the amazing secrets of the hottest forex trader.pdf

the amazing secrets of the hottest forex trader.indd 1 20/06/2013 10:48

© Copyright 2013 by Fleet Street Publications (Pty) Ltd. All rights reserved. No part of this book may be reproduced by any means or for any reason without the express written consent of the publisher.Fleet Street Publications (Pty) Ltd. Private Bag X16, Northriding 2162. Registered in South Africa No: 1999/019170/07. VAT Reg No: 4430185282

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Publisher: Annabel Koffman. For subscription queries call 0861 114 365 and for editorial queries please fax us on 0861 114 716 or e-mail us at [email protected]. We may monitor and record calls to maintain and improve our service.

We do try to research all our recommendations and articles thoroughly, but we disclaim all liability for any inaccuracies or omissions found in this publication. For the purposes of this publication a “penny share” is a share in a company under R10. Prices quoted at time of going to print. Shares are, by their nature, speculative and can be volatile. Generally, investments in small companies have a higher risk factor so you should never invest more than you can safely afford, as you may not get back the full amount invested. The difference between the buying and selling price of small company shares can be significant. The past is not necessarily a guide to future performance. Before investing, readers should seek professional advice from a stockbroker or independent financial adviser authorised by the Financial Services Authority. Profits from share dealing may be subject to taxation. Levels and bases of, and reliefs from, taxation are subject to change.


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Content

Why I divorced Shares and re-married Forex 1

Why RELAXING on the weekend makes you a better Forex Trader! 5

A leopard will wait a week to catch its prey, so should a successful trader 7

Faith, luck and other super-natural phenomenon - don’t put your trust in these things when trading! 11


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Why I divorced Shares and re-married Forex

by Timon Rossolimos, 11 March 2013

Investing in shares is hard work. It’s stressful and it takes a lot of time and money.

That’s why I’m divorcing my relationship with the stock market.

You see, I’ve found a new partner that’s much more attractive…

It’s faster, cheaper and much easier to access, being worth more than $4 trillion a day.

All in all, I’m proud to say my new partner is Forex.

And today I want to share with you the five reasons I’ve moved my money

Forex Benefit #1 - You never have to worry about Liquidation or Bankruptcy again!

When you buy shares, you’ll always have the risk of companies going bust.

You have to watch out for directors dealings and very often making bad acquisitions. Even changing Government policies about nationalisation and the like could affect your shares adversely…

But with Forex you’ll never have to worry about such things.

You won’t have to fear a currency crumpling or going bankrupt, unless a whole country decides to collapse, and then the world has much bigger problems to worry about than a small trading loss.

But the fact is, trading the major currencies like US Dollar, Yen or Euro means immunity against bankruptcy and general political instability for the most part...

Forex Benefit #2 - You need less than one tank of petrol worth of money to trade Forex

With shares you need much more capital starting out, to make money. In fact, R10,000 or more as start out capital is barely enough these days.

But Forex is different. In fact, due to the gearing on forex trades, it’s possible for you to start out trading with as little as R1,000 or so. Barely more than the fuel tank of a large car takes these days…

Forex Benefit #3 - You can trade 24 hours a day 5 days a week!

Picture this, you’re holding a share, and it goes up 2% in a day.

At the end of the day, I’m sure you’re feeling jubilant confident about your shares for tomorrow.


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Until…

A major news story comes out, which leads to a collapse in the markets worldwide.

You’re left sitting at home, feeling defenceless because you’re stuck holding onto your positions until the market opens the next day.

Anxiety takes over, until morning comes and you run to your computer to find…the international markets dropped by more than 4% over night.

At your computer, you see thousands of sell orders flooding the market before the market has even opened.

Then when the JSE opens, your shares are 5% down, this leaves you feeling frustrated and hopeless.

But with Forex this isn’t a problem…

The Forex market trades 24 hours a day, 5 days a week. From Sunday 11pm to Friday 10pm.

So you can open or close a trade whenever… And best of all, you won’t have to feel anxious overnight with your open positions as you can always get out.

Forex Benefit #4 - The Forex market is more liquid than any share market in the world!

The shares market is tiny compared to the Forex market. . In fact, the JSE Equity Stock market has a yearly average trading volume of $200 billion per year!

Sound like quite a lot?

Think again…

The Forex market is the largest market in the world with over $4 trillion traded per day!

There are thousands of buyers and sellers every second trading the Forex market. So how does that affect you?

Well, you never have to worry about liquidity issues again!

There are many buyers and sellers and high competition in the market which means one thing.

You’ll never be stuck with a currency like you could be with a share…

And there are much TIGHTER SPREADS because of the high liquidity!

I’m sure by now you’re starting to see why the Forex market is so appealing.

But I have one more benefit that should excite you further.

Forex Benefit #5 – The lowest costs you’ll ever have to pay while trading!

Imagine trading a market where there’s no unnecessary costs related to trading.

Costs like securities taxes, brokers commissions, trading fees, regulatory fees and more.

While the stockmarket leaves you stuck with fees like these, the forex market won’t.


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You see, with Forex you’ll only have to pay one small fee.

The tight spread between the bid and offer price!

This can range from one to five pips on the major currencies.

These days I wake up every morning enthusiastic to trade on the Forex markets, more enthusiasm than I ever had for the stockmarket…

So start trading Forex today and start reaping the benefits now.


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Why RELAXING on the weekend makes you a better Forex Trader!


On Friday I spoke to my friend Chaleb. He was trading the Euro Dollar and felt very confident of his long position. The currency was in a nice uptrend and, while sipping his coffee, Chaleb was telling me how the Euro would continue going up…

And looking at the chart, I couldn’t disagree…

But nobody has a crystal ball that can predict the future…

Monday came and Chaleb was as stressed as ever. He told me “Timon, I can’t even stomach a cup of coffee today. This morning I woke up with a huge chunk of my portfolio wiped away”…

You see, Chaleb’s actually a day trader. And deciding to deviate from his day trading strategy and keep his position open over the weekend, no matter how good it looked, was a bad move to make…

And today, I’m going to reveal four simple tips you can follow to make sure you NEVER end up in the same position as Chaleb.

Following this means you can literally relax over the weekend and become a better Forex day trader…

So what exactly transpired on the weekend?

Well, on Saturday 16-March-2013, Cyprus spooked the markets worldwide. The Eurozone finance ministers and the International Monetary Fund made an unprecedented announcement.

The government contemplated taking 6.75% of all small deposit accounts and 9.9% of all large depositor accounts from all Cypress bank accounts. They planned using this to fund part of the 17 billion euro (R202 billion) bailout Cyprus needs to stay afloat.

When Chaleb woke up after this news, he was shocked to see the news. And there was nothing he could do about it over the weekend. He had to wait till Monday to exit the trade.

This, and surprise moves like this, cause distress to the financial system. And this was evident when markets opened on Monday morning. The Euro took a big hit, dropping 165pips at the open.

Scary right?

This could have been you if you didn’t follow your strategy and held a position open over a weekend when you shouldn’t have…

‘Black Swan’ events can affect your bank account

I told Chaleb, by keeping trades open over the weekends, he was moving away from his trading strategy of day trading. By doing this random events, known as Black Swan events, could ruin him.

I told him out of my nine year trading experience, these ‘Black Swan’ events happen numerous times every year. And each event is completely different to the next.


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Over the weekend, you could never have predicted the announcement that took place. And if you had a position open over the weekend, you would have incurred unnecessary losses.

That’s why I use these two tips to keep me protected and make me a better day trader.

Two simple tips on becoming more successful while day-trading Forex

Forex Tip #one: Close your Forex trade at the latest by 8pm on a Friday. This way you’ll have a nice strict time to stop trading which can prevent you from holding a Forex trade over the weekend.

Forex Tip #two: Don’t be smart and jump into a Forex trade first thing in the morning when the market opens the next week. The market still needs to digest the news that transpired over the weekend.

Remember, if you’re a Forex day trader and you appreciate the high probability low risk trades, this article is for you. However if you are a medium- long-term investor and making money in the Forex market then keep at it.

There are many traders that can trade ‘Gaps’ and hold Forex over the weekends successfully so this article will respectfully not apply to all of you.

The point here is that you need to stick to your trading strategy. And if you’re a day trader, then stick to day trading.

By following these two tips, you can sleep soundly over the weekend knowing you’re not holding any positions in the Forex market.

“The key to wealth is by enlightening your mind”


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A leopard will wait a week to catch its prey, so should a successful trader

by Timon Rossolimos, 15 April 2013

Picture this…

There’s a leopard lurking behind the bushes in a crouch position, waiting all day for just the right moment to pounce on its prey and bring the hunt back to its family.

Knowing it can outrun a buck, it still waits for a vulnerable and injured animal so it will have a higher probability of being successful with its catch.

Today, I’m going to tell you three techniques why the most successful traders in the world wait patiently to hunt down profitable trades and how you can use these techniques to be rewarded.

Just by keeping calm, patient and collected with your trading plan.

Now let’s head back to the jungle…

Just like a leopard knowing it can outpace most animals, with a trading account, you can take advantage of every possible trade at any time. The problem is the costs to pay, emotions to handle and far too much movement in the market and which trade is worth hunting.

During a hunt the leopard says, “I wait patiently for my setup despite how many animals are lurking around” so a successful trader should say “I wait for the profitable trading setup before I execute a trade”

So by learning the way of the leopard and waiting for the right opportunities, this can increase the probability of success as well as minimise your chance of ‘injury’.

Three ways using patience can improve your trading.

Patience tip #1 Become a trading predator and wait for the opportune moment to pounce

Once you’ve done your homework, identified your prey, and developed a consistent method of entering into a trade. All you need to do is wait for the price to reach its entry point.

You need to follow an automated set of prearranged rules which is devoid of emotion similar to the instinctual behaviour of our predator cat.

You can see an example of the trading setups which I have used successfully over the past decade.

Patience tip #2 Don’t fixate over your prey

When you enter into a trade it’s human instinct for temptation to watch your trades all day. This can distract


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you from your higher priorities you have in a day.

By monitoring your trades all day you’ll eventually start to doubt your position and probably be tempted to get out of your trade.

Stop right here!

If you’ve put your stop loss level and take profit level, your strategy will be in place…

So I’d suggest you take the day off and let the trade do its thing. At the end of the trading day, your results will be a lot more accurate by sticking to your trading setup levels and your rules.

Patience tip #3 Don’t try and catch every potential prey out there just because they are plentiful

The best tip has been saved for last because I believe it’s the one you need to keep on your mind at all times. I’d assume your trading strategy has a good performance rate where your winners outstrip your losers.

If they are not, then I’d suggest you go back to paper-trading a demo account and build yourself a great trading system. The market isn’t going anywhere and will always have prey ready for you to pounce on.

There are always opportunities in the market and it’s only necessary to catch the few that are conspicuous and within your reach.

I have trading setups that can take an entire month to mature, especially in derivatives. But it’s very rewarding knowing that I keep strictly to my rules of engagement with the strategy.

Here‘s your final hunting skill you need know to set you apart from the pack

By now I’m sure you’re ready to sink your teeth into a profitable trade. But you must remember to remain disciplined and patient, let your trading setups follow their course.

If you’re tempted to get out of your trade, then take a deep breath and ‘time-out’ and go over why you entered into your trade to begin with.

Remind yourself that your stop loss and take profit is in place from a strategic reason and this alone will make you a great leopard trader.

Always keep in mind

“Patience is a trader’s virtue”


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The top nine Forex currency-pairs revealed

by Timon Rossolimos, 03 April 2013

With pure excitement I remembered starting up my Forex platform for the first time, ready to make my first Forex trade. I went to my drop down list in the platform to select my currency pair and then...panic struck!

I saw over a 100 currencies, I never even knew existed!

I started feeling anxious and frazzled because I couldn’t believe how many currencies there were to choose from...

The question was: Which of the 100-odd currencies should I trade?

After a pile of research and a whole lot of trial and error... I found the answer...

There are only NINE currency pairs you’ll ever need to know to trade.

That’s right!

Out of all of the hundreds of currencies to trade, you only need to understand nine of them to be a successful Forex trader!

Luckily for you, these currency pairs are already broken up into two categories:

Major and Minor

Later on we’ll get into these currency pairs but first I want to enlighten you on the differences between these two categories.

Major currency pairs are the currencies that are the most popular in the WORLD. They can handle trade sizes of over R4.5 billion per trade in the spot market.

The minor currencies on the other hand are the less popular currency pairs which usually cost you more than you deserve to pay. So this category of currency pairs, you can disregard them completely when trading Forex.

Let me start off by telling you why I only trade these nine Major currency pairs.

Three reasons why I make money trading these Major currency Pairs

#1 Major currency pairs are the most liquid trading currency pairs in the world, this tells me one thing... I’ll make money knowing there will always be trends and movements while trading these.

This also means that I don’t need to worry about paying high spreads between the bid price and the offer price.

Basically the spread is the difference between the price the buyer is willing to buy at and the price at which the seller is willing to sell at.


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The spreads are usually 0.5 to three points. If your spread is higher, I’d advise you find a better broker as this is an extremely high competitive market, so spread should be less.

#2 Major currency pairs are ‘safe’: They the most dominating currencies in the world, so you don’t have to worry about the currency making vast movements such as dropping 5% or rising 7% in a day.

The possibility of one of the Major currencies collapsing is much LESS than the risk of a Minor currency pair.

Purely because there’s trillions of dollars traded with the Major currencies a day that not one big event should ever cause a big dent in the currency price.

#3 The daily range of trading these Major pairs is on average a 100 pips. Now, I like to make on average around 20 to 70 pips a trade so having an average of 100 pips a day is more than enough for my trading style.

So now that you know why you should trade the Major pairs; let’s get into what the ‘big nine’ Forex plays actually are!

The nine most profitable Forex pairs revealed:

The table not only shows the currency code and the currency formal name; it also shows you the popular informal “fun” name people use for the major currency pairs on a daily basis.

So now you know which currencies to trade and which to filter, so go out there and make some good Forex profits.

Keep in mind

“Liberate your mind with profound knowledge and you’ll enter the realm of enlightenment”


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Faith, luck and other super-natural phenomenon - don’t put your trust in these things when trading!


Faith, luck and other super-natural phenomenon! So many people depend on these things when trading.

And the fact is its human nature. When you don’t know what’s going on or you’re unsure about something, you search for answers whether they’re true or false.

I’m sure there’s times when your imagination has run away with you.

Times when you’ve seen things which aren’t there. But today I want to tell you to resist this behaviour as it could lead to very bad trading decisions.

But in order to do that you need to understand how your brain works. So let’s look at a recent study I’ve come across...

How we interpret super natural messages which aren’t there to begin with

Over the weekend I was watching a YouTube clip. This clip prompted me to write the below article and how it applies to your trading performance.

Let‘s get to it.

Jennifer Whitten (PhD), who’s a psychologist at the University Texas Austin, studies how human beings interpret meanings from science and events in the world around them.

She asked a group of people to answer 20 questions electronically. Each question showed a random pattern between two options, A or B.

In their mind, they saw patterns between the two options even though there weren’t any.

The computer was pre-programmed to tell them each of their answers were “CORRECT”

At the 17th question, they felt confident and top of the world while going through the test.

Because they were “winning” of course!

At the end of the test, a “white-noise” of static was displayed on their screens.

Finally, they were asked if they saw a “hidden” image within the white and black dots.

They all confidently said “no”

Subsequently, Whitten tested a new group with the same test with only one difference.

The computer was pre-programmed to tell them, their answers were “INCORRECT”.


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After 15 questions, you can imagine the lack of confidence and frustration they felt.

When the last question came, they were asked if they saw a picture hidden inside the “white-noise”.

They all said “YES”.

They saw objects such as, frogs, trees, houses, people, cups and other pictures which weren’t essentially there.

Their state of mind made them see things which weren’t there to begin with.

So here’s how it applies to your trading.

Discover why you don’t need destiny to trade

When I started trading, I saw patterns and levels in my losing positions.

If you’re a trader, I’m sure you know what I’m talking about.

So seeing these patterns, I kept having the feelings of control when trading.

Little did I know, I was in for a very rough ride!

I started to generate feelings of false comfort and hope. And when looking back at my charts I perceived levels, (supports, resistances and channels), which weren’t there to begin with.

At the time, I “knew” the market was going to bounce off one of those levels and miraculously, bring me back into profit. How wrong I was…

A flood of emotions like fear, greed and the revenge instinct took over.

The outcome was a 15% loss on my portfolio.

But it doesn’t have to be this way…Here’s why!

Things you can do to stop believing in supernatural events which influence your trading

I went back to watching YouTube to help me get my mind frame back.

I recall hearing a profound quote “Fear over-rides all rational thinking” which made me realise: “I need to stick to my trading plan with strict discipline.”

I’m sure there’s times when you underestimate yourself. But I’ll tell you now, if you have a robust enough trading plan then I know you’ll do great trading as long as you’re disciplined to keep at it.

You just have to keep riding the trading waves through good and bad because I guarantee you now… there’ll be losses – it’s the nature of the beast.

But, there’ll be profits and you’ll need to make sure your profits over-ride your losses.

Many times the trading patterns don’t play out, but getting annoyed and aggravated won’t help your cause.


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So don’t resort to the unscientific approach of faith, guessing and proverbial luck. I call this the super natural intervention.

Rather have the confidence that if a trade is going against you it is mitigated by a strict trading plan.

Don’t be an optimist looking for other patterns and transcendent levels but instead, exit your positions and preserve your wealth!

There’ll be many more trading opportunities you can make up for in the future.


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