Advanced Trading Strategies for Experienced Forex Traders

09/16/2007 12:00 am EST

Focus:

Tim Bourquin

Co-Founder, The Traders Expo and The Futures & Forex Expo

Moderator Tim Bourquin, co-founder, the Traders Expo and the Forex Trading Expo, joined Todd Gordon, currency strategist & active trader, Forex.com, and Dave Floyd, president, Aspen Trading Group, as they shared the essential steps traders need to take if they wish to advance their trading to new levels.

As an introduction, Tim asked the panelists for an overview of their trading styles.

Todd is a follower of both Elliott Wave and Fibonacci Theories. He commented that he found them to be simple ways to approach the market. And he noted that these tools allow you to align yourself with the trend of the market, while taking the temperature of different legs, so that you can pick entry levels at specific points, as well as set stop losses & targets.

Dave practices swing trading, in time frames from a couple of hours to a couple of days. To be successful, he employs very analytical tools, and also uses Elliott Wave and Fibonacci. His primary style is structured trading, always with a game plan.

Both panelists discussed the need to limit the number of simultaneous trades, their favored time frames for trading, and how they go about finding trading opportunities.

When asked about patience, Todd replied that he uses as many tools as he possibly can and waits for the right opportunity. He remarked that doing nothing is the hardest thing for traders to accept.

Dave agreed, noting that you must not mistake quantity for quality. He made a fitting analogy – successful traders are like good carpenters. Sometimes you need a chisel to get the cut just right, or a blend of tools, under weighting or over weighting them as necessary. He uses a variety of tools and indicators, mixing them up into different combinations, as the trade requires.

Tim queried the panelists about the annual returns they expect. Dave remarked that the answer depends on the individual’s risk tolerance, and suggested that traders define what they are willing to risk on a per-trade basis, before considering their returns.

Both Todd and Dave gave examples of one of their worst trades and the lessons they learned from it. Todd told traders that it was essential to first determine if it is a trend day or a range day, and then stick with your plan. Dave agreed, emphasizing the importance of removing emotions from the game so that you do follow through with your plan.

Both panelists gave specific examples of indicators – outside of Forex – that they used, and discussed, in detail, particular conditions to confirm Wave 4 patterns.

Tim asked if, after their years of trading, if they each are comfortable and confident that they could consistently make a profit over a monthly, or even daily basis. Dave responded that he could – most of the time – but he believes you must continue learning, and lately, has decided to take his technical analysis to a deeper level. Todd agreed, telling attendees that it took about five years for him to reach a certain level of comfort; that Forex trading can’t be learned in six months. Expect to put in some time if you want to be successful.

When asked if they set goals for how much money they want to make in a year, both panelists said no. Todd commented that a successful trader is judged by how he takes his losses. If you set profit targets, you may cut your trades short, leaving a lot of money on the table, and that’s not a good move. Each month, your profits will change, depending on the market. He further advised that traders should not move their stop losses – unless they have an overwhelming reason to do so.

Dave agreed, and remarked that traders must accept that from time to time they won’t do as well during other periods. However, if you were consistently losing over time, it would be a good idea to reanalyze your plan.

At Tim’s request, to close the session, Todd and Dave gave attendees a trade they could take right away – a nice bonus, in addition to all of the practical advice attendees received from these trading pros.

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