If you are looking for a high probability forex day trading system,  Click here to visit The London Forex Rush System.

there are two most recent example of London Rush system,

The next example

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As a professional forex trader myself, I can assure you there are few forex trading systems can really deliver what it promised.  Most of these systems are developed to take money out of the less experienced traders’ pocket instead of out of the forex market.

I am always skeptical to the demonstrated trading results by these preched forex trading systems. If it’s really that good, why bother sell it short for $100, go out to convince some people with deep pockets, setup a hedge fund, you can make tons of money why bother about those poor soul suffer.

In Hector Trader’s Forex trading Course, it’s not a black box system, it was developed by a fellow forex trader, The part I like most is to watch those recorded trading vedios .

Here are few things I learned from this course according to my trading experience, the 3SMA system better suit for swing trading, not a best system for forex day trading, there are few signal given , the best reliable signle I fould is on the 4hour timeframe. There are few examples,

3SMA Trading Example #1,

3SMA Trading Example #2,

3SMA Trading Example #3,

If you want to learn to trade forex from a professional trader,  click here to visit HectorTrader’s Forex Trading Course

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Actually these ten books are somehow related. Both Market Wizards‘ book are  interviews of top traders of our time. Most top traders recommend Reminiscences of s Stock Operator as a must read. Pit Bull was written by market wizard Martin Schwartz. Street Smarts was written by another market wizard Linda B. Raschke. The Taylor Trading Technique was Linda B. Raschke’s recommendation. The goal of professional trading is Trading for a Living. Trading psychology and trading tactics are two important factors to achieve this goal. Trading in the Zone is by far the best trading psychology book. To assemble a successful trading tactics, Technical Analysis of the Financial Markets is the best technical analysis book; Japanese Candlesticks Charting Technique and Point & Figure Charting are the best charting tools to interpret market price action.

1.  Market Wizards and The New Market Wizards by Jack Schwager

If your goal is to be a professional trader, these two wizards books are perfect for you. Many top traders were interviewed in the book. Just to name a few, Richard Dennis, Paul Tudor Jones, Ed Seykota, Marty Schwartz, James B. Rogers, Victor Sperandeo, and Linda B. Raschke. Some of them already retired, while others are still going strong now days. You might get disappointed, if you are trying to find any specific trading techniques or trading secrets in the book. After finish reading these two books, you will understand there is no such thing as holy grail in professional trading. New traders can benefit from top traders’ market insight and how them deal with various trading challenges as well.

2. Reminiscences of a stock operator by Edwin Lefevre

Reminiscences is a true classic. It was published 87 years ago (1923), and still read by traders around the world, professionals and amateurs alike. It’s the most recommended, and most quoted trading book ever written. This book chronicled Jesse Livermore’s trading career. Jesse Livermore is considered one of the best speculators ever.  Reminiscences is full of trading wisdom. My favorite quotes have to be “there is only one side to the stock market; and it is not the bull side or the bear site, but the right side”, and “there is nothing new in Wall Street… Whatever happens in the stock market today has happened before and will happen again.”

3. Pit Bull: Lessons from Wall Street’s Champion Day Trader by Martin Schwartz

Pit Bull was written by market wizard Martin Schwartz. In this book, Schwartz chronicled his trading career. Schwartz didn’t expose the detail of his trading system, but he did mention the trading tools he used to make trading decision, which includes 10 day exponential moving averaging, and Terry Laundry’s Magic T Theory. By the end of Pit Bull, Schwartz shared what his typical trading day looks like. After reading this book, you will find out super trader’s success has nothing to do with getting lucky or because they are smarter than others, they actually work very hard to get what they want. If you are still thinking trading as getting easy and quick money, then I am afraid trading might not be your cup of tea.

4. Technical Analysis of the Financial Markets by John Murphy

There is no need to repeat the importance of technical analysis to ones trading success. Most professional traders are using technical analysis to earn their butter and bread. For example, the author of Pit Bull, Martin Schwartz states, “I always laugh at people who say “I’ve never met a rich technician” I love that! It’s such an arrogant, nonsensical response. I used fundamentals for 9 years and got rich as a technician.” Unlike other technical analysis books’ dry reference written style, this book is well written and an excellent read. If you want read only one book about technical analysis, Murphy’s book should be your pick.

5. Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude by Mark Douglas

If you have put your money on the line for awhile, you might already realize that the most important factor in trading success is not about finding a profitable trading system; trading psychology plays a rather significant yet often overlooked role. Trading in the Zone is the best trading psychology book I have ever read. If you are still struggling to achieve consistent performance, you might experience some aha moment reading through this book.  Have you ever been wondering why people use identical trading system while having different trading results. Trading psychology is the answer.  So grab this book and learn to put trading psychology as your edge as well.

6. The Taylor Trading Technique by George Taylor

This book was recommended by market wizard Linda B. Raschke. Well, I have to agree with Raschke that George Taylor definitely a better trader than writer. I don’t have a dyslexia, but I do feel I have one after reading. Don’t be fooled by the hard understandable writing style though, this is an excellent book which captures the essence of swing trading . Taylor divided trading days into three categories: buying day, selling day, and short sale day. Then there are certain trading strategies for each trading day. Short time traders shouldn’t miss this book. It might bury the information you have searched high and low for years.

7. Street Smarts: High Probability Short-Term Trading Strategies by Linda B. Raschke, Laurence A. Connors

Linda B. Raschke was featured in the New Market Wizards. This book introduced quite a few high probability trading setups. It’s not necessary to use or even understand all of them. If you could just find one setup ring a bell, that would be good enough. My personal favorite trading setup is the range contraction. I found the NR4/ID, and NR7 patterns are quite reliable in currency trading. Other useful patterns to me include Wolfe Wave, morning news reversals, and big picture news reversals. Raschke’s analogy of trading to playing poker makes lots of sense to me, “The real discipline is in waiting for the right hands. You don’t have to play every hand but you must bet very aggressively when you have the best hand. Don’t bet money when the odds are not fully in your favor!”

8. Japanese Candlestick Charting Techniques, Second Edition by Steve Nison

Candlestick charts are originally used by legendary Japanese rice trader Homma Munehisa in 18th century, and introduced to western world by Steve Nison in last century. Candlesticks interpret price action in an quite unique way, which are perfect combination of eastern philosophy and western financial world.  If you want to add candlesticks to your trading arsenal, look no further, this is THE book for you. Although there are some cheaper candlesticks books available, Nison‘s book is head and shoulders above others. Try to learn from the best resources, candlesticks could be your trading edge as well.

9. Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices by Thomas J. Dorsey

Among various charts, only point and figure charts can be used as a charting tool and a trading system as well. Since point & figure charts filter out pre-defined price fluctuation, it is great to identify major support and resistance levels, and take advantage of real breakouts or breakdowns.  Trend following pretty much goes hand in hand with Point and Figure charting. For more information about the benefits of using P&F, please refer to Forex Trading with Point and Figure Charts.This book will teach you how to construct point & figure charts, identify bullish & bearish chart patterns, and project price objectives. A must read for P&F fans.

10. Trading for a Living: Psychology, Trading Tactics, Money Management by Dr. Alexander Elder

The ultimate goal as a trader is to consistently take money out of the market. Trading might be the most challenge career ever. It is possible to trade for a living, and many already achieved the goal, for example the traders featured in Market Wizards. This book points out three important factors to trading success: psychology, trading tactics, and risk control, and offers practical suggestions to drive home each point. Study Guide did a wonderful job to help readers to check what they learned and how to implement those knowledge.

Buy and read these 10 best trading books might be one of best trading decisions you ever made. This investment is way much better than just buying a black-box system, which has little to do with becoming a professional trader. Since these books are so classical, you might find some in your local library as well. I found at least five books at my local library. Sure it takes lots of time to read these books, and even more efforts to implement what you just learned. I can assure you that would be money and time well spent on your journey to grasp the essence of trading. If you missed any single book listed above, I would urge you to go grab a copy and read it sooner rather than later. You won’t regret about that decision. These picks are just my own opinions based on my trading  experience. You might have a different view, please share your wisdom on the subject in the comments. For more trading books recommendations, please refer to forex resources.

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Step 1: Make a Decision to Go Pro
If you can’t make this commitment, you’d better take the money out your trading account and fly to Las Vegas. You might experience the same results, but at least you’re having some fun. This may sound harsh, but it’s the reality. So far the only people can consistently take money out of forex market are professional traders. If you really want to make a living by trading currency, you’d better make the decision even before your first currency trade. How many times have you heard that any amateur fx trader make money trading currency? So try to treat forex trading like a business, which means a systematic approach to forex trading.

“Everybody gets what they want out of the market.” – Ed Seykota, Market Wizards

Step 2: Get Educated (Book Smart)
To trade currency like a pro, you need to think and trade in a professional way. It’s difficult to find a professional forex trader as your mentor who can take you under their wing when get started. Thanks to the information age, there are hardly any real trading secrets out of touch. Of course it takes lots of time and effort to gain this information. All the needed information is right at your finger tip; all you need to do is a willing heart and savvy eyes to find them. Below is a minimum list of best trading resources I am personally benefited a lot. If you could really grasp its essence, it should be sufficiently enough to lay down a solid foundation for your forex education. For more recommendation, please refer to forex resources.

Best Trading Books

• Market Wizard by Jack Schwager
• The New Market Wizard by Jack Schwager
• Reminiscences of a stock operator by Edwin Lefevre
• Technical Analysis of the Financial Markets by John Murphy
• Pit Bull: Lessons from Wall Street’s Champion Day Trader by Martin Schwartz
• Trading in the Zone: Master the Market with Confidence, Discipline and a Winning Attitude by Mark Douglas

Best Trading Course

• Hector Trader’s Forex Course of Price Action Forex System
  

Best Trading Tool

• Forex Point and Figure System

“… I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today was happened before and will happen again.” – from Reminiscences of a Stock Operator

Step 3: Gain Battle-proven Experience (Street Smart)
No matter how book smart (step 2) you are, or how great your trading system is, if you can’t make money in the real forex market, it’s all useless. The first step to test your forex system or forex knowledge is to trade with a demo account (Click here to open a Zecco practice account). I know there are argues about whether demo trading is beneficial or not. I won’t take sides here, because both sides have a valid standing. Since the psychology is quite different when the real money is on the line, I would recommend demo trade at least for a couple of weeks to get desirable results, then switch to a mini account. If you need more time to test before taking the plunge, you could just open a micro account (for as little as $50) to manifest the emotional roller coaster of real forex trading. Just don’t stay demo for way too long.

Step 4: Find Your Edge
After you get the proper forex education (step 2) and trade awhile (step 3), if you can statistically take money out of the market, then you are well ahead of the game now. If you haven’t got a desirable result, you need to get back to step 2 (if your decision to go pro haven’t changed yet). Your trading system could be either discretionary or mechanical. But don’t be fooled to think that you could just pay a few hundreds or even thousands dollars to buy a black-box system, then get money out of the forex market as a ATM machine. Black-box systems aren’t your edge for sure.

“If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.” – Warren Buffett

Step 5: Money Management & Risk Control
You find your edge, now what? Most people would spend lots of time, efforts, and money to look for the next killing trading system or trading strategy. Yes, read this as the search for the Holy Grail. Money management is equal important as other trading factors. While there are so many resources on this topic, it’s easy to get overwhelmed, I would recommend to start with The Original Turtle Trading Rules.

“The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system. There are old traders and there are bold traders, but there are very few old, bold traders.” – Ed Seykota, Market Wizards

Step 6: Consistency is King
You have nailed down your trading system, and you already trade profitably with you edge while risk is under controlled. You are more than half way to achieve your goal to go pro at this stage. All you need to do is to rinse and repeat what you have learned during the process. If you could take money out of the forex market on a consistent basis, you can’t go wrong with that approach.

The above six steps should be sufficient enough for new forex traders to start their journey to go pro. Hope you could trade currency with minimum pre-defined risk just like a professional fx trader.

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Most traders are familiar with line chart, bar chart, and candlesticks, few heard about point and figure charts (P&F), even less trade with this powerful tool. Note that this is an introduction though, if you already know the benefits of P&F, and plan to use it in your currency trading, feel free to check out the above P&F system. If you know little about point & figure, don’t worry, after reading this article, you will have a better understanding whether it works for you. Then you could add point and figure chart to your trading arsenal with confidence  as well.

Why Use P&F Charts?

Forex market is a very dynamic market. The price can be both very choppy, and then trending very well. Without years of quality screen time, it is difficult for less experienced traders to effectively identify support and resistance, breakout or breakdown, and trending or ranging at real time. These basic trading concepts are the stepping stones for most profitable trading setups. With the help of P&F, even amateurs can get hands on experience of these concepts with reasonable efforts. When I added P&F to my trading tools two years ago, I found myself having a better understanding of trend following, and became more selective to my trading entries. Until today P&F is still at the top of my trading tools and I use it on a daily basis.

How To Construct P&F Charts?

P&F is constructed based on price action exclusively. There is no time factor, volume information involved as other charting systems. Point & Figure charts  are formed by alternate columns of Xs and Os, while X column represents rising price, and O stands for falling price. To build a point & figure chart, two parameters need to be pre-defined – box size and reversal box number. For any price fluctuation that is less than the box size is considered insignificant and is filtered out. For any cross-current price action that is less than the magnitude of box size times reversal box number, the price will stay at current column, and the reversal is yet to happen. For more detail about P&F chart construction, there are three great books in the PnF resources section.

Since we know the basic of P&F construction, there are two options to build P&F charts to help our forex currency trading, we can either build it manually or use a point & figure software.

It is advised to draw point & figure chart for at least one market on a daily basis. I myself update three forex markets on a daily basis, which include GBP/USD, EUR/USD, and USD/JPY. It’s a good trading routine and keep me alert to any trading opportunity to the three forex markets. I strongly suggest you to draw your own P&F charts as well. If you are familiar with the construction process of P&F, it could be done as few as 10 minutes.

“Notice how many old-timers who have been successful for years still construct their own point-and-figure charts by hand intraday” – Linda Bradford Raschke (The New Market Wizards)

Since P&F charts give less yet more reliable trading signals, it would be nice to scan through a basket of chosen markets to find the best trading opportunities. To track a variety of  markets, an automatic P&F charts drawing software will become handy and save you lots of time and energy. Click here to visit Forex Point and Figure System website.

Forex Trading P&F Example

The above candlesticks about sterling pound offer a perfect example how to apply P&F chart to trade a range-bound forex market. From 1/21/2010 to 1/28/2010, pound moved into a less than 200pips range for 5 days. The price roughly tested both the upper and lower bound three times, which indicated rather strong support and resistance level, especially, the lower bound of the range had a confluence with the 61.8% Fibonacci retracement level. This range-bound price action was crystal clear on its corresponding P&F chart. The range was characterized by a triple top at 1.6266 and a triple bottom at 1.6100.

Once a trading range is clearly defined, there are two forex trading strategies could be applied to take advantage of this well-defined pattern. The first trading strategy is to short at the top of the range, while long at the bottom of the range. Of course you can’t just blindly long or short, a better way to short at the range top is waiting for a bearish signal is given, while long at the range bottom when a bullish signal is present. We might make less forex pips this way, but it significantly increase the odds of winning while spend less time in a position while testing the top or the bottom of the range.

Although a well established ranging market is notoriously for fake breakouts or breakdowns, there always exists the possibility of range top breakout or a range bottom breakdown. So the second trading strategy is to be well prepared for such breakouts or breakdowns. Finally, on 1/29/2010, sterling pound made a triple bottom breakdown. After the breakdown happened, as long as pound stays below 1.6100, we will remain bearish and hold our short position to the full extent if we do a position trade.

The above sterling pound trading example clearly demonstrated how to trade currency successfully with point and figure charts on range-bound market.

PnF Resources

1. Forex Point and Figure System by Hector Trader
2. Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices by Thomas J. Dorsey
3. The Definitive Guide to Point and Figure by Jeremy Du Plessis
4. Complete Guide to Point-and-Figure Charting by Heinrich Weber and Kermit Zieg

To learn more about how to apply point & figure charts to forex currencies trading, click here to visit Forex Point and Figure System.

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