My Forex Journey

Trading Market Time

2010-04-16T19:33:00.000-07:00

Quote:

Originally Posted by nathanalgren

I didn't know where to ask this, since this is the hottest topic, I am posting it here.

In my trades, I almost always make money in the first four days of the week and on Fridays, I always lose money. Always the market goes against my expectations, the same system that works in the 4 days, doesn't work on Fridays. Is it there a reason behind this? Like people are taking profits on Friday and closing their positions before weekend etc? Is this only happening to me or are there others like me?

When to Trade if You Want to Lose Money

Fridays: Fridays are very unpredictable. This is a good day to trade if you want to lose all the profit you made during the rest of the week.

Sundays: There is very little movement on these days. Trade this day if you want to start off your week with NEGATIVE pips.

Holidays: Banks are closed which means very little volume for whatever country is having the holiday. Holidays are great to trade when you would rather lose your money than take a day off and enjoy the other finer things in life.

News Reports: No one really knows where the price will go when a news report comes out. You could lose a fortune trading during news releases if you don't know what you're doing. Price acts like a drunken monkey during these times and become unpredictable.

via DailyFx

Double Bottom Chart Pattern

2010-04-07T07:41:00.000-07:00

Introduction

A double bottom occurs when prices form two distinct lows on a chart. A double bottom is only complete, however, when prices rise above the high end of the point that formed the second low.
The double bottom is a reversal pattern of a downward trend in a stock's price. The double bottom marks a downtrend in the process of becoming an uptrend.

Double bottoms are often seen and are considered to be among the most common of the patterns. Because they seem to be so easy to identify, the double bottom should be approached with caution by the investor.

According to Schabacker, the double bottom is a "much misunderstood formation." Many investors assume that, because the double bottom is such a common pattern, it is consistently reliable. This is not the case. Bulkowski estimates the double bottom has a failure rate of 64%, which he terms surprisingly high.If an investor waits for a valid breakout, however, the failure rate declines to 3%. The double bottom is a pattern, therefore, that requires close study for correct identification.

What does a double bottom look like?

As seen below, a double bottom consists of two well-defined lows at approximately the same price level. Prices fall to a support level, rally and pull back up, then fall to the support level again before increasing.

Double Bottom Bullish Pattern

The two lows should be distinct. According to Edwards and Magee, the second bottom can be rounded while the first should be distinct and sharp. The pattern is complete when prices rise above the highest high in the formation. The highest high is called the confirmation point.

Analysts vary in their specific definitions of a double bottom. According to some, after the first bottom is formed, a rally of at least 10% should follow. That increase is measured from high to low. According to Edwards and Magee, there should be at least a 15% rally following the first bottom. This should be followed by a second bottom. The second bottom returning back to the previous low (plus or minus 3%) should be on lower volume than the first. Other analysts maintain that the rise registered between the two bottoms should be at least 20% and the lows should be spaced at least a month apart.

There are a few points of agreement, however. Investors should ensure that the pattern is in fact comprised of two distinct bottoms and that they should appear at or near the same price level. Bottoms should have a significant amount of time between them - ranging from a few weeks to a year depending on whether an investor is viewing a weekly chart or a daily chart. Investors should not confuse a consolidation pattern with a double bottom. Finally, it is crucial to the completion of the reversal pattern that prices close above the confirmation point.

via trending

Forex Trading Burnout Magnet

2010-04-04T10:11:00.001-07:00

In trading, however, it seems such an approach is not widely taken. This is unfortunate, as trading has enormous potential to cause burnout. If you have been trading for while, chances are, you have experienced a case of burnout in the past. Burnout affects all types of traders, but especially so, the day trader.

So, what is burnout? It may be defined as a state of emotional, mental, and physical exhaustion caused by excessive and prolonged stress. It is a gradual process that occurs over a period of time. Burnout is all-encompassing. It affects all areas of your life. You need to be paying attention to early warning signs or it can creep up on you without you being aware.

Here are some warning signs and symptoms that we as traders need to be on the watch for:

Physical

* Everyday is an ordeal for you.
* You begin to question why you should care about following your trading rules
* Frequent headaches and muscle aches.
* Lowered immunity, feeling sick a lot.
* You are extremely exhausted all the time.
* Change in appetite or sleep habits.

Emotional

* Sense of failure and self-doubt.
* Feeling helpless, trapped, and defeated.
* Decreased sense of accomplishment
* Loss of motivation.
* An increasingly negative outlook.

Behavioral

* Holding off in closing a trade you know is doomed anyway.
* The abuse of drugs/alcohol, or using food to ‘fill the void’.
* ‘Kicking the dog’ scenario. You take your frustrations out on others.
* Entering and exiting trades for no apparent reason.
* Total disregard for your own trading rules.

Now that we know what burnout is, and what it looks and feels like. We will explore some prevention tips:

1. Learn to recognize and remember the signs that burnout is approaching.
2. Start the day with a relaxing routine. This may be meditation, a nice warm bath, or simply some quiet time.

3. Do something you enjoy everyday. For me, it’s writing. I tend to tune everything else out and get deeply focused when I write.
4. Try and remember the feeling you had when you first started trading. Remember the excitement.
5. Find a mentor, or simply another trading buddy with whom you can comfortably share.
6. Laugh more! Call up some old friends and maybe reminisce a bit. If the old yearbook picture does it for you, so much the better.
7. Pamper yourself once in a while; think full-day beauty spa for us women, or a spontaneous getaway with your family or just that special someone. After doing this your return to the charts will see with you at your absolute best.

I really do hope that this article has been helpful. If it helps at least one person, I will have done my job. I sincerely suggest that you take on board the seriousness of the issue, because burnout can prove lethal to a trader’s career if it is not recognized and properly addressed.

Successful trading requires alertness and clarity of mind. It is a worthy profession, but once the fire is gone…. fallen victim to burnout… you might well decide that trading, something you once had such passion for, is not really worth the effort anymore.

via ForexHound

Avoid Trading Forex During Holiday -Happy Easter

2010-04-01T20:19:00.000-07:00

forex-holiday.jpgHoliday trading is useless. It can be difficult to pull yourself away from the excitement on the market and take a break from the action. Banks are usually closed on holidays and professional traders and big institution are on vacation. Because of this, two way trading is very limited. That means that prices can move very easily in one direction if any surprise large orders come in.

The unexpected behavior is usually the exception rather than the rule. Most of the time, there is very little action in the forex market on holidays. For daytrading purposes, technical analysis usually fails. The market is usually so slow that even if you can make money, it will probably be so little that it isn’t worth it.

The market also have less Liquidity that sometimes a surprising event will happen and because the markets are not liquid, they will move very quickly and sharply. These moves can take place in a blink and if you are trading, the market can make a move against you before you even have a chance to act.

Rest of all that you shouldn’t be trading on holidays because you have to rest sometime. It’s better to take time off and spend it with your family. That time does not come around often and it’s better to take that time off while you can. The forex trading markets are busy most of the time. Holidays are a perfect time to rest, reflect, and recharge. Merry chrtistmas-Happy new year and Happy holiday there.

Have a happy Holiday. Cheers!

via http://daily20pip.com

Forex Weekly Trading Forecast - 03.29.10

2010-03-28T05:21:00.000-07:00

via DailyFx

Forex Trading Tips

2010-03-26T20:47:00.000-07:00

There are thousands of successful Forex traders making money trading foreign currency, but did you know that 90% of new traders lose money doing this? In order to be successful, there are a few things you absolutely must know. The following are some of the more important forex trading tips to understand if you plan earn money trading currency.

Learn In Pairs – Know Both Sides Of The Currency

It is absolutely impairitive that you understand the relationship that both currencies you’re trading have with each other. Understand how swings on one currency affects the other, and their cyclinicals. Failure to have the basic understanding of learning what you’re trading will likely end up cost you alot of money.

Watch Global Influencers – News and Events

One of the largest contributers in currency fluctuation is events happening around the world. News good or bad, especially in the financial sector, will cause a swing in global currency values. Instability in one market will likely lead to upturns in another – make sure you know your pairs! Remember, instability and volatility is where you make your money.

Tiny Margins and Over-Cautious Trading

We’ve all heard the old addage “slow and steady wins the race.” Well, it’s this trader’s opinion that those types of investments will lose the race. This is a player’s game, if you don’t give your position a chance to demostrate it’s value you’ll end up undercutting yourself in trading fees. Making big trades is where the money is, then again you must know and be confident in your position.

Have A Strategy But Stay On Your Toes

Would you start a business without a business plan? If so, Forex trading isn’t right for you. You must have a plan that details the approach to take, the currencies to trade and how to manage the risk your taking. But with that said, always be aware of your market and don’t be afraid to call an audible if you see indicators suggesting a change of plans Remember the global influencers?

Emotional Trading and Confidence

This goes back to having a strategy. If you’re emotional then you’re not thinking with your head, much like a poker player who goes on tilt. Keep cool stay confident and stick to your plan. Learn to manage stress and understand that as long as you play a winning strategy, they’ll be ups and downs but in the end you’ll be successful as long as you keep your cool.

Forex Trading Tips

2010-03-25T01:17:00.000-07:00

Tip 1. Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling.

My first attempt of Forex trading

2010-03-24T22:12:00.000-07:00

I opened a forex trading account using http://liteforex.org/openaccount.php. And then proceed to make a 100USD deposit via moneybookers. That is roughly about RM350 in Malaysian Ringgit.

I decide using real money from now on because it is better learning than using demo money because I will not be so serious about losing money if using demo capital.

So hopefully I will learn and improve.

Cheers