Week 29: Going Short on USDJPY and Some Thoughts on Trading

It makes me sad when a friend wants to pursue a dream that is in line with yours, the journey could be fun with a close friend besides you, but chose not to pursue his dream because of a shorter term goal and temptation of instant gratification.

Like I always believe, the road to success is a lonely road. You will lose friends because not all people see the same opportunity and the future that you want to see. A successful person is courageous to continue to go on, even after losing all that he has, and even if the journey is his, alone to pursue, he will still go on.

Being focused on a goal is important in any endeavor. Spending all your effort and time on a single business is what makes it successful. See the visionaries of our time. I will be honest with you. Since you have started your way to forex trading. Never expect to earn money with it. Not at least the first few years. Even more if you have another job and doing this part time. That is the truth. Do not expect to beat the market by being a part time trader. Do not expect to be rich with a half-assed effort. Doing that only means you are underestimating the market.

Seems like a good opportunity to SHORT now for USD/JPY. It could be a retrace. Weekly chart also showing weakness. Trade at your own risk.

Update on Trade USDJPY and EURUSD

I just watched the opening of the “Amazing Spiderman” movie and I think its better than the first movie. Since because its more related to the real story in the comics and Peter Parker is a fun character, sarcastic and witty, like the real spiderman in the comics. You should watch it. It doesn’t have anything to do with this post but, I just want to share it with you. Ha! :)

Update on USDJPY Trade

I opened the trade a few days back. You can actually see the first time I blogged about this trade. Its here. Its a trade going for the short side. Right now, as of this writing, it has given us good amount of profit and the risk is now zero. Which means, I can add more position to it. Take a look at it, I think its awesome.

I am guessing that it will continue to go down. Take note, “guessing”. I will never ever tell you that I’m sure of a trade. There’s always a possibility to reverse. That’s how you spot a fraud forex trader or analyst. They think they know where the price will go. They’ll come up with fancy words and stuff, but all that just to keep you insecure and to make themselves look better. You see, trading is simple. Its not easy but simple. You just have to bet whether it will go up or down. Just make sure you don’t lose the house when you’re wrong. When you’re right, then good for you!

Update on EURUSD

I opened this trade yesterday. As you know, I have been a contrarian trader. I like it when a lot of people shout the same stuff. “Eurozone will go down and stuff so go short!”. I say, okay. That’s great. What if you’re wrong today? Then majority of the people who are short will want out. That’s when I come it. >:)

See my position? That’s what you call a bottom. What did you say? It doesn’t exist? Your mentor told you not to be bottom fishing? That’s great. More for me. When looking for the bottom or the top, you need to find a way to determine a valid support and resistance lines and you place your trade near those lines. Actually, I think for me, one of the best skill to have other than try to sit around and wait patiently is to find support and resistance lines easily. It comes with practice and I suggest you start trading live immediately or do demo trading and try to look for those lines. There are tools to help you with that, fibonacci retracements, stochastics, rsi, zodiac signs, horoscope and my favorite, constellations.

Where do we stand?

At this writing we are currently up by 47.05%. What? Again? I’m not complaining though. I’m nearing to doubling my capital a few percent more. But I always remind myself not to be greedy so the market won’t take it away from me. I think its a good attitude to have.

Week 7: Solidifying My Plan – Martial Arts Tournament

I was in a hiatus for 1 week. That is because I participated in a martial arts, full contact, knockdown karate competition. And I was injured. It took me a week to fully recover and so I am back. You may watch the video below to what kind of karate I practice. I don’t have the video of my matches but you can imagine me the one being knocked out. ;P

During those times, I kept on back testing my strategy. Day in, day out and I will backtest my strategy later tonight before I go to sleep. Everyday. I want to make sure that I will follow my plan. To make it second nature.

The reason being is I want to solidify my plan. I want to have a fixed, concrete goal. If I say, I want to be a millionaire by the year 2015, I should have at least a plan to achieve it and a confirmation that it can happen, that its possible. And its definitely possible.

The goal I have to reach $25,000 per month in forex only boils down to an ultimate goal – To earn a $1,000,000 in forex. With back testing, the shortest time I can reach this is 3 – 5 years. If and only if I follow my plan. Every broken plan will only delay me further.

Another goal of mine is to have all the time in the world. Forex is my ultimate vehicle to obtain ultimate freedom. I see myself doing 1 – 3 trades per month but the profit are enough for me to last a year. This is possible with the strategy I am back testing. I just hope that the market does not change enough to make it invalid.

Crazy as it may sound. The only missing piece to all this plan and trading is patience. A lot of it. All things come to he who waits. I just have to keep the idea in my head, that I will be a millionaire in 3 – 5 years time, the only payment for that is discipline and patience. Not a bad trade off in my opinion.

Forex Trading on USD/CHF Feb 9

More forex trading before sleeping! I’m excited to spot a nice setup on USD/CHF. I just can’t pass this opportunity up before going to sleep. The chart looks like this:

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It’s definitely going down. So I made “short” to enter the trade and hopefully get’s back with the results when I wake up by tomorrow. :) By the way, this is on daily chart. It’s better to trade in this chart for me so I don’t have to be afraid of the noise happening with candle sticks going up and down on fast charts.

Update: Feb 9

Currently at +25.0 pips. I’m short on this trade. I chose short because of the pinbar that’s been in a bullish trend. And I’m quite iffy about the candle that will form today. We’ll see. I see no reason to go long though.

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Update Feb 9 Exit Trade

I exit the trade with 63.5 Pips. It’s a WIN.

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USDJPY Forex Trade Update: Up by 17%

I am now heavily invested into USDJPY. With 4 positions on the pair, I always look out for the nearest resistance to place my stop loss. You don’t want to lose too much when the trend suddenly reverses. Play defensive as one might say.

But it seems pretty good trade so far. I almost got all the bottoms and I’m waiting for the real trend to begin. Capital is up by 17% as of this writing.

By the way, there’s a new forex trading lesson out now. Its worth reading.

Why Trading the News is Probably a Bad Choice

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You might have noticed that I don’t post much about the news like other forex blogs. I don’t bother with what the next interest rate would be or the quantitative easing of currencies. I realized that if you depend so much in the news, you’ll end up confused.

Don’t get me wrong, there are a couple of people who trade solely on the news, and its a strategy that I never got the hang of. Its fun to see your account go up the moment the news was released, and provided you’re on the right direction, it can provide so much high. And I think I understand why some people would depend so much on the strategy. Its fun!

But in my experience in messing around with the news as a forex trading strategy, while waiting for the news to come out, like for example, the interest rates. Its hard for an ordinary person to predict what would be the interest rate. Even experts can’t be so accurate to predict it, so that leaves me “guessing” what will be the interest rate. And with time pressure on your side before the news broke out, its just a matter of guessing now. With 50% chance of going wrong, you’ll eventually go break even or go bankrupt. And with stress as its effect, I don’t think I would last much with this strategy.

I don’t know, some people may make a killing out of it, I see a lot of people depending on news for their trading and investing decisions. I see a lot of this in stocks and currencies particularly.

What about you? Do you trade with the news? How was it?

Closed: +35% USDJPY

Closed trade on USDJPY giving us with 35% boost in capital. Its a great trade and the reason I closed is because of the strong resistance. Also, there’s a doji that formed this morning. I don’t want to risk the profit if all the indicators are telling me its still uncertain.

As a rule of thumb for me when trading forex, I get out when I am confused. As of this moment, USDJPY is in a confusion as both buyers and sellers don’t know where to go. As proof, a doji formed. I’d rather be on the sidelines or open a position on the sell side since its a lot closer to a resistance line. But that’s just me.

Forex Trading Rule #1: Never Lose Money

The most accepted adage, “Higher Risk is equal Higher Profit”, could be true for forex trading. But does it have to be that way?

I used to bet big on position only to find myself in a hole when the position becomes a lost. Ignoring the fact that if you want to be successful in forex trading, I think, the wisdom of the old rich people are still the best advice. Warren Buffett said “Rule #1 in making money is to never lose money. Rule #2 is never forget rule #1″.

This rule have been integrated into my trading system. Being contented in making small but sure profits instead of betting the house for a once in a lifetime lottery trade. Small but sure, consistent profits is much better than luxurious profits with high risk.

Trading EURUSD & GBPJPY – Big Bluff

I personally think that the EURUSD and GBPJPY’s uptrend is one big bluff. Look at what happened when the news went out for EURO. The situation there is terrible. Just one news and down it goes for more than 200 pips in a few hours. I think the GBP will be next. Will it go up? Sure, but I think it is short lived and just a bluff.

I’ll still continue to wait for GBPJPY or find ways to add position on EURUSD. I think the short term traders may have made the pairs too overbought. But its a good opportunity for most of us to make money out of it.