Forex is not a quick rich scheme.
Forex is not easy even though my blog says so.
Forex is not a place for newbie
Forex is not something you can learn overnight
If you needed the money, dont put it in Forex. Seriously. Go somewhere else.
Forex is a journey, enjoy it.
There is no such thing as holy grail coz there is no perfection in this world. If perfection exist in this world it would be boring. No more room for improvement.
Forex is not rocket science. There is no right or wrong. There is only probability.
I am typing this from my pc. It a bit of a mess now, the new house still needs a little work and I am not feeling well lately. Maybe its the change in climate.
This week I am going to talk about numbers only. Forex is after all based on numbers. Example, I have a long position on GBPUSD @ 1.4700 with a profit of 320 pips at the moment and still holding.
What I am going to say is big players only see big number. The do not see the last 2 digit. The last 2 digit is for scalpers. Big players only see the 1st 3 or 4 digit only. So if a bank wants to buy or hedge a currency they will give an instruction to buy at 1.47. Thats it. Simple yet people fails to see it.
So what happens at 1.47? The price will bounce of or hover around it but things arent always what they appear to be. What happen is price will have a range between 1.46 - 1.48. That is almost 200 pips wide range. Imagine what happen to your 50 or 100 pip SL?? Now you know why people lose money even though they have the right direction.
These big players have big money they dont mind to stand few hundreds negative pips coz in the end they will profit big time. What they do is they will have a standing order to trade at certain level. Because the total amount of order, the market cannot fill the order in 1 transaction and so price will hover or bounce of a certain level. This is where double top or bottom appear. Behind it is the action of filling orders by these big players.
Example EJ currently have a top of 1.34 and a bottom of 1.30. Big players are playing the game here. At the moment EJ is climbing and there is a big possibility that it will reach 1.34 again. I have a standing order to buy EJ at 1.30. If it hits there is a very big chance for 400 pips gain. Only time will tell.
15 April 2009
BIG PLAYERS SEE ONLY BIG NUMBERS
I am typing this from my pc. It a bit of a mess now, the new house still needs a little work and I am not feeling well lately. Maybe its the change in climate.
This week I am going to talk about numbers only. Forex is after all based on numbers. Example, I have a long position on GBPUSD @ 1.4700 with a profit of 320 pips at the moment and still holding.
What I am going to say is big players only see big number. The do not see the last 2 digit. The last 2 digit is for scalpers. Big players only see the 1st 3 or 4 digit only. So if a bank wants to buy or hedge a currency they will give an instruction to buy at 1.47. Thats it. Simple yet people fails to see it.
So what happens at 1.47? The price will bounce of or hover around it but things arent always what they appear to be. What happen is price will have a range between 1.46 - 1.48. That is almost 200 pips wide range. Imagine what happen to your 50 or 100 pip SL?? Now you know why people lose money even though they have the right direction.
These big players have big money they dont mind to stand few hundreds negative pips coz in the end they will profit big time. What they do is they will have a standing order to trade at certain level. Because the total amount of order, the market cannot fill the order in 1 transaction and so price will hover or bounce of a certain level. This is where double top or bottom appear. Behind it is the action of filling orders by these big players.
Example EJ currently have a top of 1.34 and a bottom of 1.30. Big players are playing the game here. At the moment EJ is climbing and there is a big possibility that it will reach 1.34 again. I have a standing order to buy EJ at 1.30. If it hits there is a very big chance for 400 pips gain. Only time will tell.
Attach is a chart of GBPUSD. If you look carefully, you can see my actual entry point. I will explain the rest of the chart in due time.
At the moment I am rather busy. Moving to a new place and house. The house still needs a lot of work. As a result, I do not have time to update this blog. Trading is still going on but on a shorter timeframe. Result is consistent now. AudUsd is very kind at the moment with no sudden movement.
In the next few weeks I will show you how to trade using only MA. As usual what works for me may not work for you. This is because some of you may not be able to follow the rules of the game.
RULES OF THE GAME
1. Trade based on your capital and the time that you have. The bigger your capital the longer the TF. The more time you have the longer the TF. Vice versa.
2. Only trade at the direction pointed by the MA pairs. If the MA pairs is showing mixed direction, do not trade. The MA pairs must be pointing at the same direction.
3. If a trade suddenly change direction, do not hesitate to close it at a loss and turn the trade. This is the hardest part where most of you failed. Free your mind or become a loser all your life.
4. Keep in mind, there is no such thing as winning all the time. Just make sure you win a lot more than you lose. In the end your profit will grow along with your confident.
Simple system with simple rules. I like to keep it simple. No point of having the most complex system when simple system can have the same result. With this system you will be out of the market most of the time. This is because you will only be taking the big move and avoiding the small move and market noise.
Last advise. Do not anticipate. Forex is not a game of inteligence eventhough this system at full swing will show you possible turning point. I am having a possible turning point for audusd at 0.7200 but I will not take it coz there will be market swing before the actual turn. Why wast time waiting for the big move when you can actually see when its going to move.
In the mean time, good luck for all of you. I will be back once my pc is online again. At the moment I am posting this on a laptop. I dont like laptop, too small keypad, makes it hard to do speed typing.
After more than 2 years of trading, I can tell you a story about forex system. Forex system is a way to trade to have higher chances of profit. Unfortunately not all forex system works. This is because its not the system that is not working. It is you.
What if I tell you that I have a system that consist of Moving Average only. The system can make profit and will minimize you loses or even give you a chance to break even during hard times.
You would be thirll to test it out only to find out that in the end you are losing money and you say the system is crap. The truth is if one person is making money using the exact same system yet you are losing money. So where do you think the fault is? Is it with the system or is it with yourself?
You can never gain profit in Forex until you figure out what is wrong with you. Most of the time when you are losing money you would blame it on the market, news, system etc but never on yourself. Until you figure out what you did wrong, any system no matter how good will fail in your hands. After you realize what you did wrong, then you can make money, seriously.
When you know what not to do, you can trade without any indicator. I myself is trading using only MA now. Took me a while to understand but once you see it, you no longer depending on any indicator. It is your judgement that counts.
I never know what I would learn the further I go in this world or Forex. Right now I am starting to understand why some traders trade without any indicator. The best indicator is in your brain. You just need to develope it. It will take some time. No hurry.
24 February 2009
A DIFFICULT MARKET CONDITION
It is not looking particularly well for GBPUSD. In the other hand, EURUSD and AUDUSD is looking good for a long term trade. I am taking the long position. It may take a very long time to profit but looking at the chart from a technical view, EURUSD and AUDUSD is in a good position for a long term trading.
I dont exactly know the entry point but I do know the direction. It is time to monitor the shorter time frame in order to find the best possible entry and to minimize stop loss.
It may take sometime but I dont care. I have been waiting for this moment almost 2 months. Look at the charts and see the formation of daily, 4 hour, 30 minute and 5 minute. You may see something that took me over 2 years to see.
Only time can tell if my calculation is correct. At the moment I am still waiting for the 5 minute chart to give and entry signal.
Good luck to us all.
This blog has not been regularly updated. This is due to internet connection problem. It has been months now and my internet connection is still not up to 100% fitness level. I can post text but I cannot upload pictures or any attachment. I even opted to use my office internet during the day for my uploads.
As for forex I am playing the short term game. 5 minute TF to be exact. It is much safer since my internet is not stable. Its a intraday system trading the 30 minute trend with a 5 minute signal for entry and exit. So far so good.
Actually the system is simple. It is based on MA and RSI only. Even trading is simple for me nowadays. It seems that experience changes me. I am no longer sitting in front of the PC hoping for miracle. There is no miracle in Forex. It is just knowledge and study so that the direction can be expected.
The longer I trade the more I understand. After all I am still learning with every trade. Now I understand how people can trade from candlestick alone. This is because the best indicator is not on the screen but in your head. Use your brain, the best indicator of all.
By the way just wanted to invite you to my flickr page. Just an old hobby given new life with a new DSLR A350. Now I have 3 camera, each one with its own unique features. Do check out my flicr page and tell me if you like my photography style. Just needed to find a model for my portrait shot.
Back to Forex its in ranging mode now but the daily chart is showing a weakness is trend. EU is a downtrend but is weakening at the moment. 30m chart is still showing a downtrend at the moment with 5m chart is supporting it. So for today the best bet is to short EU but watch out for the long term trade.
GbpUsd is not going up, celcom 3g is not getting better. Trading is getting slower. Looking at the daily chart GU is still a downtrend. Only time will tell in the mean time I stumble upon a system worth looking into. Its not mine but it is beautifully created taking into account the strength of trend. A style that is safe to me.
Trend has it momentum, when you enter when the momentum is strong enough the price will continue it course. Thats how you profit as a small fish.
In my long last post I mentioned I was waiting for 1.4650 level. It did reach and a bit more down. At the moment it is at 1.5000. Its a slow climb and looking at daily chart it is still a downtrend but if it maintain its course, it will go uptrend soon.
Still having trouble with internet. Celcom 3G is not as stable as it used to be. I cannot upload and having trouble login to forex account. Anyone else having problem with Celcom 3G??
When people say free forex signal, it refer to an instruction to trade specific currency pair at a certain price. Normally this signal is based on the trader study and experience. It is more of a personal view of things to come.
In certain cases the signal does work. In a different situation, it fails. This is because the person giving that signal is also a small trader. His study is based on either technical or fundamental with no real money to back it up.
If that person is good, he will have enough followers and the total money traded towards his signal will back him up and make the currency move. If that person have very few followers, then he is swimming alone in a sea full of sharks.
That is what most of us do. We do not coordinate and we work alone in forex. Thats why the sharks are taking their time and making easy picking of us, swallowing one at a time. It doesnt sounds good but its the truth. Now you dont have to wonder why most people fails and why banks keep on making huge profit.
If you want to take forex signal, take it from someone who you can trust from inside the banks. They have a lot more info and study on forex. The amount of info, knowlegde, manpower and money is impossible for any of us to compete.
For some people who manage to find a method to be profitable in forex, its a good thing. You have found a way to take advantage of the system. The system after all is developed by human and human by itself is full of weaknesses.
For those of you who is losing, its time to think about swimming alone is a sea of sharks. Time to find friends and help each other out in terms of knowledge and money power.
Dont get me wrong, I am in profit today. I have found a way to take advantage of the system though its like a mouse, stealing food one little bit at a time. Better to profit a little than losing all the time but for how long are you willing to be the small fish. Always jumping in and out of trade. Hoping for the trend to hold long enough for you to gain a little profit.
In order for me to grow in forex, I need to team up. It has long been in my mind, just looking for the right opportunity and people. Anyone here think the same?
• Sellers are ASKing for a high price
• Buyers are BIDding at a lower price
• Trading is an auction
• Slippage occurs with most Market Orders
• The difference between the ASK and the BID price is the SPREAD.
A Trader must understand what each order is, what it and what part it plays in capturing profit.
A Forex Trader must use three (3) types of orders: a Market Order, a Limit Order, and a Stop Order.
The two, primary orders used for entering and exiting the Forex market are Limit and Stop Orders. Once
an order is placed, there are two critical procedures: One‐Cancels‐the‐Other (OCO) and Cancel‐and‐
Replace Orders. Properly understanding the procedures of order execution is a vital step to profitable
trading.
Remember: All good carpenters carry a toolbox. The sharper the tools, and the more skilled the
carpenter is at using them, the more effective they are. The sharper you become as a trader, the more
efficient and lucrative you will be.
Market Orders
A Market Order is an order given to a broker to buy or sell a currency at whatever the market is trading
it for at that moment. The Market Order can be an entry order into the market, or an exit order to get
out of the market. Traders use Market Orders when they are ready to make the commitment to enter or
exit the market. Caution should be exercised when using Market Orders in fast moving markets. During
periods of rapid rallies, or down reactions, gains or losses of many points may occur due to slippage
before receiving the fill.
Trading is an auction where there are buyers bidding on what sellers are offering. The bid is the buy and
the offer to sell is the ask.
Slippage
Slippage is a trade executed between a buyer and seller where the resulting buy or sell transaction is
different than the price seen just prior to order execution. On average, one to six pips will be lost with
Market Orders, perhaps more, due to slippage. Market Orders are rarely filled at the exact, anticipated
price. Market Traders Institute recommends caution when entering or exiting with a Market Order.
Limit Orders
Limit Orders are orders given to a broker to buy or sell currency lots at a certain price or better. The
term "Limit" means exactly what it says. Most of the time, you will buy at that exact limit price or better.
Limit Orders are used to enter and exit the market. They are generally used to acquire a specific price,
avoid slippage and unwanted order fills (execution price), which can happen with Market Orders.
When selling above the market, it is a Limit Order. When buying below the market, it is a Limit Order. A
Limit Order will be executed when the market trades through it. Seventy to ninety percent of the time, if
the market is trading at your Limit Order, it will be executed. The market must trade through your
specified Limit Order number to guarantee a fill. The trading software provides notification within
seconds of the fill. A trader does not have to call his broker to see if their order has been filled.
Stop Orders
Stop Orders are orders placed to enter or exit the market at a desired, specific price. When buying
above the market, it is a Stop Order. When selling below the market, it is a Stop Order. Stop Orders turn
into Market Orders when the market trades at that price. Stop Orders, as well as Market Orders, are
subject to slippage, Limit Orders are not.
The majority of Stop Orders are used as protective, Stop Loss Orders. These orders are placed with an
Entry Order to insure an exit when the market goes against you. A good trader never trades without a
protective Stop Loss Order. They are orders executed to get you out of the market when your trade has
gone against you. Protective Stops are discussed separately as one of The 10 Keys to Successful Trading.
One Cancels the Other (OCO)
Whenever entering the market, exiting the market at some future time is required. An OCO order is a
procedure that means "one‐cancels‐the‐other." Upon entering the market, place a protective Stop Loss
Order and establish a projected profit target. That projected profit target can be your Limit Order.
If you simultaneously place both Limit and Stop Loss Orders when you enter the market, you can OCO
them and walk away from your computer. What does that mean? At some future point in time, either
your Stop Order or Limit Order will automatically cancel your opposing order. If the trader is sure about
a trade, they can execute an OCO order and walk away from the trade. The trading software will then
manage the trade.
Cancel/Replace Orders
A Cancel/Replace Order is a procedure and not an Entry or Exit Order. By definition, it is when the trader
cancels an existing open order and replaces it replace it with a new order. A Cancel/Replace order is
primarily a strategy of trading and predominately used after one has taken a position in the market and
wants to stay in the market locking in profit. For example, you buy Swiss at 1.410. Your protective Stop
Loss Order is 1.390. The market moves in the direction you projected. Now, you want to reduce your
potential loss. So, cancel your Stop Order at 1.390 and replace it to 1.410 where you got in. You are now
in a trade with no risk! As the market moves further North, in your direction, you want to lock in more
profit. You can cancel your 1.410 Stop Loss Order and replace it with a new 1.440 Stop Loss Order. You
have locked in 30 pips of profit. You are in an all‐win, no‐risk trade. Keep canceling and replacing your
Stop until you are finally stopped‐out. This is discussed separately under "Protective Stops" as one of The 10 Keys to Successful Trading.
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