Trading the markets has never been more accessible or cost effective for individual retail traders. Yet the reality is that most of these traders lose money and give up fairly quickly. I believe the main reason people lose money is that their trading methodology does not take into account how price actually behaves and so their methods only work sporadically. In my view, this includes all lagging technical indicator based methods, which are the most popular with retail traders.
However, you can understand how the market behaves by learning to “read” how price moves on a price chart. This is surprisingly easy to do! Most books on trading fail to get to the heart of price action and hence the strategies they promote only work fleetingly. You need to learn to read a price chart successfully to be consistently profitable.
Trading the markets is about anticipating the likely future relative buying and selling pressure from many other market participants. Trading is a negative sum game (after frictional costs) so for every winner there are losers.
Most of the time entering the market provides a 50:50 chance of making X or losing X (providing X is not too small). This means that the market is largely efficient. However, there are times when the market becomes temporarily inefficient offering a greater than 50% chance of a certain directional future move in price. The job of profitable traders is to identify such times in the market and trade accordingly. Risk management remains key because many trades will still fail.
The problem many retail traders have is that they do not have a simple way of exploiting these inefficiencies. Most indicator-based strategies lose in the long run and have a negative profit expectation. Even if they appear to provide a positive outcome, the trader never knows if this is the result of certain market conditions being favourable to the system (which may not repeat) or certain other factors.
This book has sought to address these issues by providing a simple but powerful approach to putting the odds in your favour. This will enable you over time to trade the markets with confidence knowing that you have a definite trading edge which you can exploit.
The book includes sections on:
1)A simple way to understand price action in any market and any timescale;
2)Specific entry set ups based on this price behaviour;
3)Specific exit points for these entries;
4)A solid risk management framework which ensures the correct reward to risk and anticipated long term gains;
5)Details on how to trade intraday and end of day;
6)A template to compute reward to risk and manage your trades; and
7)The psychological aspects of trading and practical ways of helping with this.
8)Plus I have provided lots of examples to make the concepts clear!
The approach is not based on indicators so will work in all market conditions. It is also equally effective in any timescale, so that you can adapt your trading to suit your lifestyle.
However, you can understand how the market behaves by learning to “read” how price moves on a price chart. This is surprisingly easy to do! Most books on trading fail to get to the heart of price action and hence the strategies they promote only work fleetingly. You need to learn to read a price chart successfully to be consistently profitable.
Trading the markets is about anticipating the likely future relative buying and selling pressure from many other market participants. Trading is a negative sum game (after frictional costs) so for every winner there are losers.
Most of the time entering the market provides a 50:50 chance of making X or losing X (providing X is not too small). This means that the market is largely efficient. However, there are times when the market becomes temporarily inefficient offering a greater than 50% chance of a certain directional future move in price. The job of profitable traders is to identify such times in the market and trade accordingly. Risk management remains key because many trades will still fail.
The problem many retail traders have is that they do not have a simple way of exploiting these inefficiencies. Most indicator-based strategies lose in the long run and have a negative profit expectation. Even if they appear to provide a positive outcome, the trader never knows if this is the result of certain market conditions being favourable to the system (which may not repeat) or certain other factors.
This book has sought to address these issues by providing a simple but powerful approach to putting the odds in your favour. This will enable you over time to trade the markets with confidence knowing that you have a definite trading edge which you can exploit.
The book includes sections on:
1)A simple way to understand price action in any market and any timescale;
2)Specific entry set ups based on this price behaviour;
3)Specific exit points for these entries;
4)A solid risk management framework which ensures the correct reward to risk and anticipated long term gains;
5)Details on how to trade intraday and end of day;
6)A template to compute reward to risk and manage your trades; and
7)The psychological aspects of trading and practical ways of helping with this.
8)Plus I have provided lots of examples to make the concepts clear!
The approach is not based on indicators so will work in all market conditions. It is also equally effective in any timescale, so that you can adapt your trading to suit your lifestyle.
