Here is a little play that I trade with good risk/reward parameters.

This trade is looking for a base to fail.

Often when the trade is successful there is substantial follow through.

On a failure of the pattern there is the possibility of a reversal trade.

I am looking for a base to form that is easily identified.

I then want to see price spike through support and quickly retrace back up.

In this example we can see a nice reversal bar with a tail.

This is where the range bars give great visual clues for trade setups.

Daxshoulder.jpg (107.39 kb)

A few posts ago I decided to concentrate on currencies to free up some time for myself.

Focus on one thing and hit the setups as they appear.

Guess what, that completely went out the window and I have been trading everything.

The Dax, ES, Hang Seng, SPI, stocks and currencies.

It was just too boring for me.

Over the last 10 years I traded hundreds of times a day and to just trade in the single figures was like watching paint dry.

The good thing for me is that my style has tightened up and the results have been consistent over the various instruments.

January results were positive $47,000 which was reasonable considering I spent a few weeks away from the market.

I feel I am finding my footing on the Dax with some consistent results and I feel very relaxed with my trade style and risk.

Today I traded the Dax with an initial long trade that failed.

Instead of just closing out the trade for a loss, I reversed the position as the structure looked like it had changed to favour a downside bias.

In trader development this is one of the most difficult things to do in an objective manner while trading real time.

There is a fine line between reversing for a new setup versus reversing because you're revenge trading.

Revenge trading has been a specialty of mine which has provided some of my biggest losses over the years.

The only way for me to stop this mental problem has been to have a consistent structure for every trade I take with pre-planned what if scenarios.

I know I am trading well when I can adapt to new information quickly and act decisively.

Below is the Dax trades for the first 2hrs of trade.

Dax1min.jpg (93.52 kb)

Trade results.jpg (75.43 kb)

It looks like Dr Brett has been getting dogged by the cowboys out there on the web.

It just shows that you need to be vigilant and ask the hard questions before paying for education, brokers etc.

I've seen many shonks out there. Ask for trading statements and/or strong reviews. That will help in separating the good, bad, and ugly.

I like his blog heading.

The Reason I Don't Partner With Your Firm is Because You Are Cheap Whores

http://www.traderfeed.blogspot.com/

Just back from a camping trip at Lennox Heads in North NSW.

We met Philippe and his son Sebastian who our boys had a great time with.

Philippe was camped next to us and is a trader who has been to a couple of my talks and a reader of the blog.

It is amazing where traders pop up, it almost feels like some sort of religious sect. (we may need a secret handshake or something)

Although the surf was non existent, the beers were cold and the beaches and lake were great for the kids.

It's funny how our boys enjoy camping much more then hotels, I'll just have to get better at the 6.00 am mornings when the birds start squawking.

TRADING/INVESTMENT COSTS

I read this article recently that shows the difference that fees have on investment returns over longer term time frames.

It also has implications for traders and their brokerage costs over time.

The blog is from the UK but with the exorbitant fees Australia's wrap funds charge all the more important for super funds.

http://davesbrain.blogs.com/mindmoneymarkets/2010/01/costs.html