A Strong Trading Mind

[Catch22]

Source-- http://en.tradimo.com/learn/technical-analysis/chart-patterns/three-drives-reversal-chart-pattern/

The three drives pattern is a reversal pattern characterized by a series of higher highs or lower lows that complete at a 127% or 161.8% Fibonacci extension.
It can signal that the market is exhausted in its current move and a possible reversal is about to occur on the price chart. The bullish version of the pattern can help to identify possible buy opportunities and the bearish version can help to identify possible sell opportunities.
How to identify the three drives pattern
The chart below illustrates what the bullish version of this pattern looks like:

First drive
number_2 Second drive
number_3 Third drive
As you can see above, the price makes an initial low at point 1, this is the first drive of the pattern. Price then retraces before making a new low at point 2, forming the second drive. This second low should be a 127% or 161.8% Fibonacci extension of the first drive. The price then retraces once again and makes a third drive down which should also be a 127% or 161.8% Fibonacci extension of drive two. It is this third drive that you want to pay the most attention to as this is where you are looking for a long entry.
The next chart shows this pattern as a bearish set up:

First drive
number_2 Second drive
number_3 Third drive
This time the price makes an initial high at point 1, this is the first drive of the pattern. Price then retraces before making a new high at point 2, forming the second drive. This second high should also be a 127% or 161.8% Fibonacci extension of the first drive. The price then retraces once again and makes a third drive up which should also be a 127% or 161.8% Fibonacci extension of drive two. It is this third drive that you want to pay the most attention to as this is where you are looking for a short entry.
How to trade using the three drives pattern
We will now show you how to trade the three drives pattern.
Enter your trade
Traders look to enter the market on the third drive as this offers the most precise entry point with the greatest profit potential. This will either be a 127% or 161.8% Fibonacci extension. We will use the bullish three drives pattern as an example. For a bearish three drives pattern (a short/sell trade), simply invert the pattern and your orders.
Place a buy order here, as below:

First drive
number_2 Second drive
number_3 Third drive
el1 Long entry
As you can see, the price hits the extension level on the third drive down which is where the entry for the buy trade is placed, in the opposite direction to the most recent overall move.
Place your stop loss
Place your stop loss below the 161.8% Fibonacci extension level of the second drive.

First drive
number_2 Second drive
number_3 Third drive
el1 Long entry
sl2 Stop loss
Try the following exercise to practice placing your entry order and stop loss:
Exercise 1: Place your entry order and stop loss Show exercise
Place your profit target
A simple way of finding a profit target is by drawing a Fibonacci retracement from the very high of the start of the pattern to the very low of the pattern, where the pattern completes the third drive.
The take profit is the 61.8% Fibonacci level of this swing.
See the chart below for an example of this:

First drive
number_2 Second drive
number_3 Third drive
el1 Long entry
sl2 Stop loss
tp3 Profit target
Summary
So far, you have learned that ...
• … the three drives pattern is a reversal pattern designed to highlight times when the market is exhausted in its current move.
• … the pattern has a bullish version and a bearish version.
• … the pattern is composed of three waves or drives that complete at a 127% or 161.8% Fibonacci extension.
• … the trade is entered in the opposite direction to the overall move, when the third drive is completed at a 127% or 161.8% Fibonacci extension.
• … the stop loss goes below the 161.8% Fibonacci extension for a buy and above the 161.8% Fibonacci extension for a sell.
• … draw a new Fibonacci retracement from the start of the pattern to the completion point of the pattern and take profit at the point where price will have retraced 61.8% of that distance.

source-http://en.tradimo.com/learn/technical-analysis/chart-patterns/three-drives-reversal-chart-pattern/

 

[Blackhole]

 

[Catch22]

Creating Strategies

I always encourage traders to develop their own forex strategies, time permitting. There are several reasons why I believe it is important for traders to develop their own strategies. First of all, creating strategies requires the traders develop a greater knowledge of the market and its price movements. Secondly, when one develops their own forex strategy they are tuned into how the strategy actually works, what will cause it not to work and they will be in a much better place to make adjustments when needed. Even if you trade someone else’s forex strategy, test it thoroughly, and in the process, you make it your own as you learn the in-and-outs of it, possibly adding your own twist.-CORY MITCHELL

 

[Blackhole]

MOM

A Woman was admitted in a hospital as she was suffering from Brain Tumor. Her son & relatives were around her. She died within a few Hours

Her son cried the whole day & became ill. He returned home the next day; & found a letter on the table besides his mothers bed. Surprisingly it also had a few tablets.

His hands trembled as he read the letter;

“TAKE THESE TABLETS DEAR;
I know you catch a cold easily after crying..LOVE MUM

No matter in what condition mothers are…they always care about their children

KINDLY RESPECT AND LOVE YOUR MOTHER

 

[amitrandive]

The Seven Habits of Highly Effective Futures Traders
http://www.rb-trading.com/article11.html

Stephen Covey's The Seven Habits of Highly Effective People has been on the national best-seller lists for years--first as a hardback and then as a paperback. I wondered how its list might relate to commodity futures trading.

My interpretation of Covey's agenda is as follows:
1) Take responsibility for yourself and your life,
2) Act in light of your vision of success in life,
3) Act with proper attention to the correct priorities,
4) Act in a way that maximizes benefits for everyone,
5) Try to understand the other person before putting your point of view across,
6) Exploit the potential for cooperation among the people in your life,
7) Pay attention to maintaining and refining your physical, mental, social and spiritual dimensions.

ONE. Understand the true realities of the markets. Understand how money is made and what is possible. The markets are what is called chaotic systems.Market price movement is highly random with a trend component.

Unsuccessful and frustrated commodity traders want to believe there is an order to the markets. They think prices move in systematic ways that are highly disguised. They want to believe they can somehow acquire the "secret" to the price system that will give them an advantage. They think successful trading will result from highly effective methods of predicting future price direction. They have been falling for crackpot methods and systems since the markets started trading.

The truth is that the markets are not predictable except in the most general way. Luckily, successful trading does not require effective prediction mechanisms. Successful trading involves following trends in whatever time frame you choose. The trend is your edge. If you follow trends with proper money management methods and good market selection, you will make money in the long run. Good market selection refers to selecting good trending markets generally rather than selecting a particular situation likely to result in an immediate trend.

There are two related problems for traders. The first is following a good method with enough consistency to have a statistical edge. The second is following the method long enough for the edge to manifest itself.

TWO. Be responsible for your own trading destiny. Analyze your trading behavior. Understand your own motivations. Traders come into commodity trading with a view to making money. After awhile they find the trading process to be fascinating, entertaining and intellectually challenging. Pretty soon the motivation to make money becomes subordinated to the desire to have fun and meet the challenge. The more you trade to have fun and massage your ego, the more likely you are to lose. The kinds of trading behaviors that are the most entertaining are also the least effective. The more you can emphasize making money over having a good time, the more likely it is you will be successful.

Don't blame others for your failures. This is an easy trap to fall into. No matter what happens, you put yourself into the situation. Therefore, you are responsible for the ultimate result. Until you accept responsibility for everything, you will not be able to change your incorrect behaviors.

THREE. Trade only with proven methods. Test before you trade. When applied consistently, most trading methods don't work. The conventional wisdom that you read in books is mostly ineffective.

You must be skeptical of everything you read. You must somehow acquire the ability to test any trading method you intend to use. The reliability of non-computerized testing is highly suspect. You must, therefore, use software that tests a particular approach or a variety of approaches. You must learn the correct way to test and evaluate trading approaches.

Have a good approach. Follow the four cardinal rules of trading. 1) Trade with the trend. 2) Cut losses short. 3) Let profits run. 4) Manage risk. These are well known cliches. Yet virtually all losing traders violate these rules consistently. Trading with the trend means buying strength and selling weakness. Most traders are more comfortable buying weakness and selling strength, the essence of top and bottom picking.

Trade good markets. Trend is your only edge. You must emphasize those markets which trend the best. This will maximize your statistical edge over time.

FOUR. Trade in correct proportion to your capital. Have realistic expectations. Don't overtrade your account. One of the most pernicious roadblocks to success is a manifestation of greed.

An experienced money management executive has stated that professional money managers should be satisfied with consistent annual returns of 20 percent. If talented professionals should be satisfied with that, what should you be satisfied with? Personally, I believe it is realistic for a good mechanical system diversified in good markets to expect annual returns in the 30-50 percent range. This kind of trading would still result in occasional drawdowns up to 25 percent of equity.

FIVE. Manage risk. Manage the risk of ruin when you create your trading plan or system. Manage the risk of trading when you select a market to trade. Manage the risk of unusual events. Manage the risk of each individual trade.

Trading with small stops is usually ineffective because they are within the market's "random noise."

Another element of risk is the market you trade. Some markets are more volatile and more risky than others. Some markets are comparatively tame. Some markets, such as currencies, have a greater chance of overnight gaps which increases risk. Some markets have lower liquidity and poorer fills which increases risk. If you have a small account, don't trade big money, wild-swinging contracts .Emphasize risk control over achieving big profits.

Pay attention to the risk of surprise events such as crop reports, freezes, floods, currency interventions and wars. Most of the time there is some manifestation of the potential. Don't overtrade in markets where these kinds of events are possible.

The most important element of risk control is simply to keep the risk small on each trade. Always use stops. Always have your stop in the market. Never give in to fear or hope when it comes to keeping losses small. Never risk more than one or two percent of capital. Preventing large individual losses is one of the easiest things a trade can do to maximize his chance of long-term success.

SIX. Stay long-term oriented. Don't adjust your approach based solely on short-term performance. Our entire society emphasizes instant gratification. We are consuming are long-term capital. Eventually, this will lead to a decline in our standard of living over what it could have been with more attention to the future.

Most traders have such an ego investment in their trading that they cannot handle losses. Several losses in a row are devastating. This causes them to evaluate trading methods and systems based on very-short-term performance. Don't start trading a system based on only a few trades, and don't lose confidence in one after only a few losses. Evaluate your performance based on many trades and multi-year results.

SEVEN. Keep trading in correct perspective and as part of a balanced life. Trading is emotionally intensive no matter whether you are doing well or going in the tank. It is easy to let the emotions of the moment lead you into strategic and tactical blunders.

Don't become too elated during successful periods. One of the biggest mistakes traders make is to increase their trading after an especially successful period. This is the worst thing you can do because good periods are invariably followed by awful periods. If you increase your trading just before the awful periods, you will lose money twice as fast as you made it. Knowing how to increase trading in a growing account is perhaps the most difficult problem for successful traders. Be cautious in adding to your trading. The best times to add are after losses or equity drawdowns. Don't become too depressed during drawdowns. Trading is a lot like golf. All golfers, regardless of their ability, have cycles of good play and poor play. When a golfer is playing well, he assumes he has found some secret in his swing and will never play poorly again. When he is hitting it sideways, he despairs he will never coming out of his slump.

Trading is much the same. When you are making money, you are thinking about how wonderful trading is and how to expand your trading to achieve immense wealth. When you are losing, you often think about giving up trading completely. With a little practice, you can control both emotional extremes. You'll probably never control them completely, but at least don't let elation and despair cause you to make unwarranted changes in your approach.

Since correct trading is boring, don't depend on trading as your primary stimulation in life. Unfortunately, the exciting aspects of trading, such as easy analysis and trade selection, are counterproductive. Good trading is repetitive and pretty dull. Thus, if you depend on trading for the major excitement, pursuit of fun will probably cause you to lose. If you can afford it, fine. If not, seek your entertainment elsewhere.

Here's a summary of my seven habits of successful traders. 1) Understand the true realities of the markets. 2) Be responsible for your own trading destiny. 3) Trade only with proven methods. 4) Trade in correct proportion to your capital. 5) Manage risk. 6) Stay long-term oriented. 7) Keep trading in correct perspective and as part of a balanced life. The common theme is self-control. As I've often said, if you can master yourself, you can master the markets.

 

[Dax Devil]

Source-- http://en.tradimo.com/learn/technical-analysis/chart-patterns/three-drives-reversal-chart-pattern/

The three drives pattern is a reversal pattern characterized by a series of higher highs or lower lows that complete at a 127% or 161.8% Fibonacci extension.
It can signal that the market is exhausted in its current move and a possible reversal is about to occur on the price chart. The bullish version of the pattern can help to identify possible buy opportunities and the bearish version can help to identify possible sell opportunities.
How to identify the three drives pattern
The chart below illustrates what the bullish version of this pattern looks like:

First drive
number_2 Second drive
number_3 Third drive
As you can see above, the price makes an initial low at point 1, this is the first drive of the pattern. Price then retraces before making a new low at point 2, forming the second drive. This second low should be a 127% or 161.8% Fibonacci extension of the first drive. The price then retraces once again and makes a third drive down which should also be a 127% or 161.8% Fibonacci extension of drive two. It is this third drive that you want to pay the most attention to as this is where you are looking for a long entry.
The next chart shows this pattern as a bearish set up:

First drive
number_2 Second drive
number_3 Third drive
This time the price makes an initial high at point 1, this is the first drive of the pattern. Price then retraces before making a new high at point 2, forming the second drive. This second high should also be a 127% or 161.8% Fibonacci extension of the first drive. The price then retraces once again and makes a third drive up which should also be a 127% or 161.8% Fibonacci extension of drive two. It is this third drive that you want to pay the most attention to as this is where you are looking for a short entry.
How to trade using the three drives pattern
We will now show you how to trade the three drives pattern.
Enter your trade
Traders look to enter the market on the third drive as this offers the most precise entry point with the greatest profit potential. This will either be a 127% or 161.8% Fibonacci extension. We will use the bullish three drives pattern as an example. For a bearish three drives pattern (a short/sell trade), simply invert the pattern and your orders.
Place a buy order here, as below:

First drive
number_2 Second drive
number_3 Third drive
el1 Long entry
As you can see, the price hits the extension level on the third drive down which is where the entry for the buy trade is placed, in the opposite direction to the most recent overall move.
Place your stop loss
Place your stop loss below the 161.8% Fibonacci extension level of the second drive.

First drive
number_2 Second drive
number_3 Third drive
el1 Long entry
sl2 Stop loss
Try the following exercise to practice placing your entry order and stop loss:
Exercise 1: Place your entry order and stop loss Show exercise
Place your profit target
A simple way of finding a profit target is by drawing a Fibonacci retracement from the very high of the start of the pattern to the very low of the pattern, where the pattern completes the third drive.
The take profit is the 61.8% Fibonacci level of this swing.
See the chart below for an example of this:

First drive
number_2 Second drive
number_3 Third drive
el1 Long entry
sl2 Stop loss
tp3 Profit target
Summary
So far, you have learned that ...
• … the three drives pattern is a reversal pattern designed to highlight times when the market is exhausted in its current move.
• … the pattern has a bullish version and a bearish version.
• … the pattern is composed of three waves or drives that complete at a 127% or 161.8% Fibonacci extension.
• … the trade is entered in the opposite direction to the overall move, when the third drive is completed at a 127% or 161.8% Fibonacci extension.
• … the stop loss goes below the 161.8% Fibonacci extension for a buy and above the 161.8% Fibonacci extension for a sell.
• … draw a new Fibonacci retracement from the start of the pattern to the completion point of the pattern and take profit at the point where price will have retraced 61.8% of that distance.

source-http://en.tradimo.com/learn/technical-analysis/chart-patterns/three-drives-reversal-chart-pattern/

Number 2 has better PA to make profit on avg both ways than at 3. The guys at tradimo dot co m are talking conventional BS. Go figure.

 

[Blackhole]

Little boy and Family

I was walking around in a Big Bazar store making shopping, when I saw a Cashier talking to a boy couldn’t have been more than 5 or 6 years old. The Cashier said, "I’m sorry, but you don’t have enough money to buy this doll." Then the little boy turned to me and asked, "Uncle, are you sure I don’t have enough money?"

I counted his cash and replied, "You know that you don’t have enough money to buy the doll, my dear." The little boy was still holding the doll in his hand. Finally, I walked toward him and I asked him who he wished to give this doll to. "It’s the doll that my sister loved most and wanted so much . I wanted to Gift her for her Birthday. I have to give the doll to my mommy so that she can give it to my sister when she goes there." His eyes were so sad while saying this.

"My Sister has gone to be with God. Daddy says that Mommy is going to see God very soon too, so I thought that she could take the doll with her to give it to my sister." My heart nearly stopped. The little boy looked up at me and said, "I told daddy to tell mommy not to go yet. I need her to wait until I come back from the mall." Then he showed me a very nice photo of him, where he was laughing. He then told me "I want mommy to take my picture with her so my sister won’t forget me, I love my mommy and I wish she doesn’t have to leave me, but daddy says that she has to go to be with my little sister."

Then he looked again at the doll with sad eyes, very quietly. I quickly reached for my wallet and said to the boy. "Suppose we check again, just in case you do have enough money for the doll?" He said, "OK, I hope I do have enough." I added some of my money to his with out him seeing and we started to count it. There was enough for the doll and even some spare money.

The little boy said, "Thank you God for giving me enough money!" Then he looked at me and added, "I asked last night before I went to sleep for God to make sure I had enough money to buy this doll, so that mommy could give It to my sister. He heard me! I also wanted to have enough money to buy a white rose for my mommy, but I didn’t dare to ask God for too much. But He gave me enough to buy the doll and a white rose. My mommy loves white roses."

I finished my shopping in a totally different state from when I started. I couldn’t get the little boy out of my mind. Then I remembered a local news paper article two days ago, which mentioned a drunk man in a truck, who hit a car occupied by a young woman and a little girl. The little girl died right away, and the mother was left in a critical state.

The family had to decide whether to pull the plug on the life sustaining machine, because the young woman would not be able to recover from the coma. Was this the family of the little boy? Two days after this encounter with the little boy, I read in the news paper that the young woman had passed away. I couldn’t stop myself. I bought a bunch of white roses and I went to the funeral home where the body of the young woman was exposed for people to see and make last wishes before her burial. She was there, in her coffin, holding a beautiful white rose in her hand with the photo of the little boy and the doll placed over her chest. I left the place, teary-eyed, feeling that my life had been changed for ever…

The love that the little boy had for his mother and his sister is still, to this day, hard to imagine. And in a fraction of a second, a drunk driver had taken all this away from him…

Moral: Respect life, Follow and Obey Rules. Don’t make anyone else to pay and bear for your mistakes. Do not make the mistakes which cost others something that can never be replaced. Always have a giving hand and extend your help to those in need and sorrow.



m o r a l stories

 

[Catch22]

"Or do we do this to ourselves. That is, allow what we perceive to be success in others stifle us; paralyze us. So that we can no longer see our own gifts, strength, talents, innate abilities. Failure is only failure if it defines us and shapes us, preventing us from moving forward and growing from it. I like to look at so-called failure as less success. Understand that we all have success within us: from the beating of our heart, to the breathing of our lungs, to the divine within our soul.--"
Dr. Charles,

 

[Catch22]

 

[Blackhole]

Secret of Successful Marriage


There was once a man and woman who had been married for more than 60 years. They had shared everything. They had talked about everything. They kept no secrets from each other — except that the old woman had a shoe box in the top of her closet that she cautioned her husband never to open or ask her about.

For all of these years, he had never thought about the box, but one day the little old woman got very sick and the doctor said she would not recover. In trying to sort out their affairs, the little old man took down the shoebox and took it to his wife’s bedside. She agreed that it was time that he should know what was in the box. When he opened it, he found two crocheted doilies and a stack of money totaling $25,000.

“When we were to be married,” she said, explaining the contents of the box, “my grandmother told me the secret of a happy marriage was to never argue. She told me that if I ever got angry with you, I should just keep quiet and crochet a doily.”

The little old man was so moved, he had to fight back tears. Only two precious doilies were in the box. She had only been angry with him two times in all those years of living and loving! He almost burst with happiness.

“Honey,” he said “that explains the doilies, but what about all of this money? Where did it come from?”

“Oh,” she said, “that’s the money I made from selling the doilies.”