Gamers Are Better Forex Day Traders

The one thing about playing games is you learn to shut off your emotions.

I cannot count how many hours I plunged into racing games in the arcades ruthlessly trying to hunt the clock down by tenths of a second. Slamming my foot down on the pedal I almost tried to break the game again and again tirelessly.Every second of the course I could memorize. The brain works tirelessly to memorize every fraction of a second so that I know exactly when to decelerate on taking a corner and come out flying in 5th gear. I would pray for forgiveness to my girlfriend and my friends girlfriends who had to stand by behind us in the arcades for hours on end and just cheer us on as we hunted the clock down again and again and again with greater perfection. The brain shuts off all emotion and sensibility and only the pure logic of a sequence of moves performed in split seconds made the difference between winning and losing.

The human brain is remarkable. You perform a task and then the neurons in the brain connect through chemical interaction transmitting commands and retaining feedback from the result which collects into a memory. the more you repeat the task then the stronger the neural pathway becomes and the more neurons become integrated into the process of repetition. The exercise of memorizing certain moves in sequence during a racing game speeds up the way the brain absorbs the visual data and then implements an action. In the process the brain formulates its own independence of decision -making as the game hunts down the clock to record the faster speed.

The gamer does not need 5 voices from behind to tell the gamer to shift down from 5th to 4th gear. Similarly, the gamer trader does not need pundits to tell him to do this and that. More than half of the pundits are useless and dead wrong anyway. A gamer trader, just as in the case of car racing, builds hours of experience through pattern recognition. the more and more you stare at the patterns and watch the movement of the candles then the more likely the neurons will collect in your brain and retain the memory for random access when you observe a sudden repetition.

In this sense arcade gamers become ruthlessly logical day traders in the forex markets. They shut off their emotions and they do not listen to anyone. They don't need pundits and they certainly don't need a multitude of technical charts. Hardly any of these gamer traders now rising would get into MIT. But they would thrash an MIT grad any time when it comes to the art of making money in the forex markets because they have spent hours building up their predator instinct which enables them to carve small pips here and there in short bursts.

Some people call it a 6th sense. in truth; it is just hours and hours of recorded information building a mass of neurons that process data lightning fast and helps the gamer trader take a decision in the blink of an eye. of course in the long run if you are a position trader looking for days and weeks as your horizon then technical information becomes handy. But if you are a day trader and if you depend too much upon technical information then you might just miss the swing of the mood as a market reversal suddenly occurs in a few seconds. the gamer trader instinctively reacts faster because he has amassed more neurons to record the patterns in his brain.

Simply watching the flow of prices in a day helps your brain to identify the pattern of movement.

Hours and hours of reading and education did not help me to become a good day trader. But by simply watching human emotions the brain comes to understand the patterns of price action and is able to determine a response just as faster than anyone who spent hours reading books.

Bringing Down The Forex House

Bringing Down the Forex House in Asia

They're young, they're 18 -21 years old, they sit in their bedrooms, they chew noodles and

they bring the house down every single time and they are usually millionaires in Yen and Won and they do the hardest part. Then they they go out and blow all their money in expensive nightclubs but who cares anyway? They're young and they're arrogant but they will make the money again tomorrow again and again.

The Asian gamer trader is rising fast and with 5G around the corner and with China and India rising the forex trading distribution will soon be shared by Asia and Europe together. Certainly in the retail forex markets the Asian trader will become more predominant in the next 2-3 years and the age is getting younger and younger as a new generation of traders rise with a brutal efficiency to take on the forex world.

In truth 90% of the retails traders out there today have no real idea how the structure of the retail forex market works and that is why they consistently lose. So now I am going to break it down for you and hopefully you will take this understanding and become a better day trader for it.

Firstly, although hugely unregulated and non-descript, the forex spot market consists of about 80% bank commercial users, 15% large fund speculators and 5% non banking small retail forex customers .  The commercial banks which dominate the forex landscape are merely buying and selling under instruction for importers and institutional investors and therefore in an interbank market a bank is always making a bid-offer spread and booking profits countless times per day as customer orders come in. They do no use technical data as the mainstay of their transactional business. Herein lies the significant contrast where small retail forex traders cannot even make a move without reference to a smattering of elect technical indicators to justify their trade. Hence there is a failure to understand how the market works by the small retail trader.

Secondly, The FX platform provider is your house very much like a casino. The platform company has a line of credit with one or two major international commercial banks. A platform provider with 20,000 customers is likely to have an open line of credit of 20 million Dollars. Now, for illustration purposes lets imagine that the line of credit comes from Barclays Bank to the Platform Company.  This line of credit is paired with a quotation service which Barclays will provide to all it’s commercial customers which again is based upon it’s institutional price quote in the dealer market as quoted on Reuters and Bloomberg. That quote service to corporate customers is the basis upon which the Platform company will but and sell currencies to take the opposite side of their own customer orders through their own quotation service which is usually time lagged. So, essentially the Platform price a retail customer is using is time lagged behind the main price action of the bank dealer market.  Here the small trader is really at the mercy of the Platform provider to enter the trade at a time and price dictated by the Platform provider and failure to recognize this can become detrimental to the small trader’s longevity

Thirdly, Bank dealers in the interbank market are very much like the gamer traders that are emerging with the young people in that they are only concerned with what happens here and now as against any consideration of the past and the future. Bank dealers have no time to overload themselves with technical data and the new gamer traders who grew up on Naruto and other such online games are not going to waste a split second in determining where the action lies. Years of gaming have improved eye skills in understanding game play.

Looking at the 5 or 15 minute forex charts without consideration of massive amounts of technical data and the very first thing you notice is how the market moves in waves in rhythm as buyers gain strength and fade before the sellers. The only reference gamer traders keep in mind is the day chart because although trends can show up on day charts, within every 5 and 15 minutes you cannot expect prices to move up or down in a straight line, hence your window an ‘Mado’ to trade without emotion whenever pressure builds and eases off.

We are human after all and the trader that can know the wave of human emotions is able to bring the house down. Since 9 out of every 10 traders lose in the long run then the house doesn’t really care if it yields a dollar to a smart gamer trader waiting to pick that 1 Dollar up every single time. The new 21 something Asian trader has a staggering level of confidence to trade as i have never witnessed before an if they do not spend hours pouring over technical charts they're certainly staring at the movement of candles for any possible reversal as moods change and then they will pounce on the trade with ruthless efficiency and book a profit.

Then they go blow their money on their drinks, girlfriends, clothes watches and cars but they will return again because they know that the FX market is about reading human emotions. They get mad at night, they scream at police officers, they are petulant; but they know how to make money. They do not depend on anyone else to make a trading judgement. They can take a decision win or lose and move on to the next trade. Understanding how emotions work in a market is the key to a successful career in day trading forex. They don't need to work for banks and hedge funds. They're already stars in their own right and don't need to be bossed about and shown how to trade. They have transferred their eagle-eye gaming skills to the real money making arena and for every one gamer trader they're beating the hell out of the other 9 traders on the retail platform because they can ruthlessly switch from buy to sell as they move with the rhythm of the 5 and 15 minute candles.

There is no past and there is no future for the gamer FX Trader

Why do 90% of traders fail in the first 6 months? 

1. Because they are preoccupied with a flawed analysis of the past
2. Because they try to the base the future upon the past but the future can be anything

A gamer trader already knows all permutations of the past and all possibilities of the future. 

A gamer trader only lives for the now and in that living for the now he can identify with the true market pulse and flow with the wave of human emotions.

Bank dealers buy into selling pressure and sell into buying pressure and make spreads and cut their profits every single time because they only live in the here and the now. Equally the new generation of gamer traders are young and bold and they have no time for information overload and technical analysis but their skills are honed in for the only moment that counts and that is now. The gamer trader does not clog his mind with tons of technical information so much so that he spends hours deliberating a trading decision.

Tokyo open GBP/ USD 22.12.2016:

Watch the waves again and again and feel the rhythm as human emotions move the market and then bring it to an utter halt. Know this pulse and you have won half the battle to becoming a very good trader if only you can live just for the here and now.

Gamers Make The Best FX traders

University degrees and MBAs do not prepare you for your life as a trader. That's a fact.

If I was running a hedge fund I would take 10 kids from the gaming arcades every single day over top university graduates.

It is scientifically proven that a person who drives a car for twenty years has faster instinctive data assimilation, pattern recognition and consequential action and more likely to avert a collision than a new driver. The same goes for computer gaming. These sharp kids who grew up in the arcades and played online at home have sharper reflexes to become a day traders. we are regularly reading stories of teen traders who quickly accumulate modest fortunes as they transfer their skill set into a new arena where you can actually make money; and they're reveling in it.

The problems with the degree holders is they read too much into the market. They refer to their Bollinger Bands and countless studies and by the time it comes to a trading decision they are swamped with information overload. The gamer, in contrast, does not read the stochastics and divergence indicators and a ton of technical studies. The gamer closes his eye for a second, feels the beauty of the market forces at war, and then opens his eyes to a world of rhythm. Just watching candlestick charts in free flow without any reference to a technical study, will reveal a world of pure movement. Watch this movement over days and your brain will start to form pattern recognition plans. Allow the brain to feel the market pulse and flow with it. Do not read too much or you face the danger of taking other peoples opinions and reading different interpretations into the market action.

Feel the market pulse and let your mind flow with the opposing forces of selling and buying.

Shogun Total War Video

Don't Hang Out For The Big Trades And Pick Up The Little Cherries

A man may ride a donkey but at least the donkey is heading in a direction!


If you're a day trader do not hang out for the big waves. You do not need to wait for key announcements that can take you 150 pips up or minus 150 pips if you get it wrong. Tsunami trading can hurt you. 

The pairs that I monitor every day are - 

EUR/USD
GBP/USD
USD/JPY
EUR/JPY
CHF/JPY
GBP/JPY
USD/CHF
EUR/GPP

and crude oil 

Capture 20 pips  on 15 min charts for 3 candles after a signal or 45 mins and multiply that by 5/8 and youre likely to gain 100 pips versus 3 wrong trades of - 10 pips x 3 or - 30 pips.

Therefore net 70 pips can be booked regularly daily without even having to face a 50/50 prospect of a windfall or a wipe-out on a market data release.

Trade modestly as a day trader and you can pick up these cherries regularly as you see the patterns repeat over and over again.

Trade small and accumulate in the long run.

Happy trading!

Typical Tokyo Morning

Even at a pre-Christmas week with thinning volatility the following shapes and patterns are typical of a Tokyo morning.

The one thing a spot trader cannot do is trade if prices are going nowhere. great news if you're an options seller but most readers are not as sophisticated in putting $10,000 Dollars capital as a tie-in keeping in ind that you should never ever ever expose more than 5% your total capital on any one single trade.

So the greatest way to catch a move is to watch Tokyo open because by the time the FX markets drift into the California West Coast zone everyone just wants to switch off.

So here goes a typical Tokyo morning where sharp traders can each 20-30 pips each time. Not a lot you may think but hang on and hold that thought. Day in, day out capture these little 20-30 pip moves and they all stack u[ into a tidy pile which will then help you to escalate your trading scale. So take note of the little things in the FX markets if you want to succeed.

Little makes BIG.

Here's 3 - 15 minute charts:

EUR/ USD crashing through the 1.05 last night on close of US session as US traders throw in the towel. Two Bearish Engulfing red candles hammered the faintest revival earlier in New York. Then typically the market goes to sleep and drifts aimlessly in a tight range. Prior to Tokyo open the early Japan traders attempt a Fibonacci retracement as a typical reaction to the previous US session. After a good 4 hours of quiet the market has to take direction and 20-30 pips are instantly captured.

GBP/USD once again a Bearish Engulfing candle set up a wave of destruction as the shorts carried the close of US session. The market drifted and narrowed. Then Big Bang. After entropy comes movement and the currency pair is hoisted in early Tokyo session and another good 20-30 pips are captured.

USD/JPY fails to inspire on market open just to go to show also that sometimes the lack of direction can drift through Tokyo morning although at the time of writing volatility is starting to increase in range though no clear cut signal has shown itself to enter a trade.

On the whole of 6-8 currency pair majors you can expect 5/8 to take a direction after a lack of direction prior to Tokyo open.

The chart repetition occurs over and over again. Recognizing the chart patterns could mean he difference between success and failure. there is a time to trade and a time not to trade. wait for the window to open. 

Trading Tokyo open is far more profitable than trading Europe open because Europe follows on huge activity of Asia and more uncertainty creeps in but Tokyo awakens to a few hours of drifting quiet. Europe follows Asia's market noise. There is very little noise at US close. Therefore quiet and stillness is surely to be followed by noise on Tokyo open. The logic prevails. You trade the noise, you avoid the quiet.

Know your Mado.

Happy Trading !

Narrow Range 4 Inside Bar (NR4/IB) Trade Set Up

Apart from the Bullish and Bearish Engulfing patterns on 15 min charts one of the most exciting prospects is the NR4/IB where the market stalls like a motor car engine and just needs to kick-start from a state of entropy to hyper-inflation. Big Bang moment.

Spot the NR4/IB on today's 15 min CHF/ JPY. The trade setup came in prior to Tokyo open.
many Tokyo traders just love to get in there early and take advantage of directionless trading hoping to catch a big wave on Tokyo open.

The criteria for NR4 is that the preceding 4 candle bodies must be of same size or narrower and then the 4th or 5th body must become an inside bar and usually the color of the last body is an indicator of which way the market will surge.

Remember to trade 15 min charts within context of day charts and in particular the 50 and 200 day moving average.

Keep your eyes peeled.

3 charts on the GBP/JPY and how to trade Asia Euro time zones effectively

In the long run we seek rational order and balance; the sheer chaos of conflicting ideas makes us giddy and we grope for some sane anchor to pin down our belief systems and shape our confidence.

Now turning our attention to the Forex markets even a day in the global calendar can seem a lifetime and so when we search for rationality we more or less attempt to frame the day's trading activity against the yearly price range and the 200 day moving average to understand what is going on in the 24 hours we roil and seethe with intense emotion in taking positions.

If we break down the FX clock starting from Japan and Asia we have three major segments starting with Japan then moving across to Europe for the second session and then on to New York for the US session. The bulk of the day trading is completed during Asian and Europe sessions.

Let's take a look at three charts marking the progress of the currency pair GBP/JPY from the morning Asian session to Europe session. The three charts comprise Japanese time 11am - 15.00 am 17.00 for Friday 11th December..

Chart 1 - 15 minute chart

As can be expected Japan overnight was fast asleep but come 6am Japanese traders start entering the market and volatility starts to explode and momentum takes a direction. Entering a trade on Japan open is highly desirable as the session is packed full of action towards it's tail end where it will overlap withe the main market Europe. China HK and Korea adds to the growing regional FX position and liquidity.

Japan session is a good window opportunity to tak a position for any key Europe an US data release if you are a swing trader looking to capitalize on a news release.

Now let's follow to 15.00 hrs the same day yesterday.

Chart 2

Come 15.00 hrs yesterday you will notice a lot of action has happened and we are now entering into a lull in the market which I call the dead zone where it would be unwise to stake a new position. The ideal long trade would have exited around 15.00 hrs prior to Europe open.

So what happens next?

Chart 3

On Europe open the market jolts up with a large green body and larger candle bodies follow to indicate a huge battle of red and green. there is a 45 mins tussle going on where huge money is pouring in to take positions. The Hanging man on the 15 mins chart preceded by a large red body is the straw that breaks the camels back and the market plunges. Traders would have come in with big shorts on the 14th minute on the large red candle following the green hanging man. Two large red bodies follow as price collapses in 30 minutes. But then the small red body over a large line is a serious warning that the market has run out of sellers. The large green body over the next 15 minutes would have seen big longs come into the market. Thus the first two hours of the Europe open presents two brilliant trading opportunities.

The currency markets tend to follow this similar pattern all year round and hence we can understand a rational structure of thin and larger volatility across the two time zones. Work with that volatility in the short term. Feel it's pulse.

As a rule I do not think it's a good idea to take large positions into the US session and try to exit after a key report by 10 am EST. Why? Pigs get slaughtered and the US session has thinner liquidity and you can become stuck into a huge dead zone of directionless trading as you drift towards Japan open. If you want to hang out for the big trade in excess of 100 pips in a day session you are going to get slaughtered. Taking 20 pips here and there over select currency pairs over the Asia and Europe time zone gives you better chance of a 6-4 win ratio. I try to focus 90% my trades during Asia and Europe session.

Always remember past performances are not indicative of future results and 90% of traders do lose because they always read into the markets what is in actuality not there.

Stay well friends