FXCM Trading Expo

May 31, 2006

The FXCM Trading Expo is this weekend and I am going to try to attend both days.  http://fxcmexpo.com/index.html.  I've been so busy with my full-time job and other things that I haven't been able to focus on trading so hopefully this can jumpstart me.

My main issue is with time right now.  I find that I'm placing trades at times when I might not usually because I just don't have the time to follow the market.  This is very frustrating and I really don't know what to do about it right now.  I might just have to move to longer term charts like the Daily or Weekly.  I also find that I'm in such a rush all of the time that I'm breezing through all my charts and all time frames without focus.  It's either move to longer time frames or take a break for a while.  We'll see.

Well, the one thing that I promised myself I wouldn't do the beginning of this week was blatantly violated.  I went short on the Aussie this morning and for a couple of hours it just bounced around but slightly in my favor.  The FOMC report release at 2 pm was weighing on my mind though so I decided to get out of the position with a 6 pip profit.  Almost immediately, the pair thrusted downwards and I missed my chance at making over 60 pips.  HOW FRUSTRATING! How unpredictable! All I could do was laugh because this is so typical of my trades.    

Week 5 Forex Performance

May 29, 2006

I took a 3 day break from doing anything forex related over the Memorial Day Weekend.  Sometimes 3 days isn't even enough time off from this craziness.

My Week 5 performance basically wiped out most of my gains from week 3 and week 4.  I had 6 profitable trades, 6 unprofitable trades, and 1 scratch.  I lost a total of 69 pips or $619.40.  Eventually having a poor risk/reward will come back to bite you.   

What am I going to change this week? Not much.  I am going to try to let my profits run this week.  I don't have much more to say right now about this.  I just don't.

The newest Commitment of Traders report from Friday is processes and can be found at http://www.forexproject.com/Forex_Volume/

We have some economic announcement's this week that could be nice market movers, the FOMC meeting minutes released on Wednesday and the always interesting Nonfarm Employment change on Friday.

 

Channel Trading in the Morning

May 25, 2006

Does anyone channel trade the US Session? I've been doing so here and there but have been keeping track of any and all channel breaks during the past 3 weeks in the following currency pairs:

  • GBP/USD
  • USD/CAD
  • AUD/USD
  • USD/JPY

I think that I can say that from my limited observations over 3 weeks, these pairs definately move more consistently in the morning US session than others.

Another observation I've made is that the AUD/USD seems to be a great pair to trade.  I never would have thought this was the case but I've found it to be very steady once the price breaks a channel line.  If anyone has traded the GBP, you know the wild swings that occur frequently but it doesn't happen in the AUD/USD.  Once the channel breaks, it takes its time to reach a bit of profit but it eventually does.  Over the last 3 weeks, this pair has 7 wins and 1 loss.  Run-ups have ranged from 30 pips to 90 pips with the average around 30-40 pips.  The drawdowns have been very good with a maximum of -18 pips.  This is assuming that your using a 20-30 pip stop.   This pair actually was good for 30 pips today for me and helped me bring my losses down to around -50 pips.

Let's assume that your risk/reward is 1:1 for simplicity.  If you have a 30 pip stop and a 30 pip limit, here was the performance of these 4 pairs over the last 3 weeks.  I should note that the runups on some of these trades were substantial so if you rode it out for longer, the risk/reward would have been much greater.

GBP/USD – 4 Wins, 3 Losses (+30 p)

USD/JPY –  6 Wins, 3 Losses (+90 p)

AUD/USD – 7 Wins, 1 Loss (+180 p)

USD/CAD – 8 Wins, 4 Losses (+120 p)

I pick and choose my channel break trades and therefore it is discretionary.  I find that I don't pick the right one though but if I was to take every channel trade over the last 3 weeks, I would be up 420 pips and this is with a 1:1 Risk to Reward. 

2 Weeks of Gains Gone

May 25, 2006

Just like that….  my gains from weeks 3 and 4 are gone and I'm sitting at -79 pips for this week.  It is quite frustrating that I worked so hard for a little pippage over the previous 2 weeks only to see them disappear in 4 days.  1 step forward, 2 steps back.

WARNING: The additional commentary below is very scattered and I'm just spewing it out of my head so it may be contridictory.

I have not been overly impulsive, stupid, or emotional with the trades I've made this week.  There were some trades where I exited early only to see the price continue in my direction but there were also trades that I exited early and then saw them turn against me.  

This leaves me at another important juncture in my forex trading career.  When I reach this point, I always ask the question, IS IT EVEN POSSIBLE FOR THERE TO BE LONG-TERM SUCCESS FOREX TRADING?  I wish I could answer this question now but the longer I do this, the longer I fear what the answer may be.  Just thinking about working for Corporate America the rest of my life is depressing. This fact alone can motivate me to continue because I know that in this world of trading, even though I've been trading for almost a year, this is still considered very beginner. 

It's times like these when risk/reward seems like the most important thing in the world.  

I've put so much time into learning how to trade Forex that I really think I'm at the point of no return. 

The highs and lows of trading is something that is not easy to take sometimes.  What I have to ask myself and what you have to ask yourself is if it is getting harder or easier to take as you do this longer.  For me, it seems to be getting a bit easier but not enough to quantify.

Look at my true risk/reward over the last 3 weeks of trading:

 Week P/L Gross P/L  Avg Winning Pips  Avg Losing Pips

3

15 $111.1 12.8000 -18.8333
4 61 $506.8 19.8889 -16.8571
5 -79 $-748.9 9.7500 -23.6000

Look at the Average Winning column and Average Losing column.  If I average this weeks 3,4,5 my average winning pips are 14.18 and my average losing pips are 19.76.  This risk/reward isn't going to cut it.  Why is this happening? 

  1. I'm scared.  I'm scared to give up tiny gains.  I exit my positions too early.
  2. Rob Booker does not encourage great risk/reward for his trade strategies.  They are essentially 1:1 which means you have to have more winning trades than losing trades.
  3. I'm trading the smaller time frame charts

Either way, it sucks that no progress has been made in my forex trading on paper.  I have learned a lot over the last year but until this is realized in money, I cannot consider this "project" successful.

I can see why there are so many damn mentors, training websites, and signal services.  If only 10% are successful trading, then you have the other 90% saturating the market with services that they provide because they couldn't cut it.   

So what is the point of this post.  It is a venting session that everyone needs and all of you need to try.  I feel much better now.  Feel free to click on the Submit Content link on the left menu to post your vent.  I will happily post it on the front page of the site alongside mine. 

The week isn't over yet and I'm making it sound like it is so things may be different tomorrow, maybe better, maybe worse. 

Trading Forex with Deutsche Bank

May 24, 2006

I may be a little late to this story but Deutsche Bank has recently launched online forex trading for retail investors.  Most of you may know that Deutsche Bank is one of the larger financial institutions. They believe that they can help develop the market furthur.  I don't know if this is good or bad.  You can open a demo account if you're interested or open a real account with a $25,000 minimum.

http://dbfx.com/

Ultra-Conservative Approach to Trading

May 23, 2006

I don't know if it is possible but the last couple of weeks I've been taking the ultra-conservative approach with tight stops and non-greedy limits.  It seems to be working for me so far but I have to be careful not to suddenly change my method and set a wider stop because doing so can easily wipe out all of my tiny gains. 

I'm actually very proud of a trade I had this morning because even though the USD was strongly pushing upwards against the CAD, I took my 25 pips that I set out to take when I opened the trade.  The proud feeling was when I saw the price immediately turn back down.  This brings me to my main point, should I be patient and let my profits run or take a small profit.  Over the last couple of weeks, I've seen some huge days especially with the Sterling where if I was patient, the gains could have been 100+ and even 200+ pip profits.  But if this market is trending only 20% of the time or less, am I doing the right thing by taking a profit one-fifth or one-tenth of the potential profit.  I really don't know the answer to this.  I'd also like to know if any of you think that a 60 pip profit target for a week is "weak."

I have to say that the more I think about my 60 p. profit target for the week, the more I like it.  Why? Because it fits my personality.  I have a hard time sitting around for days, even hours, while the price moves ever closer to stopping me out or eating into my profits.  I've also found that even when I think I'm trading the daily charts, I'm really not because I'm entering on the daily chart and exiting on either a 15 minute chart or strictly on discretion.  So what I'm getting at is for now, I'm sticking to the small time frames and depending on my progress may keep it that way at least for a while.

Uneventful Week Trading

May 23, 2006

It has been a pretty uneventful trading week for me so far.  The lack of any major economic announcements this week will mean a lot more waiting during the US session. 

I have managed to squeeze out 11 pips so far on 3 trades but I remain on the sidelines with no longer term trades.  I've been looking at the charts the past couple of evenings but they seem totally foreign to me right now.  I cannot seem to make sense of anything and I'm not going to jump into anything until they do make sense.  

The poll from last week asked the question, "How many pips did you make or lose last week?"   It garnered 14 responses which showed that most of us did pretty well last week:

8 respondents were profitable, 5 unprofitable with 1 losing 100+ pips, and 1 respondent broke even. 

What was your Profit/Loss this week?

May 19, 2006

There is a new poll on the top of the right column of the website.  What was your Profit/Loss this week? Be honest.  I'd be interested as well as others in seeing the results. 

This week PROFIT GOAL REACHED!

May 19, 2006

I carefully reached my profit goal in Week 4:

Week # Pip P/L Gross P/L Total # of Trades Total Winning Trades Total Losing Trades Total Even Trades Avg. Winning pips Avg. Losing pips
4 61 $506.8 18 9 7 2 19.8889 -16.8571

This week, I profited 61 p.  If anyone remembers, my goal when I started Rob Booker training was to make a total of 60 p each week.  Trading 1 lot at a time isn't going to allow me to do this for a living but increasing this to 3 or 4 lots will.  I personally feel that a lot of people go into trading forex (myself included) with the thought that they need to profit many many pips each week.  When I say many pips, I'm thinking over 200 or so pips a week.  I hear how many traders not unlike myself profiting over 400 p for a given week which is absolutely possible but you also have to be honest with yourself.  Can you consistently make 400 p a week? I don't think it is possible!  Imagine the additional pressure you're putting on yourself when you're expecting even 200 p a week.  I find that keeping a pip target low and then raising your lot count is a more realistic expectation.  

The above trades were all day trades.  I do not have any position trades open and really haven't in a long time.  My goal is to continue day trading and then find position trades on longer term charts.

Making 61 p isn't easy.  I made 18 trades, profiting on exactly half.  I was very careful today and hesitated to make a short AUD trade which would have hit my target (30 p had I made the trade) because I was at +51 p and was satisfied with ending the week here.  I did see another trade this morning though and took the chance of going long on the USD/CAD.  I was still very careful placing a tight stop and only looking to stay in the trade if it went a little my way  I got out of the trade quickly for a 10 pip profit bringing my total for the week at +61.

To be totally up front, I really haven't sent Rob Booker email in weeks nor have I been following his "Chart School" all that closely.   I've been discretionary trading all week just like last and I don't know if it is a coincidence or not that I have been profitable both weeks.  I'm not trying to apply any new techniques but just trying to become more intimate with the techniques and indicators that I already have.   I haven't stopped learning or exploring new techniques or indicators but it really is just for exposure and because I feel the need to learn new things regularly.

I'm away until Sunday and will be back then to get ready for next week.  I hope everyone caught some good trades this week.  Take care. 

Forex Mentor Reviews

May 19, 2006

I stumbled upon yet another useful website if you're looking for a mentor or just want to know which were reviewed well or poorly.  Reviews are provided by users who post comments and a rating of SCAM, 1, 2, 3, 4 or 5.

Scam sites that I've seen in the past either via advertisement or Google Search:

Reputable mentors?

Take user comments with a grain of salt.  Some of the comments are really good though.  They range from really ANGRY users who had their accounts blown up in a matter of days to users that are extremely grateful.  

My mentor, Rob Booker was reviewed so-so.  Here are some comments about Rob that I found interesting:

THIS ONE I CAN RELATE TO.

"He was busy with too many
clients, with his own trading, and with some
side projects."

"Apparently Rob also
started a managed accounts service, which is a
nice proof that he actually trades himself. 
His results from January 2006 to March 2006,
haven't been too impressive at only 3% gain for
three months, but what's encouraging is that Rob
is honest about it."

"…This is a very
expensive program for offering not much more
than rehashed information from so many trading
texts."

You can check out the reviews and comments for yourself.  If anything, it opens your eyes even wider to the fact that you have to be responsible for your own account and analysis.  If you have had enough experience and have learned what works for you, it's much more beneficial working on your own or with friends than ever signing up with a mentor.  Would you be more angry if someone else told you to make a trade and you lost big money or if you told yourself to make a trade and lost big money?

Personally, I'd be a lot more steamed if I listened to someone else and lost. 

http://www.forexbastards.com/education_reviews.shtml

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