Forex For Beginners

Make Money Knowing Dow Jones

2009-08-31T14:36:00.001+08:00

I have some interesting facts regarding Dow Jones Industrial Indexes. Since 1895 to 2009 the chart lowest low starts to read from 28.66 on August 07, 1896 to present highest high at 14164.53 on October 9, 2007. If you want to know the future the history will probably gives you some clue.

Overall, whenever markets go down they will come up higher highs through the years as proven. The strongest will survive while the weak will say good bye - companies. That happens when new creative stuffs evolve such as in the 1800's when super design and powerful cars appear. In the 1900's technological stuff such computers and mobile phones stuff appear. However, consolidation or stagnation appear when nothing new seems to attract human to trigger the economy. Maybe in the coming late 2000's accessible amphibious crafts for transportation or regular size watches with super computer capabilities might appear to the public at affordable prices and the economy will rush up as it attract more people to buy.

Now let me show some fun facts. Whenever the lowest reading from DJ appears the coming highest reading will be around 2 to 6 times higher. Wow, that shows that we are in for the next really strong bull run after this temporary bear market. Benjamin Graham was right in his studies and was one of the greatest investor in the world. Do not rush into any investment or trade cause lots of studies need to be done. The market might be heading towards the head and shoulder formation 1st for some time before heading north.

Please note that I am not any great economist, analyst or etc. The very real fact that a few great investors or traders make big money, they doesn't follow blindly from hot tips or news. However, I am a strong believer of George Soros 'Theory of reflexivity' , Jesse Livermore 'Follow the tape' and Arthur William Cutten trading style. Ever wonder why 5% do things differently from the 95%? The 5% are very secretive about how they trade too.

I have compiled the decade's low to decade's high DJ readings as below, feel free to comments.

What's up for Aug 09'?

2009-08-24T12:48:00.005+08:00

I have not been updating my blog for quite a while. The market had been trading in range bound and I take this opportunity for a break by listening to free seminars relating to trading. This is to update myself and to sharpen my skills in trading. Of course to meet traders too. One must be willing to learn continuously to succeed in any field. That was very true when the presenter an ex-floor trader told us he was shocked to find out that a retired trader worth $16million is still learning and writing down notes in a previous trading seminar! He said the retired trader is very happy even with a 10% of new knowledge found in trading.

Just to share how I trade. For me, before I trade I will update myself on good blogs and websites such as Bloomberg, Forexfactory , CNBC, Kathy Lien etc. Talk about Kathy Lien she was at Invest Fair Aug 09' Singapore. Many people had the opportunity to learn from her as with her previous appearance at Asia Trader & Investor Conference (ATIC) March 09'. One thing for sure, her presence will be full house! A person success does not comes by chance but stood the test of time. Normally, tons of gurus will tell you tons of story and sell you products but of little use in trading.

Kathy is a person who is very relevant when it comes to trading, only a trader will know thy trader. I have been following her blog closely and was amazed 9 out of 10 times what she said come to pass. (Note : Some gurus claimed 100% accuracy but please beware.) Her free forex trading class is worth much more than paid seminars. She taught traders how to trade profitably. My skill in trading went up to another level and it was mind blowing for me.

How to trade effectively

2009-08-04T13:48:00.008+08:00

I happen to stumble upon this blog, follow for quite sometime and read on the success forex trading by Nick. This guy is what I believe doing things for passion and making real money. His trading success rate is 80%.
No! He will not charge you with a big sum of money like most others. In fact, he even shows his free weekly trading analysis in advance on how he will trade and sometimes show you in recorded videos using his live account how he trade! (Most failed traders only tell you history events, sell stuff or the usual disclaimer) However, you need to read his free e-books before making any trades.
Trading is a skill and it takes time and patience. He trades mostly on GBPJPY. Most successful traders will only trade a few currency pair. Each currency pair behaves differently and it takes time to know them well. I know some would claimed to be able to trade all the currency pairs. Just look at George Soros making $1billion trading GBPUSD. Way to go Nick!

Living The Abundant Life!

2009-07-31T17:00:00.001+08:00

Yes, it's Friday and time for a break! Be charge up once again. Let this mind movie brings you closer to your heart desire in attracting what is rightfully yours - Good health, abundance of money, great time with your love ones, desire home etc. Dance to the beat and feel the energy strike your inner self. You might still in the learning curve in mastering Forex market. When you put your heart, mind and soul you will stand up strong and be a successful Forex trader in due season if you faint not.

A great list of technical indicators

2009-07-29T14:03:00.001+08:00

A to Z list of technical indicators. Does knowing all the technical indicators make you a profitable trader? Just master a few and put it into your trading chart. Trading is not a Science but more of an Art. In fact profitable traders are more concern of price actions, trendline, support and resistant.

A
Advance/Decline (A/D) Line
Advance/Decline (A/D) Ratio
Absolute Breadth Index (ABI)
Accelerator/Decelerator Oscillator (AC)
Accumulate or Running Total
Accumulation Swing Index (ASI)
Accumulation/Distribution (A/D)
Accumulation/Distribution of volume
Advance/Decline Line Breadth
Advancing-Declining Issues
Alligator
Alpha
Alpha Jensen
Andrew's Pitchforks
Arms Index (TRIN)
Aroon Oscillator
Aroon
Average Directional Movement Index (ADX)
Average Directional Movement Rating (ADXR)
Average Price
Average True Range (ATR)
Awesome Oscillator (AO)

B

Beta
Bollinger Bands
Bollinger Bands Histogram
Bolton-Tremblay Indicator
Breadth Thrust
Bretz TRIN-5
Bull/Bear Ratio

Candlestick
Candlevolume
Chaikin Money Flow
Chaikin Oscillator (CHO)
Chaikin Volatility (CHV)
Chande Momentum Oscillator (CMO)
Chaos Fractal Bands
Chaos Fractal Oscillator
Chaos Gator
Chicago Floor Trading Pivotal Point
Chinkou span
see Ichimoku Kinko Hyo (IKH)

Commodity Channel Index (CCI)
Commodity Selection Index (CSI)
Comparative Performance
Comparative Relative Strength Index
Comparative Strength
CP volumentum trend
Correlation Analysis
Cumulative Volume Index (CVI)
Cutler's RSI

Darvas Boxes
Demand Index
DeMarker (DeM)
Detrended Price Oscillator (DPO)
De-trended Price
Directional Movement Index (DX)
Disparity index
Displaced MA
Double exponential moving average (DEMA)
Down Average
Dynamic momentum

Ease of Movement
Ehler's Fisher Transform
Elder-rays
Elliot oscillator
Ellipse
Envelope Percent
Envelope
Equivolume
Error Channels
Exponential Moving Average (EMA)

Fast stochastic
Fibonacci Arcs
Fibonacci Fans
Fibonacci phi-Channel
Fibonacci Retracements
Fibonacci Spiral
Fibonacci Studies
Fibonacci Time Goals
Fibonacci Time Zones
Force Index (FRC)
Forecast Moving Average
Forecast Oscillator
Four percent model
Fractals
Full stochastic

Gann Fan
Gator Oscillator
General Stochastic Calculation

Haurlan index
Herrick Payoff Index
High Low Bands
High Minus Low
Historical volatility

Ichimoku Kinko Hyo (IKH)
Inertia
Intraday Momentum Index (IMI)

Kagi chart
Kairi
Keltner channel
Kijun sen
see Ichimoku Kinko Hyo (IKH)
Klinger Oscillator (KO)

Large Block Ratio
Least Squares Moving Average
Line Oscillator
Linear regression channel
Linear regression indicator
Linear regression slope
Linear Regression Trendline
Linear regression

Market Facilitation Index (BW MFI)
Mass Index (MI)
McClellan Oscillator
McClellan Summation
Median Price
Member Short Ratio
MESA Sinewave
Modified moving average
Momentum
Momentum percent %
Money Flow
Money Flow Index (MFI)
Moving Average
Moving Average Convergence/Divergence (MACD)
MACD 2 lines
MACD Histogram
Moving Average Envelope
Moving Average of Oscillator (OsMA)
see Oscillator of moving averages

Moving Averages of the High and Low
Moving Correlation Coefficient
Moving Covariance
Moving Dispersion
Moving Regression Line
Moving Standard Deviation
Moving Standard Error
Moving Summation

Natenberg Volatility
see Historical volatility

Negative Volume Index (NVI)
Net Momentum Oscillator (NMO)
New Highs - Lows Cumulative
New Highs - Lows Ratio
New Highs - New Lows
Norton high-low indicator
Notis %V

Odd Lot Balance Index
Odd Lot Short Ratio
OHLC bars
On Balance Open Interest (OBOI)
On Balance Volume (OBV)
On Balance Volume, Expanded System
On Balance Volume, Moving
Open-10 TRIN
Oscillator (Percent)
Oscillator
Oscillator of moving averages (OsMA)
Overbought/Oversold (OB/OS)

Parabolic SAR (pSAR)
Percent change
Percent of resistance (PCR)
Percent R
Percentage Volume Oscillator (PVO)
Performance Indicator
Pivot Points Support & Resistance Lines (PP)
Point & Figure
Polarized Fractal Efficiency (PFE)
Positive Volume Index (PVI)
Price action indicator
Price and Volume Trend (PVT)
Price channel
Price Oscillator
Price Rate of Change (ROC)
see Rate of Change (ROC)

Price Volume Rank
Prime Numbers Bands
Prime Numbers Oscillator
Projection Bands
Projection Bandwidth
Projection Oscillator
Public Short Ratio
Puts|Calls Ratio

Qstick
Quadrant Lines

Raff Regression Channel
Rainbow Oscillator
Random Walk Index (RWI)
Range Expantion index (REI)
Range Indicator
Rate of Change (ROC)
Ratio
Rectangle
Regression Forecast
Regression Intercept
Regression R-Squared
Regression Slope
Relative Momentum Index (RMI)
Relative Strength Comparative
Relative Strength Index (RSI)
Relative Vigor Index (RVI)
Relative Volatility Index (RVI)
Renko
Ribbon Study
R-squared
Running total

Schaff trend cycle
Senkou span
see Ichimoku Kinko Hyo (IKH)

Shaded Equivolume
Simple Moving Average
Slow stochastic
Speed Lines
Spread
Standard Deviation
Standard Deviation Channel
Standard Error
Standard Error Bands
Standard Error Channel
STIX
Stochastic Momentum Index (SMI)
Stochastic Oscillator
Stochastic RSI
Stoller Average range channel (STARC)
Swing Index

T3
Tenkan Sen
see Ichimoku Kinko Hyo (IKH)

Three Line Break
Time Series Forecast
Time Series Moving Average
Tirone Levels
Tom Demark Moving Average
Tom Demark Range Projection
Total Short Ratio
Trade Volume Index
Trend Line
Trend Score
Triangular Moving Average
Triple exponential Moving Average (TEMA)
TRIX
=Triple exponential Moving Average (TEMA)

True Range (TR)
True Strength Index (TSI)
Typical Price

Ultimate Oscillator (UO)
Up Average
Upside/Downside Ratio
Upside/Downside Volume

Variable Moving Average
Vertical Horizontal Filter (VHF)
VIDYA
Volatility
Volume
Volume Accumulation
Volume Adjusted Moving Average
Volume by price
Volume Oscillator
Volume+
Volume Rate of Change (VROC)

Weighted Close
Weighted Moving Average
Welles Wilder Moving Average
Welles Wilder RSI
Welles Wilder Smoothing
Welles Wilder Summation
Welles Wilder Volatility Index
Williams’ Accumulation/Distribution (WA/D)
Williams %R

Zero Lag Exponential Moving Average
Zig Zag

Warren Buffett

2009-07-27T13:58:00.002+08:00

Warren Buffet speech often stand with authority in the market. It's good to learn more of him.

George Soros Predicts Stagflation

2009-07-24T13:53:00.001+08:00

Meet George Soros. They guy who make another billion in recent recession speak.

Are You A Novice or Profitable Trader ?

2009-07-22T11:59:00.009+08:00

There are some very clear differences between the consistently profitable trader and the consistently losing trader. To know and learn more of yourself will lead you to be a better trader everyday.

Character of a new trader

Do you tend to follow the crowd?
Do you act on the advice of experts, market gurus, analysts, and your brokers?
Do you tend to complicate the trading process with lots of indicators?
Do you buy and sell after a move in price is well underway and do you buy into resistance and sell into support ?
Do you have an average of 10% capital gain annually in a year or more?

Character of a consistent profitable trader

Do you lead the herd?
Do you do you own research ?
Do you buy (sell) after a period of selling (buying) and into price support (resistant)?
Do you have an average of 20% capital gain annually or more in the last 10 years or more?

Profitable trader can stood the test of time. As the forex market becomes more active, suddenly many 'experts' or 'gurus' evolved. Many have claimed they have traded forex since 19XX? Some claimed - 100% to 1000% return etc. If their winnings can be consistent throughout the years, they would be one of the riches man in the forbes list, just like Warran Buffet .

Some 'coaches' teach from their website while others coach personally. Just beware that most 'experts' or 'gurus' have not been really profitable in their trading career. Most make their money through expensive courses, softwares, signals, books etc. Have you ever wonder George Soros, Warran Buffet etc did not conduct courses etc like many 'expert' or 'gurus' ? I know the 'expert' or 'gurus' would give countless reasons. Have you read Millionaire Traders - most profitable traders are too busy making real money on their personal account by trading! Now you should know why I don't update my blog everyday but I do give really good content - *Hint*

In fact, real investors or traders can produce their earnings annual reports. Yes, and not just a certain day big earnings and cover the other losing days. Can anyone for the last 30 years have an average annual earnings of more than 20% - Warran Buffet!

Secret to Becoming a Money Magnet

2009-07-13T09:42:00.002+08:00

Wake up to your internal body to attract money.

Secret to Attracting With Your Mind

2009-07-08T09:30:00.001+08:00

Michael J. Duckett shows you the secret to Attracting With Your Mind.

Millionaire Traders Part 14 - Getting Started In Trading

2009-06-01T21:08:00.003+08:00

This is the final chapter of the book Millionaire Traders. There are some very simple and powerful facts that you need to know before trading.

1. Be well capitalized - The majority of business fail simply because they do not have enough money to survive the inevitable mistakes that befall all start ups. Money buys time and time turns into experience, which is the necessary ingredient to master any skill.

2. Expect to lose for at least six months - Learning to trade is like learning how to do many things in life such as riding a bike. Most probably everyone has fallen once or twice. This applies to trading where you don't expect to be successful from the start. You will make mistakes and probably blow up your first trading account. The difference between most new traders and pros is their perseverance. It is much easier to give up trading and move with our lives than to have the dedication to learn from our mistakes and ensure that we don't repeat them. Remember the initial starts up for the 12 star traders?

3. Test before you try - Testing every strategies before you trade live is so important for new traders that it deserve its own section. Review your charts to have a better understanding of how assets trades. Use multiple time frame to ensure more winning trades.

4. Always use stops - Use stop to protect capital. Most asset classes are trending, smart traders will realize that if they catch a breakout move, the move can last for a long time. The best way to take advantage of this dynamic is through the use of trailing stop .

5. Trade to your personality - People who need instant gratification are probably to find their best success focusing on shorter-terms trades. People who are patient and willing to sit with a trade for days or weeks at a time are best suited for long-term trading.

6. Tools of the trade -

A) Mechanical tools
- Good desktop computer with minimum 2GHz chip, IGB of Ram and 100GB hard drive.
- At least two 19-inch flat-panel monitor to view charts,price action, and various websites.
- Preferably two broadband connections (ie., both cable and DSL) to ensure redundancy.
- Speed-dail button on your phone to your broker in case all electronic systems go down and you need to liquidate your position manually.

B) Analytical tools
-Bloomberg and CNBC for latest news.
-DailyFX.com
-www.elitetrader.com

Millionaire Traders Part 13 - Steven Ickow

2009-05-28T20:40:00.003+08:00

Almost 70 percent of trading on Nasdaq is now done through automated order-entry programs. Many traders have bemoaned the onset of computerized trading robots as the end of face-to-face markets, but Steven Ickow had not only adjusted but prospered under the new regime by probing out the logic behind the software algorithms.

Let's get some tips from Steven Ickow :

"At the beginning it was very hard because I couldn't figure it out. You'd feel a sense of failure, why can't I figure it out? And then it just clicked. I tell people that after six months you either get it or you won't."

"So I can tell people exactly what to do. But their emotions get the better of them. I have trained people who were good traders to become better trader."

Lastly, find the right instrument to trade and be very focus- forex, stocks, commodities, future index etc. Trading requires total dedication and complete commitment. Winning traders always have a crisp, clear and logical foundation for their trade.

Millionaire Traders Part 12 - Marcelino Livian

2009-05-25T16:45:00.001+08:00

Marcelino Livian has a amazing 80% return from the forex market in the last four years! However, the interesting aspect of his story is not his trading, but how trading has improved the bond within his family - all are forex trader!

Marcelino always look to get paid while holding his position. This is the reason he trades FX exclusively on the side of the carry, letting the positive interest rate differential between the currencies work to improve his average entry price while he waits for his trades to become profitable.

This idea is important even if you do no trade the way Livian does. If you hold too large a position and end up not having enough capital to sustain regular fluctuations, then you can be easily get stopped out by the short term market movements.

Millionaire Traders Part 11 - Paul Willette

2009-05-21T15:56:00.004+08:00

Paul Willette moved into the toughest trading arena of all - the electronic stock index futures market - where high leverage and whipsaw volatility destroy even the most seasoned traders. Paul is a classic breakout trader where he will buy only after a new swing high. He will add trade to winners and get rid of the losers.

Good quotes from Paul :

"I don't try to pick exact tops and I don't try to pick exact bottoms ... I've gotten burned way too many times trying to pick tops and bottoms. I'd rather know where it's going. All I care about is where it's going."

"Yes. I played them all and I expect to win. I have high expectations of myself. I do get bummed out when I lose."

In the trading field, support from loved ones is the key to success. During a trade, he will maintains at least a partial position in the trade until there us a reversal in the trend. He will never overtrade and only puts himself only into the highest probability setups and at the same time keeps his transaction costs to a minimum.

Millionaire Traders Part 10 - Ashkan Bolour

2009-05-18T10:26:00.007+08:00

Ashkan Bolour has both strong quantitative skills and a deep background in psychology that he use in forex trading. He compares trading to the ocean - calm one day, turbulent the next - and counsels traders to take it all in stride.

Some good advised from him are :

"Reversal only happens once, but the continuation's happening all the time until the moment the reversals is hit."

"Trading is very demanding. It will take a physical toll on you. What I like to do is trade for a couple of weeks, make a good amount of money, and then just go on a trip."

"Although when I'm not trading I like to watch news and kind of absorb it."

"Even though you're away from the market, there are always things to do that can help you become a better trader. I get caught up on my candlestick reading."

"Yeah take it very seriously because, if you do, that's when you'll reap the benefits, I think. But if you don't, you'll always see the potential, but you'll never reach it. I think a lot of people see the potential but they never take it to that nest level."

So what happens when he has two losing trade in a row? Just stop trading and come back the next day.

Millionaire Traders Part 9- Tyrone Ball

2009-05-14T14:56:00.002+08:00

Tyrone Ball only trade in the Nasdaq stocks. He has been able to navigate and prosper through a variety of changes in the market, including the vicious bear market decline in the early 2000s and the decimalization, which compressed bid/ask spreads and destroyed many profitable trading strategies. While the majority of his colleagues have fallen by the wayside, Tyrone has found new ways to extract profits from the market.

Some of his experiences quoted :

" You know there were plenty of trades where, if held them a little bit longer, I would have more. But there are plenty of trades where, if they did the same thing and I just waited another minute to exit because I though I might go in my favor, I would have lost a lot more. So I come to understand that you can't pick the top and the bottoms of your trades. You have to be willing to take money while it's still in your favor and cut your losers small."

" I run cable and DSL from home."
(Note: This is for redundancy)

" It's a heck of a job and lifestyle, and I enjoy the freedom to sacrifice six-and-half hours versus going out and working 8 to 12 for somebody else - that scares me worse. So I have no problem sitting here."

" ..., but equity day traders tend to be very athletically minded."

Tyrone said that in order to succeed in trading, you need to establish an expertise in a particular domain. He only focus on a select group of stocks and watching their price action intently.

By being a little more disciplined than the average guys can give you an edge in winning the trading game. The most common reason that most trader fail is because they refuse to properly respect and contain risk. One stubborn bad trade is all it takes to wipe out years if gains.

One piece of good advise from Tyrone is to constantly learn and adapt.

Millionaire Traders Part 8 - Roland Campbell

2009-05-11T16:19:00.003+08:00

Meet systems engineer who trades on forex market - Roland Campbell. His strategy is to trade news flow, but only news that catches the market off guard. When everyone is wrong and getting stop out, that is when he wants to be in the market. Fading sentiment and psychology is a very important aspect of his trading and one that has proven well form him. He looks for big moves based on misaligned sentiment. He turned $60,000 into $100,000 in a single trade!

Roland will let the news come out. Let the market move in its directions. He will watch for pullback, make sure it's not a reversal, and then normally he'll move in on the pullback. If it's a reversal, he'll go short.

Some of his encounter in quotes :

" I have a tendency where, as soon as I buy a currency, it will dip 10pips. Before I would get upset, but now I love it because I feel like I can get in a better price, so I hope it dips another 10 pips. I know the price I want, so I will average into that price."
(Note : If the price moves against him and goes further than four average downs, he will usually abandon the trade.

" The most important thing is to get in there and start educating yourself because the market will teach you a lot. Then, later, I think you should read some trading books."

The above strategy might not sound right to some GURUS. I guess making money is more important that being right or round.

Millionaire Traders Part 7 - Indi Jones

2009-05-07T13:54:00.010+08:00

Meet commodity trader Indi Jones. He flies around the world looking for hidden gems. Spending six months trading from a beachfront condo in the Caribbean and six months trading from an emerging market country every year. He lives a lifestyle most of us can only dream of.

His forte is trading options for volatility as well as directionality. His motto is to press the trade when it moves in your favor and to always know your maximum loss limit. He turns $25,000 into a million dollars before he was 30.

During one of his answers he said : " When I decided to become professional after that first year of the $20,000 loss. I ate, breathed, slept, and drank commodities. I read everything about the markets. "

Indi always has his pulse on the sentiment of the markets. Everyday single day he speaks to many different types of market players and read at least 10 different newsletter.

Millionaire Traders Part 6 - Franki Law

2009-05-04T17:56:00.004+08:00

Franki Law turned $200,000 Hong Kong dollars(HKD) into HKD$6million. Having been in the business for more than 20 year, he is a big believer that success comes with experience, and time.

I really love some of his word of wisdom :

"You are faced with many success and failures, and my later successes come from the experience of my failures."

"So, when I make a bad trade, I forget about it, go to sleep, wake up and start all over again tomorrow."

"If you cut your losses, you not only end the pain, but you also regain your decision-making power and can examine the market from an objective point of view."

While majority of traders average down, Franki average up. This prolongs the life of his trades and allows him to capture as much of the trend as possible.

For day traders it is useful to employ a ranking system. For example. if a currency pair has a daily average range of 100 pips aim to get 30 to 40 pips is possible, 50 to 70 pips slightly harder but 80 to 90 pips may be extremely difficult. This serve as a guide for day traders when to take profits on their day trades by controlling their greed.

Millionaire Traders Part 5 - Hoosain Harneker

2009-04-30T20:36:00.002+08:00

Hoosain Harneker will triple demo his account twice successfully before trading real money. Nobody can master a professional skill right away. Doctors practice on cadavers, lawyers spend countless hours in moot court, and mechanics toil for months in classroom garages. Practices does not guarantee success but lack of practice almost always ensures failure.

Hoosain 10-pip-a-day is extremely conservative. However at 10 pips a day, five days a week, four weeks a month, that adds up to 200 pips per month or 2400 pips a year. By altering you trading size one standard 100,000 unit lot, 10 pips are worth $100, but on 10 of those lots, they are worth $1000 a day.

One of his pearls of wisdom is that he practice going back analyzing his trades. His winnings and and string of losses are analyzes thoroughly and he find ways to improve his chances of success.

Millionaire Traders Part 4 - Chuck Hays

2009-04-27T17:40:00.004+08:00

Revenge is never sweet. "Revenge trades are the most costly trade" ....said Chuck Hays.
Chuck Hays makes his living in the highly chaotic world of e-mini stock index futures where the difference between fortune and failure can be measured in seconds. During his free time, he has counseled and coached scores of futures traders.

Many retails traders get into the business expecting to make money right away. The irony of this profession is that the more you need to make money to pay your bills, the less likely you can do that. The main reason that trading is difficult to master is that it is the only profession in the world that actually punishes you for non-performance. Furthermore, trading is the only profession in the world where a wrong decision will result in an instant loss of your money. It is absolutely critical to understand that success takes both time and money. Good traders are able to totally divorce themselves from their emotions. These professional traders never let the previous bad trades ruin them.

Chuck will often add to his positions. He even coined new terms for his style of trading : SHADD for short add and LADD for long add. This practice is very controversial because it flies in the face of the long-accepted market wisdom that traders should never add to their losing position. However, rules are meant to be broken when properly executed with highly successful experience.

Millionaire Traders Part 3 - Rob Booker

2009-04-23T13:29:00.003+08:00

In less than 5 years, former lawyer turned full-time trader has gone from being a $2500 trader to a client of a major bank who trade a respectable-size account. He practices defensive trading and focuses on preservation of capital. His number one rule of trading is : "If I can't prove that a system works from my testing, than I have no business trading with real money."

Some of his encouraging quotes :

"There was going to be learning period during which I felt uncomfortable, made a lot of mistakes, and had to learn for myself some of the things that you simply can't learned by reading a book or listening to someone else as much as they try to help you."

"I made a decision that I was going to make it work. It was clear to me that other people could trade for a living, and if it was possible for other people to do it, then I could persevere long enough to figure it out."

The key to learn from his interview is that knowing yourself is more important than any particular trading strategy. You need to make sure that your style of trading is in sync with your personality. If you are a short term trader, you should focus on short-terms profits. If you are long term trader, you should focus on longer term or bigger profits. Some of his favourite currency pairs are GBP/USD, USD/JPY and EUR/CAD.

Millionaire Traders Part 2 - Dana Allen

2009-04-20T11:15:00.008+08:00

One of the twelve successful traders is Dana Allen. He started reading the Wall Street Journal at 9 and opened his own commodity trading account by the time he was 21. Be it commodities, stocks or options, Dana has succeeded in finding deep value in whatever instrument he traded, often increasing his initial investment tenfolds. He managed his risk and walk away with returns that most retail traders can only dream about.

One of his word of wisdom is " I think the greatest deterrence is that most of us don't think high consistent returns are possible. You can't achieve something if you don't think it's possible."

Dana Allen loves to trade divergence based on fundamental reasons. Guess what, most retail traders solely based on technical reasons. One of his favourite set ups occurs when a company reports superior earnings but the stocks sells off on profit taking. Once the selling is completed, he will scope up for long term investment backed by strong fundamental.

Millionaire Traders Part 1

2009-04-17T16:05:00.002+08:00

Time sure past fast. I recall reading Millionaire Traders book by Kathy Lien and Boris Schlossberg. Guess what? Kathy Lien is heading to Asia, Singapore is her destination for Asia Trader & Investor Convention on 18th April 09 and 19th April 09. There is a great list of events and seminars by experts in the industry.

Actually in the book they interviewed 12 traders who have hit it big trading for themselves. The are ordinary people who started with as little as $1000 and turned their initial small stakes into a six to seven figure fortunes. They come from all walks of life, live all over the world and trade a variety of electronic markets. Some of the traders focus on equities, others on futures or foreign exchanges.

Each has a very different style of trading, some that are even in the direct conflict with each other, showing that there are many paths to success in the financial markets. However, all these traders practice discipline, and always cut their losses. None of the interviewees were successful from the start. Several have blown up at least one trading account. But instead of walking from the markets, they learned from their early failures and used their experience to improve and ultimately succeed.

The traders were 'force' to share their stories and tell how they got started, their best and worst trades, their number one rule if trading, and the many lessons that they have learned through the experience. This book serve to inspire traders to believe that success is possible and that everyday people can beat the Wall Street at its own game.

I'll share more on the 12 individuals in the coming days.

40 Inspirational Speeches in 2 Minutes

2009-04-14T11:17:00.003+08:00

Remember the time you said to yourself that you will make it not matter what it takes? Yes, there will be bound to be fall back along the path before success. With sheer force and determination you can be the 10% of success trader in the forex market.

The reality of forex trading

2009-04-02T20:38:00.002+08:00

In reality, only 10% of all traders are successful and 90% of the traders who attempt to become a successful forex trader fail.

3 simple rule :
Knowledge = Income
Lack of knowledge = Lack of Income
Correct applications of knowledge = Financial Freedom

Many people source forex trading knowledge through means of books, free e-books, free e-course, forum etc freely available through the internet etc. Sure almost 90% did go for free stuff. Some even paid heavy monetary lessons to the forex market thinking they can learn through their own trading experience. Most or 90% of them went broke.

To really master forex trading you need a very good mentor. Someone, on the trading floor with years of experience. Most might come at a price. But it's really worth as your winning can cover the course. There are some very good mentors that charges for a small fraction of price. But beware, ask for verification as nowadays more and more self claim gurus without real experience and track records evolved!

Yes, you still need to learn through means of books to update and learn from good traders experience. It's a continuous educations.

Benjamin Franklin once said :"If you think education is expensive, try ignorance."

Which level of trader you belong?

2009-03-30T20:13:00.002+08:00

Basically, there are three levels of trading :

Level 1 : The Beginner Trader
From here your focus is on studying, understanding, and beginning to established your trader's constitution, methodology, and trading strategy to match your personality. Master you trade in a demo account to familiar with the trading platform.

Level 2 : The Competent Trader
You acquire conscious competence. You begin to trade with real money, go through your emotions, and learn to trade with equity management rules to achieve a consistent financial return.

Level 3 : The Expert Trader
You acquire unconscious competence. You mechanically execute profitable trade with no emotion. Your decisions are based on your belief, educations, established rules, and experience to achieve a consistent financial return.

Be really clear of your goals and be persistent till it achieve. Keep learning from mistakes and made good progress daily. Know where you are and work from level 1 to level 3. There will be many circumstances that shows and hinder you during your forex trading journey but stay focus and look forward towards the joy of tremendous rewards.

A successful trader - know thyself

2009-03-26T15:38:00.003+08:00

"If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle"... Sun Tzu, Art of War

1. Are you honest or dishonest?
Be true about your trading results. If you falsely said you are good you will never learn.

2. Are you a promise keeper or promise breaker?
Make commitment to what you promised to anyone! Bring this habits to successful trading, make commitment to you stop loss - Don't shift your stop loss.

3. Are you a rule breaker or keeper?
Successful trader follows certain rules closely and not driven by emotions.

4. Are you a good listener or bad listener?
When market moves it tells a story. History tends to repeats itself. A bad listener will interrupt (trade recklessly) and guess what it is saying (market directions). Most of the time is a bad trade.

5. Do you think before you speak or vice versa?
People who speak before they think are often branded as ignorant and annoying. We valued the think before speak as intelligent.

6. Do you think before you act or vice versa?

Successful trader think before they act to execute successful trading habits. They follow trading plan.

7. Do you manage your emotions or vice versa?

Successful traders manage their emotions to make logical decisions.

8. Are you responsive or reactive?

Successful traders response logically to the next move and take advantage of the next opportunity that comes

9. Is your ego more constructive or destructive?

A constructive ego keeps you focused on all the details necessary to avoid any and all storms as you sail through life.

10. Are you positive about life or negative about life?

Remember the law of attraction? Successful trader focus on the positive side.

11. Do you fear mistakes or take it as a learning lesson?

Learning from mistakes is important to your future success.

12. Do you focus on what you have or what you have lost?

The longer you dwell on past failures and losses, the longer you will stay captive in your current state of failure. Successful trader focus on what they have gained.

13. Are you a goal setter or a goal quitter?

Any great achievement will accompanied by setbacks. Successful trader persist to achieve realistic goals no matter what it takes!

Unsuccessful trader behaviour

2009-03-24T20:57:00.004+08:00

Thousands of books and hundreds of seminars relating to investing and wealth creations have flourished throughout the years by successful people. One thing for sure is that successful people will do what unsuccessful people won't or can't do!

Let's look at what an unsuccessful trader does. Once remove the root of the problem, big fruits will grows continuously.

Unsuccessful trader hunt for success in any field or any walk of life. They are like rainbow chasers. They are filled with anger, envy, jealously, greed, arrogance, self-pity, resentment, destructive ego etc. Very seldom do they take responsibility for their outcome and look inside themselves to discover why they have failed.

They go from one business opportunity to another, never achieving their end result, and are clearly locked into self-destructive habits. They repeat their bad habits, ever chasing their rainbows, fail at just about everything they do. Many traders who fail will blame the market or just about anything but themselves. Believe it or not, this is how history repeats itself in their lives. Be it in relationships, work, friends, family etc.

Many new traders underestimate the importance of preparation for success.That is the main reason they get locked into poverty and mediocrity. When fighting in a battlefield unprepared and unprotected their focus turns from the cause they were fighting for to survival and self preservation.

To survive and win in the forex market you need to know who you really are. You need to understand yourself because the market tends to be self-fulfilling. The law of attractions will always give what you are looking for, whether it be good or bad. http://tinyurl.com/cfvy65

Trading behaviour of USD/CHF

2009-03-17T14:41:00.002+08:00

USD/CHF is often said to be a safe-haven currency pair. When unexpected geopolitical news hits, USD/CHF usually reacts the fastest and farthest. However, those markets reactions are increasingly short-lived, usually minutes to hours before the preexisting trends continue.

Switzerland conducts the 80% shares of its foreign trade with the Eurozone and remaining EU countries. The Swiss National Bank only gets involve in the forex market either Swiss franc is too strong or too weak against the Euro.

3 points to take note on trading USD/CHF:

Price actions tends to see one-way traffic in highly directional markets.
False breaks of technical levels occur frequently.
Spike reversal are very common.

Trading behaviour of GBP/USD

2009-03-10T14:09:00.004+08:00

Trading GBP/USD presents its own set of challenges.This is because, the pair is prone to sharp price movements and chaotic price actions. Well, this is what most speculators love. When you get into the right wave direction you'll be rewarded quick and huge.

The UK economy is the second largest national economy in the Europe after Germany. The pound is heavily influenced by cross border trade and mergers and acquisitions activity between UK and continental Europe. Two-thirds of UK foreign trade is conducted with EU members states, making the EUR/GBP cross one of the most important trade-driven cross rates.

GBP/USD moves is similar to EURUSD. However, GBP/USD price movement exhibits more abrupt volatility and more overall extreme overall price movement. For example, if better than expected data released, GBP/USD price movements would double EUR/USD price movements.

3 points to take note on trading GBP/USD:

Price actions tends to see one-way traffic in highly directional markets.
False breaks of technical levels occur frequently.
Spike reversal are very common.

Trading behaviour of USD/JPY

2009-03-03T13:04:00.003+08:00

USD/JPY is the most politically sensitive currency pair among the majors. Japan is 40% export-oriented economy. Japanese officials will get involve to keep JPY from strengthening beyond desired levels when needed. Weaker JPY makes a nation's exports cheaper to foreigners.

USD/JPY can be either active directionally or consolidating. As such, we like to approach USD/JPY on a hit and run basis.

4 ways to spot for trading opportunities :

USD/JPY tends to respect the technical levels with less false breakout.
USD/JPY price actions are usually highly directional on breaks of technical support and resistant.
Spike reversals from technical levels are relatively common.
Orders frequently define intraday highs and lows and reversal points.
Japanese candlesticks

Can you spot more ?

Trading behaviour of EUR/USD

2009-02-24T09:38:00.007+08:00

The deep liquidity and tight trading spreads in EUR/USD make the pair ideal for both shorter-term traders and longer-term traders. During normal market conditions, EUR/USD tends to trade tick by tick, as opposed to other currency pairs. Less liquid currency pair, like GBP/USD, typically fluctuate in a far jumpier fashion, which is reflected by the wider price spread.

When you spot EUR/USD is heading to its support or resistant level do not jump in to trade. This currency pair tends to move and pull back in a nice fashion. If you are planning to sell wait for the pull back to sell to gain more pips.When it comes to trading around the technical support and resistant levels, EUR/USD can try the patience of even the most disciplined traders. This currency pair will linger around from minutes to hours around the support and and resistant levels.

What is G7?

2009-02-13T11:58:00.007+08:00

Who is the hottest big player in the forex market? Correct, G7!

G7 or The Group of Seven is composed of the seven largest developed economies in the world. The G7 are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. The G7 is the primary venue for the major global powers to express their collective will on the currency values and the need for any adjustment.

Forex markets follow the G7 several weeks ahead. The power of the G7 statements lies in the perception that all the participants are in agreement with what is contained in the communique.

Currency values may be on the agenda for their meetings. When G7 comments of certain currencies should reflect economic fundamentals, be prepared that excessive currencies volatility appear. This Sunday there might be a big gap when the market open.

Liquidity in forex market?

2009-02-04T10:30:00.006+08:00

Forex market has the highest liquidity volume. Trading volume per day exceeds $3 trillion. High liquidity gives the ability in buying and selling at any time fast. A highly liquid market like the forex market can see large trading volumes transacted with relatively minor price changes.
An illiquid market will tend to see prices move more rapidly on relatively lower trading volume. A market that trades during certain hours also represents a less liquid market.

Trading in the Asia-Pacific session account for about 21 percent of total trading volume. The overall trading direction for the AUD,JPY and NZD can be set for the entire session depending on news and data reports.

Trading in the European and London session account over 50 percent of the trading volume. As it overlaps with the Asia Pacific session and North American session its liquidity is at absolute peak! News and data reports are released during the morning and the biggest movers would be EUR,GBP and CHF.

Trading in the North American session account about 22 percent of the total trading volume. However, the overlap between the European and Amercian trading session make the trading volume super high! Some of the biggest and most directional price movements take place during this cross period.

Bid and Offer ?

2009-01-28T12:57:00.007+08:00

Liquidity will affect the quality of the bid-offer spread in different time zones and by currency pairs. Spreads will widen many time when there are news announcements of interest to the currency market.

EUR/USD had a 2-pip spread while GBP/JPY had a 8-pip spread during in normal market conditions. In the early Asia time zone when markets are very quiet, you will find wider spreads. In the London time zone, when we have much better liquidity, spreads are narrow. When both US and European markets are overlapped you will notice the best liquidity and spreads for trading.

One pip trade on a 100k lot (standard account) is approximately the same for EUR/USD and GBP/JPY, so the value of the two-pip spread in EUR/USD is really four times more than a eight-pip spread in GBP/JPY. However, the volatility of GBP/JPY is about 3 times to EUR/USD. Which means on an average day EUR/USD moves 100pips while GBP/JPY moves 300pips. Some just love the GBP/JPY as it gives more chances of getting in and out of a trade with more pips even a higher spread involve.

Remember to check with your broker, open a demo account or better still open an account to trade. Nothing beats the accuracy of a real account.

Credit Rating Downgrade affects currency ?

2009-01-21T10:43:00.005+08:00

The Eurozone refers to a currency union among the European Union member states that have adopted the euro as their sole official currency. The Eurosystem, headed by the European Central Bank, is responsible for monetary policy within the Eurozone.

The Eurozone has sixteen members - Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain.

Standard and Poors downgraded the sovereign debt rating of Spain from AAA to AA+. Greece’s rating was downgraded last week and Ireland and Portugal on credit watch negative, this could be the beginning of more downgrades.

Credit rating downgraded means higher costs of borrowing and a greater risk of defaulting on debt. This is because investors shift their money out of Spanish into a country with higher credit rating.

This movement will lead to Euro currency weaker. If you are trading the, EURUSD or EURJPY, do expects it to dive towards south.