WELCOME! Daily Forex Fanatics Review. December 30, 2013

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WELCOME!

Daily Forex Fanatics

December 30, 2013

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Todd Granthem

todd.granthem@apiaryfund.com

Daily Forex Fanatics Forum

DFF Buddy System Forum

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2013 Topics

• Why Do You Trade

• Trading Well

• Becoming Better

• Evidenced Based Trading

• Strategy Development

• Routine Development

• Alignment Trade • Back Testing

• Risk Management

• Angela’s PSAR Strategy

• Keys to Success

• Being A Good Losers

• Trading Plan Development

• Todd’s Strategy

• Getting Funded

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Why Do You Trade?

Reason:

1. Money

Why do we want money:

1. Take care of our needs 2. Take care of others

3. Freedom of Time 4. Freedom of Choice

Who is your underlying reason for trading? 1. Yourself 2. Significant other 3. Family 4. Children 5. Those in need

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Trading Well

In order to achieve the “reason” why you are trading you need to learn to trade well?

1. Trading well means you have a trading plan

2. A trading plan means you have entry and exit rules

3. Trading well means you have the confidence to follow your trading plan

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What stops us from trading well?

Reasons:

1. Not having a well-defined trading plan

- Scale of 1-10

2. Yourself

1. Lack of confidence 2. Fear to succeed 3. Fear to fail

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Trading and Basketball

Trading Offense - Entries Defense - Exits Basketball Offense – Motion

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Trading and Basketball

Trading Practice Offense - Entries

Defense – Exits

At trader must practice their

entries and exits so much that it becomes a natural reaction to what they are seeing in the market.

Basketball Practice Offense – Motion

Defense - Man on man

A Team will practice their offense and defense so much that it

becomes a natural reaction to

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Trading and Basketball - Habits

Traders

Bad – Must break the habit buy replacing it with correct habits Good – Must know their

strengths and continue to improve upon them

Basketball Team

Bad – Must break the habit buy replacing it with correct habits Good- Must know their

strengths and continue to improve upon them

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Trading and Basketball – Live

Traders

Will do what they have learned to do while in practice

They will trade their entries They will trade their exits Basketball Team

Will do what they have learned to do while in practice

They will run their offense They will run their defense

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Evidenced Based Trading

Evidenced based trading relies on what we see happening, not on what we think or feel should happen.

This is done by:

1. Having a well-defined set of rules

2. Taking action base only on what they see

• Example: Buy when the 50 period simple moving average is pointing higher and the price is closing above the 50 SMA

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What is a trading plan

A trading plan is more than a strategy. It includes things like: 1. Why you trade

2. What you trade 3. When you trade 4. How you trade 5. Goals for trading

This is an all encompassing document that takes into consideration all conditions for trading situations.

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Trading Plan Development

Goals:

1. Get your trading plan 2. Develop your strategy 3. Trade-well

4. Profits

Trading plan leads to trading well which leads to consistency and profitability

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Main Elements of Good Trading Plan

• Identify our Traders Profile

• Self-assessment – Trading Strengths/Weaknesses

• When we won’t trade

• Objective – Long term/short term goals • Routines – Daily, Weekly, Month

• Analysis – Trade, Profit, Loss, Month • Method of Journaling defined

• Risk Tolerance – Trade risk, Portfolio risk • Strategy – Charts, entry, exits, etc.

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Trading Plan Template

• Apiary site

• Search –

Bare Trade Plan Template

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Strategy Development

Step 1: Write down the reason for buying or selling Step 2: Write down your entry point

Step 3: Write down your exit point

Step 4: Write down when not to trade

Step 5: Write down Money Management Rules

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Trading Plan: Strategy (Scalp, Swing, Position)

• Market – Which pairs

• Time frames – 1 min -1 month, Time during day

• Tools – Indicators, Trends, Support/Resistance

• Entry – Trigger (What we need to see on the chart to enter)

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Trading Strategy Development

• Where do I start?

• 1. Take the Apiary Traders Profile.

• 2. Take the Apiary Courses 1-13 ( Beginning, Intermediate, Advanced Strat.) • 3. Learn trading platform

• 4. Pick one pair to trade – EURUSD

• 5. Pick one time frame to trade – 60 min.

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Angela’s PSAR Strategy (1hr and 4 hr)

• Long

• MACD (12,26,9) – Must have a bullish cross • Parabolic Stop And Reverse (0.02, 0.2)

• Trigger: When the PSAR gives a dot below price and MACD give a bullish cross - buy

• Short

• Trigger: When PSAR gives a dot above price and MACD give a bearish cross - sell

• Long exit

• Initial Stop below PSAR • TP: Bearish cross of MACD

• Short exit

• Initial Stop above PSAR • TP: Bullish cross of MACD

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Alignment Strategy

• 4 hour chart • 1 hour chart • 5 min chart • 60 SMA • Apiary Pivots • Price Cycle

• Bullish Alignment Price above 60 SMA on all time frames

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Bullish Alignment Trade

• Buy stop order on the 5 min chart

• Last pivot high +1 pip

• Stop at last pivot low on 5 min. or if price moves below 60 SMA on any chart

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Bearish Alignment Trade

• Sell stop order 5 min chart

• Last pivot high -1 pip

• Stop at last pivot high on 5 min. chart or 60 SMA on any chart

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Alignment Trades

• Tip – don’t open when 1 hour chart has move 70 to 90 percent of it’s price cycle

• Tip – Scale out by closing out half the trade at 3 pip profit and move stop up to B/E or +1 pip

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Todd’s Strategies

• Trend Trades

• Identify the trend

• Identify a pull back

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Todd’s HMA Trading Rules

• 10 period HMA

• 200 period HMA

• MACD (old) 24,52,18

• Trade Direction

• Long – 200 HMA up and MACD above zero

• Short – 200 HMA down and MACD below zero • Trigger

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Limited Discretion

• I’m not deciding if I should take the trade on anything other than what the chart is showing me based on my trading rules.

• No Discretion on Entry

• Limited Discretion on Exit

• Limited Discretion on when to trade • News = no

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Risk Management

• How to control risk • Reduce lot size

• Smaller lot size • Lower lot size

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Max. Suggested Risk?

• 2% - Never lose more than 2% of your account in any one single trade.

• “Normal” trading conditions = risk 2%

• “abnormal” conditions = risk 1%

• “Crazy” trading conditions = risk 0.5%

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Statistics of Successful Strategy (SSS)

• Win/Loss Ratio

• AW/AL Ratio

• Less concerned with = 90% WR or 10% WR

• Less concerned with = AW and AL

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Back Testing

Todd’s Testing Goals

• 1. Back tested with Positive Results

• 2. Initial run of 100 Trades

• Demo account – Wins = 90%, Profitable

• 3. Run strategy on a live account (not for profit)

• 0.01 lot size

• Have 100 trades

• Look at W/L Ratio

• Look at AW/AL Ratio

• Look at DD

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What we should know about our trading

• 1. What is your win/loss ratio

• 2. What is your average win and average loss

• We need to trade our system

• 1000 trades

• 100 trades from system 1 • 500 trades from system 2 • 30 trades from system 3

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Routine Development

• 1. Turn on computer

• 2. Look at closed trades

• 3. Check account balance for mistakes

• 4. Checked New, reports, announcement

• 5. Look at open trades

• 6. Make adjustment to open trades

• 7. Go to the bathroom

• 8. Take a shower

• 9. Look for new setups

• 10. Place new trades

• 11. Review any testing

• 12. Education

• 13. Listen to Todd

Weekly and Monthly Routines

• Looking at results

• Analyzing what they mean

• Testing

• Save money to go to Summit to hang out with Todd

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Daily routine

• 1. Check current trades

• 2. Check closed trades

• 3. Check economic report releases

• 4. Look at News headlines

• 5. Pull up Charts to look for new trades

• Weekly

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The “#1” Key to trading success!

• Having a Strategy

• Confidence – Consistency – Disciplined – Successful/Profitable

• Question should NOT be: What is the strategy (I need to find a good/perfect strategy)

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The “#1” Key to trading success!

• Consistency – consistently bad, have to have a plan

• Mindset – without a plan -bad

• Risk management - Strategy

• Having a plan – Mindset, risk management

• Discipline – Plan

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Being A Good Loser

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Fear of Losing!

• Root cause of our fear = loss of money

• Look at our Risk Parameters (2% Max) – Turnover ratio

• What is our level of comfort with our chosen Maximum Loss? • Todd (not you) is comfortable at a risk of ½ % (Chicken)

• If Todd (not you) takes a loss – I don’t care

• Desire to be right = not want to lose

• Todd (not you) know that with my trading system in order to be “right” I need to take losses or in other words I need to be “wrong”

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Losses in proper perspective

• If you connect losses to your winning strategy then loosing become winning.

• Losses need to = a positive response from the trader

• Make taking a loss a good thing

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Getting Funded: Why are you NOT funded yet?

• New

• Developing a System – It Shouldn’t take years • Don’t have consistency needed

• Confused

• Refining trading skill • Fear

• Undecided on what to trade • Poor R:R ratio

• Poor Expectancy/W/L Ratios • Filtering out un-needed stuff

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Why did I get funded?

• Positive Profit Curve

• Good Money Management

• Positive Win/Loss Ratio

• Positive R:R (AW vs. AL)

• Consistency

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Trading Psychology: Discipline

• Training to act in accordance with rules

• Can you be a disciplined trader when only follow your rules sometimes? • If I’m only disciplined 9 out of 10 times then I’m not a Disciplined trader!

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What would Todd make you do?

• Don’t focus on making money

• If we focus on money we are trading on emotions

• Take away losing as a negative thing

• Focus on our ability to trade our System • Trade the EUR/USD exclusively

• Focus

• Don’t do anything just because Shawn or Todd does it.

• Trade the 1 hour charts

• No more than 2 indicators – one has to be a SMA (50)

• Must trade a $1,000 account

• Must trade only 1 micro lot at a time

• You can only have one trade open at a time

• You must have a stop loss of no less than 25 pip and no more than 100 pips

• You must review every trade with another trader

• If you take a loss you must write a paper on why that trade was a loss

• If you take a win you must write a paper on why that trade was a win

• You may not take another trade until your paper has been read by another trader

• Before you can take your first trade you need to submit your trading plan and rules for entering and exiting your trades

• This plan and set of rules needs to be reviewed by another trader

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