When we first look under a car bonnet, we may know a few of the components like the motor, and where the oil and water goes.

The individual components and how they work together is a bit of a mystery.

A good motor mechanic with years under his belt will know how all the parts work together to create a working engine bay.

With many years of working with different cars the mechanic would be able to identify subtle differences and similarities when fixing any problems with the engine.

He has fine tuned his skills through practice which improves his ability to do his job.

These small nuances can make a dramatic difference to his performance and I believe the same is true in trading.

By putting in the time you can fine tune trading setups in the same manner to acheive higher quality outcomes.

I have an example of an entry trigger I use which fine tunes my entry with less risk.

It is a short term failed failure. This entry area marked in blue is a low risk high probability area for my style of trading.

The trade is with the trend but requires patience for a move which washes out some long holders and catches some short traders on the wrong side.

The key is in allowing for some selling which forms the red range bar(these examples are following the uptrend) which is immediately followed by buying which is marked by the ellipse.

Price is also moving away from the moving average which is trending up. I execute the entry on the opening of the new range bar.

This trade can miss moves when there is no sellers on the retracement but I have found it generally has good follow through when the conditions are met.

The idea here is to get a feel for how I look at the market so that you can develop a setup that fits your own style.

There are many more setups if you look carefully and understand market structure and participant psychology.

Failed failure.jpg (118.08 kb)

Consistently executing a well planned trading style is the key to trading success.

The skills are not learned easily to achieve this.

Hours of review and practice is what sorts out the few winners from the many losers.

The practice required needs to be efficient with replay practice of the days events and print outs of specific areas that require review.

It is easy to get lazy fooling yourself that watching the ticker move up and down and listening to CNBC playing, that you're doing focused research.

Think about what professionalism you would expect of someone trading you're money.

Study the key areas where the unexpected occurred.

How did price move around key zones?  Where did price fail and reverse? Where did price exhaust?

Learn, fine tune, and become an expert.

Here is a little shameless self promotion for my wife Jackie.

After dealing with my trading accounts around the globe for 10+ years she is putting her skills to more use helping others to navigate those areas that I never want to go.

Fast Accounts is a bookkeeping and accounts service that provides specialist services for share traders and self managed superannuation funds.  The business is owned and managed by my wife, Jackie Clarke, who is a qualified accountant and has had 10 years experience providing bookkeeping and performance reports for my trading business, as well as managing our SMSFs.

Did you know you may be eligible for a GST REFUND?  If you operate your trading as a business or have a SMSF, Fast Accounts can help you determine if you are eligible for a refund, determine how much it is and arrange all the paperwork for you. 

Do you want to spend less time on the paperwork and more time on your trading?  Fast Accounts can collate all your trading records, work out your trading profits and provide invaluable statistics and feedback on your trading performance to help you improve your results.
See Jackie's website at www.fastaccounts.com.au or contact Jackie on 0438 019 212 or admin@fastaccounts.com.au if you would like to know more.

Trading against a trend move is an addiction that just keeps taking.

 From all that I've seen in trading the one thing that nails even the best of traders is getting caught trading against a trend move.

The strong emotional desire to get a trade back to break even is usually the catalyst that drives destructive behavior.

Two things tend to occur, the trader holds a structurally deteriorating position as reality and belief in the traders mind diverge.

The other destructive behavior which tends to result in catastrophic loses is the adding of positions as price moves against the position.

This is an attempt to create a lower break even price.

At times the strategy works but creates the environment for the trader to suffer massive losses down the road.

We get wealth transfer as the chips are pushed away from the inexperienced to the experienced.

For these strong trends there has to be an unexpected move that catches out the majority.

Often on the SPI200 a strong down trend happens after the US markets have closed strongly.

Today is a great example as the SPI trended down not allowing longs to get a break even opportunity.

As the longs closed thier positions they where in effect selling, adding to the downside momentum.

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