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Jumat, 20 Desember 2013

Boris's Weekly Email - Three Trading Resolutions For The New Year

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Blood, Sweat & Pips
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 See how we hit our Profit Targets Live Trading NFPs on 12.6.13
Thoughts on Trading 
 Three Trading Resolutions For The New Year
 

 

Trade on longer time frames
As a retail trader you have two massive barriers which are the bane to your existence -- spread and volatility. If you trade a short term time frame you are vulnerable to adverse movements in both.

 

 

 

 

 

 

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Spreads at most brokers are variable and can go to 15 wide on daily basis even when nothing is happening. (Ever see EUR/JPY at 5PM NY Time?). If you are trading with 15 point stop there goes your trade. Volatility is similar. One big exporter order on the fix could flip your trade from a winner to a loser as prices scurry 20 points in 20 seconds and then come tumbling back.

 

Its all a matter of math. 2 point spread on a 10 point stop is 20% cost of business. Same spread on 100 point stop is 2% cost of business. The higher your costs, the better you have to be to make money and I am not that good -- are you?

 

 

Focus on avoiding risk rather the chasing reward
Here is a simple exercise to consider. Take a strategy with 15 point target and 15 point risk. Now subdivide the equity into two halves. Trade one half on 15/15 basis and the second with 15 stop and 8 target. You have three scenario you lose on both halves you are -30. You lose on one half and make 1 take profit you are -7 (-15, +8) you will on both halves you are +23 (15+8). In the original scenario you are either -30 or +30.

 

So let's compare and contrast. In worst case scenario you lose -30 both way. In best case scenario you win +23 on the 15 and 8 strategy and +30 on pure +15 strategy. So you are -7 on combo. However in the intermediate case you are only -7 on the combo but -30 on the pure +15 strategy. You are actually +21 on the combo. (You only lost 7 points on the combo and -30 on +15 -- you would need to make up 21 points just to get equal to combo)

  

When you look at risk this way you realize that you have some very asymmetric payoffs. In the best case scenario the "bet it all on one target" strategy only gets you 7 more points, but the murky middle (where almost all of life and trading takes place) it loses 21 points. Effectively the combo strategy is a better because its a compromise between cutting risk and chasing reward.
 
(This is a very simple example to illustrate a point. Spare your emails on expectancy ratios, etc. I am well familiar with statistics. I also know stats often don't mean jack in a non-static environment like the market)

Mix and Match
We all know that diversification is good because it creates non-correlated returns which are supposed to be less volatile. But here is something to consider. You don't need two separate strategies to create a diversified portfolio. The same strategy using different stops and take profits can produce wildly different results that are not very correlated and can therefore provide the portfolio effect you seek. So when you mix and match don't just look at different system look at same systems trading differently. 

 

 

  

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Boris Schlossberg and Kathy Lien
BKForex.com

Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

 

This email was sent to forexhudi.euro@blogger.com by contact@bkforex.com |  
BKForex Advisor | The Desks of Boris Schlossberg and Kathy Lien | NY | NY | 10280

Jumat, 13 Desember 2013

Boris's Weekly Email - The Most Underrated Part of Trading Well

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BK Forex Trading Signals
BK Club Forex Trading Education
Boris' Weekly Trading Newsletter
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Traders First and Analysts Second

Blood, Sweat & Pips
- Here are our thoughts on Trading 



   
 See how we hit our Profit Targets Live Trading NFPs on 12.6.13
Thoughts on Trading 
 The Most Underrated Part of Trading Well 

 

Yes yes, of course the key to long term successful trading is to be able to pick winning ideas -- a task by the way that is much harder to achieve then it seems. But I think many traders miss the other key aspect to long term positive performance -- not losing. Not losing is not the same thing as winning. Not losing is the art of avoiding bad ideas -- which is a skill wholly separate yet no less important than the ability to find winning trades.

 

 

 

 

 

 

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Warren Buffett when asked what was his number one rule for investing said, "Don't lose money." When asked for number 2 he replied, "See rule number 1." That philosophy served him well over the past twenty years as he was able to navigate financial crises much better than most investors. In 2000 and 2001 when the S&P was down by -20% each year, Buffett was only down by -3%. When equities rebounded, other investors needed to see a 40% jump before just getting to break even, Buffett on the other hand was profitable the very same year stocks turned positive. Therein lies the power of not losing.

 

Not losing should not be confused with not trading. After all of us can simply sit in cash all the time, but that means we will never see any returns. Risk assumption is the essence of trading and if you get involved with the financial markets you WILL lose money. The key however is to constantly evaluate and assess the quality of your risk.

 

 

 To do that well, it helps to think like an insurance company. Insurance is the very definition of a risk business, but insurance companies go out of their way to minimize their risk as much as possible. How do they do that? A few ways.

 

First and foremost insurance companies rely on the law of large numbers and spread their bets as wide as possible. No life insurance company will write a life policy of 1 Billion dollars for one man, but they would all be happy to write 1 Billion dollars worth of policy for a million men.

  

Secondly, insurance companies do a lot of research before they underwrite you. They want to know if you smoke, if you ride motorcycle, if you bungee jump, if you ever had cancer -- so on and so on. In short insurance companies are looking for a thousand reasons to say no so that they avoid an unnecessary loss. As traders we should follow the same formula. When looking at trades we are always focused on all the reasons to make them -- all the reasons to say yes. By thinking like insurance underwriters we could become a lot more disciplined and selective in our approach and hopefully learn how to lose less -- the most underrated part of trading well.
 

 

  

 

 

 

 

 

    

 

 

 

   

  

 

  

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Can USD/JPY Hit 105? Forex Weekly Technicals  12.16-20.13
Can USD/JPY Hit 105? Forex Weekly Technicals 12.16-20.13
Forex Technicals Video for the Upcoming Week


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Sincerely,
 

BSignature

Boris Schlossberg and Kathy Lien
BKForex.com

Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

 

This email was sent to forexhudi.euro@blogger.com by contact@bkforex.com |  
BKForex Advisor | The Desks of Boris Schlossberg and Kathy Lien | NY | NY | 10280

Jumat, 06 Desember 2013

Boris's Weekly Email - Mandela Lessons for Traders

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BK Forex Trading Signals
BK Club Forex Trading Education
Boris' Weekly Trading Newsletter
Bheadhot
Traders First and Analysts Second

Blood, Sweat & Pips
- Here are our thoughts on Trading 



   
 See how we hit our Profit Targets Live Trading NFPs on 12.6.13
Thoughts on Trading 
 Mandela Lessons for Traders 

 

The last few hours have seen an unprecedented outpouring of support and mourning over the death of Nelson Mandela. There is no doubt that he will go down as one of the seminal figures in history, a man who -- as one analyst said -- embodied the idea that you must become the change that you seek. However since our weekly focus is the filthy lucre of the markets I would like to leave the soaring rhetoric to others and concentrate instead on the more pragmatic aspects of Mandela's nature.

 

 

 

 

 

 

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Almost every story about Mandela talks about his amazing ability to forgive the white minority of South Africa for the horrors of apartheid rule. And that indeed is one of the greatest historical examples of human graciousness that all of us should admire and appreciate. However, beneath the supremely moral nature of Mandela's actions I believe there lurks a pragmatic impulse that is even more impressive.

 

Mandela understood very well that the white minority of South Africa was absolutely essential to the future success of the country. He understood with crystal clear precision that there could be no freedom without prosperity, no freedom without peace and no freedom without collaboration. In short Mandela, more than any other late twentieth century leader kept his eye on the prize and never allowed personal grievances to get in the way of the greater goal.

 

 

 Think about that as he endured the brutal incarceration on a bone chilling speck of an island, cut off from society for 26 years, performing the mindless back breaking work of splintering rocks into two.  

 

It is not only that our day to day grievances of missed trades, crooked dealers, and capricious markets all pale in comparison to the hardships endured by the man. It is perhaps the much greater lesson that despite all the obstacles, despite all the challenges, despite all the years of struggle and humiliation Mandela never lost sight of how to win.

  

Not only did he never give up, but he never allowed to corrosive, corruptive maddeningly frustrating environment around him, to influence his actions or to lose his discipline. He stayed true to his goals and that is perhaps his greatest legacy of all.  
 

 

  

 

 

 

 

 

    

 

 

 

   

  

 

  

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Forex Technicals Video for the Upcoming Week

Euro Indomitable? Or Double Top? Weekly FX Techs 12.9-14.13
Euro Indomitable? Or Double Top? Weekly FX Techs 12.9-14.13

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BKTMedia
2-5 BK Trades Per Week
Each With a Game Plan and
Specific Stop and Exit Directions

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Sincerely,
 

BSignature

Boris Schlossberg and Kathy Lien
BKForex.com

Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

 

This email was sent to forexhudi.euro@blogger.com by contact@bkforex.com |  
BKForex Advisor | The Desks of Boris Schlossberg and Kathy Lien | NY | NY | 10280

REMINDER: FREE Invite to Trade Non-Farm Payrolls with us LIVE on Friday

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Dear Forex brown,

 

Trade Non-Farm Payrolls with us LIVE

Starting at 8:15AM GMT Friday Dec 6  

 

  

 

We are holding a very special LIVE trading session for Non-Farm Payrolls this Friday.

 

Join us for this FREE session and a learn an EXCLUSIVE TRADING STRATEGY FOR Non-Farm Payrolls that has produced positive results 9 out of the last 11 MONTHS this year.

 

*Past performance is not indicative of future results.  

 

Just register using the following link and we'll see you at 8:15AM ET / 13:15 GMT on Friday December 6 (session should last between 45 min to 1 hour).

 

REGISTER NOW  

 

 

https://www1.gotomeeting.com/register/576242561

 

 

We look forward to a fun trading session!  

 

 


Sincerely,

BSignatureKSignature

Kathy and Boris

Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
 
This email was sent to forexhudi.euro@blogger.com by contact@bkforex.com |  
BKForex Advisor | The Desks of Boris Schlossberg and Kathy Lien | NY | NY | 10280

Rabu, 04 Desember 2013

FREE Invite to Trade Non-Farm Payrolls with us LIVE on Friday

bklogo  

Dear Forex brown,

 

Trade Non-Farm Payrolls with us LIVE

Starting at 8:15AM GMT Friday Dec 6  

 

  

 

We are holding a very special LIVE trading session for Non-Farm Payrolls this Friday.

 

Join us for this FREE session and a learn an EXCLUSIVE TRADING STRATEGY FOR Non-Farm Payrolls that has produced positive results 9 out of the last 11 MONTHS this year.

 

*Past performance is not indicative of future results.  

 

Just register using the following link and we'll see you at 8:15AM ET / 13:15 GMT on Friday December 6 (session should last between 45 min to 1 hour).

 

REGISTER NOW  

 

 

https://www1.gotomeeting.com/register/576242561

 

 

We look forward to a fun trading session!  

 

 


Sincerely,

BSignatureKSignature

Kathy and Boris

Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.
 
This email was sent to forexhudi.euro@blogger.com by contact@bkforex.com |  
BKForex Advisor | The Desks of Boris Schlossberg and Kathy Lien | NY | NY | 10280