Page 297 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes closed. If you actually do this with discipline, by only taking obvious price action setups
and rigidly implementing a risk reward of at last 1 to 2, you will become profitable over
a series of trades.
The key is to not get discouraged if you hit a few losers or become over-confident if you
hit a few winners. What if you lose on the first 8 trades out of 20? Look at the results of my
trading experiment above; did you notice that I lost on 9 trades in a row before hitting a
series of winners? This is called trading, and sometimes you will hit a string of losers or a
string of winners, but you can’t let this influence your forex trading plan, you have to have
a longer-term outlook and remind yourself that your edge, combined with risk reward,
needs time to play out.
Obtaining the proper training is the key.
Other than being able to control your emotions and remaining disciplined enough on a
consistent basis to not over-leverage or over-trade and implement proper risk reward on
every trade, the biggest variable that can influence your trading success is whether or not
you know what your edge is and when you should trade it. This is where proper forex
trading education on a high-probability trading strategy like price action comes in. I have
been successfully using simple yet effective price action setups to trade the markets now
for years, and I teach other traders exactly how I trade in my forex trading course. My
course and it’s teachings not only give you a trading strategy, but it shows you when to
use the strategy and what the market should look like before you enter.

When you combine my price action setups with a thorough knowledge of risk reward
implementation and a mastery of trading plain vanilla price charts, you will begin to
think like a professional trader. Pro traders see the market in a completely different way
than amateurs do; they do not over complicate anything. First they check the market to see
if their trading edge is present; if it is not present then they leave the computer or not look
at the charts for a period of time, typically at least 4 hours. If their trading edge is present,
they will then move on to the next factor to check; whether or not a risk reward of at least
1 to 2 is logically attainable. If a risk reward of 1 to 2 is attainable then they enter the trade
and walk away, that’s it. The reason a professional trader thinks and trades like this is
because they don’t get attached to any one trade; they know that each trade is just one out
of a series of many that they must take in order to see their edge play out. Amateur traders
get caught up on each trade; they react to the emotion of each loser or winner because they
simply cannot see the forest for the trees, typically due to a lack of experience and insight.
Questions
1. About what lesson is the Author talking about in the case?
2. Why proper training is important?

Source: http://www.learntotradethemarket.com/forex-articles/forex-trading-random-entry-and-risk-
reward
14.5 Summary

The forex market represents the electronic over-the-counter markets where currencies are
traded worldwide 24 hours a day, five and a half days a week. The typical means of trading
forex are on the spot, futures and forwards markets.
Currencies are “priced” in currency pairs and are quoted either directly or indirectly.
Currencies typically have two prices: bid (the amount that the market will buy the quote
currency for in relation to the base currency); and ask (the amount the market will sell one

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