Items Tagged With buy

Thanks to Forex2stay for the following comments.  Visit his blog at http://forex2stay.blogspot.com/

I do think it's possible, but I believe money mangement is the key. This needs to be a marathon not a sprint. One thing I've realized is that you can't use the same lot sizes for all of your trades. For example on one trade you might be risking 30 pips and another 20 pips. So if you trade 4 lots on both of them (standard account) you'd be risking $1,200 on one trade and $800 on the other. That's not good money management and it can get you a person in trouble.Here's what I do.....

When I position trade (4hr and daily charts), I won't trade unless I have a 2:1 risk reward ratio. I figure out the proper stop loss for my trade, based on TA. So for this example say that's 40 pips. I then make sure based on TA that I'm comfortable getting at least 80 - 120 pips profit. Once i'm comfortable I put my information into the following formula.

S=(E*R) / (P-X)

S = Size of Trade
E = Account size (Cash)
R = Maximum Risk percentage per trade
P = entry price on the trade
X = pre-determined stop loss or exit price

So let's put in some numbers.....

My account size $10, 000
Entry price on EUR/USD 1.2600
Currently I'll risk 3% of my account on a trade
My pre-determined SL is 1.2560

So how many shares of EUR can we buy with our money management rules??

S=($10,000 * 3%) / (1.2600 - 1.2560)
S = $300 / .40
S= 75,000

Anyway this is the way I do it. I hope it helps...

Forex2stay

I picked up a copy of the March Issue of Stocks & Commodities magazine this weekend.

There is an article that explains the use of candlesticks and moving average crossover as a strategy.  This is yet another setup strategy that I like for its simplicity.  As long as you can chart 2 moving averages and identify candlestick patterns, you can use it. 

The simple idea is that as moving averages crossover, the candlestick that forms during that crossover can be used to identify the possible direction of the market.

You can read a snippet of the article at http://www.traders.com/Documentation/FEEDbk_docs/ForexFocus/FOREXfocus.html

To read the full article, you need to buy the latest issue of Stocks & Commodities.

According to a variety of economic indicators, Japan is now the fastest growing economy in the G8 Industrialized countries. Further, it seems Japan has definitively succeeded in ending a decade-long deflationary spiral, during which its nominal GDP declined. Japanese economists have hinted that the Bank of Japan may soon end its ultra-loose monetary policy. This move, which will take the form of higher interest rates, has even received the support of Japanese politicians, who previously seemed ambivalent. While the rate hikes will not occur for a couple of months, currency traders are already beginning to buy Yen based on the prospect of a narrowing interest rate differential between Japan and the rest of the developed world.

Read More: Policy hope propels yen’s rally

Raghee webinar visitors!  Read my previous posts regarding Raghee especially the posts regarding her  EZ2Trade software where if you buy it directly from Divergence Software costs extremely less than $195 a month.

Raghee Horner Previous Posts

One of the most fundamental principles of macroeconomics dictates a nation’s currency should depreciate when its current account balance is negative, in order to induce foreigners to buy its products and services. What happens when foreigners substitute their purchase of goods and services for stocks and bonds? This is precisely the question that economists and currency traders have been asking themselves for years, as the US current account deficit has ballooned while foreigners continued to purchase American assets. According to the most recent data, foreigners are on pace to buy nearly $1 trillion of American debt and equity this year. This number has remained fairly constant and suggests the USD will remain buoyant until demand for US assets declines.

Read More: Foreigners Flock to U.S. Securities

I'm a little behind when it comes to buying computer equipment.  From being in the business for quite some time, I have a lot of spare equipment laying around so I never feel the need to go out and buy anything.  I did just make a purchase today though.  I ordered a 20.1 inch wide aspect flat panel from Dell for under $500.  I'm looking forward to viewing my charts on this screen as opposed to my 15" Flat.