4 Stupids Things and 1 Best Thing to Do

The first stupid thing you can do is to close a position early because you think it is going to go against you. Just because you have an edge over the market does not mean that price will immediately shoot up or down to your target. Price will move up and down and will even probably move against you before it moves in your favor. If you let FEAR of LOSS get you, you will lose money. If the market is going to take you out, let the market take you out by taking out your stop. That is why it is there. The odds are still in your favor.

The second stupid thing you can do is to close a position early because you don’t think (or you are AFRAID) that it won’t reach your target. If you don’t play the odds properly, you will not realize the full profit potential. That is a lot of effort for nothing. Even worse, if we make some mistakes along the way The system is designed for a 20 pip target, GO FOR IT.

The third stupid thing you can do is to get greedy. Just taking 5 or 10 pips can be considered GREED as well as FEAR since you are so afraid of loss that you get greedy for those 5 or 10 pips compared to the potential loss of 20-40 pips. Don’t let it get you, follow the rules and be happy with your 20 pips.

The fourth stupid thing you can do is move your stop, believing that the market will eventually go in your favor. This is the fastest way to lose money. We are DAY traders. Yes the market may go in your favor but it may move 300 pips the other direction before it does, if it does. This could take weeks or months and you have a limited account balance. If 5% of your account is tied up waiting this position out, guess what. You are missing 20 other opportunities to make money instead of just sitting there waiting, down a hundred pips while you miss the opportunity to make 20 trades for 20 pips each. Maybe you break even, when you could be up 400 pips. JUST DON’T DO IT.

The best thing to do is TURN YOUR COMPUTER OFF and go do something else once you place your trade, and place your stop and limit, . You are now in automatic mode, and the market will take you out, either for a profit or for a loss. This is the best way to eliminate the temptation to succumb to FEAR or GREED and do something stupid. If you are trading and following the rules of your system, and not making money, you need to take a look in the mirror. It is not the system that is the problem, it is you.

Your trade results will show if you are doing what is correct or you are doing what you like

Trading Mantra: Trade without Fear & Greed

1. Objectively identify my edges - I have a system here that works.

2. Pre-define the risk of every trade.

3. Completely accept the risk. Consider the money GONE.

4. ACT on my edges without reservation or hesitation. Follow the rules and take every trade that meets the conditions.

5. Pay myself as the market makes money available. Take the 20 pips and be happy, or trail your stop. Even if compounding my account, pay myself something out of my profits each month.

6. Continually monitor my susceptibility for making errors.

7. Understand the absolute necessity of these principles, and therefore I never violate them.


Your trade results will show if you are doing what is correct or you are doing what you like

31 July Aud trade in 1hr frame

Depending on the red arrow in 1hr frame as a guide to enter, profit to be taken @ EMA @ 1hr.
5 min should be used to enter in a better postition. 5 min reg need to be focus on for take profit or enter point , to be explore.

Your trade results will show if you are doing what is correct or you are doing what you like

30July 09 14pips profit from CHF given back to market

GBP is not good for trading with a spread of 5pips! Ended up giving early 14pips profit from CHF to the market. .....

Your trade results will show if you are doing what is correct or you are doing what you like

29 July 09 Euro 15pips

Did a redemption at night with gbp. Profited 8pips - possible profit of 2opips.

Exited by stop loss. Lost 30 pips - avoid entry before and after important news release.

Exited Euro with 9pips profit.

Exited when momentum is exhausting and grabbed 15pips.

Your trade results will show if you are doing what is correct or you are doing what you like

28 July 09 AUD 20pips

AUD has been up for the entire day. Finally see exhaustion at 1hr. Entered at 5mins to short and grabbed 20pips. Missed out 3 good trades in the afternoon.

Your trade results will show if you are doing what is correct or you are doing what you like

27 July 09 EURUSD Using Momentum for entry not exit

Did a short in the morning. Result of 7pips. Potential profit of 40pips if kept longer.

Another 7pips taken off the table from Euro for short.

Entry when indicators are in favour. Use momentum for establishing the strength of trend. Exit only if indicators are weakening, not just momentum alone. Profited 2 pips - could have been 10pips.

Took a look at the market in the afternoon. Eur surging to price of 80pips from my entry price! What a miss of huge profits. Oh well, that's just one of those days.

Your trade results will show if you are doing what is correct or you are doing what you like

Things successful forex traders do - from Investopedia

Approach

1. Trading Timeframe
2. Methodology / Strategy
3. Pairs that validates by the strategy

Attitude

1. Patient. Wait for strategy to validate entry.
2. Discipline. Pull the trigger when strategy tells you so, especially for stop loss.
3. Objectivity. Do not be emotional, just rely on your strategy that gives consistent result.
4. Be realistic on how much you can earn from your trading timeframe.

Implementation
No system will trigger a 100% sure win. The art of profitability is in the management and execution of trade.

The Bottom Line
There is only profit-making or loss-making trade. Therefore, remember the following 2 rules

Rule 1: Never lose money
Rule 2: Remember Rule 1
Your trade results will show if you are doing what is correct or you are doing what you like

Factsheet for 6 major currencies

British Pound Factsheet
The British pound is the official currency of the United Kingdom. Next to the U.S. dollar and the euro, it is probably the most widely held reserve currency.

Trading Mechanics
Quote Convention:
Value of a Pip for a 100k lot: USD $10
Currency Nicknames: Sterling or Cable

Most Active Trading Hours
2:00AM ET / 2:00 GMT+8, London Open
4:30AM ET / 4:30 GMT+8, UK Economic Releases
8:30AM ET/ 8:30 GMT+8, U.S. Economic Releases

Key Currency Crosses
EUR/GBP
GBP/CHF
GBP/JPY

Central Bank - Bank of England (BOE)
Mandate: Price Stability;
Keep Inflation below 2%
Created: 1694
BoE: Mervyn King

General Economics Statistics
2007 GDP Estimate: GBP 1.35 Trillion (USD $2.7T)
Population*: 60.9 Million
Interest Rate**: 1.0%
Inflation*: 4.70%
Trade Balance*: -8.2 Billion GBP
*National Statistics Oct 2008, **Bank of England Feb 2009

Market Moving Economic Releases
BoE Rate Decision
Claimant Count
Consumer Prices
GDP (Gross Domestic Product)
Industrial Production
Retail Sales

Important Correlation
GBP/USD and FSTE


Japanese-Yen Factsheet
The Japanese yen is the official currency for Japan.

Trading Mechanics
Quote Convention: JPY
Value of a Pip for a 100k lot: USD $9.40

Most Active Trading Hours
7:00PM ET / 7:00 GMT+8, Tokyo Open
7:30PM ET / 7:30 GMT+8, JPY Economic Releases
8:30AM ET/ 8:30 GMT+8, U.S. Economic Releases

Key Currency Crosses
EUR/JPY
NZD/JPY
GBP/JPY
CAD/JPY
AUD/JPY
CHF/JPY

Central Bank - Bank of Japan (BOJ)
Mandate: Maintain Price and Financial System Stability
Created: 1882
BoJ Governor: Masaaki Shirakawa

General Economic Statistics
2007 GDP Estimate: JPY 480 Trillion (USD $4.37T)
Population: 127 Million
Interest Rate*: 0.10%
Inflation**: 2.10%
Trade Balance†: -324 Billion JPY
*Bank of Japan, Nov 2008
**Statistics Bureau Sept 2008
†Japan Ministry of Finance, Sept 2008

Market Moving Economic Releases
BoJ Interest Rate Decision
Consumer Prices
Corporate Goods Price Index
GDP (Gross Domestic Product)
Retail Sales
Tankan Report

Important Correlation
USD/JPY and Nikkei


Canadian Dollar Factsheet
The Canadian dollar is the official currency of Canada. The USD/CAD is the sixth most actively traded currency pair by turnover, according to the Bank of International Settlement’s 2007 FX report.

Trading Mechanics
Quote Convention:
Value of a Pip for a 100k lot: USD $9.68
Currency Nicknames: Loonie, Buck

Most Active Trading Hours
7:00AM ET / 7:00 GMT+8, CAD Economic Releases
8:30AM ET/ 8:30 GMT+8, U.S. Economic Releases

Key Currency Crosses
CAD/GBP
AUD/CAD
EUR/CAD

Central Bank - Bank of Canada (BOC)
Mandate: Price Stability; Keep Inflation near 2%
Created: 1934
BoE Governor: Mark J. Carney

General Economic Statistics
2007 GDP Estimate: CAD $140.9 Billion (USD $128.1B)
Population*: 33 Million
Interest Rate**: 1.0%
Inflation*: 3.4%
Trade Balance†: CAD $4.7 Billion
*Statistics Canada, Oct 2008,
**Bank of Canada Jan 2009
†Statistics Canada, Oct 2008

Market Moving Economic Releases
BoC Rate Decision
Consumer Prices
Employment Change
GDP (Gross Domestic Product)
IVEY PMI (Purchasing Managers Index)
Retail Sales

Important Correlation
CAD/USD and Oil


Swiss Franc Factsheet
The Swiss franc is the official currency of Switzerland. The USD/CHF is the fifth most actively traded currency pair by turnover, according to the Bank of International Settlement’s 2007 FX report.

Trading Mechanics
Quote Convention: CHFMeans
Value of a Pip for a 100k lot: USD $9.09

Most Active Trading Hours
2:00AM ET / 2:00 GMT+8, London Open
1:45AM ET / 12:45 GMT+8, Swiss Economic Releases
8:30AM ET/ 8:30 GMT+8, U.S. Economic Releases

Key Currency Crosses
EUR/CHF
CHF/JPY
GBP/CHF

Central Bank - SWISSNATIONALBANK (SNB)
Mandate: Maintain Price Stability; Inflation Target of Less than 2%
Created: 1907
Central Bank Governor: Jean-Pierre Roth

General Economic Statistics
2007 GDP Estimate: CHF 500 Billion (USD $424B)
Population*: 7.6 Million
Interest Rate**: 0.50%
Inflation†: 2.90%
Trade Balance**: 1.43 Billion CHF
*Swiss Federal Statistical Office June 2008,
**Swiss National Bank Feb 2009,
†Swiss Federal Statistical Office Oct 2008

Market Moving Economic Releases
Consumer Prices
GDP (Gross Domestic Product)
KoF Leading Indicators
Retail Sales
SNB Interest Rate Decision
UBS Consumption Index

Important Correlation
USD/CHF and EUR/USD


Euro Factsheet
The euro is the official currency of 16 states in the European Union, known collectively as the Eurozone.

members of the eurozone*
Austria
Belgium
Cyprus
FInland
France
Germany
Greece
Ireland
Italy
Luxembourg
Malta
Netherlands
Portugal
Slovenia
Spain
Slovakia
* As of January 2009

Trading Mechanics
Quote Convention:
Value of a Pip for a 100k lot: USD $10
Currency Nicknames: Anti-Dollar

Most Active Trading Hours
2:00AM ET / 2:00 GMT+8, London Open
4:00AM ET / 4:00 GMT+8, Economic Releases
8:30AM ET/ 8:30 GMT+8, U.S. Economic Releases

Key Currency Crosses
EUR/GBP
EUR/CHF
EUR/JPY

Central Bank - european central bank (ecb)
Mandate: Price Stability; Keep Inflation below 2%
Created: 1998
Central Bank Governor: Jean-Claude Trichet

General Economic Statistics
2007 GDP Estimate: EUR 8.8 Trillion (USD $12.32T)
Population: 320 Million
Interest Rate*: 2.0%
Inflation**: 3.6%
Trade Balance**: -64 Billion EUR (seasonally adjusted)
*ECB Jan 2009,
**ECB Sept 2008

Market Moving Economic Releases
ECB Rate Decision
German Consumer Prices
German GDP (Gross Domestic Product)
German IFO (Business Confidence)
German Unemployment
Manufacturing and Service Sector PMI

Important Correlation
EUR/USD and Oil


US Dollar Factsheet
The U.S. dollar is the official currency for the United States. 85% of all currency transactions involve the U.S. dollar.

Trading Mechanics
Quote Convention: USD
Currency Nicknames: Greenback, Buck

Most Actively Traded Currency Pairs
EUR/USD
USD/JPY
GBP/USD
AUD/USD
USD/CHF
USD/CAD

Most Active Trading Hours
2:00AM ET / 2:00 GMT+8, London Open
8:30AM ET/ 8:30 GMT+8, U.S. Economic Releases

Central Bank - Federal Reserve (Fed)
Mandate: Price Stability and Sustainable Growth
Created: 1913
Central Bank Governor: Ben Bernanke

General Economic Statistics
2007 GDP Estimate: USD $13.84 Trillion
Population*: 305 Million
Interest Rate**: 0.25%
Inflation***: 5.40%
Trade Balance****: -USD $59.3B
* U.S. Census Bureau Oct 2008,
**Federal Reserve Feb 2009,
*** Bureau of Labor Statistics Sept 2008,
**** U.S. Bureau of Economic Analysis Oct 2008

Market Moving Economic Releases
Consumer Confidence
Fed Interest Rate Decision
GDP (Gross Domestic Product)
Non-Farm Payrolls
Retail Sales
Service and Manufacturing ISM
Trade Balance
Treasury International Capital Flow Report (TIC)

Important Correlation
USD/JPY and S&P 500

Your trade results will show if you are doing what is correct or you are doing what you like