Items Tagged With november 2006

I've been keeping busy and trading.  With 2 days left in November, I'm down 38 pips.  This really isn't that bad considering how disorganized my trading has been this month.  Specifically, I've been trying to discretionary trade for a couple of weeks and this has proven to be a work in progress.  For instance, yesterday I tried and tried to get short on the USD/JPY but after much work, I wound up down over 100 pips.  I was off from work yesterday and kept my eye on the USD/JPY chart most of the day and night.  Before going to bed, I put my orders in for any possible H-system trades that may occur during the European session.  A trade did trigger and I quickly profited 90 pips.  The physical and mental work that went into the failed USD/JPY trades was just so overwhelming compared to the semi-systematic H-system trading system.   

ARGHHHHHHHH!

1. "I think the market is going to..."
2. "There is no way the market is going to..."

There is no predicting what's going to happen next with anything.  I think it's better to just go by what the data is giving you at this very moment and make a decision based on that.  

Here are some comments on my post, 10 Things I Have Learned Trading FOREX.  I'm posting them on the front page because the comment system is so dysfunctional right now due to the neverending attempt by spammers to dilute its usefulness.

1. Your last comment is absolutely right. The markets, whatever you are involved in, and Forex is no exception, are moving on basic emotion i.e. fear and greed. A demo account is useful only for the mechanics of a particular brokers systems. There is no substitute for having your money in the market and then dealing with your emotions.  (Posted by traderjoe)
2. I have been stopped-out on two occasions by my broker on "one-minute dips," when the 15 minute chart was totally in my favor. As a result, I got much looser with my stop-loss placement. Tight stops = an automatic grabbing of your money by the brokerage firm, and they have the technology to pull off that stunt. Best counter strategy is to baby sit - actually monitor for direction for a while after taking a position. Have to do this with loose stop-loss levels as compensation for putting more money at risk. (Posted by Rob)
3. Excellent points! (Posted by Rocko)
4. I cannot begin to express how helpful your blog have been to my still-novice trading this last year. This insightful entry is no exception. I believe I speak for most when I say we appreciate the honesty, selfless sharing of information, and your contagious diligence (how many hours exactly do you sleep man?!). Keep it up. We're counting on it. (Posted by Fx Trader)
   

I just finished this flowchart that summarizes the flow of a trade using money management techniques.  Of course, this is totally discretionary from the amount of lots traded, stop loss placement and target profit placement.   If it's useful to me or you, maybe I'll add hyperlinks to pictures of chart examples. 

Thanks to Daily Dopeness for mining this information and ~chaffcombe for providing the content.  Here is what you should be clearly thinking about during each and every economic announcement at this point in time:

"Finally, 99% of market moves following economic announcements are based upon perceptions on how the information may affect interest rates. If it’s bullish for rates, the price goes up; if it’s bearish for rates, the price goes down."

Since I have deemed this week, "Money Management Week", I felt like I should mention a new Investopedia article titled, "A Logical Method of Stop Placement." I'm not overly impressed by the article but you might find it more useful than I did.   The author gives a brief overview of 5 different types of stop methods:

1. Hard stop - placing a stop a predefined number of pips away from the entry price
2. ATR % stop - stop calculated by taking a percentage of the current ATR
3. Multiple day high/low - placing stops at predetermined day's low or high
4. Closes above/below price levels - placing stops above or below specific price levels (ie: double zeros)
5. Indicator stop - stopping out a position based on the value of a certain indicator (RSI, ROC, CCI, etc)