No bitterness nor regrets for what happened during this 2010 or earlier as I have made my peace with myself.
Strangely....I am also very patient when I drive and at works, if I have nothing good to say then I just keep my peace whenever possible becoz I know what I will say. So....this way, less trouble and less fighting to do too. Of course, I will give "my last look" that this is for the best that I do what I do eg stepping back to give space and not to surrender!! This monkey maybe old....but can still be very "feisty" if need to.
So for now....looking forward to welcome in the new year day for 2011 tomorrow morning!
Thursday, December 30, 2010
31/12/2010
Man....this is the last day of 2010 and looking back at what I have done as a trader or investor, the word "failure" is the right one to use. For 2010 as a whole....my health is great so is family life too. Other activities were kept to the bare mininum to the extend of none existance which is good and bad. Bad --- Nothing to look forward to once I finished my work. Good --- no need to look behind my back everytime when I am out. Don't spend much also....then the bad part again, all these saving end-up paying for my losses for stocks, forex and toto/4D. Lucky....toto/4D investment was small as I pulled the hand-brake when my luck wasn't there.
Now...being the last day of 2010, I am eagerly looking forward to the New Year 2011 as there are some new changes I must handle eg new flat, hunting for new job and settling into the new job. For the other activity....will
have nothing to look forward to and not planning to active seek for it too.
I must learn to lay low....may have to give up car to daughter so without a car guessed there goes my chance of anything.
Final year or two, to be an independent trader but that would take lots of discipline and willpower not to mention "$$$$$$". Frankly I am lucky with finding "$$$$$$" so far, my retrenchment, my AIA retirement fund plus my CPF money....do come handy during this period. Hopely....my luck also can improve. HUAT AH :)
Now...being the last day of 2010, I am eagerly looking forward to the New Year 2011 as there are some new changes I must handle eg new flat, hunting for new job and settling into the new job. For the other activity....will
have nothing to look forward to and not planning to active seek for it too.
I must learn to lay low....may have to give up car to daughter so without a car guessed there goes my chance of anything.
Final year or two, to be an independent trader but that would take lots of discipline and willpower not to mention "$$$$$$". Frankly I am lucky with finding "$$$$$$" so far, my retrenchment, my AIA retirement fund plus my CPF money....do come handy during this period. Hopely....my luck also can improve. HUAT AH :)
Saturday, December 11, 2010
Look at the time....and date!
Thought this year I can be a successful trader at the end of it but now looking back at all the screw-ups and depleted trading funds ( forex and stocks ), just cannot help but to feel "sad".
There are some lessons to be learned from all these bad situations....first thing is not to set any daily profit target becoz in doing so is to force self to trade even when no clear set-up in the charts. So....when started to loose money, tend to over analyized what wrong then totally start to loose self confidence which caused more stresses to self.
Then the self bashing started to set-in which resulted in having the depression and the "rotten" feeling of it all. Plus also having suicidial thoughts which was really the "pits". Luckily....slowly I was able to see thru the whole picture and slow down the trading therefore the losses. At the same time....look for advices via the net and friends. Now....slowly starting back over again and felt good to trade "small" again. So...for the past month, I was able to have small gains plus starting to have my self confidence back too.
Now with better money management and trading small....I hope to slowly get back on my feet again and will happily trade on part-time basis, less stress and also happier to trade win or loose. Believed...in a longer run, I can be a more succussful trader too. Btw success now to me may not mean to make big money daily....but to be able to enjoy trading and can make some coffee money without all the stresses. That would be just fine, better
if can made back the course fees.
There are some lessons to be learned from all these bad situations....first thing is not to set any daily profit target becoz in doing so is to force self to trade even when no clear set-up in the charts. So....when started to loose money, tend to over analyized what wrong then totally start to loose self confidence which caused more stresses to self.
Then the self bashing started to set-in which resulted in having the depression and the "rotten" feeling of it all. Plus also having suicidial thoughts which was really the "pits". Luckily....slowly I was able to see thru the whole picture and slow down the trading therefore the losses. At the same time....look for advices via the net and friends. Now....slowly starting back over again and felt good to trade "small" again. So...for the past month, I was able to have small gains plus starting to have my self confidence back too.
Now with better money management and trading small....I hope to slowly get back on my feet again and will happily trade on part-time basis, less stress and also happier to trade win or loose. Believed...in a longer run, I can be a more succussful trader too. Btw success now to me may not mean to make big money daily....but to be able to enjoy trading and can make some coffee money without all the stresses. That would be just fine, better
if can made back the course fees.
Trading Forex Part Time – Your Best Chance at Success by Nial Fuller
PLEASE READ TODAY’S ARTICLE AND LISTEN TO THE ADVICE IT WILL HELP YOU.. ALOT!.
I want you all to understand, that it does not matter if you are employed, a business owner, retired or etc etc , my advice will remain the same – Your first goal must be to become a “Part time trader and student”. DO NOT fool yourself and believe that you take up trading and replace your income and become a full time trader in the short term. I built my reputation on honesty and integrity and you all should know by now, ALL of my posts are genuine insights and truths on the topic of trading. So if you are a novice trader, a struggling trader.. or basically if you are into trading or even trying to become a pro trader, then this article is for you.
Keeping it Part Time Early in Your Trading Career.
The majority of people that get interested in forex trading do so because they are unhappy with their job or with the current amount of money they are making, or both. They think they will be able to quit their job and become a full-time forex trader in a relatively short period of time, and it is this thinking that actually sets the stage for losing money in the forex market and for making their journey to become a consistently profitable trader extended and difficult. The reason why having an overwhelming desire to become a full-time forex trader can actually be detrimental to your trading success is simply because it makes you feel like you NEED to trade or that you have no other options for happiness in life. To succeed at making money consistently in the forex market, you need to operate from the mindset that you don’t really need to trade, this will work to positively affect your trading and will actually make it easier to profit consistently in the market. The Pressures on the mind when the trader feels like he/she must make a trade in order to make money to pay for the rent /mortgage or other living exspenses will ultimately lead to ongoing failure. That is just one aspect and evidence why new and aspiring traders MUST keep their trading a part time endeavor in the initial stages to escape the mental pressures and emotional roller coaster. The less time you spend trading and thinking of the market the better in my opinion.
• Part time trading; keep your day job
As a beginning forex trader, it is important that you realize early on the significance of not devoting all your energy to just trading. No matter what your current job situation is, you need to maintain it and excel at it, and always work to keep it a priority in your life, if you lose your job or quit your job thinking you can take up full time trading, you will stand no chance at becoming a successful trader. At first, you need to keep trading a part time goal, once you learn the ropes and master the art and skill of successfully reading a price chart, then you can set your sights on becoming a full-time trader. I always say, this is NOT something you can rush.
Keeping your day job and having a secure source of income is crucial to maintaining the proper trading mindset, you don’t want to be operating in the market from the point of view that you have no other options, and that your trading has to work out. Trading only part-time will also help to keep you out of the market, this may sound counter-productive at first, but over-trading is probably the biggest cause of failure among forex traders. By taking a part-time approach to the market you can avoid trading addiction easier because you will be forced into a routine of looking at the market at certain intervals each day, rather than being glued to your computer screen.
• Lose the “get rich quick” mentality
Many traders, if not most, come into the forex market thinking they are going to get rich quick, if they don’t openly express this sentiment they are certainly thinking it or hoping for it somewhere in their mind. While there certainly is nothing wrong with wanting to make money in the market and believing you can do it, when it becomes an all-consuming thought, and you think it will or should happen really fast, you are setting yourself up for failure. Traders who feel like they are going to get rich quick in the market inevitably end up over-analyzing it, essentially they think by looking at their charts and / or reading as many economic articles as possible, they will somehow gain an “edge” just because they are putting in a full-time effort.
The reality of this “get rich quick” mentality is that it ends up causing you to attempt to control the market, whether you realize it or not, when you stay up all night staring at your charts until your eyes burn you are subconsciously trying to control the uncontrollable, and the more you do this, the more you get caught up in actually believing that the increasing time you are spending watching the market is paying off, or going to pay off. So, in essence, by believing you can “get rich quick” in the forex market, you ultimately end up spending massive amounts of time over-analyzing market variables, this causes indecision and emotional trading, which ultimately causes you to lose money.
It is simply a myth that forex trading is a quick and easy fix for income; it’s not possible to make quick and easy money on a consistent basis, unless you are doing something illegal. Traders need to have realistic expectations when coming into the market, by taking a part-time approach to the market you will keep your mind clear and you will trade from a nearly stress-free mindset. The reality of trading the market is that the only thing you can control is yourself, the more control you have over your own actions, the more success you will have in the market. It is easy to fool yourself into thinking you are controlling yourself even as you over-trade and over-leverage your trading account, but when you really step back and think objectively about every action you take in the market, it becomes much clearer as to whether or not your actions are logical or emotional.
The ironic and perhaps metaphorical aspect of forex trading is that taking a part-time approach, or a “less is more” approach will actually make you more money faster, because you will be far less likely to trade emotionally when you accept the fact that you can make money by only trading a few times a week or less. So, to really make consistent money in the forex market, you need to accept the fact that it’s not going to happen fast, unless you are risking way too much and get lucky a few times in a row, or if you have a very large sum of money to begin trading with.
• Part-time trading helps keep you accountable
Probably the biggest reason why making money consistently in the forex market is difficult for most people is because there is no one to be accountable to. Unlike your current boss, who will fire you if you lose money for the company or do something else he or she doesn’t like, the forex market will not fire you no matter how much money you lose, it doesn’t even know you exist or how much money you have or don’t have, or anything else. To put it succinctly, you have to figure out a way to make yourself accountable if you want to excel at forex trading.
Being a part-time trader forces you to study and trade higher time frames, if you work a full-time job you are probably going to have to trade off the daily charts. This is actually a blessing in disguise though, despite what many traders think there really is no advantage to trading the lower time frames. Sometimes you can improve your entry by trading the 4 hour or 1 hour chart, but because the market provides daily setups each week for traders to take advantage of, there is no real reason to feel like you NEED to trade any time frame lower than the daily. Essentially, trading part-time forces you to master the higher time frames early on in your career, when it is the most critical to do so, then as your talent and skill begin to show you can start implementing lower time frames to improve your entries or exits. Many traders unfortunately take the reverse course of action; they start out by analyzing the lower time frames, and only after losing tons of money and time to these noise-infused charts, do they finally figure out and accept that trading less frequently on the higher time frames is key to making consistent money in the forex market.
POWER....another good piece of advice from Nial. Why? It's becoz I have gone thru some of these stressful situations trying to make money daily after I got lucky and more than double my funding in a "10 days winning run" then after that I thought I can do better by spending more time analyzing the lower time frame charts to score more money but in the end....confused myself and lose the winning touch. As a result....wiped out the winnings and my fund together with my own confidence. SHIT! The worst I did was that I set a daily target of making at least $200 or more.
That to me....was the biggest mistake becoz I were setting myself to fail. Now....I'm back slowly again starting to trade with micro lots and at the same time to spend less time glued to the pc by doing the same things that I did during the "winning run" just look at the weekly then daily charts....once spotted a trending pattern then go to 3hrs and hourly charts to confirm. Only when I need to set entry order...I will go to the 15 mins chart, same for my exit or take profit setting. Yes....I am happier and less stressed out by doing all these again. I have a life....swimming, sauna, gym and doing the things I like.
I want you all to understand, that it does not matter if you are employed, a business owner, retired or etc etc , my advice will remain the same – Your first goal must be to become a “Part time trader and student”. DO NOT fool yourself and believe that you take up trading and replace your income and become a full time trader in the short term. I built my reputation on honesty and integrity and you all should know by now, ALL of my posts are genuine insights and truths on the topic of trading. So if you are a novice trader, a struggling trader.. or basically if you are into trading or even trying to become a pro trader, then this article is for you.
Keeping it Part Time Early in Your Trading Career.
The majority of people that get interested in forex trading do so because they are unhappy with their job or with the current amount of money they are making, or both. They think they will be able to quit their job and become a full-time forex trader in a relatively short period of time, and it is this thinking that actually sets the stage for losing money in the forex market and for making their journey to become a consistently profitable trader extended and difficult. The reason why having an overwhelming desire to become a full-time forex trader can actually be detrimental to your trading success is simply because it makes you feel like you NEED to trade or that you have no other options for happiness in life. To succeed at making money consistently in the forex market, you need to operate from the mindset that you don’t really need to trade, this will work to positively affect your trading and will actually make it easier to profit consistently in the market. The Pressures on the mind when the trader feels like he/she must make a trade in order to make money to pay for the rent /mortgage or other living exspenses will ultimately lead to ongoing failure. That is just one aspect and evidence why new and aspiring traders MUST keep their trading a part time endeavor in the initial stages to escape the mental pressures and emotional roller coaster. The less time you spend trading and thinking of the market the better in my opinion.
• Part time trading; keep your day job
As a beginning forex trader, it is important that you realize early on the significance of not devoting all your energy to just trading. No matter what your current job situation is, you need to maintain it and excel at it, and always work to keep it a priority in your life, if you lose your job or quit your job thinking you can take up full time trading, you will stand no chance at becoming a successful trader. At first, you need to keep trading a part time goal, once you learn the ropes and master the art and skill of successfully reading a price chart, then you can set your sights on becoming a full-time trader. I always say, this is NOT something you can rush.
Keeping your day job and having a secure source of income is crucial to maintaining the proper trading mindset, you don’t want to be operating in the market from the point of view that you have no other options, and that your trading has to work out. Trading only part-time will also help to keep you out of the market, this may sound counter-productive at first, but over-trading is probably the biggest cause of failure among forex traders. By taking a part-time approach to the market you can avoid trading addiction easier because you will be forced into a routine of looking at the market at certain intervals each day, rather than being glued to your computer screen.
• Lose the “get rich quick” mentality
Many traders, if not most, come into the forex market thinking they are going to get rich quick, if they don’t openly express this sentiment they are certainly thinking it or hoping for it somewhere in their mind. While there certainly is nothing wrong with wanting to make money in the market and believing you can do it, when it becomes an all-consuming thought, and you think it will or should happen really fast, you are setting yourself up for failure. Traders who feel like they are going to get rich quick in the market inevitably end up over-analyzing it, essentially they think by looking at their charts and / or reading as many economic articles as possible, they will somehow gain an “edge” just because they are putting in a full-time effort.
The reality of this “get rich quick” mentality is that it ends up causing you to attempt to control the market, whether you realize it or not, when you stay up all night staring at your charts until your eyes burn you are subconsciously trying to control the uncontrollable, and the more you do this, the more you get caught up in actually believing that the increasing time you are spending watching the market is paying off, or going to pay off. So, in essence, by believing you can “get rich quick” in the forex market, you ultimately end up spending massive amounts of time over-analyzing market variables, this causes indecision and emotional trading, which ultimately causes you to lose money.
It is simply a myth that forex trading is a quick and easy fix for income; it’s not possible to make quick and easy money on a consistent basis, unless you are doing something illegal. Traders need to have realistic expectations when coming into the market, by taking a part-time approach to the market you will keep your mind clear and you will trade from a nearly stress-free mindset. The reality of trading the market is that the only thing you can control is yourself, the more control you have over your own actions, the more success you will have in the market. It is easy to fool yourself into thinking you are controlling yourself even as you over-trade and over-leverage your trading account, but when you really step back and think objectively about every action you take in the market, it becomes much clearer as to whether or not your actions are logical or emotional.
The ironic and perhaps metaphorical aspect of forex trading is that taking a part-time approach, or a “less is more” approach will actually make you more money faster, because you will be far less likely to trade emotionally when you accept the fact that you can make money by only trading a few times a week or less. So, to really make consistent money in the forex market, you need to accept the fact that it’s not going to happen fast, unless you are risking way too much and get lucky a few times in a row, or if you have a very large sum of money to begin trading with.
• Part-time trading helps keep you accountable
Probably the biggest reason why making money consistently in the forex market is difficult for most people is because there is no one to be accountable to. Unlike your current boss, who will fire you if you lose money for the company or do something else he or she doesn’t like, the forex market will not fire you no matter how much money you lose, it doesn’t even know you exist or how much money you have or don’t have, or anything else. To put it succinctly, you have to figure out a way to make yourself accountable if you want to excel at forex trading.
Being a part-time trader forces you to study and trade higher time frames, if you work a full-time job you are probably going to have to trade off the daily charts. This is actually a blessing in disguise though, despite what many traders think there really is no advantage to trading the lower time frames. Sometimes you can improve your entry by trading the 4 hour or 1 hour chart, but because the market provides daily setups each week for traders to take advantage of, there is no real reason to feel like you NEED to trade any time frame lower than the daily. Essentially, trading part-time forces you to master the higher time frames early on in your career, when it is the most critical to do so, then as your talent and skill begin to show you can start implementing lower time frames to improve your entries or exits. Many traders unfortunately take the reverse course of action; they start out by analyzing the lower time frames, and only after losing tons of money and time to these noise-infused charts, do they finally figure out and accept that trading less frequently on the higher time frames is key to making consistent money in the forex market.
POWER....another good piece of advice from Nial. Why? It's becoz I have gone thru some of these stressful situations trying to make money daily after I got lucky and more than double my funding in a "10 days winning run" then after that I thought I can do better by spending more time analyzing the lower time frame charts to score more money but in the end....confused myself and lose the winning touch. As a result....wiped out the winnings and my fund together with my own confidence. SHIT! The worst I did was that I set a daily target of making at least $200 or more.
That to me....was the biggest mistake becoz I were setting myself to fail. Now....I'm back slowly again starting to trade with micro lots and at the same time to spend less time glued to the pc by doing the same things that I did during the "winning run" just look at the weekly then daily charts....once spotted a trending pattern then go to 3hrs and hourly charts to confirm. Only when I need to set entry order...I will go to the 15 mins chart, same for my exit or take profit setting. Yes....I am happier and less stressed out by doing all these again. I have a life....swimming, sauna, gym and doing the things I like.
Wednesday, December 08, 2010
Forex and stock up-date
Didn't do much for both....therefore no big change for my funding. Hope the stocks may have a nice "pop" for the year-end rally so that can use the winning to pay for the COV haha.
I am holding on to the Genting, UOB and Ezra, so far....all are in the negative side. Fingers...crossed!
For forex.....very quiet since I don't have the time and focus to trade therefore not much happening in this area. Yes....only with a sharp focus then there maybe a chance to make some profits, cannot anyhow trade....surely will die if I do that.
4D....no luck, anyway I also don't but big so it is okay. Toto...yes! I do buy once in awhile but just $5 each time....maybe max $10 for 2 draws haha so it is still fine with not winning any money.
I am holding on to the Genting, UOB and Ezra, so far....all are in the negative side. Fingers...crossed!
For forex.....very quiet since I don't have the time and focus to trade therefore not much happening in this area. Yes....only with a sharp focus then there maybe a chance to make some profits, cannot anyhow trade....surely will die if I do that.
4D....no luck, anyway I also don't but big so it is okay. Toto...yes! I do buy once in awhile but just $5 each time....maybe max $10 for 2 draws haha so it is still fine with not winning any money.
It's Dec.....very soon 2010 is over.
Man....when I said how fast time flies, guessed it is an under-statement haha. Well, at least it's how thing is esp talking about time. Blink, blink and it's gone!
My lease for the condo....just left with another 6 months and now I am house hunting for the past 2 Sundays. Lucky that the COV is came down quite a fair bit. Now can still see some asking for 30 to 50K....and they have to wait "long long" lor. On the average....the asking COV is around 20 to 30K but the reasonable ones are those asking for around 10 to 20K esp for lower floor units or the older ones. For the newer ones....the valuation is still pretty high. Also noticed the Punggol has a higher valuation cpmpared to Sengkang. Therefore....planning to get in Sengkang around Blk 297 to 299 area for the sake of wifey and kids' transportation.
Went to Waterloo street temple on last Monday ( lunar 1st of 11th mth ) and took a chiam-see. Got no 69.....it is about the shoot of a cherry bloomson in winter looking dry and leaveless but come spring and it will be bloom into a nice plant with lovely flower. Meaning....must have the patient to wait and things will be fine. Same time....asked about the housing thingy but was advised to look to Yee Tee area. For the past 3 days I have been looking up the property ads plus on-line at I-property and Propertyguru sites.....but cannot help noticed the COV and valuation for the flats there. Yes, some of the older ones have a larger floor area but the look is not so in tune as in Punggol or even Sengkang. Unless go the newer ones near the end of Yee Tee and I went to have a look on last Sunday....noticed lots of FTs ( PRC and Indians ) as there are worker hostels there. Understand these people would sit and messed up the ground floor with their litters eg empty beer bottles and food packaging. So it is not safe.
At Punggol....went to view EA and 5I units, wow....some have very nice fixtures and in "move-in" standard but with higher COV. Also went to view Sengkang....and it is less by 30 to 50K in valuation for some units. The renovations for some are also "good". May have to break the advice if I go for Sengkang....and from the look of things, I will go with the flow with nothing casted in stone!
My lease for the condo....just left with another 6 months and now I am house hunting for the past 2 Sundays. Lucky that the COV is came down quite a fair bit. Now can still see some asking for 30 to 50K....and they have to wait "long long" lor. On the average....the asking COV is around 20 to 30K but the reasonable ones are those asking for around 10 to 20K esp for lower floor units or the older ones. For the newer ones....the valuation is still pretty high. Also noticed the Punggol has a higher valuation cpmpared to Sengkang. Therefore....planning to get in Sengkang around Blk 297 to 299 area for the sake of wifey and kids' transportation.
Went to Waterloo street temple on last Monday ( lunar 1st of 11th mth ) and took a chiam-see. Got no 69.....it is about the shoot of a cherry bloomson in winter looking dry and leaveless but come spring and it will be bloom into a nice plant with lovely flower. Meaning....must have the patient to wait and things will be fine. Same time....asked about the housing thingy but was advised to look to Yee Tee area. For the past 3 days I have been looking up the property ads plus on-line at I-property and Propertyguru sites.....but cannot help noticed the COV and valuation for the flats there. Yes, some of the older ones have a larger floor area but the look is not so in tune as in Punggol or even Sengkang. Unless go the newer ones near the end of Yee Tee and I went to have a look on last Sunday....noticed lots of FTs ( PRC and Indians ) as there are worker hostels there. Understand these people would sit and messed up the ground floor with their litters eg empty beer bottles and food packaging. So it is not safe.
At Punggol....went to view EA and 5I units, wow....some have very nice fixtures and in "move-in" standard but with higher COV. Also went to view Sengkang....and it is less by 30 to 50K in valuation for some units. The renovations for some are also "good". May have to break the advice if I go for Sengkang....and from the look of things, I will go with the flow with nothing casted in stone!
Friday, October 22, 2010
Another weekend....time to up-date the blog
Yes, time flied by and I am breathless. So So So...fast, and now it is already coming to the end of Oct.
This morning I went to Waterloo temple for praying ( lunar 15th of 9th mth )
and asked for a chiam-see. This time I got no 62 which can be said a good
omen one. That there will be a patron to help look-out for me and at the same will help to point me to the right direction in life. Yes, I needed that....amen!
Forex and stock....both are "down" for me this week, nothing doing!
4D....same same, kena makan!
This morning I went to Waterloo temple for praying ( lunar 15th of 9th mth )
and asked for a chiam-see. This time I got no 62 which can be said a good
omen one. That there will be a patron to help look-out for me and at the same will help to point me to the right direction in life. Yes, I needed that....amen!
Forex and stock....both are "down" for me this week, nothing doing!
4D....same same, kena makan!
Wednesday, October 13, 2010
Trading up-date.
Stock - yes, my Genting shares are hanging tough hehe. For the rest eg Ezra, St James, Magnus and Memtech are still "dead" in the water. FiberChem...no news! Well,
just got to cheer Genting on then...to make up for the rest for the moment.
For forex, yes I have started to write a journal for my trades win or lose. For Monday, didn't do much....but did enter some trades on Tuesday and kena stopped out!
Well....just small trades so small losses, just push my fund to less than 30% of the original amount. Have already sent my checks to top-up the fund....should be ready by tomorrow for trading.
Wah...this GBPCHF, USDCHF and USDJPY pairs really gave me a big headache. Still down after hitting their multi-years' low last week. MAN....while EURUSD and AUDUSD are hitting their high for the moment!
just got to cheer Genting on then...to make up for the rest for the moment.
For forex, yes I have started to write a journal for my trades win or lose. For Monday, didn't do much....but did enter some trades on Tuesday and kena stopped out!
Well....just small trades so small losses, just push my fund to less than 30% of the original amount. Have already sent my checks to top-up the fund....should be ready by tomorrow for trading.
Wah...this GBPCHF, USDCHF and USDJPY pairs really gave me a big headache. Still down after hitting their multi-years' low last week. MAN....while EURUSD and AUDUSD are hitting their high for the moment!
Today....I was happy to witness 2 great events.
First....the rescue of the 33 miners in Chile and can see the joy and reliefs when the 1st miner was out of the mine. I too was crying tears of joy when their stories were reported. I was following the whole thing on CNN and BBC....in fact, most of the news were reporting about the event even CCTV in China. The powerful thing is that they were in the mine for 68 days and yet...they are so orderly. That takes great discipline and will to live!!! I can understand what they went thru esp the inital 16 days when they were trapped and no one knew for sure if they were alive! The truth was that most people on the ground were saying it was not possible that they can last so long. Yes....God must be a Chilean!!! Yes also...for the Chilean people and their leaders, they are something!!! I am very happy to witness this event esp after what Chile has gone thru early this year, the earthquake! This does made me believe that there is God and if one is to pray hard enough....nothing is impossible!
See story as followed :
SAN JOSE MINE, Chile – The miners who spent 69 agonizing days deep under the Chilean earth were hoisted one by one to freedom Wednesday, their rescue moving with remarkable speed while their countrymen erupted in cheers and the world watched transfixed.
Beginning at midnight and sometimes as quickly as once every 40 minutes, the men climbed into a slender cage nearly a half-mile underground and made a smooth ascent into fresh air. By early afternoon, more than half the men — 17 of 33 — had been rescued.
In a meticulously planned operation, they were monitored by video on the way up for any sign of panic. They had oxygen masks, dark glasses to protect their eyes from unfamiliar daylight and sweaters for the jarring climate change, subterranean swelter to the chillier air above.
They emerged looking healthier than many had expected and even clean-shaven, and at least one, Mario Sepulveda, the second to taste freedom, bounded out and thrust a fist upward like a prizefighter.
"I think I had extraordinary luck. I was with God and with the devil. And I reached out for God," he said as he awaited the air force helicopter ride to a nearby hospital where all the miners were to spend 48 hours under medical observation.
The operation moved past the halfway point with the rescue of the 17th miner, a 56-year-old electrician named Omar Reygadas who helped organized life underground. His fourth great-grandchild was born a month after the men were sealed into the mine's lower reaches by an Aug. 5 collapse of 700,000 tons of rock.
As it traveled down and up, down and up, the rescue capsule was not rotating as much inside the 2,041-foot escape shaft as officials expected, allowing for faster trips, and officials said the operation could be complete by sunrise Thursday, if not sooner.
The anxiety that had accompanied the careful final days of preparation broke at 12:11 a.m., with the first rescue — Florencio Avalos, who emerged from the missile-like chamber and smiled broadly after his half-mile journey. He hugged his sobbing 7-year-old son and wife and then President Sebastian Pinera, who has been deeply involved in an effort that had become a matter of national pride.
Avalos was followed an hour later by the most ebullient of the group, Sepulveda, whose shouts were heard even before the capsule peeked above the surface. He hugged his wife and handed out souvenir rocks from the mine to laughing rescuers.
No one in recorded history has survived as long trapped underground as the 33 men. For the first 17 days, no one even knew whether they were alive. In the weeks that followed, the world was captivated by their endurance and unity.
Health Minister Jaime Manalich told a news conference after eight miners were rescued that all of them were in good health, and none has required any special medication, not even the diabetic among them.
Chile exploded in joy and relief at the first, breakthrough rescue just after midnight in the coastal Atacama desert.
In the capital, Santiago, a cacophony of car horns sounded. In the nearby regional capital of Copiapo, from which 24 of the miners hail, the mayor canceled school so parents and children could "watch the rescue in the warmth of the home."
News channels from North America to Europe and the Middle East carried live coverage. Pope Benedict XVI said in Spanish that he "continues with hope to entrust to God's goodness" the fate of the men. Iran's state English-language Press TV followed events live until President Mahmoud Ahmadinejad touched down in Lebanon on his first state visit there.
The images beamed worldwide were extraordinary: Grainy footage from beneath the earth showed each miner climbing into the 13-foot-tall capsule, then disappearing upward through an opening. Then a camera showed the pod steadily rising through the dark, smooth-walled tunnel.
After the fifth miner made his ascent — 19-year-old Jimmy Sanchez, the youngest and the father of a months-old baby — the rescuers paused to lubricate the spring-loaded wheels that gave the capsule a smooth ride through the shaft, then resumed the rescues.
The ninth, Mario Gomez, who at 63 is the oldest miner, dropped to his knees after he emerged, bowed his head in prayer and clutched the Chilean flag. His wife, Liliane Ramirez, pulled him up from the ground and embraced him.
Gomez is most experienced of the group, first entering a mine shaft to labor at age 12, and suffers from silicosis, a lung disease common to miners. He has been on antibiotics and bronchial inflammation medicine. Manalich said Gomez came up with a special oxygen mask.
The lone foreigner among the miners, Carlos Mamani of Bolivia, was visited at a nearby clinic by Pinera and Bolivian President Evo Morales. The miner could be heard telling the Chilean president how nice it was to breathe fresh air and see the stars.
Most of the men emerged clean-shaven. Crews had lowered packages dubbed "palomas," Spanish for carrier pigeons, to get food and medicine to the men during their weeks underground, and in the days before rescue they were sent razors and shaving cream.
The entire rescue operation was meticulously choreographed, with no expense spared in bringing in topflight drillers and equipment — and boring three separate holes into the copper and gold mine.
Mining is Chile's lifeblood, providing 40 percent of state earnings, and Pinera put his mining minister and the operations chief of state-owned Codelco, the country's biggest company, in charge of the rescue.
It went so well that its managers abandoned what a legion of journalists had deemed an ultraconservative plan for restricting images of the rescue. A huge Chilean flag that was to obscure the hole from view was moved aside so the hundreds of cameras perched on a hill above could record images that state TV also fed live.
That included the surreal moment when the capsule dropped for the first time into the chamber, where the bare-chested miners, most stripped down to shorts because of the underground heat, mobbed the rescuer who emerged to serve as their guide to freedom.
"This rescue operation has been so marvelous, so clean, so emotional that there was no reason not to allow the eyes of the world — which have been watching this operation so closely — to see it," a beaming Pinera told a news conference after Avalos was brought to the surface.
Avalos, the 31-year-old second-in-command of the miners, was chosen to be first out because he was in the best condition. When the capsule came out of the manhole-sized opening, Avalos stepped out as bystanders cheered, clapped and broke into a chant of the country's name — "Chi! Chi! Chi! Le! Le! Le!"
The next three men out, including Mamani of Bolivia, followed because they were deemed the fittest of body and mind. The 10 to follow included miners with health problems such as high blood pressure, diabetes and skin ulcers.
The operation started just before midnight, when a Codelco rescuer made the sign of the cross and was lowered to the trapped men. A navy paramedic went down after Avalos came up — a surprise improvisation as officials had said the two would go down to oversee the miners' ascent before the first went up.
The last miner was slated to be shift foreman Luis Urzua, whose leadership was credited with helping the men endure the first two and a half weeks without outside contact. The men made 48 hours' worth of rations last before rescuers reached them with a narrow bore hole to send down more food.
Janette Marin, sister-in-law of miner Dario Segovia, said the order of rescue didn't matter.
"This won't be a success unless they all get out," she said.
Chilean officials played down the risks of the rescue.
Panic attacks during the ascent, they said, were the biggest concern. The miners were not sedated — they needed to be alert in case something went awry. Manalich said rescuers could accelerate the capsule to its maximum speed of 3 meters per second if necessary.
Rescue coordinator Andre Sougarett told The Associated Press beforehand that the worst technical problem would be the possibility that "a rock could fall" and jam the capsule in the shaft.
But Davitt McAteer, who directed the U.S. Mine Safety and Health Administration during the Clinton administration, said there were many risks: A miner could get claustrophobic and somehow jam the capsule, the cable could get hung up, or the rig that pulls the cable could overheat.
"You can be good and you can be lucky. And they've been good and lucky," McAteer told the AP just before the operation commenced. "Knock on wood that this luck holds out for the next 33 hours."
The CEO of the Austrian company that made the capsule's winch and pulley system said there was no danger of the motor overheating because the winch was not working under maximum capacity.
Mining Minister Laurence Golborne, whose management of the crisis has made him a media star in Chile, insisted all risks had been considered.
"There is no need to try to start guessing what could go wrong. We have done that job," Golborne said. "We have hundreds of different contingencies."
McAteer said he gave "very high marks" to the Chileans for creating lowered expectations by saying that it might take until Christmas to rescue the men — and then consistently delivering results ahead of schedule.
"Second, they have had very few technical problems," he said.
Three rescue capsules were built by Chilean navy engineers, named Phoenix for the mythical bird that rises from ashes and painted in the white, blue and red of the national flag. Only one has been used in the rescue.
The miners' vital signs were closely monitored throughout the ride. They were given a high-calorie liquid diet donated by NASA, designed to prevent nausea from any rotation of the capsule as it travels through curves in the 28-inch-diameter escape hole.
Engineers inserted steel piping at the top of the shaft, which is angled 11 degrees off vertical before plunging like a waterfall.
Drillers had to curve the shaft to pass through "virgin" rock, narrowly avoiding collapsed areas and underground open spaces in the overexploited mine, which had operated since 1885.
At the regional hospital in Copiapo, two floors were prepared for the miners to be evaluated.
Then the second one....is about the armless pianist in China who went on to win the China Got Talent contest. Wow...me with 2 good arms and legs can't even think of doing 5% of what he have achieved. Yes....play the piano, and can swim well too. For this young man....it takes great discipline and will to live life to the fullest.
See story....
October 12, 2010 : If you think that the piano can be played only by hand, then you should certainly meet Liu Wei. Liu Wei is perhaps the World's best armless pianist.
Liu Wei lost his arms at the age of 10 when he was accidentally electrocuted while playing a game of hide and seek. Liu, a resident of Beijing taught himself to play the piano when he was 18 and has been practicing regularly ever since. For his final performance, Liu performed the song "You're Beautiful" all the while, singing and playing the piano with his feet.
"I really do not care how people regard me. It is enough for me to do the things I like. When other people express their regret and sorrow because I lost both arms, I can tell them confidently that I have perfect feet," he said.
Liu lost his arms when he was 10 after touching a high-voltage wire during a game of hide-and-seek.
At the time he dreamed of becoming a soccer player. He was encouraged by Liu Jingshen, vice-chairman of the Beijing Disabled Persons' Federation, to do daily chores with his feet and started swimming two years later. He won two gold medals and one silver at the National Swimming Championship for the Disabled in 2002.
By the age of 19, Liu had taught himself how to play the piano with his feet and started composing and producing music, practicing more than seven hours every day.
One year later, he was given the chance to work with the famous Hong Kong pop star Andy Lau and they composed the song Let It Be.
"Music is like water and air to me. I can't live without it," Liu Wei has said.
The jury panel of China's Got Talent, Shanghai stand-up comedian Zhou Libo, Taiwan singer-actress Annie Yi and mainland pop composer Gao Xiaosong, all praised Liu's performance.
"We all fought for our dreams when we were young, but no one has fought as hard as you," Gao said at one of the auditions.
"You tell us that to realize our dreams, we need to spare no pain," Yi said.
"There are only two options for the rest of my life: die as soon as possible or live life loud," Liu said during one show, inspiring thousands of people across China.
Liu moved the audience in the stadium and TV viewers when he said "at least I have a pair of perfect legs", according to the report.
Liu started playing the piano at 19 to pursue his childhood dream of being a musician. His first teacher quit because he thought it was impossible for someone to play with their toes, the newspaper said previously.
But Liu, who was studying music theory, persisted and taught himself in secret how to play, creating his own technique.
At the ceremony on Sunday, Liu was invited by Taiwanese singer Jolin Tsai to be a guest performer during her overseas tour. The report said he may also receive a performance contract, without elaborating.
Looking at the two events....it does give me "hope" that I can do whatever I set my mind to do and have the will-power to follow thru the action plan. Frankly...the easiest thing for me to do is to lay down and wait for a hopeless death, esp with just thinking of the road ahead for me....is kind of blocked with not much hope. Now with these 2 events today....I should kick myself to get out of this "mind trap" and do whatever needed to live my life meaningfully. Don't wait for hopeless things to happen....when in my heart, I already know that it's time to move on and to let go all the wishful thinking!
Yes....I will do my best after my present job end to master Forex plus go all out with the insurance thingy! If that doesn't work....then it is alright to lay down and die! In doing so.....I would know I done my best and it's time to let go!
See story as followed :
SAN JOSE MINE, Chile – The miners who spent 69 agonizing days deep under the Chilean earth were hoisted one by one to freedom Wednesday, their rescue moving with remarkable speed while their countrymen erupted in cheers and the world watched transfixed.
Beginning at midnight and sometimes as quickly as once every 40 minutes, the men climbed into a slender cage nearly a half-mile underground and made a smooth ascent into fresh air. By early afternoon, more than half the men — 17 of 33 — had been rescued.
In a meticulously planned operation, they were monitored by video on the way up for any sign of panic. They had oxygen masks, dark glasses to protect their eyes from unfamiliar daylight and sweaters for the jarring climate change, subterranean swelter to the chillier air above.
They emerged looking healthier than many had expected and even clean-shaven, and at least one, Mario Sepulveda, the second to taste freedom, bounded out and thrust a fist upward like a prizefighter.
"I think I had extraordinary luck. I was with God and with the devil. And I reached out for God," he said as he awaited the air force helicopter ride to a nearby hospital where all the miners were to spend 48 hours under medical observation.
The operation moved past the halfway point with the rescue of the 17th miner, a 56-year-old electrician named Omar Reygadas who helped organized life underground. His fourth great-grandchild was born a month after the men were sealed into the mine's lower reaches by an Aug. 5 collapse of 700,000 tons of rock.
As it traveled down and up, down and up, the rescue capsule was not rotating as much inside the 2,041-foot escape shaft as officials expected, allowing for faster trips, and officials said the operation could be complete by sunrise Thursday, if not sooner.
The anxiety that had accompanied the careful final days of preparation broke at 12:11 a.m., with the first rescue — Florencio Avalos, who emerged from the missile-like chamber and smiled broadly after his half-mile journey. He hugged his sobbing 7-year-old son and wife and then President Sebastian Pinera, who has been deeply involved in an effort that had become a matter of national pride.
Avalos was followed an hour later by the most ebullient of the group, Sepulveda, whose shouts were heard even before the capsule peeked above the surface. He hugged his wife and handed out souvenir rocks from the mine to laughing rescuers.
No one in recorded history has survived as long trapped underground as the 33 men. For the first 17 days, no one even knew whether they were alive. In the weeks that followed, the world was captivated by their endurance and unity.
Health Minister Jaime Manalich told a news conference after eight miners were rescued that all of them were in good health, and none has required any special medication, not even the diabetic among them.
Chile exploded in joy and relief at the first, breakthrough rescue just after midnight in the coastal Atacama desert.
In the capital, Santiago, a cacophony of car horns sounded. In the nearby regional capital of Copiapo, from which 24 of the miners hail, the mayor canceled school so parents and children could "watch the rescue in the warmth of the home."
News channels from North America to Europe and the Middle East carried live coverage. Pope Benedict XVI said in Spanish that he "continues with hope to entrust to God's goodness" the fate of the men. Iran's state English-language Press TV followed events live until President Mahmoud Ahmadinejad touched down in Lebanon on his first state visit there.
The images beamed worldwide were extraordinary: Grainy footage from beneath the earth showed each miner climbing into the 13-foot-tall capsule, then disappearing upward through an opening. Then a camera showed the pod steadily rising through the dark, smooth-walled tunnel.
After the fifth miner made his ascent — 19-year-old Jimmy Sanchez, the youngest and the father of a months-old baby — the rescuers paused to lubricate the spring-loaded wheels that gave the capsule a smooth ride through the shaft, then resumed the rescues.
The ninth, Mario Gomez, who at 63 is the oldest miner, dropped to his knees after he emerged, bowed his head in prayer and clutched the Chilean flag. His wife, Liliane Ramirez, pulled him up from the ground and embraced him.
Gomez is most experienced of the group, first entering a mine shaft to labor at age 12, and suffers from silicosis, a lung disease common to miners. He has been on antibiotics and bronchial inflammation medicine. Manalich said Gomez came up with a special oxygen mask.
The lone foreigner among the miners, Carlos Mamani of Bolivia, was visited at a nearby clinic by Pinera and Bolivian President Evo Morales. The miner could be heard telling the Chilean president how nice it was to breathe fresh air and see the stars.
Most of the men emerged clean-shaven. Crews had lowered packages dubbed "palomas," Spanish for carrier pigeons, to get food and medicine to the men during their weeks underground, and in the days before rescue they were sent razors and shaving cream.
The entire rescue operation was meticulously choreographed, with no expense spared in bringing in topflight drillers and equipment — and boring three separate holes into the copper and gold mine.
Mining is Chile's lifeblood, providing 40 percent of state earnings, and Pinera put his mining minister and the operations chief of state-owned Codelco, the country's biggest company, in charge of the rescue.
It went so well that its managers abandoned what a legion of journalists had deemed an ultraconservative plan for restricting images of the rescue. A huge Chilean flag that was to obscure the hole from view was moved aside so the hundreds of cameras perched on a hill above could record images that state TV also fed live.
That included the surreal moment when the capsule dropped for the first time into the chamber, where the bare-chested miners, most stripped down to shorts because of the underground heat, mobbed the rescuer who emerged to serve as their guide to freedom.
"This rescue operation has been so marvelous, so clean, so emotional that there was no reason not to allow the eyes of the world — which have been watching this operation so closely — to see it," a beaming Pinera told a news conference after Avalos was brought to the surface.
Avalos, the 31-year-old second-in-command of the miners, was chosen to be first out because he was in the best condition. When the capsule came out of the manhole-sized opening, Avalos stepped out as bystanders cheered, clapped and broke into a chant of the country's name — "Chi! Chi! Chi! Le! Le! Le!"
The next three men out, including Mamani of Bolivia, followed because they were deemed the fittest of body and mind. The 10 to follow included miners with health problems such as high blood pressure, diabetes and skin ulcers.
The operation started just before midnight, when a Codelco rescuer made the sign of the cross and was lowered to the trapped men. A navy paramedic went down after Avalos came up — a surprise improvisation as officials had said the two would go down to oversee the miners' ascent before the first went up.
The last miner was slated to be shift foreman Luis Urzua, whose leadership was credited with helping the men endure the first two and a half weeks without outside contact. The men made 48 hours' worth of rations last before rescuers reached them with a narrow bore hole to send down more food.
Janette Marin, sister-in-law of miner Dario Segovia, said the order of rescue didn't matter.
"This won't be a success unless they all get out," she said.
Chilean officials played down the risks of the rescue.
Panic attacks during the ascent, they said, were the biggest concern. The miners were not sedated — they needed to be alert in case something went awry. Manalich said rescuers could accelerate the capsule to its maximum speed of 3 meters per second if necessary.
Rescue coordinator Andre Sougarett told The Associated Press beforehand that the worst technical problem would be the possibility that "a rock could fall" and jam the capsule in the shaft.
But Davitt McAteer, who directed the U.S. Mine Safety and Health Administration during the Clinton administration, said there were many risks: A miner could get claustrophobic and somehow jam the capsule, the cable could get hung up, or the rig that pulls the cable could overheat.
"You can be good and you can be lucky. And they've been good and lucky," McAteer told the AP just before the operation commenced. "Knock on wood that this luck holds out for the next 33 hours."
The CEO of the Austrian company that made the capsule's winch and pulley system said there was no danger of the motor overheating because the winch was not working under maximum capacity.
Mining Minister Laurence Golborne, whose management of the crisis has made him a media star in Chile, insisted all risks had been considered.
"There is no need to try to start guessing what could go wrong. We have done that job," Golborne said. "We have hundreds of different contingencies."
McAteer said he gave "very high marks" to the Chileans for creating lowered expectations by saying that it might take until Christmas to rescue the men — and then consistently delivering results ahead of schedule.
"Second, they have had very few technical problems," he said.
Three rescue capsules were built by Chilean navy engineers, named Phoenix for the mythical bird that rises from ashes and painted in the white, blue and red of the national flag. Only one has been used in the rescue.
The miners' vital signs were closely monitored throughout the ride. They were given a high-calorie liquid diet donated by NASA, designed to prevent nausea from any rotation of the capsule as it travels through curves in the 28-inch-diameter escape hole.
Engineers inserted steel piping at the top of the shaft, which is angled 11 degrees off vertical before plunging like a waterfall.
Drillers had to curve the shaft to pass through "virgin" rock, narrowly avoiding collapsed areas and underground open spaces in the overexploited mine, which had operated since 1885.
At the regional hospital in Copiapo, two floors were prepared for the miners to be evaluated.
Then the second one....is about the armless pianist in China who went on to win the China Got Talent contest. Wow...me with 2 good arms and legs can't even think of doing 5% of what he have achieved. Yes....play the piano, and can swim well too. For this young man....it takes great discipline and will to live life to the fullest.
See story....
October 12, 2010 : If you think that the piano can be played only by hand, then you should certainly meet Liu Wei. Liu Wei is perhaps the World's best armless pianist.
Liu Wei lost his arms at the age of 10 when he was accidentally electrocuted while playing a game of hide and seek. Liu, a resident of Beijing taught himself to play the piano when he was 18 and has been practicing regularly ever since. For his final performance, Liu performed the song "You're Beautiful" all the while, singing and playing the piano with his feet.
"I really do not care how people regard me. It is enough for me to do the things I like. When other people express their regret and sorrow because I lost both arms, I can tell them confidently that I have perfect feet," he said.
Liu lost his arms when he was 10 after touching a high-voltage wire during a game of hide-and-seek.
At the time he dreamed of becoming a soccer player. He was encouraged by Liu Jingshen, vice-chairman of the Beijing Disabled Persons' Federation, to do daily chores with his feet and started swimming two years later. He won two gold medals and one silver at the National Swimming Championship for the Disabled in 2002.
By the age of 19, Liu had taught himself how to play the piano with his feet and started composing and producing music, practicing more than seven hours every day.
One year later, he was given the chance to work with the famous Hong Kong pop star Andy Lau and they composed the song Let It Be.
"Music is like water and air to me. I can't live without it," Liu Wei has said.
The jury panel of China's Got Talent, Shanghai stand-up comedian Zhou Libo, Taiwan singer-actress Annie Yi and mainland pop composer Gao Xiaosong, all praised Liu's performance.
"We all fought for our dreams when we were young, but no one has fought as hard as you," Gao said at one of the auditions.
"You tell us that to realize our dreams, we need to spare no pain," Yi said.
"There are only two options for the rest of my life: die as soon as possible or live life loud," Liu said during one show, inspiring thousands of people across China.
Liu moved the audience in the stadium and TV viewers when he said "at least I have a pair of perfect legs", according to the report.
Liu started playing the piano at 19 to pursue his childhood dream of being a musician. His first teacher quit because he thought it was impossible for someone to play with their toes, the newspaper said previously.
But Liu, who was studying music theory, persisted and taught himself in secret how to play, creating his own technique.
At the ceremony on Sunday, Liu was invited by Taiwanese singer Jolin Tsai to be a guest performer during her overseas tour. The report said he may also receive a performance contract, without elaborating.
Looking at the two events....it does give me "hope" that I can do whatever I set my mind to do and have the will-power to follow thru the action plan. Frankly...the easiest thing for me to do is to lay down and wait for a hopeless death, esp with just thinking of the road ahead for me....is kind of blocked with not much hope. Now with these 2 events today....I should kick myself to get out of this "mind trap" and do whatever needed to live my life meaningfully. Don't wait for hopeless things to happen....when in my heart, I already know that it's time to move on and to let go all the wishful thinking!
Yes....I will do my best after my present job end to master Forex plus go all out with the insurance thingy! If that doesn't work....then it is alright to lay down and die! In doing so.....I would know I done my best and it's time to let go!
Saturday, October 09, 2010
The important of having a Forex Trading Journal - Written by casey
I am going to start an online Forex Trading Journal that will be a public log of every trade I make. There are a couple of reasons I am going to start posting my trades here on the Winners Edge Trading blog. First reason is because I want to follow my own advice in an article I wrote last week about forex discipline. If I am going to write about doing it, I want do to it and live it. So this will be my trading accountability structure. All of you will be my accountability partners, and I want every one who reads this blog to help out. You guys can post your trades her as well and we can get some group feedback. I will write all the entry points as well as stop loss, and take profit target. I will also include my pre-trade analysis as to way I take each trade.
The other reason I am going to post my trades is because I have been getting tons of emails about my trades and strategies. In addition to helping me in my trading I believe this will help everybody else as well. To keep my entries to a manageable number I will only post swing trades with a daily, 4hr, or 1 hr entry candles.
I am always writing about keeping a Forex Trading Journal so now I will teach you how to keep one as well by following this journal. The journal will start tomorrow because it is the first of the month. It is easier to show someone something then it is to tell someone about it. This way I will be showing you how to keep a journal. Please join me and participate in this Forex trading journal because as always your participation is what is going to make this a success. Winners Edge Trading would not be here if it was not for this great community. If you like this idea or have any other ideas about how I should proceed please include it the comments below.
The other reason I am going to post my trades is because I have been getting tons of emails about my trades and strategies. In addition to helping me in my trading I believe this will help everybody else as well. To keep my entries to a manageable number I will only post swing trades with a daily, 4hr, or 1 hr entry candles.
I am always writing about keeping a Forex Trading Journal so now I will teach you how to keep one as well by following this journal. The journal will start tomorrow because it is the first of the month. It is easier to show someone something then it is to tell someone about it. This way I will be showing you how to keep a journal. Please join me and participate in this Forex trading journal because as always your participation is what is going to make this a success. Winners Edge Trading would not be here if it was not for this great community. If you like this idea or have any other ideas about how I should proceed please include it the comments below.
Forex trading tip#1 - remember to always pit the strongest against the weakest - Written by Karthik
Lot of people/traders talk about how similar stock markets and the currency exchanges are. Both are leveraged products, both involve lots of risks and returns, both can be analysed using techies and fundies and we could go on and on about the similarities. But there is one crucial difference between how you trade stocks and how you trade currencies which many traders fail to realise and recognise. Due to the fact that they don't even realise it, they do not realise how powerful it can be and how it can be properly exploited to increase your profit potential and at the same time, decrease your risks as well.
The big crucial difference is the fact that in the FX market, i am talking about spot forex and not the futures, we always play one currency against the other while in the stock market, we always deal with only a single stock at any point of time. In other words, we are not bothered about how the share price of Microsoft is going to perform relative to the share price of Google. We are just going to be bothered about how it is going to go on its own respect. Whereas, in spot forex, we always need to see how one currency is going to perform relative to the other.
So, how does this affect our profit and risk potential? Imagine this scenario: assume that there are 2 boxing bouts, one in which Muhammed Ali (one of the greatest boxers of all time) is up against Joe Frazier (another very good fighter) and in another bout, you have Ali against yours truly (yes !! Thats me, Karthik). Assume that the odds are the same for both the bouts. Which bout would you place your bets on? It would of course be the one which pits yours truly against Ali. It does not mean that Joe cannot or never will beat Ali, its just that you want to be on the safer side, reduce your risk and make some very good,low-risk money. At the end of the day,Joe might even beat Ali, but you always play to the side which has lesser risk. And even if Joe does beat Ali, it is going to be a long, hard-fought excruciating fight which will make you keep biting your fingernails, not knowing the results till the last moment. While the bout between me and Ali is going to be a short straight forward low-tension fight. Now, can you think for a while and compare this scenario with the one in the spot forex markets ?
From the last article, assume that Ali is EUR, JPY is Joe and USD is yours truly. So, now the first bout translates to EURJPY and the second bout translates to EURUSD. For the past 2-3 weeks, we have seen that the euro has been strengthening, Instead of blindly going long on some pair based on its strength, you needed to spend 5-10 mins to find the best pair to go long. So, now, you have decided to go long on EUR. Choose the pair which pairs the Euro against the weakest. Surely, JPY is not the weakest. How do we know that. We can know this by seeing that it is gaining against USD. Now we know that USD is weaker. Now, we see whether USD is gaining against any other currency. We continue doing this till we find a currency which is not gaining against any others. Now, we see that USD is not gaining against any currency. So, we come to the conclusion that it is best to play the strongest, Euro, against the weakest, the USD. True to this, we can see that EURUSD has gained 600 pips in 2-3 weeks while no other pair has gained that much.
I could see that there were a lot of people who tried going long on GBPUSD, EURJPY etc. but all that you needed to do was go long on EURUSD. This guarantees good returns and the risks were also very low. If you had more money to invest, take more lots on EURUSD rather than going long on other pairs just because one of it was strong. In the boxing example, we knew Ali was strongest but we had to pick the bout which pitted the strongest against the weakeast.Lesser risk,lesser nail-biting,lesser tension, higher returns. So remember to always pit the strongest against the weakest.
The big crucial difference is the fact that in the FX market, i am talking about spot forex and not the futures, we always play one currency against the other while in the stock market, we always deal with only a single stock at any point of time. In other words, we are not bothered about how the share price of Microsoft is going to perform relative to the share price of Google. We are just going to be bothered about how it is going to go on its own respect. Whereas, in spot forex, we always need to see how one currency is going to perform relative to the other.
So, how does this affect our profit and risk potential? Imagine this scenario: assume that there are 2 boxing bouts, one in which Muhammed Ali (one of the greatest boxers of all time) is up against Joe Frazier (another very good fighter) and in another bout, you have Ali against yours truly (yes !! Thats me, Karthik). Assume that the odds are the same for both the bouts. Which bout would you place your bets on? It would of course be the one which pits yours truly against Ali. It does not mean that Joe cannot or never will beat Ali, its just that you want to be on the safer side, reduce your risk and make some very good,low-risk money. At the end of the day,Joe might even beat Ali, but you always play to the side which has lesser risk. And even if Joe does beat Ali, it is going to be a long, hard-fought excruciating fight which will make you keep biting your fingernails, not knowing the results till the last moment. While the bout between me and Ali is going to be a short straight forward low-tension fight. Now, can you think for a while and compare this scenario with the one in the spot forex markets ?
From the last article, assume that Ali is EUR, JPY is Joe and USD is yours truly. So, now the first bout translates to EURJPY and the second bout translates to EURUSD. For the past 2-3 weeks, we have seen that the euro has been strengthening, Instead of blindly going long on some pair based on its strength, you needed to spend 5-10 mins to find the best pair to go long. So, now, you have decided to go long on EUR. Choose the pair which pairs the Euro against the weakest. Surely, JPY is not the weakest. How do we know that. We can know this by seeing that it is gaining against USD. Now we know that USD is weaker. Now, we see whether USD is gaining against any other currency. We continue doing this till we find a currency which is not gaining against any others. Now, we see that USD is not gaining against any currency. So, we come to the conclusion that it is best to play the strongest, Euro, against the weakest, the USD. True to this, we can see that EURUSD has gained 600 pips in 2-3 weeks while no other pair has gained that much.
I could see that there were a lot of people who tried going long on GBPUSD, EURJPY etc. but all that you needed to do was go long on EURUSD. This guarantees good returns and the risks were also very low. If you had more money to invest, take more lots on EURUSD rather than going long on other pairs just because one of it was strong. In the boxing example, we knew Ali was strongest but we had to pick the bout which pitted the strongest against the weakeast.Lesser risk,lesser nail-biting,lesser tension, higher returns. So remember to always pit the strongest against the weakest.
New trader's mistakes - By Diane Holstrom from WorldFXIQ
It was once said, “a smart man learns from his Forex mistakes – but a wise man learns from others’ Forex mistakes!”
When it comes to learning Forex trading, your money is on the line! We want you to learn from others that have forged ahead of you in the learning process.
1.Trading without the proper education
a.Let me ask you – would you be hired as an educator, engineer, accountant, doctor or lawyer without the proper education? NO! Then why do we believe that because we can do this trading thing in the convenience of our home with no boss, no employees, that it should be easy? It’s not rocket science – but you need to be committed to getting educated in order to make smart and profitable trades.
2.Trading without a plan
a.This is a nutty idea – but I would venture to say that over 90% of new traders do this. Why? Because we don’t yet know what we are doing and we are simply feeling our way around. Trading with a plan includes some of the following items:
i.Declaring the pairs you will trade and stick with those for a period of time
ii.Knowing your limit of the number of trades to have on at the same time.
iii.Deciding you will leave a bad trade when it goes against you at 2-3% of your total margin
iv.Understanding that if you don’t know why you are in a trade – you need to leave it.
v.Committed to only training when nothing else is going on; no phone calls or visitors, etc.
3.Trading when emotionally distraught, trying to get over being emotional!
a.Greed and fear rule trading. Greed gets stronger when the trade is going in your favor and fear takes over when the trade is going against you.
b.Emotions rule in either case so deciding not to trade when or if something else in your life is distracting you is the only decision.
c.Emotions keep you from following your plan.
d.There is an old adage – Bulls make money and Bears make money – pigs get slaughtered.
4.Trading when you must have the money
a.This type of pressure puts you in a position of fear. Sound, logical decisions that support your plan will be abandoned. Be wise – know this is not a quick fix to your money problems!
5.Placing an order for the wrong pair
a.The charts are exciting and new at the beginning of your trading career. When you see a pair heading in a direction you don’t want to miss – take one more second to make sure the order you are placing is the one you want!
6.Placing an order for 20 lots instead of 2 lots
a.Ouch, this hurts! Especially if the trade is going against you. Often times traders post different amounts each time they trade e.g. 1 standard lot, .5 lots, .3 or even .1 lots. Be sure you know when you are getting into the trade, how much you want to put in the trade and check it one more time! That extra second it takes to double check could save you lots of money!
7.Placing too many trades at one time
a.New traders are excited to trade and don’t realize the adrenaline that is pumping through the veins. Getting multiple trades on at a time may keep you from managing the money on 1 or 2 very profitable trades because you eyes were off the ball. Be wise. Start small until you are proficient.
8.Placing too much risk on a single trade, otherwise known as “doubling up to catch up”!
a.This happens so quickly! You think you are fine; the trade is headed in your direction. Then, it’s not! So you place another trade in the same direction to “dollar cost average the trade” knowing that it will eventually turn in your favor. But it doesn’t and you now have 3 or maybe 4 trades on the same pair. Now you are stuck holding that one trade and have used up all of your available funds so you’re unable to get into something profitable. Its not fun to sit on your hands and watch the pips evaporate and your account get margined out. Remember it is better to be wishing you were in a trade then wishing you were out of a trade.
9.Placing a trade not knowing why you got in the trade
a.As a new traders you have so much to learn. Someone will call a trade in the news, or from a Tweet. You trust the individual, so you make the trade. Boom! It goes against you! How dare them! Be careful as you didn’t know why you were in the trade in the first place! Remember it is your money
b.Only get in a trade when you agree with the call.
10.Accidentally going Long instead of Short
a.This is as easy as entering 2 lots instead of 0.2 – be very clear when you pull the trigger the pair you are trading
When it comes to learning Forex trading, your money is on the line! We want you to learn from others that have forged ahead of you in the learning process.
1.Trading without the proper education
a.Let me ask you – would you be hired as an educator, engineer, accountant, doctor or lawyer without the proper education? NO! Then why do we believe that because we can do this trading thing in the convenience of our home with no boss, no employees, that it should be easy? It’s not rocket science – but you need to be committed to getting educated in order to make smart and profitable trades.
2.Trading without a plan
a.This is a nutty idea – but I would venture to say that over 90% of new traders do this. Why? Because we don’t yet know what we are doing and we are simply feeling our way around. Trading with a plan includes some of the following items:
i.Declaring the pairs you will trade and stick with those for a period of time
ii.Knowing your limit of the number of trades to have on at the same time.
iii.Deciding you will leave a bad trade when it goes against you at 2-3% of your total margin
iv.Understanding that if you don’t know why you are in a trade – you need to leave it.
v.Committed to only training when nothing else is going on; no phone calls or visitors, etc.
3.Trading when emotionally distraught, trying to get over being emotional!
a.Greed and fear rule trading. Greed gets stronger when the trade is going in your favor and fear takes over when the trade is going against you.
b.Emotions rule in either case so deciding not to trade when or if something else in your life is distracting you is the only decision.
c.Emotions keep you from following your plan.
d.There is an old adage – Bulls make money and Bears make money – pigs get slaughtered.
4.Trading when you must have the money
a.This type of pressure puts you in a position of fear. Sound, logical decisions that support your plan will be abandoned. Be wise – know this is not a quick fix to your money problems!
5.Placing an order for the wrong pair
a.The charts are exciting and new at the beginning of your trading career. When you see a pair heading in a direction you don’t want to miss – take one more second to make sure the order you are placing is the one you want!
6.Placing an order for 20 lots instead of 2 lots
a.Ouch, this hurts! Especially if the trade is going against you. Often times traders post different amounts each time they trade e.g. 1 standard lot, .5 lots, .3 or even .1 lots. Be sure you know when you are getting into the trade, how much you want to put in the trade and check it one more time! That extra second it takes to double check could save you lots of money!
7.Placing too many trades at one time
a.New traders are excited to trade and don’t realize the adrenaline that is pumping through the veins. Getting multiple trades on at a time may keep you from managing the money on 1 or 2 very profitable trades because you eyes were off the ball. Be wise. Start small until you are proficient.
8.Placing too much risk on a single trade, otherwise known as “doubling up to catch up”!
a.This happens so quickly! You think you are fine; the trade is headed in your direction. Then, it’s not! So you place another trade in the same direction to “dollar cost average the trade” knowing that it will eventually turn in your favor. But it doesn’t and you now have 3 or maybe 4 trades on the same pair. Now you are stuck holding that one trade and have used up all of your available funds so you’re unable to get into something profitable. Its not fun to sit on your hands and watch the pips evaporate and your account get margined out. Remember it is better to be wishing you were in a trade then wishing you were out of a trade.
9.Placing a trade not knowing why you got in the trade
a.As a new traders you have so much to learn. Someone will call a trade in the news, or from a Tweet. You trust the individual, so you make the trade. Boom! It goes against you! How dare them! Be careful as you didn’t know why you were in the trade in the first place! Remember it is your money
b.Only get in a trade when you agree with the call.
10.Accidentally going Long instead of Short
a.This is as easy as entering 2 lots instead of 0.2 – be very clear when you pull the trigger the pair you are trading
Forex trading is a up-hill battle for most
There is a high turnover in the number of traders that come into the premium trading room. We try everything in our power to help them trade profitably and stay members. As a matter of fact we conducted a poll of one of our trading session at the end to see how many traders were profitable during the session. This was a session where we posted 5 trades and they were all profitable for us. At the end of the poll the results were that 21% of the traders lost money even though we called 5 profitable trades.
In the beginning our team would get very frustrated about the fact that traders lose money despite us doing everything we can to help them. We still work hard and do everything we can but we have learned that many people fall through the cracks and dont make the cut as forex traders.
I have found a remarkable article about Forex Discipline that I recommend that you read. It is written by Jason Stapleton and he explains some key issues why traders fail.
I have also found an article that release the actual success rate of all traders at IBFX.
Thanks for reading and I hope this helps you take some improvements in your trading.
Casey
In the beginning our team would get very frustrated about the fact that traders lose money despite us doing everything we can to help them. We still work hard and do everything we can but we have learned that many people fall through the cracks and dont make the cut as forex traders.
I have found a remarkable article about Forex Discipline that I recommend that you read. It is written by Jason Stapleton and he explains some key issues why traders fail.
I have also found an article that release the actual success rate of all traders at IBFX.
Thanks for reading and I hope this helps you take some improvements in your trading.
Casey
Discipline: Why You Don’t Have It……And How to Get It.
It’s the “thing”. When you break it down and cut out all the noise, all the talk about trading systems, EA’s, psychology, money management and risk management what trading really comes down to is discipline. It’s the one thing that will make or break you as a trader. Winning system? Without discipline, you won’t follow it. Tight spreads? Without discipline, you will still over trade costing you a fortune in broker fees. Lightning fast internet connection with a spit second new feed? Without discipline, you will constantly miss out the good trades due to your own indecision.
But this is nothing new. Everyone knows you need discipline to be a trader. The question is HOW.
I’ve always believed the best teaching tools come from real life. So I want to talk to you for a little while about something else in life that takes a great deal of discipline with roughly the same success rate as trading…….weight loss.
Nearly everyone reading this article can identify with a waistline that’s become a little………unflattering. At some point, the sight of yourself as you pass by the mirror on your way to the shower becomes too much for even you to tolerate. What follows is a process that is all too familiar.
1. Tell friends and family that you are thinking about losing some weight.
2. Listen to those people giving you advice about how best to lose the weight. (Most are overweight as well.)
3. Get several new books by current authors covering the latest strategies for achieving your goal.
4. Buy a bunch of new stuffs like a blender, vitamin packs, health foods, new running shoes, exercise shorts and a gym membership.
5. Decide to start in a week or so.
6. In a month, received the credit card bills for all the stuffs you bought and decide to get started.
7. Religiously follow your diet and exercise program for a full week.
8. Start to see some results.
9. Give yourself a “cheat day” to reward yourself.
10. Go right back to your old eating and exercise habits.
11. Put all your weight back on.
This has been the process for nearly every dieter in the world at one point or another. So let’s talk about the WHY. WHY is it so hard to stay disciplined when dieting? Let me frame the scenario differently. Let’s say you want to lose some weight and you decide you are going to cut out the sweets. NO MORE SUGAR! No more soda pop or candy. No dessert or treats after meals. On its surface this seems to be a very simple, rational and effective plan for losing some of those unwanted pounds. How hard to you think it would be to follow?
Most people would say, “Sure Jason, it sounds simple. But it’s a lot harder than it sounds.” True, but let me add a critical piece of information. If you’re stranded on a deserted island. See what I mean? With no access to processed sugar it becomes easy to follow your rules and stay disciplined.
But let’s change our scenario one last time. What if you worked at a pastry shop? Not just any pastry shop but the kind of shop that would rival Le Grenier a Pain. Every day you show up and create some of the most delicious morsels ever devised. You get to smell the aroma of fresh baked sweets as the waft through the kitchen. The display cases are lined each day with every conceivable guilty pleasure. Occasionally you poke your head out only to find the patrons of the shop enjoying the fruits of your labor. You see the look of satisfaction on their faces as they devour every last bite.
Get the picture? So how long do you think you could stay disciplined and committed now?
Traders, your commitment to follow your trading plan and stay disciplined is just like a commitment to cut out sugar. The problem is………..
The FOREX market is your bakery.
Each and every day you sit down to trade your commitment to follow your trading plan will be tested. You’re on a diet in a pastry shop. The market will seek at every turn to challenge your resolve and attempt to push you out of your comfort zone causing you to make impulsive emotional decisions rather than disciplined, planed ones.
Many people will tell you it is wrong to look at the market as a living breathing entity, “The market is not out to get you.” as the saying goes. But I find in this case that it serves the analogy well. The “market” is the representation of every trader’s decision as a specific point in time. That’s all. But the market rewards risk and punishes those that follow the path of least resistance. This must be the case in order for markets to function.
Because of this simple truth we can deduce that in order to succeed, we must have the strength of our convictions since they will no doubt run contrary to many in the market.
Remember 90% of traders lose money. If you want to be part of the 10% look at what the 90% do, then do the opposite.
Ok, if you’re still reading I’ve kept you in suspense long enough. So how do you stay disciplined given the overwhelming temptation to do otherwise?
Discipline is an emotional quality. To have discipline means you have fixed yourself in a course of action and are unwilling to deviate from it. Having discipline starts with commitment. Even this first step causes people some problems. A lot of people think they are committed but most are not.
“There’s a difference between interest and commitment. When you’re interested in doing something, you do it only when circumstance permit. When you’re committed to something, you accept no excuses, only results.” -Art Turock-
Step one to staying disciplined; Are you truly committed? If not, you must make that commitment if you ever expect to succeed. This first step while simple acts as an anchor to your trading. The commitment to succeed is what allows your mind to focus on a goal. This is a moving target. As one goal is achieved a new commitment to a new goal must be set allowing you to continue your journey.
In NLP and NAC (psychological processes) we actually call this an “anchor”. You must literally change your perception of reality before you will truly create lasting change. Again, using the weight loss analogy; People who ultimately achieve lasting results have shifted their reality. Often this comes from a doctor visit when they are told they have diabetes. For some, it comes after a heart attack, or after a child expresses concern for their well-being. Whatever the catalyst, something changes in the individual at a fundamental level that literally alters their perception of the world. Their new reality causes them to view their decisions differently and shifts their focus of what’s important.
But if blowing up account after account doesn’t do the trick how do we create this anchor? I find that a lack of trader discipline is the result of 2 specific things.
1. A Lack of direction
You simply don’t know what you’re doing. This sounds a little hash but the cold hard truth is most traders simply don’t have the education, understanding and experience to have confidence in what they are doing. If you’re struggling with discipline right now I would venture to say you really question if there’s something you’re missing. Some piece of the puzzle you don’t yet have.
2. Lack of/Unprofitable Trading System
This one get’s misunderstood. I don’t mean to suggest that most traders don’t have a winning system. What I am saying is that most traders don’t KNOW if their system is a winner or loser.
They have never done any of the hard work necessary to test and verify the system they are trading. I would venture to guess that most of you reading this article have not tested the system you are currently trying to follow for any length of time. For those of you who think you have let me ask you a couple of questions:
Over the past 300 Trades,
What is the expectancy of your system?
What is the average DD given your money management strategy?
What is the maximum DD
What is the average number of losing trades?
What is the maximum number of losing trades in a row?
What is the average Risk/Reward Profile?
Given your money management system what was the ROI over the past 300 trades after accounting for slippage and commissions?
If your answer includes the words “about” or “roughly” you’re wrong. You should have exact figures. WHY? Because having those figures gives your mind something to anchor to when the going gets tough. It provides a foundation for you to build your trading house on.
If you know, for example, that your system produces 4 losing trades in a row on average and that you had a maximum of 7 losing trades in a row over the sample testing period, you have a base line. When that 3rd 4th and 5th losing trade come you can have confidence that if you are disciplined, the losses will soon end. Not only were you prepared for this drawdown, you were expecting it. You knew it would come. And now that it has you are prepared for it mentally.
When this happens your reality literally shifts. You can now change what kind of effect your decisions have on you emotionally based on how you now view your trading. Instead of “winning brings me pleasure and losing brings me pain.” You now have a new reality. “Following my rules brings me pleasure; not following my rules brings me pain.” This is much the same way someone who used to over-eat due to a love of food now eats healthy because of a love for their health. They have shifted what brings them pain and pleasure based on how they view the world.
Imagine how different your results would have been over the past several months if you had simply applied some if this knowledge. But alas, you’re trading journey has gone largely the way of the 90%. See if this sounds familiar. (Not unlike the dieter.)
1. Get interested in FOREX and find a chat room where you tell others of your interest.
2. Listen to those people give you advice about how best to trade FOREX. (Most are losing money, hand over fist.)
3. Buy several new books by current authors covering the latest strategies for achieving your goal.
4. Do OK in a demo account, decide to go live.
5. Blow your account out in a month
6. Attend a seminar, buy a $97 EA that promises you millions while you sleep, join a signal service or a live trading room.
7. Decide to get serious and create a plan to follow
8. Religiously follow your trading plan.
9. Start to see some results.
10. Get cocky.
11. Slip back into your old habits
12. Blow your account out again.
The secret to gaining discipline in your trading is having confidence in what you’re doing. That comes from KNOWING. Not hoping or believing but KNOWING that if you follow your rules with consistency and discipline then you will achieve consistent results.
Now if you don’t have a winning system or any idea how to test the one you have, then we have more to discuss. But that will have to wait for another article. Until then, I wish you every success in trading and in life.
Good Luck and Good Trading,
Jason Stapleton
Head Trading Coach
4xtraderslive.com
But this is nothing new. Everyone knows you need discipline to be a trader. The question is HOW.
I’ve always believed the best teaching tools come from real life. So I want to talk to you for a little while about something else in life that takes a great deal of discipline with roughly the same success rate as trading…….weight loss.
Nearly everyone reading this article can identify with a waistline that’s become a little………unflattering. At some point, the sight of yourself as you pass by the mirror on your way to the shower becomes too much for even you to tolerate. What follows is a process that is all too familiar.
1. Tell friends and family that you are thinking about losing some weight.
2. Listen to those people giving you advice about how best to lose the weight. (Most are overweight as well.)
3. Get several new books by current authors covering the latest strategies for achieving your goal.
4. Buy a bunch of new stuffs like a blender, vitamin packs, health foods, new running shoes, exercise shorts and a gym membership.
5. Decide to start in a week or so.
6. In a month, received the credit card bills for all the stuffs you bought and decide to get started.
7. Religiously follow your diet and exercise program for a full week.
8. Start to see some results.
9. Give yourself a “cheat day” to reward yourself.
10. Go right back to your old eating and exercise habits.
11. Put all your weight back on.
This has been the process for nearly every dieter in the world at one point or another. So let’s talk about the WHY. WHY is it so hard to stay disciplined when dieting? Let me frame the scenario differently. Let’s say you want to lose some weight and you decide you are going to cut out the sweets. NO MORE SUGAR! No more soda pop or candy. No dessert or treats after meals. On its surface this seems to be a very simple, rational and effective plan for losing some of those unwanted pounds. How hard to you think it would be to follow?
Most people would say, “Sure Jason, it sounds simple. But it’s a lot harder than it sounds.” True, but let me add a critical piece of information. If you’re stranded on a deserted island. See what I mean? With no access to processed sugar it becomes easy to follow your rules and stay disciplined.
But let’s change our scenario one last time. What if you worked at a pastry shop? Not just any pastry shop but the kind of shop that would rival Le Grenier a Pain. Every day you show up and create some of the most delicious morsels ever devised. You get to smell the aroma of fresh baked sweets as the waft through the kitchen. The display cases are lined each day with every conceivable guilty pleasure. Occasionally you poke your head out only to find the patrons of the shop enjoying the fruits of your labor. You see the look of satisfaction on their faces as they devour every last bite.
Get the picture? So how long do you think you could stay disciplined and committed now?
Traders, your commitment to follow your trading plan and stay disciplined is just like a commitment to cut out sugar. The problem is………..
The FOREX market is your bakery.
Each and every day you sit down to trade your commitment to follow your trading plan will be tested. You’re on a diet in a pastry shop. The market will seek at every turn to challenge your resolve and attempt to push you out of your comfort zone causing you to make impulsive emotional decisions rather than disciplined, planed ones.
Many people will tell you it is wrong to look at the market as a living breathing entity, “The market is not out to get you.” as the saying goes. But I find in this case that it serves the analogy well. The “market” is the representation of every trader’s decision as a specific point in time. That’s all. But the market rewards risk and punishes those that follow the path of least resistance. This must be the case in order for markets to function.
Because of this simple truth we can deduce that in order to succeed, we must have the strength of our convictions since they will no doubt run contrary to many in the market.
Remember 90% of traders lose money. If you want to be part of the 10% look at what the 90% do, then do the opposite.
Ok, if you’re still reading I’ve kept you in suspense long enough. So how do you stay disciplined given the overwhelming temptation to do otherwise?
Discipline is an emotional quality. To have discipline means you have fixed yourself in a course of action and are unwilling to deviate from it. Having discipline starts with commitment. Even this first step causes people some problems. A lot of people think they are committed but most are not.
“There’s a difference between interest and commitment. When you’re interested in doing something, you do it only when circumstance permit. When you’re committed to something, you accept no excuses, only results.” -Art Turock-
Step one to staying disciplined; Are you truly committed? If not, you must make that commitment if you ever expect to succeed. This first step while simple acts as an anchor to your trading. The commitment to succeed is what allows your mind to focus on a goal. This is a moving target. As one goal is achieved a new commitment to a new goal must be set allowing you to continue your journey.
In NLP and NAC (psychological processes) we actually call this an “anchor”. You must literally change your perception of reality before you will truly create lasting change. Again, using the weight loss analogy; People who ultimately achieve lasting results have shifted their reality. Often this comes from a doctor visit when they are told they have diabetes. For some, it comes after a heart attack, or after a child expresses concern for their well-being. Whatever the catalyst, something changes in the individual at a fundamental level that literally alters their perception of the world. Their new reality causes them to view their decisions differently and shifts their focus of what’s important.
But if blowing up account after account doesn’t do the trick how do we create this anchor? I find that a lack of trader discipline is the result of 2 specific things.
1. A Lack of direction
You simply don’t know what you’re doing. This sounds a little hash but the cold hard truth is most traders simply don’t have the education, understanding and experience to have confidence in what they are doing. If you’re struggling with discipline right now I would venture to say you really question if there’s something you’re missing. Some piece of the puzzle you don’t yet have.
2. Lack of/Unprofitable Trading System
This one get’s misunderstood. I don’t mean to suggest that most traders don’t have a winning system. What I am saying is that most traders don’t KNOW if their system is a winner or loser.
They have never done any of the hard work necessary to test and verify the system they are trading. I would venture to guess that most of you reading this article have not tested the system you are currently trying to follow for any length of time. For those of you who think you have let me ask you a couple of questions:
Over the past 300 Trades,
What is the expectancy of your system?
What is the average DD given your money management strategy?
What is the maximum DD
What is the average number of losing trades?
What is the maximum number of losing trades in a row?
What is the average Risk/Reward Profile?
Given your money management system what was the ROI over the past 300 trades after accounting for slippage and commissions?
If your answer includes the words “about” or “roughly” you’re wrong. You should have exact figures. WHY? Because having those figures gives your mind something to anchor to when the going gets tough. It provides a foundation for you to build your trading house on.
If you know, for example, that your system produces 4 losing trades in a row on average and that you had a maximum of 7 losing trades in a row over the sample testing period, you have a base line. When that 3rd 4th and 5th losing trade come you can have confidence that if you are disciplined, the losses will soon end. Not only were you prepared for this drawdown, you were expecting it. You knew it would come. And now that it has you are prepared for it mentally.
When this happens your reality literally shifts. You can now change what kind of effect your decisions have on you emotionally based on how you now view your trading. Instead of “winning brings me pleasure and losing brings me pain.” You now have a new reality. “Following my rules brings me pleasure; not following my rules brings me pain.” This is much the same way someone who used to over-eat due to a love of food now eats healthy because of a love for their health. They have shifted what brings them pain and pleasure based on how they view the world.
Imagine how different your results would have been over the past several months if you had simply applied some if this knowledge. But alas, you’re trading journey has gone largely the way of the 90%. See if this sounds familiar. (Not unlike the dieter.)
1. Get interested in FOREX and find a chat room where you tell others of your interest.
2. Listen to those people give you advice about how best to trade FOREX. (Most are losing money, hand over fist.)
3. Buy several new books by current authors covering the latest strategies for achieving your goal.
4. Do OK in a demo account, decide to go live.
5. Blow your account out in a month
6. Attend a seminar, buy a $97 EA that promises you millions while you sleep, join a signal service or a live trading room.
7. Decide to get serious and create a plan to follow
8. Religiously follow your trading plan.
9. Start to see some results.
10. Get cocky.
11. Slip back into your old habits
12. Blow your account out again.
The secret to gaining discipline in your trading is having confidence in what you’re doing. That comes from KNOWING. Not hoping or believing but KNOWING that if you follow your rules with consistency and discipline then you will achieve consistent results.
Now if you don’t have a winning system or any idea how to test the one you have, then we have more to discuss. But that will have to wait for another article. Until then, I wish you every success in trading and in life.
Good Luck and Good Trading,
Jason Stapleton
Head Trading Coach
4xtraderslive.com
Friday, October 08, 2010
Friday - trading the news release thingy
Wah lau....high impact news release trading, but for the 2 releases this evening I managed to get "whacked" by both. CAD Employment Claim plus Unemployment rate for Canada at 7pm followed by the mother of all news release Non-farm Employment report from US at 830pm.
The lessons learnt were that whatever personal's view doesn't really matter and that the market is always right and has it's own way to deal with over where it wants to go. For me....can only guess at best and hope my guess is right. For the set-up, it is to enter the market just a minute or two before the release plus set the SL tight enough for the widening of spread by the dealers/brokers during the release and still left enough for some wild swings but not too wide that will caused bigger losses! If the spike goes against you....then it is wiser to take the "hit" than to fight it. For this high impact release....the run can be more than 50 pips in less than a min. So...no point to have wide SL.
Btw it is any body's guess which way the market spikes? For the rest...of the forex traders, we can only hope for the best and hope our guess and set-up was "right".
The other good thing was that I closed all other orders and trades before the release to lock in and focus on my trading plan! I also tips from a few different top-guns traders, still "failed" and take a 25% hit for my fund. May have to do another top-up this coming week or left with not much bullets for another good fight! For forex....traders must be able to take "hits" then be cool enough to profit from it.
The lessons learnt were that whatever personal's view doesn't really matter and that the market is always right and has it's own way to deal with over where it wants to go. For me....can only guess at best and hope my guess is right. For the set-up, it is to enter the market just a minute or two before the release plus set the SL tight enough for the widening of spread by the dealers/brokers during the release and still left enough for some wild swings but not too wide that will caused bigger losses! If the spike goes against you....then it is wiser to take the "hit" than to fight it. For this high impact release....the run can be more than 50 pips in less than a min. So...no point to have wide SL.
Btw it is any body's guess which way the market spikes? For the rest...of the forex traders, we can only hope for the best and hope our guess and set-up was "right".
The other good thing was that I closed all other orders and trades before the release to lock in and focus on my trading plan! I also tips from a few different top-guns traders, still "failed" and take a 25% hit for my fund. May have to do another top-up this coming week or left with not much bullets for another good fight! For forex....traders must be able to take "hits" then be cool enough to profit from it.
Thursday, October 07, 2010
Wah...it's Oct already!
Time flies....yes, it really does!
Same for my fund too....blew it trading USD/JPY, USDCHF and USDSGD pairs. Thought they were already too low as it was reported that these pairs were at their lowest level for the year, then multi years' low...shit, they still went further down. Now! I had cold feet....almost wiped out my funds at Onada and MFG. Topped up....but it was gone again!
At same time....also "got caught out" by shorting of EURUSD and AUDUSD pairs. Luckily......I traded with tight "SL" but with a few std lots size at one "go" so the damaged was "bad" too. Was thinking....how low can it goes? And also surely BOJ would step-in again if it across a certain level. But no action noted....on Wed and Thu and the USDJPY sank to near 82.1 level before jumping back to 82.4. Now....back to 82.3 level and maybe to test the low again by morning. Btw I have 3 std lots....awaiting at 82.02 to 81.92 level, still believe that BOJ will intervene! Shit.....they must have gone to sleep!!
For stocks....got whacked by Genting PLC, shit! 25 lots at $2.16 bought last month.
Today....it was at $2.03! Btw it was "greed" that I bought it thinking it can go higher for the Qtr-end plus F1 thingy but it didn't work out according to my thought! It was worst last week....it was down to below $1.85 with a strong finished on Friday to $2.00. The best it went up was on Tuesday....$2.13!
Trading forex on news releases....still didn't quite got a "hang" for it. eg today, I bet that AUDUSD would dropped due to the same situation yesterday with the RBA thingy. No...once the news was out, it "popped" upward and got out my "shorts". Yesterday...it was the other way around. It sank....and caught my "long" since my signal was telling me 2 thirds of the Analysts were looking at 4.75% interest rate.
I was thinking....all the datas lately from Australia do not support such a move.
Frankly I don't blame anyone for my losses nor find excuses for my "greed and fear".
This evening...when GBPCHF, USDCHF and USDJPY "tanked" I was busy shifting my positions downward. I was thinking....wah, so lucky that I managed to shift before my position was triggered.
Oh....I went to KL for my niece's wedding on Sat, so I drove up on Fri morning after my work. Hand-over to my daughter to drive most of the trip. Only took back the wheel....near to KL and the Singapore/JB leg. Crazy jams at KL and crazy drivers too....but they don't really get too pissed at each other like here! They go about their business even when they were "blocked"....they still don't "honk".
Quite peaceful lot....those crazy drivers but they do "tail-gate" which I hate! So
I speed up....whenever it happened!
Same for my fund too....blew it trading USD/JPY, USDCHF and USDSGD pairs. Thought they were already too low as it was reported that these pairs were at their lowest level for the year, then multi years' low...shit, they still went further down. Now! I had cold feet....almost wiped out my funds at Onada and MFG. Topped up....but it was gone again!
At same time....also "got caught out" by shorting of EURUSD and AUDUSD pairs. Luckily......I traded with tight "SL" but with a few std lots size at one "go" so the damaged was "bad" too. Was thinking....how low can it goes? And also surely BOJ would step-in again if it across a certain level. But no action noted....on Wed and Thu and the USDJPY sank to near 82.1 level before jumping back to 82.4. Now....back to 82.3 level and maybe to test the low again by morning. Btw I have 3 std lots....awaiting at 82.02 to 81.92 level, still believe that BOJ will intervene! Shit.....they must have gone to sleep!!
For stocks....got whacked by Genting PLC, shit! 25 lots at $2.16 bought last month.
Today....it was at $2.03! Btw it was "greed" that I bought it thinking it can go higher for the Qtr-end plus F1 thingy but it didn't work out according to my thought! It was worst last week....it was down to below $1.85 with a strong finished on Friday to $2.00. The best it went up was on Tuesday....$2.13!
Trading forex on news releases....still didn't quite got a "hang" for it. eg today, I bet that AUDUSD would dropped due to the same situation yesterday with the RBA thingy. No...once the news was out, it "popped" upward and got out my "shorts". Yesterday...it was the other way around. It sank....and caught my "long" since my signal was telling me 2 thirds of the Analysts were looking at 4.75% interest rate.
I was thinking....all the datas lately from Australia do not support such a move.
Frankly I don't blame anyone for my losses nor find excuses for my "greed and fear".
This evening...when GBPCHF, USDCHF and USDJPY "tanked" I was busy shifting my positions downward. I was thinking....wah, so lucky that I managed to shift before my position was triggered.
Oh....I went to KL for my niece's wedding on Sat, so I drove up on Fri morning after my work. Hand-over to my daughter to drive most of the trip. Only took back the wheel....near to KL and the Singapore/JB leg. Crazy jams at KL and crazy drivers too....but they don't really get too pissed at each other like here! They go about their business even when they were "blocked"....they still don't "honk".
Quite peaceful lot....those crazy drivers but they do "tail-gate" which I hate! So
I speed up....whenever it happened!
Saturday, September 18, 2010
Activties for this coming week.
Meeting....and more meetings with boss plus some servicings for some "alien clients" on Mon and Tue. Shit....lots of running around activities with little to no benefit for myself plus giving myself "stress"! No choice for
the moment....my trading skill is not "sharp" enough to replace my day job
to trade full-time!
Hope for some "peaceful" times for me to focus on my trades. Really want to be "free" to have open mind in order to fully focus on my trade plans for both forex and stock.
Yes.....must have a "focus" mind esp when trading "short term" forex. But if I can't have this "focused" thingy then I will give-up on forex trading for the week.
the moment....my trading skill is not "sharp" enough to replace my day job
to trade full-time!
Hope for some "peaceful" times for me to focus on my trades. Really want to be "free" to have open mind in order to fully focus on my trade plans for both forex and stock.
Yes.....must have a "focus" mind esp when trading "short term" forex. But if I can't have this "focused" thingy then I will give-up on forex trading for the week.
Up-date for 13 to 17 Sept trading week
For stocks.....well, managed to clear the last lot of HK stocks in my holding. SMIC....and managed to run before it went "south". Good call!
Now shifting back my attention to SGX counters and the lastest addition
was ChinaAniHealth. Still kind of "chicken" to trade Gentings as it has "gone" north with such a huge run. Maybe this week....may think of it if see any pullback for short term trade. Max....to hold till end of the month ( window dressing due to Qtr-end plus F1, therefore lots of visitors and tourists ).
For forex, was caught out with my USD/SGD pair which I bought from last week. So...last Tuesday, sold down to one single std lot and shifted my
postions to USD/JPY on the hope of a upward swing with the election in Japan, but no such luck and I was kind of regreting my earlier move. Luckily on Wed morning....news of BOJ moves for selling of the yens came, the USD/JPY just shot up nicely....and I was like "OMG". Just "swee swee" :)...to see my trade "pop" with a nice "doubling" of my fund in one single move. SWEET!
On using Henry Lui's trading on news release method....committed a couple of silly mistakes. 1st....using a trailing stop loss and was "stopped out" by the spread just before the news release. Shit....just open-up to plus-minus 10 pips while I put in my trade with a 15 pips trailing SL. So with a minor whip-swing....my position was "gone" for me to see the spike going in my direction.....straight-up with a 60 pips run. Shit!!! 2nd mistake was that I open postion 15 mins before the release only to see my postion kena stopped out just by the widening of ask/bid spread at news release.
Both mistakes costed me....more than 100 pips of potential gain plus at the same time immediate loss of more than 60 pips. My stop loss is at 29 pips/trade....plus some spillages. Luckily...I only traded with half std lot size during news release, so a loss of about S$700 for both mistakes instead of making a nice gain S$1K+. Sighed!
End of the day....I took this as a painful lesson and one that would help to sharpen my trading skill when I trade "big". Finally added back my USD/SGD when I closed my USD/JPY position on last Thursday and now my positions are showing a "plus". My reasoning is that....USD/JPY has corrected, followed by USD/CHF so the USD/SGD should start to move "north" soon. On Friday....even USD/CAD also shifted higher plus the fact that EUR
is having some problems with their banks thingy again, therefore it went "south".
For the week....also bought a "signal" thingy from a site in UK and I started to receive my 1st signal on last Friday evening. Didn't see it till nearly 2 hrs later. Short for both EUR/USD and GBP/USD pairs and Long for USD/CHF and USD/JPY pairs. Both "Short" calls....were spot-on! But for "Long" I was "whacked" by the USD/CHF pair with a small profit for my USD/JPY pair. In the end....loss nearly S$500 at close of trade due to my missed trade for USD/EUR. It went down by nearly 60+ pips therefore didn't dare to "fire" my Short call for it. I managed to "fire" for GBP/USD but I didn't managed to get the max pip for it ( also it has gone down by the time I saw the signal ). The worst thing was that I open 2 positions for USD/CHF for only 1 position each for my other pairs. USD/JPY didn't have any huge swing.....quite a calm ride for it.
So....the result was still a positive one for my trading fund as of close!
Now shifting back my attention to SGX counters and the lastest addition
was ChinaAniHealth. Still kind of "chicken" to trade Gentings as it has "gone" north with such a huge run. Maybe this week....may think of it if see any pullback for short term trade. Max....to hold till end of the month ( window dressing due to Qtr-end plus F1, therefore lots of visitors and tourists ).
For forex, was caught out with my USD/SGD pair which I bought from last week. So...last Tuesday, sold down to one single std lot and shifted my
postions to USD/JPY on the hope of a upward swing with the election in Japan, but no such luck and I was kind of regreting my earlier move. Luckily on Wed morning....news of BOJ moves for selling of the yens came, the USD/JPY just shot up nicely....and I was like "OMG". Just "swee swee" :)...to see my trade "pop" with a nice "doubling" of my fund in one single move. SWEET!
On using Henry Lui's trading on news release method....committed a couple of silly mistakes. 1st....using a trailing stop loss and was "stopped out" by the spread just before the news release. Shit....just open-up to plus-minus 10 pips while I put in my trade with a 15 pips trailing SL. So with a minor whip-swing....my position was "gone" for me to see the spike going in my direction.....straight-up with a 60 pips run. Shit!!! 2nd mistake was that I open postion 15 mins before the release only to see my postion kena stopped out just by the widening of ask/bid spread at news release.
Both mistakes costed me....more than 100 pips of potential gain plus at the same time immediate loss of more than 60 pips. My stop loss is at 29 pips/trade....plus some spillages. Luckily...I only traded with half std lot size during news release, so a loss of about S$700 for both mistakes instead of making a nice gain S$1K+. Sighed!
End of the day....I took this as a painful lesson and one that would help to sharpen my trading skill when I trade "big". Finally added back my USD/SGD when I closed my USD/JPY position on last Thursday and now my positions are showing a "plus". My reasoning is that....USD/JPY has corrected, followed by USD/CHF so the USD/SGD should start to move "north" soon. On Friday....even USD/CAD also shifted higher plus the fact that EUR
is having some problems with their banks thingy again, therefore it went "south".
For the week....also bought a "signal" thingy from a site in UK and I started to receive my 1st signal on last Friday evening. Didn't see it till nearly 2 hrs later. Short for both EUR/USD and GBP/USD pairs and Long for USD/CHF and USD/JPY pairs. Both "Short" calls....were spot-on! But for "Long" I was "whacked" by the USD/CHF pair with a small profit for my USD/JPY pair. In the end....loss nearly S$500 at close of trade due to my missed trade for USD/EUR. It went down by nearly 60+ pips therefore didn't dare to "fire" my Short call for it. I managed to "fire" for GBP/USD but I didn't managed to get the max pip for it ( also it has gone down by the time I saw the signal ). The worst thing was that I open 2 positions for USD/CHF for only 1 position each for my other pairs. USD/JPY didn't have any huge swing.....quite a calm ride for it.
So....the result was still a positive one for my trading fund as of close!
Thursday, September 09, 2010
Trading up-dates
Had some pips from my last week's USD/SGD forex pairs on last Monday evening when the trailing stop was triggered, still a few hundred $$$ profit but on Tuesday....it went higher.
No trading on Tuesday...and on Wednesday, went long again for EUR/CHF pair and this time managed to ride out at least the bulk of the run and added nearly a grand to my profit. Today....kena stopped out on a few small trades but still holding on to my main bulk of my trade USD/SGD - 3 std lots which I picked up when it went south from 1.344 to 1.341. Wah...but then it went even lower to below 1.3392, lucky didn't kena stopped out yet as my stop-loss is at 1.3385. Now at 1.30am it has recovered back to 1.3426/32 and there are a couple of hundred of profits for my account too. Not about to close...as I have been aiming for this trade since I sold off last Monday and now I am getting this pair even cheaper. My cost - at around 1.3418 as compared to my last entry at 1.3455 that is why I won't "chicken too early" and will give this pair some running space.
For HK stocks....managed to make back some losses too so on the whole, it is a reasonable profitable week for me. Hope I didn't speak too soon hehe!
No trading on Tuesday...and on Wednesday, went long again for EUR/CHF pair and this time managed to ride out at least the bulk of the run and added nearly a grand to my profit. Today....kena stopped out on a few small trades but still holding on to my main bulk of my trade USD/SGD - 3 std lots which I picked up when it went south from 1.344 to 1.341. Wah...but then it went even lower to below 1.3392, lucky didn't kena stopped out yet as my stop-loss is at 1.3385. Now at 1.30am it has recovered back to 1.3426/32 and there are a couple of hundred of profits for my account too. Not about to close...as I have been aiming for this trade since I sold off last Monday and now I am getting this pair even cheaper. My cost - at around 1.3418 as compared to my last entry at 1.3455 that is why I won't "chicken too early" and will give this pair some running space.
For HK stocks....managed to make back some losses too so on the whole, it is a reasonable profitable week for me. Hope I didn't speak too soon hehe!
BOC Interest Rate Decision Forex Trading Plan 09/08/10 - by Henry Lui
Bank of Canada (BOC) will once again meet for their Overnight Rate (Interest Rate) and the decision will be announced today at 9:00am sharp. Along with the rate decision, BOC Carney will also announce a Rate Statement to further explain today’s decision. Here’s what analysts are expecting:
9:00am (NY Time) CA BOC Rate Decision Forecast 1.00% Previous 0.75%
ACTION: USD/CAD SELL 1.00% BUY 0.75%
The Trade Plan
BOC (Bank of Canada) will be hiking its Overnight Rate as the majority of analysts agree (14 out 20 as surveyed by Bloomberg). BOC is likely to remain optimistically cautious in its tone but the overall market is expecting a rate hike.
However, since this rate decision is not perceived as a “done deal”, it is possible that we’ll see market react to both possibilities, therefore we would be looking to BUY USD/CAD if BOC decides to leave rates unchanged and SELL USD/CAD if BOC decides to hike as expected.
I’ll be trading this release using Spike Trading method as the odds for either possibilities are high, therefore it is almost guaranteed that we’ll see strong market movement immediately after the release.
The Market
As CAD gained across the board last Friday after NFP release showed the underlying market sentiment that a better U.S. economy is likely to ease BOC’s concerns over global uncertainty, which increases the probability for BOC to hike rates today.
As a matter of fact, Credit Suisse is predicting about 65% of probability for a rate hike today; however, there is 35% of possibility that BOC may just hold rates unchanged and adopt a wait-and-see stance for the time being.
Additional Thoughts
BOC has been on target with its monetary policy and the series of rate hikes since June has been done in such a way that avoided parity level on the USDCAD pair. This may be another opportunity to BOC to hike interest rate and at the same time warn the market over future uncertainty, which will make CAD less strong, thus keeping the volatility to a minimum.
On the other hand, we are also seeing the economic growth in the 2nd quarter slowing, along with negative job data. With US economic outlook lagging, BOC may pause for the time being…
Since both outcomes have merits, market will move after the rate decision, and the idea is to get in and hold on to the trade as USDCAD usually doesn’t retrace much.
Pre-News Considerations
I’ll be looking to SELL USD/CAD prior to the release, from recent highs.
9:00am (NY Time) CA BOC Rate Decision Forecast 1.00% Previous 0.75%
ACTION: USD/CAD SELL 1.00% BUY 0.75%
The Trade Plan
BOC (Bank of Canada) will be hiking its Overnight Rate as the majority of analysts agree (14 out 20 as surveyed by Bloomberg). BOC is likely to remain optimistically cautious in its tone but the overall market is expecting a rate hike.
However, since this rate decision is not perceived as a “done deal”, it is possible that we’ll see market react to both possibilities, therefore we would be looking to BUY USD/CAD if BOC decides to leave rates unchanged and SELL USD/CAD if BOC decides to hike as expected.
I’ll be trading this release using Spike Trading method as the odds for either possibilities are high, therefore it is almost guaranteed that we’ll see strong market movement immediately after the release.
The Market
As CAD gained across the board last Friday after NFP release showed the underlying market sentiment that a better U.S. economy is likely to ease BOC’s concerns over global uncertainty, which increases the probability for BOC to hike rates today.
As a matter of fact, Credit Suisse is predicting about 65% of probability for a rate hike today; however, there is 35% of possibility that BOC may just hold rates unchanged and adopt a wait-and-see stance for the time being.
Additional Thoughts
BOC has been on target with its monetary policy and the series of rate hikes since June has been done in such a way that avoided parity level on the USDCAD pair. This may be another opportunity to BOC to hike interest rate and at the same time warn the market over future uncertainty, which will make CAD less strong, thus keeping the volatility to a minimum.
On the other hand, we are also seeing the economic growth in the 2nd quarter slowing, along with negative job data. With US economic outlook lagging, BOC may pause for the time being…
Since both outcomes have merits, market will move after the rate decision, and the idea is to get in and hold on to the trade as USDCAD usually doesn’t retrace much.
Pre-News Considerations
I’ll be looking to SELL USD/CAD prior to the release, from recent highs.
Upcoming Signals Overview (Sept. 6 ~ 10, 2010) - by Henry Lui
Hello folks:
Here are the news releases that we’ll be trading this week. I’ll be sending you a more detailed analysis usually a day ahead of their schedule. Thanks.
Tue September 7, 2010 12:30am EDT – AU RBA Interest Rate
Wed September 8, 2010 9:00am EDT – CA BOC Interest Rate
Wed September 8, 2010 10:00am EDT – CA IVEY PMI
Wed September 8, 2010 9:30pm EDT – AU Employment Change
Thu September 9, 2010 7:00am EDT – UK BOE Rate Decision
Fri September 10, 2010 7:00am EDT – CA Employment Change
And of course, we do have several untradable yet high impact releases scheduled for the week:
Thu September 9, 2010 8:30am EDT – US & CA Trade Balances – Market seems to ignore this release, therefore it’s better we stay away from them.
Thu September 9, 2010 8:30am EDT – US Unemployment Claims – Market is getting used to this release and we rarely see any significant push.
Fri Septermber 10, 2010 4:30am EDT – UK PPI – Even the CPI release out of UK is losing its appeal to move the market, much less the PPI.
Looking at the overall market sentiment and the fact that we’ve gotten a nice positive surprise in the US NFP release last Friday, it’s entirely possible that we are staring at the early stage of trend reversal, one that would push USD and JPY lower as concerns over double-dip recession subsides. Some big name analysts are now switching their position and unwinding their USD longs brought upon by the exaggerated demand for safe-haven instruments during the last few weeks as concerns over recession was exacerbated by Bernanke’s dovish stance and the possibility of a second round of stimulus, better known as quantitative easing.
What was changed this week from last week is, time. We now have time to wait and see. Big Ben won’t have to make a decision to start codename QE2 (Quantitative Easing Round 2) yet, and if jobs market shows resilience in recovery, evidenced by the next NFP release (one is a fluke, two could be a trend), Bernanke could very well wait until next year before undertaking such a measure, and the very fact that Feds might be delaying the controversial QE2 program, is in itself a positive message for Risk Appetite.
Therefore, I expect to see some general sentiment moving it that direction this week. Although it is still at early stage of a trend reversal, which by definition is prone to fake moves, I’d advice everyone to watch the development in EURUSD and USDJPY for more taletelling signs.
As far as weekly trends for the week, I am biased towards further risk appetite sentiment, but I do understand there are risks to assume direction this early in the trend reversal stage. Perhaps we should see a more defined market next week so that we can take advantage of it.
Understand that he is coming out with another new site - "10K to 1 mil in 12 months". Wow....that is POWERFUL and I would be damn happy if I can made double my 10K in 12 months haha! Frankly....I won't dare to say that it is not possible as there are some lucky souls who will make it with their trading. Look at POWER-UP site, they also claimed some newbies who made tens of thousands in a short period of trading. Beginner's luck????
Not likely....maybe they have better in-sight and luck during their trades.
I too had a huge run early June....then end-up loosing most of the profits when I added more technical stuffs and changed my trading method. Too much changes until I lost how to enter and exit a trade....and managed to win only small profits while end-up loosing "big losses". Well...I will monitor Henry's new site and his methods when it is out.
Here are the news releases that we’ll be trading this week. I’ll be sending you a more detailed analysis usually a day ahead of their schedule. Thanks.
Tue September 7, 2010 12:30am EDT – AU RBA Interest Rate
Wed September 8, 2010 9:00am EDT – CA BOC Interest Rate
Wed September 8, 2010 10:00am EDT – CA IVEY PMI
Wed September 8, 2010 9:30pm EDT – AU Employment Change
Thu September 9, 2010 7:00am EDT – UK BOE Rate Decision
Fri September 10, 2010 7:00am EDT – CA Employment Change
And of course, we do have several untradable yet high impact releases scheduled for the week:
Thu September 9, 2010 8:30am EDT – US & CA Trade Balances – Market seems to ignore this release, therefore it’s better we stay away from them.
Thu September 9, 2010 8:30am EDT – US Unemployment Claims – Market is getting used to this release and we rarely see any significant push.
Fri Septermber 10, 2010 4:30am EDT – UK PPI – Even the CPI release out of UK is losing its appeal to move the market, much less the PPI.
Looking at the overall market sentiment and the fact that we’ve gotten a nice positive surprise in the US NFP release last Friday, it’s entirely possible that we are staring at the early stage of trend reversal, one that would push USD and JPY lower as concerns over double-dip recession subsides. Some big name analysts are now switching their position and unwinding their USD longs brought upon by the exaggerated demand for safe-haven instruments during the last few weeks as concerns over recession was exacerbated by Bernanke’s dovish stance and the possibility of a second round of stimulus, better known as quantitative easing.
What was changed this week from last week is, time. We now have time to wait and see. Big Ben won’t have to make a decision to start codename QE2 (Quantitative Easing Round 2) yet, and if jobs market shows resilience in recovery, evidenced by the next NFP release (one is a fluke, two could be a trend), Bernanke could very well wait until next year before undertaking such a measure, and the very fact that Feds might be delaying the controversial QE2 program, is in itself a positive message for Risk Appetite.
Therefore, I expect to see some general sentiment moving it that direction this week. Although it is still at early stage of a trend reversal, which by definition is prone to fake moves, I’d advice everyone to watch the development in EURUSD and USDJPY for more taletelling signs.
As far as weekly trends for the week, I am biased towards further risk appetite sentiment, but I do understand there are risks to assume direction this early in the trend reversal stage. Perhaps we should see a more defined market next week so that we can take advantage of it.
Understand that he is coming out with another new site - "10K to 1 mil in 12 months". Wow....that is POWERFUL and I would be damn happy if I can made double my 10K in 12 months haha! Frankly....I won't dare to say that it is not possible as there are some lucky souls who will make it with their trading. Look at POWER-UP site, they also claimed some newbies who made tens of thousands in a short period of trading. Beginner's luck????
Not likely....maybe they have better in-sight and luck during their trades.
I too had a huge run early June....then end-up loosing most of the profits when I added more technical stuffs and changed my trading method. Too much changes until I lost how to enter and exit a trade....and managed to win only small profits while end-up loosing "big losses". Well...I will monitor Henry's new site and his methods when it is out.
Forex Trading Tips - copied from Henry Lui
Here is a list of some of my previous posts on various tips and insights into the currency market. If you are new to news trading or even to Forex trading in general, this would be a place to start:
The Grandma Indicator – Too many times traders chase after a trade or get in the market when everyone else is getting out. Hopefully by understanding this basic concept, you won’t chasing trades anymore…
Pick Your Battles – I see more and more novice traders spend far too much time trading, and sometimes even when the market is flat trying to force a trade. I’ve realized this long ago, and I’ve decided to share a little insight…
New to News Trading? Start Here - This is my welcome post to all new traders starting in the fundamental analysis space, and I try to put together valuable information to get you started.
FOREX News Trading Trigger Sheet - This is a link to download my deviation sheet containing all of the news releases that I trade, along with a video showing you how to use this report.
FOREX Tricks Video – My dumbest trick (yet it works!) - This is a special shortcut or loophole, that I’ve discovered one day when comparing different brokers. Make sure you watch this video.
Currency Strength Meter – Add 30 pips to your trade - This meter needs no introduction, but if this is the first time you read about this, you NEED to get it, and the best part is, it’s FREE!
The Grandma Indicator – Too many times traders chase after a trade or get in the market when everyone else is getting out. Hopefully by understanding this basic concept, you won’t chasing trades anymore…
Pick Your Battles – I see more and more novice traders spend far too much time trading, and sometimes even when the market is flat trying to force a trade. I’ve realized this long ago, and I’ve decided to share a little insight…
New to News Trading? Start Here - This is my welcome post to all new traders starting in the fundamental analysis space, and I try to put together valuable information to get you started.
FOREX News Trading Trigger Sheet - This is a link to download my deviation sheet containing all of the news releases that I trade, along with a video showing you how to use this report.
FOREX Tricks Video – My dumbest trick (yet it works!) - This is a special shortcut or loophole, that I’ve discovered one day when comparing different brokers. Make sure you watch this video.
Currency Strength Meter – Add 30 pips to your trade - This meter needs no introduction, but if this is the first time you read about this, you NEED to get it, and the best part is, it’s FREE!
Friday, September 03, 2010
NFP or Russian Roulette anyone - by Dean Popplewell
It’s like attending a bingo session. All eyes will be down waiting for the highly anticipated employment print this morning. Will this week’s ADP report translate into a much weaker jobs number? Will the stubbornly elevated weekly claims push the unemployment rate up two ticks? Will analyst’s consensus of a headline loss of -100k jobs and no growth in the private sector provide us with a non-event as we head into the ‘labor’ weekend? Expect liquidity to be thin as many New Yorkers skip out of town averting the storm ahead of the holiday. It’s another crap-shoot. Spin the wheel, black or red?
The US$ is stronger in the O/N trading session. Currently it is higher against 11 of the 16 most actively traded currencies in a ‘subdued’ trading range in the O/N session.
We had a plethora of data to digest yesterday ahead of this mornings highly anticipated employment report. It will either be a snooze, non-event heading into this long North American weekend or the results will force traders to react like ‘elephants in a china shop’. In his communiqué yesterday, Trichet met market expectations, again announcing that emergency lending facilities would be extended into next year. Somewhat of a surprise was the EU’s policy maker’s small upward revision to next year’s views. They now expect to come inside a range of +0.5% to +2.3% (up from +0.2% to 2.2%). Could they not have made it any wider! The inflation outlook was also revised up a tad to a range of +1.2-2.2%. It’s worth noting and not surprising that they again identified risks to the downside and flagged renewed tensions in financial markets. Policy makers have no intention ‘to signal any change in rates and remains apart from experiments elsewhere with respect to providing rate guidance’.
The dreaded weekly claims reports potentially points to a downside risk to this morning employment print. Analysts note that initial claims (+472k vs. +475k) remains ‘stubbornly elevated and at a level inconsistent with any expectation for meaningful job growth’ and supportive of renewed private job losses. Digging deeper, continuing claims fell by -23k to +4.456m (2nd consecutive week of declines). Up to date, the average has been hovering around the +4.5m mark as claims push further into extended (+894k) and emergency (+4.1m) categories. Since bottoming at the end of the 1st Q, extended benefits have surged higher by +531.6%. Not to be out done, emergency benefits have seen a similar fate and rallied +50%. With unemployment assistance being extended until the end of Nov. has caused the massive surge in both categories.
And finally, US pending home sales unexpectedly jumped yesterday (+5.2% vs. -1%). Any other day and the market would have paid more heed, but, a day before NFP where market participants try to batten down the hatches, there was no excitement. Technically this is the first ‘bullish’ news we have had to digest in the US housing market for some time. Analysts have been quick to explain the huge monthly jump away, the growth is coming off the lowest base ever (June was all-time record low). On level terms, the July data is only ‘ever so slightly better’ and remains insufficient to counter mounting stockpiles of unsold and shadow inventories. So, it’s back to our doomsday housing scenario.
The USD$ is lower against the EUR +0.05% and higher against GBP -0.01%, CHF -0.17% and JPY -0.10%. The commodity currencies are weaker this morning, CAD -0.18% and AUD -0.15%. The loonie pared some of its euphoric rise, a day after its largest gain in three-months, on concern that US job losses will stall the global economic recovery. Next week’s BOC call is a spilt vote amongst analysts. Fact, futures are pricing in a +40% chance of the BOC tightening. It’s probably one of the toughest calls over the last decade. A string of disappointing Canadian data and a darkening global outlook have weighed heavily on the market’s conviction for a Sept. hike. Last month, the CAD happened to post one of its worst performing months in over a year, falling -3.5% vs. the dollar. The dollar has now capped a triple top at 1.0675 and will prove a formidable support level for the currency again. Canada is not immune to weaker data reported south of its borders. It is only natural that growth and interest rate sensitive currencies would experience some volatile moves on changing risk attitudes. A shortened holiday week will continue to keep the market on its toes.
The AUD fell in the O/N session vs. all its major trading partners ahead of this mornings NFP report. The market anticipates further job cuts this month which is dampening the demand for higher-yielding growth currencies. Investors continue to speculate that the RBA will keep interest rates unchanged next week. The currency has underperformed against all of its major trading partners and is expected to do so until there is a new Government formed. The commodity rich currency is not isolated, as other growth sensitive currencies are suffering the same fate. Government data has also happened to put a lid on the recent rally. Net result traders are adding to their bets that the RBA will leave interest rates unchanged for the next 12-months. Interest rate differentials play a big part of the currency’s attractiveness (0.9100).
Crude is lower in the O/N session ($74.67 -35c). Crude prices yesterday advanced, paring earlier losses, after a rig in the Gulf of Mexico was struck by an explosion, reinforcing concern that US regulations will reduce output in the region. Stronger economic growth data happened to provide a leg up for the ‘black-stuff’ earlier this week. Aiding the commodity was the weekly EIA report revealing an unexpected decline in supplies of distillate fuels. Distillates (heating oil and diesel), fell -739k barrels to +175.2m. The market had been expecting the inventory to increase by +1.15m barrels. Inventories of crude itself advanced +3.42m barrels to +361.7m Supplies were forecast to climb by +1.2m. On the face of it, the weekly report should have been market bearish, but investors happily ignored the data as they found solace in Chinese and US manufacturing data showing new signs of growth. How long is this sustainable? Perhaps NFP will bring even more surprises? In reality, oil hovers just above this month’s low, on concerns that weaker economic data will push the US into a double-dip recession. The market should be wary that the underlying situation has not changed, the fundamentals remain very weak, demand does not look good and stockpiles of crude and products remain at a record high. Speculators remain better sellers on up-ticks in the short term.
Gold prices continue to advance on its record high print recorded earlier this year as investors seek to protect their wealth. The uncertainty of recent data has had investors contemplating boosting their demand for the commodity as a safe heaven. Last month, bullion appreciated +5.2% alone. The market would not be that surprised to see some sort of technical pull back supported by profit taking selling if investors embraced more risk. Consumers are trying to put there cash somewhere more solid on mounting evidence of a US economic slowdown. Speculators again are supporting the various safe heaven assets on pullbacks, avoiding risky assets due to uncertainties in the markets. With a genuine fear for global growth, by default, should boost the demand for the metal as a protector of wealth in the grand scheme of things. With treasury yields expected to remain close to their lows, could promote a quickening inflation rate, which would promote pushing commodity prices even higher. The opportunity costs of holding gold are low due to falling interest rates ($1,254 +60c).
The Nikkei closed at 9,114 up +51. The DAX index in Europe was at 6,093 up +10; the FTSE (UK) currently is 5,376 up +5. The early call for the open of key US indices is lower. The US 10-year backed up 4bp yesterday (2.61%) and is little changed in the O/N session. Treasuries fell a second consecutive day as a surprise pending home re-sales print coupled with a drop in the initial jobless claims data reduced, temporarily at least, the relative safety of government debt. The curve had become too rich and the overbought asset class was due for some sort of correction. Again the curve 2’s/10’s spread has widened 2bp to +211bp after flattening sub +200bp a matter of days ago. Treasuries also after the government announced the sizes of the $67b three debt sales next week (3’s, 10’s and long bonds). Despite product becoming expensive on the curve, NFP uncertainty has debt better bid on pullbacks.
The US$ is stronger in the O/N trading session. Currently it is higher against 11 of the 16 most actively traded currencies in a ‘subdued’ trading range in the O/N session.
We had a plethora of data to digest yesterday ahead of this mornings highly anticipated employment report. It will either be a snooze, non-event heading into this long North American weekend or the results will force traders to react like ‘elephants in a china shop’. In his communiqué yesterday, Trichet met market expectations, again announcing that emergency lending facilities would be extended into next year. Somewhat of a surprise was the EU’s policy maker’s small upward revision to next year’s views. They now expect to come inside a range of +0.5% to +2.3% (up from +0.2% to 2.2%). Could they not have made it any wider! The inflation outlook was also revised up a tad to a range of +1.2-2.2%. It’s worth noting and not surprising that they again identified risks to the downside and flagged renewed tensions in financial markets. Policy makers have no intention ‘to signal any change in rates and remains apart from experiments elsewhere with respect to providing rate guidance’.
The dreaded weekly claims reports potentially points to a downside risk to this morning employment print. Analysts note that initial claims (+472k vs. +475k) remains ‘stubbornly elevated and at a level inconsistent with any expectation for meaningful job growth’ and supportive of renewed private job losses. Digging deeper, continuing claims fell by -23k to +4.456m (2nd consecutive week of declines). Up to date, the average has been hovering around the +4.5m mark as claims push further into extended (+894k) and emergency (+4.1m) categories. Since bottoming at the end of the 1st Q, extended benefits have surged higher by +531.6%. Not to be out done, emergency benefits have seen a similar fate and rallied +50%. With unemployment assistance being extended until the end of Nov. has caused the massive surge in both categories.
And finally, US pending home sales unexpectedly jumped yesterday (+5.2% vs. -1%). Any other day and the market would have paid more heed, but, a day before NFP where market participants try to batten down the hatches, there was no excitement. Technically this is the first ‘bullish’ news we have had to digest in the US housing market for some time. Analysts have been quick to explain the huge monthly jump away, the growth is coming off the lowest base ever (June was all-time record low). On level terms, the July data is only ‘ever so slightly better’ and remains insufficient to counter mounting stockpiles of unsold and shadow inventories. So, it’s back to our doomsday housing scenario.
The USD$ is lower against the EUR +0.05% and higher against GBP -0.01%, CHF -0.17% and JPY -0.10%. The commodity currencies are weaker this morning, CAD -0.18% and AUD -0.15%. The loonie pared some of its euphoric rise, a day after its largest gain in three-months, on concern that US job losses will stall the global economic recovery. Next week’s BOC call is a spilt vote amongst analysts. Fact, futures are pricing in a +40% chance of the BOC tightening. It’s probably one of the toughest calls over the last decade. A string of disappointing Canadian data and a darkening global outlook have weighed heavily on the market’s conviction for a Sept. hike. Last month, the CAD happened to post one of its worst performing months in over a year, falling -3.5% vs. the dollar. The dollar has now capped a triple top at 1.0675 and will prove a formidable support level for the currency again. Canada is not immune to weaker data reported south of its borders. It is only natural that growth and interest rate sensitive currencies would experience some volatile moves on changing risk attitudes. A shortened holiday week will continue to keep the market on its toes.
The AUD fell in the O/N session vs. all its major trading partners ahead of this mornings NFP report. The market anticipates further job cuts this month which is dampening the demand for higher-yielding growth currencies. Investors continue to speculate that the RBA will keep interest rates unchanged next week. The currency has underperformed against all of its major trading partners and is expected to do so until there is a new Government formed. The commodity rich currency is not isolated, as other growth sensitive currencies are suffering the same fate. Government data has also happened to put a lid on the recent rally. Net result traders are adding to their bets that the RBA will leave interest rates unchanged for the next 12-months. Interest rate differentials play a big part of the currency’s attractiveness (0.9100).
Crude is lower in the O/N session ($74.67 -35c). Crude prices yesterday advanced, paring earlier losses, after a rig in the Gulf of Mexico was struck by an explosion, reinforcing concern that US regulations will reduce output in the region. Stronger economic growth data happened to provide a leg up for the ‘black-stuff’ earlier this week. Aiding the commodity was the weekly EIA report revealing an unexpected decline in supplies of distillate fuels. Distillates (heating oil and diesel), fell -739k barrels to +175.2m. The market had been expecting the inventory to increase by +1.15m barrels. Inventories of crude itself advanced +3.42m barrels to +361.7m Supplies were forecast to climb by +1.2m. On the face of it, the weekly report should have been market bearish, but investors happily ignored the data as they found solace in Chinese and US manufacturing data showing new signs of growth. How long is this sustainable? Perhaps NFP will bring even more surprises? In reality, oil hovers just above this month’s low, on concerns that weaker economic data will push the US into a double-dip recession. The market should be wary that the underlying situation has not changed, the fundamentals remain very weak, demand does not look good and stockpiles of crude and products remain at a record high. Speculators remain better sellers on up-ticks in the short term.
Gold prices continue to advance on its record high print recorded earlier this year as investors seek to protect their wealth. The uncertainty of recent data has had investors contemplating boosting their demand for the commodity as a safe heaven. Last month, bullion appreciated +5.2% alone. The market would not be that surprised to see some sort of technical pull back supported by profit taking selling if investors embraced more risk. Consumers are trying to put there cash somewhere more solid on mounting evidence of a US economic slowdown. Speculators again are supporting the various safe heaven assets on pullbacks, avoiding risky assets due to uncertainties in the markets. With a genuine fear for global growth, by default, should boost the demand for the metal as a protector of wealth in the grand scheme of things. With treasury yields expected to remain close to their lows, could promote a quickening inflation rate, which would promote pushing commodity prices even higher. The opportunity costs of holding gold are low due to falling interest rates ($1,254 +60c).
The Nikkei closed at 9,114 up +51. The DAX index in Europe was at 6,093 up +10; the FTSE (UK) currently is 5,376 up +5. The early call for the open of key US indices is lower. The US 10-year backed up 4bp yesterday (2.61%) and is little changed in the O/N session. Treasuries fell a second consecutive day as a surprise pending home re-sales print coupled with a drop in the initial jobless claims data reduced, temporarily at least, the relative safety of government debt. The curve had become too rich and the overbought asset class was due for some sort of correction. Again the curve 2’s/10’s spread has widened 2bp to +211bp after flattening sub +200bp a matter of days ago. Treasuries also after the government announced the sizes of the $67b three debt sales next week (3’s, 10’s and long bonds). Despite product becoming expensive on the curve, NFP uncertainty has debt better bid on pullbacks.
Forex trade after the NFP release - copied Daily Forex Forecast
The Japanese yen is sharply lower in early US session after release of better than expected non-farm payroll report from US. Commodity currencies also soar broadly on risk appetite. European majors are relatively steady and Swiss Franc is indeed dropping sharply following yen. The headline non-farm payroll number showed -54k contraction only comparing to expectation of -105k. Prior month's number was also revised up to -54k. importantly, private sector job market showed 67k expansion versus expectation of around 40k while prior month's data was also revised up to an impressive 107k. Unemployment rate climbed from 9.5% to 9.6% as expected and is ignored by the markets. Markets will now face another test of ISM services later in US morning.
Release earlier today, UK PMI services dropped more than expected to 51.3 in August and sent sterling lower against Euro. Eurozone services PMI was revised mildly up to 55.9 in AUgust. retail sales grew 0.1% mom , 1.1% yoy in July. Swiss CPI was flat mom, rose 0.3% yoy in August.
CAD/JPY follows risk appetite in US session and jumps sharply. Consolidation above 78.52 is still in progress and more upside should be seen to 82 and above. But after all, we'd still expect upside to be limited by 83.48 resistance and bring resumption of the whole fall from 94.46.
Release earlier today, UK PMI services dropped more than expected to 51.3 in August and sent sterling lower against Euro. Eurozone services PMI was revised mildly up to 55.9 in AUgust. retail sales grew 0.1% mom , 1.1% yoy in July. Swiss CPI was flat mom, rose 0.3% yoy in August.
CAD/JPY follows risk appetite in US session and jumps sharply. Consolidation above 78.52 is still in progress and more upside should be seen to 82 and above. But after all, we'd still expect upside to be limited by 83.48 resistance and bring resumption of the whole fall from 94.46.
US NFP (Nonfarm Payroll) Employment Analysis & Trade Plan 09/13/10 - by Henry Liu
We’ll be trading the US NFP (Nonfarm Payroll) Employment Changes, it is the most volatile news release for the week as traders and their cousins all sit around in front of their PCs preparing to jump in…
Here’s the forecast:
8:30am (NY Time) US NFP Forecast -100K Previous -131K
8:30am (NY Time) US Unemployment Rate Forecast 9.6% Previous 9.5%
ACTION: USD/JPY BUY -30K SELL -170K
The Trade Plan
With today’s release, as per a special report by Bloomberg, the expectation ranges from +70K to -190K, counting on an increase in the private sector payrolls estimated at +47K versus the 71K release in July, and Census job cuts in the public sector of -119K. Market has shifted down its sentiment towards private sector jobs slightly after Wednesday’s ADP report of -10K versus +20K of expectation.
The Unemployment Rate will be another important figure today as it is expected to rise to 9.6% from 9.5% in July. I believe that in the event we get a conflict of releases, such as a better NFP figure but worse Unemployment Rate, market will react more to the Unemployment rate if it’s above the psychological 10.0% level.
Considering the lackluster market movement during Thursday’s trading session after ECB Trichet’s interest rate speech, market is likely to remain neutral at the time of NFP release… We could see potential movement in either direction pending on the outcome of the release.
Here’s the plan: If we get a significantly lower release on the NFP (-170K or worse) and Unemployment Rate (9.6% or worse), I’d be looking to BUY JPY (SELL USDJPY, SELL AUDJPY) on a retracement. There might be a chance to go LONG on GBP/USD or EUR/USD as “delayed trades” because the immediate reaction to another disappointing NFP release would prompt traders to SELL USD against JPY. But after the initial spike focused on strong JPY is over, traders will turn towards LONG on EUR and GBP while selling USD.
On the other hand, if we get a positive NFP release (-30K or better) and the Unemployment Rate remains at 9.6% or better, JPY should weaken immediately as USD/JPY may recover and move above 87 throughout the trading session, and the long-term trend would eventually head back on to 90 in the next few weeks…
If we get a conflict release, we will wait and see how the market reacts first. If there is an overwhelming sentiment driving the market, there will be plenty of opportunities for entry. If you just wait for 5 minutes before making an entry, you’ll get a much clearer view.
The Market
If you remember what took place during last NFP release, market didn’t react with much directional bias as the release came out in line with expectation.
We’ll probably see similar reaction in the market if we were to get an in-line with expectation release, or -100K on NFP and 9.6% on the Unemployment Rate. However, I believe the general market will be focused more on the Private Sector jobs, which are expected at a +47K; simple math shows that the entire -100K drop in the NFP forecast is attributed to the -119K of Census Temporary hiring, and that makes the private jobs growth the real reflection of U.S. employment sector…
Therefore, I’d advice everyone to focus on both headline NFP and Private Sector job growth. If we get around 70K+ in the private sector growth, I think market would really take that as a positive sign for the U.S. economy.
NFP Trading Strategy
Below is a general guideline on how to trade NFP release. This is what I do with EVERY NFP release.
Let’s talk about how to trade this release: We’ll wait for the numbers to come out, but will not take any trade YET, even if we get our tradable figures (-170K or -30K). We’ll wait for a possible revision to the previous release number, which is -131K, as the market usually overreacts with the Revision and chances favor for this trade to work out if we do not get conflicting releases between the revision and the actual release; at this point, still stay out of the market.
Then the next step is to wait for the Unemployment Rate, which is expected to be at 9.6% from 9.5% prior. If the Unemployment Rate were to surprise higher, we’ll have to really make an executive decision at the time of the release and see what is the primary focus of the market. As long as we don’t go over the 10.0% psychological level, I think traders may not focus exclusively on this release. However, if we do get over the 10.0% level, I’d probably be looking for a SELL on USD/JPY or other JPY crosses and Yen should strengthen.
After all of the numbers have been released. Wait for the market to push… then be patient and wait for a decent retracement before getting in. Look for recent support/resistance areas for entry as a high impact news with various components are extremely volatile, and those who are patient will always get a chance to enter with much better entry.
Additional Thoughts
With USD/JPY sitting at the psychological level of 84, with throwing distance of the 15 year high level at 83.50 against USD, it is going to take a very strong momentum to break this level. I have noticed the numerous attempts to break below this level but the general market seems to find support and unable to stay below 84.00. Therefore, I’d consider this level when SELLING USDJPY on a worse than expected NFP release, and possibly skip the trade altogether to avoid whipsaw.
Looking at the NFP, there are a few indicators pointing for a better than expected release despite the surprise -10K release on ADP report this Wednesday. We’ve got better ISM Manufacturing PMI which indicated strong employment component, a slightly better initial Jobless Claims, higher consumer spending, and general rise in Consumer Confidences…
Although one could argue that the negative ADP report and the uncertainty of government Census job cuts could skew the NFP result to a worse figure, most traders should be focusing more on the Private Sector jobs rather than the headline NFP.
Pre-News Consideration
I strongly suggest that any pre-news trade be closed at this moment. As with NFP releases, liquidity will die down from now until the actual release time because most traders are likely to sit on the sideline.
DEFINITION of NFP
“Measures the change in number of employed people during the previous month, excluding the farming industry. A rising trend has a positive effect on the nation’s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.”
Here’s the forecast:
8:30am (NY Time) US NFP Forecast -100K Previous -131K
8:30am (NY Time) US Unemployment Rate Forecast 9.6% Previous 9.5%
ACTION: USD/JPY BUY -30K SELL -170K
The Trade Plan
With today’s release, as per a special report by Bloomberg, the expectation ranges from +70K to -190K, counting on an increase in the private sector payrolls estimated at +47K versus the 71K release in July, and Census job cuts in the public sector of -119K. Market has shifted down its sentiment towards private sector jobs slightly after Wednesday’s ADP report of -10K versus +20K of expectation.
The Unemployment Rate will be another important figure today as it is expected to rise to 9.6% from 9.5% in July. I believe that in the event we get a conflict of releases, such as a better NFP figure but worse Unemployment Rate, market will react more to the Unemployment rate if it’s above the psychological 10.0% level.
Considering the lackluster market movement during Thursday’s trading session after ECB Trichet’s interest rate speech, market is likely to remain neutral at the time of NFP release… We could see potential movement in either direction pending on the outcome of the release.
Here’s the plan: If we get a significantly lower release on the NFP (-170K or worse) and Unemployment Rate (9.6% or worse), I’d be looking to BUY JPY (SELL USDJPY, SELL AUDJPY) on a retracement. There might be a chance to go LONG on GBP/USD or EUR/USD as “delayed trades” because the immediate reaction to another disappointing NFP release would prompt traders to SELL USD against JPY. But after the initial spike focused on strong JPY is over, traders will turn towards LONG on EUR and GBP while selling USD.
On the other hand, if we get a positive NFP release (-30K or better) and the Unemployment Rate remains at 9.6% or better, JPY should weaken immediately as USD/JPY may recover and move above 87 throughout the trading session, and the long-term trend would eventually head back on to 90 in the next few weeks…
If we get a conflict release, we will wait and see how the market reacts first. If there is an overwhelming sentiment driving the market, there will be plenty of opportunities for entry. If you just wait for 5 minutes before making an entry, you’ll get a much clearer view.
The Market
If you remember what took place during last NFP release, market didn’t react with much directional bias as the release came out in line with expectation.
We’ll probably see similar reaction in the market if we were to get an in-line with expectation release, or -100K on NFP and 9.6% on the Unemployment Rate. However, I believe the general market will be focused more on the Private Sector jobs, which are expected at a +47K; simple math shows that the entire -100K drop in the NFP forecast is attributed to the -119K of Census Temporary hiring, and that makes the private jobs growth the real reflection of U.S. employment sector…
Therefore, I’d advice everyone to focus on both headline NFP and Private Sector job growth. If we get around 70K+ in the private sector growth, I think market would really take that as a positive sign for the U.S. economy.
NFP Trading Strategy
Below is a general guideline on how to trade NFP release. This is what I do with EVERY NFP release.
Let’s talk about how to trade this release: We’ll wait for the numbers to come out, but will not take any trade YET, even if we get our tradable figures (-170K or -30K). We’ll wait for a possible revision to the previous release number, which is -131K, as the market usually overreacts with the Revision and chances favor for this trade to work out if we do not get conflicting releases between the revision and the actual release; at this point, still stay out of the market.
Then the next step is to wait for the Unemployment Rate, which is expected to be at 9.6% from 9.5% prior. If the Unemployment Rate were to surprise higher, we’ll have to really make an executive decision at the time of the release and see what is the primary focus of the market. As long as we don’t go over the 10.0% psychological level, I think traders may not focus exclusively on this release. However, if we do get over the 10.0% level, I’d probably be looking for a SELL on USD/JPY or other JPY crosses and Yen should strengthen.
After all of the numbers have been released. Wait for the market to push… then be patient and wait for a decent retracement before getting in. Look for recent support/resistance areas for entry as a high impact news with various components are extremely volatile, and those who are patient will always get a chance to enter with much better entry.
Additional Thoughts
With USD/JPY sitting at the psychological level of 84, with throwing distance of the 15 year high level at 83.50 against USD, it is going to take a very strong momentum to break this level. I have noticed the numerous attempts to break below this level but the general market seems to find support and unable to stay below 84.00. Therefore, I’d consider this level when SELLING USDJPY on a worse than expected NFP release, and possibly skip the trade altogether to avoid whipsaw.
Looking at the NFP, there are a few indicators pointing for a better than expected release despite the surprise -10K release on ADP report this Wednesday. We’ve got better ISM Manufacturing PMI which indicated strong employment component, a slightly better initial Jobless Claims, higher consumer spending, and general rise in Consumer Confidences…
Although one could argue that the negative ADP report and the uncertainty of government Census job cuts could skew the NFP result to a worse figure, most traders should be focusing more on the Private Sector jobs rather than the headline NFP.
Pre-News Consideration
I strongly suggest that any pre-news trade be closed at this moment. As with NFP releases, liquidity will die down from now until the actual release time because most traders are likely to sit on the sideline.
DEFINITION of NFP
“Measures the change in number of employed people during the previous month, excluding the farming industry. A rising trend has a positive effect on the nation’s currency. Job creation is an important indicator of economic health because consumer spending, which is highly correlated with labor conditions, makes up a large portion of GDP. This report is the first of the month that relates to labor conditions, making it susceptible to big surprises.”
Thursday, September 02, 2010
Forex Plan For US ADP NFP Employment 09/01/10 - by Henry Liu
ADP or Automatic Data Processing (NASDAQ:ADP) is releasing it’s own estimate for the private sectors of NFP (Nonfarm Payroll). This is high impact release and it’s followed by currency traders as they look for hints on Friday’s NFP official release. Here’s the forecast:
8:15am NY Time US ADP NFP Change Forecast 20K Previous 42K
ACTION: USD/JPY BUY 70K SELL -30K
The Trade Plan
As stated in my last analysis on ADP NFP news, I usually don’t trade it but I use this release for future market trend references. However, I assume that most traders are likely to do the same, but if the deviation of 50K is actually hit, true speculators will probably have not problem jumping into the market, and this will undoubtedly change market perception for Friday’s NFP release; therefore it is best to be around your computer during the release time rather than finding out what happened hours later and perhaps missed the entire movement.
With the above being said, if we get 70K or better release, I’d be looking to BUY USD/JPY; if we get a -30K or worse, then I’d be looking to SELL USD/JPY… I’ll look at how close we are to the 84.00 level as it has been considered a strong support for the pair and in order for us to take a SELL trade, we need to see market break beyond 83.50 level.
The Market
With NFP private jobs forecasted at +47K, or a decrease from last month’s figure of 71K, this ADP release’s range is between +17K to +30K, which averages out at around 20K.
With the current market focus on risk aversion, which is exacerbated by the ever increasing unemployment rate and job losses in the U.S., a better than expected release should change the overall perception of the NFP release on Friday and we should see some unwinding of JPY long trades.
Additional Thoughts
The ADP NFP Employment Release is aways considered as a high impact release because ADP is the largest private payroll processing provider in the U.S., traders in general pay more attention to this release, especially during NFP week. ADP usually releases its version of Non-Farm Payroll numbers before the actual NFP based on it’s proprietary private payroll data.
I’ll use caution when trading this release even if we get our deviation. When it comes to NFP, market always exaggerates.
Pre-news Consideration
ADP is expected to show a modest gain of 20K, but with Census hiring skewing the overall picture (still 200K workers need to be fired), private data such as the ADP may not move the market much… However, if we do get a strong release, we could expect some change in the pre-news expectation for NFP on Friday.
There should not be much pre-news trading opportunities for this release. General market trend is still for leaning towards risk aversion, although I am seeing some sign of rebound.
8:15am NY Time US ADP NFP Change Forecast 20K Previous 42K
ACTION: USD/JPY BUY 70K SELL -30K
The Trade Plan
As stated in my last analysis on ADP NFP news, I usually don’t trade it but I use this release for future market trend references. However, I assume that most traders are likely to do the same, but if the deviation of 50K is actually hit, true speculators will probably have not problem jumping into the market, and this will undoubtedly change market perception for Friday’s NFP release; therefore it is best to be around your computer during the release time rather than finding out what happened hours later and perhaps missed the entire movement.
With the above being said, if we get 70K or better release, I’d be looking to BUY USD/JPY; if we get a -30K or worse, then I’d be looking to SELL USD/JPY… I’ll look at how close we are to the 84.00 level as it has been considered a strong support for the pair and in order for us to take a SELL trade, we need to see market break beyond 83.50 level.
The Market
With NFP private jobs forecasted at +47K, or a decrease from last month’s figure of 71K, this ADP release’s range is between +17K to +30K, which averages out at around 20K.
With the current market focus on risk aversion, which is exacerbated by the ever increasing unemployment rate and job losses in the U.S., a better than expected release should change the overall perception of the NFP release on Friday and we should see some unwinding of JPY long trades.
Additional Thoughts
The ADP NFP Employment Release is aways considered as a high impact release because ADP is the largest private payroll processing provider in the U.S., traders in general pay more attention to this release, especially during NFP week. ADP usually releases its version of Non-Farm Payroll numbers before the actual NFP based on it’s proprietary private payroll data.
I’ll use caution when trading this release even if we get our deviation. When it comes to NFP, market always exaggerates.
Pre-news Consideration
ADP is expected to show a modest gain of 20K, but with Census hiring skewing the overall picture (still 200K workers need to be fired), private data such as the ADP may not move the market much… However, if we do get a strong release, we could expect some change in the pre-news expectation for NFP on Friday.
There should not be much pre-news trading opportunities for this release. General market trend is still for leaning towards risk aversion, although I am seeing some sign of rebound.
Using Econonomic News to Supercharge Your Forex Trading Profits
Most forex traders I know use charts and technical analysis to make their forex trades, and are taught by so called “gurus” to completely avoid the market when news comes out, and in many cases, to even take off trades before news. My question is, why avoid trading during a period where price action actually behaves sensibly? In other words, price action actually moves due to traders’ reactions to new information about the economic state of a country, rather than some pattern or price level that may or may not have any predictive ability.
Should you trust the news in your forex trading?
Save some time and watch for only the high probability trading opportunities
News isn’t something you should avoid. News is the only thing that you know for sure moves the market. News has a much longer effect than just the knee jerk reaction immediately after the release and the next 5 minutes. The reason why news time has such a bad rap among traders is that many news events create random, whipsawing price action that can easily take out stops. So what does one do? Avoid trading during and after useless news events and only stick with ones that have strong cause-effect relationships (i.e. a surprise in the economic data has a high probability of producing a strong, one-directional move in a currency pair). These are:
Interest rate announcements, statements, press conferences (including US FOMC minutes)
Retail sales
Manufacturing PMI, Chicago PMI, Ivey PMI
Inflation/CPI
German ZEW, IFO surveys
US Employment (Non-farm payrolls),
Canadian employment
3 ways to use news in your trading
Analyzing sentiment (and thus direction) using news releases can be a very powerful element of your forex trading strategy. I’m not talking about chasing the market after a news release- I’m talking about professional, calculated, profitable forex trading. Here are some ways to combine forex news trading with technical analysis so that you have a better chance of getting both the direction and timing right during your trades.
1.Look for breakout due to important news surprise.
Out of all the forex technical analysis methods out there, I don’t think any are as powerful as watching how price reacts to weekly (or even daily) highs and lows. All other things equal, if price breaks a high, it’s likely to continue going up, and vice versa for lows. The reason why such a simple strategy as this can result in depleted accounts is because it doesn’t take into account the momentum and behavior of the market. If you consider that the GBP/USD traders are reacting strongly to a surprise in the amount of retail sales in the UK, however, then a sustained upward move beyond the break of the high looks more likely, doesn’t it?
2.Trade retracement of a news spike.
The easy days of waiting for a surprise in scheduled economic data and buying up a currency are long gone, as the competition is too fierce and brokers have implemented measures to make this practically impossible. However, that’s not to say that we can’t get into the move after the original price spike following the release. If you keep your eye on a 4-hour chart and see a clear break of a recent channel or weekly high after a surprise in economic data, wait for a retracement back down to the high and buy there.
3.Fade an “irrational” news move.
I can’t tell you how many times I’ve seen price rocket upward 50-100 pips after a release only to come back down to right where it started a few hours later. Usually what happens is one of two things. First, the deviation between the market’s prediction and the actual economic number might be small (e.g. US retail sales is +0.3% vs. 0.1% expected), but nevertheless enough of a surprise to throw the market off and spur buying, or second, the news release turns out to be better than expected while in the recent past nearly all releases have been negative. In these situations I would look for a nearby technical resistance level, such as a weekly high, and short price when it gets to that level. Of course vice versa for the opposite scenario.
Copied from TFF
Should you trust the news in your forex trading?
Save some time and watch for only the high probability trading opportunities
News isn’t something you should avoid. News is the only thing that you know for sure moves the market. News has a much longer effect than just the knee jerk reaction immediately after the release and the next 5 minutes. The reason why news time has such a bad rap among traders is that many news events create random, whipsawing price action that can easily take out stops. So what does one do? Avoid trading during and after useless news events and only stick with ones that have strong cause-effect relationships (i.e. a surprise in the economic data has a high probability of producing a strong, one-directional move in a currency pair). These are:
Interest rate announcements, statements, press conferences (including US FOMC minutes)
Retail sales
Manufacturing PMI, Chicago PMI, Ivey PMI
Inflation/CPI
German ZEW, IFO surveys
US Employment (Non-farm payrolls),
Canadian employment
3 ways to use news in your trading
Analyzing sentiment (and thus direction) using news releases can be a very powerful element of your forex trading strategy. I’m not talking about chasing the market after a news release- I’m talking about professional, calculated, profitable forex trading. Here are some ways to combine forex news trading with technical analysis so that you have a better chance of getting both the direction and timing right during your trades.
1.Look for breakout due to important news surprise.
Out of all the forex technical analysis methods out there, I don’t think any are as powerful as watching how price reacts to weekly (or even daily) highs and lows. All other things equal, if price breaks a high, it’s likely to continue going up, and vice versa for lows. The reason why such a simple strategy as this can result in depleted accounts is because it doesn’t take into account the momentum and behavior of the market. If you consider that the GBP/USD traders are reacting strongly to a surprise in the amount of retail sales in the UK, however, then a sustained upward move beyond the break of the high looks more likely, doesn’t it?
2.Trade retracement of a news spike.
The easy days of waiting for a surprise in scheduled economic data and buying up a currency are long gone, as the competition is too fierce and brokers have implemented measures to make this practically impossible. However, that’s not to say that we can’t get into the move after the original price spike following the release. If you keep your eye on a 4-hour chart and see a clear break of a recent channel or weekly high after a surprise in economic data, wait for a retracement back down to the high and buy there.
3.Fade an “irrational” news move.
I can’t tell you how many times I’ve seen price rocket upward 50-100 pips after a release only to come back down to right where it started a few hours later. Usually what happens is one of two things. First, the deviation between the market’s prediction and the actual economic number might be small (e.g. US retail sales is +0.3% vs. 0.1% expected), but nevertheless enough of a surprise to throw the market off and spur buying, or second, the news release turns out to be better than expected while in the recent past nearly all releases have been negative. In these situations I would look for a nearby technical resistance level, such as a weekly high, and short price when it gets to that level. Of course vice versa for the opposite scenario.
Copied from TFF
Overview of News Trading - copied from Forex Boost
If you’ve read through our site and others, you know there are two sides to forex trading; Fundamentals and Technicals. Technical trading is all about reading forex charts, using moving averages, tools and indicators to such as fibonacci studies and trendline analysis to find high probability trades. There are some very good ways to make money in forex technical trading. This section describes the other side of forex trading called Forex News Trading. This is where your odds of making good, profitable trades increase enormously.
Trading the news, is one of the best ways I know of making larges sums of money in very little time with very little risk. Financial news announcements get released every week. Some of these news announcement can and do move the market if there is a surprise in the announcement. For example, if a country is expected to raise it’s interest rate by a quarter of a point (0.25), the market prices this “expectation” into the price of it’s currency. When the announcement comes and the country decides to hold rates steady or raise them even more, e.g by half of a percent (0.50), this will absolutely move the currency. These are the kind of opportunities forex news traders look for and profit from.
Most news traders break even unless they have an edge. The edge we need is called "spike trading" and it's the only way to be consistantly profitable trading the news. Spike trading is a term used for playing the initial spike in price when a news event is released. This is where the money is made and the way to do this is with tools that get us into a spike trade immediately upon a news release. The only tool I know of, and have used used for amost 2 years, is called the Secret News Weapon (SNW) and it gets me into 80% of my spike trades. Sometimes prices moves too far, too fast so no matter what tool you use, you will not get into a spike trade. But the news spike trades we do get in to, hold your hat, because you can make a lot of money within 10-15 seconds after a news release. Nothing beats news trading with the SNW for super quick and profitable trades.
News trading can also be challenging. In our previous example we said if a country raises it’s rates more than expected, we would expect it’s currency rate to increase. That could be so, but timing is also very important. If the interest rate announcement is accompanied by a statement from that countries Fed of Board that indicates something like this could be the last interest rate hike for a while, this could have a negative effect on the currency. So instead of skyrocketing up, price stalls, flounders a bit and start crashing in the opposite direction. You would initially be on the right side of the trade, with a very nice profit and before you know it, price goes the other direction, stops you out and you lose money of the trade. This can and does happen.
How to Trade The News
You need to know tho (2) things about news trading. First you need to know when important news gets released. The second thing to know, is what kind of numbers will make your news trades work.
The first one is easy. Just look at any forex news calendar to see what news releases are due out and at what time of day. The one I use every day is the Forexfactory Forex News Calendar. This calendar shows you at a quick glance, all the news scheduled for release for the current week. The ones with Red folders are the ones to consider trading.
The second one is what can make you a lot money. To make money trading the news, the news release itself has to be a "shock". In other words, every news event has a Consensus number. This is the number the market is expecting. If that number is hit, or very close to consensus, then 99% of the time, that is considered a "No Trade". In other words, the numbers came out "As Expected". There were no surprises and chances are very good price will not be affected. However, when there is a surprise deviation, this is when price takes off. If the number is a "Good Surprise", then that's good for a currency and that currency would increase in value. If the number is a "Bad Surprise", the opposite happens and the currency you're trading dwould ecrease in value. As news traders, we look for these deviations from consensus and that's what makes us money.
So, the Million Dollar question is, "How do you know what a good deviation number should be?" The only way to know is to look at past performance of news releases and see what numbers caused the currencies to move. The one and only service I know of that has all this historical information in one easy to read place is called News Trader Pro. We also worked out a deal with them too so for our ForexBoost members, if you order their service through our site, you will save 10% off their service one-time service plan. And if you want to make serious money trading the news, you need to get the Secret News Weapon and watch your profits go thru the roof.
Trading Example
One of the best News Trades that everyone looks forward to is called the Non-Farm Payroll Report or what it's commonly referred to as NFP. This report comes out on the first Friday of each month. Everyone looks forward to this trade because if the released numbers deviate considerably from the consensus, then this can be a huge money maker. Some traders only trade this report. That's how important the NFP release is to forex news traders.
The first thing you would do is got to the Forexfactory Forex News Calendar to see what time the report is getting released and what the Consensus is. The NFP is always released at 8:30am EST but you should always double check every report just to make sure. The second thing you would do would be to go to News Trader Pro and find the previous releases for all the past Non-Farm Payroll reports. You would quickly see what deviations caused a huge move in the currency pair when this report was released in the past. I personally trade the USD/JPY (US Dollar vs. Japanese Yen) pair for this report. In my opinion, this pair is the most dependable pair to trade for this report. So, if you see that a deviation of 100,000 for example, caused a huge move, then you would Buy the USD/JPY pair if the number came out at 100,000 or better. And the opposite is true. If you saw a number worse than 120,000 historically caused a huge move in the other direction, you would Sell the USD/JPY pair. If you were fortunate enough to get the Secret News Weapon, you would put these deviation numbers into the Weapon and set your autoclicks. Then wait for the news to come out and if your deviation gets hit, watch your trade fly into profit. I suggest closing 1/2 of your position immediately after the initial spike. Then watch the price action and either go for more profit if price continues, or close out the final 1/2 if price retraces past 50% of the initial spike.
There are many reports released each week and sometimes you'll get a few each day! In my opinion, there's nothing more profitable than news trading in forex. At least with news trading, you know exaclty when to be ready for a trade and you can get in immediately. With technical trading, you really need to watch all your charts and indicators all the time, to make good trading decisions. I'd rather sit through a news release trade for 15-20 minutes than look at my charts for a few hours waiting for a setup. Dont' get me wrong though. I enjoy technical trading, but for faster profits and much less risk, nothing beats trading the news.
Forex News Trading Summary
For trading forex, you need to have money to start with. If you can’t start a forex trading account with at least $2500, my recommendation is to stay out of news trading with us. Needless to say, the more money you start with, the more money you can use to trade and the higher profits you will make.
This is a great business and I’m so glad I decided to get into forex trading when I did. I’ve been at this for years and expect to do it for many more years. I also expect to have enough money to have a nice, early retirement for myself and my family. News trading is one of the main reasons why I'm so much closer to my financial goals than every before.
Trading the news, is one of the best ways I know of making larges sums of money in very little time with very little risk. Financial news announcements get released every week. Some of these news announcement can and do move the market if there is a surprise in the announcement. For example, if a country is expected to raise it’s interest rate by a quarter of a point (0.25), the market prices this “expectation” into the price of it’s currency. When the announcement comes and the country decides to hold rates steady or raise them even more, e.g by half of a percent (0.50), this will absolutely move the currency. These are the kind of opportunities forex news traders look for and profit from.
Most news traders break even unless they have an edge. The edge we need is called "spike trading" and it's the only way to be consistantly profitable trading the news. Spike trading is a term used for playing the initial spike in price when a news event is released. This is where the money is made and the way to do this is with tools that get us into a spike trade immediately upon a news release. The only tool I know of, and have used used for amost 2 years, is called the Secret News Weapon (SNW) and it gets me into 80% of my spike trades. Sometimes prices moves too far, too fast so no matter what tool you use, you will not get into a spike trade. But the news spike trades we do get in to, hold your hat, because you can make a lot of money within 10-15 seconds after a news release. Nothing beats news trading with the SNW for super quick and profitable trades.
News trading can also be challenging. In our previous example we said if a country raises it’s rates more than expected, we would expect it’s currency rate to increase. That could be so, but timing is also very important. If the interest rate announcement is accompanied by a statement from that countries Fed of Board that indicates something like this could be the last interest rate hike for a while, this could have a negative effect on the currency. So instead of skyrocketing up, price stalls, flounders a bit and start crashing in the opposite direction. You would initially be on the right side of the trade, with a very nice profit and before you know it, price goes the other direction, stops you out and you lose money of the trade. This can and does happen.
How to Trade The News
You need to know tho (2) things about news trading. First you need to know when important news gets released. The second thing to know, is what kind of numbers will make your news trades work.
The first one is easy. Just look at any forex news calendar to see what news releases are due out and at what time of day. The one I use every day is the Forexfactory Forex News Calendar. This calendar shows you at a quick glance, all the news scheduled for release for the current week. The ones with Red folders are the ones to consider trading.
The second one is what can make you a lot money. To make money trading the news, the news release itself has to be a "shock". In other words, every news event has a Consensus number. This is the number the market is expecting. If that number is hit, or very close to consensus, then 99% of the time, that is considered a "No Trade". In other words, the numbers came out "As Expected". There were no surprises and chances are very good price will not be affected. However, when there is a surprise deviation, this is when price takes off. If the number is a "Good Surprise", then that's good for a currency and that currency would increase in value. If the number is a "Bad Surprise", the opposite happens and the currency you're trading dwould ecrease in value. As news traders, we look for these deviations from consensus and that's what makes us money.
So, the Million Dollar question is, "How do you know what a good deviation number should be?" The only way to know is to look at past performance of news releases and see what numbers caused the currencies to move. The one and only service I know of that has all this historical information in one easy to read place is called News Trader Pro. We also worked out a deal with them too so for our ForexBoost members, if you order their service through our site, you will save 10% off their service one-time service plan. And if you want to make serious money trading the news, you need to get the Secret News Weapon and watch your profits go thru the roof.
Trading Example
One of the best News Trades that everyone looks forward to is called the Non-Farm Payroll Report or what it's commonly referred to as NFP. This report comes out on the first Friday of each month. Everyone looks forward to this trade because if the released numbers deviate considerably from the consensus, then this can be a huge money maker. Some traders only trade this report. That's how important the NFP release is to forex news traders.
The first thing you would do is got to the Forexfactory Forex News Calendar to see what time the report is getting released and what the Consensus is. The NFP is always released at 8:30am EST but you should always double check every report just to make sure. The second thing you would do would be to go to News Trader Pro and find the previous releases for all the past Non-Farm Payroll reports. You would quickly see what deviations caused a huge move in the currency pair when this report was released in the past. I personally trade the USD/JPY (US Dollar vs. Japanese Yen) pair for this report. In my opinion, this pair is the most dependable pair to trade for this report. So, if you see that a deviation of 100,000 for example, caused a huge move, then you would Buy the USD/JPY pair if the number came out at 100,000 or better. And the opposite is true. If you saw a number worse than 120,000 historically caused a huge move in the other direction, you would Sell the USD/JPY pair. If you were fortunate enough to get the Secret News Weapon, you would put these deviation numbers into the Weapon and set your autoclicks. Then wait for the news to come out and if your deviation gets hit, watch your trade fly into profit. I suggest closing 1/2 of your position immediately after the initial spike. Then watch the price action and either go for more profit if price continues, or close out the final 1/2 if price retraces past 50% of the initial spike.
There are many reports released each week and sometimes you'll get a few each day! In my opinion, there's nothing more profitable than news trading in forex. At least with news trading, you know exaclty when to be ready for a trade and you can get in immediately. With technical trading, you really need to watch all your charts and indicators all the time, to make good trading decisions. I'd rather sit through a news release trade for 15-20 minutes than look at my charts for a few hours waiting for a setup. Dont' get me wrong though. I enjoy technical trading, but for faster profits and much less risk, nothing beats trading the news.
Forex News Trading Summary
For trading forex, you need to have money to start with. If you can’t start a forex trading account with at least $2500, my recommendation is to stay out of news trading with us. Needless to say, the more money you start with, the more money you can use to trade and the higher profits you will make.
This is a great business and I’m so glad I decided to get into forex trading when I did. I’ve been at this for years and expect to do it for many more years. I also expect to have enough money to have a nice, early retirement for myself and my family. News trading is one of the main reasons why I'm so much closer to my financial goals than every before.
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