The best trader of them all
Michael Marcus who reportedly turned $30,000 into $80 million was interviewed by Jack Schwager in Market Wizards. One of the things Marcus said was that one of his best trading methods was to determine where price was about to trade with momentum and enter with a large position and a tight stop. If momentum didn’t move when he thought it would, he got out. Momentum means you make money, no momentum means you sit and stew.
Are you using the best tools?
A Forex trader is often taught about the many tools that he or she can use but the concepts that make money are often lacking. Websites, books, and seminars are long on trading tools and short on what makes money in the market.
The RSI, Relative Strength Index, which is often taught to new traders, is taught incorrectly 99% of the time. So before we start with how to make fast profits, the trader needs to understand the correct concepts behind RSI. The best way to do that is to read RSI PRO: The Core Principles. It is an inexpensive read and it will get you started on the New Concepts behind RSI.
New concepts of RSI
RSI, using these concepts, allows a trader to enter trades at momentum peak times with small draw downs. By doing this, the trader is able to increase the size of their positions and increase their profits.
For example if you were trading an account with $3,000 and you traded 1 standard lot and your projected goal was 10% and your risk was 5% then you would be trading to make 30 pips and risking 15.
You would want to trade a system that would tell you where to trade, what direction and when. The RSI with the New Core Principles does that. In fact many trades trade with less than 10% drawdown and the target is significantly greater than the goal of 10%.
This is how to maximize profits by using tight stops and trading at the time of momentum. In the Core Principles you will learn about momentum and how to locate the three kinds of momentum. When you become proficient in putting yourself in position to take a trade with a high probability of momentum you will begin to see profits increase quickly. Traders who learn this method are able to double profits in 10, 20 or 30 days.
Not only does RSI give you specific entries, it gives you specific targets and it teaches you when momentum will most likely be in play to drive price to your target.
Source by Paul W. Dean