Quick Pips

Sometimes the market is quick to reward you. This was the case with the eur.usd trade that I took today. The pair had a hard break to the downside, quickly reaching my take-profit point.

All wrapped up in less than 4 hours. A nice way to close the month of June, no?

Plan your trade, and then trade your plan!

I was stopped out of the Eur.Yen trade today.

Was my initial analysis correct? Yes.

I had correctly marked out the area where I would like to watch, with the intention of either taking full profit or moving my stop to break-even at this point.

Problem was, I DID NOT watch.....because I went to sleep instead!

Because I did not get to execute my original trading plan, I ended up hoping that I have a second chance, once the pair broke thru the trend line.

I knew I was walking on thin ice at this point, because this wasn't part of my plan. Instead of trading according to my plan, I ended up trading based on HOPE.

Hope, in my view, has NO place in trading. Plan your trade, and then trade your plan.

So now it looks like I may need to rethink about taking intra-day trades during US session. If I cannot wait to watch how the next bar looks like, I need to put in my take-profit target right away.

Losing trades make great teachers, and this is one of them.

I do not blame the market for this loss - the blame rests squarely on my shoulders.

Still, that's just 2% of my a/c capitalization. My money management has done its job, eventhough I did not execute the trade well.

It's time to move on to another trade.

Risk

Despite what you may have heard from the "experts" out there, there is not a single soul that can tell you what's going to happen next in the market.

Only God knows what the future is like. The "experts" are certainly not God!

Because we don't know how the next price bar is gonna look like, the only thing that we can do is to determine how much risk you're going to take, when you enter a new trade.

Or to put it in another way, how much money you're willing to lose if you're wrong about the market.

We need to focus on risk more than thinking about how much money we can make out of the trade.

Ask yourself "How much money can I lose in this trade?", before pondering about "How much money can I make in this trade!"

Averaging Down

Mutual funds/unit trust folks love to average down their positions. The thinking is that you can make money when the investment that the're holding would finally tuns up and go in their favor.

This approach is most popular during the doom-and-gloom times, like the times we are now.

I don't believe in this strategy, simply because it is based on HOPE that price would eventually turn up.

Look. nobody in this world can tell me where the price would be at in the future, or even in the next 5 minutes.

Sorry, but I would rather lose money at the amount that I'm comfortable with, rather than watching small losses snowballing into a huge account buster!

Averaging down can be quite similar to a sinking ship deliberately taking in more water.

News Trading

Many of my friends trade based on news. This is not surprising, as news can definitely move price in a huge, huge way.

There is a lot of money that can be make, if you make the right call.

I must confess....I am not good at news trading, as I am basically a technical analysis guy.

All my backtestings were done based solely on what price had done in the past.

That said, I do take note on Interest Rate news, as well as Non-Farm Payroll announcements.....I would not want to enter my trades during these times, as the market can be quite crazy during these times.

Also, the spread can be quite big - so I see no reason why I should enter any new trades during these volatile times.

This is not to say that one cannot profit from news play - it's just that I personally do not employ this strategy in my trades.

I am basically quite content trading with just the price action at important support & resistance areas.

Less can sometimes be MORE!

I fully subscribe to the "less is more" concept when I go about my trading activities. For instance, I like my charts to be clean and uncluttered. I like to make my decisions based on pure and unadulterated price actions.

I also do not believe that more trading activities equal more to more profits. Hell, more trading can often mean more losses!

I am more towards having LESS trades as a result of being a little bit EXTRA PICKY in my trades. Yeah, I'm one of those who would wait for the planets to align to each other before firing my trading gun.

This, of course, means that my trading activities is about as exciting as watching paint dry. Or fishing (OK, no flames please - I know there are a lot of you lurkers who are rabid fishing fans).

It also means that I have to constantly keep my emotions in check, whenever I see questionable trade setups take off like scared rabbits.

Monday Rant

I always have trouble whenever I'm asked what I do for a living ("penyangak matawang" occasionally comes to mind.....but that's another story!).

Heck, I'm used to seeing people rolling up their eyes whenever I attempted to explain my "job"..........this just goes to show that online trading can be as exciting as watching old TV re-runs.

My problem would be compounded further whenever someone ask for my business card. That's because (not surprisingly) I really don't have one.

Even if I have one, I think it would kind of sound a bit corny if I were to put FOREX trader on it - and then subject myself to yet another round of explaining how to earn a bit buying and selling other countries' currencies.

These days I just mentioned that I'm blissfully retired - end of story.

Where to, EurYen?

Alright, this pair has now broken the short-term trend line and is now heading down. The area marked in the chart is my tentative take-profit area.

There is nothing else to do, except to simply wait and let the market does its thing. But I will watch and see how the next couple of bars unfold before I decide to trail my stop.

In the meantime, I'll head back to my cave and (surprise, surprise!) WAIT for other trading opportunities to pass by. Trading is indeed BORING!

Euro Yen Trade Update

The market did what we expect it to do. It bounced off from the area where we expect it to run into some trouble.

My original plan was to move my stop to break-even when it got there. Well, I did not do anything with regard to fiddling with my stop simply because, err......I slept thru the whole thing (yes, I do screw up with my trade management from time to time just like everyone else)!

There's simply nothing for me to do at this point, except wait. Looking at the chart, it looks like this pair is now stuck in a wedge-like pattern. Since it is now nearing towards the apex, the market will show its hands which way it wants to go......real soon.

If it breaks the lower trendline, it means I'm still in the game. Will manage the trade accordingly as this happens, IF it does happen.

On the other hand, I will take a loss if the market goes north, as my stop loss is located just shy above the big round number of 135.00, effectively telling me that I was wrong in my assessment earlier.

That's OK, too. It's what the stop is there for, which is to prevent you from having a catastrophic losses should the market turns against you.

EUR.JPY New Trade

It looks like I just can't get enough of the Yen crosses! After exiting from the nzd.jpy trade, I took a short position on eur.jpy today. Not really an "A" trade in my book, but still tradeable in my opinion.

The market will let me know soon enough whether or not it agrees with my opinion, so let's see how this trade unfolds!

Watching Dollars Turn To Dust

Nothing riles me up more than watching a winning trade (paper profit) turns into a loss (real loss), once the original stop loss point is hit. Many of my previous trades (especially during my stock trading days) were like this.

Needless to say, I found this pattern extremely distressing.

As traders, we learn from our experience and evolve. In my case, I am now more risk averse.

This is reflected in my trade management style, where I would quickly move my stops to Break Even level (I usually add/substract 1 pip to lock in a few loose change) whenever I get the opportunity to do so.

The recent NZD.JPY trade that I took recently is a good example of my approach to this aspect of trade management.

As you can see, my trade management style is somewhat influenced by my own psychology as well. That's the reason why no two traders trade the same way, because of the way their own unique psychology influence the way they trade.

That is why even though Trader A & Trader B enter the same trade at the same time, how and when they exit their respective trades would be very different from one another.

After all, your trading performance in the long run depends on HOW you exit your trades!

Because our own psychology exerts great influence on how we manage our trades, I personally find trade management to be one of the most difficult trading aspect to master.

And just how do you come to grips with trade management?

By doing lots of backward/forward testings.

Yep, it means lots of screen time!

Kiwi-Yen Intra-Day Update

I managed to move my stop to BE+1 level for the Kiwi.Yen trade that I took last night, before I went to sleep.

Woke up this morning to discover that my stop had been triggered by that hammer bar spike, before price promptly went back up again.

Could this pair now run all the way to the moon, after taking my stop out in this rather wicked fashion? Sure!

But I couldn't care less, as this is how I control my risk - which is to move my stop to BE+1 as soon as the situation warrants it.

Next trade, please!

Kiwi-Yen New Trade

A new week, a new trade. Let's see how far this Kiwi bird wants to go, as it gingerly marches towards the land of the rising sun!

Losing Your Job

I recently bumped into an old friend whom I have not met for 15 years. After the usual exchange of pleasantries, the guy told me that he, along with the rest of his collegues, are going to be laid off in a month time. He's also not quite sure what he's going to do after this.....

....and he asked whether FOREX trading can be the savior!

It pains me whenever I hear stories like this. However, I worry EVEN MORE when people put high hopes on FOREX as their potential lifeline.

As I've explained before, you cannot expect FOREX (or any other business venture for that matter) to provide sustainable income within a short period of time.

This is a skill-based business, so it takes time to acquire the necessary skills in order to do well in this business. For instance, you need to be able to make decisions based on the information that you see on the charts. Acquiring this skill takes time.

Fortunately, FOREX trading is so widespread that you can try it out without risking a dime! Most online FOREX brokers offer FREE demo accounts with FREE charting software (usually Metatrader 4, which I use for chart analysis).

This way, you can apply what you learn and trade with fake money. There is no need for you to risk real money while you hone your skills.

Look, if you cannot make money using demo account, chances are you will not do so with your real money as well!

Now, after your stint with the demo a/c's, you may also discover that you're just not cut out for FOREX!

Is that a bad thing?

No, and it's good that you find out about this early on. FOREX is NOT for everyone.

Most importantly, FOREX is NOT a get-rich-quick scheme!

There's absolutely no need to receive margin calls, ever!

Time and again I hear folks getting margin calls. This usually happens to new traders, although there could be exceptions as well :-)

The reasons are plenty, but probably the most common would be due to NOT using stop loss, or incorrect way to use it.

Almost all brokers allow traders to enter stop loss order, so why not use it?

Again, this comes down to proper use of money management.

If proper money management is used, it's almost impossible to get margin calls.

That being the case, why do we still hear descent folks blowing their accounts in this manner?

Not treating trading as a business could probably be one of the reasons. When you treat it like a business, you would have a trading plan as well, just like having a business plan.

The other would be not giving FOREX trading the respect that it deserves (you know, treating it like a "hobby".....).

This is a TOUGH business with a HIGH failure rate, so due diligence is required.

Just like in any other business.

Leverage

For a small sum of money, I am able to use every exercise equipment that is available at my gym. These are m/c's that work on specific body parts that you want to tone (or bulk up).

Some of them cost a small fortune, and I would definitely not able to buy them all and put them at my home (my wife would definitely see to that)!

This is an example of how I leverage my money in order to be able to use the exercise equipments - paying small amount of money relative to their cost.

In FOREX, we often see brokers touting all sorts of leverage one can get by opening your account with them. Heck, quite a few even go as far as offering 1:400.

To tell you the truth, this sort of leverage does not really interest me. Keep in mind that whatever amount that you cough up to take a trade merely amounts to "deposit."

In other words, you could lose A LOT MORE than the amount (or margin) that you use, if you screw up in your money management plan. This is unlike stocks, where you cannot lose more than the amount of money that you use to trade the security.

Whatever the leverage is, it still comes down to the trader's money management plan.

Unlike the gym metaphor that I use earlier, the biggest leverage that I get from trading FOREX is TIME. I now spend roughly 1-2 hours a day looking at the charts for trading opportunities.

It sure beats working from 8 am to 6 pm anytime!

Now that's leverage in my book!

Watching Paint Dry

I used to think that trading opportunities are available at every trading hour. Well, I've since evolve from that mindset. In fact, I've morphed into becoming quite picky at the trade setups that would interest me.

My daily routine now consists of opening charts, seeing nothing that interests me, and then closing them down again. Heck, I've now come to a stage where my trading gets really, really BORING!

To put it in a different way, my trading is now more about WAITING for the setups that I want to see, rather than ACTUALLY TAKING THE TRADES! Still, I admit that I do get miffed a little bit when I see "iffy" trade setups that just took off to the moon...ahh... these are the kind of emotions that I need to keep in check when I'm trading!

So what does all this mean? It means that I have LOTS of time to kill, although this certainly wasn't the case when I first started out trading for a living - where I spent practically every waking hour looking at the charts till my eyes hurt.

Since my tummy is beginning to look "rounder", I've decided to sign-up for gym membership. I opted for 1 year membership, just to get myself to commit to at least a few days in a week to pump some irons. I figured that if I only sign-up for those monthly type of membership, I might jump ship once the 1st month ends (you know, the "hangat-hangat tahi ayam" syndrome).......

Go figure!

FOREX Seminars & Courses

I was recently asked whether or not I've attended any of the FOREX seminars or courses.

The short answer is YES. After all, it's a great way to shorten your learning curve.

Besides attending seminars (I attended two of them), I also bought a couple of educational resources on FOREX from the Internet, as I was always looking for ways to imptove my trading skills.

I also surf many online Forums as well, besides reading up on a whole bunch of FOREX-related info that is freely available on the Internet.

There are a few places over the net that can provide GOOD info on FOREX, totally free of charge (yes, free IS good).

One of the best online resource is at babypips.com. There's just TONS of solid stuff in there that I doubt you can cover them all in one day!

If you're new to FOREX, I highly recommend that you pore over the information that is available there. No need to spend thousands of dollars on seminars or other expensive online courses.

Does that mean that seminars are useless?

No. But what I'm saying is that you would be in a better position to judge whether a particular seminar would do you good, once you have already covered the FOREX basics.

For one thing , you already know what questions you want to ask during their "preview" sessions. You can get a lot of info about what you can expect from such seminars, simply by asking the right questions and listening to their responses.

If they are somewhat evasive or too overly guarded in their responses, that should trigger some alarm bells in your head.

Another tell-tale sign of scam would be the outrageous victory claims (I made $50,000 in a day!) ......there's just too much hype nowadays that it pays to be a bit skeptical.

But the ultimate way to judge is to ask those who have already attended such seminars/courses, if you can get hold of them.

Another thing is to lower your expectation - do not expect that you can be a FOREX guru after you're done with that seminar! Treat the seminars as part of another step (instead of "the only seminar that you'll ever need!" hype) in your quest to become a proficient trader.

There's simply no finish line in this business. Every trading day is a learning day for me.

I like you but......

In the course of sizing up trading opportunities, I do come across setups that "just don't look right" - even before I drill down the reasons behind such thought.

I think this is a natural "filtering" process that every trader would develop, once you've spent some time in the trenches.

The EUR.GBP trade (yep, the one that gave me good pips previously) caught my interest today with that nice looking pin bar, but I decided to let it pass.

I did not like the location of the pin bar. It's also not at a Swing High, too.

Could it break down hard and leave me holding the bag? Sure!

But there's always another trade in the corner.

Thank you for the ride!

I finally got out of the EUR.GBP trade, after my trailing stop was hit. The trend has to end sometime.

The ride was enjoyable (read: profitable).

On to the next trade!

Trading in a Group

A few days ago I went to a local brokerage office to close my account. I have no need for this a/c, simply because I no longer trade stocks that are listed in Bursa Malaysia.

While I was at the brokerage office filling up the necessary forms, I saw quite a large group of people hanging out in the lobby, watching the price movement of the stocks off from several monitors.

At first, I could not understand why these people wanted to do this. They could have easily track how their favorite stocks were doing from their own homes, thanks to Internet.

It was only after observing them for a while that the reason became more obvious. Besides watching their portfolio, they were also engaged in discussions of their trades, their reasoning for investing in such-and-such companies etc.

Kind of like "collaborative" investing, no?

And what is my take on this?

I think sharing ideas is good. But if you have open positions in the market, it can be quite tempting to veer off from your original trading plan and be influenced by what the others are saying with regard to the trades that you are currently in.

I do, from time to time, engaged in discussions over at online trading forums - it's a great way to learn how the others from around the world approach this business. If I find ideas that can further strengthen or compliment my existing trading framework, I would incorporate them as part of my trading arsenal.

But I would NEVER look for some kind of "signal service" - I like making my own trading decisions, whatever the outcome may be.

Whenever I goof up, I can always learn from my mistake, try not to repeat it again and move on.

If I have to depend on other people to make trading decisions, I might as well hand my money to some mutual fund/unit trust companies to invest on my behalf.

Enjoying my European train ride

One of the things that I find most pleasureable when I'm in a trade is to trail my stops....

....especially when the pair is moving along nicely in my favor, like a train rolling on its track.

I'm in such a trade now with the EUR.GBP pair.

With this trade, there is nothing much to do - other than trail your stop to lock in profits, should the market reverses.

Now, adjusting stops as the trade progresses can be too darn BORING...

...but hey, I'm not complaining!

When will this scenic train ride end?

Who knows....but I will definitely keep on trailing my stop if the pair still has legs to run!

CAD.JPY Trade

I took a Long position in CAD.JPY. When it shot up, I quickly moved my stop to break even or b/e (well, it was actually 1 pip above my entry point).

And whaddaya know, the market reversed.....and I got out at b/e + 1 pip gain.

Could this pair reverse back and head to the stratosphere after it has kicked me out? You bet!

Do I care? Nope, because I had acted upon my trading plan when I got out of this trade.

Most importantly, b/e trades are winners too.

Psychology & Trading

I used to wonder what the fuss is all about when people talk about trading and psychology in the same breath. It's only after I've traded for a while when I finally saw the relevancy of psychology to trading.

Specifically, it's all about tailoring (or matching) trading plans to suit YOUR OWN personal traits. Or taking someone else trading techniques and modifying it to suit to your own style.

Confused?

OK, let me give an example.

When I first started becoming a full time trader, I thought that I could trade 5 min charts and scalp my way to financial nirvana. I figured that since I can ogle at the charts all day long, I should have plenty of opportunity to rake in the pips.

Or so I thought.....

In the end, I found out that what I had originally wanted to do as a trader (which is to trade using 5m chart) and what I've actually found good at doing (which is trading using longer time frames), are entirely two DIFFERENT things!

No matter how hard I tried, I just could not get good results when I trade using 5m chart. I guess I am just not cut out to be a pip scalper.

Now how do I know that I'm more at ease trading longer time frames?

By doing lots of back testings & forward testings. In other words, lots of chart times.

Using Technical Indicators in Chart Analysis

A friend of mine recently asked me what are the technical indicators that I use in my chart analysis.

Well, I have to confess...I have never been a big fan of using indicators on my charts. If you look at all of the charts that I've posted so far, they're quite "clean" - except for the odd support/resistance lines here & there. That's the way I like to trade, which is looking at how price reacts at major support & resistance areas.

I do have the MACD Histogram indicator at the bottom of the chart, though. I use this mainly as a confluence to support what the price action is telling me. I never use MACD as a signal to take up a trade on its own. Never.

This is not to say that indicators are absolute crap. I know plenty of traders who swear by them, and that's fine with me. There are many ways to skin a cat in this business. For me, I'm just comfortable with the rather "minimalist" way of trading.

Still, I sometimes find myself dumbfounded whenever I look at someone's else charts that have all sorts of indicator lines (and in various colors, too!), trying to make sense of what the market wants to do...

Personally, when it comes to using technical indicators, I fully subscribe to "less is more" concept!

Tales of the 3 Donkeys

This one below refers to Stock Traders, but I'm sure you'll agree that it can be applied to FOREX as well...


Ever noticed that the market always goes thru cycles? Just like night and day, the market goes into periods of bull runs followed by bear runs and repeats the same pattern again and again. The events that shape the cycles may be different but the end results are the same.

In the stock market, there are 3 types of donkeys. They are the Young Donkeys, Regular Donkeys and Old Donkeys. The Young Donkeys are the newbies. This is the time when mistakes are made and tuition fees (some are more expensive than others) are paid to the masters.

And who are the masters? Yup, the Old Donkeys! The Old Donkeys take the money from the Young Donkeys in exchange for valuable and sometimes expensive trading experiences in the stock market.

Just like in college, some of these Young Donkeys would rapidly graduate to become Old Donkeys. They learnt quickly from their trading mistakes, developed their own trading system that suits their own unique personality and have solid money & risk management strategies. They also recognized their own strengths & weaknesses in dealing with greed & fear. Greed & Fear are the factors that drive the market.

When trading in the stock market, the goal is to get over the Young Donkeys phase as fast as possible with minimal financial damage. And then, very quickly graduate to become the Old Donkeys.

However, the reality is that many of the Young Donkeys get stuck in that stage, unable to graduate to become the Old Donkeys. As time passes by, the Young Donkeys tragically become the Regular Donkeys without even realizing it.

And when they do (maybe after taking multiple big hits on their wallets), they have already become totally disillusioned with the stock market.

That is probably when they start saying that the stock market is just another form of casino. To the Regular Donkeys, trading stocks is just like gambling.

This is tragic.

Bringing the balance of probability in our favor is what stock trading is all about. It is NOT gambling. It becomes a gamble ONLY when you do not have a solid trading plan.

EUR.CAD Post Mortem Analysis

Although accepting losses is part of the trading game, it does not mean that I like to lose. Especially when I lose on trades where I initially hesitated to take, simply because they "don't look right."

This was the case on the EUR.CAD pair where I cut my loss, simply because I did not like the way the pair was behaving at that time. Yes, I know that it would have been a profitable trade had I hung on, but this wasn't my point (remember, hindsight is always 20/20).

At the time when the entry was initiated, the pair was pretty much in a sideway pattern. The pin bar body was right smack in the middle of the consolidation "box", making this trade somewhat 50-50 (could have gone in EITHER direction).

So the key point here is not whether or not I could have managed the trade differently. Instead, the question should be why did I take this somewhat "iffy" or "C grade" trade in the first place.....I should have just passed it on!

Perhaps I was getting a bit light-headed (read: greedy) due to my other trades going nicely in my favor. It's all psychological - limiting the impact of emotions from interfering with your own trading decisions.

I need to further sharpen my sniper skills!

May Pocket Money

This was a trend trade that went well as per my trading plan, which was to take profit at 60 level. Could I have trailed the stop and ride further up? Maybe, as hindsight is always 20/20. But the trade did bring me a nice wad of cash as the month of May came to a close.

Besides, nobody goes broke taking profit!

Of catching falling knives and standing in front of a freight train

I think everyone who has done some trading are well aware of the danger of "trying to catch falling knives" - you know, like buying a plummeting stock in anticipation of price reversal.

The opposite also happens when trying to sell short in the face of strong buying pressure. My recent EUR.NZD short trade had all this hallmarks of trying to be a hero in front of a speeding bus, or a freight train, whatever...

Eventually this trade did go to where I had intended to take profit, but this took place AFTER my stop was already taken out. Just look at the size of the bullish bar right before the pinbar that prompted me to short this pair....

Sometimes the market does give us clues as to what it intend to do. It depends on how well we interpret them.

Missed another trade...

Here's another one that got away from me......booo-hooo!

Sigh...this one I missed by just a few minutes.....well, what can I say - that's just the way it is.

You just can't win them all. It's just another trade that was not meant to be for me.

BTW, the EUR.GBP train is chugging along nicely. Have just moved my trailing stop.

Kill! Kill! Kill!

I've decided to kill off my EURCAD trade to cut my losses. Instead of a hard pin bar break as I had expected, this pair bounced off the minor resistance area.

When I look back at this trade, it's quite obvious that there was a lot of traffic to be overcome. It would have been nice if the pinbar tail had extended outside of all the bars that are in the vicinity, suggesting possible strength as the market tried to reverse.

The pin bar and its location is good, but it's not enough to power thru to the next level. With this being a counter trend trade, there's a good chance that the dominant trend would continue. I will not wait until I get taken out for a full loss, so I feel it's better that I bail out now.

I need to get better at being picky, especially on counter-trend trades!

Another rant on the missed USD.JPY trade (again!)

OK, OK, I admit that I do sometimes feel a tinge of "regret", when the trade that I could not trade did exactly like what I had in mind. In this case, it went straight to the area where I had intended to take profit, had I taken it.

But this feeling of "being left-out" normally does not last long, as there's ALWAYS another trade that is waiting for me to jump on-board, no matter how picky I am in picking out trading opportunities.

Enough of the rant...time to move my stop on the EUR.GBP trade that is moving nicely in my favor...

USD.JPY Missed Trade Analysis

As I mentioned before, I missed taking this trade. On second thought however, it may just turn out to be kind of a blessing in disguise for me.

Look at the chart, did you see the marked-up area where price kind of stall? That's right, the indicated bar low area is providing some kind of resistance to the upward move - and I completely missed this in my earlier analysis (maybe I was getting too cocky).

Sure, price could just bulldoze thru here and head for the moon. But I would be violating my own rule, which is always to look for trades that offer paths of least resistance.

For the earlier EUR.GBP trade, I will now start trailing my stops while letting the trade runs. Let's see where she goes!

A Trade That Got Away

This is a pair that I was aiming for. I was ready to pull the trigger before I realized that I had insufficient fund to take the trade! It happens...

EUR.CAD

A trade that I just entered. This is a counter-trend trade, so I'll be pretty quick to pull the trigger when the time comes.

Trading Execution Conventions

Last night when I was chatting with an ex-collegue of mine over a glass of "nescafe tarik", he had a question on the various definations of Limit & Stop orders (we were discussing about the merits of Market & Limit orders when opening a new trade).

Wan Hashim, if you're reading this, here they are:

A BUY LIMIT order is executed if the Ask is equal or lower than the order level.

A SELL LIMIT order is executed if the Bid is equal or higher than the order level.

A BUY STOP order is executed if the Ask is equal or higher than the order level.

A SELL STOP order is executed if the Bid is equal or lower than the order level.

I personally do not have to grapple with all of the above definations, simply because my broker's platform (it's OANDA by the way) only has MARKET or LIMIT orders.

I always use Limit orders whenever I open a new trade. This is because I need to know the precise price level that I intend to enter, in order for me to calculate the right position size for the amount of risk that I'm willing to take for each trade.

When closing my positions however, I do sometimes use a market order to quickly kill my trades, when required.

EUR GBP Trade Update

This pair is now moving nicely in my favor. Now that it has gone past the first area of resistance, I've moved the stop to break-even level.

Can I Make Money With FOREX?

Someone recently asked this question to me. Since I now make a living out of it, naturally I answered yes. Then again, I wondered whether or not my answer to that question gave the impression that trading FOREX is easy....

...and the short answer is that it is NOT!

Yes, it's possible to grow capital or earn a living out of trading FOREX.....much in the same way that it is also possible to do the same by joining the numerous MLM companies selling all kinds of stuffs...

Have you ever wondered why out of thousands or so honest folks who attended MLM seminars all wanting to learn how to earn extra cash, very few actually succeed in doing so? And the majority of the attendees are simply there to make up the numbers?

How many times have you heard time & time again that most people NEVER really get the success that they so crave, after paying huge amount of money to attend the oh-so-many seminars on stocks, options, Internet Marketing, FOREX and so on?

Do you really think that you can grow your $500 to $50,000 within two months? Or earn $10,000 a month right off the bat after walking out of the hotel where the seminars are held?

Like everything else in life, you need to work really hard in order to be able to earn your stripes in this business. My retinas have been burnt many times from all the hours spent looking at the charts, reading e-books, surfing forums, trying to make some sense from it all.

But it CAN be done. It's just that there is no shortcut in this business.

Trading can be very brutal to your wallet.

But the reward is that, I no longer need to be somewhere else at 8 am on Monday mornings!

EUR GBP

The EUR.GBP pair that I talked about in my previous post has now made its move heading south. I'm now short on this pair.

Why I took this trade? I liked the way it bounced of the 8750 level, which is a major PPZ area in my opinion. I also like the price action that took place in that area.

1st Post

Since this blog is about my FOREX trading activities, I'll start by posting a chart of the currency pair that is currently on my radar screen right now.

I'm looking at EUR.GBP, waiting to see if it wants to make a move down.

If it does, I'll ride with it.