Items Tagged With Forex Trading

I've added a new feature to My Trade History.  Next to each trade is a commentary link.  Click on the commentary to find out why I decided to make a trade and what was going through the mind of a forex rookie at that moment.  Not every trade will have commentary but I'm trying to make this few and far between....

I'm learning more by enhancing My Forex Goal page.  I've added a couple more columns:

From evidence of both weeks performance, you don't have to win as many trades as you lose.  This is obviously contigent on your ability to place stops to limit your losses.  This week (week #2), my average pip loss is only -15.33 which shows how tight I've been placing my stops. 

I've been very busy and if you don't see a lot of posts coming through, that is why.  This is temporary until the wave passes.  The good thing is that I haven't stopped trading.  I've actually been pretty active this month, which is turning out to be quite a good one so far.   

I've decided to post something from a guest writer.  It's original material specifically written for the Forex Project.  Hope you enjoy.

The successful forex trader never loses sight of the big picture. There are hundreds if not thousands of factors that contribute to the strength or weakness of a given currency relative to any other and it is best to avoid getting bogged down in an attempt to wade through this endless swamp of variables. Keeping that in mind, there are certain issues that all forex traders should stay apprised of in order to make the most of their investments. If you make any trades at all involving the US dollar, you had better become a bit of a political junkie.

American politics can affect the dollar in dramatic ways. Every shift in US politics can affect exchange rates, from new legislation and big policy changes to seedy scandals and small shifts inpublic opinion. If you can learn to read the signs, then keeping an eye on the ever-changing political landscape can help you predict which way the dollar is headed. Acquaint yourself with the ins and outs of our government and its political process and you’ll not only become a better citizen, but you might soon be a much richer one as well.

1. The never-ending election cycle: Learning to predict whether foreign investors will react positively or negatively to the periodic changes in our government is a difficult task, but gaining such foresight will be well rewarded. The relative suspicion of or confidence in any new administration can cause investors to buy the dollar in bunches or sell it as fast as they can.
2. The popularity of the Oval Office: Foreign investors tend to show more confidence in a solid leader of the executive branch and often view a popular president as a strong president. Therefore, the rise and fall of the dollar often tends to be closely connected to the current US president's rise and fall in the opinion polls.
3. Consumer tax cuts: At least in theory, tax cuts or tax rebates should almost always have a bolstering affect on the dollar. Tax cuts are intended to fuel consumer spending and improve the economy, much to the benefit of the dollar. Troubles arise, however, when tax cuts coincide with government expansion and therefore increase the national deficit, a result that can ultimately weaken the dollar.
4. Growing government: Speaking of government expansion, the dollar can be adversely affected by the addition of new government programs that draw funds from other allowances in the budget. The relatively recent creation of the Department of Homeland Security and the vast expansion of the Transportation Security Administration are timely examples of how this type of expansion can influence the dollar.
5. Credit history: Part of what has kept the dollar so strong for so long has been the US government's excellent record of not defaulting on its debts. The nation's increasing deficit has been disturbing the dollar in foreign markets, and if US government's credit begins to suffer, the dollar will surely head south.
6. War: Terrorist attacks can impede economic growth by destroying consumer confidence and curtailing spending. War is expensive and leads to further debt, making foreign investors nervous about the increased risk of default. The dollar can be buoyed by victories and deflated by defeats, so the dollar will be in flux for as long as conflict continues.

Heather Johnson is a freelance finance and economics writer, as well as a regular contributor for CurrencyTrading.net, a site for currency trading and forex trading information. Heather welcomes comments and freelancing job inquiries at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

I was short 3 lots on the GBP/USD since the European session today and I was just stopped out on all lots.  I lost a total of 111 pips using my H-system or $1100.  I followed my rules without any deviation and though it sucks to lose, I've accepted it.  It actually feels easier to lose when you follow the rules. 

Some of you may not be able to relate to this analogy but I find this similar to when you finally take financial responsibility for your debts.  I have huge student loan debt and when I graduated, I put my loans in forbearance which is basically like saying, "I'll pay you back when I have a good job and when I'm not spending all of my money at bars." Even though your loan is in forbearance, the interest still accrues and you'll just have to pay back more later.  Eventually, I decided to get my *&!# together and made a plan to pay off this debt within 12 years.  This was 5 years ago and I actually feel good writing that large check every month to the student loan lenders because each check gets me closer to my goal of paying the loan in full.  If I didn't have a plan, I could have just blindly started sending them the minimum payment which as some of you credit card debt holders know is the kiss of death.  Since I had a plan, I started sending them a lot more than the minimum payment, actually it was almost double the minimum payment.  I was putting a substantial amount each month towards the principal and not just the interest.  My analogy is that if you have a trading plan, even if you lose, you kind of win.  If you want to win in the game, you have to be willing to lose and if you can accept that fact, you won't get bent out of shape when you do lose.  This loan was an investment in my career and if I didn't have this education, I wouldn't have this wonderful full-time back breaking job.  Even though I have a stressful job, I get paid enough to pay all of my bills and save some money.  I get paid a lot better than other people I know but if I didn't have the education that I have, I may be living paycheck to paycheck or I might not own a house.  So it's a fact of life that to make money, you have to be willing to spend money.  

Firstly, Happy New Year.  Remember that reasonable new year's resolutions promote success.

Secondly, the Wall Street Journal says the dollar usually posts modest gains in January regardless of events and data.   Will Dollar Get a Pop?  

Thirdly, I don't care what the WSJ says.  I'm sticking to my rules.  I went GBP/USD long this morning and started off 2007 with a 96 pip gain.

I think it is important psychologically to get off on the right foot.  Bad habits tend to propagate with me if I slip just once.

FWIW, the trend is still in place on both the above pairs so I'm rather hoping that you changed your mind about the EUR/JPY and went with it.  I  know it can be difficult to comprehend that a trend will continue when it  is seen as already having gone quite far but such in the nature of trends  in general that selling Yen was the only trade to make.

I've been watching the charts today and from what I've seen and heard, range trading will rule.  With Thanksgiving in the USA approaching, volume should be light on Thursday and Friday. 

I'm working on Friday (I work for a major financial) so there will be a NY trading session but I'm sure I won't see a majority of traders going to work Friday morning. 

After an almost six month hiatus from day to day trading, I got back into trading forex at the end of October.  Since then, I've tried to follow the economic news more consistently, tried to post more regularly to this blog, and tried to get back into the flow with between 1-3 currency pairs.  Though I've "tried", I'm not quite where I want to be and never quite sure I ever have been.  This may just be the best that I can do considering I have a full-time job and other responsibilities (similar to a lot of you.)  One thing that I think I can do to improve my trading is to get in the flow with the market during the European/US session overlap.  As of yet I haven't been able to but I think all this requires is changing up my schedule a bit so that I'm in front of my computer at around 7 am EST.

November could have been an up month for me had I not lost my last four trades.  Losing streaks are all part of trading though, so I don't feel too bad that I'm down 2%.  

What did I do wrong in November? I jumped the gun on a couple of trades this month before my systems showed buy/sell signals.  This wasn't due to impatience but more because I felt my signals would generate while I was sleeping.  I lost a couple of trades because of this and will try not to make this mistake again.

What did I do right in November? I feel like my position sizing strategy controlled my risk very efficiently.  There would have been another time in my trading career when I'd be down a lot more than 2% when being down 290 pips during a particular month.  

I'm not going to change much going into December because I think I have a good base to build on.