Unlucky

Bit unlucky there yesterday. My target setting didn’t pay me last night, in the last position I set only 75 pips target ,normal setting is 150 pips. Even some time I set mental taget, why didn’t I do it yesterday? I would have made $12000 for the last trade alone.

Trade results August 2011

Very volatile market condition makes me stopped out few times this week ,except those big hit it was an average month.

Making more money by trading smaller

2 trades

Shorted USD/JPY and USD/CHF.+25 from jpy and +11 pips from chf pair.

Two trades

Shorted EUR/JPY and GBP/USD .25 pips on eur/jpy and 8 pips on gbp/usd

Are you making money?

By looking at the features of your trading behavior ,one easily can tell what kind of trader are you or will be come. May be you are making money at this moth or this quarter but in the long run your activity will determine your success in trading.

Some key characters of armature retail traders:
Armature traders usually do not have any written trading plan, when they enter a trade, their position size will always very; they hope trade will go in their way and will make fortune in one trade. They want to be in market all the time, shorter time frame gives them that opportunities. Some trader use 30 seconds time frame witch is not only difficult to trade but impossible for a human brain to react that fast. It’s easy for them to enter a trade but they struggle to get out of a losing trade, usually their losing trades are so big that 10-12 winning trades can even cover that.
One important fact about armature traders are that they always want to enter a trade to the exact level or point but market is random place accuracy is rare here.
They trend to go against the main trend and scalp it to get some quick profit using Bollinger band or any reversal indicator, which often bring disastrous results.
Since they don’t have any plan what so ever, profit taking is much quicker then price action it self.
They can’t relax when they are in a trade and their family life often suffers for that.

Now let’s see what are the characters of successful traders:
They have elaborate written plan which they follow by every word. Capital preservation is the top priority of the plan. Their position changes according to their capital and open positions. Stop levels they use are for emergency exit only.
Their percentage of winning trades is not that great but they usually cash 10 -20 times more then their initial risk. They do not believe in over night success, consistency is they key to their success.
Professional traders separate their family life and trade. They are come quite and calculative. They keep journal of their trades, some trades even video record all trades to see what went wrong, what could have done better to get best out of every trade.

Trade summary

How to increase the probability in 2B pattern!

Definition: When market makes new high or new low, there is always a pullback. After the pullback the market will re-test the previous high/low. If the market fails to hold the new high/low, it signals a potential trend reversal. Trade orders are entered to sell the low of the bar trying to breakout or buy the high of the bar trying to breakdown.

This pattern is regarded as a high probability set up; there is one way to increase the probability even higher. Divergence is a great tool to see the dying momentum in the 2B pattern. The price will make new low or high to form a 2B pattern as we can see from the definition. In a successful breakout, momentum should shift to higher level but 2B is an unsuccessful breakout or you can say fake out, so failing momentum will be an early sign for us to not enter the breakout. We will now wait for the signal candle to enter the trade with confidence.

Target: The target is usually set at the ‘swing low’ prior to the new high or ‘swing high’ prior to the new low.
Stop: Protect your ‘long’ trade entry by placing a ‘stop’ below the recent low and protect the ‘short’ trade entry by placing a ‘stop’ above the recent high.

What should you look for in a trading system?

1. Profitability: This is a must when we look for a system .Lowering the risk factor and increasing the reward is simply the answer to a profitable system

2. Probability: One of the important elements of a trading system, but it does not always mean it will be a profitable trading system, if the proper money management is not in use.
3. Consistency: Without consistency we will not be able to breath in the on going changing market condition. A consistently profitable system will pick up some drawdown as soon as the extreme condition is over.

4.Flexibility: Providing Simple, Easy and Powerful System which can be used in any time frame and on any financial instrument.

123 Pattern for profit

123 short entry
This pattern occurs at the end of a trend, they are an indication of change in the trend.
Point 1: Price will make a swing high.
Point 2: Downward correction to a swing low, where an upward correction begins.
Point 3: Price would then form another swing high, which is lower than the previous high
123 long entry
Point 1: Price will make a swing low.
Point 2: Downwards correction to a swing high, where a downward correction begins.
Point 3: Price would then form another swing low, which is higher than the previous low

Europe's threat to UK economic recovery

Buy the support and sell the resistance!

Support
Support is the price level at which demand (buyers) is thought to be strong enough to stop the price from further decline. The logic behind this support is that the price declines toward support and gets cheaper, buyers become more interested to buy and sellers become less interested to sell. By the time the price reaches the support level, it is believed that demand will overcome supply and prevent the price from falling below support.
1. The more times the old support/resistance levels are tested the more forceful it is if it is violated.
2. The volume on each test is very important because low volume on the test means price has no power to break the S/R line and if volume is high that’s means big buyer/seller are behind this force which has power to break the S/R.
After a support level has been broken, it often acts as a resistance level; this is because investors want to limit their losses and will sell later, when prices approach the former level.
Easy way to trace historical support or resistance is to look for V shape pattern in the chart. In the chart below we can see that price made several V shape patterns.

Resistance
Resistance is the price level at which supply (sellers) is thought to be strong enough to stop the price from rising more. The reason behind this resistance is that the price advances towards resistance, sellers become more interested to sell and buyers become less interested to buy. By the time the price reaches the resistance level, it is believed that supply will overcome demand and prevent the price from rising above resistance.
After a resistance level is penetrated, it often becomes a support level; this is because buyers who didn't buy at that price before it went up are now willing to buy at that price.
How can Support & Resistant Levels help you make profitable trading decisions?
1. Identification of key support and resistance levels is an essential part to successful and profitable trading. Being aware of the support and resistant levels of stocks and indices or forex can greatly boost analysis and forecasting abilities.
2. If a security is approaching an important support level, it can serve as an alert to be extra watchful in looking for signs of increased buying pressure and a potential reversal. If a security is approaching a resistance level, it can act as an alert to look for signs of increased selling pressure and potential reversal.
3. If a support or resistance level is broken, it signals that the relationship between supply and demand has changed. A resistance breakout signals that demand (bulls) has gained the upper hand and a support break signals that supply (bears) has won the battle.

No direction!

The Market has no direction at all; it’s frustrating for both long and short term traders. Watch out for whipsaws before it damage your account. Channels in the pairs that I posted before still holding, so possible buy in GBP/USD, EUR/JPY and sell in GBP/JPY pair in the next couple of days,unless they break through the channels.

Banks Seek Exemption From Dodd-Frank for Foreign-Exchange Swaps

Market volatility

In this volatile market condition, it is hard to be a technical trader. Bailout in Europe seems like a never ending story. Portugal is next in the queue, even though they said; they don’t need any help in this crisis. They are even threatening to get out of European Union. This is dragging the Euro down and shaking the whole market. Polish inflation is a concern for euro, who knows how long volatility will continue

Why does the average forex trading strategy lose money?

Opening range breakout

The opening range is used by the World’s Most Successful Traders. This trading approach provides a trading path for the new and experienced trader alike. During the first 30 minutes of the day’s trading traders and investors are reacting to any news they have heard or analysis they have done since the close of the prior day. This makes the opening period psychologically very important to many traders.
I use first 30 minutes(for forex first 1h or asian sessioan can be consider as opening range) price action as my opening range.
What I look for to trade opening range high / low:
· A long tight consolidation at the ORH/ORL.
· Relatively high volume.
· Price is trading above to 10 MA for long and below 10 MA for short, if the price is close to MA that’s add more probability .
· Momentum in the price action is necessary when we enter this breakout.

Few trades

Some days are wild, you can’t get enough of any thing, and I tried to be a short term trader but I am not. I regretted it afterwards, when I saw that I was actually lucky to get out with some or no profit. I went long EUR/USD at the top and it was clearly struggling to go up, but I didn’t see that at all, it could have been a loss.

Not a good start

Not a brilliant day, for some reason i cancelled the EUR/USD long order and it can’t stop going up .I exited too early in the EUR/GBP as well, I am completely out of focus.

Long EUR/USD

Just one trade so far.Went long EUR/USD with one lot. Short term pattern looks bullish and conservative approach towards buying EUR from big players made some nice move today.

Baby boy

Hello readers, I know it's a long time since I posted anything on my blog, I am sorry for that. As you guys know we were expecting a baby and at last he decided to come out and by the grace of God mum and baby are doing alright. He had a little bit of a fever at the delivery and some kind of urine infection was the reason for that so he is now under doc’s care.
Hope you guys are making money and are enjoying life. Take care.

$830 gain

Market is still unstable, Greece debt is apparently not giving comfort to the big players. I went long on EUR/JPY and GBP/JPY pair; after 40 pips gain I put my stop at breakeven as always. GBP/JPY just couldn’t give me enough time to react and stopped out.

Why Does the Average Forex Trading Strategy Lose Money?

ATR (average true range) Level Stop-Reverse System:

This system is very easy to understand and it is profitable. I prefer a 4 hour time frame to use in this system but 1 hour time frame is also recommended. The good thing about this system is that it will not only give you a good entry point but also a stop level and exit point. The Price Retracement is the most important element of this system, without a retracement or pull back we should not consider any entry point.
This system is designed to use ATR stop level indicator and has the following conditions:
· ATR stop level indicator

· This trading system is an always-in-the-market trading system.

· Long Entry: Price has to cross above the Trailing Stop Level (Red line) and we will wait for retracement and entry will be the high of the last candle of the consolidation plus 3 pips plus spread. We will not enter any trade if the retracement is too deep and breaks the red line.

· Long Exit: We will exit when the price crossing is below the Trailing Stop Level.

· Short Entry: Price has to cross above the Trailing Stop Level (Green line) and should retrace back and enter at the low of the last candle of the consolidation plus 3 pips plus spread. We will not enter any trade if the retracement is too deep and breaks the green line.

· Short Exit: Close price crossing above the Trailing Stop Level and that is our short exit point.

· Suggested currency pairs: EUR/USD, GBP/USD, USD/CAD, AUD/USD, AUD/JPY, EUR/JPY, GBP/JPY and EUR/GBP

· Remember that without money management a golden entry will fail to give you the success that you deserve. Do not enter any trade if the conditions don’t allow you to do so. You must take partial profit

1036 dollar profit

GBP was showing some strength and I was willing to join the rally but missed the actual entry .I had to wait for the pull back to enter long on GBP/USD and GBP/JPY pair. Vertical price movement from the fair value often end up in same way.