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
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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?
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© 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
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© 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.
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© 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!
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© 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…..
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© 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.
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© 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
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101
Sharpen Your Pencil – Get to Work
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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
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103
Your Turn
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104
And Again
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105
Result
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106
Classical Reversal
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107
Classical Reversal
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Classical Reversal
Tough day in the office?
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110
How Would you handle this?
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111
Price Action
- Market Maker Behaviour - Europe
- “School Run” Strategy
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© Material is copyrighted by Tom Hougaard. – All rights reserved
Short DAX – hmmm!!!
Did I bet against momentum?
I bet against momentum!!!
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117
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118
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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
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166
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167
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168
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169
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170
Same
technique 11
years ago
Now
Changing
Times
US Holiday
Telegram = @TomHougaard
hello@tradertom.com