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Forex Scalping
Maxx your Profit!
Are You Finally Ready To Start Making Money Easily? Hold on to the Large Traders tail, and enjoy the ride!
This guide was created by Maxx Mereghetti, and is offered FREE to all Forex traders.
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Coming onto the stage, to the Rolling Stones music, in front of more than 500 people, like a rock star, and certainly not like the trader in a necktie you are used to seeing at an average financial presentation. But why am I telling you all this? Usually people make themselves seem important by talking about their successes and how they made millions. When I went on stage for the first time, I was in front of 9 people. I remember that during the coffee break I dissolved into tears with my friend Andrea, because I believed I was not able communicate, my heart and my passion to all the people there, together with the information they came for. After the break, I understood something had changed The people there were participating, smiling, enthusiastic and became an active part of the show, while they were learning. In other words, they were with me, accepting me as if they wanted to consume me and I did nothing other than give them all of myself, my heart and my spirit, along with information and entertainment. When I found myself in front of more than 500 people, who were all there for me, 5 years on from that first time, it was simply extraordinary. I do not usually prepare an opening speech or a rigid programme for my presentations.
- 13 Tutti i diritti riservati Massimo Mereghetti
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I always improvise and try to develop the presentation according to the make-up of the audience. Basically, the audience loves me, it seems to need to meet me. In reality, all this comes from the fact that when Im on stage I give them my heart and I lay myself bare to everyone. Yes, because if you remember what you read up to this point, I was born shy! When people think they are getting a lot from me, they do not know how much I am getting from them. Being accepted for what you are is the best satisfaction for a shy person, and every person in the room was a big vote of confidence to me! Maybe this is the reason why I never became bigheaded in front of all those people, and I never will. Heart for heart! People always gave their heart to me and I always gave them mine back in return... With time I learned to accept myself fully and to give people back the gift they gave to me: acceptance. Im not writing these words for myself. It is beautiful to say all this things to the people around you who sometimes see you as an example. Many people think Im really someone to put it briefly, I eat and drink, have fun and get angry like everybody else in the world. I have my fears even if I have learnt
- 14 Tutti i diritti riservati Massimo Mereghetti
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to give less importance to fear and more emphasis to important things so that I do not lose the important things out of fear, as often happens . I do not even believe I am talented.. I owe everything that I have achieved to my heart, to perseverance and to some flash of genius but to nothing unique. Why am I saying all this? To be free, in peace and in tune with the world! I have met more than 5000 people and I felt good with all of them isnt that fantastic? I want each of you to receive these few lines and to be able to read them, as if I had written them by hand and addressed them personally to you. In the following pages you will discover a part of the experience I have gained in trading, but what you will not discover is the person I am and this is the reason I wanted to tell you something personal about me. When you read the book, I wouldnt want you to think that its the stuff of genius and therefore is in some way unachievable for the majority. Im an average person. So make good use of the information and understand that the result will always and only depend on the person you are, or decide to be.
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At this point, it is appropriate for me to thank all the people who made it possible for me to live the first 34 years of my life in the best way possible. Starting in chronological order, my first thanks go to my brother, with whom Ive had a lot of fun from when we were kids, and who taught me patience, a virtue of which he is so full that many would be ready to make him a saint immediately. To my mother and father, who have always lived a life devoted to sacrifice and honesty, which is not a small thing, and always tried to instil those values in me. To my childhood friends, those you never forget, with whom I discovered the world step by step. To Claudio, who for years freaked me out with his talks on philosophy, leaving a sharp and indelible mark on my youth. To Lina, who dedicated an entire life to others and never got tired of passing on the message of charity. To my high school mates who completely changed my diligent self at school, making me forget about the school uniform and the good guy hair cut. To Valentina, who spent 16 years of her life beside me and gave me trust and unshakeable respect. To Andrea Cesarano, friend and brother, who taught me how to sell under the pretext of teaching me how to live with an awareness of the possibilities open to me .
- 16 Tutti i diritti riservati Massimo Mereghetti
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To all those to whom I owe my success at Investing People. To Stefano De Carlo, who was the first person to arrive in the office and who has shown heart and enthusiasm for himself and for everything around him over the last 3 years. To Mirko Masoni, Stefano Gianti, Valerio Maggi, Salvatore Lo Voi and Gianluca Landini, inveterate traders who have experienced in their life what it means to leave a safe job and to live only from trading. Monica, Valentina, Fabio, Alessandro, Stefanny, Elisa, Francesca and Felipe who dedicated time, passion and enthusiasm, both when working for us and during moments of fun or difficulty. Again thank you to Stefano De Carlo, Daniele Repossi, Alessandra Chirizzi, Andrea Mereghetti and Alessandro Bonetti, who share the challenges of trading with me every day, having this as their only profession. To the woman I never thought would arrive in my life but who, in answer to a simple request to Baby Jesus, just arrived like an angel, and gives me tenderness, love and enjoyment every day of my life: Alessandra, for our friends Cina. Thank you, thank you, thank you to over 5000 people who I have met in these 5 years of on and off stage training and who are still reading my words today, in this book.
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To them goes all my esteem and respect for the love they have shown me, and the commitment they put into trying to change and to learn at any cost. I want to share with you all my new idea of growing together Not only through the exchange of information which is possible from a stage, but also in front of a monitor in the trading room and on Investing Peoples new TV channel I am always available to you, I want to meet all of you to drink a glass of good wine or brandy together, in our trading room, in front of a butterfly of $100,000. It has been wonderful and from today it will be even better! Im expecting you.. A big hug. Maxx.
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Welcome
The Forex is the most discussed trading tool in the world at the moment. Easy money now! This seems to be the trading formula on the Forex. What you will learn in this e-book is how to recognise and interpret the main price scenarios. The price, of course, because only the price contains real information about where the market is going. By reading these pages, you will discover that the price always gives a readable sign from which you can learn important things. You will learn that buying at a high
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price is one of the most common errors to be avoided and you will find out that, often, the techniques you read about in books are the result of experiments which are no use to you for earning money on the market. You will also find out how to follow the sharks, the ones who move the market, the ones who are always on the right side, in this way it will be easier for you to earn money instead of losing it!
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1.
stock exchange?
1.1. What the brokers think
Over the years I have talked to several brokers who have sight of their customers accounts. What people say in the trading rooms and at business dinners is that very few accounts operate in the black and many of them are not destined to be profitable in the long term. These observations certainly do not encourage anyone to start out or to continue as a trader.
- 21 Tutti i diritti riservati Massimo Mereghetti
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It is often commission that makes a trading model inefficient, or over rigid automatic systems, or the emotions of the trader who uses his discretion. However you look at it, it seems there is always something that goes wrong, for the majority of professionals, private individuals or for the often ill-prepared people camping in the land of gold, on planet trading.
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The product package is important in every case: just think about the amount of money that has been raised from the introduction of capital-guaranteed products after the stock exchange crashes of 2001. In this case the products success does not come from the performance promised, but from the feeling of safety generated by the product. Some years later you would have discovered that nothing was guaranteed by those products, as the risk assumption made during subscription was based on bonds issued by certain banks that wrote the history of finance and today do not even have an official web site.
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What I do not accept is giving up a job like this, that defines me as person. I believe that often even the best trading methods, and I have discovered and invented hundreds of them, have varying periods of inefficiency or inactivity. I think this is normal, I do not believe that is good business to sell ice to Eskimos, and in the same way to do options calendar spreads in the middle of the storm of the financial crisis, or to buy call and put, in a range market, cannot be anything other than a crime.
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2.
This is my strongest position. There is no technical analysis that can predict price. Technical analysis is a very good discipline for describing and justifying the past, but definitely not for earning money operating on the market in the present. Directional traders often support this. What also helps me here, are the completely informal conversations I have had with traders who live from trading on the stock market or on the Forex and who have spoken to me about how their strategy, is based on studying the price but also takes into consideration previous key levels,
- 28 Tutti i diritti riservati Massimo Mereghetti
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and only works because of the care taken to enter into the position at the right moment and only earns because of care with risk management. When I talk about risk management in my courses, the audience only pays attention because of the word risk, and all the rest is just boring as people want to hear about profits, and definitely not about how to manage their own operational plan: management does not fascinate anybody. In this book you will learn that technical analysis is the result of the amount of money operators put into the game and not the opposite. A resistance does not only form because the price reacts psychologically to a specific past price level. If no money was involved, the price would not go anywhere. A level of support results if money flows in the market but the fact that those movements correspond with a support, does not tell us if it will be a support, or a broken support. What should I do when I read about the presence of a support on a chart? Do I buy it, thinking that it works as support, or do I sell it, thinking that there will be a breakout? Is this not the same thing as deciding to buy or to sell at any time?
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2.2. Oscillators
Oscillators are definitely a taboo subject. People say that oscillators do react late in relation to the price, that they give a more immediate and filtered reading of the price and that they therefore reduce the information it gives. Of course, a line drawn with a mathematical formula can not, at any time back up my personal decision about the risk I want to take. A very interesting observation came from a pleasant chat with a directional trader recently... When stock exchange traders were floor members they certainly did not have computers and could not calculate the MACD or stochastic value at any moment of the day. Traders knew the prices of the previous stock exchange session and they could mark with a pencil, in a notebook, the prices of the trading day that were shown on a luminous strip display. These traders managed enormous capital and represented the interests of institutions that definitely did not trade on the stock exchange to lose their money. Today, computers allow us to automate complex formulae in a second and this allows analysts and private traders to go crazy using indicators and "magic
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formulae", which have nothing to do with the price, other than as the basis for a calculating model that tries to explain what the price already says. The more you move away from the pure price, the more you go towards something that does not represent the price at all. In any case, I want you to remember that what we buy and sell is always a price, never one of its derivatives, the stochastic is not on sale.
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In any case, if a character exists who "manipulates the market, (usually called a strong hand), it would be interesting to understand what logic this character adopts and what moves he/she makes, so that we can be on the right side of the market. I have never found the phone number of someone who could keep me updated about the intentions of the strong hands, but what I have identified is the track that those strong hands leave when they move. This particular detail warrants consideration in this e-book, which does not intend to explain direction as the result of a technical observation, but simply as the result of the circulating money flows. To know where the money masses are directed gives us the chance to be on the side of those who earn simply because they have enough capital available to influence the rules.
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3.
I went through phases when opening a calendar spread was a free meal in 80% of the cases. I remember when this happened between 2005 and 2006. I bought butterflies without an afterthought in the first part of 2007, when the market went down without a hitch and I was earning from volatility, time or from direction, but it was not difficult to bring money in, taking well judged risks. I saw the break-even points of my options strategies fly from one side to the other during the crashes of 2007, whatever the underlying.
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I then decided to operate buying monsters and gianty swaps, as we called them, to earn from volatility without taking a risk on direction even when the market went on moving violently and did not seem to want to stop. I operated with options on the Vix, to earn rapidly during market crashes, with an underlying that was maybe even more volatile than the market itself, simply because the Vix represents the measure of the market's volatility. I have been able to create, with the help of expert scalpers, an unshakeable operating strategy for the Forex. Besides all this, I had to face difficult, non-profitable or even loss periods. But above all, why did I go on changing strategy if I had a strategy that worked? The method is useful to understand how a determined strategy has to be applied. In any case, you cannot think that the strategy you use is the only one for your entire life. Your ability as an experienced trader will allow you to understand the conditions in which to use one strategy or the other. No business lasts forever without innovation. Trading needs to travel step by step with evolutions in the market. The application method of a strategy can last for 6 months, a year or maybe 2 Then this method will end up in the drawer to make room for a new method, waiting for one you used for the previous 2 years to come back into fashion.
- 38 Tutti i diritti riservati Massimo Mereghetti
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And when your method ends up in the drawer, what do you do? The method is not wrong. What is wrong is to always go on using the same method, at any cost. The true method is the one of knowing how to recognise the method that works in a defined, longer or shorter phase of the market, and to know that if you do not know the right method, it is better not to risk your own money. I expose myself to risk when Im conscious of having the chance of earning a profit and definitely not when Im at the mercy of risk.
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Wake up! The market could simply have changed and the moment has come for you to adapt. When the system is not performing anymore, the only responsibility you have is to notice it before having lost your entire capital and having given it away to whoever was already ready to receive new money, yours!
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I decided that I would definitely stop trading when in only 6 months I managed to accumulate a small fortune that allowed me to buy my parents' house in cash. At that time those were modest dreams: I lost the same amount of money in around 3 months.
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The feelings I felt were so strong for me, that a wave of pure ammonia in a closed elevator would have been nothing in comparison, even if the wave went on for 1 hour. At that point I decided to definitely stop trading. To rebuild the neuronal journey that allowed me to accept the loss and to start facing the market again has not been easy. It was like after the first free fall parachute jump , the emergency landing near a tree made me completely forget the idea of carrying on jumping, and years later a partner of mine suggested I try again. Well, at that time I was already conscious that I wanted to trade again and I was already earning money with it, which made it seem easier for me to do another parachute jump. That's how I got my parachutists licence.
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I sincerely thought that for him trading was a fascinating subject to study with an academic approach. Even if rare, his was not the first case I saw of a person who, after having attended a course and traded virtually, did not start operating in real money after having passed the critical limit of 6 months. By this time more or less everyone starts trading, even the most risk averse, with the desire of challenging their own goals. Well this person, who is now a friend of mine, comes into my office for a talk, after I had not heard from him for a while,. We meet and we discuss the latest trading news and what do I find out? He started trading. With an account of $100, you will think. Absolutely not. His first account was $100.000 and his profit in the first 3 months $30.000. I have always told people to start trading virtually, with paper money, and then to open a small account and then, goal by goal, to increase the managed amount. In any case, starting is very important, once you feel ready, to get a feeling for the market. He did virtual trading for more than 2 years, he carefully consolidated his knowledge and he started without losing 1 dollar.
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His first quarter has been a very good one for a beginner, not only because he has proved that he can manage risk emotionally, but also by because he has gone on the market with a such a significant amount of money for his first options account. I strongly recommend not opening such a big account, during the first few months of operations, but his story has been a lesson for me. Just thinking of the number of books about trading he suggested I read, in only one evening, his study time has not been too long or too short. I also told him I would read them but I do not think he believed me, as I did not write down one title or author he told me about. This has been a period for him when he gained awareness of the risk and he worked out his identity as a trader. The job was so well done that when he started, he started with the confidence that only a trader with at least 1 years experience on the markets could have had. When you work with different people, you understand that what you can teach them is simply the beginning. After a while, you will definitely learn far more from each of them.
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4.
I started trading in 1997. So I cannot state that I have been trading all my life, as I believe nobody can. There is always a beginning, and when you start you are exactly like anyone else starting something: doubtful, confused, maybe a bit clumsy, and if you add some insecurity, the recipe is made. By 2009, in the 12 years since I started trading, I had seen at least 3 important crashes on the stock exchange: the one on the Japanese market, the 9/11 crash and, finally, the one that involved the whole financial world and is still having an impact today (2010) all over the world.
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The beginning is the first phase, the one that is for brave, passionate or simply curious people, but the results fill the white pages of your own story only because you started one day.
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a difficult test. The thing is, those people did not think they would still have to face such a trial after quite a long successful period in trading. Difficulties have existed, do exist and will always exist even in the life of a super trader who has faced the market for years and managed any amount of money. We cannot know what we are not prepared for until the day when, unexpectedly, it turns up at our door.
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Success is not 100% enthusiasm, and even successful people experience discouragement but they do not give up disheartened in the face of an obstacle. There are no obstacles that can stop successful people, and maybe this is the only difference between a successful and an average person.
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When you lose or risk losing, you also experience a fear that will go with you in your conscious and, above all, unconscious memory. You will live through this uncomfortable feeling again every time you risk losing money and this quite heavy, unpleasant feeling could provoke a reaction of refusal to trading, where every day and in every single operation you risk losing money.
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The fifth loss exceeds the stress levels that the trader had fixed in advance and furthermore it goes against the estimated acceptable risk ,because the trader was not prepared to accept that fifth loss. At this point the trader goes into shock and stops for a few days before regaining confidence or before being simply drawn back by a dependence on the gaming table.
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In reality a degree of humility never hurts and a break to reflect could be more valuable than any other solution. The backtest simulation, like a demo trading account, is a very good solution to regain confidence and to keep on training or to test your own method during an unsuccessful phase of the method itself. To simulate without money allows you to draw more reasonable conclusions about the operativity, exactly when the results are not those you were expecting and the loss of money could invalidate your rationality in analysing the problem.
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The pleasure of an easy win. - What do you feel reading this phrase? Are you already feeling lust for the possession of money? But not the money you sweated for and worked for, the money you got without doing anything and that has an immeasurable value. The money that falls at your feet and you did not have to commit for. The money that changes your life in a moment because fortune choose you.
Do you feel lucky today? - What do you feel reading this phrase? If you wake up in the right mood and you go to have breakfast in a caf, would you not invest at least 10 on a lottery ticket?
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If it is luck and the feeling of it being "the right moment" which is driving your choices, you will probably have disappointments of huge proportions. It is through emotions that people choose, but you do not have to confuse emotions with luck.
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Win for life, happy and lighthearted - What do you imagine reading this phrase? Not having problems any more? Not depending on anything or anybody? Not needing money any more? You can win all your life at a cost of only 1 .
It really seems that with the financial crisis, the income from lotteries and gambling has increased out of all proportion. If the probability of winning is very low and the money usually ends up in the hands of the Government, why then do so many people decide to gamble even if they know they will be throwing their money away? This is the reason why the slogans I reported above are the true luck of the marketing companies that look after the lotteries and the gambling industrys ad campaigns, and especially the Governments coffers. If this phenomenon did not constantly increase, the Government probably would not be able to keep its public debt at an acceptable level. Money coming from gambling actually represents capital which the Government cannot give up without having to create new taxes or new more restrictive measures.
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If, starting tomorrow, everybody would stop gambling and the Government then decided to increase taxes to compensate for lost revenue, a civil war" would probably break out.
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4.9. My advice for those starting, and for those who have already started
Believe in the fact that trading is a profitable activity. Believe in yourself. Look for an intelligent trading method, test it and start believing in the method itself. Once you overcome those three steps, start trading and never, for any reason, doubt yourself or trading. Only in this way will you belong to the group of people who have achieved success with trading, without paying any attention to the people who told you to be careful or laughed at you because you chose to become a trader.
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Disclaimer
The present book is only intended to be educational. It must not be considered in any way as operational investment advice, or as solicitation of funds from the public. The results presented real or simulated are no guarantee of hypothetical future performance. Speculative trading activity carries enormous economic risks and anyone who does it, does so at his or her own and exclusive risk, and so the Authors do not take any responsibility for potential direct or indirect damages arising from investment decisions the reader may take.
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