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We provide a brief summary of the previous day’s action and how the report identified useful support & resistance levels.
In the main part of the report we start with our outlook for the day & our opinion on direction through trend analysis. (Bear in mind markets usually do not move in one direction throughout the day but move up and down in a general direction).
We then identify the most important support & resistance levels where prices may pause or reverse. We notify you of minor resistance & support (which are useful targets).
We will also notify you if we think there is a good chance of a high for the day or a low for the day at a certain level.
A support level is a price level where the market price tends to stop moving down. This means the price could very well “bounce” off this level rather than break through it and is more likely to do so the first time it it tested. However, once the price has passed below this level, perhaps on the second or third test it is likely to continue dropping until it finds another support level.
Support levels tend to work better in a bull trend.
A resistance level is the opposite of a support level. It is where the price tends to stop moving up.
The rule is that support becomes resistance when it is broken and resistance becomes support. So once a break below support is seen we expect the price to head towards the next target or minor support level.
When a break above resistance is seen we look for a move towards the next target or resistance above.
If the market is in a positive bull trend experienced traders try to buy if there is a small correction down to a support level. They are also ready to buy a break above a resistance level & look for a move towards the next target & resistance level for profit taking.
If the market is in a negative bear trend traders try to sell if there is a small correction higher to a resistance level. Or they are ready to sell a break below a support level & look for a move towards the next target & support level for profit taking.
If traders do not place a stop loss on every trade, they have not predetermined the maximum loss they will take on a trade. This is one of, if not the worst trading habit practiced. Every trader experiences being stopped out on some trades before the market reverses. It is just something that will occasionally happen. However sooner or later, by not using a stop loss on every trade, one trade will run away and traders will be frozen as the losses increase dramatically. In some cases traders will lose the total amount in their account.
This is unfortunately a very common problem for inexperienced traders.
When you are ready to execute a trade you need to ask yourself:
- How much can I afford to lose? … so that I can continue trading tomorrow? The general rule is only risk 1-2% of your account on each trade.
- Exit strategy: You must always place a stop on entry. Ask yourself: What is the price at which I will admit that this trade is not working? We give clear stop levels on our reports when we suggest a buying or selling opportunity.
- Profit taking: How will I close this position? Use a trailing stop if you think you can or are prepared to run your trade a long way. ORSet a realistic target if you are looking for a quick turn.
We have provided our daily technical analysis to many leading investment banks and brokers including Deutsche Bank, Morgan Stanley, Bank of America Merrill Lynch, Bayern Landesbank, Mizuho, Bourse de Montreal Canada, First Continental Trading as well as the leading professional UK proprietary day trading arcades: Marex Spectron, Xconnect Trading and Tower Trading Group.
We also have hundreds of retail trader clients, many who have been with us for several years.
NO! If you have little experience you will need to be patient and educate yourself. Why?
Imagine you are learning a completely new skill, such as riding a bicycle. It looks dead simple, because so many people do it every day. However we all know it takes quite a lot of practice just to get going and stay up right. Then we have to master controlling the brakes…not too soft, not too strong. Then we have to get used to building up speed. Eventually we may be ready to cycle on the road but we have to gradually build road awareness. We need to be aware of the dangers of other vehicles and learn the rules of the road.
Even if you are a successful car driver, learning to ride a bike and then use it on the public roads would take a lot of practice.
Risking your own money to trade financial markets is much harder than learning to ride a bike. Markets are far more unpredictable than other vehicles. Cars indicate but markets change direction without any prior signals.
Anyone who thinks you can credit your brokerage account and start trading profitably from day one is a fool. You will get ‘run over’ in the market if you do not practice on a demo account.
Learning any new skill requires study and education. It requires practice and learning from mistakes. Trading is incredibly hard to master become much of it requires you to have total self control.
Just because you are successful in other fields does not mean you will be successful at trading.
Take time, invest in your trading career.
Every one develops a trading style that is unique to them, one that suits their personality. You must give yourself time not only to learn but to develop your trading strategy and style. THIS TAKES A LARGE INVESTMENT IN YOUR TIME.
If you are not prepared to invest time in educating yourself and practising to develop your skills, stop now before you lose all your money.
A trader must study the psychological side of trading, the simple basic rules of discipline, patience, trade management, risk management, account management (especially position sizing) BEFORE risking money.
Understand that I don’t want to take your money on a subscription to then see you fail because you don’t understand basic trading rules. If you are not prepared to educate yourself don’t waste your money on a subscription to our reports.
Practice important trading rules & techniques on a demo account, using our levels & trade ideas for at least couple of months. Any new skill requires a lot of self education. If you fail to control your emotions, plan your trade fully before entry, your trade exit, your discipline etc, you will lose a large sum of money, I guarantee it.