Some great questions were put to my by Claire and in this video I am addressing the use of the isolation low/highs and the trade rule which is to wait for price to make a higher high/lower low than the last 3 bars.
Claire is a bit confused about inside and outside bars and how they affect the rule and also the relationship between the trigger bar and the trade bar. Claire sent me in a chart which I use to help explain and answer her questions.
I also touch on the difference between a mechanical and discretionary trader and the different approaches towards not only the rules of the 4T’s system, but also to the way in which they enter the market as it can be quite different; a reason why it is important to know who you are and whether you are best suited to a mechanical system or not.
David asked if I had the system available for download. At this moment I do not, however I plan on putting it up in the forum in the members section of A Traders Universe very soon.
I also thought this would be a great time to demonstrate something regarding the purchase of trading system’s as ebooks.
When I do eventually put the 4 T’s system on my forum, it will only take one post and will be quite short. This is because in reality, it is a mechanical system requiring no discretion on the traders part. Adding things to the system becomes the job of the trader and is a personal thing. So with that said, it really is just a simple set of rules….and here’s my point
I was sent a message by Robert who pointed out a couple of inaccuracies in my video, may thanks to you Robert for pointing this out to me.
Mainly to do with the interest component of Futures and CFD’s
When you purchase a futures contract you are NOT charged interest as an extra cost, you are only charged the brokerage fees (unless you purchase CFD futures). When I made the point about interest on futures I was hoping to explain that there is an interest component built in to the price, hence the higher prices for further out month contracts. I apologize to anyone if this confused you.
The interest costs charged on a CFD contract is calculated daily on a mark to market basis. In other words, at the end of the day you are charged interest on the size of the position at the time. Of course this has a two way effect, a smaller charger on a smaller position and so on, but it did need to be pointed out. Once again, my apologies.
Finally, it should also be noted that your broker will most likely also charge you a conversion cost at the end of each day to convert back to your native currency, however this can sometimes be negotiated. Do speak to your broker.
Many thanks to Robert for pointing those out to me
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