The Insecurities of Technical Analysts

Trading, whatever markets you are into is still the same, making profit out of the volatility of the price. Whatever you use to have an edge over the market is a personal reference and thus every person may have a different way to try to trade the market. Thus, there is no one person that can claim that there is only 1 way to trade.

I am using technical analysis to try and trade forex. But its only 10% of my whole trading system. Its not even that important. When I try to share this knowledge, you may already being branded as a fundamental analyst and this can raise eyebrows. What else can you be using aside from technical analysis?

I think there is a perversion in technical analysis today. Trying to claim that it is a the holy grail to trading. I think there is none. I think its a probabilities game. Its all guesses and betting money for that hunch. Ok maybe its still predicting, but its more like a perverted way to say LONG or SHORT by saying, the market will go down at this price and bounce back at this price and we can enter to earn this amount.

You can not be that too much precise as if you know the next move. Even elliot wave, which I have quit a bit of time learning, will never tell you when is an extension of a wave will end. Where a correction will end or when the extension of that correction will end. So, when do you enter?

Just because everybody is doing it, it is the right thing. More often than not, it is the wrong. Or if it is right, when will you know when it is wrong? Markets change, trading strategies become obsolete. At one point in time, one system will not work anymore. So how will you know that your trading strategies is already dead? Because your mentor is still using it? Its not a very good indicator is it?

Thinking for yourself and welcoming new ideas is the evolutionary quality that makes great traders. If you try to shoot down any new concept because it wasn’t the way you were taught, you will find yourself old with an old system that doesn’t work. The world and the market has moved on and you can never adapt.

Forex Trading – The Best Business?

picture-2 My open trade (150+ pip, indicated by blue arrow (buy order)

I think I’m inlove with businesses. Once I see an opportunity, I always wanted to pursue it. But like all busy people, time is the major problem. The most exciting part in doing business is the first few years of it. Its the most exciting where a lot of problems happening and problem solving is a thrill rush. But when I have an idea for a new business, I always do a check to my long term goal. After a few years, 20 or so, I want to retire. Or make money / trade anywhere / anytime and the only business that I can think of that fits the criteria is forex trading.

When I think of food business. I think of customer service (which I hate). Then think of forex where customer service is not present.

Forex trading is the best business model in my opinion and my long term goal should be (logically) go this way. Studying and learning more about forex and testing strategies should be mandatory if I want to be profitable in this trade.

What do you think? Do you think forex trading is the best business model?

Forex Trading vs Stock Trading

One of my first question when I learned about trading or investing in general is that, “Which is better? Forex or Stocks?”. Though many people will argue that one thing is better than the other. I would like to give my opinion on this case. They are both great vehicles for making money and have a lot of potential in making you rich and we will tackle them in this post at forex philippines.

Forex market is The Largest Market in the world. The market is open almost 24hrs a day. When one market closes, other markets open, making it possible to have a continuous 24hrs operation. There are a lot of benefits trading in the forex market and one of it is being liquid. You are trading money with other money (currency) how liquid can you get? It is not like real estate where you can declare you are a millionaire but still you can’t even use that million unless you sold your house. Being liquid makes it possible for you to invest and reinvest money quickly.

In Forex Trading, There is little to no intervention. Not like stocks, the forex market is too huge of a market and encompasses all of the nation’s condition and reflected it in their currency. Its not just 1 company we are talking about here. Its the sum of all businesses that a country have and their economic condition. Politics and current events play an important role in which non of them you can control.

Little investment required. In trading forex, you don’t need to shed out a lot of money to start. Me and my friend started out $100, testing the waters and we continue to increase our funds as our experience increase. And with most brokers offering leverage, your $100 can buy 40 times more.

Investing in the Stock Market for me is a long term goal as forex is a short to mid term. I think the volatility of the forex market makes it difficult for an average investor to keep the money for the long term as you will be stopped most of the time, if not margin called. In the stock market you can take advantage of dividends offered by companies, pay checks for you for investing with them. You can be the top head of that company just by buying majority of the shares. These are all wonderful perks of stocks. But what keeps me from investing money here for now is the fact that it can be manipulated by people inside the company. Just as the popular movie “Wall Street”.

We can not really say what is better or best in investing. It comes down to preference and your view of each market. One thing is for sure, if you have money, invest in both as they are great vehicles to earn money.

Polishing My Trading Style

Been trading demo and live money for weeks and trying to come up with my own trading style. Been focusing on just 1 currency pair and with one time frame (15 minutes).

For the first few days that been trading, my funds are diminishing everyday, trying to bang my head on the wall why do I lose trade? I came up of the idea to make everything simple. Watch out for just 1 setup and wait.

Knowing that setup and pattern will get you acquainted with it. Making you recognize the pattern anywhere on the chart and recognize it when it is forming. You get to know one setup and pattern really well, try to learn another pattern until you build up your trading pattern vocabulary.

Indicators

I did a lot of indicators in the beginning. But the I didn’t like it that much. The reason for that is because all indicators are lagging. Meaning, they only indicate what already happened and try to assess what will. But still, things already happened, the ideal scenario would be – you to know things will happen before they happen, not after. All indicators lag behind.

That leaves me with nothing more than a blank slate of just candlestick charts. How can trade with just candlesticks? The answer is, price action. I’ve been amazed by how price action can well determine what’s happening in the market. It even tells you what the news tells you. Price action is a technical analysis that shows fundamentals very clearly.

Did I Profit?

I’m proud to say, after lots of weeks practice and money lost. I am beginning to feel that I learned and I am improving. I traded with small volumes last Friday night before market closes and it got me 40+ profit twice. And this time, I know it is not just by mere luck.

I’m still way behind my trading goal. But I know I’m seeing the light. I know I’m on the right track. And I won’t stop until I reach that goal. To anyone who reads this blog for forex trading tips. I think that the most important thing to know first when trading is to never give up. Developing your own style of trading by just trading by yourself, without the help of other people’s advice. We develop our own style when put into lots of pressure, emotions, greed and diminishing red font on your capital funds.

It is pressure that turns a lump of coal into diamonds.

P.S. I have a friend trading with me next week and we decided to record our trade in video. Stay tuned. :)

Forex End Of The Trend Trading

Like any new forex trader, I was looking for that reversal bar that will end a trend. To my surprise, sometimes, its not a reversal pin bar which will end the trend. Sometimes, its an inside bar. Here is a screenshot of the culprit.

picture-1

The inside of an inside bar can be a series of different bars. What you want to do is wait for the last bar which will tell you what will be the next trend. An inside bar is an indication of a new trend forming or an end of the trend for those who are already riding the wave and needs to get out.

Welcome to Forex Philippines

This is forex philippines. I’ll be blogging about my forex trading experience on this site. I’m still new at trading with forex and still use demo account to practice how to trade. So you can expect many many mess up and success tradings here. And also some thoughts about a particular trade. I’ll also be putting some things that I learn. Things I stumble on the internet and things learned from forex trading experts.

About me, you can call me Jeff I’m 25 years old (as of this writing) and I’m a businessman. I’m trying to learn forex to have more diversification.

If you have any questions do not hesitate to ask. We are all here to learn and succeed in forex trading.

UPDATE: I am now trading live since 2011.

Waiting For More Price Action Before Entering the Forex Trade

We have some good news and bad news. The bad news is, our analysis did not reach our expected top. And a sudden reversal happened in EURUSD daily. We don’t need to be worried though as it is a retracement testing the support. If support holds, it may continue its upward trend for one last time to hit our top. The good news is, this is not the big trend that we are waiting for and so, we can rest assure that we are not being left by the trend yet.

I’m still waiting for the top to go short. There’s also another option to go long on the bottom.

Free Forex Trading Course

As you might have noticed, I removed the forum and replaced it with something better. Forex Philippines is now offering free forex trading courses, brought to you by yours truly. Its a course with a personal touch. Its a course that gives more of an insight on how I managed to get started on trading forex. Lessons 1 and 2 are out now so be sure to check the site out for more lessons to come.

I want to touch more lives by teaching what I learned in forex so I made an online book. Please support and share the page or comment if you have any questions. Your comments keeps me motivated. And all this for free! Or if you feel like treating me for a coffee, that’s fine as well.

Knowing How Long is The Trading Trend

Ahhh… After playing with different timeframes. I pretty much got the idea at what timeframe I’m comfortable with. The idea is this, it should match your personality. If you’re a full time forex trader who don’t want to miss every good trade that may come by, be a day trader that trades smaller timeframes (5 minute charts to 1 hr ). If you’re a more long term and just wants to take a time off after placing a trade consider becoming a swing trader (days to weeks).

I say this because I kinda mess up the timing of entry and exit. I hold positions longer even though im in the 5 minute chart, resulting in losses. I tend to close position on a winning trade too early on a longer chart (days) and the result, I don’t earn much money as I have to.

So knowing the right mix would give you the idea how long should you hold trades.