Forex Trades & More

Forex & Oil Trading

2010-06-04T01:52:00.000-07:00

Good Morning Traders,

THE FOLLOWING TRADING SIGNALS ARE A ANALYSIS OF GBP/USD, EUR/USD & OIL

EXPECTATIONS FOR TODAY’S TRADING

All times are UK.

Announcement information is taken from http://www.forexfactory.com

High Impact Announcements for Today
09:00 GBP Halifax HPI m/m 0.3% -0.1%
12:00 CAD Employment Change 16.8K 108.7K
12:00 CAD Unemployment Rate 8.1% 8.1%
13:30 CAD Building Permits m/m -1.8% 12.2%
13:30 USD Non-Farm Employment Change 529K 290K
13:30 USD Unemployment Rate 9.8% 9.9%
15:00 CAD Ivey PMI 59.8 58.7

Medium Impact Announcements for Today
Day 1 ALL G20 Meetings
08:40 CHF SNB Chairman Hildebrand Speaks
13:30 USD Average Hourly Earnings m/m 0.1% 0.0%

Trading Chances for Today
GBP/USD

Long @ 1.4650
Take-Profit @ 1.4690-1.4710
Stop-Loss @ 1.4630
Short @ 1.4610
Take-Profit @ 1.4590-1.4575
Stop-Loss @ 1.4630

EUR/USD

EURUSD also lost some strength over night and is now in a mini sideways range.
Long @ 1,2220
Take-Profit @1.2280-1.2300
Stop-Loss @ 1.2175
Short @ 1.2140
Take-Profit @ 1.2100-1.2070
Stop-Loss @ 1.2170

Always take care of your stop management and consider your money and risk to reward ratio. Never over expose yourself.

TRADING TIP OF THE DAY

Anything can happen! You do not need to know what is going to happen next in order to make money.

To Your Trading Success

The Investor Guru

Forex and Oil Trading

2010-06-01T01:36:00.000-07:00

Good Morning Traders,

The Following Trading Signals are a Analysis of GBP/USD & EUR/USD

Rather neutral news from Europe has been the reason that EUR/USD did not leave its sideways range. There was an interesting short trade in USD/CAD in the afternoon where 29 pips were on offer due to good news of the Canadian Gross Domestic Product.

Expectations for Today’s Trading

After the early morning movement I will be expecting more volatility in the afternoon today.

Trading Chances for Today
GBP/USD
Early Cable losses and now appears to be parked in a sideways range.
Long @ 1.4555
Take-Profit @ 1.4595-1.4605
Stop-Loss @ 1.4520
Short @ 1.4450
Take-Profit @ 1.4385-65
Stop-Loss @ 1.4490

EUR/USD
EURUSD also lost some strength over night and is now in a mini sideways range.
Long @ 1.2320
Take-Profit @1.2370-90
Stop-Loss @ 1.2285
Short @ 1.2230
Take-Profit @ 1.2185-1.2160
Stop-Loss @ 1.2275

Always take care of your stop management and consider your money and risk to reward ratio. Never over expose yourself.

TRADING TIP OF THE DAY
Do you trade according to your trading system?
Yes? No?
Sometimes a small change can make big results. Maybe you should think about your trading system and maybe change it.”
Do you write down all your trades in a diary?

To Your Trading Success

Forex Trading & Oil

2010-05-26T23:07:00.000-07:00

The Following Trading Signals are a Analysis of GBP/USD & EUR/USD

After a sideways range in the morning there was a movement in EUR/USD in the direction of 1.2190 after good news from USA. In comparison to EUR/USD GBP/USD was stuck in a sideways range.

Expectations for Today’s Trading
After the early morning movement I will be expecting more volatility in the afternoon today.

Trading Chances for Today
GBP/USD had already some wins in the morning due to good news from Asia.

Long @ 1.4505
Take-Profit @ 1.4585-1.4620
Stop-Loss @ 1.4445

Short @ 1.4350
Take-Profit @ 1.4285-50
Stop-Loss @ 1.4410

EUR/USD was a similar picture to GBP/USD

Long @ 1.2320
Take-Profit @1.2385-1.2410
Stop-Loss @ 1.2255

Short @ 1.2135
Take-Profit @ 1.2085-60
Stop-Loss @ 1.2195

Always take care of your stop management and consider your money and risk to reward ratio. Never over expose yourself.

TRADING TIP OF THE DAY
“What about your trading system? Do you trade according to it? Yes? No?
Maybe you should think about your trading system and maybe change it.”

To Your Trading Success

The Investor Guru

Forex & Oil Trading

2010-05-04T04:13:00.000-07:00

EUR/USD…Greece we are coming!!!

Hello Friends and Traders,

There was a long lasting sideways range in the EUR/USD chart. However, I had some fine trades in GBP/USD & Oil.

Profit of the day: 52 pips.

In the morning I did not expect this result, it was a bank holiday in the UK and there have often been false break-outs, mini trades with only a few pips.

Looking Back
After a range between 1.3205 and 1.3250 the course of EUR/USD and GBP/USD lost a lot after Germany’s Chancellor Angela Merkel promise for the Greek aid package.

It seemed as if the whole world was waiting, will it go further on with Greece.

Further the economic news of Switzerland, the European Currency Union and USA has been positive.

However, let’s stop talking here. It is more important, how the markets will go on today.

High Impact Announcements for Today
09:30 GBP Manufacturing PMI
15:00 USD Pending Home Sales m/m

Medium Impact Announcements for Today.
07:00 EUR German Retail Sales m/m
09:30 GBP Net Lending to Individuals m/m
15:00 USD Factory Orders m/m

However, let’s wait and see. I would expect more movement in GBP/USD than yesterday; also in EURUSD it could be more volatile when Wall Street opens.

When the markets are trending sideways like they are at the moment, they can be more difficult to trade.

Forex Trading Chances for Today
EUR/USD
EUR/USD lost a lot this morning due to the finished Greek package of the EU.
Today morning 04:30 GMT the cross pair is in a range between 1.3186-1.3214.
I would see trading chances for long above 1.3230 with take-profit at 1.3295-1.3320 and stop-loss at 1.3190.
For short there could be some chances below 1.3170 with take-profit 1.3120-1.3070 and stop-loss 1.3195.

GBP/USD
For GBP/USD it’s the same picture. The cross pair is now in a range between 1.5230-1.5264.
I would see trading chances for long above 1.5285 with take-profit at 1.5340-1.5360 and stop-loss at 1.5245.
For short there could be some chances below 1.5210 with take-profit 1.5140-1.5100 and stop-loss 1.5260.

Always take care of your stop management.

Trading Tip of the Day

Always check your trading and look at different time scales.
What can you see?
Look at the 4-hour-chart, 1-hour-chart, etc. Until you reach your favourite time scale for trading your given strategy. You will see a different view point and this could aid your trading.

To Your Trading Success

Forex Trading 12/04/2010

2010-04-12T00:40:00.000-07:00

Good Morning Friends,
It feels like I have been away for a long time...some might say I should have been.
I even got up later than I would normally have done. I did one early trade, before my 08:00 GMT. Because it was this early I was only looking for a 10 point limit.

Cable Early Trade

I am now taking my children out for the morning so will not be trading for a few more hours. I will be waiting for 14:30 GMT which is when Wall Street opens.
Have a good mornings trading and I will catch up with you all a little later.

To Your Trading Success

The Investor Guru

Forex Trading 06/04/2010

2010-04-05T23:02:00.000-07:00

Morning Friends,

I hope you have all had a good few days rest over the holidays. The mother of a friend of mine died over the weekend, my thoughts are with you Farai.

Well an early morning couple of trades for me today. I traded my stochastic strategy on Oil, entry 8645 and took 8 points at 8653. Very early for big moves and I wanted to make the week a really good one. I am going away with my family for a few days and we are all looking forward to it...No Laptops allowed!

Well just time to tell you of my trade on Cable...Had been talking with a friend in the states and we were discussing shorting Cable at the S1 level of 15241. It had been using this as resistance all morning so when it shot up earlier we both jumped on. See below how the trade went.

Well I am off now to enjoy a week away with my family...No electronic items allowed.

The Investor Guru

Forex Trading 01/04/2010

2010-04-01T10:04:00.000-07:00

Good Morning,

And for all the people that understand "Pinch-Punch 1st of the Month!

If some of you out there think that I just roll out of bed and put on a couple of trades then hobble back into bed then I am going to give you a little insight into how my days is.

05:00 get out of bed, put the kettle on to make a mug of tea (Most important at this time of day) I drink Tazo Green Tea. Boot up Laptop's and PC's. While the systems are booting up, I read my Beliefs and then my Trading Plan, almost as important as the 1st mug of tea. Then log in to ForexFactory to check the data and put the information into a skype chat that I am a member of. Log in to IG Index and FXCM. Load the charts up that for the Pairs that I watch GBP/USD (Cable), EUR/USD (Fiber) and Daily US Light Crude (Oil). Decide on the levels of where I suspect the morning breakout to come from and draw lines. Today my entry short on Cable will be 15170 and my long entry is 15245 just above the R1 Pivot (R1 = Resistance 1) checking pivots and indicators for my strategy (although I generally do not trade it before 08:00 GMT). Now open up MetaTrader, again checking possible entry points for a pivot strategy that I trade.

05:30 once the 1st mug of tea has been drunk, make a second mug. Now that the information from ForexFactory has been disected and categorised, the only ones we are truly interested in are High Impact Announcments and Medium Impact Announcements. I place this in the skype chat for other members to view at a quick glance.

Now that these tasks have been done I then start to read. The book I am currently reading is "Way of the Turtle" by Curtis M Faith. This can be picked up at Amazon UK or Amazon USA. I read at least one chapter, always keeping one eye on the charts. As some of you may be aware I am writing my own book, I then write a few pages.

I bet you are thinking bloody hell there is a lot to do here, well before you know it the day is over. I am not even at 07:00 GMT yet.

Just to keep you informed, I think the holiday's have kicked in for some people, it is 10:30 GMT and I have not placed one trade yet. Well it is now 17:50 GMT and I have not traded all day. I gave up hours ago so I hope you all made money this afternoon UK & Europe and this morning for all my friends stateside.

Have a very happy holiday tomorrow. I will not be around again until the end of next week, we are going away for a week to unwind with the family.

To Your Trading Success

The Investor Guru

Forex & Oil 31/03/2010

2010-03-31T12:33:00.000-07:00

Afternoon Friends,

I hope you are all well and had a good morning trading. I have decided to put my blog together in the afternoon today so that I can take into account the Oil breakout trade I do in the afternoons.
So I will start with this mornings trade, which I might add is a good place to start. You may or may not be aware that for the morning breakout I normally set a limit of 12 points.
Cable Breakout 31/03

So then I was off taking the girls to school and missed a whole load of fun around 08:30 - 09:00 GMT. Oh well 12 points are in the bag.

I was thinking around lunchtime, why would you ever let a winning trade turn into a loser, or not have a systematic way of taking profits, if you weren't convinced the market was going your way indefinitely? Why would you hesitate to take a trade or not put it on at all, unless you were conviced that it was a loser when the market was at your original entry point? Why would you break your money management rules by trading too large a position relative to your equity or emotional tolerance to sustain a loss, if you weren't positive that you had a sure thing? and why would you, because you know that anything can happen when you are trading and you have your strategy. Your strategy has as many indicators that you need to help tell you when to enter the trade and when to exit.

Well it was pick up the girls from school time and then to the Wednesday Oil breakout trade. Very interesting trade this afternoon. There were quite a few significant levels to get to grips with. I had 2 OTO's (Orders to Open) placed, one long and yes the other short. I cancelled the long OTO, I was not convinced that the trade would go long, call it gut feeling or intuition. I left the OTO short and when the market changed it did with vengence and I was very soon triggered in, thankfully I was never out of profit and was very soon 20 points to the good.

Although I was very pleased with my analysis of the market and the execution of the trade, a lot of my friends were all triggered long around 8347 and lost around 50+ points each.

Here is to another day

To Your Trading Success.

The Investor Guru

Forex Trading 15/03/2010

2010-03-15T11:58:00.000-07:00

Good Morning,

In the UK over the weekend it was Mother’s Day. This is where we celebrate our mothers, mine lives a long way from where I do and I rang to wish her a happy day.

Do any of you follow Rugby Union, well my team Sale Sharks are having a bit of a bad year and so are England. I read in one report that Martin Johnson says that the team are improving, which England is he watching? He needs to stop kidding himself that he can coach. There, that’s my rant over with.

So on to this morning, and might I add that it is a very good morning, so good in fact that I am going for a round of golf and my beloved Golf Club.

So let me tell you the story of this morning. Well as per usual I got up 05:00 GMT. Did my usual boot up of the laptops and PC’s, more for Internet Marketing that my wife and I do. So nothing seemed out of the ordinary. I checked Forex Factory, there weren’t any fantastic announcements coming up. I started to reading “Way of the Turtle”. Checking the charts I noticed that Cable (GBP/USD) was ready for entry with my strategy. So it was around 07:36 I opened my ticket short, limit of 15 set. It wasn’t long after setting this that I noticed that AUD/USD was also ready so I opened up a ticket also with a 15 point limit, the next was Fiber (EUR/USD) and another ticket open. I have never been this exposed this early in the morning, three trades on the go and it wasn’t even 09:00 and all before my gorgeous girls were at school.

Now this blog is going out before I have had time to put the charts up for you. I got back from dropping the girls at school to see that my Cable trade had netted 15. Now Oil was looking like a trade 08:50 ish. So it is now 09:30 and I am off, suffice it to say that I have picked up 15 points on every trade this morning so am 60 points up. How about that for a Monday, talk about Trading in the Zone.

To Your Trading Success

The Investor Guru

Forex Trading 11/03/2010

2010-03-11T01:43:00.000-08:00

Good Morning,

Well after my good day yesterday I decided to look at the charts early this morning. As if you didn't already know!

I set my levels just in case of a breakout of the 22:00-06:00 range. There wasn't however I did manage to scalp 8.7 points on cable while it was ranging.

Nothing now till this afternoon when I will update you with some more trades.

Forex Trading 10/03/2010

2010-03-11T01:26:00.000-08:00

Good evening all,

Well I cannot say too much about today's trading apart from WoooHooo 106 points, and to think that I don't really trade in the mornings on a Wednesday. I attend a course so normally do not trade till around 15:00 GMT Wednesday’s.

This morning I got up at my normal time 05:00 GMT dark and cold at that hour. I do like to look at the markets and the sit, relax and then give myself time for some self-hypnosis; it sets me up for a very good day. Today was a little different though, when I looked at the GBP/USD (Cable) charts the S1 pivot was sat in a very nice place around 14950. I looked and thought if it breaks that pivot it could go all the way to the S2 pivot at 14890. Well I first got in for 10 points at 14962 to 14952, right onto the pivot. I had some breakfast then came back and was really quite shocked at how far GBP/USD (Cable) had dropped beyond 50. The price was stopped around 14930 so I decided trade it one last time before getting myself and the girls (my daughters) ready for school. No sooner had I entered the trade around 07:15 I was out with another 10. I was a little cross with myself because of the limit I had put on because I was sure that it would drop below 20 and down to the S2 which I had earlier thought. So I opened up another ticket at 14926 this time I put a limit of 30 on which would allow for the pair to get down to S2 at 14890, and then I went for a shower. I came back 10 minutes later and I was nearly at my 30 point limit, I didn’t have to wait long though and that was that, 50 points and its only just gone 08:00. I was literally trading in the zone. The day was only going to get better.

When I arrived back to watch the different charts GBP/USD (Cable), EUR/USD (Fiber), Daily US Light Crude (Oil) and one that I had not traded before, although one that a very good friend Adrian H said was a good mover AUD/USD (Australian Dollar).

The Oil trade on a Wednesday is the breakout after the 15:30 announcement. So basically you wait for the candle to finish and then wait for the following candles to breakout of either of the ends, today it was a long trade and I didn’t have to wait very long either.

So my friends Nev C and Adrian H and my trading were really hitting the highs and we were all in the zone. The next trades came off Cable (17.4) 2 trades, Fiber (10) and AUD/USD (10).

It sounds so easy, I can say that one of the cable trades and the Fiber trade were difficult at times. Having watched the signals from my trading system say to get in only for the pairs to immediately reverse. When things like that happen you have to be mentally tough. Specifically the Fiber trade, it reversed to the point where my stop was, I have the ultimate confidence in my strategy and although it can go against you and me, I raised my stop way past I would normally. The trade was somewhere close to 30 points against when it again reversed, just before I did consider closing the trade out. I was pacing my office and then I caught sight of my 8 pointed star on the wall, the word DISCIPLINE appeared to stand out. I sat down and watched and waited. I won’t say soon enough it was all good and I was 10 points to the good. I will say that the mental toughness and discipline kept me going and was very happy when I was at break even. However it wasn’t long after it first got back down to this level that it blasted straight through and I eventually took 10. The other trades were slightly more encouraging and didn’t strain the nerves.

The best being AUD/USD which from the moment of entering the trade I was straight into profit, I have to say that the generous spread of 2 points that IG Index give makes this pair very good to trade and some other pairs like GBP/JPY (8 point) less interesting.

I am going to go and have some dinner now.

To Your Trading Success

The Investor Guru

Forex Trading 08/03/2010

2010-03-08T04:08:00.001-08:00

Afternoon Friends,

Well I would have traded this morning, however the weather was so good I decided to go for a game of golf instead at a great golf club (Broadstone). What a great life I have. 12 months ago I couldn't really imagine waking up in the morning and deciding that because the weather is good that I am just off for a game of golf. I had always wated this from life, I suppose I never really expected it. That time is now here.

Well now that I am back and looking at the charts, I do not expect much in the next 45 minutes. Back soon.

Sorry for the delay, it is now Tuesday.
The trading yesterday afternoon was just really manic. Nothing really with my strategy till around 16:00 GMT then I picked up 52 points in literally 30 minutes, it was just awesome.

To Your Trading Success

The Investor Guru

Spreadbetting & Forex The Handbook

2010-01-26T01:29:00.000-08:00

Hi there,

Well I mentioned that I was writing a book, well just to give you a brief foray into the contents.

1. CHOOSING A SPREAD BETTING FIRM
2. SETTING UP
3. RESOURCES FOR TRADING
.
.
.
8. 10 COMMON SPREAD BETTING AND FOREX MISTAKES
9. KEEPING YOUR LOSSES SMALL – THE USE OF STOP LOSSES
.
.
.
12. FINDING THE WINNING STRATEGY FOR YOU
13. SPREAD BETTING STRATEGY I – Trend Trading
14. SPREAD BETTING STRATEGY II – Stock Trading
15. SPREAD BETTING STRATEGY III – Stochastic & MACD 60/40 Trade
15. THE EXIT STRATEGY

There are more, I just thought I would give you a taster.

To Your Trading Success

The Investor Guru

Forex Trading

2010-01-19T10:00:00.000-08:00

Just to give you an update as to how the new strategy is working.

Today I traded 8 times with one trade that was a 20 pip loss. So that was a net gain of 60+ pips.

To your Trading Success

The Investor Guru

Forex Trading

2010-01-18T21:56:00.000-08:00

Well it has now been over a week since I last put some trades up here for you to view.

It isn't because I have stopped trading, that couldn't be further from the truth. As I mentioned last week I am developing a new strategy and it is currently taking up a lot of my time with back and live testing. As I also mentioned last week I am very excited about it. Yesterday alone while watching there were at least 6 entry points that I could have chosen (GBP/USD Only). I actually missed one due to cleaning windows and car. DOH! 1 traded ended at break even and the other 4 were all winners yielding a total of 45 points. I will be putting up some sample trades this week. Obviously I will not be able to put too much information in.

Did I mention that I am also writing a book? Yes that's right I am writing a trading book. I will be putting excerpts from the book in my blog from time to time and I will be updating you on the content. If you have any suggestions for content that you would like to see in a Forex book then please feel free to pass them on and I will do my best to accommodate.

To your Trading Success

The Investor Guru

Forex Trading

2010-01-14T07:56:00.001-08:00

Hi Everyone that really enjoy reading my blog.

I am sorry that I have not put any posts up for a couple of days. I am developing a new strategy and it seems it is taking more of my time than originally thought...I have to say that I am really excited about it.

To your Trading Success

The Investor Guru

Forex Trading 11/01/10

2010-01-11T14:02:00.001-08:00

Back to it and fully recharged, well recharged. So I was up and eating breakfast early this morning as I was on the school run, had to be out of the house by 08:10.

I have to tell you that before my first trade this morning I was looking at my mate Kofi’s blog and he has changed the appearance. It looks really cool and I have to say that I am a little jealous. Which brings me round to mine…this will be changing over the next couple of weeks, you will get the link’s so don’t worry you will not miss out.

So today’s trades, 6 in total today with at least 2 where I was kicking myself after

I placed 2 trades at the same time over different accounts. The indicators I use were all for a long, MACD & Stochastic.

I set an entry order for 16113.0 and my reason for going in on 2 accounts was purely based on the good movements on the candles before. The entry was placed 5 points above R1 (16108.0).

I took 9.2 and 7.9 respectively. I didn’t trade the retracement and the very next time when it again went through the same price. Kofi did, good lad. By the time I had got back from dropping my little darlings then the post office to send out some of my Mindset for Trading CD’s. Cable was ready to trade again.

I made a mistake with this trade I clicked my limit button and forgot to change the price. As the traders out there with FXCM accounts will know that when you do this it automatically places your last limit in, and in my case this was 12 points.

That was the morning over and done with.

My next trades were all short 3 in total…and this is where I made some very bad mistakes, I didn’t follow my own rules. The first was for 11 points, it was a long time coming and it is one of those trades and I am sure you are all laughing with me on this one…you get out with 11 points…30 seconds later it suddenly moves and you would have been 20 up.

Laugh on the previous trade I may, I certainly didn’t on the next two. If I thought it would do any better than saying disgusted I would swear here. Golden rules broken on both trades.

Each trade should have at least netted 10 points. So the rule that is broken was – what I ask myself on entering the trades
Question: What do I want from the trade?
Answer: 20 points
Question: What would I be happy?
Answer: 7.5-15 points

So now you can see why I am disgusted. These were my last trades of the day, time to go and reflect on the days trading and of course to post this blog so all my friends can keep up with me.

Oh well onwards and upwards. Till tomorrow.

To your Trading Success

The Investor Guru

PS Tell me what you think.

Forex Trading 08/01/10

2010-01-08T08:11:00.000-08:00

Well another Non-Farm day arrives!

Let’s get straight down to it as I will place the charts of the early trades completed and not the non-farm. It was fast and furious. A friend of mine took 40 points trading the 5 minute candle of the announcement. I took 38 with 3 trades. In total I traded 6 times today for 108 points.

I am actually done in. My head is quite mashed at the moment and I cannot really think straight let alone put any charts together. I think it must be the first week back after Christmas and a Non-Farm day. I am going to get my guitar out and have a strum…

Till next week when I should be recharged.

To your Trading Success

The Investor Guru

Forex Trading 07/01/10

2010-01-07T13:25:00.001-08:00

By the time I had finished my self-hypnosis session the markets had started to move. I felt that it was a little too early at 05:30 to be considering. The entry point I had considered was 15987. With hindsight I should have ignored my inner talk and lowered my ppp (Pound Per Point) and traded. I even ignored the signals again at 06:40, by this time it had reversed back up past my entry point then proceeded to short from 06:45. The first trade would probably have netted me 10+ points, it actually moved approx 20+ points short and the second would have been 20+, and this one actually went to around 40 points.

I finally traded GBP/USD at 08:27 and exited around 08;45 with a smidgen over 15 points.

That was my only trade of the morning, what on earth was I looking at. There should have been at least 1 other trade. Perhaps I was too deep in trance!

Well this afternoon was a little different. Get this…I traded EUR/USD, I will give you time to pick yourself up off the floor…yes it is true EUR/USD, my mate Neville who is jaunting around the world at the moment with his lovely wife, trades it all the time. So I thought well if it is good enough for Neville then it is good enough for me. Let me tell you it is that long since I traded this pair I cannot remember. Well out of my comfort zone. Because I have not properly studied and traded this pair I have to say and I am not kidding when I say it, I was nervous. Not knowing how pairs react to certain times of the day and different market opening times. So without further ado here is the chart…

My aim for this trade was really to see how I reacted to it. I have to say when it retraced past my entry, I had thoughts of oh well never mind, this is why you don’t trade this pair. I have an old Orange SPV, can anyone remember them? Well I am giving it to charity and wanted to wipe it and the only charger I have is a car one so went outside and sat in the car for 20 minutes, came back in to see that if I had put a limit of 10 in place then I would have had my points. I did wonder about getting out with 1 point however even in this screenshot you can see the trend so I decided to wait it out. I made up my mind that from this trade I wanted 15 points and would be happy with 10+. I hit the get out button on approx 15 and ended with 11.2. Happy as Larry.

I traded cable a further 2 times for 10 points each time, so I ended the day with a grand total of 46 points. Not bad really.

Oh isn’t trading easy!!!

Just as a point to note, it is Non-Farm Employment Change tomorrow at 13:30 UK time and this usually makes Cable volatile.

To your trading success

The Investor Guru

PS Please could you make comments and suggestions of what you would like to see and read about, also about the current layout and how I can improve it.

Forex Trading 06/01/10

2010-01-07T09:28:00.001-08:00

Well time was moving on this morning and I needed to leave at 08:15 to take the kids to school then on to do some training myself.

So it was almost 08:00 and not only did I need to get ready and get out of the house the FTSE was about to open and that can send the market in any direction.

Because of my need to get out of the house, I made some very fundamental mistakes…I did not adhere strictly to the strategy…I entered one trade and when it went against me by 10 points I jumped out of the trade, only to get back in later and pinch 5 points back. Then got in again…

So 15 points on the trade above so a grand total of 10 up for the day.

After being on my course for just over an hour it was cancelled due to the weather (snow). So was at home for the afternoons trades. Well I actually thought I had winning trades in the afternoon, however on checking my accounts the mornings trades were the only ones...strange, very strange.

To your trading success

The Investor Guru

Forex Trading 05/01/10

2010-01-05T02:04:00.000-08:00

I was up and at the charts this morning…well it was more like, I was frozen and needed to get some early momentum into my body. After reading out aloud my beliefs and my weekly trading plan, I sat by the radiator and did my self-hypnosis.

It wasn’t long before I was in a trade. I was quite shocked to see that Cable (GBP/USD) started moving early (05:45 UK time). I opened my ticket and was in the trade, within a minute or two I found myself around 13 points up. I sat there waiting for more. What the heck was I thinking about, it was 05:45 in the morning and I didn’t take the 13 on offer. I did end that trade with a smidgen over 6, my learning for that trade is “Remember to remind yourself what it is you want from the trade”.

As mentioned in the chart at this time of day 10+ points should have been a no brainer, especially with the pivot at 16138. Limit as usual for me was set at 30 and stop of the same. With Cable I have noticed over the years that the levels the fifty’s hundred’s can be quite significant. My stop on this trade of 30 being below the 16100, I was pretty sure that I would not get stopped out.

Another reason I should have been out of the trade a little earlier, when I was viewing my stochastic indicator, I was being told that this trade was over bought.

Onwards and upwards as they say to my other trades of the early morning.

I entered again around 16125 and exited at 16151.

Not much more you can say about that trade really.

What happened next is just really bad. My wife Alison was taking my children to school and needed the car scraping so being the gent I offered. I only wish I lived in warmer climes like our friends in Spain. However, when I arrived back inside and saw that Cable had crashed well I can only sit here and cry nearly 100 points in the half hour I was away scraping the cars.

I was sat talking with Alison, when I looked over my shoulder and noticed that all the signals were looking good for a trade.

I took 10 points on this trade; realistically I should have stayed in for longer and taken 20. However I do say before entering my trades what it is I want from the trade and what I would be happy with. 10 points was what I wanted. I also keep reminding myself “I have a Positive Trading Attitude, I am in total control. My motivation and dedication mean I am fully prepared and confident. My mental toughness and discipline are making me a Master Trader.”

Practicing what you preach was something that I was brought up on. So with that in mind, I will catch you in a couple of hours as I am off to read a trading book “Trading for a Living” by Dr Alexander Elder.

To your trading success

The Investor Guru

Forex Trading 04/01/10

2010-01-04T09:52:00.001-08:00

Happy New Year to everyone.

I hope you all had as wonderful time as my family and I did. We went up to Stockport (Near Manchester) for New Year and spent it with some pretty wonderful people. Thanks to the ones that were there.

Very interesting first day back, I was sort of running blind. One of my strategies I use Metatrader 4 and Pivot Points. However this morning the pivots were way out (due to holiday’s last week). Meant I had to look at one of the other strategies, although I do like looking at the pivots at different time (5, 30 & 60 minutes) scales so that I can read the charts better.

Since I have been using Stochastic and MACD Indicators together my chart reading has become more attuned to the way the market it moving. This morning however was a little different and I will put it down to being rusty having had too long off for the holiday period. By the time I had got my pivots and Stochastic Histogram back it was too late and I had got in at the point of being oversold (Stochastic).

Sorry for the change in charts, it really is down to which I am looking at and my reasons for getting in. The one above is to show why I got in and really why I shouldn’t.

So on to this afternoon, I was waiting for a US announcement at 15:00 London, 10:00 New York &12:00 Tokyo time. It was good news for our American friends so I expected them to push GBP/USD down. So I was surprised to see the price rise over the first 10 mins, then it reversed at around 16191 and tanked it down and then on the next candle it carried on. My entry was 16158 with a limit of 20. This trade was with a higher PPP (Pound Per Point) than the mornings trade so did not require the same amount of points.

If only I had hung on. I am not here to beat myself up although!

Well I am tired out after my first day back. I hope you all had as interesting day as me, and we will meet again for tomorrow’s instalment. Have a good Night/Day.

To your trading success

The Investor Guru

Forex Trading (Christmas)

2009-12-23T22:39:00.000-08:00

Merry Christmas Everybody.

Well I know technically it is still Christmas Eve, I will not be around tomorrow to write on my blog.

I will start with a little recap of what has been happening over the last couple of days. Well on my last blog I asked the question "Can GBP/USD break below 16000". Well all those people that were hoping it would...it did. It start its move a little shakily then broke through for a good 60+ points. I was good for 10. Time of year and not wanting to be in a trade too long is why I got out early. I will start again in the New Year with charts.

As I write this blog at 06:55 GBP/USD has now broken back above 16000, can it stay there and will I be tempted into a trade? Yes and No respectively.

Well I will say Merry Christmas again to all that know me, especially Alison my wife and love of my life. Secondly Kofi my trading buddy, he kept me going throughout the year.

To Your Trading Success

The Investor Guru

Forex Trading (Christmas)

2009-12-22T02:42:00.000-08:00

Well hello everyone...I hope you are all having a truly magnificent christmas. My holidays started last week so am now relaxing.

I just thought I would spend some time here explaining what is currently happening with the markets. Well to cut a long and somewhat boring story short...Very Quiet. In fact I think the tapping of my keys as I write this may just about wake someone up.

I take at least 2 weeks off over the christmas period. Having said that I very nearly traded GBP/USD @ 16045 and EUR/USD 14303. Short and Long respectively each would have netted me 20 pips each. Can GBP/USD finish below 16000 today, I do think it can and may not get there until our American cousins come on board. Good luck and be careful to all out there that are trading over this period.

If any of you readers had watched yesterday there was very little volatility in the market so for me and I did not trade.

It is time for me to finish this blog and take my children to the park. You all have a safe and happy christmas.

To you Trading Success,

Investor Guru

Forex Trading 15/12/09

2009-12-15T11:28:00.000-08:00

I am sorry I did not update my blog yesterday. This was due to a deep depression, and I am not talking of the weather…although that was crap too.

I am of course talking of the forex markets. My trading yesterday left a lot to be desired and I am not going to bore you with the charts and how’s and what for’s, all I need say is that I was 40 pips to the bad and that is that.

Now on to today, everything started brightly then I went long at a point that I really shouldn’t, I was trading the pivot strategy that I normally trade. Soon enough I was 50 pips down so the 10 previously taken were wiped out.

Over the weekend I produced a new trading mindset CD. “Trading in the Zone”. Well I listened to it for the first time last night and I can say that after the early loss it did not take me long to get into the zone. It would take me hours and I am sure you would soon get bored looking at the endless charts if I was to post them here. 11 trade’s in all today, 1 loss and 10 WINNERS. This totally eradicated my early mistake.

My wife Alison started calling me to let me know that it was time to eat. 17:00 and I had not realised the time I had been totally in the Zone with my trading.

Till tomorrow.

To your Trading Success.

The Investor Guru

Forex Trading 11/12/09

2009-12-11T08:21:00.000-08:00

Good day to you all, seems like a recurring theme here…I am a little late in the day posting this blog today.

Well I do have good reasons. This morning I was at my eldest daughter’s nativity and the school that both my daughters attend were having a Christmas fare.

As anyone who watched GBP/USD today, it was really quite quiet. I traded this morning and what a trade. I should have had 15+, just like Kofi. However, it was meant to be a short trade. I bloody well hit the wrong button and went in long, boy the air was blue around my trading station. All I can say is when I was looking at the Stochastic and MACD together it was giving me hope. It eventually went up and I very quickly got out, 3.9 pips.

So on to this afternoon. So we were chatting to another friend of ours Adrian H. We were discussing entry points and decided that the break of the pivot at 16280, so the price 16270 was chosen. My actual entry price as noted above was 16267, was a little worried as the price decided to go north and was getting closer to my 40 pip stop. It didn’t get there and started the downward movement. It actually moved a lot faster than I expected and I got out with 13.2 pips. I had discussed that 10 would be my limit so was an extra 3 over so happy. Not as happy as Kofi who exited with 30 pips, well done mate. Adrian H was just watching and didn’t get in.

I went to the school fete, as soon as the trade was over.

However I thought I would share this with you, while we were chatting Kofi shared this link with the other traders, so I am now sharing with you the laptop of my dreams.

Have a great weekend.

To your Trading Success.

The Investor Guru

Forex Trading 10/12/09

2009-12-10T08:28:00.000-08:00

What a crap day so far. 40 pips down GBP/USD has been a nightmare. It could have been worse had I not been up on one trade, poor old Kofi is down pips too.

After my losses this morning I have been looking at another indicator (Stochastic) as many of you will know this is more of a true indicator as it is leading where most of the other indicators that are used (MACD for instance) are lagging indicators.

Had I used the stochastic indicator earlier today, I may not have incurred the losses that I did. As many of you know this indicator shows oversold and overbought levels. Again had I used this indicator on my earlier trades the one trade that I did win, I would have got out with the maximum available pips (22).

Do you really want to see the charts...? Oh go on then rub it in.

After this I did not trade for the rest of the day. I was watching some very nice trending and I predicted 2 further trades. One long for 15 pips and the other for 30.

As I was not around for either of these trades I did not enter

Predicted trade 1 was long at 16290 – 16305, this trade started at 09:35 and would have been finished at 10:05.
Predicted trade 2 was short at 16270 – 16240, this trade started at 15:00 and would have been finished at 15:10.

I have shut down my trading station for the evening and am off to learn Fibonacci Retracements.

To your Trading Success.

The Investor Guru

Forex Trading 09/12/2001

2009-12-09T07:52:00.000-08:00

Gosh…I went out last night with some friends who I worked with at Barclays Bank. It was an awesome night. So one of them mentioned that he was working on early’s today and was getting up at 06:00, he doesn’t know what early is does he! Thanks for the night out.

So on to the trading day…well Gordon (The Joker) Brown and Alistair (No Backbone) Darling are going to be spinning some yarn at 12:30 so GBP pairs will drop. They usually do when they make jokes!

So I was up at my usual time of 05:00, having spent sometime checking the charts I went through my normal routine of reading aloud my trading plan & mission statement…do you know what I will leave it in the blog for you to read and maybe if you want to copy it.

This morning’s trades were a little strange for me. It was all me as there were plenty of points on offer, I was just slow. As you can see from the chart my entry and exit weren’t the best. Oh well 11 pips was OK for starters. Kofi was up somewhere close to 30+ pips and quite rightly rubbing my nose in it.

Then the market changed. So I got in going long, oh did I mention that I put a limit of 10 pips in place and I got it…woohoo…well it would have been had the limit been 20. I do love hindsight, it is a wonderful thing.

Then there were trades 4, 5 and 6. I will not bore you with the charts on these. Trade 4, I will be brief on this, 20 pips down. Oh and not forgetting trades 5 and 6, well you won’t believe how many pips I am up 5.7. Enough said.

With all this I am closing my trading station for the day and will return tomorrow. So till then.

To your Trading Success.

The Investor Guru

Forex Trading 08/12/09

2009-12-08T00:35:00.000-08:00

I read this last night and thought I would share it with you.

“The subject of money is really two subjects: (1) money, plenty of money, and (2) absence of money, not nearly enough money. Often people assume that because they are speaking the words "I want more money," they are speaking positively about money. When you are feeling fear or discomfort as you speak, you are not speaking of the subject of money; you are speaking of the subject of not enough money. And the difference is very important, because the first statement brings money and the second holds it away”

Well things started moving early today, Kofi is not on yet and I have already taken 10 on a breakout strategy and 35 on a pivot strategy.

Amazing movements so early on today.

I cannot believe on the breakout strategy I set a limit of 10. How annoyed am I!

So 45 pips up and it is only just gone 06:30. Now you see why I am annoyed as my day would have been finished had my limit been a further 20 pips away on the breakout strategy.

Now waiting for the GBP announcements at 09:00 & 09:30. Well they didn’t tell me anything. So I think that is me finished till later in the day when the USA are available to give some movement.

To your Trading Success.

The Investor Guru

Forex Trading 07/12/09

2009-12-07T11:37:00.000-08:00

Oh, I am really late posting this today.

If I had a pound for every time my buddy Kofi has an issue with IG Index and slippage. Well this morning apparently it was worse than ever, I was in the trade at least 5 seconds before him. I have also told him to get an FXCM Account too.

Well bitching aside, lets get on with the positivity that emanated from GBP/USD this morning. It was so good I don’t suppose Kofi is sat there now complaining too much, he did end the day some 50+ pips up. Not bad and well done mate.

Another friend of ours Toj, asked the question this morning about getting into the GBP/USD Breakout trade before 07:00 UK time. The resounding answer was no. He got in early, at 06:40 ish, only to be stopped out soon after. Which brings me to mentioning Preparation and how important it is to be fully prepared and disciplined? Disciplined not to get in before 07:00.

So now lets have a look at the charts and see where I took my 60+ pips.

So 20 pips up and felt like Kofi I should have had more, for different reasons!

When the pair started to drop again, not long after this first trade, I was confident enough to get in at 16433.2, could have done with being in at 440 however I am not complaining. My exit was 16410.4 for at total of 22.8, (No Limit this time).

Well I was buzzing at this point 42+ pips up before 08:30 and the rest of the day to relax and watch what was happening.

As it says on the chart it wasn’t long before I was in another trade. 10.3 pips this time.

I heard that Gordon Brown had opened his mouth and spouted some rubbish this morning, this was what mad the tumble. Well for me he can open his jowls every morning if I am going to be taking this many pips in a morning, without I might add putting in too much effort.

I did very little for the rest of the morning (listed some Trading Mindset CD’s on eBay).

There was an opportunity to take a further 10 pips this afternoon, which I took without loosing breath. I did see another however I did think that I might be overtrading, and I wanted to protect my 60+ for the day.

All have a good evening/day and I will speak with you again tomorrow.

To your Trading Success.

The Investor Guru

Forex Trading 04/12/09

2009-12-04T09:17:00.000-08:00

Oh, I am later in the day writing my blog today. Well that is because of the Non-Farm Employment announcement which affects the USD pairs, Dow Jones Index, Oil and FTSE.

I shall start from the beginning...well this morning!

I set an entry for a short trade at 16520 and my long entry 16555. As you can see from the chart below it quickly went long this morning, which was a bit of a shocker as I had expected it to be a slow morning what with the announcements in the afternoon.

So a 28 pip trade, not bad for the first trade of the day. This trade was quite unusual for Kofi (Trading Buddy) and I because it meant we entered the trade before 07:00, which as I have mentioned before is not what we like. However today the moves were very significant and with purpose.

19 pips on this trade added to the 28 earlier. A nice 47 and the day is only just starting.

So I kicked back for a couple of hours, went for a walk had a shower, you know all the stuff that should be done.

24.2 pips on this trade and 47 from the 2 previous trades to make a total of 71.2 for the day. Not a bad days work at all, Kofi ended the day on 60 so a big high 5 to him for that.

I did notice later in the day that I could have totalled 100 pips today. I do believe that would have been over trading so I used so real Control in staying out of the trades.

To your Trading Success.

The Investor Guru

Forex Trading 03/12/09

2009-12-03T12:00:00.001-08:00

I will start with good morning; however it wasn’t a good morning at all.

40 pips down on GBP/USD after being 10+ up.

It was certainly a morning where I had to keep my “Positive Trading Attitude”. Kofi and myself don’t often have trades that do not go our way these days so when they come along it can give you a bit of confidence crisis. This is where you need your “Mental Toughness”, “Confidence” in the strategies that we trade and our ability.

Now as I have mentioned this week about the psychology of trading. It would have been quite easy today to walk away and not trade for the rest of the day. However my belief is that if the strategy is saying there is a trade on and then pick yourself up dust yourself down and get on with it.

You need a certain amount of motivation to trade as long as it is used correctly, if the trades are not then the motivation can be misplaced an be more classed as overtrading. As you know that is one of the top ten mistakes that Forex traders can make.

So, back to my trading.

Well I was talking with a friend over Skype and he mentioned that the hour strategy that we use was looking good for Cable at 11:00. I did not get in at 11:00 for a few reasons, one being that it can be a quiet time. So when the signals were still there at 12:00. I decided to trade.

With hindsight and following the strategy I should have waited for the 13:00 candle to finish. That would have got my 40 pip loss back. Anyhow at least I am only down 10 pips today.

If I didn’t have a positive trading attitude then I would have withdrawn in to a shell and not traded for the rest of the day.

I would have traded again, however I needed to take my electric shaver back to a well known high street store as it was not working, not a month after purchase.

In the USA tomorrow an announcement you should be weary of is the Non-Farm, this happens on the first Friday of every month.

To your trading success.

The Investor Guru

Forex Trading 02/12/09

2009-12-02T06:42:00.001-08:00

Good morning everyone.

I didn’t trade in the afternoon yesterday so nothing interesting to report.

I had to take my car for its MOT this morning so actually missed a really good trade which I know my mate and trading buddy took 30 pips on GBP/USD. So well done Kofi you are a Master Trader.

There are some early announcements which really don’t help the market.

I have mentioned in the chart that I should have really taken more points on this breakout. I was trading 2 different strategies at this time and didn’t want to leave too much of my equity exposed. So closed this trade down with 10.9 and left the other to run.

I finally came out of the trade below with 22.6 so a total of 33.5, which when you look at the time limit in the trade 15-20 minutes I don’t think that is a bad return.

Well till tomorrow…I was going to go for a run this afternoon, I think I should take my swimming trunks!

Forex Trading 01/12/09

2009-12-01T01:34:00.000-08:00

Good morning everyone.

I had a really good day trading yesterday. I ended up with 55 points having taken 35 pips in the morning then a further 20 pips in one trade in the afternoon on Cable.

After those comments I have to say that I blew the 20 I made in the afternoon yesterday by a trade before 07:00 today. I went in short on GBP/USD at 16395, was up 2 pips then stopped out with 20 pip loss.

Would you believe me, if I said that I was trying to fix my laptop and missed the massive rise? I took 5.5 pips right at the top when laptop was back up and running. Let’s have a look at the charts and see where you could have made and lost your pips this morning.

I am now going to stay away from the trades for a couple of hours (have to buy some necessities). Will be back this afternoon for some more trades, which no doubt I will be telling you all about tomorrow.

Going on from my blog yesterday where I spoke of how important it is to have a Mission Statement. Today I am going to touch on “Trading Plans”. This for me is another must, this is where you put down on paper your weekly, monthly, quarterly and yearly plan and outcomes that you want from your trading.

On my weekly Trading Plan I start with goals, what I want my trading equity to grow by each week, from this I specifically mention how much I want for living expenses and then say that I also want some for our retirement fund.

Next I set a 4 weekly goal to raise my trading equity by a certain percentage. Again under this I state what I will be doing to maintain this. E.g. “I focus on continuous, repeatable success”, by following my trading rules. Then after this I read my Mission Statement.

To your Trading Success

Forex Trading 30/11/09

2009-11-30T02:23:00.000-08:00

Good morning everyone.

I hope everyone had a good weekend, I did.

At the end of last week I was at Investment Mastery helping train new traders. My specific area is the Mindset and how to have the correct mindset for trading.

As you know it takes a special person to be in trades that are not going as planned, maybe 30+ pips against and you may be thinking of closing the trade, only to see it turn back in your favour and suddenly you are 15 pips up. You need to be in control, be disciplined and confident that the trade you entered was correct. I will cover this later.

The chart below shows my entry points for this morning. I will add at this point that I was with Kofi and Kate this morning in our chat. Kofi and I found that we were both in the first trade without actually letting each other know. We are beginning to understand this to such a degree that it is almost second nature. Soon it it will be!

Each day for the next 5+ days I will be covering how to “Achieve Performance Excellence”.

Becoming an online trader is very much like being a top athlete. You have to work at it and you have to perform the fundamentals.

A quote that I particularly like is “There are tons of people who could be great, but they don’t practice the basics. They don’t want to work at it”. – Michael Jordan (1995).

You have to perform the fundamentals, make sure that you know the strategy you are trading. If you do not then you should not be entering the trade. So you need to prepare properly for the trade. You need “Motivation”. What gets you out of bed in the mornings? What do you want from your online trading? If you cannot answer what you want from your online trading then how can you motivate yourself to get out of bed. Incidentally I get out of bed at 05:00 every trading day morning. I read out my mission statement and what I want from the day. From here I then do my preparation which will be covered another day. Just for you:-

Mission Statement
“I am a competitive disciplined online trading athlete. My goal is to have more mental toughness which means I am in total control when approaching my daily trades. Becoming a full time online trader is giving me the financial security to spend more time with my family.”

“I have a Positive Trading Attitude, I am in total control. My motivation and dedication mean I am fully prepared and confident. My mental toughness and discipline are making me a Master Trader.”

To your trading success.

Forex Trading 27/11/09

2009-11-28T02:24:00.000-08:00

I have never mentioned on here about the importance of having the right mindset and I will be going into this side next week.

For me the most important aspect of trading is having the right mindset. I also believe that to Achieve Performance Excellence you need the following:- Positive Trading Attitude, Control, Motivation, Dedication, Mental Toughness, Preparation, Confidence and Discipline.

I will be going more into this over the coming weeks by covering one of these areas each day.

I hope you all have a wonderful weekend.

To your trading excellence.

Forex Trading 26/11/09

2009-11-27T00:42:00.000-08:00

Well what can I say about this morning’s trade without laughing and swearing at the same time. You are puzzled! Well let me start by telling you that I had a ticket open before 07:00 UK time which for me means have a limit of 5. Fairly sensible, however I went for a coffee and didn’t close the ticket so when the entry I wanted going short was reached at 16375 I pressed the button and I was rightly in a short trade on GBP/USD. However, when it plummeted and I was looking at getting out with 25 points, I realised that I had not removed from the ticket my limit of 5. So to recap I took 5 points instead of 25+.

As one of the good old television game shows of yesteryear would say “Let’s have a look at what you could have won”.

So let’s have a look at the chart.

Kofi as you know as my trading buddy was sat next to me this morning sniggering as he took 30+ points.

I am off to help out at Investment Mastery to help new Forex Traders understand the mindset of trading and how important it is to have the right mindset in place before trading.

Forex Trading 25/11/09

2009-11-26T05:44:00.001-08:00

Howdy Doody…Well Happy Thanksgiving to our American Cousins.

Well as another day starts I should say that I took another 10 points on GBP/USD yesterday. I won’t put the chart up. There was a pivot 16673 and I took the points going short from 68 to 58.

Well what can I say about today? It is not even 08:30 and I am 50 points up. Kofi took 29. I used 2 different strategies for the points. I used an hour strategy, which I might add you are supposed to stay in for the full hour or thereabouts. Had I stayed in for the full hour I would have had 64 points. Also I used the breakout strategy

We will start with the hour strategy first.

My entry was 16653.9 (short) and I had my 20.2 points at 16633.7

As you can see all the signals were in place. The Bollinger Bands were moving out of Pinch, MACD was Diverging, Standard Deviation had reached the bottom and was just rising, and Volatility was still low enough.

Lets look at it now the hour has passed.

As you can see there was a heap of points to get, it GBP/USD actually went down a further 50 points.

Which brings me to the other trades that I did. I used the 5 min chart and traded a breakout at 07:00, this netted me 20 points and then traded it later for a further 10

I was in the chat with Kofi and Kate when I noticed that there could be another 10 available. I did try and tell them however they were deep in conversation.

Forex Trading 24/11/09

2009-11-25T02:12:00.000-08:00

Morning all, there are quite a few announcements today at Forex Factory. I am specifically interested in the revised GDP at 09:30.

It is Wednesday so the Crude Oil Inventories are released at 15:30. Another strategy that I watch and sometimes trade, it is the breakout of the announcement.

I have had so many laptop issues this morning. I actually thought that I would not get to trade.

However not to disappoint I did…the results weren’t what I expected and there were far more points on offer than I took. The main trades today were GBP/USD and GBP/JPY. Yep that’s correct GBP/JPY. I know I have not mentioned this one before, mainly because I have not really traded it before. I used a pivot strategy for this trade and it worked a treat.

Kofi and I were joined in our chat with a friend of ours Kate.

On to the trades. My first was old reliable Cable. My entry point was 16655 and exit was 16667.9 a total of 12.9 points. Now you are all sat there going there were at least 50 to 60 points available. Yes there were and the level that I really wanted to get in at was around 30-31. I did say that I had issues with my laptop. For the techies (it kept freezing), the laptop not the charts.

Now the interesting one for me was GBP/JPY. Having not traded this before on my pivot strategy I was slightly nervous. However I needn’t have been as it complied with all the signals ligning up, I set my Entry Order and let the market do what it does best and move. A little over 20 minutes I had 20 points. I got out as it looked as if it would turn. Only for me to be proved wrong and it go balistic and rise by a further 20+ points. Happy though that I have 20 points as my first trade on this pair.

Forex Trading 23/11/09

2009-11-24T00:33:00.000-08:00

Hello and welcome to another day. Kofi is not up at this time, should I really be 05:00!

Wow let me start by saying that there are a lot of announcements today. This could add lots of volatility to the market.

I have just traded my first 5 points of the day my entry was 165600.

Because it is before 07:00 , I am quite wary. However if I feel the trade is right I will go for fewer points. I chose the 165600 due to the support from earlier; also evaluating the histograms I was sure this would be a good short.
I placed an entry order with my online broker and within seconds it had been opened then filled. Great start to the day.

What can I say; using the same entry points as above I have taken another 5 points as GBP/USD again goes below 60 but not below 50.

Well here we go again. Using another strategy I have entered GBP/USD again. It is after 07:00 so this time I am looking for a larger amount of points, 20+.
My entry is 16545.8 and exit is 16523.3 a total of 22.5 points. It has hit the pivot and bounced back up so my exit strategy on this trade was spot on.

Well for the time being I am going to leave it as there are a number of announcements coming up, I have also traded 3 times already today and do not want to over trade. Chasing trades and over trading can be some people’s downfalls.

Forex Trading 20/11/09

2009-11-23T13:48:00.000-08:00

Having not been around for the last couple of weeks, doing something completely different. It seemed a little unusual getting up at my normal time of 05:00. I Use this time to prepare for the trading day, I read out allowed my Trading Plan and Mission Statement. I also like to either go for an early morning run or perform some empowering self hypnosis.

I check for announcements on Forex Factory and pass this information on to others.

Now on to the trading. Normally Kofi and I (my trading buddy) are chatting and will trade Cable (GBP/USD) breakout. We only trade this after 07:00 when the markets around Europe are opening, at this time there is more volatility in the market which gives more points in a shorter time frame. However having had a couple of weeks off I was a little rusty and completely missed the entry point long. Kofi entered the trade and got out at break even. He really should have taken the 15+ points that were available to him. He could also have stuck it out and gathered the points that he was after.

Having the attitude that there will always be another trade I decided to look at maybe using one of the other strategies that we know. I started to look at a strategy that uses hour candles and other indicators (MACD, Standard Deviation, Momentum and Chaikin Volatility). I had been assessing these indicators and decided that at 09:00 I would place a long trade.

I entered at 16589.9 and set my limit to 16626 (37) points, I set my mental stop approximately 10 points beyond the ma20.

Kofi and I continued our chat and around 09:30 we both confessed to being in the trade. What a pair we make!

Although my limit was 37 points I actually exited the trade with 25. After my earlier missed chance on the breakout I was very happy with the 25.

The Top Ten Trading Mistakes

2009-04-29T04:41:00.000-07:00

Top-Ten Mistakes FOREX Traders Make

You are ready. You’ve done your homework. You have read the all right trading books, watched all the right professional trading videos and attended a few of the right live seminars presented by big-name professional traders. You’ve researched your brokers, did your trials of various electronic trading platforms, and have your trading account ready to go.

Its day one of your new career; hopefully the one that will finally send you down the road to financial freedom.

Congratulations, you are now an Online Trader.

But the odds are against you. You know that. You’ve read the statistics and heard the critics; but you are confident you won’t be the one to fail. You have the best trading system and you have planned for every contingency you can think of. Your charts, analysis and research are up-to-the-minute and instantly ready for every market you are going to trade. It’s go time. You take a deep breath and click the mouse…your first trade is LIVE; you’re in the game.

Fast forward six months. Your account balance is lower than when you started. Sure, you had some great trades and looking back, your analysis of most of the markets you traded was correct; but where is the profit you could have had? How did this happen? How do you get back on track?

I’ll tell you how it happened, because it happened to me; more than once. It happened because the real world of trading and the textbook world of trading are two completely different things.

You need to be ready for that reality or you run a very big risk of being the one who makes part of the statistics.

MISTAKE # 10

PAPER TRADING TOO LONG (Virtual Trading)

Paper trading is hypothetical trading. If you have never traded anything before, you will probably do some paper trading. The benefit of paper trading is that it will help the new trader become acquainted with the basics of interfacing with the markets. This is often a “demo” account with a broker or clearing firm that provides real-time market data but provides a hypothetical balance. You are allowed to buy and sell as much as you want, just like in a “live” or “real” account. Your hypothetical gains and losses are accrued against your hypothetical account balance over time. As time goes on, most traders find that they can gain quite a surprising amount of paper-profits in a very short period of time. These traders are now completely convinced that they can easily duplicate those hypothetical results in real time with real money. They open their real trading account and POW! Within about three to four weeks they are down usually more than 50% of their equity. This is not my opinion, this is actual fact. Ask any broker in the industry what happens to “paper-traders” who open a real account. The ratio of “paper-traders” to “winning traders” is about one in ninety.

Why does this happen? Because there was never any real risk to the trader.

Let me illustrate by telling you a story:
I know a private pilot who soloed on his 17th birthday. In 1979 he was an Air Force academy appointee. He has flown a T-38 Jet fighter in extreme conditions. Just knowing that, I think most people would agree that he probably has a certain amount of experience flying airplanes.

In the suburbs outside of Chicago there is a small airport that has a “Fighter Pilot for a Day” program. This is where you fly co-pilot with a retired military pilot in high-performance aircraft. You are allowed to fly the aircraft (with the real pilot’s hands on the controls) in an attempt to “shoot down” an “enemy” fighter; which is another co-pilot flying another airplane with HIS retired military pilot.

You are awarded a “kill” if your laser guns hit your opponent. It’s like a very expensive high-stakes game of laser-tag. He went for a day to have some fun. As it turned out, he was flying against a complete novice. Of course, he didn’t tell him that he had some Air Force training. He asked his adversary what kind of training he had. He very confidently told him that he was the top scoring “ace” from his on-line club and various other national methods of playing of high-tech video games. He also told him that he could “out-fly” almost anyone in the Microsoft Flight Simulator in both the F-16 Falcon and F-15 Eagle.

Everyone agreed that his credentials were very impressive and proceeded to blow him out of the sky no less than six times in 20 minutes. To start with, this novice had never flown in aerobatic conditions so he spent most of his time trying not to throw-up. He stalled and spun most of the other time. If he wasn’t flying with someone he’d be dead. In the end he had to quit early because he simply couldn’t take the physical punishment. To add insult to injury, my friend has never played Microsoft Flight Simulator (ever). He does the real thing. There is a BIG DIFFERENCE between the two as you can see.

Do you see the point I’m getting at?

PRETENDING to do something is never the same as actually doing it. Yes, it is helpful up to a certain point to simulate certain things but that can only take you so far. In the case of air-to-air combat, PRETENDING to be a fighter pilot will likely get you killed if you ACTUALLY go up against a trained fighter pilot. In fact, the US Army Air Corps learned this the hard way back in WWI. They sent young men into combat with oftentimes less than 10 hours of actual flying time. Imagine how fast those men were killed when they went man-to-man with Richthofen, Boelke and Immelmann.

Everyone concluded flying was “dangerous” when in fact it was the lack of training that was “dangerous” I’m not trying to impress you with my friends flying skills. I’m trying to impress on you that paper-trading is exactly like playing Microsoft Flight Simulator. It is pretending to be something you are not while convincing you that you know what you are doing.

Paper trading hides from you the need for real skills. Paper-trading will get you killed because when you go up against real traders with real money it’s not a game anymore. If you make the wrong move you lose equity. There is no “do over” button. If you stall your F-16 in the simulator, you get another chance; stall your F-16 in combat and you die. Lose money in your paper-trading account; just sign up for another trial account. Lose money in your real account and you go home broke.

Paper-trading is a waste of time because paper-trading will never give you the real skills you need to trade. All paper-trading can do is help you learn how to use the functions of your trading platform. In fact, that is a good thing. But once you learn the functions of your platform and your account is ready to trade, everything you learned paper-trading goes out the window because NOW IT IS DO OR DIE. There are no second chances. Don’t make mistake #1; don’t think you know what you are doing because you pretended to trade without taking any real risk.

HOW TO MAKE THIS MISTAKE WORSE: Continue paper-trading for more than 30 days and/or go back to paper-trading if you have lost money in your first real account.

SOLUTION: Open the absolute smallest account your broker will allow and trade for 90 days the absolute smallest size possible.

If you are ahead, increase your equity size and your trade size by a factor of 20%.

If you are losing, stay with the real thing; it’s the only way to learn.

MISTAKE # 9

NOT HAVING A TRADING PLAN

Suppose you called your 401K manager this afternoon. Suppose you asked him “What is your plan for the next six months?” Suppose he told you “Oh, whatever. I just try to get on the right side and if I don’t I just get out”. How long would that guy be managing your retirement money if you had any say in the matter?

Many traders take the same attitude with their daily work habit and many don’t even know they do it. Not having a clear and concise plan for your daily trading presence is a serious mistake and you need to address it. The best way to describe a sound plan is to let you read one from a professional full-time trader.

This is an actual trade plan from a friend of mine who is an E-mini trader:
2006 Trading Plan My goal is to earn 100% on my trading equity before the end of the year. To maintain my focus I will set a near term goal every quarter to be at a 25% gain and I will plot my equity daily. If I reach my quarterly goal ahead of the last trading day of the quarter I will take a two-day break. I will hold any open positions that are at a profit but any open trade losses I will close at that point before I take a break. If my open trade gains continue into the new quarter I will add to those winning positions by a factor of 25%. I will move my protective stops up to reduce my exposure on the entire position. If I am behind on my trade goal for the quarter, I will take a five-day break. I will re-evaluate my trade system and ask the question: “Has my market quality changed to something my system is not able to perform at best?” During the year I will not trade more than three markets. I have learned I cannot focus well on more than three markets at a time. If I have more than four losing trades in a row in any of my three markets I will take a trading break for five days. Again, I will leave open position winners alone in the other markets but close all losing positions. I will again roll protective stops to reduce my risk. When I take a trading break, I will enter resting limit orders in the open trade winners to take the objective profit should I be unavailable and the market gets to those levels during my break.

If I am ahead of my plan for the year at any point I will take a break. I will take 30% of the new equity out of my account and place that into a secure place. If I am behind I will not add equity under any circumstances. If I reach a 40% drawdown from my high equity I will quit for the year. I will record my daily trade activity in my trading log and review this weekly. I will know my ratios and results; I will look to improve them by 5% each week. I will trade only from the bull side because my analysis tells me that all three of the markets I have selected have more than a year of solid bullish fundamentals. I will learn how to use options this year because I see from last year I could have protected more trades if I had a solid grasp of when to use options and when not to. I will invest two-hours a week on option knowledge. My son is leaving for Europe in May. I will not trade the week before he leaves or the week after. I plan to join him in the fall for Oktoberfest for one week and will not trade the three days before I leave or when I get back. I know I suffer from jet-lag so the week after I am back I am not at my best. I have blocked out these times on my trade calendar so I will not be tempted to trade anyway.

If you read between the lines you will notice that his trade plan included all the things that were in his control, NOT things outside of his control; like the markets.

HOW TO MAKE THIS MISTAKE WORSE: Base your trading plan on hypothetical profits or on how well you did paper-trading, Ignore your personal emotional needs when compiling a plan, Ignore your family while making a plan, keep thinking you can trade everyday or all the time, average your potential over a period of time and think results will equal a daily amount.

SOLUTION: Ask a professional trader to show you his daily/weekly/monthly or annual trading plan. Ask yourself if you can make a plan that addresses similar things. If the professional you have selected can’t show you or won’t show you his plan then ignore what he has to say.

If he isn’t using a plan then he is likely unable to assist you in building wealth.

MISTAKE # 8

TRADING TOO LARGE FOR YOUR ACCOUNT

The fastest way to go broke is to bet it all, all the time. Most traders don’t learn this lesson until they have had at least one blow-out; by that I mean they have lost all their equity quickly and have had to start over. For some reason, there is a tendency for traders of all age and experience levels to trade too large for the actual cash in their account. This is a symptom of a larger problem and unless you are willing to consider that you personally might have this problem already you most likely will be trading too large for your account right now today.

What is this larger problem?

GREED, BABY, GREED

It is unrealistic for you to believe you are going to make a killing on THIS ONE TRADE RIGHT NOW. Sure, you might be on the right side of a large move but that will take time and evidence to see. For this moment, any trade you have on has the potential to run the other way against you and if you are trading too large, your potential to lose a lot on only a few trades is huge. No matter your age, education, skill or experience level you are not going to make 100% winning trades. Therefore a certain percentage of your trades will simply not work. Those trades cannot be so large that you lose a significant portion of your equity in the process. To beat the greed habit you need to make a few changes to both your equity management and more importantly to your thinking.

First, trading is a business. You need to treat it like one. There are certain things every business needs to run effectively and the first thing is liquidity. Simply put, if you run out of cash to play you can’t remain open.

Second, if you had a reasonable plan in place already then it is a good guess that your plan calls for only a reasonable amount of percent gain on your equity regularly. If you were to use some basic mathematics while creating a sound trading approach one of the things you would be looking for was a realistic “risk-to-reward” ratio. That means for every dollar you lose you expect to make a certain number of dollars and out of every 100 trades a certain percent will be winners and some will be losers. If you put this all together and asked the “what-if?” questions you get this base-line number that statistically will be a winning set of results: 42% winning trades out of 100 taken Two dollars out for every dollar you give back This is not my opinion, this is the Probability of Ruin Matrix and you can research it yourself if you have time. Of course, if you have higher percentages of winners and take more out on those winners you make money a lot faster but the point is if your results are at least this good consistently you are on your way to success.

It’s great to be on the high side of the matrix but most of us didn’t start there and that is why you have to TRADE SMALL at first. To protect yourself from being greedy about your trading and to help you stay focused on long-term success it is important to make your trade size small enough so that it won’t leave you in a position of not being able to play at all should you have a string of losses all at once. I found that limiting your risk/reward ratio to a factor of about 1.5% on any one trade is a great way to stay focused and not get greedy. This means that for any one trade you take, no matter how you think of the trade or how certain you are of a win; you will not risk more than 1.5% of your account balance at any one time. This means that if you are trading so that your average loss is 3-5% of your account balance at any one time, you are trading TWO to THREE TIMES TOO LARGE for your account size. In that case, the Probability of Ruin Matrix will work against you and you will likely run out of capital before you make money with your approach. If you are the greedy trader right now and you are guilty of making this mistake; If this means you have to drop your trading size down a few notches then you had better call your broker today and fix it, because if you don’t you are an accident waiting to happen. It only takes making this mistake THREE TIMES IN A ROW to drop your account balance 15% or more in a heartbeat; especially if you are day trading!

HOW TO MAKE THIS MISTAKE WORSE: Convince yourself you are so good at trading that this couldn’t possibly happen to you, convince yourself that your analysis is good enough to help you find 80-90% winning trades all the time, trade without a stop-loss order “just this once”, double-up on the next trade after taking a large loss.

SOLUTION: Immediately reduce your account balance; take 20-30% of your cash home. Trade position sizes that are no more than 300% as valuable as your account balance. In other words, if your account size is $10,000, don’t trade anything that has a total contract value larger than around $30,000. If that means trading mini’s instead of big-board you had better do it.

MISTAKE # 7

VARYING THE SIZE OF YOUR TRADES

Most professional athletes can tell you when they are “in the zone”, that special place that only they know about but it leads to maximum performance. Every one of those athletes will tell you that they got that way by strict discipline and practice. One of the things that they practiced constantly was the basics as they understand them to be. A golfer has “his swing”. A baseball player knows “his pitch”. A racing car driver has “his line”. These professionals got there by following the bedrock basics all the time.

In trading, the bedrock basics include trading a size that works for you. Just because you can trade a 50 lot of something doesn’t mean it is a good idea for you to do that. It is a mistake to think that whatever trading size you choose to work with day-to-day will automatically “fit” in your head. In fact, most traders will tell you the single most embarrassing blow-out they have had is the one that came from varying their trade size when doing well. In other words, they were pulling money out of the markets regularly and decided to increase their trade size just because they could; and subsequently the resulting new levels of equity gains or losses threw off their equilibrium. It made them see things differently and they lost enough of their edge to cause themselves losses.

To help put this in perspective, look back to a time in your life when you were trying something new for the first time. Did you ever have the feeling that someone else “made it look so easy”? Imagine your son or daughter being exposed to baseball or ballet for the first time. You and the instructor can plainly see that those kids have what it takes to excel at these sports. But if you push them too fast they will get discouraged because they “can’t do it”. Of course they can do it, but they don’t see that yet and they lack the confidence that doing the basics well can offer them.

Imagine a 10 year old Hank Aaron with no experience staring down Major League Pitcher Al Downing for the first time.

In my early life, before I was a trader, I had the privilege of learning how to drive an open-wheel single-seater race car. The education process started with a lot of classroom theory followed by getting in the car and just doing it. I had to start at small “revs” so the car didn’t get ahead of me; in other words drive slow at first. After every few laps we had some critique by the instructor. While I was learning I was never allowed to exceed a certain amount of revs. Some guys in my class were never given the go ahead for higher revs; they flunked out. When my turn came I was given the green light to “see what the car could do”.

Because I had gotten really good at doing the basics of cornering I had absolute confidence and respect for my developing talent. I came within a few seconds of a course record on my third round of “full lapping” at full revs. I had no idea I had done that well; I just felt “in the zone”.
When my instructor offered me a chance to move up to a bigger horsepower car I had absolutely no worries. 20 minutes later I was so scared I thought I would kill myself. I was making serious mistakes, my speed was dropping and I was “off my line”. In retrospect, and my instructor told me this, he had moved me up too fast. Although I was getting good at lapping with a lower performing car, I didn’t have the real bedrock knowledge yet. I needed more time and experience. When I got that time and experience I was a real driver—but that took two more years.

I honestly believe that if I would have stayed with the bigger car initially I would have had a huge accident and maybe gotten seriously hurt. Trading is a lot like that learning curve. What makes you a success at an early stage is not necessarily going to be what keeps you successful as the game goes on. As you get better and better it is tempting to increase your trade size. When you do, it is not uncommon for the new set of parameters and risk/reward numbers to “mess with your head” so much it leads to losses. Things were going really well but now you are losing ground.

Don’t be the trader that thinks he can do it all, all the time. Don’t vary your trade size easily. Stick with what you know is working and plan on increasing your trade size for very good reasons and at a certain level of success. Don’t do it too fast or you will find yourself holding losses for no real reason you can figure out easily.

HOW TO MAKE THIS MISTAKE WORSE: Focus on the money being made instead of the discipline required to get there, make your trade size as big as possible for your account size, ignore money management rules, don’t run a stop-loss order, trade larger when losing.

SOLUTION: Make the commitment to trade only a certain size until you have successfully doubled your account balance. Don’t increase size until you have done at least 100 trades with your system. No matter how well you are doing don’t increase your size for a full calendar year.

MISTAKE # 6

OVERTRADING

Overtrading is a symptom of a bigger problem; the one we have already discussed: GREED, BABY, GREED

Overtrading is typically defined as doing a lot of trades, mostly losers very quickly. Sometimes overtrading can be defined as trying to trade too many separate markets. Sometimes it is defined as jumping back into a market immediately after you have gotten out. No matter how you want to slice it, making this mistake is very deadly to your equity. Here’s why you need to guard against overtrading: THE TRADE IS A LOSER!! YOU OR THE SYSTEM OR BOTH ARE WRONG!! STOP TRADING FOR NOW!!!

By continuing to throw good money after bad you are no longer trading; you are gambling and/or hoping to get your money back. You are not thinking clearly and you are probably ignoring reality. It would be better to take a break and go do something else for a period of time. When you are in a state of overtrading you are doing something that is completely psychological in nature and has nothing to do with the markets. You see, the market does not know you have any position on at all. The market is simply doing what it is designed to do, process orders from traders. The market has no idea what the results of those orders are for any one trader. If you have lost touch with reality and can’t figure out which direction the market is more likely to continue moving in, it is very likely that you will be on the wrong side of the price action; you will likely lose more. If you compound this problem by trading excessively your probability of success drops even farther. It is better to take a break and just take your lumps.

As long as you have equity in your account tomorrow you can come back then and take a fresh look at it. If you continue overtrading there is a strong probability you will lose a significant amount of your equity making it next to impossible to recover easily from a minor set-back. Losses are part of the game. They are a minor set-back. If you complicate your losses by wildly flying in and out of the market hoping to get your money back you will lose your cool. You will no longer see the market in an objective manner or let your system help you come back to even.

All trading approaches have their share of winners and losers. If you compound your problems by doing trades your system never asked you to do, plus overtrading in the process, you are headed for a meltdown. Overtrading is easy to spot and simple to stop.

First, if you are doing trades your system hasn’t called for you; you are overtrading. If you are adding to a position (trading more) without a profit; you are overtrading. If you are reversing after a loss (taking a loss then going the other way) and getting whipsawed; you are overtrading. If you are adding to a losing position with more contracts than when you first did the trade; you are overtrading. If you are “winging it”; you are overtrading. If you are trading too many markets and committing 100% of your equity all the time to all those markets; you are overtrading. In short, overtrading is any trading you do that is not part of your original plan and not part of your trading system. Overtrading is any trading that causes you to risk more than a reasonable amount of your equity on any one trade. If you spin yourself silly you will not have enough equity to recover. Don’t be the trader who is overtrading.

HOW TO MAKE THIS MISTAKE WORSE: Ignore common sense with regards to how much trading you are doing, don’t count the number of trades you did daily, tell yourself it is OK to add to a loser “just this one time”, get angry with people who ask you how you are doing, ignore professional advice, trade without a stop-loss order.

SOLUTION: Set a number of losing trades in a row and stick to it. If you number is three losers in a row; then have the courage to quit after those three losers. Don’t go back in 4, 5, 6 or more times thinking “you will get it back”. Ask professionals to look at your trading history and follow the advice they give. If you have a certain number of losing days in a row, take a break for a few days.

MISTAKE # 5

USING ONLY ONE TIMEFRAME FOR TRADE SELECTION

As you can see, it is my opinion that psychology is vastly more important to lasting trade success than anything else. I really believe that trader psychology is 95% or more of lasting success. Part of what shows this clearly is how traders focus on time. Every trader reading this will already have some idea of how much time is “required” for a trade to work; even if it is just a fuzzy sort-of feeling that you need to “give it time”. I realize that this particular discussion of this particular mistake might be over a few heads at first. For those who might be saying “This is a bit much for me” I want you to try and follow along anyway. I promise to make what appears to be a difficult concept very simple to understand.

Suppose you do a trade at this moment.

When do you expect that trade to make money? I’m sure you answered to yourself immediately and said “By (such and such) time” or something close, correct? That amount of time you thought of, in almost all cases, is too small for that trade to work.
I say this because most traders do not stop to consider anyone else in their trade selection; and this is even truer if you are using a “system” provided to you.

It is very important for you to consider that if you are attempting to trade using a particular time frame (say a five-minute price chart) there are only so many people using that time frame as far as all the people in the market are concerned. There are traders using one-hour charts to find a trade, 120-minute charts, 15 minute charts, daily/weekly/monthly charts; all sorts of different time frames. Even if those traders are all using the exact same trading system, each of those different time frames will tell a different story about the market. It is completely possible that you might get a “buy” signal on your chart at the exact same moment someone else is getting a “sell” signal on their chart, even if you both are using the same trading system.

After you put the trade on, each of you will then wait a certain amount of time before liquidating your trade. The amount of time you wait will both be different. For the smaller time frame trader this amount of time will only allow for a certain amount of distance in the price movement; the scale is “smaller”. To illustrate this thinking a bit more, have you ever done a trade and closed it with a nice gain only to see that market move considerably farther in your favour over the next few hours or days? You would have made a huge profit if you would have waited just a bit longer. The reason you didn’t wait is because you are using too small a time frame and your system gave you a false signal to get out. The most common problem with using only one time frame for trading is cutting a profit short. The important thing to remember is that the market is a very big place.

There are literally millions of individuals trading. They represent everything from college students hoping to make a few dollars for tuition to multi-billion dollar multi-national investment banks and even governments looking to hedge huge amounts of money. All of these individual traders have different needs and goals from their trading. Sometimes they operate on time horizons that are several years out from now. Sometimes they are “scalping” for only a few PIPS and are out in seconds. All of these time frames are competing against each other and for the most part the people with the longest time frames are usually the winners. You want to trade WITH the big players and not AGAINST them. By going in and out of the market too quickly you lose the benefit of the large player pushing the market in a particular direction over time.

Think of it this way:
Even a dead fish can float downstream. It takes a lot of effort to swim against the current. It is always easier and more cost effective to go WITH the largest traders in the direction they want the market to go. By using a larger timeframe the overall trend is easier to see and it is usually the more accurate one. Once they get the market moving in that direction it will go a long way over time; be the trader who is flowing with that larger amount of time. Don’t jump in and out all the time.

HOW TO MAKE THIS MISTAKE WORSE: Ignore what large traders are doing and focus only on your chart, use your system exactly the same way no matter what it says on a different time frame, don’t place a stop-loss order, add to a losing trade, ignore broken support or resistance on a larger timeframe, go against the bigger trend.

SOLUTION: Use three time frames lower than yours and three time frames higher than yours to get a better idea of what other traders might be thinking. Look for conflict between the timeframes such as a sell signal on one chart and a buy signal on another when using the same system on both; always go with the larger time frame signal.

MISTAKE # 4

FAILING TO DO YOUR HOMEWORK

Of all the mistakes that FOREX traders make this one is one of the most common.

If you want to lose money quickly, make sure you ignore doing your homework. When I say homework I mean get market knowledge. People often make the mistake of thinking that all they have to do is buy a trading system or a piece of software and start trading. If it was really that easy then everyone would be rich and there would be no horror stories of people losing all their money. It is true that a trading system or software can be a very valuable asset. Those tools make finding winning trades somewhat easier. They do not take the place of true market knowledge.

True market knowledge can only be acquired by regular study and education. Market knowledge is highly needed because a trading system or a computer cannot take into consideration general conditions. Computer software and trading systems don’t take into account people’s behaviour. As a serious trader looking to make real money trading you can’t just plug in a black box, hit “go”, and sit back and watch the money roll in. That might work for a period of time but once conditions change or people’s behaviour changes the quality of the market changes; once that happens your computerized approach will start losing money faster than you made it in all likelihood.

For example, most electronic systems or trading approaches use the laws of probabilities and averages to create trade signals. Many systems you might buy are Trend Followers. That means they use various algorithms, pivots, formulas, and ratios to determine that a market has traded to a price that is favourable as a place to go WITH the trend. In other words, the market has rallied to a sell point in a down trending market or fallen to a buy point in an up trending market. See example “A” and “B” below:

Example A: USD/JPY Daily Price Chart, courtesy of Genesis Financial Technologies. The market is in a very obvious down trend and the red arrows are where my proprietary computerized SELL signals would have told you when to short this market for a potential profit in a down trend.

Example B: EURO/USD Daily Price Chart, courtesy of Genesis Financial Technologies The market is in an obvious uptrend and the green arrows are where my proprietary computerized BUY signals would have told you to BUY this market for a potential profit in an uptrend. The problem comes in when the market itself is no longer trending. At a time like this, a trend following software will get chopped to pieces as the market rallies and falls chaotically; whipsawing you as you try taking each trading signal. See example “C”

Example C: USD/CAD Hourly Price Chart, courtesy of Genesis Financial Technologies The market is trading sideways with enough distance to fool the computer into thinking it is developing a trend. Notice how the red and green arrows suggest getting in to the market just at the time the market would reverse. By understanding how to tell when a market is truly trending and when it is not you can save yourself the headache of continuing to trade every signal a computerized approach might give you. This type of market knowledge is never going to be “inside” the software or “inside” the black box. You as a trader must not make the mistake of thinking that you don’t have to do any homework about the markets you are going to trade. Trading systems and software only will go so far; you need to be vigilant on making up the difference through quality on-going market education. It is important to understand the basic fundamentals of the FOREX markets as well as how to apply a trading system properly.

HOW TO MAKE THIS MISTAKE WORSE: ignore new developments in the news, don’t take refresher courses, don’t take advanced courses, don’t read any trading books, don’t attend seminars, ignore changes in your system, and don’t take feedback when offered.

SOLUTION: Make regular time daily to read books on solid trading principles, attend seminars or online webinars offered by seasoned professional traders, update your software and hardware regularly, and invest some of your trading profits into continuing education regularly.

MISTAKE # 3

TRADING THE NEWS

Traders who have made a lot of money and kept it will be the first to encourage you to not make this mistake; starting on your first trading day. Trading the news is one of the quickest ways to the poorhouse. There are no professional traders working in any trading arena that will make trades when the news comes out or change their strategy when the news comes out.

It’s important to understand a few things about the news. There is nothing special about the news, ever. In fact, I would almost go so far to say that the news doesn’t even matter but the markets do need to process changes to the fundamental picture to some extent. But for successful traders the news, for the most part, is not any more or less significant than anything else. The market’s reaction to the news is what is significant, not the news itself.

Stop and think about this: Everyone reads the news. The news about the FOREX market is available to everyone. There is no secret news that is so special that if you knew it ahead of time it would somehow help you find the right place to do a trade. All the wire services, reporters, television shows or financial periodicals all have access to the same government reports and people in authority that might move the market. There is nothing they can say or report that is any different, unique, or somehow “more important”. For every potential news item that will be released, it has already been discussed, analyzed, debated and re-hashed from both sides for weeks or months before it is released. Even the unexpected news will have a two-sided debate that rages sometimes for years. All the news is the same for everybody all the time. And the markets don’t move because of the news. The markets move because of what people do. Sometimes people focus on the news and trade that is the only important thing about the news.

Because the nature of the markets are such that we as traders are trying to anticipate a change in price, and often a change in price happens during a news event, most traders consider the news already “factored” into the market. In other words, if I was expecting the news to be bullish for a particular currency I would buy the currency ahead of time and wait for the news to be released. This tendency for traders to “anticipate” the news or “predict” the results of the news is where the trading maxim “Buy the rumour/Sell the fact” came from.

It is natural for a market to rally expecting bullish news or fall when expecting bearish news; but that market will do something else when the news is released. This is why you should never trade BECAUSE of the news. All of the traders’ actions BEFORE the news created a price change and now when the news is released, the traders’ will do a DIFFERENT action. This is why a market often drops hard after a bullish piece of news was released. Basically, everybody was already in; they just liquidated when the news came out. Therefore, the people who rallied the market BEFORE the news were the SAME people selling the market when the news came out. The individual trader who just got in that market at the moment the news came out was left holding the bag. The market now drops when he liquidates. All of this can take place very quickly as some of us can attest.

When you wait for the market news to be released before you attempt to do anything you are taking a huge risk that you will misinterpret what the results of that news will ultimately be by the end of the trading day. In most cases, the market will react violently in both directions enough to either scare you out with a loss or force you out with a loss before settling down to a reasonable sort of trading. Trading the news is a very dangerous thing to do and most professionals often are out of the market around a news event or have only a small base position on. In reality, there are really only three things that can happen when a news item is released. The news item can be:

1. Better-than-expected

2. Worse-than-expected

3. About as expected

How the market reacts to the news when the news is in one of these three categories will give you much more information about what might be coming next. For example, if a piece of bullish news is expected, and the market rallies ahead of the news, then the news comes out vastly more bullish than expected, but the market actually drops on that day; THAT price action tells you a lot more about the health of that market than anything else could.

For a bullish market to rally on anticipated news and then drop on much better news says quite clearly that no one is left to buy that market anymore. It wouldn’t surprise me in the least to see that market much lower after only a few days; leaving all the people who bought because of the news scratching their heads and asking “Why did the market go down, the news was bullish?” The market dropped because the news was already “factored in” and the buyers already made their move. Don’t be the trader that gets into the market when the news is released, make your choice and enter the market when the system says to; don’t expect the market to respect the news. Don’t expect that your interpretation of the news will be in the direction the market is going to trade today.

HOW TO MAKE THIS PROBLEM WORSE: Try to guess the news, go long or short just before the news comes out, buy as the market rallies or sell as it breaks hoping to catch the wave, don’t place a stop-loss order, and try to trade both sides of the volatility.

SOLUTION: If you don’t have a trade active in the market, wait at least 45-60 minutes after the news comes out to do anything. If you have a trade active, turn the screen off for 45-60 minutes when the news comes out and just let it work. Don’t let the volatility scare you out. Give the market time to settle down after the news comes out.

MISTAKE # 2

NOT KEEPING RECORDS OF YOUR TRADING

Suppose you told me that you owned your own business but had absolutely no records of what your inventory was, what your average ticket sale was, how long your customer stays in your store, what the average wholesale price of your best selling items were, etc.? People, me included, would think you were Looney-tunes. You can’t run a business without good records. Trading is a business. You need to keep trading records. You need to keep accurate records of your trading because over time you are going to learn that certain things work and other things don’t.

Sooner or later you will come to the conclusion that your trading system or computer analysis is only a small part of what it means to be a successful trader. The rest is how you personally participate and if you don’t have a record of how you participate; you can’t learn what behaviour will work for you and what behaviour doesn’t help you. The purpose of keeping good trading records is to help document what your personal winning behaviour is and what your losing behaviour is. Your goal with these records is to discover your trading strengths and weaknesses.

Once you have a handle on what your trading strengths and weaknesses are you can now put guidelines and/or rules in place to maximize your trading strengths and minimize the effect of your trading weaknesses. You don’t have to do it by much in order to tip the odds squarely in your favour and put you on the high side of the Probability of Ruin Matrix.

Let me tell you a story of how keeping records helped me turn the corner in my personal trading. As a young trader, I would often “shoot from the hip” I would make a snap judgment based on my point of view and make a trade instantly. Because I had no real rules for getting in or out, I had my share of “jumping the gun” on trades that eventually would have worked from that side. Once I learned to keep good records and review them I discovered that I often was correct on my initial observation about net price action, but I was usually a day or two early. I was often stopped-out for a loss just before the market would turn. After this happened several times, I would simply execute again immediately to get back in; resulting in another small loss. This would happen six or seven times (making mistake # 6 “Overtrading”).

Usually the market went a significant distance; then the market would turn. I would hold the winner but I would need to overcome a major loss to my equity before the trade had a net gain. On a 200 point move in Japanese Yen (for example) I would net maybe 30-40 points because I had a 150 point deficit to overcome first.

After reviewing my notes, my observations, and my trading history, I decided that my skill at finding a trade was not the issue. My system worked fairly well. My timing was usually a day or two early. I made a new rule for myself: “If I have three losses in a row, I cannot trade for 24 hours”. If my first three attempts to buy what I felt was a sell-off were losers, usually I would get another chance right in the same area or better within a day or so. By disciplining my trading in this manner, I would save myself three or four more losers. Nothing really changed in my trade selection or my analysis but changing my behaviour allowed me to get into the market better and stay there better. I might have never made that connection if I hadn’t reviewed my records and changed how I operated my business. That one little change made a huge difference in my results.

HOW TO MAKE THIS MISTAKE WORSE: Don’t keep any records of any kind, never review your trades, check your account balance only rarely instead of after every trade, do trades without thinking them through, ignore advice from professionals, trade without a stop-loss order and don’t write anything down.

SOLUTION: Get a three-ring binder and fill it with lined paper. Write everything you do down. Calculate your results daily and make time every week to review your notes on your trades. Join a support group of other traders and have them hold you accountable for record keeping. Now, I want to give you the number one mistake FOREX traders make. This is without a doubt the single biggest mistake you can make and you only need to make it once to end up broke. If you made every other mistake in this book but never made this one, you would still have a fighting chance for ultimate success. But if you make this mistake, you might as well take a $10,000 stack of $100 bills out to the backyard, tear them into tiny little shreds and start a bonfire with them. There is no faster way to losing all your money than making this mistake.

MISTAKE # 1

TRADING FOREX WITHOUT A STOP-LOSS ORDER

Why do you think they are called stop-loss orders?

Because that is the point you want to stop losing. There is no way to adequately communicate how important it is to pre-select, in advance, exactly where you will liquidate a losing trade if the market goes against you. There is nothing you could say or do, no argument you could ever make, that would justify, even remotely, trading FOREX without a safety-net on your equity.

I have heard all the opinions, rationalisations, justifications from traders who say that they don’t need to use stops, they have “mental” stops, they will “just get out” etc. I have heard all the sob-stories from these same traders when they have to clean out their desk and find another career; “if only I had placed a stop at least I would still be in the game” I’m as serious as a heart-attack.

If you place a trade without a stop-loss order to protect yourself you WILL be in that group of traders sooner or later. It is important to constantly remind yourself that trading is a risky environment. Because it is simply not realistic to think that you will have 100% winning trades it is equally important to limit the risk exposure on any one trade. You have to let the laws of probabilities work for you and you have to control your risk to do that.

When you place a trade, it is completely possible that something in the market might change and that change might take the price against you to places you personally just never expected. If you are still in a trade at that point, your loss is probably a significant amount of your balance. If you were trading too large to begin with you might be close to getting wiped out. All of that is prevented by placing a stop-loss order. Additionally, getting stopped out of a losing trade frees up both capital and mental resources to look for the next potential trade.

You are going to have both winning and losing trades. Get out of your losers quickly and confidently. Don’t let the markets take more from you than is reasonable to find out if you are in a position to profit. It only takes ONE trade that runs hard against you to wipe you out if you continue holding it. Use stop-loss orders and never break this rule, always use stop-loss orders on every trade. There is nothing more to say on the subject. Make this mistake and you’re out.

HOW TO MAKE THIS MISTAKE WORSE: There is no way to make it worse. This is as bad as it gets in this business.

SOLUTION: Simply place a stop-loss order on each and every trade. When you click the mouse to get in; follow that order IMMEADIATLY with a stop-loss order.

IN CONCLUSION

I hope you have found this short booklet enlightening and helpful. As I have told my people many times I learned all these lessons the hard way. I would encourage you to consider very carefully if what has been presented to you here is the right thing for you. Some people won’t agree with my point of view on some of these mistakes but that isn’t the point. The point is to help you get a better head start to trading FOREX and shorten your learning curve.

Good luck

Good Trading and To Your Success