Afshin Taychian today one of the most popular world-recognized expert and lecturer on all aspects of trade. He is the founder of the company «Traders International» and developer of trading methodology for trading the S & P 500, NASDAQ and DOW E-mini, which was the highest ranking line TIMES. He spent many years studying advanced technical analysis, and effectively used his extensive knowledge and experience to develop methodologies that are unique and have been popular among the professionals trade.
Today, there are a sufficient number of highly liquid and highly volatile markets, which represent a «gold vein» for short-term traders.
For short-term or intra-day trade, the discovery of the correct marketing tool is essential. These tools can be clearly attributed to the stock indices futures E-mini and currency instruments, which have become very popular over the past few years, because it has some valuable features, which have no other markets.
In order to enumerate all the advantages of trading in these markets would require a very long time, but some of them I still enumerate:
• Unique combination of high volatility, high liquidity and high credit leverage;
• the opportunity to trade with 100% of th e execution of orders, eliminating the need to exchange room or stock broker to attract the hall;
• minimal slippage;
• Small spreads;
• equal opportunity to open a short or long positions;
• absolutely no requirement to do market research;
• a much easier implementation of transactions than for other instruments;
• very low or no fees;
• Significant short-term tax benefits;
• the possibility of hedging;
• And most importantly, these markets are, and always will be, absolutely fair. No corruption, no manipulation, no insider information (compared with the shares of individual companies).
Methods and systems
Any of these benefits could have a significant impact on your results. Your success is a direct result of your choice in the trade market, and your choice of trade.
What about the method of trading? Does this matter? Are you sure you yes! The method of trade must comply with your trading style, as well as your personal identity. If you do not have the patience and discipline, you will need a mechanical method, but not at 100%.
Before we discuss what needs to be a trader, let's give a couple of minutes to discuss what the trader does not need. In recent years, a trend from extremely complex to very simple methods - from one extreme to another. The truth is that no one method does not work perfectly.
Complexity leads to fatigue, fatigue to the disorder, and disorder to failure. Using a complex approach, you will always find at least one element that is not consistent with the overall picture and you have to make any assumptions. Most people are not the supercomputers and sophisticated techniques, involving multiple charts and indicators are not working well for them.
Some go the other way in search of «The Holy Grail chalice» - buy magic program that should turn their computer into the car to make money, which will make decisions about buying and selling for them, because they no longer have the confidence to make decisions for themselves. They are held responsible for its financial future on a computer that does not even know when to speak Greenspan. Of course, this is not realistic. Success can not be bought. It should be work, and require accountability and scrutiny. Remember this.
Commercial software can not be effective a long time, because they were programmed based on past market data. The fact is that the driving forces of the market is always changing, and the program is unable to admit it. But when you know how to be flexible to dynamic changes in the market, you can very well monitor their transactions.
But what about the trade practices? Have you heard the phrase, «if you want something done properly, then do it yourself». This expression is doubly true for a trader. Success in trade is nothing like the discovery of a market that offers the greatest sequence of long periods of time because, let's recognize it, you'll want to make money as long as possible. We are again talking about «cup of the Holy Grail»? Absolutely nothing! Building a reliable method means that you - the star, not your computer. You completely control your transaction and are responsible for their financial future. Now we come to the really important question - «Is there a methodology available that works?»
To date, we hope that you know that the complexity does not mean return, so let's talk about the simple approach. Combining these simple techniques with the advantages of some of the market should provide us with a positive result.
For example, take the market S & P 500. The average price movement of market S & P 500 E-mini is about 25 points a day, and each item is $ 50 per contract. You can trade as many contracts as far as your account and your risk management rules. If you are five contracts traded in one transaction, for example, and have just two points, it will be $ 500 a day. Of course, to be fair, one should notice that you can lose the same amount if the market goes against you. Everything is how you manage risk and potential for use in the course of his trade.
Look at the schedule for one minute S & P 500, and you'll notice that most of the time, the index moved up and down, at least at two points or more every 5 - 20 minutes. When you aim to arrive in two points of entry points, you have a very high probability of achieving the goal.
To increase their chances, avoid excess of the trade regime and filter the «market noise». You can take a simple yet powerful method of trading, which organically combines similar levels of stop-orders, a very precise trade signals, and normal approaches to managing money to achieve excellent results Trade. Stop for a method should not be more than two points, but you should be winning more deals than Losing in accordance with this method.
To determine the buying and selling signals, I use Stochastics and Moving averages of certain parameters on the one minute chart. Setting is very important for the accuracy of the signals when they confirm a certain price movement. These two indicators are based on different formulas and look at the market from different angles. Whenever they both confirm some movement, this implies a deal with a high potential.
The most traditional methods of trade using multiple schedules with different time scales. 1 -, 5 -, 10 -, 15-and 30-minute charts are expected to provide us with high reliability and accuracy when these graphs confirm a price move. The biggest drawback of these methods, generally, is that they miss many opportunities.
For example, if we have a full movement of four points in one minute schedule, we can enter into this movement and make a few points rather easily. But if we want to wait, when the five-minute schedule, etc. show proof, then the movement has already finished! Even if we use a five-minute schedule, 90% of our signals will not be confirmed.
With multiple time formats we skip a lot of opportunities to catch a little movement in a few paragraphs, which could mean substantial profits, depending on the size of the position and number of transactions. A separate one minute candle schedule and correctly configured to combine the two indicators will enable you to make quick bargain.
But what about the definition of the market direction over the next five minutes or something like that? What if we use the enormous power of modern technical analysis and allow the natural tendency of the market to tell us how far the market will go in this direction?
Most traders follow the same school in their trade. Some methods used to recognize image patterns and waiting for the formation of high models. Other traders use technical analysis to predict the next price movement. Still others use astrology, news, and lots of other ways to get «answer».
We found that the combination of the legendary models of «likely» to a simple, yet reliable technical analysis is the single most accurate way to determine the entry points into the market.
At highly volatile and highly liquid markets, this is an excellent approach to trade. Does this mean that we can expect in our dealings only small gains in the two paragraphs? With this approach, it is possible to accurately detect the long, strong trends at their very early stage and traded in their direction. You also can trade against the main trend or sideways market.
Trade as a business
Trade like the majority of other types of businesses. According to statistics, 90% of newly businesses fail within the first year or two. There are three main reasons for this. First - this nedokapitalizatsiya, the second - lack of a reliable business plan, and the third - poor management. Any of these three factors can lead to business failure, but nevertheless, there are many people who try to carry out his dream to own their own business.
Interesting, but the same is true of the statistics of trade. Trader may fail due to lack of one or more of these same elements (ie, being nedokapitalizirovannym, not having a reliable method of trade, or by poor management of money), add here two more - the lack of discipline and control to properly implement the terms of trade .
With today's technology, it is much easier than ever before, follow the proper steps in order to grow and develop trade and implement this plan, not just risking capital to make sure that the method and the plan worked well.
After the lining of the method and adapt it to your personal and financial status, you can check it on a virtual account to see how viable your method of trading, while not risking real money. This testing should demonstrate that your business plan is normal. I always convince newcomers to achieve 15 consecutive days of successful trading, before they start trading real money. As most traders will confirm that it is almost impossible without a very powerful and accurate method of trade, plus good personal skills of its execution.
The next step (assuming that the trader has sufficient capital), is good governance (or execution) of the plan. This step is probably the biggest challenge because it involves the deployment of real capital in their transactions. We believe that the best way to make a smooth transition from simulation to the stage of «real thing» is to sell a small amount of money. The smallest amount of money being at risk will reduce the impact of human factors (emotions) in trade. Later there will be time for fear, greed and insecurity.
Once you've proven to myself that the method worked with the trade on a virtual account, you have successfully used to trade for small money, you are ready to negotiate this delicate business, as your confidence grows and your skills sharpened. Patience, discipline and concentration make it possible to control the situation, and the trader becomes a fearless warrior with an arsenal of weapons invincible to trade.
The next logical step would be to increase the volume of trade by increasing the size of the positions. Now, a trader can enjoy the fruits of their efforts - the award comes not only in financial terms. Need work, study and responsibility in the beginning to get to a positive working stages, but it's worth the effort.
Afshin Taychian
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