all right guys some of the information
that we're gonna we're going to go over is is gonna be you're gonna overlook at
first but you got to stay with me and see the whole picture you know trade and really is simple when
you break it down to it once you get past all the mental games that goes on i
mean you can really learn trading in just a few weeks time it's the head games that that your mind
plays on you that you know really hinders one's ability to perform well on
the market and everybody's been there before myself included I have bad days but you know I'm a lot
more control more now than I was when I first started not knowing what you don't
know so all right so let's go ahead and get
started now this slide right here guys were says everybody can see it
unbelievable training strategy that made a hundred four thousand dollars let me see if he's in here yes he is so oh no problem thick thank you sir now i actually found this strategy which
you know I i'll show you the caveat behind it when it's all said and done
this strategy was just to prove that somebody about how simple trading can be
and that's what made me really want to put this webinar on and share this was
with this many people as possible I mean this is truly something I can
impact your life but you know we gotta start from the basics in and actually
build upon it is to show you guys for any of you guys are want to trade the
bias or some of my levels that I showed from the previous week you know you need to have these
foundations before you can even think about trading something like that you
need to make sure you put yourself in a position to win and not really have the
market beat you up I notice I know if my voice starts
cutting out i came down with a cold last night probably about 11 30 in the
morning so I got some pretty good cold medicine at me right now so hopefully
we'll make it through this without my voice cut now I think I should be okay
though alright so before we get started we have
the normal disclaimer you know there's a high risk and 4x you
can lose a lot of money you can make a lot of money you know it's all your financial advisor
before placing trades where I could be given eight recommendations on this
webinar as we speak self all right here's a little bit about me
for those those of you that don't know me we do have a few new faces in here so for those of you that don't know me
my name is mike Swartz I've been training for roughly about 10 years two
and a half years i started out trading stocks options as well as futures for
really found a home trading in the forex market i really i really love what the forex
market has to offer you can check in any trades at night you
can manage your positions all the way from the market open the only time we
are susceptible to two gaps is really over the weekend during this current
time and a lot of times I'll close my trade down on friday if I have a big
profit in it I'm going for a bigger move then i'll keep it open over the weekend
but for the most part you know I try to close most of my trades you know friday before the market closes
all right so we're going to talk a little bit about money management and
this is so important that so many people overlook mean this is one of the the
biggest factors that's going to impact your trading and that's going to dictate
if you're going to be a success or failure when trading in here are some of
the ways that money management effects traders the first as a direct effect on
your P&L now if anybody thinks that that's not true please send me a little something a
little text in the chat box because as this presentation moves forward I will
prove my point hands down what money management could
do for one strain account it also affects the trader psychology
which we just talked about a little bit you know being scared to take the trade
taking profits too early you all of mind games that really go on and a traitor
smart i mean it's it's very easy to place a trade think about all you're
doing is clicking a button click a button get and click a button get out or
click a button to get in and have your stops and targets already preset all right here's the effects on returns
then how does it poor reward to risk example every pore reward to risk you
know here's an example of trader risk in 60 pips to make 20 pips this is a lose-lose scenario you may
laugh at this and say haha who would do this what they look on the internet you may
you probably the same junk in here and boxes i do and you'll see people talent
higher win-loss ratio but you know you gotta look at the reward to risk factor
you know what they're achieving that if you get ninety percent win-loss ratio
and you have a positive risk reward ratio or even a one-to-one I mean that
would be great but when you're going negative on the risk-reward that's
that's not a scenario where you're going to be in the game for a long time no could you have some good runs yes but
when the market turns your count is is going to suffer a pretty good job mount
now here's another fact I think about this you have small winning days and
bigger losing days how many times have you guys made this a
fifty dollars in one day and then the next day you lose a hundred two hundred
or even five hundred dollars the very next day all this leads to poor psychology and
you know the fear to be able to place the traitor the confidence you have to
really train in that in the proper trade location all right it's very very important to
keep your money management under control we're going to show to strategies within
this webinar that will show you it is possible re psychology we kind of touched on I'm
gonna go money management can affect the trader psychology by cause any trader to
take profits too soon that's not trader that you know maybe when you first put
the set the train up you say hey I'm going to get in here I'm gonna I'm gonna risk 20 pips I'm
going to go for 40 which is great yeah - one risk/reward ratio that's awesome but then soon as the
market moves of five tips starts this all a little bit they say oh it's going to come down i
don't want to have a loser let me go ahead and take my profits ok so you take your profits you like who
that was good I made a little bit of money i feel good
about myself and then you want to mark the market March all the way up to your
target how good of a trade was that really
because in the scheme of things to to really let the
model play out for you have to take and let your profits be able to hit the
objective just because you set it there if you don't get the train the
opportunity time to get there then you're doing yourself no favourites and
you're actually you're actually having a negative risk-reward ratio over the long
term cause the traders to trade scared think about this you see a trade setting
up yes there are there are teeth are you guys seeing the slides by the way I want
to be real clear is everybody seeing the slides progress no all right well good good that I
looked at the the the chat log so here we'll go ok so we're going to go
back a little bit i'm a little rusty guys so bear with me okay so here's
where it was money management after the slide you guys seen here's what we talked about oops here's what we talked about how it has a
direct effect on your P&L effects trailer psychology here's where it talks about the negative
risk-reward ratio that just probably went over and thanks again guys for go
ahead and let me know in the chat box I'm a little rusty so you know that's
that's one of the downsides and I put on a webinar in a while here's what i talked about you know you
have smaller winning days then bigger losing days everybody he had cold
medicine that could be it could be a tu jo I'll blame it on the cold medicine small
many days in bigger losing days you know that's that's really going to
be key to a lot of new traders I feel like you know you you know you feel good
one day because you made a little bit of money in the market just really kitchen
that got the next day and takes back more than you made the previous thing
and then some psychology this were talking about I
think this is where we left off causing a trader in the trade scared and I think
this is where we're at when you guys said the slides were not progressive so
cause i try to trace care let's say you have a signal saying when it can be
stochastic societies the cast across his back below and take the trade to the
outside so you know last trade you did had that
work out for you now you start getting a little bit scared saying hey this trade
may not work out well it doesn't matter this trade works out or not this is just
one trade in the big scheme of things okay this is just one of many trades the
sooner you can learn not to take that trait personal the further along you're
going to be in a much quicker time and it took me a while to get over this
remember guys those of you that have known me for a while know it took me
about two years before I became consistently profitable it took quite a while it's still
learning process every day every week every night also allows down to set in so think about this let's say you back
tested whatever strategy that you want to train you say okay it has a win-loss
ratio of sixty percent i should make three or four percent of my count per
month whatever the number is okay so you did all this back tests and you've seen
it this is what the results should be well
and then you start tweaking it I'm gonna get out early i'm going to i'm going to
get a little later i'm going to get in early we'll go ahead and move my stop loss up
faster than what i did there my testing you know you have to be consistent with
your process if you're not consistent with your process you're never gonna cheat the same type
of results and that goes back into being scared you know if you have a true
strong belief then you're going to believe in your system and you're going
to do what is right here to take a trade now I never really suffer from this one I've talked to a lot of traders out
there and they're just so scared to put a trade on where me and My partner Scott that trades we were
just opposite we got into the trade way before we
should have a lot of times you know because i wanted to participate in the
market i like this excitement of it I wanted to make sure that i had the
opportunity to make money and that's the wrong way to think to both ways are are
bad you can't be scared to take the trade you can't be too anxious to want to jump
into the trade you have to make sure the conditions are met for whatever system
that you back tested this works universal across every trading strategy
there is your calls and trader to enter a trade too late so think about this you
back tested your setup and it's when this moving average crosses over the
next moving average you you by the next bar right so you know you start thinking
that the one trade then work out then the second tray didn't work out come true three you say well the other
two trades didn't work out maybe i'll just take a little bit more
time and see if the streets really going to work well now it's two or three bars later
you say oh yeah it's definitely going you get in and guess what the markets
just get ready to a normal pull back and it could be still going in the direction
that you were intending it to and the pullback not sure all the trade because
you have proper trade location from your strategy that you back tested very
important to be consistent with your approach all right here's the four pillars of
money management and what I think that traitor needs to look at the first one
is going to be a reward to risk ratio very very very important guys the next one the probability of a trade
setup you know what what's the probability
that you're going to make money because if you have a let's say five to one
risk/reward ratio which is great I mean that would be excellent and the
probability trade working out is one percent well that's not going to make you money
when you might have a great reward direct reward to risk ratio but you know
you're gonna go broke sooner than later the next one your win-loss ratio and the next one your position sizing here's another one this I would honestly
have to say guys if I had their prioritizes reward to risk ratio in your
position sizing are the two most important components you know if I had to rank highest the
lowest those two would be in the very very top two small position sizing you're not gonna have the counter that
you need but you're still be in Game two bigger position size and you're going to
gain margin call to have to put more funds into your train account in order
to continue trading alright so let's use a little question I
have to ask you guys which we were correct risk ratio is best when day
trading you want to focus on the day training aspect of this guy's is it a
reward 20 pips risking 60 pips which is a negative 1 2 3 reward to risk ratio is it be a reward 20 and risk in 20 which is basically a
one to two in the first risk-reward ratio is it see 2020 which is a
one-to-one reward the risk ratio or is it d a four-year reward is 40 pips to
risk and 20 pips 21 reward to risk ratio very good or is it II you're going to
make 60 pips to lose 20 pips so go ahead and type in the chat box
guys what you guys think the correct answer is and still never amazes me how we have a
few people got a right let me just double check this real that's good good deal James they see yeah there's a few of you guys got got
it right but there's a lot of you guys at my opinion you got wrong in the next
slide actually got it wrong it just seems a typo so the next slide I put it see what
actuality the answer is really d it was just a typo on my part it's all right Keith you know just takes
practice and you'll see this is going to really open your eyes during this
presentation this first part you guys have seen but when we get into the
charts it's going to be an eye-opening
experience for you now here's why see he is the best answer to one we have
to look at the four pillars of money management now the first ok but first before i give you the
answer okay I got one more question for you guys what we lost percentage is needed to
break even with the 21 reward the risk ratio go ahead and type that in the Box real
quick we'll see how many of you guys remember this because we have this slide
before the slides been around for years let's see i'm actually a lot of a lot of
you that have been in there for a while gotta write the answer is e guys it's
actually 34 . something percent it's actually II so let's think about
that you only have to be right less than four times out of ten trades
and you're still be making some type of profit alright so here we're going to a little
coin flip to reward the risk ratio k if we flip a coin 10 times and lands on
heads we make one dollar if it lands on tails we lose a dollar flip the coin 10 times if it lands on
his five times guess what we break even now how many of how many traders you
know if you're not consistently profitable right now does this fit your trading account to t
you know if you're not losing money a lot of traders are stuck right here breaking even because they're so tied up
on their their win-loss ratio that there are missing the missing the bigger
picture in front of them here's an example Oh in the example above once again we
have a fifty percent probability of the coin landed on heads or tails they can
only do one of two things guys heads or tails let's say we landed on heads four times
now guess what we lose money is not good we don't want to lose money on a weekly
monthly basis we are going to have down weeks and hopefully with next year we
don't have any down months we have laid down once this year so that's the Scopes
trial for that again next year all right now let's look at the two one
risk/reward ratio we're going to do the same thing we're
going to flip the coin 10 times we make two dollars every time right yeah you're
right Joe so cold medicine again so that's Joe is
actually really keen on that is that is the type of two shows that we actually
lose two dollars which is absolutely correct remember guys I told you guys as on some
cold medicine so you actually lose because if we did
the math right we would lose six dollars and we only
make for back and appreciate that jail it just shows on human I i do make
mistakes I'm actually very nervous that presented
and that's why i like to do webinars and and talk to people helps me face my
fears a little bit and trade is easy part Joe all right now we're going to flip a coin
10 times if the coin lands on heads we make two dollars and when the coin lands
on tails we lose one dollar that's a scenario i want to be involved in this
example we have a 50-50 probability of it landed on heads if we land on heads
five times that is a 50-percent win-loss ratio in a gain of five dollars now see
how that see before we broke even now where where are actually making five
bucks now I know you guys are probably
thinking and that's why we're going to go into charts here shortly that ok well the market can do more than
just go up or down it can go sideways and that's very true the market can go
sideways but if the markets going sideways if you're not training options you're not losing money and if you sold
the options then you would actually be making money
so the markets going sideways you're not losing anything you can reassess the
situation if you want to stay in the trader and move on now if we land on heads four times until
six times we have a 40-percent win-loss ratio and a profit of two dollars now imagine this guy's you place 10
trades only for him all right you make money on four of them six of
them lose and you still make two dollars yeah it doesn't sound very appealing go
out there talking about yeah I got a 40-percent win-loss ratio right but guess what you can be proud of
yourself that you're actually making money in the market it's not about winning every trade three
two one risk/reward ratio once again we're flip a coin 10 times if it lands
on heads we make three dollars it lands on tails we're going to lose a dollar at
the end of 10 flips it lands on heads 5 times we make ten dollars now that's
great but when they train we can't it's going to be very hard to put your
stop loss in the profit target in a place where they can wear it can hit
your profit target without hit your stop loss on a consistent basis without going
to the really hire time frames - 40 a daily chart and stuff like that now let's say we lay our heads three
times we would still make two dollars with thirty percent win-loss ratio so
that's great if you turn off a daily chart shoot four three two one
risk/reward ratio but when you're trading intraday you're going to find
it's extremely extremely difficult that's one of the problems that scalpers
have guys you know if you look at the futures market and stuff most of those guys don't have a three to
one or two one risk/reward ratio between you're scalping it's so difficult to not have your stop
get hit but your profits are you get it without having too much risk out there
for the market to really take advantage of you alright i will show you later on in the
market is not best that this is not the best risk-reward ratio we have probably
fifty percent probability of each set up working out when market noise is
factored in all right so you need to familiarize
yourself with this chart right here guys this chart is very very important the chart on the right shows
how much a how much of a game is required to recoup losses okay so look if we have a 10-percent
draw it out we only have to make eleven percent to get back to break even hey that's great but look what happens
you know you start losing fifty percent of your cowl now you need a hundred percent return in
order to get back to break even you start going to seventy eighty
percent let's say eighty percent you have a four hundred percent return just
to get back to break even if you lost ninety percent you look at nine hundred
percent now let's say you did do it how long do you think it would take you
to have a nine hundred percent return it's going to take quite some time to be
honest and last thing that can be done but you know honestly the it would you
have the odds really stacked against him that's why it's a must that we keep our
losses on the control or else our psychology will get the best of us
myself included you know when I first started trading
them I'm Tony guys I was a wild man i was a gunslinger right from the hip boom
boom i mean i was in and out rates arm up until probably high price a six years
ago I was still place in anywhere between 200 and 600 trades per month I mean I was illustrating a lot very
very active I don't want to miss the movie I want to
make sure I get every move and you know what I found that well let's play some more trades
actually made more money when i started taking less traits it's kind of funny thing how that works all right here's a strategy for money
management our strategy is gonna be a MACD
crossover and this isn't the one that made the money that showing the first
slide guys the one not sure the first slide is
truly going to blow your mind - our system of charges will be MACD
crossover with all 5 money management scenarios applied over one year time
frame and this is an old slide some of you guys have seen this slide before
this guy's you will open a new position once maggie has crossed over and open a
new position at the opening of the next bar as long as there is not an open
position already do not trade this strategy it's only for example guys I don't think
a moving average cross service the cast across over or MACD crossover all by
yourself have any significance all right so here's an example right
here macd crossed over right here it bought
actually across their own this bar it by here profit profit objective was a was
reached oops a real quick and move my slides and guys
ok here's here's the next one same thing we got in the trade here macd
cross on this bar it got in here and got stopped out for a
stop loss i want to show you guys what it will look like what a loss would look like ok now here
it is the downside we short macd cross shorts here like to actually cross on
this bar so in short stay here profit target hit that's what we want to
see in trading profit target here's another example macd cross right
here on this bar the market entered this bar stop this
out boom again two losses back to back all
right this is a live account this is just a premade strategy and tradestation
that i plugged in just to show you guys this is going back years and years all right so here's what the results are
going to look like of each of those scenarios so with a reward of 1 and risk
in three we're going to lose right here five
thousand two hundred dollars over 1 year so you know that's definitely not what
we want to be involved in all right now look at our win-loss ratio guys right when loss ratio is 73 points seven seven
percent so hey that's great go to everybody yeah i got a win-loss ratio of
seventy-three percent you know because when they ask you how much money you
made if you're being honest he did not gonna be able to have a
positive number you're probably gonna want to dance around that question a
little bit now let's look at this 1a 1a risk we're going to have one reward to risk
and two in this example we are risking 40 pips to make 20 pips notice our
win-loss ratio is still above 60 and turns a small profit so our win-loss ratio is sixty-seven
percent we made five thousand dollars which
isn't bad I think we ran this over a longer period of time this would
actually be losing scenario ok now let's do a one to one risk/reward
ratio remember that fifty percent trader guys look at our win-loss ratio when
loss ratio is forty nine point five percent and look we lost 4622 dollars
not very good very good stuff at all that's why we we must make sure that we
have a positive risk reward ratio all right here it is again guys these
examples are 15 minutes are all of them all the way across the board all right same exact time frame and
everything are in this example we're risking 20 pips to make 40 pips look at this made eleven thousand nine
hundred and eighteen dollars and seventy cents a look at what are our win-loss
ratio or percentage thirty-five percent that's not great
military but yeah I made thirty five percent I'm my weight loss ratios 35% there
laughs at you and tell you how terrible of a traitor you are ok if you made
eleven thousand dollars and say you're going i'm pretty pretty well you know you can
always kill the lot size remember that you can always trade more locks as you
make more money the more like trade the more money you're going to make and it's
just all about percentages next example three-to-one risk-reward ratio in this
example were risking 20 pips to make 60 sounds great our weight loss or weight loss ratio is
twenty-four percent we lose five thousand dollars now you may ask yourself this why is
this like this all right three two one risk/reward
ratio talked about all the books about how great it is and that's what you need
to do to be successful trader or two to one risk/reward ratio and this is all
applied to the same time frame the same chart illustrates the purpose that a 2-1
is actually better when you have market noise you need to make sure you can be far
enough away from the market noise but your target can be close enough to where
it's a high probability that that's heart is going to be reached before
you're actually taking out from your stop loss not field very often a Kashmir
was not filled very often your target or the stop-loss stop-loss
always gets filled may not be at the price you want oh yeah it's hard when you have a 65
target so far away which is kind of funny because the next example i'm going
to show you towards the end of the slide is actually
go off a 60 pips target which is really gonna blow everybody's mind all right so
look here in this 31 restore a show we can hit 60 pips a majority of the time
but watch it then it's like we're going to show it and current market conditions
on the last one guys on the last week over the charts to be pretty amazing eye
opening alright so I've already touched on this
reason in my opinion and this is just my opinion of why three two one risk/reward
ratio is not going one day trading normal fluctuations are going to stop
you out more than you're going to be right this is part of where the probabilities
come into play you know we flip the coin fifty percent
is going on heads fifty percent is building on tails are you can have a run where it lands on heads 10 times or can
land on tails 10 times all right but you know it's good I wanted two things the fluctuations in
the market you know how the market is moving is going to stop you out more
than it's going to hit your target because if the market can go up 60 pips
it darn sure can go down 20 pips just to stop you out and in normal move I normal move all right so I believe
that everyone here can make profitable trades at least thirty-five percent of
time you think that's a true statement guys that each and every one of you in
here have the ability to be right thirty-five percent of the time I do
mean it's pretty easy all right the steps i teach typically
have a 42 cent percent win-loss ratio when applied correctly now the strategy
i showed everyone was a winning strategy when proper money management was applied all right so even if used to the MACD
crossover that i just showed with two one risk/reward ratio you have a lot of losing days but over
the course of a year it would make money I'm I do not advise
you to go to that strategy is way better strategies out there trade than that all right now every week i speak the
traders that say it's so hard to get 40 pips and the two one risk/reward ratio I showed only using macd no fibs no
moving averages no pivot points no volume or any other tools that 40 pips
could be attained with the two one risk/reward ratio in that and a few
slides back so there's no reason you know why you have to have yourself
believe that it's impossible to reach i showed you the results i didn't i didn't
hypothetically say if this is cool maybe we would have got in here you know when it's in the computer the
computer only knows yes or no the computer doesn't have the logic that
we sabotage yourself with it can be done i would like to see each of you go back
over your journals and check to see what would happen as far as your piano if you
had a two to one risk/reward ratio i think that you'll see that you have
would have a lot more of a positive impact in results than what you
currently are achieving a position size in my opinion and traders should not
risk more than 2% max on anyone trade and I've actually updated this guy's in
my tone train account I'm not risking more than one percent
portrayed now they may say how are you making any money well it's it's actually making more
money now than I was before and my stress level goes down a little bit more
even a two percent have much of a stress level when i first started training I
definitely how is just definitely risking a lot
more than I should have now just because your broker will give you higher margins let's say four to one does not mean you
should trade with 304 dollar count three two or three main lots it's a statistical fact that everyone
including myself is going to have 10 losing trades in a row at some point in
time we take a drink real quick guys alright so if you don't think you have
ten losing trades go play some trades in the market over a long enough period of
time and you have you have ten losing trades at some point in time you feel
like there's nothing you can do right hi so if a trader it excuse me lose my boys the traitor is
let's say five percent per trade that would be a 50-percent draw now remember
that slide we did before right so if you lost ten trades risk and five
percent you lose fifty percent of your account a trader wrist ten percent portray that
would be a hundred percent loss hey guess what games over until you have
funds to your account you can you can train them or you don't have the ability
to have any more opportunities in the market at that point in time so let's go
back and look at that chart fifty percent of a drawdown we have to make a
hundred percent of account growth in order to get back to break even hundred percent loss or broke obviously
but you know this ten percent the twenty percent is kind of sweet spot you can
recover this fairly quickly in the market last week alone are not this week
that we just finished this week the week before actually had eleven percent
increase in my account that mark for that week this week and not so good we
still made a profit and our signals we started off the week extremely well and a hundred eight pips
right off the grip on monday and i think we finished out with 60 pips the palace
cook me a couple times and couple trades I still ended up with 60 pips which is
well below what i wanted that was a terrible week for me but you know i just
came off an extremely good week the week before so you have to kind of expect it
and if you want taking trades off the bias which I did in my personal Cal just
using the bias because some of the other trade levels weren't hit yet i went
ahead and had some other trade setups I made more than 60 pips but I didn't
hit my 200 pip quota for the week and most people are going to come on here to
tell you I hit my quota every week I'm always better well I'm not that's just that's just the
fact sometimes you're not going to hit your goal but you have to look at the week before
and I I really excelled past my goal week before all right let's take in percentages guys
this is very very key so what if on the same ten trade
scenario we risk one percent to make a two percent game right ten losing trades in a row would only be
a 10-percent all down that's not bad we only need eleven
percent to get it back just like we showed that previous slide now let's say you win four out of ten
trades right so you're only going to win for trades you have a two percent gain
on your account per week now real quick guys is two percent sound
very good you guys per week don't know if you guys go look at your
inbox you can get a thousand percent per week million percent per week plus two
percent sound good let's put it in context let's think
about this if we only managed to win four out of ten trades for 52 weeks are
counts going to be up roughly a hundred and four percent for the year it's not that hard to achieve it's just
how many trades do you pump through there right so it's just a matter of I gotta
put more trades on to let the probabilities work out yeah that's with that's very good joke
that's with no compounding always like to give more conservative numbers that's why I didn't add the compound in
to make you look you know sexier dress it up i just i give it out just how it
was assuming that you can increase your position size now think about that yeah it's only a
40-percent win-loss ratio trailer right there you still have the ability to grow your
count a hundred four percent that's pretty darn good when you think about it now here's another benefit we trained
using proper money management time frame of chart is irrelevant i think it was a
bad slide oh I know I was trying to get out so
here's another no benefit we trained using proper money management the time frame chart is irrelevant alma
mater if you use a range chart k see chart candlestick chart a line
chart that doesn't matter once you have good money management it's
it's so easy to place the trade you're not scared anymore all right now we're getting ready to get
back to to to the good stuff does anyone believe we could just buy at
a random time and make money using good money management I want to see some answers in the text
box why get another drink I don't know if we can just pick a
random time of the day and just buying is good money management we could as well some people only got a few answers
probably no yes no no no no no all right - yes is break even alright so
this is where it's going what we're going to see all right we're
going to see so here's gonna be the strategy here's a
warning i do not trade this strategy let's see if he's in here yep one of the
guys I talked to all time real good friend of mine and met from the train
community home is actually in here and this is what i was trying to prove them
and i'll trade this way this is just I wrote the strategy just to prove to him
how important money management is all right so here's the strategy guys by
every day at nine a.m. eastern New York time as long as there is no open
positions at that time so if we bought let's say on monday at 9am in the market
was flat or stop off for target wasn't hit we're still in the trade we can't place
in the trade we got stopped out every place in the trade if we took profits we
can place another training all right and we're going to do this
over let's say a 10-year period of time now
we're going to set our profit target 60 pips our stop loss at 30 pips that's a nice to one reward to risk
ratio everybody would agree right we should
all read a train that's a very good reward to risk ratio alright so let's go into the chart real
quick so before you get started here is going
to be a chart of the euro/us dollar right so would you guys classify this is a
downtrend an uptrend remember we're only going to be buying right and that's a
good question why did I pick nine o'clock the reason i picked nine o'clock was
because now those of you to take an ID course from years ago was my favorite
time to look for ib bars I just picked the a time in the market
that there could be a lot of volatility in the market i could just as well went
ahead and look at london or whatever ok so most people are saying downtrend
your has been a downtrend ok so let's look at the pound what about
the pound guys over the last 10 years this goes back 10 years from today is
all the way back here it's you would have to say it's a lot
lower than it is higher correct all right and let's pick this one what
about this one guys that's probably get pretty ugly that
have to sing right i mean if you look at this you're Ozzie on a weekly chart had
went from 2.1 all the way down 1.16 that's up that's a big move down it would be nice
if i could short I did catch some of this i caught I don't know i think it was right up in
here icon and i watch the rest of it go I missed the first part i got this
little bit i thought i was doing pretty good in the market just while went a lot
further than I thought ok so now what we're going to do is I
wrote the program in there to go to example we look at the euro this is a
gyro back here on a 60 minute chart guys we go back all i had to be populate this
is took a long time on this computer to download all this data so here it is right here right here the
market this signature buys here profit target is here profit target is
here profit target notes are having some losing trades well let's go and see you strategy performance report let's just
go see what it does oops it made 37 thousand dollars over the
course of that now remember you guys just looked and said the euro was in a
downtrend all right it was in the down train all
we did was buy all right let's go look at look at the chart I'm gonna stretch yourself a little bit
let's look at the chart real quick performance graph this is a chart of the
euro this is using a two to one risk/reward ratio all right if you don't believe so let's
look at our average or average winning trades six hundred dollars 601 our average losing trade three
hundred dollars that's a 2-1 this to work you have to acknowledge perfect
that's just that's what train station has the following that Joe for their
automatic strategies or whatever so that's pretty daughter the sea it tells us um no it tells us somewhere
tells you account size how sighs require would
have been eleven thousand dollars 1947 dollars to to have that type of game but
the point isn't necessarily how much money may actually dialed up to a higher
lot i just use what translation is pre-populated to prove the point that
this chart right here that we just said this euro chart well it's not your strategy on that one
was in a downtrend right the markets been going down and we were buying every
day and I'm hot bye-bye and it made money all right now
let's go look at this pounds I can't remember oops no malice and I great palace see you
shake why did I pick a 60 minute chart I
didn't I can't 15 minutes to load all that data was just two extremely
difficult alright so here we are in the pound
pound a little bit drawn out solid dates goes a little bit pops back up it has it runs member is still
profitable guys it's not a strategy i trade but the whole point I'm trying to
do you get into guys is showing you the money management aspect of it okay look
again our average win 66 in our box average
loss three hundred dollars it's not bad let's look at the next one you're Ozzie I was a charter member this
is that right here you're Ozzie get that ingrained in your head right there and
we'll go look at that 60 minutes chart you can't really remember which one was
the highest maybe this one forty thousand dollars on that one let's go
see what that looks like it was underwater for quite a period time but
if you stuck with it boom it turns out remember how bad that
thing pulled back so that the worst drawdown that you had I would say was
roughly 11,000 1,700 bucks was a drawdown it's been as high as actually
might be hiring now 48 400 it's not bad right again let's look at
the risk-reward ratio we're not rich reward average Wayne
average laws so average winning trade was 531 because this is a dollar per pip and your average lose
was 247 so not bad right that's with two one risk/reward ratio of
guys that's very very very important so let me go back a slide all right so all right now what about
general guys you're not journal and how are you ever going to know what you need
to improve on what days you trade good are you know you're not gonna you're not
gonna know what setups are working best for you you're not going to be able to see what
time of the day you trade better and you may think that's a joke but you know I
typically trade best on tuesdays and thursdays is when I close out the
majority of my profit how that usually works i have no idea
but that's just from me journal and knowing and understanding that also i've
looked at what I've had you know more you know trying to get like a three two
one risk/reward ratio or even a one to one risk/reward ratio or even in the
past I've even been a victim of having negative risk to reward ratios and you
know you may look like it like you're doing great when you look at your weight
loss ratio as soon as you get that little bit of a job down it really really croaked share counts so
one must make a journal like my partner Scott I do and we always journal our
trades to see where we can improve what we've done good in you know you have to
be a look failure look in the mirror and say wow I really
messed this straight up go back and look at that rate him and I have a funny joke
all the time initially we have a bad trade there's a
certain day that you know we lost a lot of money and in one day you know he lost a lot of money that day
I lost a lot of money day we took almost the same exact trades mean it's really
funny looking back at it now but you know I look at that day and how I really
had a classical you know meltdown that day so did he and you know i always go back
and study that day and say wow I really messed that up and if you look at the
chart now it's like you know you just shake your head that you don't know what
you're thinking that day but again that's when psychology gets the better
part of you I was years and years and years ago is
probably your wii and I don't have to go back to look at my charts but it was
over five or six years ago but you know I made that money back that I lost in
that one day in a short period of times how much I was about eleven thousand
dollars in the day yeah it wasn't a good day but you know
things happen i also made more than that in the day before so I mean it is what
it is alright so journal you're fine now we
talked about that do yourself a favor and journal now real
quick guys before we are before we end this right here is kind of why I used to
use for general and I've had this for years I had an excel i imported into
google docs on a while back my computer crash and lost on my trade data so I was
a little upset but what I did is I went and built in count wrist size calculator
so if you want to risk if you have a ten-thousand-dollar count you want to
risk one percent then and you have 50 pips well this tells you right here how many
launches should be training you have a mini account to be 20 if you have I'm sorry for micro County be 20 if you
have a mini account would be to our standard lot to be . - now here's the beauty of and here's why
I used to use kind of switched up a little bit here is all the months january-february march april may june
july august only til december right so what I'll do
is I'll give you a monthly total over here and it gives your total for the
whole year over here then the best days of the week that you trade now here's how it works may say what's
this chichi in order for me to get this work and
this was years ago it was a little complicated for me so let's say we go to
january and we're training the euro I put your US dollar will say it was one - 5:00 at eleven now the injury for a long entry and have
to put a negative number first so let's say 130 one and here's what I got that's
where it got confusing so that I have to put a negative number for a long entry
now let's say I want to go ahead and groups and I'm when i closed out the
trade I lost money on let's say so that means
this have to be a smaller number right we'll go one . 3 100 right you can see
over here it calculates I lost 21 pips but it's kind of weird i ended up quit
using this right here just because it was too much of a pain about but I ended
up doing away with the entry and exit for time because i can go back and train
station look at the has a time stamp on my charts where you got in where you got
out and put my bias in my bullish or bearish for a day times own time zone
mean in was at london was an asian was a new york session set up i was just
breathing it could be double bottom macd cross the castex awful level you know I have a little abbreviations
for all my setups so let's say in this example we lost 21 pics right let's say
we're training 10 lots well I b210 buckskin million euros a
dollar tip you hit Enter there oops sorry I remember we had a losing it
was a loss so you have to put a negative there right so I hit that and you go back and look
at our sheet in January we're already down two hundred ten bucks mondays and
not looking so good for us all right so you can see this all on a
glance how good you're doing right here and I'll admit to give this out years and years ago when i was doing
this I just I never got around to and never never had enough people that could
get to truly start journal in their trades i'm actually going to be going back over
and change in this because there's some more stuff I want to put in it for 2015
that I want to switch it up a little bit 2015 though i'm probably going to take
the entry and exit out where calculates it because all last year I didn't use it
last year at all I ended up just calculating how many
flips it when it manually and then put in how much money I made each day now let's say the next trade
you enter the date the pair all that and it's sitting next to happen till
Thursday let's say you made a thousand dollars
all right you go back over and you can see how it transferred over to here january were upset are 90 bucks now
Thursday's are hot day in the trade and began a year takes a little while for
you to start seeing with the best day of the week is that you trade - tuesdays and thursdays for whatever
reason I actually have had some really good Friday's like myself after tuesday
or after tuesday and thursday friday is my my next best day to trade and those
of you that know me know me for a while I hate training fridays so how friday ends up being the day that
I close out so much profit i have no idea how that works it just happens to be you know how the
ball bounces arms now a lost my train of thought ok so let's clear this out real quick
now you may say what okay that's great i can track how much money I made on the
trade let's say all the same staff we lost 210
here comment enter trade late ok so when the trades over i just bought
myself a quick note so i can say what did I do was it some of my comments guys if you
went back and looked at my trades even years ago even some more profitable
trades I didn't have a set up i just had an
intuition about the market which way it was gonna go I put no trade no trade setup bad and I
highlight it that way I knew that you know I need to break that habit and I
have broken my habit i feel very very confident about where i might my trading
career right now i am i'm definitely leave some balance ahead of any any
other time since i started trading and this has helped me I'm not sure how to share this on google
docs I have a copy of it in Excel that's when i first started using it was
in excel but then when the hard drive crash a little upset that I lost a
little bit of my training data so i think i lost like you know the first
three or four months of the year of training data so if anybody wants you guys to send me
email and I can always send you the excel version of it that I have I can
just email you that simply I do plan on doing some updates to though but you know if it's something
that you'd be interested in just shoot me an email I came out make sure i said
that to you guys all right you guys have any other questions oops i just can't ok thanks now voice is actually signed to go out
now it's starting to get have a little bit of a hard time talking