LEARNING CURVE 101 BASICS

 

“If only somebody had given me advice a little earlier!”

The “learning curve” in trading is steep, and I’ve compiled some of what you 

need in the “non-computable” attributes area; trust me, you won’t find these 

in any book on trading … “I’m talkin’ “inside baseball” here”, and a firm 

grasp of these will increase your profitability greatly. In no particular order 

of importance, they are as follows: 1) know the volatility of your market 

[“Summary Volatility Table” in the “Download Links” section in the right-hand 

column], and what to expect from it when you trade, 2) know and understand 

the proper “fingerprint” for retracements in the market you trade for best 

execution, 3) understand that for any FX pair, the bull and bear moves are not 

“symmetrical”, and have very different characteristics in how they trade, 4) do 

NOT place your stops where the entire universe of retail spec accounts have 

theirs as a collective group … if you do, you will get hurt, 5) try and liquidate 

positions on spikes in your profit direction, 6) do NOT buy rallies or sell breaks, 

and 7) you must develop “situational awareness” regarding the 6 items listed 

above.

When I talk with traders who are consistent losers over time, the problem 

usually boils down to one of the 7 criteria listed above, and while the solution is 

easy to define and identify, getting a trader out of his/her losing ways and into 

 “profit mode” is another story entirely … “cuz at crunch time, they want to 

revert to what’s “comfortable & knowable”, not necessarily what’s profitable 

… in other words, the brain says one thing and the guts say another, and the urge 

to do “stupid shit” is extremely high … this is why I tell new traders that your 

biggest advantage in trading in the modern era is your “newness” … you don’t 

have any bad habits to break … meanwhile, you think it’s your biggest liability, 

when it isn’t … the hardest thing is to get veteran traders who can’t shake losing, 

cuz it’s as if it’s almost ingrained in them”.

And what most people don’t realize, is that today is much easier to learn the 

biz than “back-in-the-day”; no commuting, you got a demo and can practice 

first, and you can do a limited amount of back testing of your trading model 

… all that didn’t exist when I learned the biz from my mentor Bert … “it was 

very much head first into the deep end of the pool”.

For newer traders and veterans alike, I’ve got 4 different algorithms over in 

the “Download Links” section to keep you busy for months … 7 different 

markets, with 7 distinctly different personalities, and a multitude of time 

frames from which you can attack the markets from your own reward/risk 

profile. As most all of my regular readers know, I’m trading EURUSD and 

using 2 of the algorithms simultaneously; “The Scalper’s Algorithm: The Final 

Solution” and “The Teacup Handle Turn”. In essence, they compliment each 

other brilliantly. However, if your style is different than mine, the other 2, 

along with different time frames, work as well … I’m trying to give you the 

benefit of my trading knowledge and experience, so you can match what’s best 

for you and the market you trade.

Turning to today’s market … if you like “vicious choppy slop”, then you will 

love today … good grief, could the M1 spikes [up & down] on “vapors” get any 

worse? Throw in a range that’s truly pathetic in a classic “Flying Wedge of 

Death” [FWD] pattern from the European open, and you got a recipe for 

disaster right in front of you … buying any kind of rally today, or selling the 

mini-waterfalls, got you killed within minutes, if not seconds … your classic  

“yo-yo” FWD, all wrapped up with a Christmas bow in a “doji” daily 

candlestick. “Six months from now, somebody looks back at today on the daily 

candlesticks, and sees the tiny “doji” formation and thinks the day was a dull 

waste … quite the contrary … as I’ve stated before, these kind of days can be the 

most vicious account killers traders will ever witness, and over the course of my 

career I’ve seen plenty of people get buried in the “Trader’s Graveyard” cuz of 

FWD small “dojis”, of some shape, manner, or form”.

Only one trade today … PAMM up slightly, a couple of bucks.

The ‘setup” was good, and for 90 seconds I looked like a genius in liquidating 

only a few tenths of a PIP off the high for the M1, when price stopped going up 

and stalled … that “hesitancy”, when it should have been moving higher, is all it 

took to get me to liquidate … from a 5+ PIP drop, price turned around and 

marched straight up about 20 PIPS … it is what it is, and it doesn’t really 

bother me, cuz it comes with the territory [“Stop complaining about the 

screaming Fido, and get out from underneath the wicker sofa … geesh, Mr. 

Sensitive over there”!]. And after that little run on short covering, EURUSD 

price is back within a few PIPS of where I made the trade … another very 

tough day to trade from the long side, in a market that has suddenly become 

totally paranoid of higher U.S. interest rates. 

Ok, February is in the books, and we got a fresh new month kicking off with 

NFP on Friday, and Italian elections on Sunday … plenty of volatility to be 

sure dead ahead. Problem with “doji” days, is that you don’t get the “setups”, 

and when you do they are too close to the day’s low in a very tight range to 

make the trade, simply cuz you can’t assume a 5% [or less] probability event is 

gonna hold … if you consistently make the trade off the ‘special situations” in 

the manual, you end up with early losing trades before the eventual low of the 

day is put in, and that will hurt profitability … better to leave them alone and 

wait for a bigger range, cuz 95%+ of the time, you’re gonna get it.

Nonetheless, a profitable day … many would trade places with us I’m sure 

… again, disappointed in lack of range, and in the number of “setups” the 

market gave us … so, we take the crumbs and come back tomorrow, while 

remembering the goal is to “add to equity” … it’s early afternoon in New York, 

Europe has closed, and market action has slowed noticeably; no way I’m 

getting caught in this slop heading towards the close … I’m outta here … until 

tomorrow mi amigos … Onward & Upward!!

PAMM spreadsheet directly below. [Note: sometime over this upcoming 

weekend, I’ll be uploading a new PDF over in the “Download Links” section in 

the right-hand column. I’ll now be archiving PAMM results at the end of each 

month going forward … therefore, there will be a New file, “PAMM RESULTS: 

2018 JANUARY - FEBRUARY”. When March is completed, I’ll update the file 

and add it, and on we go throughout the year, each month adding to 2018 

results. This way, everybody has a very quick and handy reference guide, 

without having to wade through all the past blog posts.]

 

Have a great day everybody!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS NOW OPEN AND

OPERATIONAL; SEE “PAMM/MAM MONEY PROGRAM” IN

“DOWNLOAD LINKS” SECTION IN RIGHT HAND COLUMN

FOR DETAILS [VIEW ONLINE AND/OR DOWNLOAD] AND

START YOUR JOURNEY FROM WHERE YOU ARE AT TO

“ESCAPE TO SUCCESS”!