April Trading Contest Winners

April 30, 2007

The 2 week April trading contest ended today and the winner, Dumb Luck, ended with a return of 34.82%.  Dumb Luck's maximum drawdown during this period was -17.20% which if classified under the May trading contest rules would put him in the aggressive category.  Nick also finished with a stellar return of 29.51% with a max drawdown of -17.99%.  More impressive was RotcaX whose return was 21.29% but his max drawdown was only -4.20%.  

If I were to use the rules for the the upcoming May contest, the following traders would have been the winners. 

Best Aggressive Traders:

  1. Dumb Luck  34.82%
  2. Nick  29.51%

Best Conservative Traders:

  1. show me the money  6.79%
  2. Reno  3.37% 

Best Money Managers:

  1. RotcaX  21.29%
  2. Milton  3.76%
  3. Netman  1.99%

Other Notables:

  1. Blackday 9.40%
  2. Qlaun 4.57%
  3. Frank Gamwell .51%

I know it's just a demo account but congratulations.  I didn't do so well with a loss of -6.93% and a maximum drawdown of -4.40%.

How To Break Out of a Trading Slump

April 30, 2007

The definition of slump that I find most fitting is "a period
of decline or deterioration."   Since trading is so psychological by
nature, this period of decline or deterioration has to be expected.  I
don't think there is anyway to avoid it, it's inevitable.  The bottom
line is that I've either been in a slump or my level of inexperience
and ability is just not sufficient for it to be called anything but

What can you or I do (or not do) to break out of this slump?  

  1. Take steroids like athletes do.  This is certainly one way to do
    it in baseball or other sports but unfortunately in trading, there is
    no such thing.
  2. By trying harder.  This seems like a sure-fire way to prolong the
    slump and this added pressure only makes things worse.  This could lead
    to overtrading and heavier losses. 
  3. Taking a short break.  This sometimes helps me to refocus and
    takes my mind off the negativity.  This can definitely be a difference
    maker in breaking out of a slump and certainly has to be seriously
    considered as a "cure."  
  4. Take a complete inventory of why you love trading.  Personally,
    if I don't love something, I just don't want to put the time or effort
    into doing it for there to be success. 
  5. Trade in your demo account.  I feel like trading my demo account
    throughout April has helped considerably.  I've managed to take my demo
    account very seriously and I have a new fond respect for its ability to
    help me break out of a slump.
  6. Change your routine.  If you don't have a daily routine, maybe
    creating one would help and if you already have one, maybe changing it
    would make all the difference.
  7. Stop thinking in terms of winning and losing.  Focus more on
    whether your overall trading skills are improving even if you're losing
    more than you're winning. 
  8. Unstress yourself.  Do something else other than trading that can
    relieve the everyday stress of trading and life in general.  Sometimes
    I forget why I'm striving to be a full-time trader, to have more
    freedom and security to enjoy things outside of earning a living.
  9. Try something new or simpler.
  10. Find someone that can help.  This someone could be in person, in a book, or just another fellow trader.

I'm not a trading expert, nor an expert in the field of psychology
but I read a lot and breaking out of a trading slump is really no
different than breaking out of any other slump that life throws out at
you.  I think we all have the ability to break out of it because of all
the experience from past slumps that we've encountered.  If I ever want
to be a full-time trader, learning how to break out sooner than later
can make the difference in whether I'm a success or failure.   

Lately, I feel like I'm ready to break out of this slump… I just feel it. 

British Pound Reversal Trade

April 29, 2007

I had my first very good trade in a while on Friday so therefore I'm posting a video of last weeks possible trades using this strategy. 

I managed 124 pips on a risk of only 30 pips. 

This strategy happens to be the only consistent one in my repertoire at this time but I'm working on many more.  If anything, it takes a lot of pressure off of yourself when you have a simple strategy with a known set of rules.   It's when I don't have a written set of rules that I get myself into trouble.  


May Trading Contest Prizes

April 27, 2007

** UPDATE **

We have 30 participants signed up so far for the May contest which starts this Tuesday.

Sign up ASAP.  Detail follow.


I'm satisfied with the way the April trading contest has gone so I am offering 3 prizes for the May contest.  I'm going to have 3 different categories and the winner of each will receive a $50 Amazon gift certificate.  I would like to thank the sponsor of this contest….  me.  I didn't have the time to hit up any of my advertisers.  Maybe if May goes well, I'll try to get bigger prizes for June.  I know 50 bucks isn't much but hey, it's free money.  You can buy yourself a book or something.

I don't know if this is the best way to do it but nevertheless, here it is:

1st category is Aggressive Trading

The trader with the highest portfolio return % in the month of May with a maximum drawdown greater than 10% but less than 20%.

2nd category is Conservative Trading

The trader with the highest portfolio return % in the month of May with a maximum drawdown greater than 5% but less than 10%.

3rd category is Money Manager

The trader with the highest portfolio return % in the month of May with a maximum drawdown less than 5%.

  • Having these 3 categories will prevent a trader from winning more than 1 category.   
  • THE WINNER MUST HAVE A POSITIVE PORTFOLIO RETURN %.  If you have the highest return in a particular category but it's negative, you don't win.  

Currently there are 23 participants signed up for the May contest.  You have until next Monday, April 30th to sign up.  To sign up or to find any up-to-date details of the contest, go to http://www.forexproject.com/Forex_Contests/

Oanda is #1 in Traffic

April 27, 2007

I got a couple of comments about the top 200+ forex website rankings; mostly how they weren't accurate.  The rankings before were dependent on how Alexa sorted the sites in their category listings.  I was pulling data in the order in which they gave it to me.  As some of you noticed, some sites were listed ahead of others even though their Alexa Rank wasn't higher.  The one website that got shafted the most in the rankings was Oanda which had the highest Alexa traffic rank but was listed as #19 in the rankings.  I fixed this tonight and now the rankings are based on traffic rank.  You can see that Oanda benefited greatly from this change. http://www.forexontop.com

In addition, every forex websites Alexa traffic rank is also listed.  More enhancements coming soon.

Top Forex Websites




GBP/USD Pivot Analysis Week of 04/23/07

April 26, 2007

First three days of the week saw the inability for the GBP/USD to close below the weekly pivot point at 2.0006.  Thursday, there was finally a blast below and a run down to the weekly S1 which just happens to also be the monthly R1.  It has found support at this level for now.

Afternoon 04-26-2007

April 26, 2007


  • Breached the Weekly Pivot for the classification of "bear week"
  • Found support today at the Monthly R1 pivot and the Weekly S1 pivot at about 1.9880
  • Only taking long positions at this time
  • Currently in short mode

I don't see there being a play long on the daily anytime this week and probably not for most of next week. 


  • Broke up above monthly R1 pivot
  • A tell-tale sign of today's break might have been yesterday's close above the weekly pivot point
  • The price is approaching weekly R1, about 40 pips away
  • Take only long positions but the trend might not be clearcut. 
  • Currently in long mode
  • Japanese economic data out tonight that will move this

Unpredictable at this point and waiting for the economic data tonight would be prudent.  If we get a break above 119.85 (W_R1), I would consider the following trade:

LONG at 120.10; STOP LOSS at 119.67; TARGET at 120.90 (Risk 43 to make 80)


  • Has run up a lot and is in short mode right now
  • Only take long positions
  • Pivots seem inconsequential

No plays anytime this week.



Bread and Butter Setups

April 26, 2007

I enjoyed this quote by Teresa Lo so I thought you might too:

{xtypo_quote}"I think most people simply don't realize that the market only has 2 modes:
trend (directional or grinding) and chop (trading range or consolidation pattern).
The most profitable is the directional trend mode, and there are only two setups:
retracements and tests.

New traders should attempt to trade the bread and butter setups, i.e. only the retracements and tests in the directional trend.

why the oldest piece of advice is: "The trend is your friend (trade
retracements) until the end (test), when it bends…"

all there ever was, no matter what anyone says, and the key it to KISS.
So many traders and educators make it seem like they have an "arsenal
of weapons" for trading, but in the end, it's all moot, if they cannot
identify, which of these few conditions they are attempting to exploit,
and I am sure that we can do this without even going into multiple time
frame analysis by slapping on a few moving averages…"

Forex2Stay Abandons Oanda

April 25, 2007

Brent from over at Forex2Stay has decided to rid himself of Oanda.  He decided to go with an STP/ECN broker, EFX Group or MB Trading.   

The Mighty Have Fallen

April 25, 2007

The April trading contest is at the tail end with only 3 real trading days left and the mighty have fallen.  QLaun who led most of last week and the first couple of days this week has fallen from the top.  





The top 6 traders sorted by portfolio returns have maximum drawdowns between -4.20 and -17.99.  I found details of some other contests and how they determined an acceptable maximum drawdown level.  

Acceptable maximum drawdown level for aggressive trading should not exceed 15%.

Acceptable maximum drawdown level for conservative trading should not exceed 10%.

Acceptable maximum drawdown level for fund managers should not exceed 5%.

So if I were to use these figures, I would rank contestants as of today this way: 


  1. Dumb Luck +24.26%
  2. MartinFXUY +14.66%
  3. RotcaX +12.52% 


  1. Dumb Luck +24.26%
  2. MartinFXUY +14.66%
  3. RotcaX +12.52% 


  1. RotcaX +12.52%
  2. Milton +2.91%
  3. Netman +1.86% 

Good job guys.  I'm not doing too well.  I'm at -3.05%.  The only thing I have going for me is that my maximum drawdown is -1.17. 

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