+48% Gain From USDJPY

I closed my position on USDJPY with an increase in my war funds of 48%. Right now, I took an opposite position to the SHORT side.

Why did I took an opposite position? I think that 80.70 is a strong resistance. And there’s little risk if we took the short side (betting that the resistance will hold) than remaining on the LONG side (betting that the resistance will break). I think that the resistance is strong and may take a couple of tries before it breaks (or not). I just want to play it safe by betting on which side will most likely give us a greater return. And I think, this time, its on the Short side.

Week 17: Market Going Stale, Investing In Stocks

The forex market is going stale as we reach the end of the year. Many investors are on vacation so the market is not liquid enough to be exciting. +1 in capital for this week.

But, I’ve entertained myself with investing in stocks. Primary strategy is to produce passive income. I’ll be using this nest egg to fund my forex trading account in the future or perhaps venture into real estate. Not sure for now, but the journey thus far have been so exciting. Stock market is not moving fast to date, but I’m investing in it, not trading. There’s a big difference, I like it that way since the stock market is not that liquid like forex, you can’t enter and exit within seconds, there must be a buyer or seller on the other end with the same price you want. In forex, you can enter or exit anytime, very liquid. And liquidity is very very good.

Whole Year Round Up

Well, this year I finally achieved my goal of $5,000 per month in net profit from forex. I am also trading at no risk. Which means, the money that I have in my forex account are the money that I earned trading. I already withdrew the money, initially deposited into my account and thus, trading with no risk at all. In numbers term, I already earned past 100% of my initial capital to trade with only the profits I made. Sweet huh?

This year, I also ventured into stocks and realized that its a lot different than trading forex. So I decided to change my strategy with stocks and focused on passive income generation. In which I am very much enjoying.

I realized that forex trading is a probabilities game. You can not predict what will happen next. A good forex trading system is not a system that could predict the next move of the market, because there is no such thing. A good forex trading system is 60% money management 30% emotional discipline and 10% Entry – Exit. The time I realized this, my trading just improved.

I learned to accept the risk before entering the trade. If $200 loss hurts me emotionally, I turned the risk down to $100 or $50 until I feel no pain from risk. The reward may be small, but small steps before you can run. And it have proven to be profitable.

The best way to trade forex is to trade defensively until the next big trend comes. Don’t be on the sidelines far too long or you can miss the trend. Always be in the market so you can be in the position when the trend starts. You just have to survive the ups and downs of price by money management. And if you caught yourself a big trend, double, triple, quadruple, quintuple up your positions until you are stopped. That’s how you can make money with forex.

I also realized that day trading is stressful. So I switched to swing trading daily. I forgotten my first reason in trading forex. It is to be free. The “illusion” of easy and fast money with day trading is a myth. There is no easy and fast money. The only thing you can find there is stress and a lot of time spent, staring at a computer. That is not the life I want. I want to be free. Maybe once a day looking at a chart for 5 minutes and I’m off to the beach or to the gym. With a lot of free time and let my money work for me, not the other way around. Its a great great feeling.

Week 24: Avoid the News in Forex Trading

I learned something. This is the thing I learned while learning stock investing. And I think it goes very well with trading in forex. I used to hear a lot of people saying this and I have never really understand the deeper meaning in it. Its about trading when there’s news.

A lot of traders have been saying that to never trade the news. And I have been a victim of greed over the past week. I try to anticipate news releases and have been wrong many times in doing so. I may have been right a couple of times, but results from news doesn’t last long enough to earn substantial profits.

I realized I was chasing something that I won’t be able to reach. And decided to trade only currency pairs that are not in the risk of news. I’ll let the news pass then I’ll return. Because of me, chasing the news, I realized I missed some great opportunities like in the currency pair NZD/USD. I was so caught up with EUR/USD, I missed the trend. It might not actually be a late time to enter but you get my point. Never trade the news. Go to currency pairs where there are no risk of news affecting it. Or in the words of stock investors, invest in obscure companies that are being ignored by professionals and traders.

I made money trading the USD/JPY on its way up. And got back to break even from the losses of EUR/USD hunting for the news. I’m still in good condition and still on my way to realizing my goal.

USD/JPY on Daily

USD/JPY could probably retrace now. Keep in mind though, if you’re going to take the short side, Bank of Japan have expressed their eagerness to intervene should the pair goes further down. Keep your stop losses tight. On a weekly note for this pair, its more of a sign to go long. I’ll try to catch the bottom of the retracement for the daily to enter. That position is less risky because you have BoJ on your side. The only problem now is the USD’s news affecting the currency.

Happy trading.

Week 12: Waiting for the Bearish Trend

Last week has been good. Trading forex gave me a positive +10% gain because of the EUR crisis. This week I’m seeing the EUR and other affected currency to be consolidating before really going into the trend. My opinion on the matter is that, EUR and its affected currency will most likely start a bearish trend for the long term. Keeping eye on the news will most likely keep us informed should the trend start. But of course, technical is very important.

Last week I learned to control risk. Though some trades did manage to become a lost, it doesn’t affect me that much now even if its a profit or a loss. I think the fact that thinking of each trade as a probability detach myself from being self denial of the reality that my trade may go against me. It helps to keep an open mind rather than wishing that your trade must go into your direction. Bottom line is, I made profit, 10% return for just risking 1% risk each trade. I can’t be any happier.

Also looking to get into stocks, its never bad to be diversified. Once I get the setup running and my plan tested that is.

Week 8: I Got Stopped Out and Now I Wait

Last week was pretty good. I thought I caught a top, earnings got to +100 pips. But then the price continued its upward trend. Its not a top yet. I got stopped and now I wait for it to finish its trend. I’m looking to go SHORT once there is a clear signal to where the currency is going. As you can see on the screenshot, its almost as if the currency is in the middle. You don’t want to be in that position, its the highest risk possible. You want to be at the top or the bottom to for less risk.

I got stopped for -100 pips. We’re still cool. Its all part of the plan.

Week 5: Oct 3 – 7 Taking Forex Trading Seriously

September is a great trading month. I almost, just almost, reached my 2nd goal. But the market took it away from me when I became over confident. This month, I will never let that happen again. I’ll remind myself to take only high rewards and high probability trades.

A new month has begun. Its a great thing feeling to be able to start a new. So lets get on with the forex analysis.

AUDUSD

I managed to take a trade on AUDUSD. Shorting near the peak and added positions as they break the support @ 0.9700. On Daily, it seems we have a downtrend forming and we can expect to at least touch the next support line @ 0.9516. On weekly, its still a downtrend. But we should be careful as to when the downtrend will stop. It is advisable to keep the stop losses tight to prevent further losses as we are nearing a support line. On monthly, its definitely an uptrend. BUT, with a large bear candle that formed, this might be a start of reversal. I’ll say take downtrend trades.

USDCAD

It seems we have a breakout. I kind of missed this opportunity and now will be waiting for a pullback or reversal. Opportunity missed. I’ll just leave an alert for next time.

That’s it for now. I’m spending my weekend learning a new technical trading principle. I’ll have more analysis for you when I have more time. But all in all, last week is a good trade and I’m very positive that this month will be even better.

Week 3: Forex Analysis Sept 19 – 23 On the Sidelines

Last week has been a good trade. I didn’t profit but I just broke even and capital preservation has been the most important goal. Still keeping the profit from week 1. I think that’s a good achievement in itself. The pullback from last week took me out and now I do not know where the market will go from this time on. So I’m sitting this one for the whole week and wait for some more price action.

USDJPY +49% Gain

USDJPY trade with 49% gain as of today.

USDJPY could trend down up to 78.00 so I’m holding my position up to that point. I’ll try to add more position on retrace which seems to be happening as we speak and for the next week.

UPDATE: I got stopped out of this trade making a 68% profit Friday night a few hours before the close.