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WELCOME! Daily Forex Fanatics December 30, 2013 2013 Review

Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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Page 1: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

WELCOME!Daily Forex Fanatics

December 30, 2013

2013 Review

Page 2: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

Todd Granthem

[email protected]

Daily Forex Fanatics ForumDFF Buddy System Forum

Traders Support – 1.801.701.1650

Page 3: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• Trading Psychology

Page 4: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 5: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

4. Trading well = consistent profits and consistent losses

Page 6: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

What stops us from trading well?

Reasons:

1. Not having a well-defined trading plan- Scale of 1-10

2. Yourself1. Lack of confidence

2. Fear to succeed

3. Fear to fail

Page 7: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

Trading and Basketball

Trading

Offense - Entries

Defense - Exits

Basketball

Offense – Motion

Defense - Man on man

Page 8: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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 what they are seeing on the court.

Page 9: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 10: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 11: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 12: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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.

Page 13: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 14: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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.

Page 15: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

Trading Plan Template

• Apiary site

• Search –

Bare Trade Plan Template

https://apiaryfund.com/forum/bare-trade-plan-template

Page 16: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Step 6: Write down Daily, Weekly, Monthly routines

Page 17: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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)

• Exits – What we need to see to exit at a profit or loss

Page 18: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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.

• 6. Pick one System to test (how many systems are out there? Lots)

Page 19: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 20: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• Bearish Alignment Price below 60 SMA on all time frames

Page 21: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• Profit target current value of price cycle from last pivot low

Page 22: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• Profit target current value of price cycle from last pivot high

Page 23: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 24: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

Todd’s Strategies

• Trend Trades

• Identify the trend

• Identify a pull back

• Identify a trigger to enter

Page 25: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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• 10 HMA turning in direction of the trade direction

Page 26: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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• Friday afternoon = no

Page 27: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

Risk Management

• How to control risk

• Reduce lot size

• Smaller lot size

• Lower lot size

% Risk

Page 28: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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%

• Key word = MAX

Page 29: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• More concerned about their ratio/relationship

Page 30: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• 4. Continue To 250 trades and re-evaluate

Page 31: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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• 370 trades from “unknown” system (no rules entry or exit)

Page 32: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

Page 33: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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• Review bad trades, looking at stats

Page 34: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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)

• Question should be: How do I develop MY strategy

Page 35: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• Strategy

Page 36: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

Being A Good Loser

I’m a good loser, and I know it!

Page 37: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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”

• Losing is part of my success

Page 38: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• Motto: I’m a good loser and I know it

Page 39: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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

• Looking for but not finding trades

Page 40: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

Why did I get funded?

• Positive Profit Curve

• Good Money Management

• Positive Win/Loss Ratio

• Positive R:R (AW vs. AL)

• Consistency

• Low Draw Down

Page 41: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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!

Page 42: Daily Forex Fanatics - Apiary Fund 2013 Review.pdf · Daily Forex Fanatics Forum ... Trading Strategy Development •Where do I start? ... Pick one System to test (how many systems

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