If you trade by the rules you will make money. But those rules came out of years of hard learned experience.tommiho wrote:Why not to trade by the rules? The rules are there to not to let the market beat crap out of you!This whole tread is about learning people how to trade by the rules and by following them to trade successfully with steady wins small looses and draw dawns.
And re Bob`s trading, he mentioned more than few times that sometimes his trading is not exactly by the book (the JPY selling is another well known story), If I had his EXPERIENCE I would do the same. I don't have it ergo I am following rules that are designed to protect.
90% of the time I am trading by those rules. However, every several years a Macro-economic trend happens. I used to get killed by these things, The guy I really learned Forex trading from (Peter Bain) was a pivot/trendline indicator guy. He was always bullish USD. Well, during the Bush administration it was sell the dollar. Just look at a monthly chart and you will see what I mean. Because of that I gave up on his system but his teachings were part of me and a lot of 10.4. trendline is the 240 line and I use weekly pivots instead of daily pivots. That is where that stuff came from. The one thing I did not learn from him and took me years and years to learn was knowing macro-economics. I had to learn currency exchange and how they interact in business when I started a school here in China. When I figure tuition I have to figure the exchange rates or i can lose a lot of money quickly.
Then OCT. 2008 hit and I learned about my first Macro-economic event. I finally began to understand that Forex is driven by what happens out there. Once again I lost money but i also saw there were people out there who knew this was coming and the made millions/billions on the market. Was this some big secret?? I finally figured out that the Forex writers were full of ..................... sorry Steve. They didnt know and were wrong way too much. But it bugged me how the big guys knew. The first thing I threw out were the conspiracy guys. I was lucky enough to come across John Maudin and I entered the world of economic investors who trade by Macro-fundamentals. For the first time I began to understand what drives the markets. The USD 8 year Bush drop was no surprise to them. OCT. 2008 and its aftermath they nailed that one too. They were really close on what was going to happen next. It is no big mystery or secret. You have to understand the difference between a macro economic issue and the regular day by day stuff. Well way before it ever hit the news he began to talk about the fundamentally flawed Euro as it stood. (This was back when people were predicting the Euro was the next world currency and would replace the dollar.) There was no way that was gong to happen in fact he stated that over the next 5 years the Euro would hit a crossroads and would be in danger of disintegrating if certain structural problems were not dealt with. I said OK. Boy did I get mocked over at FF when I repeated the Euro would not replace the dollar. But it happened. 2011 came, Greece hit the news just as John predicted and the Euro dropped like a rock. I did make money but I missed most of the move because the big boys would scare me off like JPY is scaring many of you off now. He walked me through that whole thing (He is not even a Forex trader but will invest in currencies from time to time). When that one finished up in fact before that one was finished he began to lay out the problem of Japan. He called a bug looking for a windshield. When Abe became the front runner last fall and won, I was ready to listen to this guy and many others like him. JPY is going to depreciate and the big boys know it. However, they need buyers, so they can sell. And they got a bunch on the hook right now. Yeah Dragon Head caught me by surprise last week but I trade in such a way that no one can blow me out of my account anymore.
For some of you this is your first experience in seeing a Macro fundamental move. Learn all you can because next time you will know enough to retire. Watch how the big boys maneuver the market for a big kill when everyone is going one way. Then watch them maneuver the market to get everyone going the wrong way so they can clean up again. They needed buyers so they could sell, well they have plenty of people buying the JPY now. There is one thing the big boys cant do though. They cant change the Macro fundamental that is moving the market long term. For us that is the 240 line the vast majority of time but in this case, they want the JPY move all to themselves. Well sorry big boys I am riding with you on this one until the macro fundamental changes I am into each wave.
