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Forex legendary tradersTrading with Legendary Donchian Channel Indicator in MT4. In the golden times of technical analysis, one name stood above everyone’s: Richard Donchian. Also called the father of trend following, he built the now famous Donchian channel indicator mt4 traders use. Despite its reputation, the Donchian channel indicator is not only a trending tool. Instead, it plays a vital role in showing volatility. Or, the volatility of a financial product. Because it deals with volatility too, the Donchian channel falls into a select class of indicators. Tools like: Average True Range Chaikin’s Volatility Volatility Quality Index, and so on, come to complete a volatility’s trader’s arsenal. However, the Donchian channel indicator has multiple uses. It deals with trend following too. For many, it looks like the Bollinger Bands indicator. Because the Bollinger Bands also has trend and volatility characteristics, traders’ confusion makes sense. This article aims to bring the work of Richard Donchian to good use. Why is there a need for such a thing? As he was mainly a commodity trader, his findings and concepts won’t work on today’s Forex market. Or, not all of them.

The idea is to bring to life what Forex traders can use. Moreover, to explain the Donchian channel indicator mt4 platform offers. Among other topics, we’ll cover: Richard Donchian’s technical analysis legacy The best ways to use the Donchian channel metatrader 4 indicator Money management rules laid down by Donchian. The idea is to take the best out of his work. And in doing that, to pay respects to one of the founders of technical analysis as we know it today. Donchian’s Contribution to Technical Analysis. For someone who published his leading work in the middle 1900’s, Richard Donchian is pretty famous. Those were the golden days for technical traders. Imagine the conditions back then: No personal computer. Hence, no trading algorithms, robots, quants, etc. No currency markets. Hence, only stock market to “play” with and some commodities. As such, Donchian’s work came to complete studies like: The Elliott Waves Theory by Ralph Elliott Harmonic patterns studies by Gartley Price and time by Gann. They all published their work around the same years. This makes top technical indicators and trading theories coming from the same group thinking. Is this good or bad for today’s Forex trading?

I would argue that it is both a blessing and a curse. It’s a blessing before future generations had a starting point. Using different tools (e. g., personal computers), today’s traders took old concepts to new levels. For example, think of a Donchian trend system developed on 1940’s commodity market. Would it work in today’s Forex market? Most likely not. Today’s traders simply open a chart on their trading platform. Next, they apply the Donchian channel indicator. Finally, buy and sell based on this channel indicator. Moreover, all Forex traders heard of the Donchian channel indicator mt4 offers. But few know its original use was on the daily chart only. Yet, traders use it on all time frames: Scalpers, on one-minute and five-minute ones Swing traders on hourly and up to daily ones Investors use daily and bigger time-horizon for their trades. Now comes the real question: how many Forex traders today are investors? The right answer: few of them. Because of this, the Donchian channel indicator is tricky to use on the Forex market. The General and Technical Guides of a Donchian System.

While most people think of a Donchian system like a bunch of technical indicators, that’s wrong. Above all, Richard Donchian was a money management master. In fact, he was a pioneer in this field. Moreover, the rules he laid down find great use in today’s Forex trading too. As such, if we are to start from somewhere, money management is the right place. And, for a good reason! I won’t list here all the rules and guides he made famous. However, I’ll mention the most popular ones. In doing that, you’ll see that you, as a Forex trader, heard them. Know them. But, you didn’t know they were made almost seventy years ago. Because the market is a sum of human behavior, money management concepts work in all areas. Forex trading included. The use of a stop loss is an aid to profitable trading Limit losses, ride profits. How many times you’ve read “let your profits run.” Or, “cut your losses”. Now you know where it comes from.

In technical analysis, Donchian was among the first ones to explain a sideways consolidation. What is that? In today’s world, think of an ascending triangle. Or, a contracting one. Even more, of a pennant, or bullish flag. All these are continuation patterns or sideways consolidation areas. And, on of Donchian’s contributions was to state that price would most likely make another advance after sideways trading. Trading with the Donchian Channel Indicator. The Donchian channel indicator mt4 traders use has a simple structure. It is made of: A 20-period default high A 20-period default low One middle band that shows the average of the two. Beware of what was mentioned earlier. The indicator work’s best on daily charts. As such, we’ll use the daily time frame to illustrate its effectiveness. The EURUSD chart above explains it all. The Donchian channel indicator’s lines define a perfect range.

For the current prices: 2537 represents the 20-day high 2165 is the 20-day low 2351 is the middle point. Or, their average. What’s interesting to know is that the Donchian indicator doesn’t include the current bar in its calculation. Therefore, it considers only the previous 20 days. The beauty of the Donchian channel indicator comes from its simplicity. As always, simple things work best. In technical analysis, that’s very much true. Complicated technical indicators make the like of a trader a nightmare. Because of that, the Donchian channels indicators is one of the best technical indicators for day trading. There are many ways to trade with the Donchian channel metatrader 4 platform offers. Here’s a list outlining some of them: Trend riding Find support and resistance levels Use an oscillator to filter entries and exits Volatility breakout with the Donchian channel indicator. Trend Riding with Donchian Channel Indicator MT4. Trend riding is everybody’s dream. But, dreams and reality differ.

Because the Forex market spends most of the time in consolidation, riding trends becomes difficult. As such, traders struggle to find the start of a trend. Above all, they lack patience. If you use the Donchian indicator to find a trend on the daily chart, you need patience. A lot of it. The rules of engagement for trend riding are: Buy when the price closes above the upper band. Sell when it closes below the lower band. Here’s the EURUSD daily chart showing one year’s worth of data. It applies the rules listed above. But the entries have an unfortunate timing. However, a simple approach like this was enough to catch the big trend. And, if you look back at 2017, the main trend in the FX market was long on the EURUSD pair.

Therefore, a simple Donchian trend system like this one was enough to spot it. Filtering the Donchian Trend Riding Entries. The approach above is too simple. That is, too simple for the Forex markets. It may have worked in mid-1900’s. And, on a different market. But for today’s currency market, traders must add something. That’s a trading plan. And, like all trading plans, we need exact rules for: Here’s a Donchian system to test: In a bullish trend Buy a break above the upper line only if The price didn’t break below the lower line on the previous dip Put the stop loss at the lower line Target 1:3 risk-reward ratio at minimum In a bearish trend Sell a break below the lower line only if The price didn’t break above the upper line on the previous spike Put the stop loss at the upper line Target 1:3 risk-reward ratio. Following the rules above, here’s where the right entry on the EURUSD chart would be: While not the perfect entry to catch the whole trend, it filtered the bad signals. As such, the approach is more conservative.

But safer. Support and Resistance Levels with the Donchian Channel. That’s pretty easy to do with this indicator. A long line, either at the upper or lower part of the Donchian channel indicator mt4 traders use, shows support or resistance. The inability of price to advance or decline shows a confluence area. Such areas are difficult to overpass. As such, they become support and resistance. Check the EURJP below. It shows the Donchian channel indicator on the daily time frame. The long upper line during the 2017 summer months proved a great resistance. Once broken it turned into support.

Moreover, when the price tested the support, it failed to close below. That is, below the lower Donchian band. Another bullish sign that helps to stay on the right side of the market. Oscillators with Donchian Channels MT4 Indicator. The example presented earlier was ideal. The EURUSD did break higher. And, in doing that, it took bears by surprise. Little or no pullback followed. However, that doesn’t happen often. Most of the times the market trips stops to the upside. Then turns and eyes the ones on the downside. And so on. Such price action shows the Donchian channel indicator’s limitations. As a trend indicator, it mostly fails. Traders end up being on the right side of the market.

But, waiting for the risk-reward ratio proves costly. Therefore, help could come handy. And help, in this case, has a name: oscillators. The AUDUSD chart above shows the RSI too. Or, the Relative Strength Index. An oscillator’s main use is to spot divergences. Namely, divergences between the price and the oscillator. The chart uses the RSI to time exits, but any oscillator works. Just keep in mind that price typically tends to make fake moves. Not the oscillator. The two entries followed the system described earlier.

From left to right: Wait for a pullback below the middle band. Go long at the next breakout Stop loss at the lower band Stay for 1:3 rr. BUT, there’s a catch. The RSI forms a considerable divergence. A bearish one. And, the trade didn’t reach the take profit. What to do? EXIT, of course. Take the money and run away! The same happens with the following short trade. Only this time, the RSI forms a bullish divergence. Exiting earlier is a sign of recognizing a change. Reacting to it is healthy for a trading account. Donchian Channel Indicator as a Volatility Measure. To use the Donchian channel indicator, mt4 traders must upload it to the platform. It doesn’t come with the default settings. A simple Internet search tells you this is a trend indicator.

If you consider Donchian as the father of trend following, then yes, that’s true. However, the real use of it is to measure volatility. Or, to spot irregular volatility before a breakout. Next, to trade that breakout for a profit. Finally, rinse and repeat the process. Luckily, the concept works on the currency market too. And, with so many currency pairs available, volatility gives plenty of opportunities to trade. Even if the daily chart requires patience. Volatility Breakouts Rules with the Donchian Indicator. As always, setting rules only help. And this time, it requires a bit of historical research. The thing to look for is periods of time when the Donchian upper and lower lines narrowed the most.

Or, not the most, but the narrow to be smaller than normal. That’s happening before a major market break. That’s the true use of volatility in Forex trading. On the EURAUD chart above you see the daily price action over the last fourteen months. The original volatility measure uses a square to depict the corridor between the upper and lower bands. Next, copy the square and project it every time you see the bands narrowing. If they narrow more than the square shows, that’s a signal to trade the next break. It shows the market is about to break, as volatility will pick up after such a narrowing. On the other hand, if the contraction is more significant than the measured move, just ignore the next breakout. Using the logic described above, out of the three situations, only two represent a real signal. Entry, Exit and Stop Loss with Donchian Volatility System. Now that we know when to expect a real breakout using volatility, we need some rules.

Or, trading rules. First, we must set the entry. This is straightforward: in a bullish trend, buy the break above the upper band. Second, set the stop loss at the previous swing lower. Having a stop loss is a mandatory condition for every trade. Finally, set the take profit using a 1:2.5 or 1:3 risk reward ratio. Even better, use trailing stops to right the upcoming trend as long as possible. From left to right, the first square tells us a breakout comes. It turned to be bullish and proved to be a great trade. Following the above rules, the take profit gets hit fast. Using a trailing stop, the trade might still be in place. The second square shows the bands missing the volatility signal.

Hence, both the upper and lower breakouts should be ignored. The third square is our measured move. Let’s skip it this time. But the fourth is another great entry. Still on the long side, with quite a tight stop loss. The Donchian channel indicator has multiple uses in Forex trading. However, it has some serious limitations. Using concepts developed for other markets may not work in Forex trading. Therefore, the original Gartley pattern was revised by technical traders multiple times in the years to come. This is why the original Elliott Wave Theory needs some adjustments for the Forex market. And, this is why the Donchian channel indicator mt4 traders use, must change too. The classic approach to buy and sell upper or lower breakouts doesn’t work.

Or, it fails most than it works. Markets these days consolidate. In a trading week, most of the days are ranging ones. As such, traders must bring something new to the trading table. One possibility is to use an oscillator to filter fake signals. We covered that here. Another one is to use the indicator differently and originally. We covered that too, using it as a volatility gauge. In fact, some prominent brokerage houses offer the Donchian indicator as a volatility one. Not as a trend following tool. For traders, it shouldn’t matter.

In the end, the right approach is the one that makes pips. Constantly. This article stressed the importance of using the right time frame. I’m not saying different timeframes won’t result in profitable trades. Only that the daily chart provides better support and resistance levels, and the overall interpretation is in line with the original intent. Add a sound money management system and some rules to trade, and the road to profitability is open. GET STARTED WITH THE FOREX TRADING ACADEMY. Damyan is a fresh MSc International Management from the International University of Monaco. During his bachelor and master programs, Damyan has been working in the area of financial markets as a Market Analyst and Forex Writer. He is the author of thousands of educational and analytical articles for traders. When being in bachelor school, he represented his university in the National Forex Trading Competition for students in Bulgaria and got the first place among 500 other traders. He was awarded a cup and a certificate at an official ceremony in his university. The World's 10 Most Famous Traders Of All Time. There are several famous former traders who moved on to different careers, such as John Key (Prime Minister of New Zealand) and Jimmy Wales (founder of Wikipedia).

However, this list is made up of traders famous for being traders. The lives of the world's most famous traders are colored by both triumph and tragedy, with some exploits achieving mythological status within the industry. The list begins with legendary traders of history and progresses to those of the present day. Jesse Livermore: Jesse Lauriston Livermore (1877–1940) was an American trader famous for both colossal gains and losses in the market. He successfully shorted the 1929 market crash, building his fortune to $100 million. However, by 1934 he had lost his money and tragically took his own life in 1940. William Delbert Gann: WD Gann (1878–1955) was a trader who used market forecasting methods based on geometry, astrology, and ancient mathematics. His mysterious technical tools include Gann angles and the Square of 9. As well as trading, Gann wrote a number of books and courses. George Soros: Hungarian-born George Soros (born 1930) is the chairman of Soros Fund Management, one of the most successful firms in the history of the hedge fund industry. He earned the moniker “The Man Who Broke the Bank of England” in 1992 after his short sale of $10 billion worth of pounds, yielding a tidy $1 billion profit. Jim Rogers: James Rogers, Jr. (born 1942) is the Chairman of Rogers Holdings. He co-founded the Quantum Fund along with George Soros in the early 1970s, which gained a staggering 4200% over 10 years. Rogers is renowned for his correct bullish call on commodities in the 1990's and also for his books detailing his adventurous world travels. Richard Dennis: Richard J. Dennis (born 1949) made his mark in the trading world as a highly successful Chicago-based commodities trader. He reportedly acquired a $200 million fortune over ten years from his speculating.

Along with partner William Eckhardt, Dennis was co-creator of the mythical Turtle Trading experiment (See: Turtle Trading: A Market Legend ). Paul Tudor Jones: Paul Tudor Jones II (born 1954) is the founder of Tudor Investment Corporation, one of the world's leading hedge funds. Tudor Jones gained notoriety after making around $100 million from shorting stocks during the 1987 market crash. John Paulson: John Paulson (born 1955), of the hedge fund Paulson & Co., rose to the top of the financial world after making billions of dollars in 2007 by using credit default swaps to effectively sell short the US subprime mortgage lending market. Steven Cohen: Steven Cohen (born 1956) founded SAC Capital Advisors, a leading hedge fund focused primarily on trading equities. In 2013, SAC was charged by the Securities and Exchange Commission with failing to prevent insider trading and later agreed to pay a $1.2 billion fine. David Tepper: David Tepper (born 1957) is the founder of the wildly successful hedge fund Appaloosa Management. Tepper, a specialist in distressed debt investing, has made several appearances on CNBC where his statements are closely watched by traders. (See: Why Hedge Funds Love Distressed Debt .) Nick Leeson: Nicholas Leeson (born 1967) is the rogue trader who famously caused the collapse of Barings Bank. Leeson served four years in a Singapore jail but later bounced back to become CEO of Irish football club Galway United. The dramatic and varied life stories of the world's most famous traders have made compelling material for books and movies.

Reminiscences of a Stock Operator , a fictionalized portrayal of Jesse Livermore's life, is widely viewed as a timeless classic and one of the most important books ever written about trading. Rogue Trader (1999), starring Ewan McGregor, is based on the story of Nick Leeson and the collapse of Barings Bank. What Makes Legendary Forex Trader? Pressure and Time. 23 Jun What Makes Legendary Forex Trader? Pressure and Time. I will never forget these famous words by Morgan Freeman. This is a great analogy on life. Success in any form requires nothing but time and pressure. I’ve spent years and years of my life in a small 4 wall room living with my parents. Forcing myself to keep pushing and pushing until i finally became successful.

Having to give up dating and going outdoors for 7 years. Legs hurting from sitting in my crappy metal chair with the bent leg that doesn’t quite align my knees properly. All of the blood rushing down into my one leg and having to walk around my parents house constantly. Depression and stress combined with financial issues are not very good friends. On many occasions considering leaving and just being a bum in the street and giving up on my life. I only had one goal after being released from prison for a felony that only a select few computer nerds will have stamped into their foreheads forever.. A felony theft, Was to not end up in a gutter and eating out of garbage cans. I am a multi million dollar forex trader. And this is my story. It all started in 1992 when i met my best friend of 19 years. This guy was the most funny and charismatic guy i ever had in my life. His name was brent. He was a big guy, about 300lbs, black hair and from new york. He had told me his story about his life and all the shit he had been through. Foster homes, endless traveling to new homes from lack of finances.

He had went to the social services and claimed he was crazy ( he wasn’t ) and would take quite a nice check home every single month to pay the rent. He was one of the best hustlers i ever knew in my life. This guy was 17 years old and already had his own apartment and car and plenty of girls to go with it. He was a very funny guy and i think women really love that. Someone with all of his problems and can express himself in such a way really attracts women. I was 11 years old at the time my best friend at the time (brian) introduced me to this guy. He was at the pool in our apartment complex throwing around a football with his buddy. I finally went home and my friend brian who introduced me to him told me to come down to the pool. I easily agreed and eagerly ran down to see what was up. At the time there was no internet or cheap personal computers. Of course my family and i were not very well off. My mom, a widow, had two jobs just to support us and we were always moving around to different towns and different apartments and houses. When i got down to the pool i saw him there. The guy throwing around the football. He was showing a bunch of us kids some kung fu moves. It turned out he was a black belt in kung fu and had spent most of his life training. It was the most awesome thing i had ever seen.

From that point on me and him were the best of friends. He taught me how to kick ass and also how to do wheelies on my bike. He had all sorts of video games at his house, mainly sega and nintendo and we would play that shit all day and night for years and years. As a matter of fact, we would play games up until the last time i saw him. We had some crazy adventures growing up together. He would later introduce me to an 18 year old girl named cheryl. I was big for my age so everyone thought i was 18 or 19. So my friend told her i was 18 and she really liked me so we got together. We never had sex cause i was only 12 at that time and had no idea how to do things like that. But we kissed a lot and had very close relations for a bit. About 5 years later i had turned 17 and me and my friend brent were best friends for 6 straight years. He had an interest in computers at that time and he wanted to show me how awesome it was and the stuff we could do with a computer. He dialed up to his local ISP (internet service provider) and we went straight to the internet.

It was the most interesting and intriguing thing i had ever seen in my life. The intrigue and fascination with technology was immediately followed by movies such as ” hackers ” “war games” and ” sneakers ” had a spot at the top of my vhs rack. I watched those movies every day and repeated them daily. My friend brent had got me into hacking at the time and actually introduced me to those movies. After a few years of learning how computers work, brent got me into trojan horses and other viruses that allow us to control other people’s computers. So since we had to call around all over the place just to find a signal we just decided to hack each other. So every day we would go back and forth trying to break each others computers. We did this for years and years and we had lots of fun. Brent was very convincing to me at the time. I was only 17 – 18 years old and was very impressionable. I had no male role models in my life so i latched onto brent as a father figure and a brother. Every thing he ever told me i took as gospel. I loved him like a brother and i respected him like a father. He was the greatest gift had given me. Lots of laughter and adventures around california and across the country later in life. He had became a truck driver after a while and naturally i had got into it as well. We both drove for about 3 – 5 years each and then got sick of it and quit.

Fast forward to 2005 – 2006. I was immensely into hacking at this point in time. Of course i had given up any chance at a job by just pouring my life into computers and breaking computers. My friend brent had got into watching movies and went through about 3 wives and many girlfriends. He had stopped hacking but not me. I was very interested in learning more and more and more. I had no money and i didn’t want to get a job because of my hacking addiction. So at one point when i was 26 i decided to start hacking into financial institutions and proceed to steal sensitive information from many people. After about a year of this i was eventually caught. The secret service had raided my house and took my computer. I spent about 18 months in prison and several months in a halfway house. While i was in prison i had met only one other guy who had hacked into financial systems and stolen identities.

I didn’t much like that guy, he had no honor, no heart. He was a piece of shit. Cocky and arrogant about his adventures into hacking and he loved stealing. He did not love the actual technology. I had to cut him loose and move on. So i decided not to talk to that guy anymore. This was between 2009 and 2011. Remember when the housing market crashed? I had met several individuals in prison who were scamming people out of millions of dollars during this time. They had told me they were the greatest real estate agents in their area. They had their pictures on the busses and benches. They would go on to tell me about their trading experiences as well. I had actually met forex traders and was introduced into forex trading inside of prison. These guys were definitely worth endless millions of dollars. They were so advanced in forex, they did not even need charts.

I was immediately intrigued because of my hacker nature. My love for technology. Hacking is of course of a form of study and analysis. Nowadays in 2018 most people see hacking as breaking into systems and causing damage. However the origins of this practice are much different than you might think. “The term “hacker” only in its original meaning, someone who applies ingenuity to create a clever result, called a “hack”. The essence of a “hack” is that it is done quickly, and is usually inelegant. It accomplishes the desired goal without changing the design of the system it is embedded in. Despite often being at odds with the design of the larger system, a hack is generally quite clever and effective.” This is what i considered true hacking. We call thieves, thieves. But hackers are people who study technology or anything and dissect that thing in order to improve on it and understand it. This is definitely related to doctors, lawyers, business owners, scientists, etc. I spent about 16 months of studying these forex traders and stock traders while i was in prison. They had taught me all about moving averages and crossovers.

And of course we had many books on trading such as Alchemy of Finance, Fooled by Randomness, Encyclopedia of Chart Patterns, etc. I would spend countless hours watching these guys as they used a piece of paper and drew a full grid chart and traded against the wall street journal numbers and cnbc on the tv. It was the most amazing thing i had ever learned in my life. After some time i learned how to draw my own charts and eventually trade on paper. I was finally released from prison with a felony in february of 2011. When i got home i was so punch drunk from the entire experience i had no idea what to do with myself. But in my head and in my heart i knew i was born to be a forex trader. The skills i had learned in prison had opened my eyes to a new world of technology and making an actual income for myself. After moving back in with my parents i tried everything i could to get a normal job. But i pissed that away when i got this felony. The only thing i could do is try to run a business. I was repairing computers and smartphones for about 5 years all the while trading in a demo account in the background. I had finally got a job working in housing preservation for a family owned business. That i would have to say was the worst job in the world. You need to climb through human feces and garbage dumpsters and clean the entire house.

All this for 12 to 14 straight hours and getting paid 8 dollars an hour by 2015. I finally quit that job and realized there’s no other way to do this but to trade forex. Working with those people was the worst decision i ever made. I worked like a slave and made 600 bucks a month if i was lucky. Foreign exchange trading has been an extreme challenge in the real world of forex trading. When you trade on paper or in a demo account it’s nothing like trading live. Live trading includes dealing with brokers and their liquidity providers that manipulate the prices to such a high degree that you will never be fully successful without the right strategy. For most newbies to this game it’s very daunting and stressful. I had read an article about this women who had traded for 15 years straight and still worked at taco bell. I immediately started to see the manipulations when i went live in a real account with real money. I spent countless hours at the forex factory, stevehopwood forums studying volume spread analysis and the sonic r. system among other things before i realized i should venture out into the internet and look for some forex trading strategies outside the most used forums. Well you know the rest of the story from here. I discovered an amazing strategy called Assar and i’ve developed it to a point where it’s the most successful forex robot in the world.

I’ve sold many copies of V10 and i’ve provided thousands of people with my free versions. I created The AssarV10 Team and have made countless thousands of dollars with my software ever since. I want you to remember just one thing. If you want to be successful in anything in life. Take the time to work on it as hard and as much as you possibly can. The more you practice something, the better you get at it. And eventually you will be successful. Pressure and time. By Joshua Allison. Founder and Owner of : The AssarV10 Team. Assar Elite Pro Forex Scalper V10. Assar Elite Pro Forex Hedge Master 2018. Assar Elite Pro Forex Scalper V11. Assar Elite Pro Forex Scalper v9. Top 5 Most Successful Forex Traders Ever. If you want to be the best, you must learn from the best. The same goes for the Forex market. Here are the 5 most successful traders in the foreign exchange market that you should know about.

Born in New York, Bill has always excelled in mathematics and was a bright student overall. He earned a B. A. in Cornell College in Fine Arts and then a Masters degree in Finance back in 1982. Apart from academics, Bill enjoyed reading whatever he could find regarding the stock and Forex market. It is said that during his stay at Cornell, he invested $12000 in stocks, which he turned into $250,000 in only a couple of months, largely thanks to his extensive knowledge of the stock market business. However, he soon lost all his money to stocks due to the erratic nature of the business; after this loss he shifted to a more stable form of trading: the forex. Today, Bill is a well known forex trader in the financial sector. He is known to have made over $300 million in a single year from trading on the forex market alone. A graduate of the LSE (London School of Economics), George has broken records in the financial sector. He made $1 billion dollars in just one day from a single transaction. This gained him a lot of press and he was branded as the man who “broke the Bank of England”, having shifted over $10 billion dollars worth of sterling out of Britain. He has written many books on investing, and is also a philanthropist, having donated over $7 billion in charity of personal savings over the course of his existence. A graduate of Princeton University, John started in the financial sector as a political analyst for Chemical Bank. Just one year into the job, he became the forex analyst for the bank which proved a wonderful opportunity for him to build a network in the foreign exchange world.

John is the proud owner of FX concepts, a currency managing firm, and operates it successfully to this day. He is also considered a pioneer of computer-aided forex trading systems, developing forex models for effective online trading. 4: Stanley Druckenmiller. Stanley started out as an oil analyst for the Pittsburgh National Bank. Having graduated from Bowdoin College, Stanley changed many jobs. First, he left PNB to create Duquesne Capital Management in the year 1981, and then he started to work for George Soros in 1988. Working with George Soros proved excellent for Stanley, because not only did he garner over 30% return in the Quantum Fund, he also contributed to the deal which earned both him and Soros over $1 billion; this was the deal which “broke the Bank of England”. He returned to Duquesne in 2000 and now works full-time there; he has also started a non-profit organization dedicated to educating people of all ages. A graduate of the prestigious Wharton Business School at the University of Pennsylvania, Andrew grew to fame when he sold New Zealand currency called Kiwi in between the value of $600 million to about $1 billion which exceeded the money supply in circulation in actuality within New Zealand at that time. Andrew ended up garnering $300 million in revenue from this transaction alone in 1987 while working at the Bankers Trust. Andrew moved on to work for Soros Management Fund in 1988, later switching to Northbridge Capital Management.

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Odin is a quick way to diversify your account equity and lower risk. Odin manages every aspect of forex trading for you 24 hours a day. We've designed Odin for every trader regardless of skill level. It's a complete solution that will handle everything for you automatically. From basic things like opening and closing trades, to advanced calculations like money management and profit control. Keep your broker honest. Forex brokers are not your friend. Odin's new Broker Shield™ keeps sensitive information away from your broker. Works with any account size, big or small. Built in money management calculates the safest lot size for you automatically. Micro, mini, and full lots are supported. Clean and informative visual interface. Odin's modern UI and user friendly interface let you see exactly what it is doing at any point in time.

What do I need to start using Odin inside my forex terminal? Odin was designed to run inside of the MetaTrader 4 forex terminal. Several major brokers offer instant MT4 demo accounts for free. Simply drag and drop Odin into your MT4 terminal and attach it to any forex chart. Installation is very simple and takes less than 5 minutes. Is previous forex experience required? Not at all. Odin handles everything for you. Anyone can use it on their charts to find great forex trades. What kind of support is included? Our dedicated support team is here to help you every step of the way with anything you might need. Can I start with a demo account?

Absolutely. Start with a demo account and switch to a live account at any time in the future. Or go live right away. Trading Tips from Legendary Millionaire Trader Jesse Livermore. Lessons on what to do, and what not to do, from a trader that accumulated more than $100 million dollars in profit trading his own account…and then lost most of it. It’s 1929, and over the last 8 years the Dow average has seen an epic rise. Everyone wants to own stocks, and loose leverage requirements allow it. Stock loans reach $8.5 billion; more money than was in U. S. circulation at the time. In September stocks start to flatten out, then decline. In spite of many people telling him it was foolish to short this raging bull market, Jesse Livermore begins to short stock, and continues to do so as the Great Stock Market Crash of. Snapshot from How to Trade in Stocks. 1929 unfolds. He profited to the tune of more than $100 million dollars…about $1.384 billion in 2014 dollars according to the Bureau of Labor Statistics.

This makes Jesse one of the most iconic and legendary millionaire traders in history (more on his ups and downs at the end of the article). This wasn’t a hedge fund manager or someone who was trading other people’s money. Jesse worked on his own and traded his own capital. Here are some trading tips Jesse Livermore provides in his book How to Trade in Stocks (1940) , and the classic book which describes his earlier trading career: Reminiscences of Stock Operator (1923) . Trading Tips from Legendary Millionaire Trader Jesse Livermore. There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again . While markets and trading technologies are constantly evolving and changing, the same patterns and emotional highs and lows continue to play out, causing some to get rich and others to lose. While most traders lose, and Jesse Livermore also had losing periods (discussed later), he established a trading system and tried to followed it. This allowed him to capture massive gains when the market trended in his direction, and also kept his risk limited if he was wrong.

It was only when he deviated from this plan that it cost him money. Here are some summary details about Jesse’s trading system: Only buy strong stocks in a bull market, and only short weak stocks in a bear market. Jesse Livermore was a trend trader. He focused on finding and buying the strongest stocks in a bull market, and shorting the weakest stocks in a bear market. Don’t focus on too many stocks. He only focused on the strongest andor weakest, as these are the ones moving the most and offer the most potential. Follow too many stocks and it’s hard to track and trade them effectively. It never was my thinking that made big money for me. It was always my sitting. Got that? My sitting tight!

If there’s no clear signal to get in, don’t trade. Jesse traded at what he called “pivotal points,” which would be equivalent to a significant prior level in the stock. Until the price moved through that level, triggering a trade, he “sat tight.” This helped avoid drawing down capital when conditions weren’t ideal for trading. A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does damage to the pocketbook and the soul. Jesse used stop loss orders to help control risk. He made trades based on his analysis and trade setups, but no one is right all the time. Jesse Livermore set a stop loss at a price which would get him out of the trade if the trade wasn’t working out. Sometimes that would mean getting stopped out at a loss, only to re-enter the position again if the trade setup occurred again. Adhering to the original plan of the trade is very important…take the loss when your trading plan dictates you should. When I am bearish and I short a stock, each sale must be at a lower level than the previous one. When I am buying, the reverse is true. Each succeeding purchase must be at a higher price than the previous one. Livermore increased his position size in winning trades–called pyramiding. When a trade continued to move in his direction, this resulted in massive gains. Great numbers of people will buy a stock, let us say at 50, and two or three days later if they can buy it at 47 they are seized with the urge to average down by buying another hundred shares, making a price of 48.5 on all. Having bought at 50 and being concerned over a three-point loss on a hundred shares, what rhyme or reason is there in adding another hundred shares and having the worry double when the price hits 44? Jesse didn’t add to losing positions–called averaging down.

Don’t throw good money after bad. To see why, read Risk Management Mistakes that Ruin Traders. The professional concerns himself with doing the right thing rather than making money, knowing that the profit takes care of itself if the other things are attended to. Doing the “right thing,” which is following your trading plan, takes practice and discipline. It means being able to stay confident in your trading plan even during a losing streak, and also setting proper trading goals. Goals, especially when starting out, should be focused on following the plan, not making money. Final Word On the Millionaire Trader Jesse Livermore and His System. Jesse Livermore’s system worked well for him, making him a millionaire trader when he followed it . Though, the greatest enemy in trading is one’s self. Jesse failed to follow his system on many occasions, and since he wasn’t afraid to “swing a big line” of shares or futures contracts, when he deviated from his plan it often cost him dearly. While he made several fortunes, he was also bankrupt or broke on a number of occasions. Follow your plan, it’s what made you the money, and it’s also what will help you keep it. By 1932 Livermore was divorced (for a second time), and remarried in 1933 to Harriet Metz. She had been married twice before, with her second husband taking his own life after suffering large losses in the stock market. Livermore would also take his own life in 1940, the same year his book How to Trade In Stocks was published. Nearly all of his massive gains had been eroded by 1932. But, knowing his tendencies to deviate from his plan, earlier in his life he had set up trusts so his family would always be provided for. At his death, the trusts totaled about $5 million, equivalent to $84.55 million in 2014 dollars.

By Cory Mitchell, CMT. Looking to build your own trading plan? Download my Forex Strategies Guide for Day and Swing Traders eBook : Over 300 pages of Forex basics and 20+ Forex strategies for profiting in the 24-hours-a-day Forex market. This isn’t just an eBook, it’s a course to build your skill step by step. – Access to my Legendary Telegram Channel. – Access to my Legendary Chat Room for 245 support. – FREE copy of my eBook: Born Again Trader. – Weekly Market Analysis, Trade setups and Insights. – Access to my Stock SwingTrend Trades + Daily Recap. – One hour 1-on-1 mentorship with the LEGEND himself. – Access to my Legendary Telegram Channel. – Access to my Legendary Chat Room for 245 support. – FREE copy of my eBook: Born Again Trader. – Weekly Market Analysis, Trade setups and Insights.

– Access to my Stock SwingTrend Trades + Daily Recap. – One hour 1-on-1 mentorship with the LEGEND himself. – Access to my Legendary Telegram Channel. – Access to my Legendary Chat Room for 245 support. – FREE copy of my eBook: Born Again Trader. – Weekly Market Analysis, Trade setups and Insights. – Access to my Stock SwingTrend Trades + Daily Recap. – One hour 1-on-1 mentorship with the LEGEND himself. – Access to my Legendary Telegram Channel. – Access to my Legendary Chat Room for 245 support.

– FREE copy of my eBook: Born Again Trader. – Weekly Market Analysis, Trade setups and Insights. – Access to my Stock SwingTrend Trades + Daily Recap. – One hour 1-on-1 mentorship with the LEGEND himself. Learn How to Trade with the Legendary Donchian Channel Indicator. Are you curious which Forex indicator is simple yet effective at the same time? I’m sure that all traders are looking for that special indicator taking care of all your trading decisions. Although this “Holy Grail” indicator does not exist, there is one particular tool that we find to be very beneficial for taking trading decisions: the Donchian channel indicator. The Donchian is actually the heart of a legendary trading story called the “Turtle Traders”, where Richard Dennis proved his point that anyone could trade successfully if they receive the right support and tools. The system that Dennis taught to his traders was based on the Donchian indicator. How does the Donchian Indicator Work.

The Donchian channel simply adds two lines to the chart: One line is the highest high. One line is the lowest low. The high and low are relative to time period used. If you choose a period of 10, then the Donchian channel will show the price of the highest high and the lowest low of those 10 candles (periodsbars. Traders can freely choose a time period of their choice, but the most used setting is 20 days. What does the indicator really indicate? When the indicator lines are flat, the price is not capable of confirming a new high or new low. When the top indicator line has an angle, this means a new high has been made. When the bottom line has an angle, it means a new low has been made. Image: showing Donchian channel lines. How can Traders use the Donchian Channel? The Donchian candle basically offers support and resistance (S&R). There are numerous Forex indicators that show S&R but the Donchian is seen by many as one of the best.

Support and resistance levels work differently depending on whether a trend or range is present on the price chart: During a range: price tends to respect S&R levels and not break them. During a trend: price tends to break above or below S&R levels with the trend. The Turtle Traders mentioned earlier used the Donchian channel for trend continuation trade setups. In general, traders can use Donchian for bounces and breakouts: Uptrend: Donchian low is support and Donchian high is a breakout level. Downtrend: Donchian high is resistance and Donchian low is a breakout level. Which Time Frames are the Best for Donchian Channel? Logically, lower time frames are showing a smaller part of the price action than higher time frames. Daily charts tend to offer more importance than 15-minute charts for most traders. The reality, however, is that the market is fractal in nature and the price patterns repeat in similar ways on all levels. In our view, the Donchian Channel is a valid indicator and tool for (almost) all time frames. The most important question is really how to use it. Using Donchian Channel in a Trading System. The Donchian Channel is a fine tool but the indicator becomes more valuable when it’s part of an overall strategy to tackle the markets. A Forex trading system helps traders analyze the price chart and identify solid entry and exit points. A system also addresses how to spot the best setups and avoid trades with bad odds. It also outlines how to deal with money management, risk management, and psychology.

Any one indicator can really only be part of that overall approach and never fully replace an entire system. Although the Donchian Channel could be a very important part of your Forex trading system, traders should never fully rely on indicators only. Image: showing how a bad bullish breakout could be avoided if traders analyzed the higher time frames which showed a resistance zone from a downtrend channel (white lines). Role of Donchian Channel in a System. In our view, the Donchian channel can play an important role in various parts of a trading system: As a filter on higher time frames: it is good to avoid trading long right in front of Donchian resistance or short before Donchian support. Always make ensure that there is sufficient space till the next support or resistance level. As a trigger on middle time frames: the Donchian can confirm a potential trade setup once price confirms a break or a bounce at S&R but it does not need to equal an immediate market entry. This is called a “trigger”. It gives traders a heads-up that an entry is nearby but traders can still look for retracements on lower time frames to get a better entry spot. As an entry on lower time frames: the Donchian channel can also be used for entries but it is advisable to have more supportive reasons for a trade setup than just the indicator itself. Following indicators blindly will never work out, certainly not in the long run. Please note that with higher, middle and lower time frames we are referring to a relative level that you use for your trading. The middle time frame is the trend chart, the higher one is used for S&R levels and the lower one for entries. Often we use a daily chart for high, 4-hour chart for a middle and 1-hour chart for entries but another combination could be 4 hour – daily – weekly or 15 min – 1 hour – 4 hours. The Donchian Channel indicator is a strong candidate for any trader looking to have automated support and resistance levels on their chart. The tool offers clear bounce and breakout spots and can be used in various ways, including as an entry, filter, and trigger.

Last but not least, the Donchian Channel becomes even stronger when it’s used as part of an all-around Forex trading system.



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