Never Trade on Mondays

I’ve been reading some beginner stuff about forex trading and one thing that caught my attention is that many experienced trader always advice not to trade on mondays. The reason behind this is because you want to know what will be the starting setup for the coming week so letting the first days alone is crucial. It also has the less volatility when it comes to pip movement.

I don’t know… Since I started trading, I’m never been more excited about mondays. When I was still in a full time job, I despise mondays! But now, I’m excited and I can’t even sleep sometimes.

What do you think? Do you trade mondays?

Forex Trading Small First Before You Go Big

People are greedy. That’s a fact. But its the emotion that keeps us wanting more and always wanting to have the things we want. Makes us think of ways on how to get it. Don’t fear greed. Make use of it. Master it.

Most newbie traders, me and my friend, talked about the profits in trading. One of us will argue that to have great profits you need to have large amounts of pips in a winning trade. Ok. Fair enough. More pips = more profits.

Think about this, you have $1M in your account as capital. And your target profit in terms of pips is in the 200+ pip range. Sounds like a lot money to be made when you get that 200+ pip. But think of the risk you will get and also the time before you get to profit. In forex trading, there are fluctuations, can you stay calm when your account displays -100pip because of its initial retracement? Can you still decide if the trend is against you or its just a retracement? Remember, earning that kind of pip will require you to hold the trade from 1 hr to 1 day. Can you handle the pressure?

I say, pip size doesn’t matter. How much you risk in each trade matters. Playing with small profit pips will reduce risk. And also, having a profit target that’s small will minimize risk. Smaller pips means, shorter time inside a trade which means lesser risk, less pressure from greed or fear.

Pip size doesn’t matter, volume does. Increase your volume once you got the thing going. Increase more to profit more, while still maintaining the same pip per trade profit. And always remember, don’t overtrade. Take a time out. Every businessman needs his vacation once in a while.

Good luck!

What is Forex Trading

Forex trading, in essence, is a market of people buying different currencies of the world and sell them at a particular time to earn money. The spot market or “forex market” is one of the most volatile market in the world averaging of $4 trillion worth of transactions per day. Money is moving up and down by the seconds that is why, many people, businessmen and investors like it, because its always active, always moving and there’s always an opportunity to earn and profit.

Forex trading is not for the weak at heart or those who are not willing to make any risk. Forex trading is a very risky game and you can potentially lose money in just a blink of an eye. With that said, the only way we can minimize risk is to educate ourselves on how to trade in the forex market. Education and experience is the key here. If you’re looking for that “get rich quick” because a friend told you so about forex, you’re looking at the wrong place.

Forex trading, when you login to your forex trader account, you’ll see a bunch of graphs. And it is what comprises of the forex market. These graphs tell stories of how the price of a particular currency pair moved throughout the day, week, hour, months or year. You should be familiar on how to read these graphs. One of the most popular kind of graph is the one invented by the japanese to trade things in the ancient times. They call it the candle sticks. Candle sticks are well known graph in the forex trading industry and we suggest you also read on that for starters.

Forex philippines is not any different. Since we are playing in a global market, we don’t have to worry about the country we are in as we can always buy foreign currencies and earn money. Of course, there are advantages though in buying your own currency paired with another currency. You know the local news and news may affect the forex market. Being in the same country as the currency you are trading will have huge advantage.

Trading Tips from The Pros

Do you know how professional traders make millions? Here are some tips from them.

Jesse Livermore: The Worlds Greatest Stock Trader by Richard Smitten
1. Don’t Lose money
2. Always Establish a Stop
3. Keep Cash in reserve
4. Let the (Successful) Position ride…until you have a Clear Reason to Sell.
5 Take the Profits in cash…and place 50% in a separate account

Lessons From the Greatest Stock Traders of all Time by John Boik
1. Trade with the Trend
2. Cut Losses short
3. Let Profits run
4. Manage Risk

How Legendary Traders made Millions by John Boik

1. Understand the General Trend of the market
2. Use the Knowledge of History in your Study and Observation of the Markets
3. Use your Own Research and Don’t Listen to Others
4. Buy the Leaders
5. Buy only on Breakouts and Use a Pyramiding Strategy to add to those Winners
6 Cut Your Losses short
7. Hold on to your Winning Positions until Classic Sell Signals tell you to unload your Positions

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 101: Forex Basics – The Requirements

So I finally started doing a post about the basics of forex trading. This post will not tackle the things like how the forex market work as you can head over to babypips.com or post in the comments section for that and we will try to answer you. We will talk about the things you need to get started trading. Things that are important to the success of your trading career and things you need to remember to not go bankrupt.

To keep on trading and learning at the same time and not blowing your account. Your first goal in trading as a newcomer in this business is to last. Not to make profit, but to last. How many months can you go on trading before you hit 0 on your fund. We can mind the profitability later, what you need first and foremost is experience.

1. You Need to Have Money / Capital / Funds / Moolah – In order to make money work for you, you need to have your workers gathered up. Money makes more money if placed in the right spot. You don’t need to have a lot of it, just enough to get you started. $100 – $1000 is probably more than enough.

2. A Trading Account (Real and Demo) – You need a trading account to start trading in forex. There are a lot of brokers around the internet and I suggest you do some research first before giving them your money. There are a lot of scams out there so be careful.

You need a demo account to practice your trading strategy. You need real account to practice your trading strategy with the components of emotions and the feeling of earning and losing money.

3. A Trading Strategy – In any business, you need a strategy and forex is the largest business in the world. Your entry and exit strategy and money management skills will play a big role in your success. Create your own trading strategy and practice it with your demo account for at least 6 months.

You can develop you own trading strategy or customize the strategy of others. You can find a lot of strategy from books and indicators. Do your research well and practice it. Just make sure you follow it when you trade, you already invested a lot of time developing it.

4. Competitiveness – Forex is the battle between the bulls and the bears. The buyers and the sellers. You will win and lose sometimes. The important thing is, do you have what it takes to get back up in case you lose? The players in the forex market are billionaires, banks, retired generals, business tycoons, politicians, managers, retired olympic athletes which are the most competitive people in the world and you’re about to take them head on. You should be well prepared of the lost and keep moving on up to the point till you become successful.

Things You MUST NOT Have

1. Emotions – Its like poker. Emotions cloud your judgement. You need to have a strategy and the discipline to follow it. Do not give in to emotion. Emotion has no place in the market.

2. Ego – You don’t need ego. Admit it when you’re wrong and cut your losses.

If you have questions or suggestions for the next forex 101 series of posts, kindly put them in the comment section below.

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 Trading Charts

When you think about forex trading and charts, what comes to mind is that, what ever time charts you are in the principles are still the same. A 1 minute chart will be the same as the daily chart. What I found out last week while I try to trade intraday chart is that. It’s not always the case.

I trade successfully on daily charts and I love the freedom it brings because sometimes, I don’t have to trade everyday and I get to do something else. While I wait for the next candle stick, it will take another day. That is why when I tried trading on smaller time frames. I never got any profit.

I don’t know. Maybe its just me. I still follow my rules but the fact that intraday trading is a whole new beast than the other charts. I realize that if I really want to be successful in this. I need to master one chart at a time.

Many books claiming that their method are great on any charts. I don’t know. Maybe just my strategy is not that good. That is why I bought some books for reading. I’ll post some of the things I learned and tested once I finished reading the book.

Forex Trading on AUD USD Feb 9

picture-31

I spotted this market on AUD/USD pair and made a “short entry”. I believe it will go down because of the momentum of the buying pressure has now (probably ended). I am still not sure. I have nothing to back up this trade but instinct. :D I might screw this up but at least its listed here and I can still go back with all the forex trades I made.

Update: Feb 10 10:30 am

picture-15

Maybe that is why we shouldn’t put emotions when trading. My trade is now at -23.7 pips. I can still see that its going down now. Might as well be on the trade.