You lose whatever you risk when tails comes up and you win twice what you risk when heads comes up. If R stands for you risk, this system is characterized by the two R-multiples it generates: 1) - 1R (when you lose, you lose what you risk and R stands…

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The Importance of Position Sizing 2

The (FX) market follows a steady cycle of oscillating between a range bound and trending environment, on a long and short term basis. During range bound markets, the buying and selling forces remain more or less equal, and therefore compress the market into a sideways trading pattern such as the…

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Bollinger Bands and Breaks

I did a retreat with one of the world’s greatest traders in 1989. At that retreat he talked about a simple trading system. It was a system in which you flipped a coin. If the coin came up heads, you won twice what you bet. If the coin came up…

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The Importance of Position Sizing

When the basic applications of technical indicator fail to explain the current market climate, we can experiment with a new and fresh look at the charts. The following (1-hour) chart shows a steady downtrend, with its expected support and resistance levels. Since the trend is to the downside, we should…

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Getting Creative with Support and Resistance

The largest traded “market” in the world is not the U.S., Japanese or European stock markets. It’s the foreign exchange market. It’s also called FOREX for short, or called the cash currency or spot currency market. Speculators can and do trade this huge market, in which over 1 trillion dollars…

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An Introduction to an Exciting Market - FOREX