Lately, I have been getting good trades using mainly Fibonacci retracement. There were more winners compared to using other ways in the past. It is simple and at least I know with certain degree of confidence where my entries and exits are.
First I would draw a Fibonacci retracement for the Day chart. Then I would go down to lower time frames. Mostly I used 30-minute chart. I would look for possible points of reversal at the usual Fibonacci levels. Even if the price is half way between one Fibonacci level to another, I would know with some certainties where it is heading. It will be toward the next Fibonacci level most of the time. The level where the prices had previously stopped or overlapped Fibonacci (days & shorter time frames) would be my take profit level.
It is simple and it works for me. That is all I need. I don’t even use any other confirming indicators. I believe Fibonacci ratios are god given in our lives.
Wednesday, September 24, 2008
Thursday, August 14, 2008
Trading GBP/JPY
GJ has always been an exciting trading pair. I am always reluctant to focus on this volatile pair given its big spread. 9 to 10 pips are usual under normal trading.
On Monday (11/8/08) night, I saw a short entry opportunity too good to pass. I went in around 7:30pm at 209.18 with just 1 lot, thinking more of the high spread. It went in my favour right from the start. By 11:19pm I exited with 62 pips profit. It was my bed time and I did not want to hold any position in a volatile pair like GJ overnight. The price kept heading south the next day especially after the CPI news for Great Britain at 4:30pm on Tuesday. By Wednesday morning the price went as far as 202.48. It would have been a handsome 670 pips profit had I not bailed out earlier.
On the brighter side, getting almost 10% of the whole move was not that bad. What else could I say? At least, I had a good night sleep.
On Monday (11/8/08) night, I saw a short entry opportunity too good to pass. I went in around 7:30pm at 209.18 with just 1 lot, thinking more of the high spread. It went in my favour right from the start. By 11:19pm I exited with 62 pips profit. It was my bed time and I did not want to hold any position in a volatile pair like GJ overnight. The price kept heading south the next day especially after the CPI news for Great Britain at 4:30pm on Tuesday. By Wednesday morning the price went as far as 202.48. It would have been a handsome 670 pips profit had I not bailed out earlier.
On the brighter side, getting almost 10% of the whole move was not that bad. What else could I say? At least, I had a good night sleep.
Tuesday, August 12, 2008
My Trading System
After spending thousands on forex books and courses (I went as far as Bahrain), I think I now have a system that works for me. I believe any system needs to match the personality of the trader concerned. I have tried some systems claimed by other people to have worked for them but I failed miserably. I conclude that you must develop your own system by combining the tools already available to everybody.
During the course of my short trading experience, I started trading with real money on February 15th, 2008, I have arrived at a conclusion that any system that works must be simple enough to employ. I have seen people using charts full with indicators that looked too difficult to arrive at a quick and correct decision. Of course, “correct” is very subjective here.
In my system, I use EMA 5 (close) and EMA 6 (open) for my entries. I use Commodity Channel Index (CCI) for confirmation. These are the tools that I use. When market is going sideways I used “the wave”, EMA 34 using all 3 parameters (close, high and low) taught by Raghee Horner in her book, Thirty Days of Forex Trading. The bulk of my decision lies with the candles themselves. I spent most of the time looking at the candle sticks searching for reversal candles. When I have found the most likely candidates, confirmed by EMAs 5 & 6 and CCI, I pull the trigger.
First, I look at the Day chart. If the price is going down then I will check either the 1H or 30M or even 15M chart for entry. If the slower EMA 5 crosses EMA 6 downward, confirmed by CCI, it is time to enter short. If the EMAs cross back, it is time to exit. I normally exit half of my position before this. For a bearish Day candle, I will only enter short position.
As for the “wave”, I use it strictly for sideways market when the 3 EMA34s are at 3 o’clock direction. A breakout upward will give me a long entry and vice versa. Again, the CCI is my confirming indicator.
Of course, I had some losses with these tools too but I am happy to report that overall, the trades have been profitable. Yesterday, I managed to capture 103 pips in EU and UJ trades simply employing this system that I called WAVEMACCI.
During the course of my short trading experience, I started trading with real money on February 15th, 2008, I have arrived at a conclusion that any system that works must be simple enough to employ. I have seen people using charts full with indicators that looked too difficult to arrive at a quick and correct decision. Of course, “correct” is very subjective here.
In my system, I use EMA 5 (close) and EMA 6 (open) for my entries. I use Commodity Channel Index (CCI) for confirmation. These are the tools that I use. When market is going sideways I used “the wave”, EMA 34 using all 3 parameters (close, high and low) taught by Raghee Horner in her book, Thirty Days of Forex Trading. The bulk of my decision lies with the candles themselves. I spent most of the time looking at the candle sticks searching for reversal candles. When I have found the most likely candidates, confirmed by EMAs 5 & 6 and CCI, I pull the trigger.
First, I look at the Day chart. If the price is going down then I will check either the 1H or 30M or even 15M chart for entry. If the slower EMA 5 crosses EMA 6 downward, confirmed by CCI, it is time to enter short. If the EMAs cross back, it is time to exit. I normally exit half of my position before this. For a bearish Day candle, I will only enter short position.
As for the “wave”, I use it strictly for sideways market when the 3 EMA34s are at 3 o’clock direction. A breakout upward will give me a long entry and vice versa. Again, the CCI is my confirming indicator.
Of course, I had some losses with these tools too but I am happy to report that overall, the trades have been profitable. Yesterday, I managed to capture 103 pips in EU and UJ trades simply employing this system that I called WAVEMACCI.
Monday, August 11, 2008
When It Gapped....
As usual when I woke up around 6am this morning, I checked the chart and was excited to see EU to have gapped down. EU went down from its close at 1.5017 last week to this week’s opening of 1.4927, a 90 pip drop. I was in short position before I left my trade to fate over the weekend. Unfortunately during the low trading period after local midnight before the weekend, my stop loss of 1.5057 was hit when the price went to as high as 1.5062. Just my bad luck. Otherwise, the gap would have given me 130 pips.
To me, gaps are rare in this super liquid frorex market. When they happen, they are worth a mention here.
From there, after small retracement, the market moved sideways all Monday morning. I would use the gap channel as my resistance. Once it breaks the gap upward, I am going long.
To me, gaps are rare in this super liquid frorex market. When they happen, they are worth a mention here.
From there, after small retracement, the market moved sideways all Monday morning. I would use the gap channel as my resistance. Once it breaks the gap upward, I am going long.
Friday, August 8, 2008
Hit By News
I went long in EU just before the ECB press conference. For the first 5 minutes, it went up in my favour. I did not want to get out hoping for big retracement in EU. I was dead wrong. It went up to as high as 1.5474, below 1.5518 minor resistance and reversed. The next 5 minutes saw EU heading south to 1.5428. Ouch!
ECB had a press conference where rate was left unchanged and Trichet continued to sound hawkish. EU continued its southbound journey. The EU weakness was attributed to "decline in annual M1" which is an important obstacle to further rate hike by ECB.
I was just too quick on my trigger to go against the trend.
ECB had a press conference where rate was left unchanged and Trichet continued to sound hawkish. EU continued its southbound journey. The EU weakness was attributed to "decline in annual M1" which is an important obstacle to further rate hike by ECB.
I was just too quick on my trigger to go against the trend.
Wednesday, August 6, 2008
Big Doji (Blunder)
The UJ trade was a disaster. I had for a few moments profitable position before I noticed a doji appearing at the bottom near to a support line. I knew very well that I was in the wrong position. It reversed after the doji leaving me with BIG loss. Literally, doji means "blunder" or "trouble" in Japanese.
In retrospect, UJ was generally on an up trend based on daily time frame. To trade counter to the trend was inviting trouble.
I also found out the chart used by Haji Nordin is called Heikin Ashi kuskus. It means " average bar" in Japanese. It is supposedly a strong indicator for traders. I believe, like any other indicator, you have to factor in several other parameters before jumping in. The candle stick chart itself is a powerful indicator. When combined with others, particularly, the trend, it would make a more formidable trade entry.
I will still look at the Heikin Ashi chart. I would use the SMA 5 & 20 in my trade. In addition, I would use the daily trend to shape my entry. If the day chart is going up, I would open the 30M chart and enter only when SMA5 crosses SMA20 upward. Heikin Ashi will be just another indicator that I will employ from now.
I appreciate all the help rendered by Haji Nordin. I guess each person must trade based on his/her own system because the psychological difference and risk appetite between people is too vast to assume that what works for one will work for another.
I have to keep searching and improving......
In retrospect, UJ was generally on an up trend based on daily time frame. To trade counter to the trend was inviting trouble.
I also found out the chart used by Haji Nordin is called Heikin Ashi kuskus. It means " average bar" in Japanese. It is supposedly a strong indicator for traders. I believe, like any other indicator, you have to factor in several other parameters before jumping in. The candle stick chart itself is a powerful indicator. When combined with others, particularly, the trend, it would make a more formidable trade entry.
I will still look at the Heikin Ashi chart. I would use the SMA 5 & 20 in my trade. In addition, I would use the daily trend to shape my entry. If the day chart is going up, I would open the 30M chart and enter only when SMA5 crosses SMA20 upward. Heikin Ashi will be just another indicator that I will employ from now.
I appreciate all the help rendered by Haji Nordin. I guess each person must trade based on his/her own system because the psychological difference and risk appetite between people is too vast to assume that what works for one will work for another.
I have to keep searching and improving......
Tuesday, August 5, 2008
In Search of the Holy Grail
A fellow trader by the name of Haji Nordin contacted me and other ex-students of Rapid Forex through group email informing his trading system that so far worked well for him. He unselfishly offered to teach anyone interested free of charge.
I grabbed this opportunity and took time off to see him. True enough he went out of his way to teach me and another trader, Izan. He volunteered some tips on his trading system. He even downloaded the template into my laptop.
Basically, Haji Nordin employs EMA3 and EMA30 in his set up in addition to various other indicators that looked alien to me. The trigger to entry is more based on the indicators, red for short and blue for long. The crossings of the EMAs are extra bonus and confirmation. He also spoke highly of particular trading times that always generate profits for him and methods of loss recovery. They all made a lot of sense to me.
Going back to my office, I saw a good set up for USD/JPY that opened a short position using my new found system. It registered profit from the start. Somehow, it retraced and I was in the red. I figure it is still too early to comment on the system. Anyway, I am very much grateful to Haji Nordin for sharing his trading system. He is truly a selfless person!
I would raise my hat to him. Or shall I say my skull cap?
I grabbed this opportunity and took time off to see him. True enough he went out of his way to teach me and another trader, Izan. He volunteered some tips on his trading system. He even downloaded the template into my laptop.
Basically, Haji Nordin employs EMA3 and EMA30 in his set up in addition to various other indicators that looked alien to me. The trigger to entry is more based on the indicators, red for short and blue for long. The crossings of the EMAs are extra bonus and confirmation. He also spoke highly of particular trading times that always generate profits for him and methods of loss recovery. They all made a lot of sense to me.
Going back to my office, I saw a good set up for USD/JPY that opened a short position using my new found system. It registered profit from the start. Somehow, it retraced and I was in the red. I figure it is still too early to comment on the system. Anyway, I am very much grateful to Haji Nordin for sharing his trading system. He is truly a selfless person!
I would raise my hat to him. Or shall I say my skull cap?
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