Thursday, May 28, 2015

What trading is really all about...

I found this on the internet, really nice reading, enjoy:

The Kirk Report
Trading is not about control. It is about going with the flow. Trading is not about knowing the future. It is about allowing the future to take place. Trading is observation, pure and experiential. Thinking isn’t necessary and just gets in the way. Trading is the glass half empty and the glass half full, alternating without rhyme or reason by the minute. Trading is total ruin and absolute reward; dual demons that lurk around ever corner. Trading is an alluring distraction from life or a life raft on the stormy search for self. Trading is strangers offering up their most precious ideas. Trading is the clueless trying to offer ideas to their friends. Trading is your best friend who steals your spouse and your house. Trading can send us to hell or to paradise, but it always takes us somewhere we have never been. Trading is a blessing whose rules, if ignored, become a curse. Trading is taking a knife to a gunfight. Knives and guns leave traces of blood, but the logic of the market is the weapon that manages to destroy without leaving clues. The mountain of trading is in the mind as the lake is level. Trading is more about knowing when not to trade than it is about trading. Trading seeks equilibrium. Trading is learning a never ending balancing act on a tight wire above a movable abyss. Trading is timing. Waiting is painful. Pain brings wisdom. Wisdom brings balance. Trading can be excruciatingly exciting when done wrong and tauntingly tedious when done right. – 
Jeff Cooper

Sunday, May 17, 2015

Challenge update: Stage 4 complete


Stage 4 has been completed on Friday and now we're moving on to Stage 5 from Monday.

In just 3 and a half months I've taken a US$ 10,000 account to US$ 30,000 - next target: US$ 50,000.00, now trading 10 ES lots now (S&P500 e-minis).

- Have I made any 20 points trade?  - No!

- Have I made any 10 points trade?  - No!

My best trade was a +5 points on this run since the beginning, the great majority of my trades were +2 and +3 points only.

Our system yields a 70%+ winning ratio, all I have to do is to take all setups that fit my own trading style, when wrong, out, if right I'll try +2 or +3 points and wait for the next setup, that's all I do, day in, day out.

Have a great trading week everyone!

Monday, April 20, 2015

Challenge update: Stage 3 done, next target US$ 30,000



Hi again folks!

We've finally achieved the target on Stage 3 at US$ 20,000, now we're moving on to the next target at US$ 30,000.

The deadline was on May, the 20th but we made it in a little more than a month, 32 calendar days, to be exact...

Stage 4 begins at US$ 20,426.90 and the deadline will be in 3 months, we will trade 6 lots.

As usual, I expect to reach that target way before the deadline, we're very confident our system will continue to work as it has done in the last 5 years or so...

One of the main secrets to success is, besides having a system that works, that is, an edge, it's to have a "free state of mind", you don't HAVE TO do anything, you will just trade whatever setup you see, *IF* it works you take profits, if you get stopped out, then you'll wait for the next setup and when it shows up, you will take it without hesitation.

In case you haven't read the post on the beginning of the Challenge, click on the link below:

Challenge: From US$ 10k to US$ 100k

Best of luck!

"Either I'll find a way or I'll make one." - Philip Sidney

Saturday, March 21, 2015

Challenge update: target 2 accomplished, next target: US$ 20,000



After 27 trading days we completed Stage 2, moving on to Stage 3 now with the objective of US$ 20,000, increasing trading size to 4 lots now.

The more we achieve, the better we feel, feeling good means easier trades, letting it run to targets or getting stopped out does not affect psychological capital, putting me totally in the "zone".

The Stage 2 target means US$ 15,000, that is a 50% profit from the initial capital of US$ 10,000, if I was able to take this account to US$ 15,000 in a little more than just a month, no doubt I can take it to US$ 100,000 in the future ahead.

I'll keep you updated on the progress.

Best of luck.


Learn s simple system that works day in, day out. Click here ==> Diamond Setups.

Sunday, March 15, 2015

Consistent little bites will take you high, rules profit


Many beginning traders ask me:

- "How much can I make a month trading ES (S&P500 e-minis) with US$ 10,000?"

I like to answer that question with a couple of other questions:

Do you have a tested system that has a good win ratio?

Do you have a sound risk management strategy?

Does the system allow you to pull the trigger every time BEFORE the entry price gets tested?

How often does the system signal entries?

If the answer is yes to all or most of the questions above, then you must be grabbing money from the markets frequently, as long as you accept the randomness of the outcome and only leave at your target price (take profits) or if stopped out (small loss), profits will take care of themselves in the execution of 10, 20, 30 and more trades.,, not a single trade or two.

We have been trading over 5 years now using our Diamond Setups system, it gives us a consistent win ratio from 70% to 90%+.

The system generates an average of 25 trades a week on ES, below I show a typical week, let's use a possible outcome for 20 trades on the example below:

The STOP we use is always 2 points (8 ticks), winners make an average of 2.50 points, sometimes it makes much more than that, mainly when we have trend days, but we will use only 2.50 here just to give us an idea on the possible $ returns.

If we get the minimum return of 70% win ratio, out of 20 trades we'd get: 14 winners and 6 losers, what would that mean in US$?

14 winners ==> 14 x 2.50 = 35 points

6 losers ==> 6 x 2.00 = -12.00

Total in profits ==> 23 points = US$ 50.00/point = Total = US$ 1,150.00 per contract.

With US$ 10,000 you could trade 2 contracts, at least until you reach US$ 12,000, the result above would bring 20%+ in one week.

I think anyone who knows how to use a trading platform would be able to achieve that as the system we use is totally visual, you see it, you trade it, ahead of price getting tested.

Patterns repeat themselves over and over again, so when we see a pattern we like we act on it without reservation or hesitation, day in, day out, making our accounts consistently grow.

See below what you could expect when trading using the Diamond Setups:

- We watch the market waiting for a pattern to show up

- When a pattern we like shows up we calmly insert our buy/short orders including our predefined STOP and target.

- We sit back and watch the price either test our target and give us a profit, or hit our STOP LOSS (in 10 to 30% of the trades)

- No matter whether stopped out or with a profit, we just wait for the next setup.

Some traders like to stop trading after they reach 2 winners in a day and just start fresh the next day.

2 winners a day would give you 5 points a day, 25 points a week!

Just as an entertaining exercise, let's consider we took profits at only +2 every time and we ended up making just 15 points a week, let's see how big we could grow our account in just 3 months (12 weeks) increasing the size we trade every week:

Week1: US$ 10,000 - 2 lots - +15 pts = US$ 11,500

Week2: US$ 11,500 - 3 lots - +15 pts = US$ 13,750

Week3: US$ 13,750 - 5 lots - +15 pts = US$ 17,500

Week4: US$ 17,500 - 8 lots - +15 pts = US$ 23,500

Week5: US$ 23,500 - 10 lots - +15 pts = US$ 31,000

Week6: US$ 31,000 - 15 lots - +15 pts = US$ 42,250

Week7: US$ 42,250 - 20 lots - +15 pts = US$ 57,250

Week8: US$ 57,250 - 25 lots - +15 pts = US$ 76,000

Week9: US$ 76,000 - 30 lots - +15 pts = US$ 98,500

Week10: US$ 98,500 - 40 lots - +15 pts = US$ 128,500

Week11: US$ 128,500 - 50 lots - +15 pts = US$ 166,000

Week12: US$ 166,000 - 60 lots - +15 pts = US$ 211,000


That looks impossible, doesn't it?

But that's what you'd get if you could make just 3 points a day on ES, starting with a measly US$ 10,000, 2 lots on ES, even making just 2 points a day it's already really good, think about that.

Only the strong minds who commit to do what has to be done will be able to make it happen.

"Impossible only means that you haven't found the solution yet" - Anonymous

Sunday, March 8, 2015

Challenge update: Stage 1 complete - next: US$ 15k


I like to tell the traders who trade with me in our trading room: - "if we were able to meet the first target (it was a difficult environment on ES when it was close to its ATH (all time highs)) then we will be able to meet the next target, the last and beyond..."

Stage 2 target is at US$ 15,000, trading with 3 lots now, we need another 20 points on ES to reach the new target, which I estimate to be achieved from one week (if we get lucky) to max 2 months, I'll keep you updated on how we progress as usual, we already start with a small advantage of US$ 500, so this journey will actually be from US$ 12,500 to 15k.

We have been using a scalping system risking only 2 points per trade that has been yielding an average of 25 points a week, we'll be trading this system this week so we might meet that target real faster.

Discipline and a sound risk management are key to success in trading, we do not know what the market will do, so take all good setups, if wrong, get out, but if it works, let the profits run.

Bear in mind: The only rule that MUST NEVER be broken is to take a BIG LOSS, do not let that ever happen to you.

"Set your target and keep trying until you reach it." - Napoleon Hill

Trade well, best of luck! ;-)

Sunday, March 1, 2015

Challenge update: First month done: +14%



Hi traders!

The first month of the new challenge to take a US$ 10,000 account to US$ 100,000 has come to and end.

It was not easy to start trading a "small account" again, we need to win right off the bat or we go under water and that's exactly what happened on our first week, we lost, but we made losses up on the 2nd week and have closed the month with a decent +14.29% profit, not bad!

Although I did expect to reach our first target at +20% on the first month, it was not possible, it's always difficult to have a flawless execution, we end up taking profits too early on some trades, mainly after a loss, when it's a must to shrug it off and continue trading, taking the good opportunities that the market gives us without skipping any of them.

That's the reason why I always put a lot of emphasis on the state of mind of the trader, a trader needs to be really cold blooded mainly after a couple of losses, most tend to skip trades and by doing that they let the winners go, if you need to make money for your expenses from a small account, oh boy! I wish you luck, that's really, really difficult to make as emotion gets in the way.

Well, now we are ready to start our second month heading to the first target, besides the current day trading system we use, we also follow a scalping system for traders who like to take several trades a day with very small risk and modest targets, we have been following the results for such system this past month and it has been making an amazing average of 25 points a week on full size!

The system is really simple to use indeed, it's hard to believe it works so well, by risking just 2 points on ES, targets range from 2 points and up depending on the volatility of the market, and, as a real Diamond Setup it has a win ratio of 70%+,  I'll let you know how we do in March.

Make sure you have a plan for trading during the month of March and act on it, there will be great opportunities in the markets as usual, trade well.

Best of luck.