Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

RichardCox

Key Steps to Building a Successful Game Plan

Recommended Posts

It is not uncommon for new traders to view the forex markets with a certain level of mystique. This is largely because of the wide variety of trading approaches that can be implemented at any given time. If we compare forex trading to riding a bicycle, some similarities emerge. Learning to ride a bike requires skill, patience, balance, the proper equipment, and the ability to accurately assess your surroundings. It wouldn’t be a good idea to practice riding on a street with speedy traffic, and the same attitudes and rules should be applied to the forex markets as well. When we are able to combine solid analysis with effective practices, it becomes easier to increase success rates. Like many things with substantial potential for rewards, successful trading requires both talent and hard work. Here, we look at some ways to combine the advantages of your natural talents with your strategic approach to put you on course to develop methods that will improve success in all trading markets.

 

Understanding the Value of Patient Preparation

 

Before any trades are placed, it is important to understand the value patience and preparation can add to any strategy. This requires an assessment of your trading goals and personal strengths. Nobody can make these judgements better than you can, and this is not something that you can learn by reading textbooks on the subject. When applying these strengths and goals to your trading plan, it is generally a good first step to decide on a time frame that will typically be used for your trades. Time frames can be altered, of course, but it is a good idea to choose a time frame that is best suited for your temperament and level of time availability.

 

Traders that typically use 5-minute charts, for example, tend to be uncomfortable holding positions overnight, as these trades carry certain types of added risk. Conversely, traders that use weekly charts tend to be willing to hold positions even through periods where prices might be working against the trade. Traders using shorter time frames will generally have to spend more time during the day monitoring their computer screens - looking for new opportunities and closing positions once the market is ready to change. Traders using longer time frames might spend more time doing research, for example using the weekend to look for new opportunities and then arriving at a game plan for the coming week.

 

Using a Consistent Methodology

 

Once you are able to settle on a general time frame, it is important to look for a methodology that you will be able to implement with consistency. For example, some traders to identify ranges and then buy when prices fall toward support and sell when prices rise back toward resistance. Some traders prefer to wait for breakouts and then trade in the direction of the underlying momentum. Others wait for indicator readings to send certain signals or for significant price patterns to develop.

 

Once you settle on a system that matches your strengths, it is often a good idea to test your ideas to see if the strategy works over a long period of time. If backtesting results show that your system generates reliable signals in more than 50% of your positions, you will be able to gain an edge and improve on the results of most of your competition. It is also important to test a few different strategies and then settle on the one that best matches your temperament and generates positive outcomes on a consistent basis. Use a variety of different forex pairs for your assessments and look at multiple time frames in order to get a broader perspective on the success or failure of your preferred methods.

 

Develop a Trader's Mindset

 

Having a go-to time frame and a solid strategy is great, but these can only have a limited impact if the trader using these techniques fails to exhibit a consistent mindset. A successful mindset comes with an adherence to four key areas: Discipline, Patience, Manageable Expectations, and Market Objectivity. Once you settle on a system, you must exercise the patience to wait for situations where all of your trading requirements are met. If your system requires prices to reach a certain area, and that area is never reached, no trades should be placed. It is time to look for opportunities in other areas. If you miss a train, you don't run after the train, you simply wait for the next one to arrive. In the forex markets another opportunity will present itself.

 

The ability to wait for the next opportunity also requires discipline, and a willingness to obey your strategic rules. Discipline is also required in order to place trades and open or close a position when it is necessary. This becomes even more important when dealing with stop losses. Market objectivity comes in when traders must detach their biases and emotions and rely on the strengths of a trading system. Traders must also create manageable expectations that are realistic. It is unreasonable to take a $500 trading account and expect to make $1,000 on each trade. There will be instances where a market will more more than you expect (and generate substantial profits) but if you expect this to happen all the time, you are setting yourself up for disappointment.

 

Don’t Focus on Too Many Markets at Once

 

Many new traders feel the need to be in a position all the time and monitor an unmanageable number of forex pairs at once. While it is true that the use more more forex pairs will generate more trading opportunities, this is a practice that is largely unnecessary. Its generally a better idea to limit yourself to a smaller number of markets, and then to have a better understanding of how those markets operate. Some currency pairs will behave differently in different market environments, so it is also a good idea to have a pairs that exhibit different types of moves so that you will have a trade to make when conditions change.

 

There is no system that will create successful trades 100% of the time. Even in cases where a system is accurate 65% of the time, you will still see periods of loss (the other 35% of the time). Because of this, overall profitability is really an exercise in risk management and trading execution. It is important to cut your losses and accept defeat in a trade in order to prevent further losses from accumulating. Look to trade in areas where prices are likely to move in your chosen direction right out of the gate. This is especially true for traders using shorter time frames. In some cases, you will need to try a position two or three times in order to see prices move in your direction right off the bat. This requires a high level of discipline and patience, but when it is done correctly, you will be able to trail your stops and stay in the trade until the move has run its course. There are many different ways to approach the forex markets in a coherent fashion, and these key steps are vital when developing a strategy that works over time. No matter your preference for time frames or strategy, these steps must be considered before putting your money at risk in potentially volatile markets.

Trading-Success.jpg.bf7343a88673d2ff2d95af4b135ccfdb.jpg

Share this post


Link to post
Share on other sites

Key Steps to Building a Successful Game Plan....

 

All fairly vague stuff.

 

You need an edge to be successful.

 

If you go to an investor seeking money for ANY type of business, the investor is going to DEMAND to know how you will make money. What value will you be adding to your product that allows you to sell it for a higher price? Or in trading parlance, how can you demonstrate that over time, your strategy WILL return profit based on changing asset prices. This is usually based on knowledge of intra or inter market interactions, or observable and demonstrable external factors and their impact on the markets. TA is too vague and subjective to offer this. TA does not offer any edge in itself.

 

So,

 

What edge can be found in the FX market? What time frames are these edges occurring in?

 

This is what should be addressed in my opinion.

 

Political factors, economic releases, fiscal policies, rate markets, repo transactions, seasonality such as tax cycles, commodities, option mechanics, etc, etc....

 

Forget your 5 min chart. You'll need to do a lot more work than back testing basic pattern recognition to find any edge.

Share this post


Link to post
Share on other sites
Key Steps to Building a Successful Game Plan....

 

All fairly vague stuff.

 

You need an edge to be successful.

 

If you go to an investor seeking money for ANY type of business, the investor is going to DEMAND to know how you will make money. What value will you be adding to your product that allows you to sell it for a higher price? Or in trading parlance, how can you demonstrate that over time, your strategy WILL return profit based on changing asset prices. This is usually based on knowledge of intra or inter market interactions, or observable and demonstrable external factors and their impact on the markets. TA is too vague and subjective to offer this. TA does not offer any edge in itself.

 

So,

 

What edge can be found in the FX market? What time frames are these edges occurring in?

 

This is what should be addressed in my opinion.

 

Political factors, economic releases, fiscal policies, rate markets, repo transactions, seasonality such as tax cycles, commodities, option mechanics, etc, etc....

 

Forget your 5 min chart. You'll need to do a lot more work than back testing basic pattern recognition to find any edge.

 

 

 

Political factors, economic releases, fiscal policies, rate markets, repo transactions, seasonality such as tax cycles, commodities, option mechanics, etc, etc....

 

Forget your 5 min chart. You'll need to do a lot more work than back testing basic pattern recognition to find any edge.[/

 

I agree with you dude, but if you were to get even more specific, what part of that framework can and do you quantify?

 

Price is nothing more than the heartbeat of the markets; however, (in my opinion at least) trading ideas should be based off of hypothesis that play on a behaviour or external factor, like what you have listed.

 

Something that has recently come to light...

 

The day before any important economic release, if the day ends positive, the odds are high that the following day will also end positive

Share this post


Link to post
Share on other sites

Seems like you've pretty much got it.

 

Basically, I think there are 2 types of edge.

 

1. Hard mechanical edges based on pricing distortions. These have very low risk. Typically involving some kind of arbitrage, like basis trading, delta neutral trading, structure against structure. Due to the low risk, they are the most competitive - but there are still opportunities. So, generally your transaction costs need to be quite low to exploit them.

 

2. Softer edges involving inter-market cycles and correlations. You mention a good example. These don't last as long - some longer than others. I used to trade a similar one you mention when I traded Euro futures. Examples include CL & ES, seasonal calendar spreads, etc. They will work more often than not, but the relationships shift over time.

 

The point is, is that you can define each one, and state why it works, how it works, when it will work etc. They arent subjective. The less subjective, the better the edge IMO.

 

Sometimes the edge is a one off - such as the news of a pipeline being build that has altered the relationship between Brent and WTI. That spread will trend for days/weeks as it takes the refineries some time to put their trades on accordingly. The point is that the trade is not subjective. The pipeline has increased supply, so there is an extremely high probability the spread between them will change. It kind of almost has to. You wont see much looking at the outrights though. Yield curve shifts (flattners and steepners) are another example. Understanding bond maths takes a lot more effort than learning a few clown patterns in TA - so few will bother - instead they try to get rich quick - ending up spending years thinking they are learning not to lose. lol.

 

Intraday edges are more likely to be one-offs, but you can spot the same ones recurring if you understand market structure through MP and how to read DOM. This is almost a 3rd type of edge as it is perhaps the vaguest, and definitely more subjective. This isnt TA though. It's understanding how large orders interact with the market. It's becoming harder due to algos breaking up large orders. A chart will never show you this due to the games played though. It's also the hardest to learn - so most pro's wont bother with it.

Share this post


Link to post
Share on other sites
Seems like you've pretty much got it.

 

Basically, I think there are 2 types of edge.

 

1. Hard mechanical edges based on pricing distortions. These have very low risk. Typically involving some kind of arbitrage, like basis trading, delta neutral trading, structure against structure. Due to the low risk, they are the most competitive - but there are still opportunities. So, generally your transaction costs need to be quite low to exploit them.

 

2. Softer edges involving inter-market cycles and correlations. You mention a good example. These don't last as long - some longer than others. I used to trade a similar one you mention when I traded Euro futures. Examples include CL & ES, seasonal calendar spreads, etc. They will work more often than not, but the relationships shift over time.

 

The point is, is that you can define each one, and state why it works, how it works, when it will work etc. They arent subjective. The less subjective, the better the edge IMO.

 

Sometimes the edge is a one off - such as the news of a pipeline being build that has altered the relationship between Brent and WTI. That spread will trend for days/weeks as it takes the refineries some time to put their trades on accordingly. The point is that the trade is not subjective. The pipeline has increased supply, so there is an extremely high probability the spread between them will change. It kind of almost has to. You wont see much looking at the outrights though. Yield curve shifts (flattners and steepners) are another example. Understanding bond maths takes a lot more effort than learning a few clown patterns in TA - so few will bother - instead they try to get rich quick - ending up spending years thinking they are learning not to lose. lol.

 

Intraday edges are more likely to be one-offs, but you can spot the same ones recurring if you understand market structure through MP and how to read DOM. This is almost a 3rd type of edge as it is perhaps the vaguest, and definitely more subjective. This isnt TA though. It's understanding how large orders interact with the market. It's becoming harder due to algos breaking up large orders. A chart will never show you this due to the games played though. It's also the hardest to learn - so most pro's wont bother with it.

 

Thanks for clarifying between the two different realms dude.

 

The majority of my labor is spent specifically in the first school of thought. I won't reveal all of my magic bullets but one of my favourite trades is a divergence trade between the indices and the vix (the model has recently incorporated bonds into the mix)

 

In regards to correlations and shifts (what i like to refer to as regime shifts), this is something i am spending a lot more time into lately. I'm not sure what kind of window you use to determine your correlations but I suggest using no longer than 60 days maximum since these things are constantly changing (as i'm sure you already know)

 

Just recently have I been putting in serious efforting into learning the latter (i.e. intraday edges through the dom). If i ever trade intraday, I will never look for a scalp... I like to go into the trading day with a general outline of areas of interest and then i'll use the dom/tape and other moving parts in my models to help identify if a trade is on or off. HFT does not make this easy by any means but with time, practice and patience I believe one can build an edge in this style of trading as well.

 

Happy to see your applying a strict logic to the madness rather than a trendline/fib retracement/or bear/bullflag

Share this post


Link to post
Share on other sites

One thing Pros say over and over again and now im experiencing that myself is sticking to the asset or industry which u know about and which you feel confident to trade in..

Going into random things leads to nowhere..

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • there is no avoiding loses to be honest, its just how the market is. you win some and hopefully more, but u do lose some. 
    • Date: 11th July 2025.   Demand For Gold Rises As Trump Announces Tariffs!   Gold prices rose significantly throughout the week as investors took advantage of the 2.50% lower entry level. Investors also return to the safe-haven asset as the US trade policy continues to escalate. As a result, investors are taking a more dovish tone. The ‘risk-off’ appetite is also something which can be seen within the stock market. The NASDAQ on Thursday took a 0.90% dive within only 30 minutes.   Trade Tensions Escalate President Trump has been teasing with new tariffs throughout the week. However, the tariffs were confirmed on Thursday. A 35% tariff on Canadian imports starting August 1st, along with 50% tariffs on copper and goods from Brazil. Some experts are advising that Brazil has been specifically targeted due to its association with the BRICS.   However, the President has not directly associated the tariffs with BRICS yet. According to President Trump, Brazil is targeting US technology companies and carrying out a ‘witch hunt’against former Brazilian President Jair Bolsonaro, a close ally who is currently facing prosecution for allegedly attempting to overturn the 2022 Brazilian election.   Although Brazil is one of the largest and fastest-growing economies in the Americas, it is not the main concern for investors. Investors are more concerned about Tariffs on Canada. The White House said it will impose a 35% tariff on Canadian imports, effective August 1st, raised from the earlier 25% rate. This covers most goods, with exceptions under USMCA and exemptions for Canadian companies producing within the US.   It is also vital for investors to note that Canada is among the US;’s top 3 trading partners. The increase was justified by Trump citing issues like the trade deficit, Canada’s handling of fentanyl trafficking, and perceived unfair trade practices.   The President is also threatening new measures against the EU. These moves caused US and European stock futures to fall nearly 1%, while the Dollar rose and commodity prices saw small gains. However, the main benefactor was Silver and Gold, which are the two best-performing metals of the day.   How Will The Fed Impact Gold? The FOMC indicated that the number of members warming up to the idea of interest rate cuts is increasing. If the Fed takes a dovish tone, the price of Gold may further rise. In the meantime, the President pushing for a 3% rate cut sparked talk of a more dovish Fed nominee next year and raised worries about future inflation.   Meanwhile, jobless claims dropped for the fourth straight week, coming in better than expected and supporting the view that the labour market remains strong after last week’s solid payroll report. Markets still expect two rate cuts this year, but rate futures show most investors see no change at the next Fed meeting. Gold is expected to finish the week mostly flat.       Gold 15-Minute Chart     If the price of Gold increases above $3,337.50, buy signals are likely to materialise again. However, the price is currently retracing, meaning traders are likely to wait for regained momentum before entering further buy trades. According to HSBC, they expect an average price of $3,215 in 2025 (up from $3,015) and $3,125 in 2026, with projections showing a volatile range between $3,100 and $3,600   Key Takeaway Points: Gold Rises on Safe-Haven Demand. Gold gained as investors reacted to rising trade tensions and market volatility. Canada Tariffs Spark Concern. A 35% tariff on Canadian imports drew attention due to Canada’s key trade role. Fed Dovish Shift Supports Gold. Growing expectations of rate cuts and Trump’s push for a 3% cut boosted the gold outlook. Gold Eyes Breakout Above $3,337.5. Price is consolidating; a move above $3,337.50 could trigger new buy signals. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Back in the early 2000s, Netflix mailed DVDs to subscribers.   It wasn’t sexy—but it was smart. No late fees. No driving to Blockbuster.   People subscribed because they were lazy. Investors bought the stock because they realized everyone else is lazy too.   Those who saw the future in that red envelope? They could’ve caught a 10,000%+ move.   Another story…   Back in the mid-2000s, Amazon launched Prime.   It wasn’t flashy—but it was fast.   Free two-day shipping. No minimums. No hassle.   People subscribed because they were impatient. Investors bought the stock because they realized everyone hates waiting.   Those who saw the future in that speedy little yellow button? They could’ve caught another 10,000%+ move.   Finally…   Back in 2011, Bitcoin was trading under $10.   It wasn’t regulated—but it worked.   No bank. No middleman. Just wallet to wallet.   People used it to send money. Investors bought it because they saw the potential.   Those who saw something glimmering in that strange orange coin? They could’ve caught a 100,000%+ move.   The people who made those calls weren’t fortune tellers. They just noticed something simple before others did.   A better way. A quiet shift. A small edge. An asymmetric bet.   The red envelope fixed late fees. The yellow button fixed waiting. The orange coin gave billions a choice.   Of course, these types of gains are rare. And they happen only once in a blue moon. That’s exactly why it’s important to notice when the conditions start to look familiar.   Not after the move. Not once it's on CNBC. But in the quiet build-up— before the surface breaks.   Enter the Blue Button Please read more here: https://altucherconfidential.com/posts/netflix-amazon-bitcoin-blue  Profits from free accurate cryptos signals: https://www.predictmag.com/ 
    • What These Attacks Look Like There are several ways you could get hacked. And the threats compound by the day.   Here’s a quick rundown:   Phishing: Fake emails from your “bank.” Click the link, give your password—game over.   Ransomware: Malware that locks your files and demands crypto. Pay up, or it’s gone.   DDoS: Overwhelm a website with traffic until it crashes. Like 10,000 bots blocking the door. Often used by nations.   Man-in-the-Middle: Hackers intercept your messages on public WiFi and read or change them.   Social Engineering: Hackers pose as IT or drop infected USB drives labeled “Payroll.”   You don’t need to be “important” to be a target.   You just need to be online.   What You Can Do (Without Buying a Bunker) You don’t have to be tech-savvy.   You just need to stop being low-hanging fruit.   Here’s how:   Use a YubiKey (physical passkey device) or Authenticator app – Ditch text message 2FA. SIM swaps are real. Hackers often have people on the inside at telecom companies.   Use a password manager (with Yubikey) – One unique password per account. Stop using your dog’s name.   Update your devices – Those annoying updates patch real security holes. Use them.   Back up your files – If ransomware hits, you don’t want your important documents held hostage.   Avoid public WiFi for sensitive stuff – Or use a VPN.   Think before you click – Emails that feel “urgent” are often fake. Go to the websites manually for confirmation.   Consider Starlink in case the internet goes down – I think it’s time for me to make the leap. Don’t Panic. Prepare. (Then Invest.)   I spent an hour in that basement bar reading about cyberattacks—and watching real-world systems fall apart like dominos.   The internet going down used to be an inconvenience. Now, it’s a warning.   Cyberwar isn’t coming. It’s here.   And the next time your internet goes out, it might not just be your router.   Don’t panic. Prepare.   And maybe keep a backup plan in your back pocket. Like a local basement bar with good bourbon—and working WiFi.   As usual, we’re on the lookout for more opportunities in cybersecurity. Stay tuned.   Author: Chris Campbell (AltucherConfidential) Profits from free accurate cryptos signals: https://www.predictmag.com/   
    • DUMBSHELL:  re the automation of corruption ---  200,000 "Science Papers" in academic journal database PubMed may have been AI-generated with errors, hallucinations and false sourcing 
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.