FX Trader Adventures

[EliteFX]

The Five Steps to becoming a Competent Forex Trader!

... ... ... “I’m a Forex Trader”.

Sorry for disturbing your journal but can't resist it. I Love you for the article. 100 and 10% true.

This exactly happened to my trading life too, stage by stage.. But at that time no body told me that at what stage I'm at that time and how much journey is left hehe

I wish I could have read this post years back to pass on to next stages quicker than I did. But anyway..

I salute you to write such a perfect article. The best one I have ever read, I can say that for sure..

 

[Alan Kingdon]

Thanks for your comments, most people get to step two then give up as they did not expect there to be so much effort and time required to get past this stage.

 

[Alan Kingdon]

Trading Goals

What is your trading goal for 2010? How many points or pounds would you like to be making next year?
Let’s break this down into smaller more measurable parts. By seeing the progress you are making towards your goal it will keep you focused and help make your overall goal more achievable.
As an example let’s say you want to be making £60,000 from your trading in 2010
Lets first break this down into a monthly target, £60,000 divided by 12 months = £5000 per month. So straight away we have a smaller more manageable target to aim for each month.
How about a weekly target, £60,000 divided by 52 weeks = £1154 per week. That is assuming you trade every week. You need to take into account holidays, the Christmas period and there will also be times when you are sick and not able to trade, so could be better using 46 weeks. £60,000 divided by 46 weeks = £1304 per week. So now you have a smaller weekly target to aim for.
You can now break down your weekly target to give you a daily target, £1304 divided by 5 days = £260.80 per day. So if you can average £261 profit each trading day you will be on target to earn your £60,000 per year.
Does your yearly target now sound more manageable, focus on hitting the smaller targets and it will make your yearly targets easier to achieve.

 

[tradingbeliefs]

Fear – A Traders Greatest Enemy? By FXTrader Paul

From the FX Trader Adventures Blog

Fear – A Traders Greatest Enemy? By FXTrader Paul

Well is it? A Traders greatest enemy? If you find yourself nodding your head in agreement then congratulations, you are not alone. All humans suffer from fear in many forms only traders tend to experience it more frequently and viscerally than most humans. It’s nothing to be ashamed of, only to be aware of and prepared to work through as part of your journey toward trading mastery.

Personally I’ve always felt that there was only one true emotion in Trading, namely Fear. I always described Greed (the other oft mentioned emotion) as merely the ‘fear of missing out’.

What I wanted you the reader to gain from this article was 1) an understanding that fear is prevalent to everyone trading the markets. 2) an understanding of how it affects Traders and 3) what are some simple things you can do to help you over come your fears.

Firstly a definition of fear and for the purpose of this article I an happy to use a simple definition from T.Harv Ecker namely the definition of fear is “the anticipation of pain”.

So how does Fear affect us as traders? Simply put there are 3 blocks to mission success:

» 1. Overanalysis (Analysis Paralysis) which leads to
» 2. Self-doubt (experienced as fear) which leads to
» 3. Hesitation (experienced as missed opportunity and then anger)

This anger then leads us towards jumping blindly into the next opportunity that raises it head….and what do you know? That was probably a far worse set-up then the first one and we end up losing money on that trade which leaves us feeling even worse. This is precisely how revenge trading occurs and is never pretty…or profitable.

So what can we do to help ourselves?

Firstly lets start with awareness. As Robin Scharma states “Awareness precedes choice precedes results.” So if you remember we defined fear as “the anticipation of pain”.

Since anticipation is based in the future and the future only exists in our imagination, fear does not exist in reality. It only lives in our head!

You and you alone create your fears and give them power. That also means you can take away their power. However that means it will take some effort on your part. I’m afraid there are no magic beans or potions I can sell you to give you the confidence to break your fears. The only way to break your fear of something is go out and do it. I will cover more on that in a future article.

One trading thing you can do is to have an immensly simple trade plan and then follow it till it’s ingrained in your consciousness. The simpler the better. I’m a big fan of the KISS principle when it comes to trading The less working parts you have to go wrong or to create analysis paralysis the better. Remember it is this analysis paralysis that create the self-doubt which you experience as fear. You break that circle by having a simple well worked trade plan that you can execute flawlessly time and time again.

Along with a simple trade plan is a committment to trading within your risk parameters. This is where nano or micro accounts come into their own. You can trade your plan till it’s part of your consciousness without having to bet the farm. If your losses are making you angry, there’s a good chance that you’re over leveraging yourself. Give it a rest. Trade small, learn from your trades and allow your confidence to build.

I hope this article has provided food for thought and if you take one thing away then perhaps you could look at your present trading plan. Does it engender confidence or make it too easy to be fearful when trading the markets? As always good luck and good trading.

Trade well

FXTrader Paul

 

[tradingbeliefs]

+45 points on Cable

A nice +45 points from GBPUSD this morning. You can read the full article at the FXTrader Adventures blog.

 

[tradingbeliefs]

Being Flat is a position

17 & 18 /3/10 – Being flat is a position
By FXTraderPaul
So no trades for me the last two days despite there being some big moves overall.

Both yesterday and today during the very early morning there were no set-ups for me on either a system or discretionary basis. With hindsight it was obvious that there were some good trades later in the day but by that time I was quite happily moved on to other things.

Now there might be some people reading this thinking, ’Calls himself a trader eh? He should be scouring the markets looking for something to trade etc’. The honest truth with me is that I do nothing, absolutely nothing unless my set-ups appear. And if that means sitting on my hands for two days like this week then so be it.

Remember we have 3 options in a trade:

To buy or go long

To sell or go short

To stand aside and do nothing. Being flat.

Those are our three options and you would do well to remember that being flat is a position. The best trades will leap of the chart at you. Forcing a trade because you feel the need to do something is a sure-fire way to ruin as a trader.

We have the conditioned response from the rat-race that we need to be doing something, we need to be placing trades and managing positions etc. This is all well and good when you’re a corporate warrior looking to justify your salary but will get you into big trouble as a trader in the markets.

So remember that being flat is a position. Having the patience to wait for your set-up, even if that means waiting for a few days is what marks a professional from an amateur. Trading for tradings sake because you feel the need to be doing something is a sure-fire way to lose capital. To finish up I came across this quote from the legendary Jesse Livermore which resonated with me and I now share with you.

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.

Trade well!

FXTrader Paul
Follow our FXTrader Adventures blog at http://wp.me/FP6t

 

[tradingbeliefs]

8th April 2010. There was some love from the Yen Crosses this morning. My Filter identified Yen strength and Euro & Swissy weakness. I was able use that data to trade them for a total of +102 pips profit. You can read the full article here. http://wp.me/pFP6t-e6

 

[LondonJimmy]

8th April 2010. There was some love from the Yen Crosses this morning. My Filter identified Yen strength and Euro & Swissy weakness. I was able use that data to trade them for a total of +102 pips profit. You can read the full article here. http://wp.me/pFP6t-e6

Thanks for the posts and the info.

Keep it coming!!

 

[GammaJammer]

Ok - I had a couple of minutes this morning and decided I'd take a look at a few of the posts. I found the following paragraphs unbelievably troubling...

"The thrill of the day was the cynical intervention by the Swiss National Bank at FIVE TO FIVE just before most of Europe closes for a long Bank holiday weekend. Talk about timing their move to perfection. No doubt the city boys were already in holiday mode and on the way out the door.

Seconds before THEY made their move I was lamenting over a nice short on GBPCHF that I felt I should have taken. THANK GOODNESS SOMEONE WAS WATCHING OVER ME AND I DIDNT TAKE IT!!!

But no doubt some of you did and you were absolutely right to do so. There was nothing on the charts to suggest a move of this magnitude was on the way so don’t beat yourselves up over it – I just hope you used a stop loss!"

WTF? Please tell me I didn't justy read that. Basically this seems to be saying that it's completely fine to trade 100% technically and not care about any other factors even if they may be stuff like impending intervention that might do far more than just spoil your day. Basically this is the equivalent of someone sticking their fingers in their ears and saying "la la la la I'm not listening".

Of course the likelyhood of intervention didn't show up on the bloody charts. That's how intervention works. Central banks aren't momentum traders. They're jobbers at best, predators at worst when they trade FX

All this is fine and dandy - it's a free world after all, and the beauty of a blog is you can genuinely write what you want, but these guys appear to be touting for business too if I've understood it correctly, offering some sort of a training course in central London. And while I'm sure they may have some good technical techniques, the paragraph I highlighted above is simply pure drivel. I'm sorry to be blunt, but anyone trying to make a go of it as a full time trader has to accept full and unadulterated personal responsibility for their money. If I were trading a market like gbpchf and afterwards I found out that what had happened (SNB intervention in eurchf) had blown my position out of the water without me having seen it coming I'd be desperate to avoid that happening again.

For me the equivalent would be someone poking their hand into a hole in a tree in the australian outback on their first holiday there and getting bitten by some nasty spider. When some bloke dressed like Steve Irwin (god rest his soul) comes along and says "Fair do's mate - not your fault, you didn't know the stripey little blighter was in there" it's gonna be scant consolation. And assuming you survive this incident, I would imagine two things would occur;

1) You will want to learn from your mistake and if you are travelling in the outback again have a better idea of the dangers ("gee, I never knew there were spiders in Oz"), and;

2) If the Steve Irwin guy is selling a course in central London where the central technique for survival is sticking your hand into tree trunks looking for small grubs you're going to think twice before ponying up.

Nickels, bulldozers etc.

I know it's a harsh lesson to learn, but at the end of the day it's also a simple one, so here it is;

TECHNICAL ANALYSIS ON IT'S OWN ISNN'T ENOUGH

Simples

GJ

 

[tradingbeliefs]

Crikey, someone got out of the wrong side of bed this morning! I trust you enjoyed your rant Gamma.

Whilst I appreciate the feedback Gamma if you are as you say you are a currency trader on the wholesale side then it's fair to say that you're coming at it from your own filtered view of trading and the markets.

I agree that Fundamental news will trump Technical’s. Also with your comments regarding the style and sentiment of Central Banks intervention. However the vast majority of people on our blog and this site will be retail traders and will have little or no access to the kind of professional info/data/research/knowledge/networks/heads-up call it what you will that wholesale traders have at their organisations.

Most of the traders here will make their decisions based primarily (though not solely) upon technical reasons. If traders waited until there was no news that could possibly influence their trades then they would never take a trade. They have to trade their set-up, manage their risk and work with probabilities. Which I think was the idea behind Sandra's initial blog post. If you had taken a trade on GBPCHF there based upon your own technical set-up then that was still valid (regardless of the outcome) because it met your set-up and rules.

As Mark Douglas stated in Trading in The Zone: Anything can happen (and it probably will) so you should be prepared for anything once your trade is triggered. This was a good example of how even a clear technical set-up can be overwhelmed by major unexpected fundamental news entering the market. Nothing can be taken for granted and you always, always need to manage your risk. Sandra certainly wasn’t looking to blame SNB for the adverse move in GBPCHF. Quite the opposite. Expect the unexpected. We're immensely committed to traders needing to take sole responsibility for their trades. No-one forces you to pull the trigger.

I appreciate that perhaps not trading CHF at all when there is talk of possible Intervention might well have been a good idea. Suggesting how retail traders could avoid such pitfalls would have been a useful contribution.

You are right that anyone can write anything on a blog. If you read all our posts you'll find that we're very open to admitting our mistakes and showing that even as professional traders we are just humans who still make errors. Our aim is to work hard at improving our performance as traders on a daily basis. If you look at the feedback we receive on our blog it's immensely positive and constructive.

I hope that answers your points and I look forward to more constructive feedback in the future.

 

[tradingbeliefs]

It's always nice to finish the week with a few cheeky pips of profit! You can read the full article at..... http://wp.me/pFP6t-f7

 

[pssonice]

sure ...

bs

 

[LondonJimmy]

I want to go one further. Is TA even worth the bother? It doesn't fit in with my intuitive instinct. I would much rather trade on solid fundamentals. TA seems good for getting your broker rich....

 

[tradingbeliefs]

I want to go one further. Is TA even worth the bother? It doesn't fit in with my intuitive instinct. I would much rather trade on solid fundamentals. TA seems good for getting your broker rich....

London Jimmy, I believe that success in the market comes from trading in such a way that you're in line with your personailty and beliefs about the market. If you feel that fundamentals suit you better than TA then I believe that is the way you're likely to be successful.

I think there are something like 6.8 billion people in the world and probably that many (if not more) ways to make a consistent profit in the markets based on there being a right way for that specific individual.

I personally am biased towards 60% Mental Analysis, 35% Technical Analysis and approx 5% fundamentals. I know when news is coming out but I'm rarely interested in the content of the news, I'm more interested in how the market reacts to that news. The TA that I do use is dead simple as I believe that aids decision-making in a fast moving market. It helps me prevent analysis paralysis.

There will be folks here who are diametrically opposed to my view about how to trade. And that's ok with me, that's what makes a market and that what makes it such an enjoyable challenge!

 

[LondonJimmy]

London Jimmy, I believe that success in the market comes from trading in such a way that you're in line with your personailty and beliefs about the market. If you feel that fundamentals suit you better than TA then I believe that is the way you're likely to be successful.

I think there are something like 6.8 billion people in the world and probably that many (if not more) ways to make a consistent profit in the markets based on there being a right way for that specific individual.

I personally am biased towards 60% Mental Analysis, 35% Technical Analysis and approx 5% fundamentals. I know when news is coming out but I'm rarely interested in the content of the news, I'm more interested in how the market reacts to that news. The TA that I do use is dead simple as I believe that aids decision-making in a fast moving market. It helps me prevent analysis paralysis.

There will be folks here who are diametrically opposed to my view about how to trade. And that's ok with me, that's what makes a market and that what makes it such an enjoyable challenge!

Interesting.

I am only new to trading so was just stating my opinion from what I have observed (in a limited sense).

I am just finishing university and can’t wait to get into the real world. University seems quite biased as you tend to learn how some people believe it is impossible to beat the market without it being due to ‘luck’. They love to point to Mutual Funds and show how they do not beat the market. Academics are renowned for not making good traders though.

Do you ever invest long-term and adopt a buy and hold strategy? From why own experience, I have done pretty well. I have invested largely in gold and silver, along with food. I am extremely bullish on commodities and have been for the last few years.

What are your thoughts on investing in foreign markets like in Asia? There are plenty of companies with low PE ratios that pay good dividends and have potential growth. I guess I just want to get out of sterling as it sucks.