Learning

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Digging deep as a trader

As the 2017 markets continue to reach new highs & settle into tight ranges, making progress can seem like a long & challenging road for a lot of traders. This is where the importance of patience, discipline & confidence really play a fundamental role in progress as a trader.

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Thanks again for listening to the show! If it has helped you in any way then please feel free to share it.

Additionally, reviews for the podcast on iTunes are extremely helpful and greatly appreciated! They do matter in the rankings of the show and I read each and every one of them.

And lastly, if you have any trading related questions, please email me at damon@piptastic.com – this show has over 66,600 downloads and counting so the answer to your question could be the difference to a fellow trader!

 

We’re always told to set goals & told about the importance of goalsetting but what if this concept is now outdated? What if “bucket lists” are now a more modern approach to a goals mindset?

Right click here & “save as” to download this episode to your computer

THANKS FOR LISTENING!

Don’t forget to subscribe to the show on iTunes to get automatic updates.

Thanks again for listening to the show! If it has helped you in any way then please feel free to share it.

Additionally, reviews for the podcast on iTunes are extremely helpful and greatly appreciated! They do matter in the rankings of the show and I read each and every one of them.

And lastly, if you have any trading related questions, please email me at damon@piptastic.com – this show has over 66,400 downloads and counting so the answer to your question could be the difference to a fellow trader!

 

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Sometimes in trading we are trapped by the apparent wisdom of specifics & definite situations. However the reality is that most situations in trading require flexibility in its approach to ensure long term success & profitability.

 

Right click here & “save as” to download this episode to your computer

THANKS FOR LISTENING!

Don’t forget to subscribe to the show on iTunes to get automatic updates.

Thanks again for listening to the show! If it has helped you in any way then please feel free to share it.

Additionally, reviews for the podcast on iTunes are extremely helpful and greatly appreciated! They do matter in the rankings of the show and I read each and every one of them.

And lastly, if you have any trading related questions, please email me at damon@piptastic.com – this show has over 61,000 downloads and counting so the answer to your question could be the difference to a fellow trader!

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Today I’m answering questions sent in from listeners which hopefully will provide some inspirational insight for aspiring traders. these questions are;

  • How did you get the idea to become a Pro Trader?
  • Did I have a trainer or mentor?
  • How did I come up with the 5,18 & 62 indicator?
  • Did I develop methods with trial & error or modify existing methods?
  • Do you need to have financial challenges in order to develop the desire to succeed in trading?
  • What is your favourite trade ever?
  • What is your worst trade ever?
  • Do you ever scan other markets in the event of your main ones ranging?

Mentioned in todays Podcast

NEW! Instagram Page here

Become a Piptastic Member here

Piptastic Facebook Page for exclusive content, “like” our page at www.Facebook.com/piptastictrading including screenshots & explanations of trades I’ve taken

Check out & Subscribe to the Piptastic Youtube Channel here

Add me on Snapchat for daily trading tips: damonelliott1

Damon Elliott uses ETX Capital as his trading platform. Click here to join ETX Capital

Right click here & “save as” to download this episode to your computer

THANKS FOR LISTENING!

Don’t forget to subscribe to the show on iTunes to get automatic updates.

Thanks again for listening to the show! If it has helped you in any way then please feel free to share it.

Additionally, reviews for the podcast on iTunes are extremely helpful and greatly appreciated! They do matter in the rankings of the show and I read each and every one of them.

And lastly, if you have any trading related questions, please email me at damon@piptastic.com – this show has over 52,400 downloads and counting so the answer to your question could be the difference to a fellow trader!

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Trying to move forward in your trading from a small account can be one of the most frustrating challenges most people have in trading. It’s almost a case of 1 step forward, 2 steps back for many & then succumb to the ideology that trading simply isn’t for them. What if a change of mindset or a clear sense of direction could help move forward from trading a small account into something worthy of achieving your goals?

Listen to todays podcast as I discuss how to use a small account to your advantage & how you can progress to achieving your ambitions in trading.

Mentioned in todays Podcast

NEW! Instagram Page here

Become a Piptastic Member here

Piptastic Facebook Page for exclusive content, “like” our page at www.Facebook.com/piptastictrading including screenshots & explanations of trades I’ve taken

Check out & Subscribe to the Piptastic Youtube Channel here

Add me on Snapchat for daily trading tips: damonelliott1

Damon Elliott uses ETX Capital as his trading platform. Click here to join ETX Capital

Right click here & “save as” to download this episode to your computer

THANKS FOR LISTENING!

Don’t forget to subscribe to the show on iTunes to get automatic updates.

Thanks again for listening to the show! If it has helped you in any way then please feel free to share it.

Additionally, reviews for the podcast on iTunes are extremely helpful and greatly appreciated! They do matter in the rankings of the show and I read each and every one of them.

And lastly, if you have any trading related questions, please email me at damon@piptastic.com – this show has over 50,500 downloads and counting so the answer to your question could be the difference to a fellow trader!

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In previous articles I have been discussing an introduction to price action trading or as I call it; Buyers v Sellers/ Sellers v Buyers & in this video I wanted to share with you a walkthrough of a easy example & how to read a more challenging example.

The overall aim with this is to ensure you are able to read who is in control of the market at any given time ensuring you stay on the right side of the market to prevent any unnecessary losses but also develop your confidence in taking trades that are with the trend.

Before watching please ensure you read the following articles so your understanding is clearer;

Part 1: How Well do you Read the Market?

Part 2: How Well do you Read the Market?

Onto the video;

Hope thats useful!

Damon

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We often discuss the importance of patience & discipline within trading however there is a 3rd component which is often overlooked yet very important as it makes up the all important “Traders Triangle”. The traders triangle consists of patience, discipline & confidence- remove one of these elements & long term, consistent trading success becomes very difficult.

Listen to todays episode as I discuss this 3rd & important part.

Mentioned in todays Podcast

NEW! Instagram Page here

Become a Piptastic Member here

Piptastic Facebook Page for exclusive content, “like” our page at www.Facebook.com/piptastictrading including screenshots & explanations of trades I’ve taken

Check out & Subscribe to the Piptastic Youtube Channel here

Add me on Snapchat for daily trading tips: damonelliott1

Damon Elliott uses ETX Capital as his trading platform. Click here to join ETX Capital

Right click here & “save as” to download this episode to your computer

THANKS FOR LISTENING!

Don’t forget to subscribe to the show on iTunes to get automatic updates.

Thanks again for listening to the show! If it has helped you in any way then please feel free to share it.

Additionally, reviews for the podcast on iTunes are extremely helpful and greatly appreciated! They do matter in the rankings of the show and I read each and every one of them.

And lastly, if you have any trading related questions, please email me at damon@piptastic.com – this show has over 50,000 downloads and counting so the answer to your question could be the difference to a fellow trader!

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Ready for some live examples/ walkthroughs?

Cool. If by chance you have landed on this page first please ensure you read Part 1 of this Trading tip before carrying on otherwise it may not make any sense.

Ok, so lets take a look at a couple of markets from today (24th March 2016)

First up is GBPUSD on the 5min timeframe;

In this screenshot what I’m indicating using the arrow is the last dominant selling candle in the initial downward trend;

Trade Tip 24032016i

What happens next is that a large green candle forms challenging the sellers;

Trade Tip 24032016j

However, take note in the following screenshot that at no point do the buyers overcome the last dominant selling candle (arrowed)

Trade Tip 24032016k

So, at this point you would know that sellers still have control of the market & should be avoiding any buy trades. What happens next is that the sellers take back the initiative thus creating sell trade entries;

Trade Tip 24032016l

As price moves downwards we now have more dominant selling candles forming. I’ve arrowed the next one that has formed below & also notice how the buyers try to overcome it with the spike upwards;

Trade Tip 24032016m

Let’s fast forward a bit to the point where the buyers do indeed overcome the last dominant selling candle;

Trade Tip 24032016n

Note the green candle as indicated by the red arrow has not only over come the last dominant selling candle (black arrow) but has also closed beyond it. This would indicate that buyers are about to take control of the market.

The next questions that spring to mind are where is entries, stops etc etc however in this article I want to cover off the basics & in Part 3 I’ll cover off the entries, exits & specifics.

Note in this next screenshot that the sellers try to take back control pretty much straight away but fail;

Trade Tip 24032016o

After this you will notice that the buyers have full control of the market & sure enough, up it moves.

That was a pretty easy market to read but what about the Dax which was a little bit more erratic? Lets have a look.

Ok, so in the next screenshot I have indicated the last dominant selling candle & you will notice the next arrowed green candle is the buyers trying to take control but failing;

Trade Tip 24032016p

Following this you would be looking for sell entries & raking in the pips. (Thats the idea anyway!)

As the market moves downward then as normal, fresh dominant candles start forming. In the next screenshot we have a great example of where people can potentially get caught out;

Trade Tip 24032016q

The first arrow is the last dominant selling candle followed by arrow 2 which is the buyers starting to make their move & the third candle is the one which actually breaches & closes beyond the last dominant selling candle. You would assume that buyers now have control however remember they only potentially have control & in this example the third candle has no further follow through suggesting the buyers have exhausted themselves. The candle that breaks & closes beyond the last dominant candle must itself have further movement beyond its highest point in order to confirm control of the market as per the GBPUSD example.

In the next screenshot we see the sellers take back control & also overcoming the last dominant buying candle giving a very nice sell entry;

Trade Tip 24032016r

The market then drops nicely & again, starts to form fresh dominant selling candles. In the next example we see yet again, the buyers trying to work their way back into control;

Trade Tip 24032016s

Yet again, even though the buyers manages to break & close beyond the last dominant candle, there is no follow through beyond the high of this candle therefore suggesting a weakness in the buyers. They are trying, bless them, but no one is picking up the gauntlet!

And yet again, fresh dominant candles are formed & again the buyers are trying to get a foothold into the market;

Trade Tip 24032016t

As mentioned before, these are all areas where traders get fooled into reversal trades thinking they can get an ultra early entry into a massive reversal. However by understanding the buyers vs sellers (& vice versa) you can prevent yourself getting trapped in these moves.

Lastly, you can see good solid sell entries where the sellers once again overcome any dominant buying candles;

Trade Tip 24032016u

Now, all of this is magnifico, however spotting dominant candles can be subjective however watching these moves play out will go a very long way in identifying them. There is no right or wrong answer in what is or isn’t a dominant candle however a good starting point is looking for decent, healthy solid candles.

In part 3 I’ll be showing you entries & examples of stop levels.

Hope thats useful!

Damon

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Greetings fellow Traders!

Are you an active participant in your trading or a passive bystander?

Maybe you just “wing it”?

Maybe, you just really don’t have a “scooby doo” (clue) on what to look for or when?

This last one is very common by the way so don’t panic!

One thing we are always told in trading is that the trend is your friend but in the real world how many traders actually rebel against this & try to enter counter trend moves only to get caught in trend continuations? Thats just human nature, I’m afraid but a great starting place is my previous trading tip here.

Today I want to share with you how I stay on the right side of the market pretty much most of the time & this will also serve as a great introduction to price action for those unfamiliar with it currently.

See, in daytrading we have to be not only smart but also be able to interpret the current price movements because our margin for error is a lot less than those on the higher timeframes. Thats why we often refer to daytrading as a skill & should be developed as such.

What I’m going to show you now is what I call “Buyers vs Sellers” or “Sellers vs Buyers” depending on which direction the market is moving in.

When you think of the price action in this way you can start to see there is a kind of battle occurring on your screens. A battle for control of the market direction. Once you understand this logic you too can stay on the right side of the moves.

Firstly, lets take a look at some “perfect” examples;

Note- I’m using Green for Buy candles & Red for Sell Candles

Trade Tip 24032016a

Above is an example of Buyers overcoming Sellers. The things to note here i that the buyers (green candle) have closed above the previous red candle.

The next important step is that it must have overcome the last dominant candle of the opposite candle not just any candle. A dominant candle is normally larger than those around it & is usually a healthy, full bodied candle. In this next example you’ll see that the buyers have overcome the previous sellers but it isn’t a dominant candle;

Trade Tip 24032016b

 

In this example above the first red candle would have been the last dominant selling candle which is the one that needs to be overcome to show that buyers have control of the market.

Trade Tip 24032016c

Note here that the green candle has overcome the previous dominant candle. Please understand that the candle must close above & beyond the last dominant candle in order to be classed as taking control of the market, unlike this next example;

Trade Tip 24032016d

This would be a failed attempt by buyers to take control of the market.

Before we analyse some live markets from today lets look at some other examples;

Trade Tip 24032016e

This above, would be an example of sellers overcoming the last dominant buying candle. Whereas in the example below, the sellers have not overcome the last dominant candle.

Trade Tip 24032016f

In this next example we see the sellers have overcome the last dominant buying candle;

Trade Tip 24032016g

Whereas this is a failed attempt to overcome them;

Trade Tip 24032016h

Ready for some live examples?

Click here for Part 2.

Damon

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There are a few things which are very frustrating for day traders, more so for inexperienced eyes with the top two easily being;

  • Market is already moving pre-open leaving very little area to get into a solid trade once 8am strikes
  • Watching the reversal commence & then sitting there doing nothing whilst a full blown reversal takes place

Typically once either one or both of these events occur the market then settles into its mid morning borefest & you are left wondering what might have been.

Sound familiar?

Don’t panic, I think we have all been there & its only when you get absolutely hacked off with missing these moves that you are truly driven to do something about it.

As a general guide I very rarely will be sat at the PC’s at 8am looking for a trade but instead let the initial few minutes play out first before settling into my trade session. This is where understanding reversals & to a degree, price action will serve you well because even if, like me you sometimes miss the first move of the day then it really doesn’t matter as there is often a continuation point or a reversal.

Today we have a great example of both which hopefully I will explain clearly.

This morning we already had some pre open movement with the Dax dropping nearly 100pts. (Note: when I speak of pre market open I’m specifically referring to the point prior to when the spreads change to their minimum levels i.e 8am GMT).

Trade Tip 22032016a

One of the great ways of getting into a moving market after the open is to drop down a timeframe of two. One of my favourite timeframes other than the 5min is the 2min as you’ll often pick up good entries with smaller stops that you won’t always see on the 5min due to the speed in which price is moving.

In this next screenshot, this is my trade from this morning via the 2min timeframe. I took this trade on my IG account as my ETX platform was a little slow in getting into this morning (Tip – always have a back up platform)

Trade Tip 22032016c

A couple of things to note here;

  • The rejection off the middle ema. This usually means the trend is holding & provides a very reliable push off point
  • Entry point is where the previous reversal took place as this was being taken out
  • Good solid stop area where price had been rejected off the middle ema

Tip: With early session moves look for where price has been rejected off support or resistance. The earlier these occur in a trend the stronger they are.

But what if you missed all of this?

Next up comes the reversal. This happens a lot more than most realise & also is a real thorn in the side for many due to being scared of getting caught in a false move before the trend resumes. In this next part I’ll show you exactly what I do to get myself into the move with the lowest risk possible.

Before we break it down, heres the reversal area;

Trade Tip 22032016d

And here;s the trade;

Trade Tip 22032016f

 

In order to trade reversals I’m counting on one major thing which is price to have broken back over the 5ema in the opposite direction. (Point 1 in screenshot below)

Trade Tip 22032016e

Now, once price has broken back over my 5ema like above then I know that there is a potential reversal about to kick in. If price does not break the 5ema then a trend continuation is likely.

At this stage you could literally enter the trade however the stop would need to be at the very low of where price had reached & this would be about 54pts which is unacceptable in day trading. Therefore I’m looking for an entry with a much smaller stop size yet allows me to get into the move.

This is where knowledge of price action kicks in. Also, this is what separates those that claim to watch the markets versus those that truly study the market movements. There is a big difference.

Allow me to explain.

Most people in trading are taught to look out for the upper wicks in a upward trend or a lower wick in a down trend. Normally this is due to these wicks providing trigger points for trade entries however most forget that there is an equally important wick at the other end & this wick provides huge clues of the current price action & also provides amazingly low risk entries.

Using the screenshot above here are my observations prior to entering a trade;

  • Price has broken back above the 5ema
  • The buyers (green candle) have also overcome the last dominant batch of sellers (red candle)
  • At this point stop is too big so I’m waiting

Take note of this candle;

Trade Tip 22032016b

During this 5min session the price drops lower where the first bach of buyers “bottle it” & some profit taking occurs. This creates the lower wick.

Once price starts moving upwards again it leaves behind this lower wick. The entry I’m looking for is once the price turns green after leaving behind this lower wick. This is price action trading as you are reading what the market is trying to do.

Notice how the lower wick provides a much reduced risk level for a buy trade where the sellers have already failed to force their way back into the market. Please note that very occasionally price will drop again so you either (like me) allow a couple of extra pips on the stop or you simply close the trade out. Also generally the later into the candle session the trend resumption occurs the better.

Also, it is worth noting that a lot of the time you will be entering the trade on an active candle as opposed to  a closed one.

Let’s take a look at the rest of the upward move;

Trade Tip 22032016g

Notice all these lower wicks providing amazingly low risk entries. Ideally you are waiting for a candle which follows a previous trend candle i.e in this upward trend let one green candle form then look for the price action entry on the next one.

Using this style of trading will not only allow you to get into some decent moves but also keep the risk levels very low (provided you close out losses where you should!!).

Hope thats useful!

Damon

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