Losing Focus is the #1 Mistake of Traders in FOREX

From Scott Downing at BigTrends.Com.....

This article is one that I'm asked to do over and over again....and that's because so many people fail to focus! In the article I'll give you some rock solid tips and methods to staying focused, and in my Forex Toolkit I'll give you an indepth video on making the methods stick! Get my kit here, and enjoy the report!

What you probably don't realize is that the "mind game" of Forex trading is just as important as having a proper trading system. This is why up to 95% of novice fx traders blow up their accounts. They make simple mistakes that cause a downward spiral of confidence. Or they let greed and fear push them into that one crucial decision that costs them all their profits (remember the big leverage that Forex gives you is a double-sided sword).

We've been successfully trading and educating traders at BigTrends.com for over 10 years and we know the proper mindset is extremely crucial to long term trading success. One of the most important factors is to take the emotion out of your trading as much as possible. Logical, systematized, rule-based trading is a much better bet versus emotional trading and not having a plan.

When you have confidence in your trading systems and indicators, you can then develop a set of rules to follow to ensure that your trade management and profit/loss taking is in correct order to maximize gains and minimize risks. You will learn the proper size and allocation to take of your trades in order to ensure that you "remain in the game" if you take a loss or two. You also will have "powder dry", aka capital available, for when the super profit opportunity comes along.

The key to having a successful trading system is to have confidence in it and the rules and to follow it properly. Poor execution is one of the leading causes of losses by beginning Forex traders. Don't fall into the "hope game" of wishing your trade would go your way. Have a proven, tested system and rules to get you in and out quickly, let the winners run and cut the losers short.

Clear your mind when you begin Forex trading each day or week. Remember and learn from your past trades, but don't let them hang over you like a negative ghost. Follow and execute your system, why have a trading system if you can't focus on executing it in the first place? Develop a specific time of day that you dedicate to focusing on only Forex trading. Keep a trading journal of your past trades, indicators, thoughts and lessons. Strive to take the emotion out of your trading.

Follow these various principles to creating the proper mindset and you will see your trading results improve. We delve far more into these and have specific proven methods and instructions in the new FIT (Forex Interval Trading) systems. I've not taken it live yet as we're still shoring up the back end....but in the mean time..

Have you gotten my Forex Toolkit yet?


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Bigger Gains, Less Time. Tap Into the Potential of Weekly Options

From Price Headley, one of the most respected authorities on Options....


Traders spoke, and the exchanges listened. And, if the growing popularity of the new weekly-expiration options is any indication, these shorter term puts and calls will soon join their monthly-expiration counterparts as mainstream trading instruments.

Just as the name implies, the newest innovation in option trading are derivatives that are issued on Thursdays, and then expire the following Friday.... six trading days later.

But why bother with short duration instruments when the traditional monthly expiries have been working fine for all these years? There are actually quite a few advantages these instruments boast that simply can't be said for the alternatives. Consider this:
• Weekly options inherently offer a greater 'delta'. That just means each of them are more responsive to changes in the underlying security's price during their lifespan than monthly options are.
• Weekly options don't suffer from a high 'theta'. In other words, time decay isn't a major impediment for weekly options. Since they're so short in duration, there's no excess time value (or premium) baked into the price. As a result, weekly options tend to cost less.

While those two details are the favorable technicalities, the overarching attraction to these new short-term derivatives is not only 'bigger picture', but much more important than the high delta and low theta..... weekly options are amazingly flexible.

Learn specific techniques and strategies for trading Weekly Options
Free Weekly Options Training Kit - Click Here! 

One of the more challenging drawbacks of trading traditional options has been the misalignment of a trader's timeframe and the option's lifespan.

For example, a trade's "sweet spot" may end up spanning the last week of one month and the first week of the next month. However, since monthly options expire right before that sweet spot has occurred (and are issued several weeks before that period), a trader may be forced to choose an option, expiration, or strike price that doesn't fully maximize a trade's potential.

Said another way, a lack of choices of when an option's life begins and ends means the trade's theta and delta aren't ideal, leaving money on the table.

Weekly options, conversely, are new every week, so a trader can pick and choose to step into a trend that's moving at the time. Or, he or she can choose to pass on a trade that's stagnant at the time. And what happens when the underlying stock or index starts to move again? No problem - just step in again with the next weekly issue. There's no need to waste time and tie up capital by holding an option during the underlying security's dead periods.

And what sorts of securities or indices currently offer these weekly options. All the usual suspects in terms of indices are available.... major indices like the S&P 500, and weekly options for some of the major sector ETFs are on the table as well. A few of the most highly-traded stocks are in the fray too. Since these are issued on a revolving basis at the discretion of the exchanges though (largely depending on demand), you never know which stock you may be able to play this way in the future. [Indeed, many traders have used them as a way to leverage a position for purely a one time event, like an earnings announcement.]

While the advantages of trading weekly options are clear, a new set of trading mindsets and rules also apply:
• Get your short term charts and ebb/flow predictions ready. One of the primary reasons equity and index options exist in their traditional time frames, with a lifespan of months if not more than a year, is to offer an active investor a way to leverage his or her capital, while allowing that same trader to ride out rough patches on the way to the end goal. Weekly options, on the other hand, are a short-term chartist's dream. The key question is, where will this stock/index be in a week (or less)?

• Use the market tide to your advantage. In the same vein is 'think short-term', traders should tap the market's near term tidal forces.... since 3 out of 4 stocks tend to move in tandem with the market's strong moves. Yes, given enough time, the best individual stock trends can defy the market's ebb and low. The whole point here is speed though, which means calling the market right at any given time is half the battle (whether you're trading stock or index options).

• Keep the original intent in mind. It's contrary to most everything we've been taught as investors, but the whole point of weekly options is to reap the benefit from a short-term move; get in and out accordingly. Some traders are using them to profit from news announcements (like earnings). Others are just using them to hedge a position through a certain timeframe. Don't be afraid to cut loose once your reasonable objective has been met.

The proliferation of weekly option trading is sure to be a beneficial one for traders. Like any other trading arena though, it's the mastery of the nuances more than the mechanics that will be the key to your success.

Looking for More strategies on Weekly Options?
Learn How to make MORE with Weekly Options - Click Here! 

Price Headley @ BigTrends.com





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Price Headley: So Why The Pullback?

The Stock Market Club would like to welcome our newest contributor Price Headley at BigTrends.com. Here is Prices weekly market report for Monday October 4th....

The four week win streak came to an end last week last week, though barely. Still, all pullbacks start with a small step, and last week's action may well be the beginning of at least a small correction. The dip came despite the much-improved economic news. Nearly all the data not only rolled in better than expected, but showed sustained improvements…. income, spending, sentiment (except for the Conference Board's consumer confidence), GDP, and most of the other data nuggets were pointed higher.

So why the pullback? It's all a matter of timeframes. In the long run, the good economic news should indeed translate into more bullishness for stocks. In the near-term (which is our primary focus from one week to the next), fear, greed, momentum, and excess movement drive the market for option trading. That's what we'll dissect below, after a closer look at the economy.

Economic Outlook
It was a plenty busy week last week on the economic front, with a rough start, but a strong finish. Though still improving, the rate of increase in home values, according the Case-Shiller index – slowed to a pace of 3.18% last month, versus the prior increase of 4.21%. Also on Tuesday, the Conference Board said consumer confidence slumped from 53.2 to 48.5 last month.

From Thursday on, however, it was nothing but good news.

Q2's GDP was revised upward, to 1.7%. Initial claims sank to near-multi-year-lows of 453K, while ongoing claims fell to 4457K… also approaching new multi year lows. The lines in the sand for each are 440K and 4430K, respectively. On Friday, the news got even more compelling. Incomes as well as spending were both up, and better than anticipated (by 0.5% and 0.4%, respectively). And, the prior week's problematic University of Michigan Sentiment number was revised upward, from 66.6 to 68.2.

How does the continued uptrend in incomes as well as spending last while both confidence measures sink? As we've said before, the confidence opinion polls are 'supposed to be' assessments about the next six months. In reality, they are assessments of the prior month. Moreover, in many ways they can be interpreted as contrarian indicators....meaning be bullish when they're most bearish, and vice versa.

Indeed, Friday's latter data confirmed that consumers aren't nearly as mired as they claim to be. Construction spending was up a tad, against the backdrop of an expected 1.4% contraction. And, though the final numbers aren't in yet, auto sales have remained strong this year – and in September – despite worries that things are going to get worse before they get better. It's all below.

Let's take a look at the charts for this coming week.....Price Headley's view for this week.

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