Part One:

Part Two:

Hello Yo’s. I usually try to avoid my computer on Saturdays but I’m dropping in a note for you, thinking about market conditions. Market conditions can go on for months and months, and our trading gains come in like clockwork. And then in one day the market condition can change, and what worked so well for the past six months may not be working as well now. This should make your trading fingers pause. Put down the mouse.

The markets were steadily ranging for the past 4 months, and ranging markets are fabulous for Combo Trading. When the market changes gears and begins to trend, a couple things change for us. Obviously, the trending direction can go on for a long time, and our trend continuation setups have a lot of potential. Secondly, the retracements are fewer but more extreme.

I was comparing notes with Rob yesterday, and in the course of this discussion I made the point that it’s not the time to hold any losses at all. If I enter a trade and it does not move immediately in my direction, I want out. I don’t want to have risk on when the trends are beckoning. I had to laugh when his response was this. While it’s true that this is not the time to hold onto losses, it is a GREAT time to let some winners run. Duh! Why didn’t I think of that!

I’m naturally focused on not losing what I have. It’s part of my strategy for making money.  We are all excellent traders, the hard part is keeping what we earn in our accounts, right? Well, I do appreciate Rob pointing out the same is true going the other way, the winning way.

So this is a note to Self, and a note to you to keep in mind that the market has changed. When trends break out they can be huge, but the retracements can be huge too. Here is what that means for me this month. I am more cautious with entries. I want to enter my trades a little late rather than a little early. I want some proofs. Once I’m in the trade and have my stop safely set to break even, I will leave my profit targets open and see if I can capture some larger gains during the trending market phase.

Just a few thoughts as you’re planning for next week’s setups.

Enjoy the rest of the weekend. See you Monday.

Jennifer

Good Morning Trader Friends.

What’s on your trading-mind this morning? Are you watching price move around around your charts? Sometimes I feel like a cat perched on a windowsill watching birds flying around. How I wish I could just grab one! Are you reading up on economic reports, data reports, political actions, and global weather? If you’re part of the Combo Traders group I know you’re finding all sorts of tradeable space on your charts today. Yipeeee! Happy trading.

Today I’m thinking about money.

When I was little I remember visiting my grandparents, and if Grandpa wasn’t home, I knew Grandma would say, “Oh you know Grandpa, he’s down at the bank counting his pennies.” I heard that so many times, and I may never know what it meant. I don’t know if he was down there making deposits and carrying out daily banking chores, or if he enjoyed the outing, making conversations with the pretty bank tellers, or if he genuinely went down there to examine his balances, look in his safe deposit box, browse through his CDs and stock notes. My grandma said, every time he went down to the bank, he found a few more pennies. For some reason, almost 20 years after his death, I still think of him “counting his pennies.”

Today I’m thinking about money, and instead of trading, I’m counting my pips. I had an excellent run of trading the past six straight weeks, and I feel like saying to my children, “I’m counting my pips this week.” Of course they will be as confused as I was when Grandpa went to count his pennies.  The markets have shifted a little over the weekend. Some ranging pairs look like they might be starting new trends, or looking for new levels to range around. Market conditions change, and last week’s trade setups might not work as well this week. If you made some pips too, maybe take a moment with me this week to hang onto what you’ve got, and count your pips. It leaves you with a sense of accomplishment.

My grandpa was an accountant for Coca Cola, and besides making a real decent living, he made a fortune in his Coca Cola stock when he retired. He lived simply. He understood money in a way that people from my generation can’t quite get. He wasn’t Ebeneezer Scrooge, but sometimes I wish he had spent more of it on my grandma. Then again, I’m sure he’d roll over in his grave if he knew how much I spend on my kids’ creature comforts rather than packing it away in a bank.  Somewhere in between there are some excellent thoughts about money, and I’m trying to find those thoughts today.

Currency:  Has to do with flow, polarity, movement, person to person exchange, rumors, passing of time, runs from one place to another such as a river, widely accepted, belonging to a time that is passing, publicity,  most recent desired thing.

Money is like other things that have a current, water, electricity, wind, heat — seeking a path of least resistance, flowing where it’s needed.  We need it to flow in and and flow out to light our homes, nourish our bodies, clothe our children and pay for our homes. We want to save it up, but as soon as it stops flowing, it’s useless or even harmful. It sounds so calm and zenful to think money will just flow into my bank account and be available to flow out to pay for all the stuff I want and need. In reality you and I know it takes a thing we call “hard work” to fill up our bank accounts and the more we do it, the more money we have in the bank. (It works that way for you too, right?) There is a tug-of-war between “calmly attracting affluence” and the “sweat blood and tears” and 20 hours of overtime we put in to make the bigger paycheck; and since I can feel the tug, I feel compelled to think about the fact that two things exist. Maybe even they are both necessary. The East and the West — the path of least resistance where the grass just grows, water just flows, and affluence shows up; and the place where hardship produces unmatched character, unquestionable growth, creativity, invention, motivation and change. Wow.

Wow…

I kind of like that thought.

My life is like that. I trade for a living, and sometimes it’s as calm and “zenful” as owning a money tree:

It has not been an easy road. No one should ever tell you trading is easy. Trading is difficult, but we are not afraid of difficult. Difficult is the thing that made us stronger. It’s the thing our pop stars sing about (well besides singing about sex and physical hotness and how great your butt looks on the dance floor. Difficult is the thing that we congratulate our children for when they graduate from high school with sleep, anxiety and eating disorders, earning their academic honors and half their college credits by the time they’re 18, and that with varsity letters in two sports. Difficult is what gets people on the track to something better. Every difficult thing produced an opportunity for growth and greatness. I can’t say I regret the hardship in my life when I look at the life-muscle it produced. Granted we have a few extra gray hairs and other signs of tough times, but you might agree those character-building experiences certainly had a role in our lives.

I spent the day thinking about money, about how it flows, and about that road to Hard Work we are required to travel every now and then.

Most of the time I think about trading, and I look for more setups and find opportunities in my charts every week. This week I’m taking a moment to count my pips. I feel grateful to have them transporting dollars into my account; I feel grateful to share great ideas with you, my online trading friends, and I feel grateful that the things which are difficult didn’t scare me away as I grew and became a successful productive trader.

I hope you have a wonderful week. Take a moment to count your pips, or count your pennies. Flirt with the bank teller, spread some cheer to the workers you see, flash a smile to box-boy at the grocery store. What goes around comes around.

Jennifer

Hello Trader Friends,

Here is a common trading conundrum…

GBP/CAD:  I had taken this trade and stopped out at break even several times in the yellow shaded area. I took off for the day, but kept an eye on my open position (from my phone) so I could move to break even, yet again. I did that, but went ahead and closed with only +20 pips. I made the decision to close my trade early because I already had several stop outs at break even, and I just wanted to bank something. As you can see the trade went all the way to target, 100+ pips away. Had I left my stop at break even this last time, I would have captured much more, but it was worth it to me to take 20 pips this time to ensure I got something for my time. After all, it was my choice to take the day off and I made a decision that put money in my account. Had it gone back to break even, I would have felt smart! Since it went to the 100 pip target without me, I still feel smart.

Make a plan, make a call, and stick to it. That’s real life trading!

I hope you got a piece of this move too.

Why do people lose money trading? There are only two ways the trade can go, for you or against you. All of the trading systems and fundamentals in the world amount to hundreds of thousands of dollars in training and education, and when it comes right down to it, it’s a 50/50 chance that your trade could win or lose.

I’ve heard it said that for all the people who set out to be retail traders, trading from their home computers, smart phones, and iPads, there is only a 3% rate of success. When the odds are 50%, why is the payout only 3%? Honestly, I could have become a professional poker player and had a better statistic for the past 11 years I have been on this venture.

Two thoughts come to mind – what is success, and how do we mess up the odds?

I want to share with you, because we’re all in this together. Traders are the most interesting group of people I have ever met, and I’m proud to spend my time in circles of people who are generally characterized by traits such as:

Honesty – The markets flush out phonies pretty quick. If you can’t honestly repeat your trade setup, you won’t be able to stack up a profit in your account over time.
Desire to be self-sufficient – Most traders would rather make a million dollars trading than buy a million dollar lottery ticket. There is a lot of satisfaction in creating our own wealth.
Hard working, long suffering, and patient – How many hours can you stare at a line on a chart? How many times did you go back to your phone or your computer to look at it again today? And do you get up in the middle of the night to pee, or do you get up to look at a line on a chart? (You know who you are!)
Smarts and hearts – In high school I had an English teacher (who was also my tennis coach) tell me that the average person only uses 2% of their brain, and if we gave it just a little more effort we could produce more amazing works in less time. We believed her, and we all produced essays, dialogues, poetry, and short stories for her to read. She told me later, with a chuckle, she was just trying to get some more interesting essays to read, and it worked. On the court she said we could either bend our knees and have faster feet, or we could just “decide” we were going to win. She was big lady who didn’t “look” like she should be a great tennis player, but no one on the high school team (boys or girls) could beat her. Was she on to some untapped brain power?  I was prime for her manipulation and spent the rest of my life believing that I was capable of accomplishing great things. I recently tried to validate that statistic and could not, but I still believe there is some truth to the notion we have untapped potential. Some take a spiritual approach to this idea, and some more scientific, (like this cool blog I just stumbled upon, http://www.scientificamerican.com/article.cfm?id=do-we-really-use-only-10). Inspiration makes things happen. Is it heart or is it mind? I do not know, but it’s available to you and me.

I’ve also heard that most people only use 2% of their computer’s functionality. If that’s true, imagine what we could do with untapped potential in our brains and our computers, two things we use all day long as traders! That inspires me to think some new thoughts right now, and do something cool on my new  17 inch HP Envy! (I just justified killing an hour on my new toy!)

My favorite “smart people” are average people. I have been in trading circles with, (and I’m not kidding), brain surgeons, rocket scientists, mathematicians, and “moms” who never earned a college degree. How cool to be part of something so remarkable where all the brains have the same opportunity and ablity to figure out a trade and make some money.

Before I get totally off track, let me come back around and tell you about the question that I think can ruin your odds of being a successful trader. The answer is “I’m not going to tell you because it will damage your trading mind.” What is the question?

Everyone wants to know how much money someone else is making trading. Having lived through quite a few trading experiences both good and bad, both huge and tiny, both regimented and free-style… My experience tells me that the more important question is what is your trading plan and can you stick to it? Know what you’re setting out to do when you answer that question and you will be able to accomplish your trading goals. At the end of the day your brains are bigger, your bucks are bigger, and your sense of satisfaction is full. That’s my idea of success. If I set out to make 30 pips, and I take profit at 30 pips, I followed my plan and I don’t feel bad that it went to 50. One time I set out to make 500 pips, I made 794 pips, and felt like a loser because I didn’t hold it when it ran over 900 pips. That’s how you mess up your odds! Why? Because the next time you try to make that happen, you end up losing 500 pips. That’s the truth.

If you ask me what my biggest trade was the answer is 794 pips.
It was worth about $800. I cannot repeat it. It has no meaning to me.

My smallest trade ever was 3 pips.
It was worth about $1000. I could and did repeat it over and over, and it nearly ruined my life.

My greatest trade ever is worth 30 pips.
It’s worth about 1.71% of my account. I can and do repeat it many times every month. I can project my account growth and I will close this trading account and set it aside for retirement when I turn 50. (6 years). I don’t wish it was better. It’s perfect for me, and every day I know exactly what to do.

What’s your trading plan? Are you finding success? If not, try writing out exactly what you’re trying to accomplish, and see what happens when you just go with what comes naturally for you. Last night I watched a movie called Gifted Hands, based on a true story about a neurosurgeon named Ben Carson. It’s a story about unwarranted and unexpected success in the academic life of a man who was inspired by his impoverished and illiterate mother.  She had no physical reason to believe, but believe she did that  great things were possible and came from inexplicable places.

I hope you’re having a great year, and that all your trading plans are keeping you on track. Be calm. Be great. Have a wonderful day!

Good morning Trader Friends,

Here is a GBP/USD chart. Not that impressive, but I do see 30 pips waiting for me on the outskirts, up or down.

Hello Yo’s! Well, Rob, I guess we were both right. My move went all the way to target. I happily took 64 pips out of a range of about 120. Your target was 1.5900, and it went just a bit farther than that. I think it will fall a bit more tonight, based on these indicators, but I’m done trading the setup for now. See you on the next setup!

I like a sell trade at 1.5990 – below the cloud, stop above 1.6060, target at least at 1.5900:

(in response to Jennifer’s post this morning)

Good morning Trader Friends,

I have a trade setup to share with you. The first chart is a pivot setup, I know you will recognize.

This is an old setup I learned from Rob Booker, called a Monday Accelerator. I always look for a setup on Monday morning where price is distant from the new weekly pivot point (in green). The idea is that price tends to accelerate back to that level early in the week.

The GBP/USD is also setting up a short Combo Trade for me. It looks like this:

1. A move above the recent high and I will be interested in a buy for 30 pips.
2. I notice there is bearish divergence with price and the indicators. I am interested in selling to the first Combo Line (50 sma), and again if price breaks below that level to the second Combo Line (100 sma).
3. I always move my stop to break even at +15 to +20 pips. My intention is to be in a trade that is ready to move, not to hold on for a long time.
4. My profit target is usually +30 to +50 pips.

Have a great day!

A short-term view of the USD/CAD. I know some of you appreciate a “quickie” every once in a while.

I like a buy trade only if the pair jumps above .9975, and I don’t even much care for it then. I’d rather sell. Here’s how and why.

I like a sell trade if we rise up to the .9950 area and then turn. Jennifer likes to draw green circles on her charts, so I’ve done that here – and that’s the space I’m watching. Aggressive short term traders might take a short-term buy trade in that space, and exit when the bottom of the dark cloud is touched.

Touch the bottom of the dark cloud, USD/CAD. You know you want to!