Do you take your trade at 1^st stab or do you rather wait for confirmation?

First stab will give you the best opportunity to manage and remove risk out of the position much sooner compared to waiting on confirmation.

To be successful with first stab entry, you will need a comprehensive understanding of price and the market.

First stab explained

It is important that we understand the meaning of first stab.

First thing to keep in mind is, we are never chasing price, we are always waiting on price to come to us.

In the Mastering Course we explain this very clearly, this concept alone can be difficult for traders to adopt. In order to take a trade at first stab we must:

• Buy into the face of a bear candle
• Sell into the face if a bull candle

We are not interested in the type of the candle or its name but we are interested in is price delivery thus how price arrives to our entry level.

Discover your key level

A First stab entry needs to be supported by a key level and as price comes into the level you take the trade on the first hit. This is by nature not what we do as humans. Most times in life we desire confirmation before committing to a situation. This also plays out in trading and it is something that most traders need to adjust to before becoming successful at trading.

Considerations when taking First stab

Nothing in trading is as simple as just an idea. All things need to be considered and trying to get everything to line up is near impossible.

Some of the factors that you should consider regardless if you are taking a trade at first stab or waiting for confirmation.

       1 – Time of day

       2 – Liquidity

       3 – News events

      4 – Price delivery. How price arrives to your entry

      5 – Price patterns (These are not traditional patterns but price liquidity patterns)

      6 – Key level

      7 – Definition at the key level (strong or weak)

      8 – Support – Resistance

Discomfort will create comfort

There are ways to become comfortable trading first stab, we discuss these methods within the Mastering course. Over time you will turn the discomfort of trading first stab into a comfort.

It is realizing that you have a much greater chance of survival by waiting for price to come to you and take it on first stab.

A metaphor for this is if you watch a documentary on an animal that stalks its prey.

The stalker will wait and wait until the prey is near enough before pouncing. This process increases the chance of a win for the stalker as well it saves energy.

In trading if you are chasing the price or waiting for confirmation, it will become mentally taxing.

The video included is from the Mastering Course. 1^st stab Entry part – 1

Happy trading,

Steve T.

Why Most Traders Fail

Let’s define what failure is in trading terms. There really is only one event that signals failure and that is when the trader has detached themselves from self-discipline and the result is to blow up your trading account.

Most traders know having a string of losing trades is not a failure. It might be because of poor trade selection and over trading, but these are often signals for you to be aware of to adjust your approach.

Profits need to be added to your account gradually. Losers taken in the same way, gradual. Either way, it should not have any huge impact on your trading account or your trading psychology.

For most, there is the need for more. We all want more money, more things, more stuff, more time, etc. Traders want more gains. With the gains comes more exposure. The exposure then eats away at your trading psychology and your self-discipline becomes fractured.

The fractured mind is now struggling to see the reality and the process that is needed for disciplined trading success.

The Big Fail

The Real Work

Trading will push you and shove you from one end of your mind to the other. You must be mentally stable whilst trading. You also do not want to overthink everything. Try to be in the flow without forcing yourself to be someone you are not.

Discover your discipline strength and weaknesses.

Successful trading is a road of self-discovery that is expressed through your trading results.

The Losing Cycle

You finally believe that you have shifted your trading ability to a level of profitability and consistency. After all, you have been trading with discipline and a small portion of good luck for several months.

The last time you had a major drawdown on your trading account was when you abused your leverage allowance and averaged into a trade. It was only a lapse in concentration otherwise it too would have been a winning trade and you swore that you would never make that same mistake again.

Over time, the pain of the “out of control” losing trade softens. We don’t forget but we believe that we have moved on and matured as a trader and will manage the situation better if this ever happens to you again.

Five Survival Techniques

Remaining grounded and in touch with your own emotions can be the most difficult situation to manage as a trader. Every trader will have a unique manner in how they view and trade the market. There is no right or wrong.

The real difference between success and failure will be how you manage yourself. The list below will give you hints on where you might need to develop as a trader to avoid the large drawdowns on your account.

• Quality trade selection (Understanding the market)
• Tight money management and risk control (Risk management model)
• Excepting the trade outcome before you enter the trade (Understanding the flip of the coin)
• Remaining humble win or lose (No room for ego)
• Strong focus on process and not outcome (Manage pips not dollars)

Note that the five survival techniques above have everything to do with YOU. If a trader can become excellent at all five techniques, then success will follow. If the trader fails at just one of these, then it will be a race to the bottom.

Can you for a moment imagine that you have all five techniques mentioned totally anchored within your trading psychology? What type of trader would now be or could become if you mastered the list provided?

This is the secret to trading. Every trader will have a method or an approach that works for them, but without the development of your own mind, you will only lose at trading.

As a guide, it will take most new traders two to three years to be comfortable with a trading approach, trading platform and the market. It is after we have established this, we move towards self-development and this is where the true challenge for the trader begins.

Traders are polluted with advertising rubbish that offers traders an easy road to success. The truth is, there is no easy road to success. The success needs to be earned and if you hang in there long enough and become a well-rounded trader and person, success will gradually feed into your trading account.

I want to discuss percentage gains (and losses) traders broadcast on social media and within Facebook groups.

Retail traders push to gain 4% or more each week and see themselves in the window of success. Yet professional traders believe 1% or 2% gain per week is massive.

This overconfidence and pushing towards big gains is dangerous.  I warn about this in my E-Book,  control your account gains if you want to trade long term.

Retail trader and professional trader

There are usually differences between both types of traders. The professional trader will use a much lower level of leverage and sometimes no leverage at all, meanwhile the retail traders have a much smaller size account to trade from, and use leverage to bloat gains.

Most retail traders will counter saying, “How else can I make money unless I use leverage?” That’s a valid question; however, first thing to remember is that to play, you must stay in the game!

Most retail traders will blow up their trading account for these two reasons.

• Abusing leverage
• Average down the loss

Most traders will slip up and do both simultaneously.

Becoming conditioned to the gains

In our society we become conditioned to all circumstances; trading is no different. A trader on a good winning streak can easily add 1% or more to their trading account each day by using leverage and averaging down. The situation can even be positive to your energy system as you believe that price will at some point return to your break-even level.

It is at this point that you have lost almost any control over your trading mind; you are no longer doing your trading, and your inner demons now possess your thoughts and decision-making.

When you make 10% - 15% etc. per month, it’s only a matter of time before you wish that you had scaled back the amount of trades and the leverage that you have been abusing.

Old-fashioned word in trading? Discipline

We are riddled with greed. We move from buying one house to buying an investment property and so on. We seek better returns and become conditioned to wanting more and more.

In trading this plays out, but the effect is much quicker and with less warning.

To be disciplined means to be shy with your trade choice and to keep integrity within your position size. By combining both quality trade choice and integrity with position size you will not be tempted to grow your account at an unreasonable rate.

It is much better to develop the skills and mindset that trading will demand from you rather than building your account at a rapid rate for several months before it all caves in on you. When that happens, your mental integrity and your account will both need rebuilding.

Slow and very steady will win the race.

Think of what you could achieve over five years rather than what you want at the moment. Over time trading will almost become boring as you carefully select your trades and up hold your trading integrity.

If you are winning and adding over 3% to your trading account week, you must regroup now.

Professional traders believe 1% or 2% gain for the week is massive, professional traders are around much longer than the average retail trader. How do you want to mirror your trading towards, the average (crashing) retail trader, or the professional trader?

Take this as a warning and protect yourself from greed and inner demons.

Trade well, Steve T.

The quick answer is, "YES you do", but finding that trader within you is the challenge. In today's article, we will break down some challenges most traders have and offer some solutions.

You will need to quickly realize that you hold the key to success when it involves trading. The success is not with the strategy or following other traders. The very fact that we are all unique as individuals must give you a hint that you already own the key to successful trading.

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 trader they are being exposed to solutions and courses that are "marketing business" geared up to sell things.

 It is difficult to recognize the real deal from the no deal.

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 evolving; there is no end in your trading development. It will take several years before you have built a strong enough psychology to deal with the markets in a consistent regular basis.

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 was published in 1937. This book took twenty years of research and is now the cornerstone book for many successful people in the world. This is not a book you read once and put back on the shelf. This is a book that you continually study and apply the concepts to your life as you develop. As you evolve, the book evolves.

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. Some are prepared to do whatever it takes and meanwhile others look for excuses to bail out and quit. This is all on you and not the circumstances.

In a world of blame, it is easy to give up but guess what? Trading is not easy and for many it will be one of the most difficult undertakings you will ever endure. This is not because it is difficult to put a trade on or to have a broad understanding of the market... Over a short period of time these are rather easy to concepts to grasp. Trading is difficult because our ego and survival instincts are pointing in the opposite direction. To overcome this, it takes a massive amount of work and personal development. As we continue with our development, we then test it in the market. 

Enjoy your development and have a look at my course on price action trading.

​Steve Teunis.

The purpose of key levels

Key levels are Support and Resistance levels where price could offer us a trade response.  These are levels where there is a line in the sand, where price should often pause. I explain key levels in depth within the Mastering course. https://eurusd-fxtrader.com/course/

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 levels there is no need to continually eyeball the levels on the larger time frame go down to a smaller time frame.

EURUSD 240 Minute chart

Below is the EURUSD 240 minute chart. The important key levels ​are documented and identified. Note, we are not looking to predict the direction of price or cast our opinions onto the market. We are looking to identify key levels where price might respond so we can execute a manageable trade.

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 be considered.

Breaking down key levels

For intraday trading, use the 60 & 15-minute charts to help you fine-tune your trade selection. If price has been trading in a tight daily range, you will find the 15-minute chart useful. If price has been stretching the daily range, you will find the 60-minute chart more helpful. Either way, both 15 & 60-minute charts should be considered as tools for intraday trades. We are looking for price structure. Price structure will be how price merged into the key levels and the structure in and around the key level.

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. At this point, you should know in your mind the exact level you want to execute the trade entry. Wait with patients. Your level may or may not get hit.

There is more to it

Never ever just take a trade based on the identity of a key level. There is much more to be considered. All of those many considerations we discuss in the course as well during the daily insights newsletter. Some of those considerations will be, time of day, Average true range, news, fundamentals, currency pair characteristics, price delivery.

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 level, this is not a license to take a trade. Important to also consider why you should not take a trade.

Happy Trading, Steve.

More than likely you have never heard of this terminology "sticky"

Understanding the individual characteristics of each currency pair will be crucial for your trading success. Taking trades on technical levels but not understanding the currency pairs personality is a big mistake. Much like people, currency pair characteristics do not change, we will discuss and show you what are sticky pairs. 

EURUSD & GBPUSD

Both the EURUSD and GBPUSD pairs respond well off key levels if the overall drivers of price are one directional. Let us assume that the market was very bullish the US dollar. We will still see these two pairs respond of key levels. Perhaps the response is not as deep compared to when the market is trading in a balanced state however you can normally trust a response when your trade selection is selective off a key level.

Naturally this will not always be the case, especially if the market is making major adjustments such as a flight to safety or risk because of political situations or central bank talk. By understanding the market as we often discuss, you will identify these events.

Our preferred trading environment is when price is range bound and staying within or near its average true range.

Sticky AUD and NZD

When these two pairs trend they trend well. I consider both pairs risk currency pairs because of their higher interest rate status. They are both reliant on China and can be sensitive when the market is in a risk-off phase. For many years both pairs had a positive carry against the US$ however over recent years this has not been the case. The positive carry allows inflows to the currency and stock market thus keeping both these pairs well bid. Both pairs still have a positive carry against the JPY and this would be unlikely to change.

Unlike the EUR and GBP, both AUD and NZD have a much smaller daily range. AUDUSD can still be traded for intraday trades, but the NZDUSD is more suited to swing trades rather than day trades.

Let's get sticky

Sticky is best explained by saying that when price is trading in a direction either up or down, the response off key levels is often muted. This is never going to always be the case as the market continually trades in phases. A phase might be between two or three big figures or a very tight range. Another phase might be when price does not respond of a key level with any conviction thus sticky. Our job is to pick up on these characteristics as they happen.

Chart example

Below is a NZDUSD 60-minute chart. I circle the important possible reaction points in blue. From the base at 0.6480 we can see how price responded and into each of these blue circled levels. Each response or in this case was very limited. In most cases at best there was simply a pause but nothing noteworthy of a manageable trade reaction.

Described is a very common characteristic seen on both AUD and NZD. You need to be careful when looking for a response from these pairs. Try to trade each of these at their extreme level for each day, when the Average True Range has been stretched and allow some wiggle room within your trade management and equity management. They can be very stubborn once we find a direction. 

We cannot explain and give you the entire structure of this sticky event situation, but hopefully this will give you some awareness to the behavior.  Much of the trading approach we teach you is about price action; however deeper component of price action is price characteristics as we are discussing within the article.

Happy Trading, Steve.

For example, when I think of some very successful business people and reflect how they might apply themselves to trading then the outcome would be obvious. Many of these people are alpha males/females…. and letting go of control and outcome is not their forte in life and unless we prepare them to make massive psychological changes, their trading account will rapidly decline and require ongoing top ups.

Often a sports person’s mindset is ideal for trading. When you listen to successful sports people during an interview they give away their mindset and how it’s applied to the individuals sport. You will often hear them say things like “ I can’t control what the opposition does but I can manage my performance” or ‘I am just focusing on the process and I can’t control the outcome” or ‘I have prepared to my full capacity and I am now ready to perform”.

The above quotes are exactly what your mindset needs to be when trading however this is often not the case and emotions will drive your trading rather than you managing your emotions.

The nice part of trading is that your account P&L represents where you are in your trading cycle. Small profits, lots of break events and loses managed within your equity management rules is a great place to be because you are at the point where you are just about to turn a corner and all that is needed is a bit of fine tuning and direction.

For most people trading is the most difficult endeavour that they will ever undertake. All of your demons will be exposed even if you can’t identify them, your trading P&L will be talking to you.

In my new Ebook I dedicated a whole chapter to explain how to avoid getting emotional and lose focus while you are trading.

I suggest you download and read it; it's FREE!

Happy Trading, Steve.

Have you noticed how we become conditioned to situations or circumstances? Governments do this to us all the time eg a gradual increase in taxes for certain items and once we have excepted the conditions in our head we view it as normal and no further action is taken.

When trading it is the same, your account will explode and this becomes normal. Now that 7% each week is reached the 4% from the previous week now looks below average. The calculator is used a little more often so you can work out how much money you will make each and every month.

What has happened here is that the trader is focused on the wrong thing and that is the money.

Your focus needs to be on the process and not the outcome. 

When the focus is on the outcome (money) rather than process (trading and controlling risk) then you will only ever end up with this disappointing result, things will cave in for you, it’s only a matter of time.

You have  been conditioned to except very high returns whilst taking a high level of risk.

I have known traders who have sold their houses to trade and have ended up losing it all. Others who have gained 30% in a few months and​ focussing on the outcome only ever ends in the same scenario, tears.

When you are trading and chasing  money eventually it will run you down and will need to pay up.

This is what happens when ego and greed take over your trading rather than focus on process. In my new Ebook I dedicated a whole chapter to explain how to avoid getting emotional and lose focus while you are trading.

I suggest you download and read it; it's FREE!

Happy Trading, Steve.

• Determine your risk as per your personal risk model.
• Place your opening STOP as per your risk %
• Make your trade entry as accurate as possible.
• Know where you need to take initial profits to fund the trade.

By getting the above in play you stand a good chance to be profitable. There is much more that needs to play out within the big picture but by managing a few basics as mentioned you avoid many of the errors made that lose equity from your trading account.

Do not go chasing the perfect trade or perfect system just focus on the process on how to prepare yourself for each trading session and managing the trade.

I have written a comprehensive Ebook on trading and how to avoid most of the mistakes you can make. What many beginning traders don't realize is that psychology plays a crucial role in your success. Failing to realize that will lead to disaster and hence the title of the book.

Happy Trading, Steve.