No trades

Market was extremely choppy and i decided not to trade in this market condition.

How to identify a trend

I was away from my computer in the European session and missed opportunities in EUR/USD and EUR/GBP pair. Clean breakdown from the consolidation gave us good short opportunities in both pairs. If you are new to trading, I will suggest a few important things to clearly identify impulse and consolidation mode of a trend.
1. Size of candlestick: Usually when the market is trending it will make wide range candles with small shadows
2. In a consolidation period we will see mixed candles which mean bull and bear candles and small in sizes.
3. Usually one directional or impulse candle will cover most of the consolidation range..
4. Usually first candle will close with no or small shadow, which shows strength of the trend.

News trading

It’s Unbelievable that I couldn’t get any thing out of the EUR/USD short. This is the problem with news trading, you have gamble, and I never gamble with my money (may be with other stuff).I made some money in news trading before but never felt comfortable trading news. Since I missed the opportunity in EUR/JPY I was already frustrated and tried to get some money out of news trading. I usually follow the sentiment even its news related trading and enter long before news release, well it worked for me .After the news release price dropped 20 pips and I thought it was enough room for the trade to breath ,but when price failed to contain in the range and I had to close it manually.

$813 profit

Martingale principle is popular in FX trading; its works very well if you have a high provability system. High probability means more the 70% winning ratios in trading. my trading strategies are able to produce 70% winning rates in any given time frame ,I was following Martingale principle. Any fundamental news related trading will consider only 50% winning ratios. Yesterday I lost three consecutive trades, though USD/JPY was up 200 dollars, I was not active enough to put it in a break even trade. After three losing trades I was sure that my system will produce a winning trade and I just follow the principle. Here is one problem if you don’t know what’s your system probability is, you shouldn’t be using this principle.

229 dollar profit

Monday is always quiet and choppy and I am always aggressive in my stop and target. Mistakenly I set target at only 3 pips instead 30, which could have made me another 150 .Other than the mistake not a bad trading day.

The unemployment news

US dollar jumped after the surprise in the unemployment news. Federal Reserve might increase the Interest rates long before the traders are expecting it. I wasn’t interested in news trading; just watched the market from the side line. In the European session market was almost dead there wasn’t any opportunity for me.

Change in the emotion of the market

Pattern couldn’t co-op with market sentiment. Strong price action was the reason to enter long in the EUR/USD but sudden shift in the emotion hit my stop. On the other hand the weakening of the market helped my short and I gained almost 50 pips.

Dollar hits 14-year yen low amid Dubai debt fears

Dubai debt fears, dollar slide hit world markets hard

Support and resistance

Support and resistance are probably the most talked elements of technical trading. Some trader’s only trades using S/R, they buy the support and sell the resistance. Of course nothing is fool proof, some days even the best of the best set up wont work, that’s trading. Cost of trading is some losing trades, you have to accept it.

Facts that you need to know:

The more times the old support/resistance levels are tested the more forceful it is if it is violated.

After a support level has been broken, it often acts as a resistance level; this is because traders 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 above we can see that price made several V shape patterns.

Valid trend line

New traders, who want to make money with high probability set ups, should get used to drawing trend lines. Tend line could be the simple tool to profit from the market, but please draw it on the bigger time frame and move to smaller time frame to execute the trade. Some Of my fellow traders send me e-mails about a valid trend line. From my way, when we are able to connect to points (HH,HH and LL,LL) we get a trend line and when the price touch the line third time and bounce back to the original trend we can say it’s a valid trend line .

Slow start

I had to go to Canberra over the weekend for some reason. This is almost a year ago since I had an escape from Sydney. I had a nice time there with my wife, but worst part is good thing always finish quickly. We arrived at Sydney domestic airport Monday evening. I had a chance to look at the market not before 8 pm Sydney time, which was already too late for any entry. I tried AUD/JPY didn’t work well, closed out break even.

MMDC result: $573 profit

This week market didn’t have any direction, best time to lose money in the market. Good news is the whole week I traded half of the regular position size, which resulted in less profit, only 573 dollar gain this week. In this kind of market, I shouldn’t complain about any profit.

Trend line trading:

Trend line trading is one of the most popular trading system that I use, as far as I remember most of the time it’s bring very good outcome from this system. So what you need to know to trade trend line system, answer is, you just connect two valid points and bingo, you are in the right track. Monitor the price when it comes close to the line, how it behaves, if it started to move away from the line, than its time to jump in the trade after the completion of the candle (what ever time frame you are trading). If the price break throws the trend line, wait for the pullback to enter the reversal entry.Detail of this system is available in my course.

Change in market sentiment:

Gross Domestic product (GDP) is the primary gauge of the economy’s health. Healthy economy should create job in a moderate phase, job hiring dropped from last quarter, which does not support that. US GDP advance increased from -0.7 to 3.5% which moved the market sentiment in the New York session. Economic commentators say that stimulus plan and “cash for clunker” helped the economy to recover from the recession. The national association for business economics thinks this growth will slow to a 2.4 percent pace in the October –December quarter. So we might observe a mixed economic data in near future.

Melbourne cup day interest rate rise:

Is it still on? Markets have priced in a 67 per cent chance that the Reserve's cash rate will go from 3.25 to 3.75 % - which would be the biggest rise in almost a decade - when it meets on the Melbourne cup day. The release of the Reserve's bullish views boosted Australian dollar over the last two weeks. This week some important indicators is showing some weakness in the US economy. Especially US consumer confidence and new home sale down by big numbers. Australian economists are also concerned about the inflation; interest rate rise won’t help the situation. So let's see what the reserve bank has to offer.

A List of Factors Which Determine Currency Value

How to Calculate Rollover Interest?

Swing set up

I have always been interested in swing trading but mind set and interest is two very different things,I guess.I like the idea that in swing trading you have long time to analize a trade ,which could be a help to make bigger profit.Prolem is I am reluctant to set a bigger stop ,which is the key to this long set up.I am in the EUR/GBP short,i'll see how it goes.

A Look at the Aussie Dollar and What It Might Tell Us About Stocks

Stop Placement with Average True Range (ATR)

Why position size is so important

This is the number one element to succeed in the market. Traders who lose their capital, have no control over their position size, they don’t know how big their lot size should be, how much they are risking in a particular trade.
Some key points to follow:
Always keep your position size the same in every trade. Traders who change their position size randomly are very often likely to fail in their business.
As your capital increases, you can increase your position size accordingly.
Never risk more than 5% of your capital in a single trade
If you lose two trades in a row third trade must be ½ the size of initial size.
After three losing trades in a row, do not trade anymore, what ever happens in the market.
As a swing trader you should not lose more then 8% in a single trade.
If you have 10 consecutive losing trades, you should take some time off from trading and review your system.
Remember; traders who make money are only good in one thing; that is money management.
What ever system you use for entry or exit should only differ by 1-2% of your performance.
Risk management will make you money.
It is very important that you understand trading is a game of probability, no one is 100% sure about their prediction, so before you enter a trade you must know how much you are willing to lose if the trade does not work out your away.
When you enter a trade, set a stop loss order.
You must know the reason behind your entry, stop and exit. If you don’t know the reason, don’t enter the trade.

Trading forex like a pro

Why you need a trading plan?

A trading plan should have complete sets of rules that cover every aspect of any trader's trading.
• What instrument (stock, forex, options, future, CFD etc) you want to trade and why? I trade stock and forex not because I like stock or forex market I have definite reasons to trade those, you need to know why you are trading individual stock not index?
• Which market (NYSE, NASDAQ etc) you want to trade?
• What is best time for you to trade why? (Suppose for forex London open is the best time to trade)
• How you will select a stock or a currency pair that will give you the best result. (I have 12 specific rules to select a stock that helps me a lot to avoid over trading)
• The maximum percentage you will risk on each trade. This is most important for new trader to learn risk management. I follow three golden rules to manage my risk.
• How many lots/share you will trade per trade (position size).I always follow two different rules to know my position size.
• Which time frames you will look at. Time frame is very important aspect to any trading. I follow 5 and 15 minutes chart for equity .Any good set up will appear in any time frame but the point is exit will be different in different time frame.
• A trading plan will give you clear-cut entry strategy, where should you enter and why .My trading plan has eight specific entry strategies.I think exit is the key to a successful trading plan. An exit strategy will show you where to exit and why. I use Three different exit strategies.

More Investors Say Bye-Bye to Buy-and-Hold

Let GM and Chrysler go bankrupt, Americans say

Double top

A double top is a reversal pattern .This pattern occurs following an uptrend. It is named for the two of peaks which form when price is unable to make a new high. Traders get the sell or short signal when price breaks below the reaction low which formed between the two peaks.
The characteristics, volume pattern and measuring rules are similar to that of the head and shoulders except for there being only two peaks.
Ideally, the double top would have two peaks at about the same price level with volume being heavier on the first peak and lighter on the second.

2B pattern

When market makes new high or new low, there is always a pullback .After the pullback the market will retest the previous high/low. If the market fails to hold the new high/low, it signals a potential trend reversal. Trades orders are entered to sell the low of the bar trying to breakout or buy the high of the bar trying to breakdown. Target: The target is usually 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.

How to find and confirm a trend?

A survival guide for the unemployed

Time frame

Profitable forex trading

What a move!

What a move! Yesterday I shorted this pair & made some money, it formed a double top. But the pair didn’t have any intention to go down .This morning I was happy to see a nice triangle, which was telling me to buy.

Very good day

Just closed two trades EUR/USD 160 pips gain and GBP/JPY 220 pips gain.

Update

Hello guys, sorry for not able to post any trades this week.Yes anonymous, i will post some charts of losing trades,though they are very little in quantity .

EUR/GBP long

After my entry i was very negative about the trade,since last 6 days this pair was chopping a lot.After three and half hours of waiting ,i was happy to see some money.

Two trades

Only two trades in this week so far.EUR/GBP was one of the best trades in this month.Market is choppy at the moment so its better to sit behind the side line.

When economy bottoms out, how will we know?

No trades

No trades this week.

GBP/JPY short

The reason behind the trade was trend line break .The breakout was confirmed when we see the shooting star formation. The result wasn’t impressive ,I guess not every trade won’t meet your expectation.

No trade today

There was no set ups that had 1:2 R:R ,So another day without trades.

Two trades

Yesterday I took one trade and today one,both of them successful.GBP/JPY (is my favorite pair even though i hate the big spread) is the pair where you will make big chunk,if the price is right ,i mean if the pattern shows authenticity.

Ultimate short selling pattern 1

The market is a place where we trade our emotions, greed and fear, you might not agree with me in this matter but it would be a lie if I say, I am an emotion free trader. Market is a place where we react to emotions and draw our behavioural pattern. But the problem is nothing stands still even human emotions are not continual patterns. Our knowledge and skills might reform our emotions or other rational/irrational behaviours. Traders who live in the era of information super highway definitely trade very differently from how traders traded in the 1900. Yes you are right we are getting very complex in our thinking. In 1900 U.S.A was a production based country now it is a service based economy, Dow Theory might not be applicable that much in today’s diversified economy but identification of market behaviour will not change and hasn’t changed.
According to Charles Dow an uptrend is when price make successive higher high and higher low and the down trend is when price make lower high and lower low.

To be continued.....

Kakadu and Arnhem Land, Northern Territory

Kakadu and Arnhem Land, Northern Territory - Watch the best video clips here

EUR/USD long

The support from the trend line was in force. Most of the time when the price move away from support or resistance, it will try to test that S/R area. This must be a technique that market movers use to get ride of the novice trader, since you know the trick, you wait for the right timing. I am not saying that you will get the best execution every time, but it worth trying. In EUR/USD I couldn’t enter at the place I wanted to enter(I was away from the PC), but I am happy with it.

GBP/USD short

Not the best set up,but selling resistance always work.Hope you guys doing all right.

No trades today

Market is very choppy for some reason,i am watching it closely.

Choosing a forex broker

Market-Makers

Pros:
Usually give free charting software and news feedPrices can be "smoother" and less volatile than ECN prices (this can be a con if you are scalping or trading very short term)Often have a more user-friendly trading and analysis interface

Cons:
They may trade against you. In that case, there will be a conflict of interest between you and themThe price they offer you may be worse than what you could get on an ECNIt is possible that they may trigger stops or not let your trade reach your profit target levels by manipulating pricesDuring news, there will usually be a large amount of slippage; their systems may also lock up or not allow order placing during times of high volatilityMany of them discourage scalping and put scalpers on "manual execution" which means their orders may not get filled at the price they want.

ECNs

Pros:
You can usually get better bid/ask prices since they come from several sourcesVariable spreads between bid and ask may give no spread or tiny spreads at timesIf they are a true ECN, they will not be trading against you but will pass on your orders to a bank or another customer on the other end of the transaction.You will be able to offer a price between the bid and ask with a chance of it getting filledIf they support Stop-Limit orders, you can prevent slippage during news by making sure that your order either gets filled at the price you want or not at allPrices may be more volatile which will be better for scalping.
Cons:
Many do not offer integrated chartingMany do not offer integrated newsMany of the trading platforms are less user-friendlyBecause of variable spreads (between bid and ask,) it may be more difficult to calculate stop loss and profit target in pips beforehand.Read the whole article:http://www.goforex.net/market-makers-ecns.htm

Economic Depression 2009

Five Signs of a Market Bottom

2 trades

Good day so far ,lets see whats bring next week.

No trades today

I am still holding half of my position in EUR/GBP ,no new trades so far.Hope you guys doing ok.

3 trades

I usded 30 minutes chart to show detail of the entries.GBP/USD looked very weak to me and i just made an excuse to enter this trade ,if you ask me what make you think that this pair was weak?I will not answer this question in public.Yes opposite thing happed to EUR/GBP,it showed great strength.In the last trade AUD/USD ,i took some early profit from the first half and last half got out breakeven.

Today's and yesterday's trades

Yesterday's trades:

I had one losing trade that was USD/CAD and AUD/USD exited break even .

3 trades

Very good day so far,i was little bit skeptial about AUD/USD pair that the pattern might fail because of the rate cut news but i was lucky .USD/CHF formed a double top pattern,i was trying to find some excuse to involve in the trade.