Ever did to watch your capital wiped out right in front of your eye balls and nothing you can do to save the situation? If you did not, well I did! I already came to various of systems (if not thousand of them!), which I can say some were really profitable in a good market condition and it's left the wrong money management which differentiate between profit and margin call. I tell you what, the importance of money management is crucial, and experiencing the margin call will never please you. Learn from my experience.. Sigh!
Asset allocation is one of the toughest jobs for investors. It's the art of minimizing your loss and maximizing your profit. In Trading Chaos 2nd edition book, there is one sub-chapter regarding money management called 'Reverse Pyramiding'. Always ask yourself how much you are willing to risk. I myself, will risk 5% in a good market condition (Wave 3 and 5?), and 3% in risky market condition (Wave 2 and 4?).
This should help you (and me!) with a better understanding what 'Reverse Pyramiding' is.
1. Wiseman 1 = 1 contract. 2. Wiseman 2 = 5 contracts. (Only after W1 is in profit.) 3. Wiseman 3 first signal = 4 contracts. 4. Wiseman 3 second signal = 3 contracts. 5. Wiseman 3 third signal = 2 contracts.
Always remember, preserve the capital is more important than making money. Happy trading! =)
When I was reading Beat The Odds In Forex Trading by Igor Toshchakov, there is one chapter about the idea of 'What currency pair should be traded for short-term intraday trader'. You can read that particular chapter here. Happy reading!
When making a choice of a currency pair for a trade, no other reasons except the practical ones should be taken into consideration. It always surprises me when I see that some traders choose a currency pair for making a speculative trade, based on patriotic or geographical reasons. I have noticed that many traders from Australia, for example, basically trade an AUD against USD or NZD. New Zealanders, Canadians, Frenchmen and many traders from several other countries frequently prefer to trade their national currencies also. They trade it against the American dollar, or against other national currencies of neighboring countries of the given geographical region. It seems to me, though, that our basic purpose of participation in this business is not to certify our patriotic feelings and pride but only to receive the greatest possible profit. From the point of view of a speculative trader, the patriotically geographical approach to a choice of currency pairs for speculative operations on FOREX cannot be considered rational and justified. The choice of a currency pair for the following speculative transaction should be done according certain parameters, and patriotism and residence are not among them.
The most important and final criterion when making a choice of a currency for short-term speculative trade should be maximum conformity of a current technical picture, and how it fits to a trading technique and/or to a trading system which you’re going to use.
The basic criteria for a choice of currency pairs should be their liquidity, activity and average amplitude of fluctuations (trading range). The higher all these parameters, the more preferable such currency pairs are from a speculative trader’s point of view. The list of currency pairs most suitable to such a definition first of all includes the following: USD/CHF, USD/JPY, EUR/USD, EUR/JPY, GBP/EUR, GBP/JPY and CHF/JPY. You may be surprised that I have not included in this group Cable (GBP/USD). The reason is that this currency pair has almost ideal liquidity as well as all other “majors”, but the average day amplitude of Cable fluctuations is lower than would be desirable. Also, the small cost of a GBP/USD pip is from my point of view better for an intermediate term positional trade, than for short-term intra day speculations. (Sometimes I also trade it, but not very oftern.)
The most important and final criterion when making a choice of a currency for short-term speculative trade should be maximum conformity of a current technical picture, and how it fits to a trading technique and/or to a trading system which you’re going to use. As in this course we talk particularly about my trading technique, just the maximum conformity of the chart to one of the templates used by me becomes a determining factor for a choice of a particular currency for a particular trade. It is especially important if in the given moment the market is in immediate proximity to some key technical level. I accept diversification and, from my point of view, it’s possible and necessary to trade various currency pairs. However, my personal practice shows that having simultaneous positions on various currency pairs disseminates a trader’s attention. It’s rather difficult to follow all the currency pairs at the same time. Therefore, I simultaneously hold open positions on no more than two or (very seldom) three currency pairs. In some cases (for example, trading USD/CHF and EUR/USD), I frequently use “substitution”. By substitution I mean analyzing one of them, but (on the basis of this analysis) trading the other one.
The Swiss franc basically doesn’t have its own brightly expressed identity in the marketplace. On a large scale, it is not more than a “proxy” in relation to Euro. At the same time, it has high activity, large amplitude of fluctuations and perfect liquidity. These “qualities” allow USD/CHF to be one of the most attractive currency pairs for speculative trade.
p/s : You can download Beat The Odds In Forex Trading by Igor Toshchakov ebook at Download Section in sidebar.
Today (Monday, April 13), Most of experts are not suggesting any open position to be made as all the European's bank are off business. I disagree! (I'm not a big fan of Fundemental analysis anyway.) LOL!
If you check the TFH1 & TFH4 graph on USDCHF, there is Wiseman Signal 1 appeared from the last hour of Friday's market. W1 on USDCHF is VALID as it fulfill the rules ; Bearish Divergent Bars (Bar inside the eclipse), have the angulation line(yellow line), & valid Divergent Bar satisfied the Green AO (red arrow in AO indicator).
Check out on EURUSD, W1 also valid, but to lower the risk in abnormal move expected in market today, I only place a contract order on USDCHF.
USDCHF already cross the pending order I made. If you use metatrader platform, I believe you are not able to execute any position. I'm using Oanda (www.oanda.com) as my trading platform, and meta4 from Interbank (IBFX) for graph reference. Trade at your own risk.
UPDATED :
I managed to win 197 pips only by using Wiseman 1 signal! =)
p/s : I have some computer problems this week, motherboard and Hard Disk issue, need to change both. Sigh! Technically, I only trade on Monday and Tuesday. There are at least three Wiseman 1 signals appeared this week on GBPJPY, GBPUSD, EURUSD & USDCHF. Dont need to say about Wiseman 2 & Wiseman 3. I miss a lot of opportunities to grow my capital this week. Really sick on this PC issue. =(
In his book "Beat the Forex Dealer", Augustin Silvani lists
important times of the day that all traders should be aware of:
00:00 Sydney Open (good time for an ambush) 11:00 LIBOR Spot Fixing (manipulation) 15:00 London FIX (corporate and "must do" flows) 17:00 NY options cut (manipulation) 18:00 Europe closes their books (reversal time) 19:15-19:30 Close of IMM (last minute positioning by Chicago traders)
All times are GMT
Manipulation and abnormal moves are common during these times, so keep your eyes peeled and watch your stops!
Good trade last week. I make more profit in pair EU, as I managed to take all wiseman signal (W1,W2, & W3).
Check out the picture above.
1st W1 = 320 pips W2 = 300 pips 1st W3 = 135 pips 2nd W3 = 110 pips 3rd W3 = 30 pips. 2nd W1 = 90 pips. (I just let it go until Friday, and decided to close the position at some points.)
You may have heard the saying "'Forex trading is simple, but not easy." ??
Article below is written by a trader goes by nickname SoulTrader on website which I do not remember. You may notice which stage you are currently and perhaps you may speed up your process to final stage by reading this. Enjoy it.
This is the first step you take when starting to look into trading. You know that it’s a good way of making money because you've heard so many things about it and heard of so many
millionaires. Unfortunately, just like when you first desire to drive a car you think it will be easy- after all, how hard can it be?? - Price either moves up or down - what's the big secret to that then - let’s get cracking!
Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again ..and again, and again.
You try to turn around your losses by doubling up every time you trade - sometimes you'll get away with it but more often than not you will come away scathed and bruised. Well this is stage one - you are totally oblivious to your incompetence at trading.
Stage one can last for a week or two of trading but the market is usually swift and you move onto stage two.
Stage Two - Conscious Incompetence
Stage two is where you realize that there is more work involved in this and that you might actually have to work a few things out. You consciously realize that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit. During this phase you will buy systems and e-books galore, read websites based everywhere from Russia to the Ukraine. And begin your search for the Holy Grail.
During this time you will be a system whore - you will flick from method to method day-by-day and week-by-week never sticking with one long enough to actually see if it does work. Every time you came upon a new indicator you'll be ecstatic that this is the one that will make all the difference.
You will test out automated systems on Meta-trader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today.
You'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them because you are so sure you are right.
You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling pips after pips are liars - they can’t be making that amount because you've studied and you don't make that, you know as much as they do and they must be lying. But they're in there day after day and their account just grows whilst yours falls.
You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and over leverage your account even though everyone says you are mad to - but you know better.
You’ll consider following the calls that others make but even then it won’t work so you try paying for signals from someone else - they don't work for you either.
This phase can last ages and ages - in fact in reality it can last well over a year - My own period lasted about 18 months.
Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times.
Then comes stage 3.
Stage 3 - The Eureka Moment
Towards the end of stage two you begin to realize that it's not the system that is making the difference. You realize that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right.
You start to read books on the psychology of trading and identify with the characters portrayed in those books. Finally comes the ‘eureka’ moment.
The eureka moment causes a new connection to be made in your brain. You suddenly realize that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.
You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold. You start to take every trade that your 'edge' shows has a good probability of winning with. When the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade will have higher odds of success because you know your simple system works.
You have realized in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what. You learn about proper money management and leverage - risk of account etc – and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile. You weren't ready then, but you are now.
The eureka moment came the moment that you truly accepted that you cannot predict the market.
Then comes stage 4.
Stage 4 - Conscious Competence
Ok, now you are making trades whenever your system tells you to. You take losses just as easily as you take wins. You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it loses and when you're on a loser you close it swiftly with little pain to your account. You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money.
You are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away. You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.
You’ll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again. You will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.
This lasts about 6 months, and then comes Stage 5.
Stage Five - Unconscious Competence
Now were cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 100 pips in a day is becoming quite normal to you. This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account. You’re a star in the trading chat room and people listen to what you say. You recognize yourself in their questions from about two years ago. You pass on your advice but you know most of it is futile because they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two but a few will.
Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.
You can now say with your head held high "I'm a currency trader."
I hope you've enjoyed this text and can recognize yourself in some stage or another – personally.
I'm at stage four now and am constantly making good amounts of pips - I've been trading in total for about 3 years and the first two were hell on earth.
p/s : Hope you learn something out of this! All the success traders know that in success trading, it takes 70% of Psychology, 20% of Money Management & 10% of Trading System. I will cover more in this Psychology matter next time. Now you can guess why 95% of trader failed. Happy trading!=)
Good start in the beginning of the week. I just missed Wiseman 2. Managed to take away total 609 pips from GJ only. I was trading only on Monday, Tuesday & Wednesday this week, as Alligator's mouth seems pretty close on Thursday as a result from the bank Holiday on Friday. Cant wait for next week!
Dancing with the market Is moving with The flow of the market- Up, down or sideways- With a feeling of harmony, Trust, gratitude, And yes, even love.
~Trading Chaos by Bill William.
1. Currency Trading for Dummies. (Good for beginner.)
2. Beat The Forex Dealer by Agustin Silvani. (Deep information regarding what is Forex all about and some popular technical systems/analysis.)
3. Beat The Odds In Forex Trading by Igor Toshchakov. (Shows what patterns in Forex market that have high potential to make profit plus with psychology thing.)
4. Selective Forex Trading by Don Snellgrove. (It's a $50 usd advertisement crap! After a while, I discover that the system need to subscribe from a company which the author has interest in. I suggest, dont waste your money on it.)
5. Trading Chaos 2nd edition by Bill William and Justine Gregory-Williams. (This is the latest update of Trading Chaos 1st edition and New Trading Dimensions. Really good book as it covers psychology matter in an easy understandable English and trading system that really work!)
If you are new (including me as well!), I really suggest you to buy no.2, no.3 and no.5. It helps you a lot to be a successful trader! I will share some e-books regarding Forex in few days.
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