I Am Oanda

My funds finally cleared at Oanda yesterday.  I traded using their FXTrade platform for the first time this morning when I went short on the GBP/USD.  Anytime I've traded this pair in the past, I've just expected to hand over 4 pips per lot to do so but with Oanda, the spread on each my lots were less than 3 pips; I believe it was 2.8 pips.  I understand that Oanda though just makes this up by charging higher spreads during news trades and less volatile times. 

First impressions are good with the exception of the reporting.  I've been trying to find where I can get a P/L statement that shows each of my trades with their respective profit/loss.  It doesn't seem to exist so you just have to go through the transaction report and calculate yourself.   I knew this going in but don't expect to trade using their charts unless you are a scalper.  You want to use an external chart solution.  The fact that you can enter a trade of any size is unbelievable and during the upcoming week, I may decide to decrease the size of my trades while my H-system is still in its infancy.

I pulled off my second straight win this week with the H-system capturing 67 pips this morning.  I'm happy that I was at least able to end the week on a positive note.  The H-system (name change is in the works) lost 94 pips for the week but for the month of September, the system ended with a PROFIT of 294 pips.   This was the profit from mid-September when the system was put in production.  From my backtesting, I'm not surprised that it has been profitable but I never paper traded the system so you never fully know until you start throwing real money at it whether the results would be similar.  This type of profit for a half of a month is the type that I can probably live on.   It won't be more than what I make from my full-time job but it could be sufficient.  Nevertheless, this system would have to consistently produce these results for at least a year before I considered trading it full-time.  

Considering I squeezed whatever I could get out of the GBP/USD this morning on its limited movement,  I'm going to end my trading week now.  It's like walking away from the poker table.  Don't ever think that just because you won a trade, you can be riskier with your winnings and place a trade that breaks your rules.  This is what get people in trouble.  I've never had a problem walking away and I'm going to do that until Monday.

Hope you had a great week.  

Popularity: 3%

Nice Big Move from the GBP

We got a nice juicy move out of the GBP/USD this morning and I was able to turn things around after my trading system lost 3 straight.  I was able to capture 118 pips.  Once my trade executed, there was never any danger of my stops being hit.  These types of trades make trading so enjoyable.  

By the way, I was interviewed for Currency Trader Magazine yesterday so I may be in the upcoming October issue.  It's not definite though but when it is, I'll let you know. 

Popularity: 3%

Reevaluating My System

After almost 2 weeks of trading my plainly named system, the "H-system", I've received mixed results.   Results looked great after week #1 but since then, I've suffered 3 straight losses on Monday, Tuesday, and today.  So far, this system has 5 wins and 5 losses but I'm still up 109 pips or $1090.  

I said earlier that I may need to reevaluate my stop loss strategy which I am now doing.  The last 2 losing trades could of easily have been wins instead of losses.  To address this issue, I've decided to tweak my system a bit.  I've widened my stop loss and have moved it to the next level of support and resistance.  Whereas before, I was setting my stops at the 2nd level of support/resistance, I am now moving it to the 3rd level of support/resistance.  This will on average increase my stop loss by 6-10 pips per lot and therefore increase my risk.  I will only be using the 3rd level of support/resistance for the early morning European session where these spikes are happening.  If the US session opens and I'm managing an open position, I will move the stop loss back to the 2nd level of support/resistance.  If a trade is initiated during the US session, I will continue using the 2nd level of support/resistance.   

So I've increased my exposure a bit and I'll just have to wait and see how it turns out. 

Popularity: 3%

Is Home-based Trading For You

I received the new issue of SFO Magazine (Stock, Futures, and Options) yesterday and I've found this issue well worth reading. 

Particularly, one article asks the question, "Is Home-based Trading For You?" Even though this is exactly what I'm striving for, sometimes I forget that there is a lot to take into consideration before even thinking about taking the plunge.   Have you thought about it?

When I first started trading last year, I remember giving myself 1 year to start trading full-time.  Some of you who had been doing this longer pointed out that I wasn't being realistic.  I wanted to remain optimistic so I stuck to it but eventually did realize that it was absurd to ever think it could take me only 1 year.  In this article, the author states that you should count on at least 4 years of practice or part-time trading.  You are jumping into a world dominated by professional killers.  You have to be ready.  

Are you Realistic?

I am.  I know that day trading isn't a get-rich-quick scheme.   No seminar or special offer on the internet is going to help you. 

I also realize that the learning curve is steep and like I've said before, the longer you can survive during the first few years, the better chances you have of making it.  Allocate a certain amount of money that you know you'll lose.  Think of it as the cost of educating yourself with market experience.  Don't blow it all in a month because if you do that, you'll be out of the game and have no way of getting that all important experience. 

You cannot underestimate the amount of time and practice that learning how to trade takes.  Trading Forex has consumed a lot of my time but I love the challenge and enjoy learning how to trade.  If you don't have the dedication, rethink if you want to ever day trade.

If you do take the plunge, are you ready for the limited social interaction at home you will receive.  I understand this and I'm ready.  I also have an option of finding a trading partner and trading out of a small office.

Can You Handle Being Wrong?

Robert Deel, a teacher who has tutored some 30,000 individuals and professional traders has found that some of the worst trading results have come from doctors, lawyers, engineers, and dentists.  Intelligence isn't the only necessary characteristic that you need for success.  You need to handle the fact that you will be wrong quite often and most likely more wrong than you will be right.

Deel found that younger traders often show a better trading record than seasoned MBA's.  Younger traders don't want to quantify every move by backtesting and second guessing.  They jump in and if they are wrong, they get out.  

Do You Blame Others For Your Failures?

Don't.  Take responsibility for your losses so that you can fix them and learn from them.

If you want to read this article, you can subscribe for free to the online edition or print edition at:

http://www.sfomag.com/subscribefree/subscribe.asp  

Popularity: 3%

Stopped Out Like Yesterday

See yesterdays frustration post! I went short on the GBP/USD with my stop at 1.8951.  The bid high reached 1.8951 this morning before doing the exact same thing as yesterday and declining.  My profit targets would have been hit.  2 days in a row.  The good news is that at least I lost less on this trade than yesterday's.   The bad news is it looks like this trade would have been more profitable than yesterday's.  Right now it would be a 130 pipper. 

Is my stop loss too narrow? Do I need to increase my risk by widening the stop loss? I think I have to re-think my stop loss strategy.  Things could be worse I guess.  My strategy was "narrowly off" in what could have been two profitable trades.  I know it's easy to say "what could have been" but I did get the direction right.  

Popularity: 3%

Currency Trader Magazine Removed

I had to remove all Currency Trader Magazine PDF's from this website as requested from ActiveTrader magazine. 

Popularity: 3%

Trading Can Be Frustrating Sometimes

I don't know if the so called "professional traders" let a losing trade go to their head but it bothers me because after all I am human. 

During the European session this morning, I had a signal to go short.  I placed my stop at 1.9008.  A little after 4am, my stop at 1.9008 was taken out.  The price did not go any higher than 1.9008 and preceded to go back down where it would have hit my profit targets.  There is nothing more frustrating than having your stop at exactly the wrong place!  If I had placed my stop at 1.9009, I would have profited at least 100 pips.  Instead, I lost 87 pips.  This is an $1800 swing against me.

Like I said, I'm human and even if I do eventually trade full-time, I don't see how things like this won't ever bother me.  I also have a hard time believing those who say that a losing trade never bothers them no matter how professional you are.  I'm also not one to dwell on blaming others for my losses.  Someone might say, "the broker took my stop out!" This would be something beyond my control so I don't even think about it.  If I never wanted to get stopped out then either I shouldn't use stops (not a good idea) or I shouldn't trade.  No broker is perfect and I'm not about to blame any unless it is blatantly obvious.  It doesn't mean I won't question their tactics but I won't blame them when I lose.

Even though this trade loss is bothering me, I am not going to let it sabotage my trading.  I am disciplined enough to not just jump into another trade because I have to make this money back.  I think this is more important than anything.  If a losing trade is going to bother you, don't let it carry its negativity to your next trade. 

So this is really a journal entry because I'm entering it while I'm still a bit frustrated by this loss.  This is probably a better time than ever for my feelings on this trade to be recorded.

Popularity: 5%

All Pivot Points

After a day straight of development, I've completed a good portion of my new site, http://www.allpivotpoints.com.  The site contains pivot point calculations for FOREX, CBOT, NYBOT, NASDAQ, NYSE, CME, and more.  There are still a lot more features to add but functionally, today the site provides pivot points for over 50,000 securities.

Popularity: 3%

Do-it-Yourself Trading

I receive a lot of emails daily but one in particular caught my attention.  This person states the following:

"Plz, I am new in the markets and I have lost a lot.  I wanted you to help me and tell me what I have to do."

This is strictly my opinion but there are a couple of things I see wrong with the approach this person is taking.

1. If you are new to the markets and risking a lot of money, of course you're going to lose a lot of money.  Open a small account and play with only the money you can afford to lose.
2. He wants me to help him? I'm having a tough enough time myself. 

I have come to the realization that absolutely nobody can make you a successful trader.  You have to mold yourself into a successful trader.  Trading is no different than any other thing in life.  When you fall, you have to get up and keep getting up no matter how many times it happens.  No one is going to hold your hand through this learning process. There are so many mentors and forex teachers out there but they ultimately will not help you.  They may steer you the right way or put you on the right track but after that, you're on your own.  I'm not saying that none of them are legitimate, I'm just saying that even if they give you a step by step trading manual, this does not guarantee anything! I signed up for Rob Booker training quite some time ago and though I sometimes think I wasted $1000, this isn't necessarily true.  All the information I gathered and all the things I've learned over the last year have stuck with me and have molded me a certain way.  The jury is still out on whether these things will ever lead to me being a consistently profitable full-time trader but there is only so much you can do.  If 2 years from now I'm still making the same mistakes and I'm not consistently making money, I will just have to accept the fact that I'm not cut out for this business.  Some people may find this out a lot sooner and one way to do it is to throw money you cannot afford to lose into a live account when you have no experience.  

The whole point of striving towards the goal of trading full-time is so that I don't have to rely on anyone to support me financially, tell me when I can take vacation, get annoyed when I legitamitaly call in sick, tell me when I can eat lunch, tell me to drive to work in 10 inches of snow and so on.  Working for someone flat out sucks and this is what keeps me going.  

So, I cannot tell anyone what they need to do because I don't have the experience to do so and even if I did, it wouldn't help.  You just have to be smart with your money because one of the most important things is lasting long enough to get the experience that may lead to success.  It is also absolutely necessary for you to have the motivation and dedication to march on no matter what happens.  

Popularity: 1%

Nice End to the Trading Week

I had another good trade with my new system during the European session this morning capturing 60 pips even though I muffed the trade.  Instead of putting in a 3 lot trade, I only put in a 2 lot trade.

I'm happy with the way things are going right now.  Before I started trading this system, the results from the end of August and beginning of September showed that it produced 10 wins out of 11 trades with a profit of over 700 pips.  Since going production, I've produced 5 wins out of 6 trades and over the last 10 days, the system is up 388 pips or $3880.  

Even though I pretty much know my entry when I go to bed, I still need to manage the trades if initiated during the European session.  If a position opens, my phone lets me know so it wakes me up out of a dead sleep.  Over the last year of dedicating a lot of my time to learning this business, more times than not I'm a walking zombie.  I think that if you want to make it day trading the FOREX, this is necessary and the price you have to pay.  So if you like the movement that the European session has to offer and you have a full-time job in a US time zone, be prepared for sleep deprivation.  I'll try to catch up this weekend but I doubt I will.

Popularity: 1%

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