Blast From The Past..I Miss Those Days..

Free Look At The Da Vinci Trading System

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Euro verse Swiss Franc

The Swiss franc/EUR cross has been moving irregularly but inexorably in favour of the
franc since March of last year. Then the cross stood at 1.46 CHf/EUR, but as problems in Portugal,
Ireland, Italy, Greece and Spain erupted, the franc began to strengthen relative to the EUR, taking the
cross down to 1.4000, at which point the Swiss National Bank, fearful that the too-strong franc would
do damage to the Swiss economy, intervened, selling its own currency, while buying the EUR. For
a few brief weeks the SNB’s intervention worked.

The cross was driven back to 1.4600, but once the Bank’s buying of the EUR stopped the fundamentals
of the problems surrounding the “PIIGS” reasserted itself and the cross made its way rather swiftly to
1.2950.
Again the SNB intervened to weaken the franc, and again that intervention succeeded… briefly… pushing the franc down from 1.2950 to 1.3900. But yet again,
once the Bank’s buying of the EUR stopped, the fundamentals of a weakening Europe rose to the fore, sending the cross to 1.2750, where upon the SNB
intervened yet another time, this time sending the cross to 1.3800. Again, the fundamentals of European problems swamped the Bank’s intervention efforts and
again the franc rose smartly, rising from 1.3800 CHf/EUR to 1.2400 by the turn of the year.

The SNB has lost billions of dollars in its ill-advised intervention efforts. All the while, as it was intervening
the head of the Bank… Mr. Hildebrand… decried the franc’s strength and tried valiantly but vainly to
“jawbone” the franc lower. This too was imminently unsuccessful. Thus we were rather shocked earlier
this week to see Mr. Hildebrand now actually defending the Swiss franc’s strength. He said that the franc’s
strength had shielded Switzerland from the damage wrought upon the rest of Europe by “rising energy and
agricultural prices.” He is finally right. The franc’s strength is indeed doing precisely that.
Having defended the Swiss franc’s strength then, rather than decrying it as he had previously, Mr.
Hildebrand has all but taken the SNB out of the intervention market, relieving that possible problem to
our position taking. If the past is indeed father to the future(GANN), then new and lower lows for the EUR relative to
the CHf lie ahead and those who had not sold the EUR and bought the Swiss franc should do so on the fake rallies of the Euro.

Trader Mindset

3 Steps To Profits In Forex Trading
by Tom Strignano

When you are trading real money your perceptions change. Trading a demo account is easy because you do not have a motivational factor- the money! One way to short cut your self to trader profits is understanding your own psychology and having a solid money management plan in place.

Trading psychology and trading psychology issues are the predominant reasons why traders lose. It has been widely discussed in books and lectures that it has been a convenient excuse for losing. What is trading psychology? Trading psychology is an attitude or a reaction that a trader creates from existing personality traits. These personality traits may not be even related to trading or to market, but they surface from trading.

Fear and Greed are the main emotions that come out in a trader, and they are the traders enemy. You must be well balanced as a trader and fend these emotions off continually. The best way to do this is through mental rehearsal, see yourself trading having a good or bad position. Practice in your mind your exit strategies. See yourself do the exits. it will make it all the more easier when trading live. Remember fear will cause you to enter a trade to late, or not enter at all. It will cause you to hold onto losers to long. Greed will cause you to stay in a good trade way beyond your exit point. it to can cause you to hold onto a loser to long. Practice mentally how you will combat these to mortal enemies of your trading account.

The fear of failure is another emotion that comes into play. Failure in trading is part of the game. No one wins all the time. The way you should mentally process failure is that you will never have it, IF you learn something from the non-performing trade! Lack of discipline is another cause of Fear. If you can t trust yourself to stick to your plan, you end up self sabotaging yourself. You must stick to your trading discipline.

According to the trading mindset psychology, the reason traders lose it because they are not psychologically prepared for battle or for trade. There are traders that are not prepared to accept financial risk for something of which they have no control over the outcome. When a trader experience consecutive losses, methods becomes replaced with a feeling of despair and hopelessness. Traders would have this feeling that it is impossible to do anything right, in this situation trading psychology is more crucial or critical that the trading method.

They say that trading is 90 percent psychological and 10 percent methodological. Even with first class trading method, if the trader has no control over their emotions, it would be difficult for them to implement their trading method.

Getting the Correct Mindset

You configure a trading plan and you stick to it. You need to define what your goals are. Stick to your plan of the day and take predetermined profits or losses.

You will need self confidence to put your trading plan into action. Successful trading relies on making quick decisions with out the self confidence to follow your plan emotions will take over and thats the sure path to haphazard trading and losses. You also need to be discipline with your decision making and focusing on the right areas. So stick to your plan, and trade your plan.

The market is always correct, and having a healthy psychological profile will give you the ability to listen to the market. It makes no difference if you won or lost, because as said before you will never have a loser if you learn something from it. Trader mindset is the key to over all profits.

Gann Trading With Fibonacci Retracements

Many Traders are interested in learning the Gann trading techniques for good reason. He amassed a fortune while trading. Gann is difficult to understand at first because he did write in riddles and metaphors. I have done extensive study of Gann and found some amazing things happen in the market place when using and applying his levels with Fibonacci. I will list three important keys you should start with.

Gann and Fibonacci levels are interrelated. Gann believed that the universe worked in precise mathematical patterns that govern all things. Fibonacci Numbers are rampant in nature, and are also part of this natural order. Many Gann Levels and Fibonacci Levels over lap, which is a good thing for us traders, we get a confluence of price. Traders use Fibonacci levels as a means of gauging when a market should be exhausting itself. Gann also believed that when time met price the market would reverse itself. He believed that for every action they would be an opposite reaction and that would occur only when time met price. So our First important point is:

Time Verse Price: Gann Main point was that the Square Root of price would be its time component. So for example if we are dealing Forex, which is what I primarily trade, we would take the current price of a market, at a significant high or low and get the Square Root Of price to determine its Time Component. An example would be if we had a low occur at a 1.618 Fibonacci extension level we would want to plot the time sequence and project it out on the chart. Low 1.5088. We then get the 1.5088 which is 1.228. We move the decimal over one place to the right and get the amount if bars that should be reactionary points. Which becomes 12.28 or 12.That is the time component in approximately 12 bars we should be at another price and time juncture.

Flexibility: Gann believed in being very flexible in ones trading approach. Gann looked for certain things to happen within a certain time period. So you have to watch the market for clues as he believed it always told you what its intent was. The way I do this myself is use fibonacci levels and if they are violated I look for the next level to be tested. You can use very tight Stop losses this way.

Gann Angles: Square of 28 the basis of all the Gann Angles was a geometric square that had 28 squares across and high. When you drew a diagonal line across it created a 45 degree angle. This angle is also known as the”angle of death.” What Gann was getting at in a rising market the 45 degree angle from the bottom of a significant low would hold. The Market would gravitate to the line and pass through only to rebound up again higher. Once price broke it would mean the end of the move higher and the market was turning down. We can also place this as a negative angle from a significant top and gauge the price the same way.

So here you have a good basic starting point for Gann pivots. You must get the time component from a major low or high. Use Fibonacci levels to help gauge this. The 1.382 and the 1.618 levels are important levels to look at. Stay flexible when trading, listen to what the market is telling you. Finally use the 45 degree angle of death to determine whether or not a move has ended.