have in recent years a good stock market with good dividends. They do not have confidence to be easy with their wealth.
Euro zone - TLTRO III
In a matter of hours we are about to have TLTRO III announced by the ECB. The most recent TLTRO was in 2016 during the Euro debt crisis. Back then the ECB deposit rate was -0.4%. The Euro zone has moved on since then and the situation for the region has improved. There has been some growth however their are still many headwinds ahead for the Euro zone. Trade wars are at play, Brexit is still dragging out and global growth is terrible.
When you see the term TLTRO III, just think the word "stimulus".
How can I use this in my Trading?
As a trader, we need to be listening for shifts from the central banks. Let us assume that in 12 months from the installation of TLTRO III, we started to see some consistent growth come out of Europe. The central bank might start communicating a positive picture for the Euro zone. This would start to translate to less stimulus and at some point an increase in interest rates and less bond buying from the ECB.
The situation explained above would be positive for EUR. We would also need to know what the FED was thinking.
Currently the EURUSD is trading near 1.1200. This is on the back of a FED that has been hiking rates and a ECB that has been stimulating the market. Less than 12 months prior the EURUSD was trading at 1.1800. This was on the back of ECB signaling rate increases at some point in the near distant future. This never happened.
The micro data such as PMI's, employment, retail sales, CPI etc are drip feeding into price. Listed to what the central banks are saying. All this combined will lead to interest rate changes and this is what the market cares about.
Clarity for EURUSD Pair
As I mention in the Mastering EURUSD Course https://eurusd-fxtrader.com/price-action-trading-course/ the EURUSD pair gives us two central banks with clear communication. Central banks do not want to shock the markets and will drip feed the market information relating to interest rates. Most often by the time an interest rate adjustment has been made, the change has already been priced in. This is why the press conference or meeting minutes are crucial as this is where the next direction on interest rates are coming from.
USD is the backbone
The United states has a very big advantage. The advantage is that it owns the reserve currency of the world. More than 80% of all trade transactions are completed with USD. This makes the USD king. There will be a shift at some point in time, there always has been but for now it is the USD. If you own the worlds reserve currency, you have a very big advantage.
As traders we need to track the USD strength and weakness. This will determine flows in and out of currency pairs. By understanding the interest rate situation for your specific trading pair, you will also have an advantage.
The more you can understand the market, the more success you will have. Do keep this in mind, the market does not always respond to the fundamental logic's, so be careful not to cast your opinion onto the market via a trading position.
The purpose of key levels
Key levels are
The future key levels are best observed on larger time frames. The 240 & 60-minute charts will give you a broad view of these key levels. You can either take a note of these key levels or document the levels on your chart. Once you have identified the future key
EURUSD 240 Minute chart
Below is the EURUSD 240 minute chart. The important key levels
Within this chart, you can identify where price has consistently traded within each key level parameter. Keep in mind, this is a 240-minute chart and not used for trade entry. It is also not going to be an exact science and slippage through the key levels needs to
Breaking down key levels
For intraday trading, use the 60 & 15-minute charts to help you fine-tune your trade selection. If
Smaller time frames
Keep in mind, we have identified future key levels from the larger time frames. We have then broken this down into the intraday charts of 15 & 60-minute time frames.
Assuming we have been able to identify a high odds and low-risk level, we now break this down into a much smaller time frame. The time frame might be a 2 or 5-minute chart.
There is more to it
The main purpose of this article is to help you understand how you can identify key levels. Trade selection, trade execution, and trade management are all a different beast.
Be mindful, just because you have identified a key
Happy Trading, Steve.
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