Short Position on USDCHF

Forex Trading

USDCHF 4 Hour Chart

Howdy! Its been a while since I last made a post here. Sorry for all the people who still read this blog. I’ve been busy with life and other things. But forex trading will always be one of those things that I could not give up. I always check the market, once a day. And only take a position unless I’m very sure that the trade will have a high probability of success. Do I trade as frequently as I used to? No. But I still trade when I think there is a high chance to profit. I think I’m growing into more of an investor in this regard, rather than a trader. Because I don’t want to watch over trades everyday once I made a position.

As I grow as a trader, I realize that respect for the market is more important than any other skill. When I respected the market, I don’t go for trades that are “pwede na” (just about right) to my criteria for entry. It should be exactly as I want it. I guess respect and discipline comes hand in hand.

I made this trade last Feb 5, 2014, Shorting USDCHF. a 4 hour chart using Ichimoku. And its been going along just fine… I still don’t see any warning signs that the trend is going to reverse, so I’m still holding unto it.

Week 9: Looking to Enter This Week

Our patience is paying off. Our prediction is steadily taking its course. We are looking to open a position next week. Hopefully, price will reach the red line, which I assume to be the top. Our stop loss, near that line.

We are still on our plan and still following that plan thus far. Remember: We only need to get 1 big trend to make money. But in order to make the most out of that trend, we must get into the top or the bottom of that trend. Get into the exact turnaround of the trend. So we have the maximum amount of profit possible. We risk as big as we can possibly get once we know that all our setups are right.

Week 18: The More Time You Have, The Wealthier You Are

I will not be day trading anymore. I’m focused on trading daily timeframe due to several reasons.

1. I Love Having a Lot of Free Time

As you all know, I love martial arts and this year, I would like to focus on my training. And to be able to train harder, you need a lot of time to practice. I also love to discover new things and not just make money. The thought of just building my nest so my money can work for me is very tempting. I plan to quit day trading forex and focus mainly on swing trading, that is, longer time frame. Which means, less updates on this blog as well.

2. Stress is not worth it

Being stressed out in day trading is just too taxing. I’d rather spend time discovering new things than spending a lot of time in the computer everyday.

3. Being Wealthy is Not Having Money, But Having Free Time

The good thing about swing trading forex is I can set my position, set my stop loss and set my proft target. Then, I’ll just check it a few minutes everyday to see if the market went against or for my direction. I can also add or reduce positions depending on my trades, in just a couple of minutes then I’m off to do something else.

Doing something else, means starting a new business that could possibly earn me more money. Staring at a chart doesn’t make it boil. I need to do something productive while waiting for the market to move. Attend some seminars, business training or start a new business. At the end of the day, the more time you have, the more things you can do and the more money you can earn because the free time becomes a productive pursuit in making more and more cash flow for you.

Before You Take The Forex Trade

Making it simple. Is probably one of the most complex thing we have to discover. With a lot of indicators around, forex traders tend to think that the more indicators they have, the more money they make. What is the difference between a forex trader with no indicators and a forex trader with indicators?

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The forex trader with NO indicators keeps it simple. Indicators tend to confuse forex trader when a lot of indicators doesn’t match. They tend to think too much and not rely on their own decision making to take a trade. This is present among new forex trader where they will try every indicators available and use it. Up to the point where they get their first loss then drop it.

A forex system will bring losses. It will bring winning trades. Some will have more losses than wins. It is ok. As long as the winning trades can cover the losses up to the point that you’re still profitable.

A forex trader will have emotion. But must not be affected by it. This is what makes forex trading addicting. To constantly in the roller coaster ride. You know you are safe, but its still a death defying experience. With a profitable trading system, you know you will win but the price action still affects you.

There are questions that a forex trader can ask himself before taking the trade. Before entering, after the confirmation signal. He asks:

  • What is my profit?
  • Where is my stop loss?
  • Why do I take this trade?

Can simply summarized by asking oneself of the reason for entry (evidence of a profit potential, a set up or confirmation signal), what’s your target profit and how much risk are you willing to make?

These questions are simple. Three questions that a forex trader can answer easily. The problem lies to whether he can keep his emotion. Psychology plays an important role. Forex trading systems work. Banks use them to earn money. But its the person using it makes it possible to NOT to work.

Week 13: Consecutive Winning Weeks – Prepare to Make Mistake Now

It has been my experience in forex trading that after consecutive winning streaks comes the losing part. Its a part of life. Let’s see how I hold up this week as I reach the “unlucky” week 13. Shall I make a mistake and end my winning streak? Or shall I go bankrupt this time, again?

The Eurozone is still the hot topic last week. Made an insane amount of profit from Euro affected currency and correlated pairs. A stunning 13%! The only thing that we should watch out for this week is the retracement. Looking at the chart, it seems like it will retrace sooner or later and just in time for the discussion and plans on easing the problem in the Eurozone. Fundamental and technical are holding each other up on this one and it would be pretty interesting what would happen next week.

This could be a good experience should I make a mistake. :) I’ll be very careful though.

Also, before I forgot, there’s Thanksgiving yesterday and then come weekend. On Monday, it should be a very volatile opening day as the institutional traders will load new trades after getting back from the holiday.

My recommendation: Be careful this week. As all of the Eurozone affected currency might be retracing now.

Week 26: The Forex Enlightenment

3 Winning Positions = 47.36% Gain. Hourly Chart of EUR/USD

I’m currently up by +47.36% this week. This is because of the rules that I applied in forex trading. I learned to think, decide and make sure that I won’t lose the house when I make a mistake but make sure I make a killing when I win. I begin to think of odds and take only trades that have the highest possibility of winning and betting all that I can, to maximize my returns.

I do not concern myself with the temporary gyration of the market. I want to be always invested in the market to cover whatever major movement it wants to give me. I’ll be the first one to say sell, when people are still shouting buy. But only making sure that all of them have used up and hyped up all the buyers until there are no more.

I realized that there are people who will hype you into taking their side. That is because they are on the losing side and they want out. I have seen these people proclaiming to be gurus, but only out there to take your money. For the lone trader, these people are your prey. They are the noisy kids who talk a lot but have nothing to show for it. They know how to make drawings out of charts, and tell all those buzz words, but at the end of the day, they make money out of hyping the newbies.

Be one that waits in the shadow. Waiting and waiting until the right time to strike. Be an assassin, a sniper if you will, who spends more time waiting than actually killing. You don’t want to be seen, you don’t want to brag, you want to take action before anyone knew what hit them. This is the real, best way to trade. To wait patiently until the right time comes, then betting all that you have for the only, one strike that you’ll ever need.

Diversification is only good for people who does not know what they’re doing. You only need 1 pair, 1 trade to make a difference. You play at a situation in which you are an expert. You don’t try to trade ranges if you don’t even know what range means. If you’re good at trend following then stick with it, be patient and wait for the first sign of a trend. That’s where you’ll make your money.

Why the rush to be rich? Everybody will probably be richer than you and probably be a lot younger than you. It doesn’t make you any less human to take it slowly. Be patient and wait. It takes discipline to be rich. There’s a reason why most billionaires are old men. They’ve spent a lot of hard work and patience to get to where they are now.

Forex Trader’s Lifestyle vs Normal People

Looking at my facebook wall, looking at my colleagues, batchmates and friends. Realizing that life is so wonderful that we are lead to live differently at how we view life in general. Some of them feels like a Saturday night drinking with friends is a good life. Some of them traveling at a far away nation or place a good way to say that “I’ve made it”. Some of them starting a family, then some of them pissed why they made those decisions.

These are all the good things that life has to offer. Drinking, partying, traveling, starting a family and so on. But I am always in shock why most of them forget, that all these things, to say that “you made it” to say you are proud of what you have accomplished, to say, you have helped your family, are things that can be obtained only if you have the money and time. And the main problem blocking that path to success is your day job.

I used to be an employee. I loved it… It is my first job, small salary, but I loved it. Its not for the money back then. But when I got into another company and started to work to get higher pay check, it started to become work. Its stressful. Its not worth it. You may be proud earning a high salary. But up to how long? You have no time. You spend the money you earned partying, traveling to refresh yourself. Then you get back to work. After a month you go to another country, party. Then back to your work station waiting for the paycheck. You have no life. As if you are just waiting to get old. Doing all the things over and over again. Its safe. Its secure. Its boring. You will die without accomplishing anything. Only the fact that your kids went to college, a house of your own, a car and nothing more. Thinking back, is that your only purpose in life? To bring your kids to college? What about self fulfillment? Your own self worth? Your own accomplishment that you can be justly proud saying a la Frank Sinatra “I did it my way”.

It is good to have patience. But sometimes you just have to stand up and say that you deserve better. I’m not saying to ask your boss for a pay raise. That’s just stupid and irrelevant. You have to go out there and do the things that you really want to do. Things that you will be happy doing without the need to know if you’ll get paid or not. Its a problem our society today, that they value money above other things. Don’t be that person. Take back your time. Work for yourself. You don’t have to be a millionaire. All you need to do is survive. The thought of luxury is fleeting and you can never reach it. It is someone who knows he does not need anything, is the richest person in the world. Both financially and intellectually.

Don’t you want to travel the whole world? Meet different kinds of people? Eat different kinds of delicacy from different countries? Meet exotic women? How would you be able to do all these things if you’re tied to your job? If a lifetime of satisfaction only commands the risk of leaving your job and doing the things you love, wouldn’t it make it a good trade off?

Be a risk taker. Don’t settle. If you want to change something in your life, you need to have the burning desire to do so. But do it without being affected by any outside force like money or reputation. Do it because you want it.

Forex trading may not be my first choice of business, or my college degree. It has never been easy for me to understand. But the idea of freedom that forex brings, only makes me want to study and push myself to learn. You may get lost in the process, bankrupt or even depressed, but its only temporary. Imagine the things that you can do once you know how to trade. Imagine all the time you will have. Imagine all the new experiences you’ll discover and enjoy because you don’t have to be stuck at your cubicle, 9 hours a day and answer to your annoying officemate. You don’t have to deal with office politics. You are just here to enjoy life. Contribute to humanity. And maybe, when you retire at the age of 30, you can probably start a family now. :)