In 1645 a Samurai swordsman called Miyamoto Musashi wrote a manual on fighting…
His guide is called A Book of Five Rings and it’s become quite popular in recent years throughout the West…
From boardroom to trading floor, this book gets pulled off shelves and out of desk drawers whenever a whiff of professional competition is in the air.
Musashi writes along similar lines to Sun Tzu in Art of War…he offers compact nuggets of thought-provoking philosophy to help you get your strategic edge in place.
I’ll give you the link to a free version of the whole book in a minute, but in today’s eletter I want to concentrate on one quote in particular:
“Do not collect weapons or practice with weapons beyond what is useful” – Miyamoto Musashi
Now think about what that might mean for a genuine warrior. Someone who stares down death on a daily basis…
He simply can’t afford to waste time messing around with things that won’t help him win his next fight. For the Samuari, a poor training routine, or the wrong choice of tools for the job, might result in a lost limb or even a loss of life.
But they were pretty good at spotting and then capitalising upon an edge the very best tools and weapons might give them…
In fact, they weren’t slow to sheathe their famous fancy swords as soon as gunpowder arrived on the scene. Flintlock rifles and cannon are what kept them alive when combat broke out during the sixteenth century!
Now for the trader, a poor choice of “weapon” is not going to be quite as catastrophic as having your arm lopped off in battle, although a trashed trading account certainly does deliver its own unique brand of pain!
But still, I am going to tread a little bit cautiously here…
You see, there are certain tools you can make a small investment in which can then provide the kind of market insight the professionals themselves trade with. After all, that’s who you’re going up against whenever you take a position in the markets.
So if it is possible you’re taking the trading equivalent of your sword to their gunfight you might like to hear about ways to step your game up a gear. I’m going to tell you why I’ve come to rely so heavily on one particular trading tool today. But this doesn’t necessarily mean it’ll be right for your own trading approach…
Before we move on, please do remember to only continue practicing with weapons that are useful… to YOU.
5 Reasons I think eSignal is hands-down the best trading tool out there
Do you recall me mentioning my favourite charting platform (eSignal) a couple of weeks ago?
It was during the review I wrote about the trading documentary on BBC2 – I was pleased to see eSignal’s familiar looking charts blinking away on trader’s screens in the background of interview footage they showed in the program.
Now the thing is, eSignal is a hugely flexible piece of software. Traders from all disciplines can perfectly shape the workspace to suit the markets they follow and the way they trade. And like we’ve been discussing, you should only focus on the specific tools you need.
So here are 5 very specific ways I’m sure Forex traders can gain a genuine edge from using eSignal’s paid platform over the everyday free charts and tools you might get from a broker.
1) Quality of Forex data
The first benefit eSignal delivers to the Forex trader is the most accurate representation of the true underlying market available.
I’m sure you’re already aware that the currency markets are de-centralised (they don’t trade through a central exchange). Well, instead of being at the mercy of your broker and his single proprietary price feed, why not access a cumulative feed from over 200 contributing banks and institutions?
It’s the same data the professionals will be using and this is going to help you place much more accurate entry and stop loss orders when it comes to your own trading.
2) Volume at Price (VAP)
One thing you’re certainly not going to be short of with eSignal is trading indicators!
A huge portfolio is built straight into the platform. There’s an active marketplace for custom third-party indicators, and you can even design and set-up your very own. But remember today’s motto of only using weapons that are useful to you? Well, here’s one I think I’d struggle to trade the shorter timescales without. And I’ve never seen it directly offered by spread betting firms I’ve traded through here in the UK.
Could there be a particular reason they don’t want you to have it, I wonder?
VAP lets you see the horizontal distribution of trading volume. With Forex it’s tick volume (the number of trades) rather than the actual amount of currency. But this is still going to make support and resistance levels jump out like never before. Here’s how it looks on your screen:
3) Access to currency Futures
Why limit yourself to analysing just the spot (cash) currency markets? Why not do what the professionals do and gain an extra insight from what’s going on in the currency futures?
Do this and you’ll see a complete new dimension into the way institutions are positioning themselves. You’ll often pick up warning signs from the futures before the Spot markets actually move.
Check out the CME (Chicago Mercantile Exchange) Forex futures – the data is all available directly from your eSignal platform.
4) Point & Figure Charts
Here’s another incredibly useful chart format you get with eSignal that I’ve never seen offered directly through UK brokers.
Point and figure is as old as the hills but delivers the cleanest and most visually impacting overview of financial markets. You can clearly see areas of distribution and accumulation and obvious breakout points leap off the screen.
I’ve marked up a GBP/USD chart here so you can get an idea of what P&F can show you:
GBP/USD Point & Figure – (100pip box-size, 3 box reversal)
A: Clear support level
B: Sell signal on break of support
C: Down-trend line offers resistance.
D: Another clear support level
E: Another sell signal on break of support
5) Bar/Tick replay feature
This is a nice little feature build into every single chart you open on eSignal… ever notice a strange but potentially lucrative new pattern you’d like to practice trading? Looking for a way to sharpen your steel while the markets are quiet? This feature lets you replay real market data on a bar-by-bar, or even a tick-by-tick basis. It’s the perfect way to practice and develop your skills in a realistic but zero-risk environment.
So there are five ways I’m sure you can benefit immediately from a premium trading tool like eSignal. Of course, it still all comes down to personal choice in the end…
You might find ways you can make even better use of it in your own trading. Or you might find you don’t have anything to gain at all. But you’ll never know unless you give things a try!
This the entry level platform (great value!) that gives you the tools Forex traders need without having to pay for stock-scanners, news feeds, and all the other bells and whistles you might never use.
Why not give it a test-run and see what it can do for you? I’d be very surprised if you didn’t feel you’d taken a definite step in the direction of pro-level trading.
Be Prepared: Market Moving Data Coming This Week (London Time):
Wednesday 15th October:
08:00 EUR Draghi speaks
09:30 GBP Average Earnings Index
09:30 GBP Claimant Count Change
13:30 USD Retail Sales
13:30 USD Producer Price Index
19:00 EUR Draghi speaks (again!)
Thursday 16th October:
10:00 EUR Consumer Price Index
15:00 USD Philly Fed
Friday 17th October:
13:30 USD Building Permits
13:30 USD Yellen Speaks
Monday 20th October:
– No big reports
Tuesday 21st October:
15:00 USD Existing home sales
So give your current trading tools a bit of consideration – are you definitely only using ones that serve you well?
Give eSignal’s trial a roll-out when you get chance.
And if you fancy bringing more Samurai philosophy into your trading here’s that book I mentioned (free online version):