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Blog Archives » January 2006FOREX Trading HoursI've been trying to determine exactly when trading starts and stops on weekends, and it seems that there aren't any sites that can tell me for certain, the best I've been able to find is that it closes around 4pm EST on friday arvo and starts again at 6.30pm on Sunday evening. However it seems to be quite broker specific, since Oanda is currently up for me, while FXCM are still on holiday. If anyone can give me any tips please email me: newbie at forexhowto dot com Before I forget, Happy New Year! Hopefully 2006 is a profitable year with good health for all of us! permalink - 1st January 2006Stop/Loss Risk Management StrategyAfter the market opened this morning I placed a trade correctly anticipating that the market was going to climb, however I messed up and set the stop/loss order too close and it was caught before the prices could rise to where they would have been profitable! So I decided that I needed to learn if there were industry accepted levels that are best to set stop/loss orders as well as limit profit orders. This is what I found.
I was already setting it up similar to this, though I think I was setting it a bit too close with generally about 10-15 pips to my stop/loss order and around 20-25 to my limit. I think I need to aim a little higher and increase my loss threshold a little and I will see how it goes. Next on my list of things to learn: How to trade the start of the new week when there isn't much history because of the weekend break. permalink - 2nd January 2006I'm a foolI don't know why I do it though I seem to have a major problem when I make a trade and then it swings the wrong way and so I make more trades expecting it to swing the way I was originally anticipating, today I went short on the EUR/USD expecting it to drop after a big price rise that I wasn't at my computer for. No sooner had I made the trade than the price began to rise, so when I next saw what I thought was the peak I went short with 10 lots thinking "excellent, this is going to make me some nice cash when it drops"... sure enough it kept climbing and I made the same mistake a couple of more times though only with single lots. Needless to say I'm well and truely in the red and have used up nearly all my margin. It is slowly dropping towards my breakeven positions though it certainly isn't going as quick as I would like! Hopefully someday I will learn to think before trading! I'm just incredibly lucky that I can practice all this on a demo account without sending myself into bankruptcy. Think before tradingI REALLY need to get into the habit of THINKING before making a trade. It seems that all that is happening to me nowadays is I'm making a quite a few trades of which some are profitable though most of them are profitable for a short while then become major losers. I really need to think through all of my trades much much more and only make a trade when I'm certain what is going to happen. I've been trying to find spikes to make big profits from, however I think what I need to do is to start trading with the trend, find a trend, make a trade and then sit on it. Also I believe I should be making longer term trades. I've been away on holiday (had a great time) for the last couple of weeks so just got back into my trading and updating my blog. permalink - 25th January 2006Making it easier as a beginnerAfter I wrote my previous post I made some changes to my setup which should hopefully help me make more profitable trades: I removed all currencies with a spread greater than 3 pips. What this should do is make it safer for me to make a trade and if it goes sour then at least I'm not going to lose as much as if I trade on something like the USD/ZAR (it has about a 1000 pip spread), I actually made the mistake of trading on that, before I went on vacation I saw a lot of movement and even made a bit of profit though after returning from vacation I misread the spread and straight away lost 1000 pips! So for the next little while I'm going to only play with the majors and see if I can slowly build back my deficit (which has really blown out!) permalink - 25th January 2006Why do I forget so easily???It seems that I write a post on my blog and then less than 24 hours later I just completely forget all about it. Case in point: Yesterday I wrote that I need to THINK before making a trade, this morning I woke up and straight away I jumped into some trades that I really should have thought about for a little longer. Needless to say they've all gone against me :( I REALLY NEED to go with the trend rather than anticipating a breakdown. Losing more than WinningSince I changed my strategy to only work on the currencies which have a very small pip spread I've started having more winners, my only issue at present is that I still don't have enough discipline to hold off from making trades for the sake of doing something. Therefore I'm making trades that I regret shortly after having made them and I lose more than I make from the ones that I've gained on :( Oh well the life of a forex beginner, I'm sure I'll work it out someday. In other news I found a forex broker (I suspect they are actually an agent for a broker) called Mada FX (www.madafx.com) who will give you $5 for your live account when you signup for a demo. What someone could do with $5 I don't know, though I guess theoretically it should be possible to turn that $5 into $5 milion. I tried signing up to their demo so that I can give another brokers forex trading platform a try, though after filling in the form I got a blank page. How to use Bollinger BandsWhen I originally was studying what bollinger bands were all about I read something about how they showed the relative strength of the currency or something along those lines (I'm pretty sure I have the incorrect terminology). Basically the idea behind what I read was that you go short when it's above the upper line and long when it's below the bottom line. Sadly this strategy hasn't worked the times that I've tried it so I did some more searching and I found what I think is a better method of using the bollinger bands. For those too lazy to read the article I linked to, the idea is that when the bands contract it means that the market is not very volatile, meaning that there is some big moves due to happen shortly. In their words:
After reading this I looked at the current daily chart for the eur/usd and I think the bollinger bands do contract quite noticeably prior to a big move. As an example (possibly not the best one since the contraction was fairly quick) see around the end of last year.
Patience Patience PatienceI'm starting (rather slowly) to realise that patience is the key to being profitable in trading, wait for a high probability trade and then make almost certain money. Last night I managed to buy into an uptrend and made a nice profit, then this morning I blew it all fairly quickly by just speculating that it might go my way rather than buying or selling into a trend. I was alerted to a massive and extremely clear downtrend on the AUD/CAD, a pity that the free FX trial on Oanda doesn't have the AUD/CAD as one of their currencies. Archives» 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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