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?
Monday, August 4, 2008
Back From the Blues
The last time I posted my blog was about 3 months ago. I had good reasons to be away for that long.
First, I travelled a lot during the period. I was in Bahrain in late April to attend a Forex Conference. In May, I went to Jakarta, golfing as usual. In June, it was school holidays. So I took my family up north, all the way to Penang. In July, I went on business trip to Sabah and Sarawak. Late July I was in Manila and the beautiful beaches of Boracay in the Philippines. You can access to my travel stories and photos on my other blog, http:/seavacation.blogspot.com.
The second reason was that I was really down on my luck in trading. I had wiped out more than two third of my capital. It almost made me quit Forex. I continued to educate myself and persevere in paper trading hoping to find that holy grail. I have decided to make forex trading a part of my life with or without the holy grail of trading.
This will be my journey towards becoming an accomplished Forex Trader.
First, I travelled a lot during the period. I was in Bahrain in late April to attend a Forex Conference. In May, I went to Jakarta, golfing as usual. In June, it was school holidays. So I took my family up north, all the way to Penang. In July, I went on business trip to Sabah and Sarawak. Late July I was in Manila and the beautiful beaches of Boracay in the Philippines. You can access to my travel stories and photos on my other blog, http:/seavacation.blogspot.com.
The second reason was that I was really down on my luck in trading. I had wiped out more than two third of my capital. It almost made me quit Forex. I continued to educate myself and persevere in paper trading hoping to find that holy grail. I have decided to make forex trading a part of my life with or without the holy grail of trading.
This will be my journey towards becoming an accomplished Forex Trader.
Saturday, April 19, 2008
Take Profit When You Should, Hold When You Could
As I was packing to leave office around 4.30pm Friday I noticed EUR/USD moving strongly downward. So, I jumped right in. By the time I reached home, my Take Profit was hit for a 33 pips gain. Somehow, I was not that happy as the price kept heading south.
Later, I received signal that the price was reversing. Again, I jumped in only to find out that I was wrong to go long. The price moved steadily down. I cut lost at 17 pips. Later I thought there was a reversal signal again. Both the stochastics and CCI confirmed a Buy entry. I was dead wrong. The price moved fiercely downward. I tried to get out but somehow it failed to execute. That was a BIG mystery to me. Was it because I had my Stop loss on? It kept moving until it hit my Stop Loss way down. That was a big loss for me. It wiped out completely whatever profits I made earlier and put a dent in my small equity.
I kept watching the screen faithfully since 6pm for reversal. Close to midnight the price eased somewhat and I went long. It remained sideways until 1.30am when I decided to call it a night. I was confident the price would reverse upward in equally big way.
When I woke up on Saturday, I checked my trade to find that I was 53 pips ahead. That was worth the efforts of staying up late. I just hope Monday would be a big move up. I could only hope and pray over the weekend that there wouldn't be another big gap down like the week before.
EUR/USD moved 222 pips before it reversed. IF only I had stayed with my first entry, I would have reaped about 200 pips. That was a big IF. It taught me a good lesson to stay in the profit zone without getting out too soon. Next time I would only get out when the price crossed the Pivot Point Moving Average (3 periods) and opened and closed on the other side supported by Williams' %R. That would be my Exit point. Period.
Later, I received signal that the price was reversing. Again, I jumped in only to find out that I was wrong to go long. The price moved steadily down. I cut lost at 17 pips. Later I thought there was a reversal signal again. Both the stochastics and CCI confirmed a Buy entry. I was dead wrong. The price moved fiercely downward. I tried to get out but somehow it failed to execute. That was a BIG mystery to me. Was it because I had my Stop loss on? It kept moving until it hit my Stop Loss way down. That was a big loss for me. It wiped out completely whatever profits I made earlier and put a dent in my small equity.
I kept watching the screen faithfully since 6pm for reversal. Close to midnight the price eased somewhat and I went long. It remained sideways until 1.30am when I decided to call it a night. I was confident the price would reverse upward in equally big way.
When I woke up on Saturday, I checked my trade to find that I was 53 pips ahead. That was worth the efforts of staying up late. I just hope Monday would be a big move up. I could only hope and pray over the weekend that there wouldn't be another big gap down like the week before.
EUR/USD moved 222 pips before it reversed. IF only I had stayed with my first entry, I would have reaped about 200 pips. That was a big IF. It taught me a good lesson to stay in the profit zone without getting out too soon. Next time I would only get out when the price crossed the Pivot Point Moving Average (3 periods) and opened and closed on the other side supported by Williams' %R. That would be my Exit point. Period.
Tuesday, April 15, 2008
Forex Expert Seminars
Over the past few months of trading as a newbie, I have come across numerous advertisements from the so called forex experts inviting people to trade forex. The ads dangled the secrets to becoming super rich super fast through forex trading. They normally would give 2-hour free pep talks and after that the participants were invited to join a 2-day class for a fee ranging from RM3,000 to RM5,000. I list below some of the free pep talks that I attended.
I attended the first free preview sometimes before Christmas last year given by Kishore M from PowerUp Capital Network, a regular in local newspapers. He claimed to have "a powerful forex discovery that could earn you $183,000 in just 2 months" with "100% accuracy trading strategy". After the talk, he made it sound so urgent that his 2-day seminar was specially priced at RM4,000 plus if we registered there and then. Otherwise, it would cost us double the amount. A lot of people were actually running to get themselves registered. We were asked to pay a deposit of RM100 to get our place at that special price. For all I know, that RM100 was definitely a genius solution to cover the cost of his "free preview" held at a well-known hotel.
Then I attended another freebie by Rapid Forex. They are the introducing broker of FXCM, my trading platform. For RM500, I registered myself for a 2-day weekend course. That was how I first learned to trade forex. The guys at Rapid Forex were genuinely honest to assist the newbies. After the basic course, I went for the weekly hand-holding session to familiarise myself with the trading platform. For a more advanced course, the fee also advanced to more than RM4,000. I was just not convinced enough to proceed.
Recently, I saw an advertisement that carried the taglines like "Malaysia Most Powerful FOREX Seminar". I could not resist their claim, " Live Performance Forex Seminar". "Live Challenge: See How Much the Professional Trader Can Make in 90 mins". It was presented by Enthuse Elixir under Winning Forex Solution. The expert who called himself Mr. M (or Mo or Bob for short) claimed that his robot trading guaranteed 20 pips per day. Trading by using technical analysis and/or fundamental analysis is the old fashion way, according to Mr. M. He told us that he is making 200 pips per day. Wow! He even showed his account balance in excess of $1.0 million. Double Wow! I was more interested in how his robot can make in 90 minutes. He entered a trade at the beginning of the talk. After the talk, to prove how easy it was to make money in forex, he would show the trade. Unfortunately it was losing more than $1,000 fast. So much for guaranteed pips! His course costs RM3,500 and his robot USD3,000. I was beginning to lose faith in local "professional traders".
Then I attended another free preview on "tornado trading method". It was conducted by Infinite FX. It was presented by a lady. At least she was direct to the point and less on hard selling.
Of all the previews, I was somehow impressed with Lily Thniah of Ringgit Fleet. She spoke of her experience of more than 10,000 hours of trading. There was a doctor who spoke highly of her course. At least she assured those who were present of a personal mentoring from her, something that others did not include in their package. I would go for her course.
I wonder, why would these forex experts already making tons of money as claimed, spend their weekend to help others. May be the fees for the 2-day course ranging from RM60,000 to RM100,000 are actually the ones making them rich in FOREX. I just assume 20 persons in one class paying RM3,000 to RM5,000 each. Just a wild guess!
I attended the first free preview sometimes before Christmas last year given by Kishore M from PowerUp Capital Network, a regular in local newspapers. He claimed to have "a powerful forex discovery that could earn you $183,000 in just 2 months" with "100% accuracy trading strategy". After the talk, he made it sound so urgent that his 2-day seminar was specially priced at RM4,000 plus if we registered there and then. Otherwise, it would cost us double the amount. A lot of people were actually running to get themselves registered. We were asked to pay a deposit of RM100 to get our place at that special price. For all I know, that RM100 was definitely a genius solution to cover the cost of his "free preview" held at a well-known hotel.
Then I attended another freebie by Rapid Forex. They are the introducing broker of FXCM, my trading platform. For RM500, I registered myself for a 2-day weekend course. That was how I first learned to trade forex. The guys at Rapid Forex were genuinely honest to assist the newbies. After the basic course, I went for the weekly hand-holding session to familiarise myself with the trading platform. For a more advanced course, the fee also advanced to more than RM4,000. I was just not convinced enough to proceed.
Recently, I saw an advertisement that carried the taglines like "Malaysia Most Powerful FOREX Seminar". I could not resist their claim, " Live Performance Forex Seminar". "Live Challenge: See How Much the Professional Trader Can Make in 90 mins". It was presented by Enthuse Elixir under Winning Forex Solution. The expert who called himself Mr. M (or Mo or Bob for short) claimed that his robot trading guaranteed 20 pips per day. Trading by using technical analysis and/or fundamental analysis is the old fashion way, according to Mr. M. He told us that he is making 200 pips per day. Wow! He even showed his account balance in excess of $1.0 million. Double Wow! I was more interested in how his robot can make in 90 minutes. He entered a trade at the beginning of the talk. After the talk, to prove how easy it was to make money in forex, he would show the trade. Unfortunately it was losing more than $1,000 fast. So much for guaranteed pips! His course costs RM3,500 and his robot USD3,000. I was beginning to lose faith in local "professional traders".
Then I attended another free preview on "tornado trading method". It was conducted by Infinite FX. It was presented by a lady. At least she was direct to the point and less on hard selling.
Of all the previews, I was somehow impressed with Lily Thniah of Ringgit Fleet. She spoke of her experience of more than 10,000 hours of trading. There was a doctor who spoke highly of her course. At least she assured those who were present of a personal mentoring from her, something that others did not include in their package. I would go for her course.
I wonder, why would these forex experts already making tons of money as claimed, spend their weekend to help others. May be the fees for the 2-day course ranging from RM60,000 to RM100,000 are actually the ones making them rich in FOREX. I just assume 20 persons in one class paying RM3,000 to RM5,000 each. Just a wild guess!
Monday, April 14, 2008
The Day Trevor Immelman Won the US Masters
I woke up at 3am local time to catch the finals of the US Masters. Trevor Immelman was leading and Tiger Wood was lurking a few places behind.
By 4am, I noticed that the EUR/USD price had retreated from last Friday's close of 1.5826 to 1.5672, a 154 pips move. It baffled me how it could have moved so much when the market was not even open for trading. Later, I learned that it was a joint communique by the G7 finance ministers that pushed the USD up. The other USD pairs had also moved substantially. When the market was open, the prices were already reversing. I went in long with the EUR/USD and short USD/JPY. By the time Trevor Immelman finished the 18th hole at Augusta and won the US Masters, the prices had moved to in my favour.
From there, they were on yo-yo rides. By 10am, I decided to close my USD/JPY pair for a 20 plus pip gain. Slightly after 11am, I closed half of my position in EUR/USD for the same gain. By4pm after I closed the remaining half of the EUR/USD, it advanced a further 73 pips. By 6.30pm, EUR/USD was at 1.5827. USD/JPY was at 100.82, almost 70 pips from my exit price. I could just kick myself.
In retrospect, my exits were hasty. Normally I would wait for the prices to cross either EMA 10 and/or EMA 20 before I close my position. I was a bit too quick on the trigger this morning. On the other hand, a total of 136 pips was not that bad to start the week.
By 4am, I noticed that the EUR/USD price had retreated from last Friday's close of 1.5826 to 1.5672, a 154 pips move. It baffled me how it could have moved so much when the market was not even open for trading. Later, I learned that it was a joint communique by the G7 finance ministers that pushed the USD up. The other USD pairs had also moved substantially. When the market was open, the prices were already reversing. I went in long with the EUR/USD and short USD/JPY. By the time Trevor Immelman finished the 18th hole at Augusta and won the US Masters, the prices had moved to in my favour.
From there, they were on yo-yo rides. By 10am, I decided to close my USD/JPY pair for a 20 plus pip gain. Slightly after 11am, I closed half of my position in EUR/USD for the same gain. By4pm after I closed the remaining half of the EUR/USD, it advanced a further 73 pips. By 6.30pm, EUR/USD was at 1.5827. USD/JPY was at 100.82, almost 70 pips from my exit price. I could just kick myself.
In retrospect, my exits were hasty. Normally I would wait for the prices to cross either EMA 10 and/or EMA 20 before I close my position. I was a bit too quick on the trigger this morning. On the other hand, a total of 136 pips was not that bad to start the week.
Tuesday, April 1, 2008
STOP LOSS
I know that every trade must carry its stop loss. The problem with me was when the market moved in my direction, I adjusted the stop loss accordingly. The way I did it was to find the next level of support or resistance and place my stop loss there. Unfortunately I got whipsawed 3 times yesterday. The consolation was, I made some gains but could have been better if not for the stop losses.
May be I trailed my stop losses a bit too soon and too close.
May be I trailed my stop losses a bit too soon and too close.
Sunday, March 30, 2008
My Favourite Currency Pairs
I love the Yen pairs.
When I wake up at around 6am local time (6pm EDT), the Yen pairs are already actively traded. They are always in probable entry positions around this time. One thing about the Yen pairs is that they move up and down in more predictable ways during these times. It's just a matter of waiting for them to hit the reversal levels for entries.
The only drawback to trading in the wee hours of Asian market is that the spread is ridiculouslly high. Paying 8 pips for a trade is normal. I am not sure whether other brokers are charging similarly high spreads. Anyway so far, I manage to come up with 30 to 50 pips profits that more or less pay for the high spreads.
Perhaps, early birds do catch the best worms.....
When I wake up at around 6am local time (6pm EDT), the Yen pairs are already actively traded. They are always in probable entry positions around this time. One thing about the Yen pairs is that they move up and down in more predictable ways during these times. It's just a matter of waiting for them to hit the reversal levels for entries.
The only drawback to trading in the wee hours of Asian market is that the spread is ridiculouslly high. Paying 8 pips for a trade is normal. I am not sure whether other brokers are charging similarly high spreads. Anyway so far, I manage to come up with 30 to 50 pips profits that more or less pay for the high spreads.
Perhaps, early birds do catch the best worms.....
Saturday, March 29, 2008
KISS.....continued
One thing I found helpful was looking at the longer period trend chart. The shorter period trend may tell you the prices are heading one way but the longer term chart may point in the opposite direction. Trust the longer term price chart to determine whether to enter short or long.
I use the 15-minute chart to determine my entry point. Let's say the 15-minute chart is heading up and 1-hour chart is going the other way. I shall wait for the 15-minute candles to hit the top of the Bollinger Band and wait for reversal before entering my short position. Instead of the Bollinger Band, the moving averages can also be used as a point to check for reversal. I use 20, 50 and 200 moving averages. I use the daily candle to confirm my direction. If the candle is red and my position is short, I am at least assured that I am heading in the right direction.
I was normally in position to catch 20 to 30 pip!
I use the 15-minute chart to determine my entry point. Let's say the 15-minute chart is heading up and 1-hour chart is going the other way. I shall wait for the 15-minute candles to hit the top of the Bollinger Band and wait for reversal before entering my short position. Instead of the Bollinger Band, the moving averages can also be used as a point to check for reversal. I use 20, 50 and 200 moving averages. I use the daily candle to confirm my direction. If the candle is red and my position is short, I am at least assured that I am heading in the right direction.
I was normally in position to catch 20 to 30 pip!
Thursday, March 27, 2008
Keep It Simple Stupid (KISS)
I was away on a family trip to visit the Borobudur in Indonesia. It is a place I would recommend anytime. Looking at the ancient Buddhist monument gave me enough motivation to visit more Wonders of the World in future. Angkor Wat is next on the agenda.
I have been using all sorts of tools to determine my entry, exit and take profit levels. They worked sometimes and most of the time it was purely a gamble.
Recently I decided to remove Commodity Channel Index, MACD and Stochastics from my chart. I had only the Bollinger Bands, Moving Averages for 20 Days, 50 Days and 200 Days. Mostly my focus was on the candle stick chart. I looked for the daily trend, 60-minute and 15-minute charts. If, say, the trend is downward and the candles are moving upward, I wait for the candles to reverse at normally obvious reversal points like the moving averages or Bollinger Bands. So far I had better luck in my trades.
I also learned that, if, after entering a trade, it moves against you, you must cut loss almost immediately. I would wait for 15 pips. There is no need to wait for the price to hit the stop loss level. If it goes against you, you are obviously wrong!
So, I would employ my KISS method until another proven technique comes along....
I have been using all sorts of tools to determine my entry, exit and take profit levels. They worked sometimes and most of the time it was purely a gamble.
Recently I decided to remove Commodity Channel Index, MACD and Stochastics from my chart. I had only the Bollinger Bands, Moving Averages for 20 Days, 50 Days and 200 Days. Mostly my focus was on the candle stick chart. I looked for the daily trend, 60-minute and 15-minute charts. If, say, the trend is downward and the candles are moving upward, I wait for the candles to reverse at normally obvious reversal points like the moving averages or Bollinger Bands. So far I had better luck in my trades.
I also learned that, if, after entering a trade, it moves against you, you must cut loss almost immediately. I would wait for 15 pips. There is no need to wait for the price to hit the stop loss level. If it goes against you, you are obviously wrong!
So, I would employ my KISS method until another proven technique comes along....
Thursday, March 20, 2008
Trading the News
I learned bitter sweet lessons from trading the news. On the 18th, I traded GPBUSD on the British CPI news and won. Then again, I used my Double X entries for the USD/CAD pair for the Canadian CPI and I was annihilated. I hit both my short and long entries and struggled from the start until I hit the close button.
The feature attraction for the day was the Fed's much expected rate reduction at 2.15am (local). It was to be the biggest rate cut in 2 decades of 75 basis points. I went to sleep first and woke up at around 2am because my son had very high temperature. I spent a while to attend to him with wet towel before dashing to prepare for the big news.
I entered long in EUR/USD and short in USD/JPY expecting for the USD to tumble upon the news. Somehow, the market moved in a strange way. The EUR/USD pair took a dive together with USD/JPY. I was registering big losses on the EUR/USD and big gains on USD/JPY. Much to my luck, the EUR/USD retraced a bit and I closed both my positions with some net gains. Then I was back to attending to my son's high fever until 4am when I had to take him to the hospital.
It has been one hectic night!
The feature attraction for the day was the Fed's much expected rate reduction at 2.15am (local). It was to be the biggest rate cut in 2 decades of 75 basis points. I went to sleep first and woke up at around 2am because my son had very high temperature. I spent a while to attend to him with wet towel before dashing to prepare for the big news.
I entered long in EUR/USD and short in USD/JPY expecting for the USD to tumble upon the news. Somehow, the market moved in a strange way. The EUR/USD pair took a dive together with USD/JPY. I was registering big losses on the EUR/USD and big gains on USD/JPY. Much to my luck, the EUR/USD retraced a bit and I closed both my positions with some net gains. Then I was back to attending to my son's high fever until 4am when I had to take him to the hospital.
It has been one hectic night!
Monday, March 17, 2008
Honey, I am Home!
I was away in Bangkok for 3 days. Decided to take a break from forex trading after incurring some losses earlier. I spent most of my time hitting balls at 3 of Bangkok's fine golf courses. Coming back from Bangkok, I booked my flight to Bahrain to attend the Middle East Forex Traders Conference to be held on 23 - 24 April.
When I checked the charts, I was excited with the development when I was away. It looked extremely good for trade set ups. I planned to wake up early to catch the good trades. I set my alarm to go off at 5.30am but somehow overslept. When I finally woke up around 6am, the prices of EUR/USD and USD/JPY had already made substantial moves. Somehow, they moved around 5.40am.
I hurriedly entered into EUR/USD, USD/CHF and USD/JPY. I was still lucky. The prices moved in my favour. Before 6.30am, I was comfortably 60 pips ahead for all 3 trades. So, I decided to start my morning exercise. One hour later, all my trades hit the stop loss for a small loss in total.
I learned my lesson. Take profits when you are ahead.
By mid morning the USD/JPY pair was hitting the bottom of the Bollinger Band. I placed a long entry order which soon was executed. I was thinking and hoping mostly for the price to reverse. I was wiped out 70 pips. I went in and out for a total of 7 trades and managed to bring my losses to a minimum. In one trade I was way ahead that had I taken profit, I would have covered all the losses and even would register a comfortable profit. Again, Lesson 1 forgotten. I took another bitter lesson in Lesson no. 2: Never place an entry order. Wait for the market to show sign of entries.
I am still looking out for some trades before I go to bed.
When I checked the charts, I was excited with the development when I was away. It looked extremely good for trade set ups. I planned to wake up early to catch the good trades. I set my alarm to go off at 5.30am but somehow overslept. When I finally woke up around 6am, the prices of EUR/USD and USD/JPY had already made substantial moves. Somehow, they moved around 5.40am.
I hurriedly entered into EUR/USD, USD/CHF and USD/JPY. I was still lucky. The prices moved in my favour. Before 6.30am, I was comfortably 60 pips ahead for all 3 trades. So, I decided to start my morning exercise. One hour later, all my trades hit the stop loss for a small loss in total.
I learned my lesson. Take profits when you are ahead.
By mid morning the USD/JPY pair was hitting the bottom of the Bollinger Band. I placed a long entry order which soon was executed. I was thinking and hoping mostly for the price to reverse. I was wiped out 70 pips. I went in and out for a total of 7 trades and managed to bring my losses to a minimum. In one trade I was way ahead that had I taken profit, I would have covered all the losses and even would register a comfortable profit. Again, Lesson 1 forgotten. I took another bitter lesson in Lesson no. 2: Never place an entry order. Wait for the market to show sign of entries.
I am still looking out for some trades before I go to bed.
Monday, March 10, 2008
BEAUTIFUL MONDAY
It was the first Monday after the country's 12th. general election. The ruling party lost several key states but managed to hang on to form the next government. I had a case of too much political news to digest.
AS I was screening for set up, I noticed that AUD/USD chart was about to reverse from it's "W" pattern with the final leg missing. I checked both the stochastics and Commodity Channel Index and they confirmed a BUY set up. It was too good to miss and I went long. True enough, I was rolling in profits from the start.
I adjusted my stop loss to a positive level, where no matter what, I would be registering profit. Then it was workout time on my tread mill. By the time I was getting ready to go to office, I was ahead by 30 pips.
The price went as high as 45 pips before retreating. It hit my stop loss but it was still profitable. A good start to a new week!
AS I was screening for set up, I noticed that AUD/USD chart was about to reverse from it's "W" pattern with the final leg missing. I checked both the stochastics and Commodity Channel Index and they confirmed a BUY set up. It was too good to miss and I went long. True enough, I was rolling in profits from the start.
I adjusted my stop loss to a positive level, where no matter what, I would be registering profit. Then it was workout time on my tread mill. By the time I was getting ready to go to office, I was ahead by 30 pips.
The price went as high as 45 pips before retreating. It hit my stop loss but it was still profitable. A good start to a new week!
Friday, March 7, 2008
ANOTHER GOOD TRADING DAY
I woke up to find that my USD/CHF position was ahead by 20 pips. It was left overnight. I woke up several times during the night, not to check on the trade but because I could not sleep. While awake, I adjusted the stop loss a couple times to my favour. I used ATR (Average True Range) value to determine my stop loss. Since I was short on the USD/CHF, I picked up the high of the last candle and added the ATR value to it as my stop loss. It seemed to work extremely well until I was stopped out in the evening. I was already well ahead in my profits.
Just before 9.30am, I went short on USD/JPY as it was hugging the Bollinger Band like the USD/CHF and confirmed by stochastics. It was another good trade that lasted until 8.30pm.
There was CAD data on Net Change in Employment. It moved a good 60-70 pips. I did not get in as I was waiting for the USD Non Farm Payroll. I used my usual Double X entry where I would place entry orders for both short and long position and would cancel the remaining one if the other was triggered. Ten minutes before time, the long order was triggered and when it was time, it moved in the same direction. Immediately I brought up the stop loss to a level that I would incur no loss no matter what. Somehow, the market reversed violently and my position was closed 16 pips below my stop loss. I was perplexed by this. I believe this is what they call slippage in forex. I could absorb the loss given the earlier winning trades.
Overall, I registered a small net profit for the week's trade. Time to take a break.
Just before 9.30am, I went short on USD/JPY as it was hugging the Bollinger Band like the USD/CHF and confirmed by stochastics. It was another good trade that lasted until 8.30pm.
There was CAD data on Net Change in Employment. It moved a good 60-70 pips. I did not get in as I was waiting for the USD Non Farm Payroll. I used my usual Double X entry where I would place entry orders for both short and long position and would cancel the remaining one if the other was triggered. Ten minutes before time, the long order was triggered and when it was time, it moved in the same direction. Immediately I brought up the stop loss to a level that I would incur no loss no matter what. Somehow, the market reversed violently and my position was closed 16 pips below my stop loss. I was perplexed by this. I believe this is what they call slippage in forex. I could absorb the loss given the earlier winning trades.
Overall, I registered a small net profit for the week's trade. Time to take a break.
Thursday, March 6, 2008
REMOTE TRADING
I entered AUD/USD early in the morning. In about 30 minutes it hit the stop loss. Later I went long on EUR/USD after checking INO's trend advice and daily chart. The trade went my way for a change. After adjusting the stop loss twice, I went out with John Phung to see the Malaysian Open. It wasn't until midnight that I checked the trade and as expected hit the stop loss. At least this time I was in the black. After offsetting the loss on AUD/USD, I still registered a small profit.
I'll wait for tomorrow when Non Farm Payroll data will be out.
I'll wait for tomorrow when Non Farm Payroll data will be out.
LOW TRADING DAY
March 5, 2008
I came to terms with my AUD/USD loss yesterday. The reasons given were mainly due to the RBA's Governor's dovish statement. Despite the rate increase, the Aussie headed south.
Today, I entered EUR/JPY and AUD/USD early in the morning. After putting the necessary stop losses and take profits levels, I went off to fetch my Sabahan friend, John Phung. I was out with him until 12 midnight. By the time I checked my trade, I hit both my stop losses.
Another bad trading day. Lessons learned: Always monitor your trade. I did register profits before hitting the stop losses but was not there to take them.
I came to terms with my AUD/USD loss yesterday. The reasons given were mainly due to the RBA's Governor's dovish statement. Despite the rate increase, the Aussie headed south.
Today, I entered EUR/JPY and AUD/USD early in the morning. After putting the necessary stop losses and take profits levels, I went off to fetch my Sabahan friend, John Phung. I was out with him until 12 midnight. By the time I checked my trade, I hit both my stop losses.
Another bad trading day. Lessons learned: Always monitor your trade. I did register profits before hitting the stop losses but was not there to take them.
Tuesday, March 4, 2008
AUSSIE FUMBLE
There was nothing on my radar this morning and my fingers were getting itchy to pull any trigger. I was following AUD/USD as there would be RBA's rate decision at 10.30am local time.
At about 8.40am I was jolted by a relatively big red candle move downward. It even penetrated the lower Bollinger band. Since I was betting on an Aussie rally given an increase in rate and it was out of the band, I figured it would be an opportune time to enter long as the candle was pulling back inside the band. I incurred a big loss on that bet. Again, just before 10am, there were indications from the stochastics and MACD to enter. I did with a bigger lot and waited for the rate increase to be announced by RBA. I had a relatively bigger bet than usual now.
When the clock struck 10:30am nothing moved. I was pretty heavy and decided to take out 60% of my open position at a meagre gain of $6.00. I was wondering why it did not move as it was supposed to. Then I realised that I was betting at local time when it was supposed to be EST (New York Time). I WAS 1 HOUR EARLY!!! That was a dumb mistake. To add insult to injury, the market was moving slowly but surely in my direction.
I still hold 40% left to ride the rally. Much to my horror, the market moved in opposite direction when it was news time. I was hit by stop losses and couldn't quite figure out how a rate increase did not trigger a rally. By 12.45pm, the Aussie moved more than 110 pips against my position. UUgh! It hurts!
At about 8.40am I was jolted by a relatively big red candle move downward. It even penetrated the lower Bollinger band. Since I was betting on an Aussie rally given an increase in rate and it was out of the band, I figured it would be an opportune time to enter long as the candle was pulling back inside the band. I incurred a big loss on that bet. Again, just before 10am, there were indications from the stochastics and MACD to enter. I did with a bigger lot and waited for the rate increase to be announced by RBA. I had a relatively bigger bet than usual now.
When the clock struck 10:30am nothing moved. I was pretty heavy and decided to take out 60% of my open position at a meagre gain of $6.00. I was wondering why it did not move as it was supposed to. Then I realised that I was betting at local time when it was supposed to be EST (New York Time). I WAS 1 HOUR EARLY!!! That was a dumb mistake. To add insult to injury, the market was moving slowly but surely in my direction.
I still hold 40% left to ride the rally. Much to my horror, the market moved in opposite direction when it was news time. I was hit by stop losses and couldn't quite figure out how a rate increase did not trigger a rally. By 12.45pm, the Aussie moved more than 110 pips against my position. UUgh! It hurts!
Monday, March 3, 2008
JOLLY GOOD TRADING DAY!
The moment I turned on my laptop I noticed that AUD/USD was climbing up from the lower Bollinger band almost touching the SMA 20 line. I thought this must be the start of another Aussie rally. It has been heading south the past week after going on a very strong uptrend. USD/JPY & EUR/JPY were walking the lower Bollinger band, a good indication of a sustained downtrend. So I went long on Aussie and short on JPY.
In about 5 minutes my position on Aussie was obviously wrong. I had to cut loss immediately. My JPY pairs were returning good results. By the time I started my morning exercise on my treadmill, I was way ahead for the day. I played only mini lots. Eventhough the pip profits looked comfortable, the dollar was pretty much very minimal. I am still new in this game. I would go for the pips instead of dollars. It is much safer that way.
The good early morning trades boosted my confidence and ego. By mid day, I was in and out several times, breaking my own rule of limiting the number of trades unless they are absolutely "an offer I can't refuse". By 5pm, I was already doing a total of 9 trades!
I put up an entry order for the Kiwis hoping that early bird catches good worms. I was wrong. I bought EUR/USD when it touched the lower Bollinger band and hoping to ride the Italian PPI news. I was wrong. I went a couple more times on Aussie and was deeper in the red. By dinner time, I gave back 75% of what seemed easy early morning catch.
After dinner, I waited for the Canadian GDP news and saw USD/CAD shot up 56 pips. I did not pull the trigger. After cursing myself for missing the obvious, I prepared to trade the USD for the ISM news. I bought EUR/USD 30 minutes earlier when the stochastics crossed. It was the best decision of the day. By the time ISM news came up around 11pm, the market reversed but I was already comfortably secured with my stop loss.
Overall, the late gain partly covered my mid day losses. I was happy to call it a day.
In about 5 minutes my position on Aussie was obviously wrong. I had to cut loss immediately. My JPY pairs were returning good results. By the time I started my morning exercise on my treadmill, I was way ahead for the day. I played only mini lots. Eventhough the pip profits looked comfortable, the dollar was pretty much very minimal. I am still new in this game. I would go for the pips instead of dollars. It is much safer that way.
The good early morning trades boosted my confidence and ego. By mid day, I was in and out several times, breaking my own rule of limiting the number of trades unless they are absolutely "an offer I can't refuse". By 5pm, I was already doing a total of 9 trades!
I put up an entry order for the Kiwis hoping that early bird catches good worms. I was wrong. I bought EUR/USD when it touched the lower Bollinger band and hoping to ride the Italian PPI news. I was wrong. I went a couple more times on Aussie and was deeper in the red. By dinner time, I gave back 75% of what seemed easy early morning catch.
After dinner, I waited for the Canadian GDP news and saw USD/CAD shot up 56 pips. I did not pull the trigger. After cursing myself for missing the obvious, I prepared to trade the USD for the ISM news. I bought EUR/USD 30 minutes earlier when the stochastics crossed. It was the best decision of the day. By the time ISM news came up around 11pm, the market reversed but I was already comfortably secured with my stop loss.
Overall, the late gain partly covered my mid day losses. I was happy to call it a day.
POST DAY 1
I suddenly felt the need to create a blog for my FOREX trading partly as a journal of my personal investment, highlights of the mistakes that I made and hopefully, to get feedbacks from fellow traders, especially the experts in these fields.
I have been trading demo account for quite a while and quite recently I took a big step in putting in real money, a small sum by other people's standard. The experience of trading demo and real accounts are world apart. I used to make 40 to 50 pips before I even left for work in the morning around 9am. That was from the demo account. Somehow, it didn't quite work out the same way for my real account.
I woke up at 6am every morning, turned on my laptop and scanned for trading set up opportunities. Normally, I would trade NZD, AUD or JPY pairs. I always thought that early in the morning, the market was just gearing momentum for the day's trade.
During my demo account days, I tried a lot of tools made available through my trading platform. They worked sometimes but not all the time. Now I use mainly Bollinger Bands, SMA 20 and MACD. So far, they prove to be more resilient.
Let's move into my trading room....
I have been trading demo account for quite a while and quite recently I took a big step in putting in real money, a small sum by other people's standard. The experience of trading demo and real accounts are world apart. I used to make 40 to 50 pips before I even left for work in the morning around 9am. That was from the demo account. Somehow, it didn't quite work out the same way for my real account.
I woke up at 6am every morning, turned on my laptop and scanned for trading set up opportunities. Normally, I would trade NZD, AUD or JPY pairs. I always thought that early in the morning, the market was just gearing momentum for the day's trade.
During my demo account days, I tried a lot of tools made available through my trading platform. They worked sometimes but not all the time. Now I use mainly Bollinger Bands, SMA 20 and MACD. So far, they prove to be more resilient.
Let's move into my trading room....
Subscribe to:
Posts (Atom)
