Lessons Learned From Making a Little Profit Today

May 17, 2006

I have 2 totally different subjects I want to talk about today. The first relates to the question, "When are the best times to trade forex?" Now I can tell you that I used to trade whenever I felt like it. "I'm bored, let me trade during the Asian session. I'm bored, I want to trade in the afternoon, 3 pm EST." As an absolute beginner, you're told that Forex is a 24 hour market. YES, that may be true but a lot of you that have been doing this for a while know that just because it's a 24 hour market doesn't mean you actually should place a trade at any time around the clock. A lot of what I'm talking about relates to the shorter time frames and also if you want the best entry on longer term charts. Most of the time, if you trade outside of the European and US sessions (2 a.m. EST - 11 p.m. EST) your chances of getting stopped out definately increase from my experience. Of course you have a great chance of getting stopped out during the 2-11 time frame but you also have a greater chance of hitting your target. I've found the Asian session almost untradeable. There is absolutely no volatility or direction and the time it takes to watch the market isn't worth what you may get out of it. CORRECT ME if I'm wrong but if any of you have found a successful way of trading the Asian session, let me know. You could stick to higher volatility pairs like the GBP/JPY but with a 9-11 point spread, your already in the hole if you place smaller stop losses. After 11:30 a.m., there are times when you can catch some volatility but I generally exit my positions around lunchtime because a lot of the time you just get consolidation.

The second thing I want to talk about are my entry mistakes.

I think it is important to mention the numerous times that I have been burned when I've entered a position a bit too early. Generally I have 2 rules when channel trading during higher volatility sessions especially when I'm trading the 15 minute charts:

Entering before the candle closes is a big NO-NO unless #2
Allow the price to push at least 10 pips past your channel line

Today wasn't a bad trading day, I made $320 but should have made twice that amount. I entered long on the GBP/USD when it closed above the upper channel by 1 pip. The problem with this is that I'm putting too much faith in my charting software and not taking into consideration that momentum may have waned and this is just the tailend of the upward move. For example, forex quotes are not the same amongst brokers and software providers. An upper channel line drawn on Esignal chart may be different from an upper channel line drawn on a Tradestation chart. So just because the GBP broke the upper channel line on my Esignal chart today doesn't mean that it broke the upper channel line elsewhere! So I could have increased my chances of profiting if I would have given the price a little more breathing room. I'm learning from experience that not giving the price a little breathing room or not waiting for the candle to close can cost me money.

Week 17 Performances

April 16, 2006

I jumped back into the market this past week and made 2 losing trades. I lost a total of $539.50. It seems like the losing will never end. I'm not discouraged and I'm looking forward to another trading week. The weather has been beautiful in New York this weekend so I've been outside and will try to remain outside for the remainder of it. I'll try to do a little studying this evening for potential setups during the Asian session today or the US session in the morning.

I figure this may be a good time to mention a new website I'm developing to complement "The Forex Project." The new site is called Forex Care and it will consist of ratings and reviews of all Forex products. There are no reviews as of yet but I'm just starting to get organized and hopeful will complete 1 in the next couple of days. I don't want to just start adding reviews quickly without being as thorough as possible. I've found out for myself and have heard from some of you that it is so hard to find forex related products (websites, books, trading signals, software, etc) that aren't just flat out garbage. Here's my first post of http://www.forexcare.com that explains a little more.

What is this website all about?

Quite
simply, I've seen for myself and have also heard from many visitors how
hard it is to disseminate useful forex information on the web from just
plain garbage. This is the big reason for starting the Forex Care
website. What this website will attempt to do is provide a repository
of Forex Ratings and Reviews of the following:

Forex Brokers
Forex Software
Forex Trading Rooms
Forex Signal Services
Forex Books and Magazines
Forex Websites

These are the main categories that come to mind but I'm sure there will be many more added in the upcoming months.

Who performs these reviews?

Me and hopefully others in the future.

Why are you qualified to perform this?

There are a couple of reasons.

I'm
relatively new to Forex and have been trading Forex for about 6
months. This means that I'm still in the exploration phase and
therefore will be exposed to many forex products.
I run another website called, The Forex Project and doing so exposes me to a lot of your comments and recommendations.
Because I am going to take the time to effort to perform the ratings and reviews without prejudice.

I'm
hoping that I can start to build a ratings and reviews inventory pretty
quickly. Keep your eye on this website for new content daily.

Candlestick Studies for Next Week

February 25, 2006

I’m attaching a graphic of 8 currency pairs and their corresponding weekly candlestick patterns provided by Metastock software. Going into next week, we see:

EUR/USD: Engulfing Bear
AUD/USD: Doji Star
EUR/JPY: Engulfing Bear