Do-it-Yourself Trading

I receive a lot of emails daily but one in particular caught my attention.  This person states the following:

"Plz, I am new in the markets and I have lost a lot.  I wanted you to help me and tell me what I have to do."

This is strictly my opinion but there are a couple of things I see wrong with the approach this person is taking.

1. If you are new to the markets and risking a lot of money, of course you're going to lose a lot of money.  Open a small account and play with only the money you can afford to lose.
2. He wants me to help him? I'm having a tough enough time myself. 

I have come to the realization that absolutely nobody can make you a successful trader.  You have to mold yourself into a successful trader.  Trading is no different than any other thing in life.  When you fall, you have to get up and keep getting up no matter how many times it happens.  No one is going to hold your hand through this learning process. There are so many mentors and forex teachers out there but they ultimately will not help you.  They may steer you the right way or put you on the right track but after that, you're on your own.  I'm not saying that none of them are legitimate, I'm just saying that even if they give you a step by step trading manual, this does not guarantee anything! I signed up for Rob Booker training quite some time ago and though I sometimes think I wasted $1000, this isn't necessarily true.  All the information I gathered and all the things I've learned over the last year have stuck with me and have molded me a certain way.  The jury is still out on whether these things will ever lead to me being a consistently profitable full-time trader but there is only so much you can do.  If 2 years from now I'm still making the same mistakes and I'm not consistently making money, I will just have to accept the fact that I'm not cut out for this business.  Some people may find this out a lot sooner and one way to do it is to throw money you cannot afford to lose into a live account when you have no experience.  

The whole point of striving towards the goal of trading full-time is so that I don't have to rely on anyone to support me financially, tell me when I can take vacation, get annoyed when I legitamitaly call in sick, tell me when I can eat lunch, tell me to drive to work in 10 inches of snow and so on.  Working for someone flat out sucks and this is what keeps me going.  

So, I cannot tell anyone what they need to do because I don't have the experience to do so and even if I did, it wouldn't help.  You just have to be smart with your money because one of the most important things is lasting long enough to get the experience that may lead to success.  It is also absolutely necessary for you to have the motivation and dedication to march on no matter what happens.  

Nice End to the Trading Week

I had another good trade with my new system during the European session this morning capturing 60 pips even though I muffed the trade.  Instead of putting in a 3 lot trade, I only put in a 2 lot trade.

I'm happy with the way things are going right now.  Before I started trading this system, the results from the end of August and beginning of September showed that it produced 10 wins out of 11 trades with a profit of over 700 pips.  Since going production, I've produced 5 wins out of 6 trades and over the last 10 days, the system is up 388 pips or $3880.  

Even though I pretty much know my entry when I go to bed, I still need to manage the trades if initiated during the European session.  If a position opens, my phone lets me know so it wakes me up out of a dead sleep.  Over the last year of dedicating a lot of my time to learning this business, more times than not I'm a walking zombie.  I think that if you want to make it day trading the FOREX, this is necessary and the price you have to pay.  So if you like the movement that the European session has to offer and you have a full-time job in a US time zone, be prepared for sleep deprivation.  I'll try to catch up this weekend but I doubt I will.

Forex Pivot Points

After hours and hours of development time, I have completed the new forex pivot point section of the website.  There are now over 120 currency pairs and their respective pivot points to choose from.  I am also now subscribing to a paid data provider so the data is checked for correctness.  The data is initially released at close which is 5pm EST and if need be, is adjusted until 7 pm EST.  

I'm using a web technology to display the pivot points called AJAX which is heavily used on the web now, most notably by Google.  It's live now at http://www.forexproject.com/Daily_Pivot_Points/ .  If anyone has any suggestions on how to make this better, let me know.

In the coming weeks, I hope to put http://www.allpivotpoints.com into production which will have daily pivot points for AMEX, CBOT, FOREX, INDEX, HKSE,  KCBT, LSE, MLSE, MGEX, USMF, NASDAQ, NYBOT, COMEX, NYMEX, NYSE, OBB, SGX, TSE, VSE, and WCE.

Another win with the h-system

I had another nice profit today when I got a signal to go long during the European session early this morning.  I manually entered the trade at 2 am this morning right when I got home from a night out.  I profited 60 pips on the first two lots and my last lot was just stopped out with a 47 pip profit.  That's a total of 107 pips.  

Since going live last week, this system is up 328 pips.  

I'm actually looking into another system that depends on the h-system.  It entails reversing if the GBP/USD reaches certain levels.  This would be contingent on having a profitable trade.  Right now I like what I see.  It seems like when the GBP/USD reaches certain levels during the European session and the US session, the pair reverses after 10am EST possibly due to profit taking or lack of liquidity.    

It's nice to see this system working out so far but I've been in similar situations before so I remain cautiously optimistic.  I feel like I'm further along in this journey than I've been in the past but nowhere near where I have to be to become a full-time trader.  I have to say though that I've never had a system like this before that has well established rules with a limited level of discretion.  I would recommend that for those of you that haven't already, dedicate your time to developing a system that fits you and learn it well. 

Maybe Rob Booker has it right.  He gives you a system that he believes in and shows you how to trade it consistently.  Stick to the system everyday and use a limited amount of discretion.  It's really not the system that's important.  What's important is the discipline involved in trading this system.

When is the best time to trade Forex?

EUR/USD

During
the Asian session, the Euro trades 15% of all volume but it can still
have a good move.It trades 39% of all forex volume during the European
session.

GBP/USD

The
pound trades lightly before and during the Asian session but has good
moves.The market can be quiet in the middle of the Asian session.In the
European session ,GBP/USD accounts for approximately 23% of all forex
trading volume .

USD/JPY

During the Asian session,USD/JPY accounts for approximately 78% of all
forex volume.This drops to about 17% during the European session but
price can be on the move all day.

——————————————-

 

The Asian session opens at 0.00 GMT or 7 PM EST and closes at 9.00GMT or 4 AM EST.

The European session is the largest market and opens at 7.00GMT or 2AM EST and closes at 17.00 GMT or noon EST.

The US session opens at 13.00 GMT or 8 AM EST and closes at 22.00GMT or 5 PM EST. The best trades occur in the first 3 hours.

Don’t give up on an entry

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This has happened to me many times before but I tend to give up on a given trade setup when it doesn't work out for me.  I have a perfect example for you because it happened this week.  

If you look at my trading log, you'll see that I went long on the USD/CAD on 9/18 at 1.1227 but was stopped out for a 57 pip loss at 1.1170.  I made a video detailing this trade setup before I entered the trade and posted it on youtube.com on 9/17. 

You can view the video at http://www.youtube.com/watch?v=rdQ0McFySxI

You can also download the video in AVI format directly because the 1 on you tube is blurry:

USD/CAD setup video 20/09/2006,14:09 26.43 Mb

Well, after I lost the trade, I pretty much forgot about the setup even though the price was still trading in a triangle.  If you look at the pair today and what happened yesterday, exactly what I stated in my video came true.  I gave up on the entry setup after I lost the trade.

As I've heard countless times before, many successful traders will lose on consecutive entries before they actually get it right and when they finally do get it right, they really make some serious dough.

Bent the Rules Today

I kind of broke the rules of my forex trading system this morning when I got a signal at 10 am this morning.  My rules say to only trade during the US/EUR session overlap which 10 am clearly falls within but sometimes you have to adapt.  Today I did just that because of the FOMC announcement coming out at 2:15 pm.  I have to wait and see if this saved me from a loss or if I missed a good trading opportunity but either way, I think I did the right thing.  I don't want to make a habit of doing this but this is the one and only announcement where I can see doing this.  During my backtesting, I have not seen a profitable trade coming after 10 am.  By this time I would think most traders are trying to settle up on their positions especially today. 

Even though the rules were bent, I think that to be successful, you have to constantly adapt to the changing environment and tweaking rules or flat out changing them is necessary.  I'm not changing them because I'm overly emotional or fearful, I'm just doing it because when I woke up this morning, I told myself not to trade until after the FOMC announcement.  I'm hesitant to open any positions before this and expected more consolidation or the classic, Buy the Rumor, Sell the News.

Followed the Rules and Won

I've followed my new system (h-system) loss yesterday with a win today.  I followed the rules without any deviation by capturing 108 pips essentially negating yesterday's loss of 111 pips.  This was a great trade except for 1 frustrating moment when my exit of the first 2 lots did not execute immediately even though it was more than 20 minutes after the economic release.  This delayed execution actually turned out better for me this time because if the trade did close when I wanted it to, I would have made 60 pips on the first 2 lots.  Instead, it exited minutes later for a 78 pip gain.  The last lot was up as much 50 pips but it couldn't push any higher.  My trailing stop was hit and my last lot closed with a 30 pip profit. 

I feel real good that I didn't do anything stupid like closing my position too early. 

As I write this, it seems like the GBP/USD has some major profit taking going on right now and the pair has reversed almost to my entry price so my exits were perfect.  

Since I started trading my new system last week, it has generated a total of 5 trades, 3 of those being winners, 1 being a mistake (loss), and 1 being a loss.  My average winning trade has produced 114 pips and the average loser, 61 pips.  This is not quite 1:2 risk/reward but close.

FOMC tomorrow…

Confessions of a Dealing Desk Broker

There's a good post on the NDD blog detailing a conversation between a trader, Pupkinus, and an Australian dealing desk broker which goes into the inner workings of the brokerage community. The broker talks about stop hunting and why brokers hate scalpers.

Check it out at http://nondealingdesk.blogspot.com/2006/09/confessions-of-marketmaker-dealing.html

Oanda Account Opened

I finally opened up an account at Oanda today and transferred funds.  Hopefully I'll be trading through this account by today or tomorrow.  I'll let everyone know how it goes.

On a side note, why must my spammers barrage my website.  I find that I'm in a constant fight to keep them from posting their forex advertising and forex promotional material here.  What a waste of time.  I'm going to start another section called FOREX SPAM SITES that explicitly list the sites that they are trying to promote.

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