So I set out to write a textbook to be used as the "source code" of my mentoring. BWILC explains those differences and gives you everything you need to achieve forex trading success over time. This book has changed my whole perspective of trading. The insights of Dirk due Toit is refreshing and mind changing. Maddoc - Nov. Most importantly it has given me the confidence that I can make my forex trading business a success according to my own goals.
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When thinking about reviewing the book Bird Watching in Lion Country I realized how difficult it is to write an objective, fair and substantiated book review. After a while I gave up on the "objective, fair and substantiated" bit and decided to just write down some random thoughts and hopefully they are of some assistance. Forex, it covers all aspects to become a successful currency trader. Included is his popular 4x1 strategy to make money forex trading. Currently Dr. Forex is busy automating his 4x1 median trading strategy.
Bird watching in lion country can be a very rewarding, yet dangerous experience. Basically on a 1 hour chart with around a months data draw in major support and resistance around pips apart, and then a range in the centre of that the median. His theory is that the price will revert to the median with time and uses this to time trades.
He recommends low gearing, which allows large stops and only taking entries in the direction of the trend. However, if you follow his program you will gravitate towards the same approach to the market that he has and intuitively understand how the shared "fundamental" insights may effect your positions or how you should think about new positions. Dirk does not call it "fundamentals", but "market dynamics" - and it is all about getting in tune with how the market discounts, which is IMPORTANT and stuff the rest information and how that shows up in prices.
Taking the risk that I stand to be corrected by the Doc himself, I would say he is an not very strict intra week trader. He believes in taking profits regularly off the table and there is no sin in taking a 30 - 40 pip profit, however a pointer is also welcome and necessary from time to time, thank you. Realizing this his mentoring is geared towards helping one to see that a "manageable time frame", which can differ from individual to individual, is much more suitable. The most important aspect I think where his approach differs from every other retail forex trainer that I have come across except the real empathy and real concern inherent to his personal approach is his MULTI ENTRY system.
In other words, where most say, take the maximum you are prepared to trade with, wait for your signal, add your stop and limit and trade, he says, "just take a little bit of what you are prepared to risk and enter in a identified "zone", and then add to that position, preferably at BETTER prices not more expensive and do so until you are fully "invested" and then wait for the profits, which you can pick off all at once or one by one.
Except maybe for Part 4, so you skip over Parts 1 - 3 directly to Part 4 to get the secret formula. This would be a mistake - take your time and read the book from page 1 to because it really explains the forex landscape lion country in a unique way. No matter what kind of a trader you are and what indicators are dear to your heart, read the book with an open mind.
If your trading is not going all that great, take a week or 2 off while you read the book - you may just come back with some new and fresh ideas. You may even continue scalping if that is what you really enjoy, but with a different mind-set.
With regard to specifics like entry and exit signals, and trade and risk management - Bird Watching in Lion Country turns a few "truths" upside down and offers a different perspective.
Surely timing of entry has to be pin-point or pip-point Surely you should cut losses short and let profits run Surely you should never add to a losing trade Get out as soon as you think you are wrong Part 1 is very general, but specific and enticing enough to compel the reader to fork out the money to buy the balance of the book.
Part 2 is about the psychological attitude toward the market, the statistical approach and the edge. This part sets the real deep down fundamentals of how you can become a winning trader. Dirk makes the point somewhere, probably in this Part or maybe Part 1 that winners and losers are not divided years or months most self-traders are simply too "short sighted" to think in terms of years down the line, but on day 1.
You need an edge. The edge is not the result of the system, but the beginning. This part also contains some other necessary mumbo jumbo, trading psychology type stuff beginners and losers need to hear and will adhere to hopefully now that they read it in the proper context. Part 3 is about how the FX Market works and underlying fundamentals. Dirk explains why the characteristics of the FX market that all the market makers put up on their websites are vitally important and why you should not dismiss it as "useless information".
He also explains practical aspects which will confront you and which can be used to your detriment or used to contribute to your success. The concept of overshooting, trading data releases, the 24 hour day. All of this must be included in your approach. He specifically shows how the "marketing wizards" like the sponsors of some well know forex portals have a grip on the general informational spam in the retail FX industry, which they use to get people to dump margin in their "segregated" bank account and then systematically turn it over to their "profit account", thinking they are going to become market wizards I think that the "technical" part of the system is interesting and good.
The fact that there is not a detailed method with accurate numbers is fine with me because at least you get the general idea and you can yourself deal with the details.
The whole system is based on the fact that you have an edge because your trade in the way of the fundamental trend. The big issue is how do we determine clearly the fundamental trend, because if we are trading in the wrong way that could be pretty bad.
And in my opinion the book presents that finding the long term fundamental trend is almost obvious. This part contains a section about looking at this idea to trade your own money strictly from a business perspective and also then contains his 4 X 1 trading strategy and median trading methodology. And relational analysis - relating price, time, events. Experienced traders will after reading the book probably add something to their armoury or may revamp their trading completely.
New and inexperienced traders will have a refreshing and sensible look on the market and they will have the basics to make it work.
But a book is a book. Trading systems are not bought of the shelf, installed in your brain and the money dropped into your bank account. Otherwise the fact that the mentoring program is highly promoted is not such a problem because it is mentioned more only at the very beginning and the very end, so you can easily avoid the commercials.
The fact that the system is not accurately defined is OK but the problem is more that the author states that you will get to know everything in detail and that is not true.
So, I would say that the book had some very interesting parts but seems to have also some "holes". Some backtest results using the 4x1 strategy and the method described in Part 4 of his course. It is about relating price and price changes ; time the time it take the price to change and the time of considering any price ; and events any factors that may influence prices in the time frame I look at the market.
In other words, what most people call fundamental analysis i. However, Dirk du Toit calls himself a technical trader because he uses technical parameters of recent and historical price changes and technical price levels to make trading decisions in conjunction with the above. Most indicators only serve to confuse the issues. In a clean price chart there is too much in formation to use sensibly. Dirk adds that the moment you add all sorts of indicator lines You should not add to information Dirk believes, but distill the USEFUL information and work with that fundamental type, information, or what he calls market dynamics which are VERY useful to filter out the overload contained in price charts suffering under the load of subjective technical indicators off all sorts.
The only way you are going to make extraordinary returns in FX is with high leverage. But high leverage can be a big problem. It starts pretty soon to affect the way you trade.
For instance where you place stops to take losses. If you make a loss you have to make it up before you can think of moving ahead. It makes much more sense to make sure you can trade on a small amount and make relative good returns in percentage terms to one day if you have the means trade properly than to be fooled by randomness and misread your luck for skill and then later just lose a large amount when your luck turn.
Stop losses are definitely one of those things that will depend on the risk tolerance of the individual. Obviously, this will not happen all the time, and the market can remain in a retracement or correction for longer than you can remain solvent.
It is up to the individual trader to ascertain their own cut off point. You give yourself an edge by just playing the long term direction.
Corrections and retracements against the long term trend are hard to time and even harder to predict how far they will go. You can save yourself a lot of worry and stress by keeping things as simple as possible while at the same time making your edge as strong as possible.
Dirk du Toit speaks of having two guidelines on when to cut his losses. If a trade is pips in the red then Dirk will consider hedging the trade at that point. If things progress to pips in the red then he will seriously start to look at the possibility that the dollar strength will continue.
If the dollar bulls have the market on the run then he has no problem in exiting my position for a loss. This generally means that trades entered in Q4 are under scrutiny in Q2, and Q3 trades in Q1. The second main guideline is when the bottom of the grid is being tested.
If the bottom of the grid is breached by price and the breach continues then obviously the grid is no longer really valid and needs to be readjusted. In this case, all open trades need to examined and closed out if they no longer make sense given the new grid placement. A market going the wrong direction is giving opportunities to average your cost of buying and that is the secret in the approach.
Multiple cost averaged entries add to the total leverage and that means that by the time the market is ready and turn around you are in the market with a nice position and then you make good money. This is way beter than jumping in and out and round and about with high leveraged short stop hit you here knock you there tactics which is the exact way the majority of losers trade.
And it gets them nowhere. To illustrate this from a reverse perspective, how many times has a trade been closed and therefore a REAL loss realised , only to find price reverse shortly thereafter to find that the loss could have been reduced or turned into a profit?
The only thing that will offset this permanent loss is a greater gain than the loss, from a new trade that is statistically totally independant of the losing trade.
Bottom line - once a trade hits a stop, a permanent loss is realised. Let me say that again - when a losing position is closed, the loss is finalised. Of course the position could be an increasing loser, but he has held positions for two years before coming out on top, at no cost to him. Same goes for holding real estate until a market recovers.
Given all of the above, losing trades are obviously going to be much larger than the daily small profits of a winning trades. These large trades will be the main counterbalance to the occasional large losing trades. The daily small profitable trades that you grind out then become the trades that allow your trade balance to slowly rise over time. Is the book a trading system?
Does it reveal a trading strategy? Then put a framework around that, which gives you a way to trade. It appears to me that the very best books--those that get recommended by a wide range of traders--never include set strategies.
Bird Watching in Lion Country, Retail Forex Trading Explained
When thinking about reviewing the book Bird Watching in Lion Country I realized how difficult it is to write an objective, fair and substantiated book review. After a while I gave up on the "objective, fair and substantiated" bit and decided to just write down some random thoughts and hopefully they are of some assistance. Forex, it covers all aspects to become a successful currency trader. Included is his popular 4x1 strategy to make money forex trading.
BIRD WATCHING IN LION COUNTRY BY DR.DIRK DU TOIT PDF
Kagarisar If marketing wizards said to countyr people you can become fabulously rich in no time with no effort little money and less risk, who was I to tell them they were deluding themselves? Maybe you feel like a failure, but is one two or even three months all that important in terms of a lifelong investment in currency trading? You will immediately find yourself back with the losers. But they cant apply their know-how on your behalf. Its for those of you asking: Its about a meter in length and two inches in diameter, and tawny coloured.
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Bird Watching in Lion Country - FX Trading Explained