How Do I Calculate My Monthly Return?

I usually only calculate my profit / loss in pips without taking into
consideration actual return.  As most of you know, a 1 pip profit in
the GBP/USD gives you a larger profit than a 1 pip profit in the
USD/CHF.  Therefore using pips as the sole indicator of success is not
complete.  To make it complete, it might be best to start calculating
monthly return based on balance.

To calculate your month end return, follow this example which
applies to calculating profit for January 2007.  I am using fictional
amounts that calculate to my true return for January 2007:

  1. What was your balance on January 1st before any trade/interest activity for the day?  Mine was $26231.04
  2. What was your balance on February 1st before any trade/interest activity for the day? Mine was $27317.07
  3. Calculate: ((February 1st balance – January 1st balance) / January 1st balance) * 100

          (($27317.07 – $26231.04) / $26231.04) * 100) = 4.14 % return for January '07

What days and time do you usually trade?

I pretty much stick to the European and US sessions.  I can trade from
my Palm Treo and I usually close my positions from it during the US
session.  I trade everyday assuming I get a signal.  When I was a total
newbie, I tried to trade the Asian session and I stared at the charts
all the time looking for a trade.  Now I pretty much know where I'm
going to enter and exit.  This is all predetermined and needs to be
because I have a full-time job.

When to call it a day with your system

Hi Rich,
I Read your blog today and just wanted to share something with you. About 2 months ago in the middle of 1 of many losing streaks, I had an epiphany which I feel has helped me understand what it takes to be a 
successful trader.
Basically as traders we all have to acknowledge, understand and embrace the Forex for what it really is – A market that is controlled, fueled and driven by human emotion. No order, no logic, no sense. Embrace the fact even when all your signals are pointing to enter long the market will still go short for no reason whatsoever. It sounds crazy but embrace losing! Embrace that you re not in control and the market will do exactly whatever it wants through no fault of your own.
In my opinion, I feel the reason why so many traders fail in this game is because they can’t handle being wrong, they like being right, they like the feeling of superiority when the marketdoes as they predict and they go insane when the market goes against them.
Regardless what my predictions or gut feelings are about what direction the market will go I always obey my system. Even if every bone in my body tells me not to enter when all my rules are fulfilled I still enter. And when I do – sometimes I lose and sometimes I win however regardless what happens I’m always comforted in the fact that I obeyed my system.
And I will obey my system till one of 2 things happen: Either I reach my financial goal or I lose all I invested and kiss the forex goodbye.
Madness, genius or just downright stupidity? Personally as I write this it definitely feels like the latter.
My point is that ive given up trying to second this cursed market. I’m fed up of not closing my trade when I was 30 pips up only for the market to retrace and close me out at a loss and feeling the anger that follows. Or worse – getting your stop hit just before the market retraces 100 pips.
As you know from my previous email I am far from successful in my trading, in fact im currently showing a 38% strike rate and have had 2 losing months which has wiped nearly a third off my capital. But saying that ive increased my capital by 57% from when I started. Its only been 5 months tho, my progress means nothing, especially with the pennies that im trading with. However saying that im still in this game, and not at a loss.
Is it because my system is great? Is it because I have a 6th sense for Forex? Or am I just lucky? Neither. I’m
just blindly following my system, trying to put some kind of order into a world without order so to speak.
My advice Rich is to stick to your H-system. Couple it with money management and compounding. Stick with it to the very end. At least if you lose your investment you will have peace of mind that you had a plan that you believed in it and you stuck to it till the end.
I sincerely apologise if this email has agitated or annoyed you or made me out to be some cocky newbie smartass. I assure you nothing is further from the truth.
To have tried and not succeed doesn’t not mean you failed, to never have tried in the first place is the true failure.
Kindest regards
Peter

How come my email or comment was not answered?

There are 3 main reasons why I won't answer a comment or email:

  1. The email or comment is nothing more than an attempt to
    self promote or mislead me or the visitors to this site. I can smell a
    spammer or scammer from a mile away.
  2. It is usually a
    question that gets asked frequently therefore it has already been
    answered here in the knowledge base. I get a lot of emails that ask me
    to do the legwork for you. I'm willing to help but some emails or
    comments are just lazy.
  3. I try to answer all comments and email but sometimes 1 slips through the cracks.

Where do you get your data for Forex Pivot Point Calculations?

We pay to receive our end of day forex data that is used in pivot point
calculations.  Our data provider obtains forex data from 250+
contributors worldwide.  The data is "real" global interbank data and
not market maker data where brokers tend to set their own prices. 

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.

How can I prevent fraud when trading forex?

There exists the CFTC or Commodity Futures Trading Commission which has jurisdiction and authority to investigate and take legal
action to close down a wide assortment of unregulated firms offering or
selling foreign currency futures and options contracts to the general
public. In addition, the CFTC has jurisdiction to investigate and
prosecute foreign currency fraud occurring in its registered firms and
their affiliates.

There is a lot of interesting information on the CFTC (Commodity
Futures Trading Commission) website, one of those things being a
spreadsheet of net monthly capital statements for all Forex brokers.
The important information in this spreadsheet are the Adjusted Net Capital and Net Capital Requirements
which is the amount of capital each firm possesses in excess of minimum
set by regulators. By looking in this spreadsheet, one can make
assumptions of the financial stabilility of their broker.

You can find the spreadsheets at http://www.cftc.gov/tm/tmfcm.htm

You can also visit their website at http://www.cftc.gov/cftc/cftcbeforetrade.htm.

An even more beneficial site is provided by the National Futures Association which provides the Background Affiliation Status Information Center where you can lookup Commodity Futures Trading Commission (CFTC) registration
and NFA membership information. This information is contributed by
NFA, the CFTC and the U.S. futures exchanges.
This is an excellent site to find out if your forex resource is reputable.

http://www.nfa.futures.org/basicnet/

 

Why is there so much advertising on your site?

I've seen other sites and it could be a lot worse.  In addition, I'm providing more quality content than advertising which is more than I can say about other sites.  

Believe me when I tell you that I'm not making a lot of money advertising.  It's barely enough to pay for all of the expenses incurred from running this website and this doesn't include my time.   I run this site on a totally dedicated server in a co-located facility which provide me with bandwidth, datacenter space, backup solutions, and more.  Before I started advertising, this cost came right from my pocket.  Now it comes from Yahoo Publisher, FXCM, GFTForex, and other sponsers.  I'd be crazy to not take their money.

Just because I allow forex brokers such as FXCM or GFT Forex sponser my site doesn't mean I recommend using them.  I remain indifferent as to whether you should utilize these sponsers.  I do use FXCM as a broker though.

I would never allow advertising from a site that I believe to be fraudulent.  Though some of you might not agree with forex broker behavior, it's pretty much the standard in this industry right now.  

Are you being honest with your postings and results?

Absolutely.  The proof should be that I haven't been at all profitable during my first year of trading and I've admitted it. 

This blog is just as much for me and it is for you.  I consider it my forex trading journal and I reference content on it everyday.  I could have just as easily kept all the content on my computer and not put it on the web but I chose to publish it to everyone so that others can benefit from it.  I only have good intentions here.

How do you rank your top 100 forex sites?

It's actually now the top 200 forex websites and can be found at:

http://www.forexproject.com/Top_200_Forex_Sites/ 

These rankings are pulled from Alexa's
traffic rankings.  To get a little more detailed, these are the top 200
sites pulled from the DMOZ category Business / Investing / Commodities and Futures / Forex /  

DMOZ
is a pretty reputable hand edited directory and Alexa has it's
limitations on knowing exactly how much traffic a site gets but it's
the best that is out there. 

Next Page »