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Blog Archives » December 2005AboutMy reasons for setting up this website are two-fold:
A little bit of background about me and my life thus far:
The way I found out about currency trading as a suitable way of making money for the average joe was that my sisters A few months back I did a bit of research into it and found that FOREX can indeed be a great way to make some very nice money (also a great way to lose money if you aren't careful, read below). I opened a free practice account at a website that had a Java based trading application and believe it or not I actually made some pretend money!!! Then I became distracted by work related things and put my FOREX plans on the back burner for a while. Well I'm going to get back into it and look at a few other free FOREX trading sites/applications before I dish out any of my $. My plan of attack is to first do some more practice with the free practice accounts that most of the FOREX brokers provide. Then when I'm consistently turning a profit I will open a mini account, from what I can understand about these mini accounts, they are the ideal way to dabble in FOREX without losing your money very quickly. You put up around USD$300 and then you can leverage this to trade in lots of $10,000 instead of lots of $100,000 obviously the profits when you leverage 100k is 10 times the leverage of 10k, though the same goes for losses, so while I probably won't make a fortune with a mini account I'm hopeful that I can learn a bit about FOREX and develop some good trading strategies. From what I've been able to acertain there are two trading techniques:
Being a computer programmer I aim to look for patterns that I can exploit. When I was playing with my practice acount a few months back I thought I was onto quite an interesting trend which involved the time differences between Europe and the USA, if my analysis shows that this trend is consistent then I will post a little more about it. Apologies for the ugliness of the site, I will make it look better soon! permalink - 14th December 2005Current Foreign Exchange RatesObviously when you decide to take the plunge into the world of foreign exhcange, you need to gather as much data/intelligence as you can. What I have done is to create a little script which every minute checks the current foreign exchange rates. I have yet to fully analyse the data that I have captured, though thought I would post the page that I found which provides the current exchange rates for the major currencies. When I have completed my analysis of this data I will post my findings :) Looking at another beginners FOREX trading experienceI was quite fortunate to come across the forex project website so early in his (is a guy?) trading life to see how other beginners trade. One great feature which is on that site is their trading history . I ran their numbers through the calculator and it seems they're up by about $1500 which isn't too shabby! I'm sensing that I might need to do is to buy some FOREX literature, that guy seems to know a quite a bit more than I do. Damn, last time was much easier!So I jumped back in with a free demo account to see how my brains would work. And I really seem to remember it being much easier last time. I jumped right in and made some buys which very quickly lost me money. I guess that's what you get when you don't do any real research before making trades. Anyway, after blowing a couple of thousand dollars very quickly I quickly remembered that you need to look at the current charts and see what is actually happening. After looking at it for a little while I managed to make some money back which was quite good, though then late this afternoon I made some silly trades which cost me money again. Hooray - The FOREX markets shut down for the weekend!In my regular work you can do it pretty much anytime of the week, so it's a refreshing change to find that the FOREX markets shutdown for the weekend! I'm slowly clawing my way back with my free demo account. permalink - 16th December 2005Areas of Support, Areas of Resistance and FibonacciWhenever you get into something new there are always many new terms and concepts to get your head around, FOREX appears to be especially so, I'm going to create a FOREX Glossary sometime, though for now I'll just post about some of the terms that I've learnt. I will also do my best to use the correct FOREX terminology :) Areas of Support: A level that the price generally doesn't drop below, as a beginner the easiest way to look at this is to draw a line that links up the bottoms of the deepest troughs. Areas of Resistance: The opposite to Areas of Support, it's a price that there is resistance to passing, easiest way to explain it is to draw a line through the highest peaks. Using these 2 lines you can begin to estimate future prices, thereby being able to trade at the most profitable moments. The reason I actually found out about the Areas of Support and Areas of Resistance is that I had read reference to Fibbonaci retracement and didn't understand what it was. I'm fairly familiar with Fibonacci numbers (except that I can never remember how to spell his name!), basically many many things in life conform to the numbers specified by Fibonacci who was a briliant Italian mathematician, I won't go into detail since lots of people have written extensively about him, you can find more information about Fibonacci here. Now it turns out that because the prices in the FOREX market tend to be wave like in appearance you can use Fibonacci numbers to predict the future peaks and troughs. I can't wait for the weekend to finish so that I can try this stuff out!
Update: Screw that, this page and site have a LOT more information, looks like I've got a lot of reading to do! permalink - 18th December 2005My FOREX MistakesSo I've been playing with a demo account for a little while now and the last few days I've been going backwards at an incredible rate! I seem to have had the amazing ability to buy a currency just before it drops like crazy :( So after I initially lost a large amount of money due to just buying without thinking, I managed to build back up to my starting capital and then turn a bit of a profit. However my last few days has undone all the good work I did in building back up to a profitable place and now I'm down about $8k. I think I need to implement a rule to never buy during a bearish market. In some more positive news I've been doing a bit of reading over on the investopedia site about the different methods used in technical analysis, mostly I've been using the Bollinger Bands, and the Parabolic SAR. permalink - 22nd December 2005I have a long way to goI'm a little bit worried about my future as a trader on the FOREX markets. It seems that I'm an expert at choosing the incorrect time to make a trade. During christmas I mentioned my incredible ability to buy at preciscely the wrong time and he said that he's had it like that as well. He even went to the extreme of doing the opposite to what he thought and it didn't work out too badly for him. I think part of my problem is that because it is virtual currency that I'm trading I've been making trades for the sake of doing something where I think I need to be more patient, sit out the quiet spells and wait for a good time to trade. permalink - 28th December 2005Back to Profitable FOREX TradesSo after my very dismal trading recently I'm proud to say that I finally made a good trade! I was watching the USD/JPY and noticed it spiking so I went short (in plain english, I predicted that the USD was being sold for too much and was going to crash back down to the levels prior to the spike so I sold some), unfortunately I did this during the first plateau of the spike and then it kept climbing and my stop loss kicked in a little bit later, when I saw that it had actually reached the top of the spike I again went short and waited for the drop. As you can see at present the price is even lower so I could have profited more, though I think that my second trade was made at close to the correct places. My reasoning behind closing my position where I did was that I predicted that the price would halt at the prior level of resistance (which I've circled in yellow), so I took my profit just before that level. In hindsight I could have taken the risk to the earlier level of resitance (circled in red) which is approximately where it has returned to.
So I'm a happy camper again :) permalink - 29th December 2005Easy Come, Easy GoIt's so incredibly easy to make money in FOREX, though it's just as easy to lose it all and more :( I saw a breakdown mid occurence on the same USD/JPY shortly after I wrote my previous post, and so I went long where I thought it would bounce back and I was WRONG, the price kept plummeting. I bought more as it kept falling though that didn't gain me much. Imagine if I had held onto my original short position (the arrow right up the top) and sold out at the bottom, I would have made over 100 points profit! I think I need to analyse how breakdowns work a little more.
Micro Mini FOREX AccountsI've just been having a look at some FOREX brokers and I found Interbank FX, one thing that they have which I think is great is a Micro Mini Account. Basically a very risk free way to trade real money, each pip is worth approx 10 cents. Obviously it'll be very hard to make a fortune when each pip is only worth 10 cents though I might use it as my introduction to real money trading. I'm going to signup for a demo account over there and see if I can actually work this one to a profit without making major mistakes from the start like I've been doing with my other accounts! permalink - 30th December 2005Archives» Nov 2006 » Oct 2006 » Sep 2006 » Jul 2006 » Jun 2006 » May 2006 » Apr 2006 » Mar 2006 » Feb 2006 » Jan 2006 » Dec 2005 |
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