Trading strategies

We frequently refer both in the articles we publish and the weekly “Inner Circle” sessions we present, to the benefits of a trading journal. However, the reality is that many traders make the choice not to measure trading despite the logical benefits of doing so. Whether you do or don’t currently, the bottom-line decision you are making is not only whether you do or don’t but how that positions yourself with your trading development.

We would suggest that this overall choice can be broken down into the following three sub-choices. You can make the decisions that are right for you subsequently. Sub-choice 1 - Measuring your system You are either making the choice to: Have certainty on not only whether your trading plan as a whole can create positive outcomes but have evidence to know which component parts of your plan are e.g. indicators you use for entry and exit, comparing strategies you trade, timeframes that work best for you, (and which are not) contributing to such outcomes.

Additionally, it allows you to compare what would happen if you change some of the perimeters on your potential results. OR You have no evidence as to whether your system as a whole and its components parts are working well to serve you in getting the results you desire. Nor do you can test and gather evidence as to what the impact of nay changes you may make to that system, Ask yourself… If I am serious about trading results which choice should I make?

Sub-choice 2 - Measuring you as a trader You are either making the choice to: Know the degree to which you are following your plan or otherwise so you can ultimately make a judgement on: a. Whether your system is working for you (all the points in sub-choice 1 above CANNOT be made unless you are following your plan religiously). b. What you need to work on in terms of tightening your behaviour e.g. on exits or entry c.

Whether there are certain market conditions which you find difficult or are ill-prepared for (so you can fill any knowledge gaps or avoid in the future). OR You can continue to trade as you do, avoiding any self-assessment and growth, and the refinement of your behaviour that may contribute to more positive trading outcomes. Ask yourself… If I am serious about trading results which choice should I make?

Sub-choice 3 - Improving your trading (closing the circle) (let’s assume you are keeping a journal for this one) You are either making the choice to: Measure with purpose that has clear follow through into further development and refinement of your trading plan and subsequently your actions. This facilitates the development of you as a trader based on your individual character and trading style. In practical terms, you ‘close the circle’ with a defined review and develop an action plan based on your review to test and change parts of your plan.

This is evidence-based trading! OR You can measure for measurements sake to on the surface appear to be “doing a right thing” but in reality, failing to unleash the real power of journaling, that is to make an on-going and continuous positive difference to your trading outcomes. Ask yourself… If I am serious about trading results which choice should I make?

In summary, if you have made the choice to read this article to its end you are left with one ultimate choice…to journal or not to journal including the three sub-choices that dependent on which you are making can impact on your trading. So, for one last time, Ask yourself… If I am serious about trading results what should my actions be with what I have read in this article? Our next steps and Share CFD education programme both have indicative trading journal templates to help get you started, and we would be delighted if you could join us.

Drop us a line, click on this link HERE, or give us a call if you want further information on either of these FREE programmes of learning.

In this brief article we explore the major differences between the MT4 and MT5 Trading Platforms in order to assist reader in deciding whether they should consider switching to the latest version of this established Forex gateway to the market. Do you have to make a switch now? The reality for now is that MT4 is still used widely by brokers and the majority of traders, and this is unlikely to change in the foreseeable future.

Hence, you DO have the choice as to whether to change now to MT5 or remain with MT4. One of the key factors that may influence your choice to stay with MT4 is that many of the external third party ‘plugins’ and EA’s are not yet available for MT5. So, if you are using any of these tools then it is worthwhile checking before making the switch.

Additionally, any profiles and templates you have set up in MT4 may have to be redone should you make the switch. If you are keen to take advantage of some of the potential advantages of MT5, you will need to invest a considerable amount of time in understanding the new platform. A demo account is available to test before you switch.

Looking ahead, GO Markets plans to launch ‘equity CFDs’ as a new product soon on MT5. If this is of interest to you, it will perhaps be prudent to gain familiarity of MT5 with instruments you are already trading. Although there are many differences in the backend functioning of MT5, we are going to focus on the potential changes that influence the layout and user functionality of your Forex trading, or in other words the “practical” trading use for most traders.

Additionally, for those of you who are making the switch, we will help by providing you with some ‘how-to’ guidance where relevant. Changes to Layout The basic four structural component remains the same as the MT4 (i.e. The ‘Market Watch’, ‘Navigator’, ‘Chart area’ and ‘Terminal’ (termed ‘Toolbox’ in MT5)) boxes.

However, the following features are unique to MT5 only: Different pop-up box structure for changing chart properties. Right click in chart area then on properties. In the pop-up box click on “colours” and then drop down in scheme menu to find the colours of choice.

Alternative ways to add additional symbols into ‘Market Watch’. There are two methods to add additional symbols (i.e. Currency pairs, CFDs).

Click on View>Symbols. Then use the side bar options to bring up different groups. If coloured ‘yellow’ then it is already active in ‘Market Watch”.

If a symbol is coloured grey, then it is available to add. Simply, click to highlight the chosen symbol. Click on “show symbol” then close the box and it will appear in “Market Watch”.In “Market Watch” find ‘click to add’ at the bottom of the existing list, then begin to type in one of pairs of interest.

As you type you will see options shown. Click on desired pair then ‘Enter’. Changes in columns in ‘Market Watch’.

Right click in the “Market Watch” area. In pop-up box find “columns”. Click on the desired additional column e.g. time, spread.

Increase of chart timeframe options from 9 to 21 (e.g. 2 mins, 2 hours, 12 hours). Ensure timeframes are enabled by ‘right clicking’ on ‘Icons’ at top. ‘Right click’ on the existing timeframes that are shown, then in the pop-up box click on ‘customize’. Highlight your additional desired timeframe in the left-hand column then click “Insert” to add to existing timeframes already present in right-hand column.

Click on ‘close’ to see your additional timeframes icons at the top. Economic calendar tab added to “terminal” window (termed toolbox in MT5). See additional tabs across the bottom of the toolbox (Note: the release times are in ‘platform time’ (i.e.

GMT +3) unlike the economic calendar on the GO markets website where you can alter the times according to your own time-zone). Changes to Function The following are unique to your MT5 platform function: Ability to ‘drag’ horizontal lines on chart e.g. to indicate key price points such as support and resistance. Insert horizontal line from the drawing tool icon to insert on the chart.

Once in place, you are now able to click on the horizontal line and drag to your exact desired position. Two additional “Pending Order” types There are Buy Limit, Buy Stop, Sell Limit and Sell Stop pending orders available on MT5. These additional two pending orders are “Buy Stop Limit” and ‘Sell Stop Limit’.

We will be covering these on a future “Inner Circle” session. Eight additional indicators (30 to 38). Again, we will explore these in detail in future “Inner Circle” sessions.

Increase of analytical objects (or in other words drawing tools) from 31 to 44. Access these in the same way as you add additional time-frames as above. Market depth.

Some traders may find market depth interesting in potentially determining buying and selling pressure. You can access market depth from top left of the chart area (left icon). Note: You will only see market depth on a live account platform (i.e. not on a trading demo account ).

Making the change Making the change from MT4 to MT5 is easy. As previously mentioned, you can try our demo trading account so you can get used to the differences outlined above. If you are an existing GO Markets client and have an MT4 account, and you would like to make the change, our team will happily guide you through the simple process.

Simply give us a call or drop us an email to [email protected] and we will help you make it happen.

A written trading plan, usually comprising of several guiding action statements, serves the following two invaluable purposes: Facilitates consistency in trading action e.g. in the entry and exit of trades, allowing the trader AND Measures the strategy used specified within each statement to make an evidence-based judgement on how well these are serving you and test and amend these statements so you can develop an individual trading plan that may work better for you. Let’s move past the fact that many traders choose not to have a plan at all, an approach that goes against what is one of the key components of giving yourself the chance to become a successful trader, to those who have a plan in place already. This article is targeted a those who have made the logical choice to have some sort of written plan in place.

Great though having a plan is, many traders still have issues with the two purposes outlined above. They still fail to some degree to develop the consistency described and are not really able to measure effectively. A common problem, if we look closely at some of the plan statements used, is that such statement may not be specific enough, have some ambiguity, that means that those purposes may be difficult to achieve.

Let’s provide and work through an example for clarity. Consider the following statement… “I will tighten my stop/trailing stop prior to significant, imminent economic data releases” Firstly, on the positive side again, this does demonstrate an awareness of potential risk and a desire to have something within your plan to manage this risk. However, in terms of being a measurable statement that you can make a judgement as to how well this approach is serving you, there are the following issues: What does ‘tightening’ mean in practical terms in relation to current price point of the pair you are trading?

How close to a data release is ‘imminent’? What constitutes a significant data release (amongst the many that are released daily)? So, to take the previous example consider the following as an alternative: “Prior to imminent economic data releases, I will tighten of a trail stop loss for any open trades, 15 minutes prior to the release and to within 10 Pips of the current price.

This will be actioned for the following data points: Interest rate, CPI, industrial production and jobs data from the country of either currency pair (or Germany, France of across the Eurozone if one of the currency pair is the EURO). US and Chinese PMI manufacturing data, GDP, industrial jobs and interest rate decisions as these may impact all currency majors." So, with THIS amended plan statement the following elements could be measured (if journaled appropriately of course): What would the difference be in your trading outcomes if: No tightening had been actioned. If a different proximity to current price is used e.g. 15 rather than 10 Pips.

If other data releases are added/removed. With this level of measurement, possible with the revised statement, one would now be able to make any changes, backed up with evidence, to your trading plan. Alternatively, of course, you could make the choice to do nothing, retain statements such as the original, and not have the ability to create the richness of evidence to make considered amendments to your plan.

Logically ask yourself the question, "which choice is more likely to serve my trading going forward?"

When digging deeper into issues relating to trading precious metals you may come across the idea of using gold to silver ratios as part of decision-making. This brief article explores what this means both in terms of definition and potential implications for traders. What is the Gold-Silver Ratio?

The direction and degree of movement in the two key precious metals occurs “in synch” i.e. when one moves so does the other similarly. However, the exact rate of this movement over a period may differ, and it is this that attracts the attention of some precious metal investors. The gold-silver ratio is simply the amount of silver it takes to purchase one ounce of gold.

If the spot price of gold is $1403 with silver at $15.3, the approximate ratio is 92:1. When considering this information, the respective prices of each are considered irrelevant; it is this ratio that attracts some attention for the most avid of precious metals investors. Rather, it is a potential indicator as to which precious metal is more likely to yield a greater return if taking a “long” position (or vice versa).

Historically throughout the 20th Century, this ratio has been reported at an average of 47:1, so theoretically the current ratio is low for silver value than traditionally has been the case. There does not appear to be a strict defined range what is normal and what is high or low, but some consensus internationally suggests that between 40-70 could be a normal range, and outside of this can be considered either high or low, and so may correct according to a movement back within the ‘normal’ range. Theoretically, the implications of this are when making a choice to trade either gold or silver, if this ratio is high then it would suggest that silver CFDs may have more positive % move potential, and if low, then gold may be more worthy of your choice.

It is also noteworthy that generally, when one explores research on this topic, that it is for possible use by those taking longer term positions (i.e. using daily/weekly charts for decision making) rather than short-term price fluctuations you may see on an intraday chart. The reality in your trading As previously stated, this seems to be something of interest to the major “gold bugs”, and there is widespread variance in thinking on this topic. The inference by some is that fluctuations in the ratio may help in the choice as to whether long term gold or silver.

So, as with much that is “out there” this may in part inform trading decision making at any level, the onus as to whether this has relevance in your practical trading of course rests with you. Our aim of this article was to put the concept out there so you can do your own research and make the choice as to relevance for you and as importantly how you may integrate it with other factors you use in your entry and exit decisions. We often discuss commodity CFDs as part of the ‘Market Watch’ section of the FREE weekly GO Markets Inner Circle webinars.

If you are interested in joining us as we look at the market and of course provide on-going education go to https://www.gomarkets.com/au/inner-circle and join us.

There are few long-term successful traders that at some stage have not suffered a major capital drawdown on their account at some stage. For whatever the reason the major factor as to whether you continue and get back to “winning ways” or continue to see further drawdowns is what you do next. Unfortunately, there are “traps” that such a set of circumstances can lead to, your aim, if this should happen to you is to avoid these.

This article aims to outline these to assist in developing awareness and assist in your “what happens next” thinking and actions. Trap 1 – Abdicate responsibility It is a natural human response when things go wrong to look for someone/something to blame. This is far easier emotionally to deal with than admitting that you have behaved, through actions, in a way that has contributed to a negative outcome.

Although it may be true that certain market conditions, or “trump tweets”, or economic announcements may all contribute to a significant market price movement, the majority of major capital drawdowns in reality occur over a number of trades and of course you have made the choice to trade and as if not more importantly when to exit any trades you have taken. The reality is of course, that unless you accept 100% that trading action is YOUR choice and that YOU are responsible for your trading results then you are unlikely to move forward and may indeed see further capital drawdowns on your trading account. Accepting this reality, gives you the drive to avoid the other potential traps and put the right things in place to reduce the likelihood of it happening again.

Trap 2 – Fail to explore WHY it happened? Beyond accepting responsibility one of your first tasks is to examine potential and subsequently actual factors that may have contributed. Commonly these can all come under the following: a.

You didn’t know what you were doing due to a knowledge gap b. You didn’t have an evidence-based (i.e. you have tested it and refined accordingly) specific comprehensive trading plan that guided your actions c. You didn’t follow your trading plan d.

Your trading system is comprehensive and sufficiently specific but doesn’t work and needs reviewed i.e. a new set of entry/exit criteria The temptation is, and many traders will go straight to ‘d’ of the above, but again arguably there is an element of “finger pointing” rather than taking responsibility. The reality is that of the four factors above the latter is the most unlikely cause. Being honest in your review is critical.

Such an honest review will give you clear guidance on which factor(s) you should focus on working on. Trap 3 – ‘Revenge’ trading Although this is a term bandied around frequently, let us delve beyond the ‘beermat psychology’ and look a little closer at what this may mean. In essence, the underlying emotional motivation is to get back to where you were before in terms of your account capital.

Commonly this thinking is backed by “desperation”, subsequently influencing actions that often bear little resemblance to good trading practice. In action, you may see: • Taking trades when there is no clear set up • Partial or complete ignoring of any trading plan • Inappropriate actions further trades go against you (e.g. finding reasons to stay in future trades when there is an exit) • Trading higher position sizing that you previously had • Trading each small market move, taking a reverse position even on a trend pause. • Looking to trade tighter and tighter timeframes These of course may significantly contribute to further losses as this emotional rather than system- based trading takes a stronger and stronger hold on your actions. Logically, the following may be more appropriate: • Give yourself some breathing space to properly review …STOP trading while you complete this (As described above) • Although easy to say and not so easy to accept the reality is that your account capital is what it is now, not what it was.

There was, for many in this situation, a time in your trading where whatever your capital level, your aim was to increase whatever that level was and put actions in place to give yourself the best chance of that happening. Ultimately, even if you strayed from this, developing consistency in appropriate trading plan actions and measurement are accepted by most traders as the way to make this happen over time. So, you need to press the “RESET button”, accept it as it is, and have the goal that through returning to that good trading practice consistently, and filling the gaps you need to.

Making this your goal rather than a dollar figure, may give yourself the chance to build capital not just to its previous level but beyond. Let it go! And do the right things from here I guess is the bottom-line message.

Trap 4 – Position size according to your previous rather than current account level This final trap for discussion in this article may seem obvious on the surface, but may either be a symptom of the previous point or something that is overlooked (unless of course inappropriate position sizing was one of the root causes of a major drawdown which you will discover in your review). It is crucial, and hence why we make special reference to it here, that you have a set risk level, usually expressed as a % of your account capital. This will differ from trader to trader but is comply between the 1-3% level as an example.

This determines lot/contract size (dependent on what you are trading) for any individual trade and combined with “stop loss” placement is a critical part of your risk management now and going forward. You need to recalculate what this is for you with reference to your NEW account size and factor this into your decision making, even if this means you are trading smaller amounts for now. In summary, major trading drawdowns are upsetting, and although not common often create additional ‘traps’ which may worsen what has happened to your trading capital.

And finally... Although perhaps of little consolation that many, many traders who now have sustained success, will have gone through this like you, the difference between what happens next and for your trading account in years to come, to your account is likely to be as a result of what you do next. You have choices to make but avoiding the above four traps described may perhaps assist in ultimately getting to where you want to be with your trading going forward.

Look, we get it… the thought of making money from the financial markets is appealing to the newcomer (and even experienced trader). Appealing enough to invest some time (often a great deal) and some money (often a great deal). At this stage, it is “interesting” (even exciting), but NOT committed.

You may even have been told it is easy if you do x,y,z or use this magical indicator, by the plethora of “gurus” simple clambering to relieve you of even more of your cash for that magical “holy grail” of approaches. We are still at ‘interesting’ not committed. The interest or motivation that drives you to this point is clear, you may even have begun to plan in your mind how you are going to spend your winnings, work less, live the dream.

Intangible, far-off pipe dreams are easy to contemplate and the market is going to pay for it!. We can imagine ourselves as some heroic ninja trader magically just making it happen (and some do magically create results on a ‘doesn’t really matter’ demo account). YES!

Still, this is still just ‘interesting’ not yet committed. However, when we commit to the daily practice of trying to put in place those micro-make-it-happen steps… this dream begins to fade. It’s replaced by the cold realization that there is some work… some hard work to be done.

That’s not what you subscribed to with that early interest is it, it should be easy to make money, shouldn’t it? What most traders do... Rather than engaging (volition) in this hard work, we choose to try to short-cut.

This has two logical outcomes: 1. Firstly, it continues to maintain our interest..no more. 2. Secondly, it is unlikely to make us any money trading.

We jump from program to program, indicator to indicator, vehicle to vehicle, read multiple articles, participate in forums, and yet the two logical outcomes above from our “interest” are still the case. There is no real point in banging on about psychology this and discipline that, we could point you in the direction of “7 things you can do to alter your trading results”, put ten other game-changing articles in front of you but nothing may change. That is, nothing will change unless you are prepared, that’s REALLY prepared, absolutely COMMITTED to making it happen..simple!

You could learn and have the system and tools to have sustainably great results, measure aspects of your trading so you can work out what might be going on with your behaviour, and yet even these may make no difference to the majority of the trading population. So, what is the difference between the “norm” who wish they had on-going positive trading results and the others who really do? Quite simply it is the level of commitment they are prepared to put in.

It moves beyond just interested. Are you ready to take this step? So, what do we mean by commitment?

Commitment is not: 1. Knowing some stuff 2. Doing some stuff 3.

Believing some stuff can happen “Some” is NOT good enough! Pe riod! Commitment is: 1.

Seeking out knowledge that will make a difference and learning it to the point where it becomes an integral part of you as a trader and the systems you develop and actually use. 2. Doing ALL of the right things on a consistent basis 3. Developing a passionate belief that something good could happen in your trading is replaced by the certainty that you can have sustained results that only evidence can provide.

So let’s cut to the chase..how committed are you? It easy to evaluate, just look at your behaviours… 1. Are you seeking out real learning that can make a difference in what you are doing or taking the short cut in the information you have (or can have access) to, and trying to replace that with a different indicator, strategy etc? 2.

Are you doing the right things ALWAYS or just when things go well (or not so well) – which starts of course by learning what the right things are? 3. Pssst! Here is a secret…You will never find the evidence to create that certainty that will keep you “safe” in those trickier market times unless you actually invest the commitment to measure what is happening and make sure these are the right things to measure (and this is not just trade profit/loss!).

There are few things more motivating than being able to provide some evidence of success. So how does what are currently doing stand up when you look at those three behaviours? The real trading EDGE We have heard all of the excuses, all of the reasons, every “my homework was eaten by the dog” story that it is possible to hear.

The reality is that trading success thing is within you and the level to which you are prepared to commit. The striving for a “trading edge”, which we will define as having an advantage over other market participants, is yours for the taking but only if you start by taking that interest and trade-changing commitment. It all starts with accepting what you are doing now..be honest… Removing all of the reasons “why not”, looking at your behaviour and ask yourself are you really committed?

We can do my part, give those who are committed the support, the learning programmes (see ‘First Steps’, ‘Next Steps’ and ‘Inner Circle’) that aim to fill gaps in knowledge, but with the “C-word”, which is your part, that is when good things can happen in your trading. So, Let’s finish with a mission (as it is these that are at the basis of making sure your commitment has the right focus) So ask the following questions and, of course, commit to following through on the following: 1. What can you learn that you don’t/partially know that could make the difference?

List your top three and seek out the answers (YES! We can help see ) 2. What are you not doing now that you know would contribute to your trading, even if it seems hard to start?

It may be to develop a COMPREHENSIVE trading plan, starting a journal etc. 3. What are you going to measure that may offer some evidence that you can REALLY do this! One last bit of good news…you CAN make the choice NOW whether you stay interested or becoming committed.

That the easy bit and your first vital step. Trade safe and exercise your choice to commit.