This article, as almost all the others, deals with Forex but not only.
I want to make myself clear. Our approach to trading, as you may have noticed, is a little different from the rest of the educational offer available on the market.
We like to be solid, so solid that our strategy accounts for as many as 5 definite instruments to be used simultaneously and 7 clear steps to follow each time a trade is being carried out.
There’s no escape to that.
The same as when you write your shopping list, or thinking at what to cook, if you forget an ingredient the recipe does not turn out well.
W also like to fly high though, and observe analogies between trading and the rest of the life. Some freak would define our way of viewing things as an holistic approach. Since we have never understood what this term really means, we limit ourselves to saying it. As in life, also in trading. If we were blasphemous, we would probably say: “ as in heaven, so on earth”.
Today’s word is imagination. And more precisely, creative imagination.
Let’s make an example: there are many ways to individualize a trend in the Forex. If you are not trained enough to observe things and your eyes are those of a beginner, you will wait for your graphic to show two crossing lines (typically the so-called average lines), and if you are even less evolved you will buy for yourself a pricey indicator with red and green lights and will wait for the colour to change.
If vice versa you have an adult frame of mind you understand that there wouldn’t be any doctors who study for twelve years before earning some money, people who break their backs working in factories, students who spend their nights on books, if just a few red and green lights were enough to pay for their rents.
You understand that in order to do something well you must devote time and passion to it. In our way of doing training the things that receive some degree of it are basically two: mind and eyes.
Today we will speak about the eyes.
Training my eyesight has always been fundamental to me. I started just as everybody else, thinking that training could be something as a videogame, but after a couple of burnt accounts I started to understand.
I had filled up the graphic with useless objects, covering the only important thing: price. I studied with great humility and also bought books to help me out. After a short time, I understood that I did not need those either. They tried to repackage things that I had already read somewhere else, unnecessary and unpractical things such as how a Head and Shoulders was made.
I threw all the book away and started to behave as a mad man.
A conscious mad man, of course.
That is, I started clicking on the new small metatrader arrows (the ones that allow you to draw back on the price without the platform automatically leading you to the last candle) and I leafed through the past. I leafed through the past of the price just as if it were a book. Trying, as if it were a crosswords magazine game, to take note of recurring forms and giving them fancy names (creative imagination).
Price patterns and Japanese candles which caused a price acceleration.
I just wanted to understand where did the price accelerate. With my trade-management rules I just needed to have 7-8 pips of profit to be quite confident I would not lose.
I did this for every single week-end for six months and I slowly realized that reality was taking shape before my eyes. It was the same as when an archeologist tries to decipher a lost language: there is a great deal of patience involved, there are pieces to be added to the puzzle, but eventually …bingo! You have found the combination.
I have found a series of price patterns and candles that cannot be found in any book and that, once materialized on the graphic, give me a high probability of price acceleration.
Just a couple of things to add: first, in order to do so you need to let yourself go a bit, have creative imagination, train your eyes, a bit like those 3D pictures where you must detect the image behind.
Second, you must be aware that nothing is created and nothing is destroyed, but everything is transformed.
As all the rest, your loved secret patterns have an expiry date, too. Sooner or later they will lose efficacy, some others will last for years , but it is important to dedicate at least an hour or so each week-end to what I call Pattern Research & Development.
Still today I happily devote an hour of my time to creative observation/imagination each weekend. I have a look at all the timeframes up to the 5-minutes, take notes and see if there are new forms that repeat themselves. If you do it each weekend, you keep your training high, but if you stop for a long time you will lose the power of your scanner-eyes.
On our site, SurfingThePips.com I share the most powerful patterns of the time and sometimes I also do the same on the ones I am still testing. Some of our customers have proved being excellent pattern researchers and they even bring out ideas for new patterns.
As always, united we stand, divided we fall…
Davide Franceschini | Chief Trader