Today's Guest Blogger is frequent TV contributor, Bob Iaccino from TraderOutlook.com. Iaccino will try to take a stab at teaching us about the importance of risk management in the Forex markets.You can also see Bob's recently released video series, charting his trading methods and successes. Make sure you comment below with any questions you have for Bob.
Position traders are suffering a little bit, both short and long term in the Forex market right now. Even scalpers are feeling the sort of chop they haven’t felt recently because of the lack of “trend/congestion, trend/congestion” that has been the consistent general nature of the Forex markets. When the economy is in a particular phase such as recession, growth, or even depression, we’ll see the Forex markets trending. However, the direction of the trend doesn’t ultimately matter. They’ll trend for a period of time, and then they’ll pause and move sideways.
I've asked Bob Iaccino from TraderOutlook.com to come back and give us a short article on "The Psychology of Loss" as a LOT of people have recently dealt with it. Bob's written two previous articles which you can find through this link. Please enjoy the article and visit Bob's site TraderOutlook.com for more great info.
At TraderOutlook.com we spend most of our time educating our clients in our technical trading models. We give specific levels for entry, profit and stop loss and spend a much smaller amount of our time on trading psychology. Trading psychology may, however, be the most important part of the equation and the most important part of trading psychology is the psychology of loss. Continue reading "The Psychology of Loss"→
Today I’d like everyone to welcome Bob Iaccino fromTraderOutlook.com. Some of you might reconognize the name, and that’s because Bob is a frequent contributor on CNBC, CNBC Asia, Bloomberg Television, Bloomberg Radio, CNN, CNN International, Fox News, and several other media outlets as a special guest analyst. Yeah he’s all over the place and he knows what he’s talking about.
All traders pick and entry point for a trade and once the trade is made, they look for a spot to get out. Most also identify a stop-loss level. The good traders have a target level they are looking to exit at, or a time frame in which to take the trade off. Not many however, use “2-target trades” very regularly. We use them quite often, looking to catch larger moves. Here’s why you should too.
2-target trades can also be defined as scaling into a position, but the main difference is that the trade scale is pre-planned in ½ trade increments and only when the trade is going in our favor. The levels are planned very specifically based on the risk/reward profile. 2-target trades are simple and can help eliminate some of the fear of putting on trades that have distant targets or longer timeframes. In the chart below, we have a recent EUR/USD trade that we discussed in our morning broadcast.
I think we've all been there...we've made a trade, we're happy with that trade, and yet our reasoning behind the trade was wrong! Today I'd like everyone to welcome Bob Iaccino from TraderOutlook.com. Some of you might reconognize the name, and that's because Bob is a frequent contributor on CNBC, CNBC Asia, Bloomberg Television, Bloomberg Radio, CNN, CNN International, Fox News, and several other media outlets as a special guest analyst. Yeah he's all over the place and he knows what he's talking about.
I remember one of the smartest human beings I’ve ever mentored, in my 15 years in the markets, explaining a trade he wanted to place. Let’s call him “Neal.” Neal told me that the Fed needed to raise rates immediately and he was piling up long USD. Well, the rate rise never came, but he made $1oK on his position anyway. The market was pricing in a larger rate rise in the future. He then prances around my trading room like a show horse, talking about how he was right for taking such a large long position. I walked over to him and proceeded to tell him that we were taking the money out of his account. “What?! Why?!” exclaimed Neal. “Because you were wrong. You said the Fed was going to raise rates immediately and they didn’t,” I told him, “so you have to give the money back.”