Forex Trading start up

To start trading forex is not hard, the tough bit comes after you've experienced a string of losses just as I did recently.The ability to learn from ones mistake is really crucial here and it is that part of forex trading I have the most problem with. Forex can be trade as CFDs or as a spreadbet (which i do).The advantage of spreadbetting in the United Kingdom  is that it is essentially tax free as long as you have another income avenue on which you  pay tax.Spreadbetting companies that allow you to start for as low as £50 include the following:

Igindex,CMC Markets,Capital Spreads,GFT and City Index.

Try Demo trading as much as possible and get up to speed with some solid reading.Some spreadbet companies will allow you place trades for as low as 10p per point in your first six weeks.

Trade 8

The trade opportunity I was waiting for has finally presented itself.The EUR/USD downtrend has finally ended its throwback.I have iodentified the formation of a pipe indicating throwback might be over.This is supported by MACD and stochastics.Trade was thus entered has follows:

Trade direction: short
Stop loss:13550
Target price for exit:13400

Potential loss (risk):  £50

Actual Entry point: 13500
Trade size (£ per point) :£1
Target profit: 100pips

Trade was exited for 50 pounds loss and reentered at 13621 with stop loss at 13671.profit target remains the same.

Comment: closed for a loss.

Verdict: No loot.

Surfing the tsunami

After my last trade i have laid off trading for a while to refocuss my energies.I now ready for another round of trades.I have now decided to trade just the GBP/USD and the EUR/USD.My next trade hopefully will be to short the EUR/USD.Now i can relax and do some chart watching :-)

Litany of Woes

Its been a crazy trading week for me,a week where i flouted all my trading rules and decided to go for broke.The markets are a costly way to find out what indiscipline can do.In trading the only control you have are your rules and if that goes out the window,the broker gets paid and this week i wrote a big fat check to my broker.I'm now looking for ways to cope with my emotional trading pattern of trying to fly before i can run.Maybe i should set weekly profit targets which when achieved means trading stops for the week? One good thing that's come out of this is i have learnt how to combine daily and 4hrly charts to give good trading signals.I can also now see the essence of running a weekend diagnostic of the market since background noise is diminished.

05/02/2011

Forex analysis
 I am thinking of using orders to trade to avoid the stress of always trying to check up on the market.

Order Trade
During my weekend analysis i have singled out a currency pair for my order trade .The daily stochchastics and MACD and pipe formation on NZD/USD daily chart are all indicating a shorting opportunity.4hrly chart is still in downtrend.I am setting up an order trade as follows:

Trade direction: short

Stop loss:7754
Target price for exit: 7557

Distance between stop and target:197
Distance between stop and target/ 4: 50
Entry point for desired risk reward of 3:1-7704

Potential loss(risk):  £5
Trade size (£ per point) :£1

Comment:
Trade was closed out early for A 5o point profit because i had commitments for the rest of the week.

Verdict: loot

Trade 6

While looking at the charts i noticed that GBP/JPY was performing better than EUR/JPY and i placed an impulse trade on it at £1 a point.This is one of the problems i have when trading,although i have looked at the signals and they look ok(maybe i am subconsciously trying to get rich quick).I have decided to leave the trade on and ride the trend.

Trade direction: Long
Stop loss:13105
Target price for exit:13252

Potential loss(risk):  £50

Actual Entry point: 13155
Trade size (£ per point) :£1
Target profit: 100pips

Verdict : No Loot

Trade 5

The Euro is enjoying renewed interest and uptrend is signalled in the 4hourly chart but not the daily chart.Using 4hrly stochastics and MACD signals i placed my 5th trade on EUR/JPY as follows:
Trade direction: Long
Stop loss:11184
Target price for exit:11400 and 11430

Distance between stop and target: 254
Distance between stop and target/ 4: 64
Potential loss(risk):  £50

Actual Entry point: 11246
Trade size (£ per point) :0.60
Target profit: 154pips
Comment: Trade closed at a loss.

Verdict: no loot

Trade 4

GBP/USD

I placed this trade hoping to turn a fast buck before the weekend.The trade was placed using 4hourly stochastics and MACD which showed a resurgence in the uptrend.The trade wasn't placed with the correct price per point.

Trade direction: Long
Stop loss:1.5820

Target price for exit:1.6000 

Distance between stop and target: 180
Distance between stop and target/ 4: 45
Potential loss(risk):  £50

Actual Entry point: 1.5865
Trade size (£ per point) :£1

Comment: I didn't feel at all comfortable with the trade and kept having doubts because the FOMC rate decision will be announced today.Hence following the saying "when in doubt,get out" i closed the trade for a £10 loss.One thing i also noticed was that the trades had a high success probability if the daily and the 4hourly stochastic where in the same phase i.e either both in up or downtrend phase.

Verdict: no loot.

Trade 3

This is my Third trade in the monthly loot series.

Trigger Signal: resistance met and held.formation of evening star reversal pattern on daily charts.MACD and stochastics indicate downtrend in motion on both 4hourly and daily charts
Trade direction: short

Stop loss:1.3263
Target price for exit:1.2998 and 1.2804

Distance between stop and target: 459

Distance between stop and target/ 4: 114

Potential loss(risk):  £50

Actual Entry point: 1.3179
Trade size (£ per point) :0.60pence

Comment: Trade went well initially and target of 12998 was met.i decided to leave 70 pips on the table to gain a further 190 pips.Overnight the rates seesawed and i had a feelingt to close out my trade as the BOE minutes was coming out the next day.I left the trade on and at 9.30am the trade went against me and closed out my position.Total profit made £86.
Lesson learnt : take of trades before big economic anouncements.

Verdict: Loot.

Weekend planning..chaff from wheat

Weekend Planning

This weekend after looking at the charts i have decided to trade four currency pairs under the following conditions.

EUR/USD

COT data suggest that the currency is begining to slow inch its way up.My trading set-up for this curency is to wait until the 4hourly charts shows a pullback from the uptrend and try and enter the market at around 13447(or when macd suggest re-comencement of the uptrend) with a profit target of 13769 where i suspect heavy resistance (looking at daily charts).

AUD/USD

Weekly,Daily charts show the likelyhood of a downtrend.wait for 4hourly stochastics to signal downtrend(this might be around tuesday evening or wednesday morning).



GBP/JPY

Looks set for a shorting opportunity on both daily and 4hourly chart (both stochastics and MACD).

Forex Trade 2

Trade was made looking at stochastic and MACD zero lag indicate a buy signal on the 4hourly chart,also cftc showed a slight discrepancy with the euro being shorted since the 11th of Jan,on referring to the charts i noticed the euro as being on the rise since that day.A trade was placed at market as follows:

Trigger Signal: resistance met and held.formation of evening star reversal pattern
Trade direction: long

Stop loss: 13301

Target price for exit:Trailing stop loss 120 and 13800 target

Distance between stop and target: 499

Distance between stop and target/ 4: 124

Potential loss(risk):  £50

Actual Entry point: 13401
Trade size (£ per point) :0.50pence

Comment:

       This trade is now closed and it features some of the mistakes i make while trading, owing to the fact that i don't usually like holding positions over the weekend i reduced  my profit target to 13600.This target was reached at around 18:50 GMT but i wasn't able to collect on my prediction because i had closed out my position at 13512 in haste before  US markets opened.Hindsight as usual painfully revealed that all i needed to do was set a tight stop loss.However total pips gained in this trade was 111 and profit was £55 pounds excluding the cost of the spread.Account at break even. 

Verdict: Loot

Forex Trade 1

This is my first trade in the monthly loot series.My main chart is the daily charts but i use the 4 hourly charts to refine my entry and exits.Over the weekend i selected pairs which might reverse or continue their previous trends during this week.Today i was looking through the charts of previously selected pairs for a possible trade and noticed the GBP/USD forex pair rebounding against the resistance at 1.5902 which agreed with the stochastic and MACD signals.I then set up an order trade using the most recent high as my stop loss and the target profit is 15594 and then 15524.order was filled at 15873.

Trigger Signal: resistance met and held.formation of evening star reversal pattern
Trade direction: short

Stop loss:1.5970

Target price for exit:1.5594 and 1.5524

Distance between stop and target: 376

Distance between stop and target/ 4: 94

Entry point for desired risk reward of 3:1

Potential loss(risk):  £50
Actual Entry point: 1.5873
Trade size (£ per point) :0.53pence

Comment: cftc cot showed more traders favouring the upside,a warning which i refused to see in my haste to trade.

Verdict: No loot

Trading observations

While poring over EUR/USD daily charts, i came up with some interesting observations using simple moving averages, macd zero lag and stochastic momemtum index.Entry should be dtermined as follows: a) determine which forex pairs are in oversold territory and are about to reverse(weekend wrk check both daily and four hourly charts) b) filter pairs according to profit targets. c) estimate reversal according to support pivot or resistance and use it to identify likely entry point(think  of limit or stop orders if pressed for time). d) during the week, charts can be checked every 3hrs 50minutes.trade should not be entered until after reversal signal is triggered and actual entry point should be compared to estimated point.

Rules
1. For a novice i seem to be using way too much indicators,using visual trends, supports and resistances should work out if money management is adhered to.(trade 4hourly charts,stoch,macd for entry,resistances and supports for exits)
2. Total amount per bet should be  £50.
3.Be more patient and ride winners with appropriate positioning of stop losses.
4. That a win to loss ratio of 4:6 is acceptable.
5. Trades should only be taken when estimated ratio of  profits to investment  is 3: 1.
6.Never ever move stop losses backwards once placed.
7. Plan each trade meticulously as if my life depended on it and let the trade be once its done.
8.Trade exit strategy should be determined before entering any trade.
9.This list should be consulted before any trade.
10.God help me :-))

Into the "Lion's" den

The 19th of January will be my first time of testing out my "loot theory" which basically consists of going for a once in a month trade which makes enough money to justify using forex as a vehicle for earning an income.I currently use stochastics and MACD zero lag but find it hard to maintain the emotional status quo  needed  to consistently mine profits from my forex account.All my post will be in the order of trigger signal,total capital invested, stop loss, profit target, comment and verdict will either be Loot or No Loot.

Trigger Signal:
Total Capital invested:
Stop loss:
Profit Target:
Comment:
Verdict: