Frankfurt rd 22nd & 23 November Thank you for attending my talks at the World of Trading in Frankfurt. I have attached the notes from both days into this file. If you are interested in watching me trade live every day, you are welcome to send me a message from the Telegram app to @TomHougaard, requesting to become a member of my channels. Please be mindful that scammers have names closing resembling mine. I will however never sell you anything. I have 4 Telegram channels: 1: Day Trading channel 2: Swing Trading channel 3: Resource channel 4: Trading software channel All resources are free. Please request access by contacting me on @TomHougaard Frankfurt rd 22nd & 23 November Trading is a mind game. Your success is directly correlated to the amount of uncertainty you can emotionally hold internally at any given moment in time. I’ve Researched Many Things Interestingly, I have discarded everything I learned, in favor of simplicity. Same technique 8 years ago Same technique 11 years ago What follows is the research for the Advanced School Run Strategy, which is bracketing th the 4 5min bar in the DAX, after the 9am local time open. It is a full year’s worth of intraday charts. Knowledge Is Nothing Without The Will to Act can YOU trust yourself? Try this exercise Simple Life or Complicated Life? www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 76 Is Your Mind Ready for Anything? Is Your Mind Ready for Anything? Keywords: Same Setup – Different Outcome www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 79 . Today we will learn about preparation and repetition. We repeat our process daily, we accept that some trades will work out. Some will not. Some days we will do nothing but win. Some days we will do nothing but lose. www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 80 Today What will you learn today? 1. Mind & method. 2. Risk control. 3. Daily routine. 4. Survival skills. What could go wrong? 1. You say “yes” when I ask if you understand, but actually you don’t understand. 2. You don’t ask enough questions. So, ASK! www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 81 Your Thinking is the most important part of your Trading! Who are we? We are traders. Who are we not? We are not fortune tellers. We are not “wise men” who can see the future. We are emotional solid – we work hard to make our dreams come true. We do not rely on luck, although at times we will get lucky. We observe and we deduce. We act with confidence and decisiveness, when an opportunity arises. We are observers of behaviour. We accept that while history never repeats exactly – it rhymes often enough for us to make money from it. We never give up. We never lose faith in our abilities to make money. What do you think will happen now? Are you seeing a higher low? Are you seeing a high, and then a lower high? Can you appreciate that all the technical analysis in the world can not give you the answer to what will happen next? So we rely on two traits of the human condition: Inertia and repetition. www.tradertom.com Our biggest enemy is our ego and our impatience. Our enemy is our desire to be right. We accept and embrace the fact that we can be right 50% of the time and still make money. We prepare ourselves mentally so that we can act in our own best self interest in the heat of the battle. We never stop growing, and we never stop learning. Your job is not to “know” what will happen, but to “know” what you will do when it happens. Take the chart on the left. We have no way of knowing what will happen next, but through the application of price action, we can be ready when a signal appears. 82 Trend or Trading Range The MORE the market is trending, the better it is to be on more trend (Mental Rehearsal helps!) Bulls look for many bars closing near their highs and consecutive bull bars = relentless buying When the market is in a trading range, we bet on failed breakouts and failed reversals. Trading Range price action means smaller bars and bodies, Bears look for many bars closing near their lows more prominent tails, more overlap between adjacent bars, and consecutive bear bars = relentless selling reversals every 1 – 3 bars 83 Want to See a Test The market is constantly probing up and down to find out how far too far is. Before trading a reversal at support or resistance, traders like to see the market reverse twice The 2 most common reversals patters have either 2 legs (Double Tops and Bottoms) or 3 legs (Wedges) 84 2nd Move Test 1st The market is constantly probing up and down to find out how far too far is. Before trading a reversal at support or resistance, traders like to see the market reverse twice 1st reversal in strong trend usually is minor (it fails to create a reversal) 2nd reversal has a higher probability of leading to a swing down. Traders see the bulls failing to buy at the high for a 2nd time. Suspect must go lower to find buyers The 2 most common reversals patters have either 2 legs (Double Tops and Bottoms) or 3 legs (Wedges) 85 Wedge A Wedge top has 3 legs up The final two form a Higher High Double Top 3 3rd leg up is test of 2nd leg up so Higher High Double Top (HH DT) It is also test of top of bull channel so Wedge 2 1 The 1st tops two create a bull channel The 3rd leg is a test of the top of the channel 86 Your Thinking is the most important part of your Trading! Who are we? We are traders. Who are we not? We are not fortune tellers. We are not “wise men” who can see the future. We are emotional solid – we work hard to make our dreams come true. We do not rely on luck, although at times we will get lucky. We observe and we deduce. We act with confidence and decisiveness, when an opportunity arises. We are observers of behaviour. We accept that while history never repeats exactly – it rhymes often enough for us to make money from it. We never give up. We never lose faith in our abilities to make money. What do you think will happen now? Are you seeing a higher low? Are you seeing a high, and then a lower high? Can you appreciate that all the technical analysis in the world can not give you the answer to what will happen next? So we rely on two traits of the human condition: Inertia and repetition. www.tradertom.com Our biggest enemy is our ego and our impatience. Our enemy is our desire to be right. We accept and embrace the fact that we can be right 50% of the time and still make money. We prepare ourselves mentally so that we can act in our own best self interest in the heat of the battle. We never stop growing, and we never stop learning. Your job is not to “know” what will happen, but to “know” what you will do when it happens. Take the chart on the left. We have no way of knowing what will happen next, but through the application of price action, we can be ready when a signal appears. 87 Your Thinking is the most important part of your Trading! www.tradertom.com 88 Price Action - Fishing Technique (reversal) - Fishing Technique (continuation) www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved Price Action Example - Clean Price Action Example 11 10 2 14 12 9 1 8 3 15 13 16 4 5 7 6 17 The Story Behind a very Profitable Technique The Story Behind “Fishing Technique” The fishing technique came about whilst sitting in a class room with Larry Pesavento. Watching the charts on an enormous 40 foot screen brought a new perspective to my chart appreciation. Fake Out after Fake Out The text books tell us to buy the breakout or sell short the breakdown. It just felt wrong to me from a practical point of view. I would buy a breakout, and it would so rarely work. My trading looked nothing like they did in the text books – you know – where you see one perfect example after another. The Realisation What I realised watching that enormous screen was that I was better off selling short double tops or buying double bottoms, but refining it with a parameter which I call “the fishing expedition completed”. So let’s dive into the world of fake-outs and fishing expeditions….. www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 92 Rules of Engagement 1. I want to see a market where a double top or double bottom is being formed. I want to see a market where stops above/below old high/low are being run. 2. I want to see a market trading below the old low, or above the old high, but not too far below the old low or too high above the old high. 3. If the market trades above the high of the bar with the lowest low, and then also closes above the high of the lowest low bar, then it is a BUY signal. 4. If the market trades below the low of the bar with the highest high, and then also closes below the low of the highest bar, then it is a SELL SHORT signal. 5. I recommend it be used on time frames from 5min and above. I use it on 10min charts mostly. 6. Target is always “where the market just come from on the previous swing”. If the stop is too big, adjust your risk per point/contract size. www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 93 Example of a Reversal & Entry Dow Index – 10min Chart – Chart 1 Dow Index – 10min Chart – Chart 2 Dow Index – 10min Chart – Chart 3 DAX Setup – Outcome Not Shown Close Up DAX Setup – Outcome Shown Euro Sterling Daily Chart www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 101 Sharpen Your Pencil – Get to Work www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 102 Close Up of Signal Højeste Bar Psykologien ved et Fiske-signal er udfordrende. Du føler at alle er positive/negative og du vil nu gøre det modsatte. Husk at hvis det føles nemt at gøre er det ofte ikke det rigtige at gøre (indtil den dag hvor man har trænet sig selv til at gøre det rigtige!!!) Lukker under bund af højeste bar www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 103 Your Turn www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 104 And Again www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 105 Result www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 106 Classical Reversal www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 107 Classical Reversal www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved Classical Reversal Tough day in the office? www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 110 How Would you handle this? www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 111 Price Action - Market Maker Behaviour - Europe - “School Run” Strategy www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved Short DAX – hmmm!!! Did I bet against momentum? I bet against momentum!!! www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 117 www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 118 www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 119 Training Is it even possible to “practise” trading? Deliberate Practise 10,000 Hour Rule The Nature of Practise Example of Frustrating Research How Did Expresso Come to Be? DAX INDEX first Example of Frustrating Research Now FTSE Situational Analysis 05 04 EXPRESSO 06 0 08 04 BRUNCH BREAK 09 Situational Analysis Part 2 11 12 13 14 15 Rule of 4 FOMC Rule of 4 News Before Open Rule of 4 Post Open Dow 30 min Sunrise FTSE 30min 06 07 08 09 10 Observe trade setting up. Emotional and logical brain receives the same message. Frustration, Depression, What is the end goal? Inability to act (yet) Processing, Negotiation, Logic vs. Emotions, Fear of loss vs. Loss of opportunity, Traders observes signal. Signal is sent to brain for processing. The signal is processed against the database of experience (emotional), as well as the factual relevance of the set up (unemotional). If “emotional” brain experience fear, you will at a conscious level experience “cognitive dissonance”. This means you are experiencing “conflict”, an emotional conflict between facts and emotions. This is a typical loop for many traders. Rationalisation, Renegotiation Surrender Cognitive Dissonance Acceptance FEAR NO FEAR Attachment leads to jealousy The shadow of greed, that is. Train yourself to let go of everything you fear to lose. – Yoda – Detachment leads to neutral thinking Neutral thinking is a state of mind of still feeling and acknowledging but not acting upon impulses. “It wasn’t technical analysis that got me here today” – Tom – Telegram = @TomHougaard Thanks for joining hello@tradertom.com Live trading YouTube daily Frankfurt rd 23 November What do you want? How badly do you want it? How much are you willing to suffer? We write our life story every day Price Action - Market Maker Behaviour - Europe - “School Run” Strategy www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved Short DAX – hmmm!!! Did I bet against momentum? I bet against momentum!!! www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 165 www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 166 www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 167 www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 168 www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 169 www.tradertom.com © Material is copyrighted by Tom Hougaard. – All rights reserved 170 Same technique 11 years ago Now Changing Times US Holiday Telegram = @TomHougaard hello@tradertom.com
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