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.....
Sunday, March 30, 2008
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)
