Tuesday, July 27, 2010


Let's go to analysis now on today's market price as I posted on previous posts that I now only trade on two pairs, which are Poundsterling Dollar and Euro Dollar.

Poundsterling Dollar:
Previous weeks shows a strong uptrend (or bullish) movement to the North side of the chart, a strong support came from around 1.4400 (June) and it went up, up, up until now. We now have price at 1.5500 and is stalling, which could be a signal for it to go short from now, however, there isn't any confirmation on the move yet.

Euro Dollar:

Last week's previous high was around 1.3000 and currently price is trying to pierce through 1.3000 which gives me no interest on this pair either.

So by looking at price movement right now, the best thing I can do is to stay on the sideline ;)
READ MORE - Analysis


Hello Traders

It has been awhile I haven't update the blog. It is my last semester now on college so I had to concentrate on my final task. Now that it is over, updating my blog is one way to kill the time ;)
READ MORE - Update

Monday, February 15, 2010

Price Action

Hi Forex Traders. It's Monday today and forex market is open for us to see what's going up and what's going down. During this time I'm sidelined until something 'catchy' comes out and ask me to take a forex trade.

Therefore at this point I would like to answer a question that I received on my private messages from some of followers sent me on my e-mail. I would like to thank those who asks because giving answer to related subject gives me how my blog helps those who needs them.

"Dear Admin, I'd like to ask how do you identify Price Action (PA) and their setups? You often mention Price Action several times on this blog and I'm interested to learn them."

My Answer:
Yes, my trade is based on Price Action because for me, Price Action shows me the future, and many indicators I've known shows only the past. Learning several types of important Price Actions such as Pin Bar or Outside Bars & Inside Bars are the first signal and then combined with other simple manual tools such as trend lines, Fibonacci, Support & Resistance lines increases the rate of success of your forex trade(s).

As for Price Action, there are many free e-books out there that you can get from Google-ing, forums, etc. I learn my Price Action from one of the e-books found here. Remember to learn all of them and back-test them on your preferred forex pairs you trade and apply them on your demo account.

Best Regards
READ MORE - Price Action

Sunday, February 14, 2010

Another great post from a great poster

I've been trading for a living for many years. Using robust methods that have worked for decades, and I trust will continue for more decades. I've had good years and slow years, while very successful over the long haul, thought I better tell those who think that trading can replace their job have the better odds winning the Powerball. Really! There are hundreds more who have won big in the Powerball than actually earn their money from private trading.

Thinking otherwise is denying reality and the facts. It is easy to ignore because the facts about trading are difficult to dig out, and only the determined care to find out anything or succeed at anything worthwhile.

After reading many posts in these threads, I decided I had to weigh in on a couple of things. I would have to agree with -Isotonic- that a very small subset of posters are actually trading for a living.

Most of my friends are traders, many of whom I helped bring into the winning fraternity. We all have to keep on our game every day, 100% , or some mistake could eradicate months or years of progress.

"Making a living" is very much a similar question as of what "is" is.

All of the professional traders I know, whether they trade forex or futures markets, do not make "so much per day". That is a phrase used by marketers, because they know what beginners are looking for, and that is a steady income so they can get rid of their jobs. Money from the market that you can count on does not come steady or nicely "so much per day". Real traders make profits, budget their expenses, save some profits, add some profits to their accounts for further building of the account, etc. Just like any business, which is what real trading is.

Most of the trading setups that you see bandied about are "tricks". Most "tricks" have small edges, and trading them continually teaches little about the big picture, and the big picture is where the big money is made. When a marketer is trying to separate you from your money, he is likely promoting a "trick".

Nothing wrong with trading these "tricks", if you know that they have a strong, provable edge. But, to know that a "trick" has a definable edge, you already have to have an underlying construct or context to compare and/or use that edge.

Almost like the chicken and the egg. To know something has an edge you have to know what an edge is.

Quickly, name all your friends who have that going for them. A couple of great trades, or a month of great trades, or a year of great trades is nowhere near enough. To make 50 thousand-plus trades and be ahead, to be able to survive years of changing markets, politicians, governments, wives, ex-wives, good health, bad health--- while trading profitably is what you need from an edge.

Private, profitable traders (those who've done the above) can tell you their edge immediately, and can prove it. Unfortunately, this set of traders is very small, estimated a few years ago by a research company at less than 800 in America--- and most of you reading this will never among them. And that is not a bad thing. That doesn't mean that you won't make money from your trading. You might even have more richness in your life by doing something else than trade.

I will tell the only way a trader is able to make $1,000,000 from trading.

Here's an example of 10 thousand trades. Of these trades, you might lose on 6000 of them for small losses, win on 3800 of them for moderate profits, and win fairly big on 200 of them. You make your million from this series of trades by losing only $9 million on your total of losing trades while making $10 million dollars on your total of profitable trades. This means averaging $50 a trade per lot or contract (in the case of futures), which is really good after expenses. Very doable with robust methods. And, you have to stay on your game or you won't do this well.

But this is nothing like you've been promised by the "gurus" and promoters of the "money per day" foolishness.

Trading for a living is demanding mistress. Read on if you can stand it.

99% of my success has come from trading and working breakouts. Primarily larger breakouts. Why? They work!

When you learn that breakouts "work" as a trading concept, over the years you continually seek the best breakouts like seasoned surfers all continually seek the best waves. The best breakouts use and highly reward your acquired skills better than lesser ones. Then you stay trading in the zone where the greatest edge is and trade the best breakouts and ignore less useful ones.

For, example, I know that the Vegas material (I have no personal connection with him whatsoever) dealing with the one hour tunnel has a firm statistical edge. A rock-solid statistical edge.

But it takes a professional to trade it. And the method's breakouts are small in expectation relative to others available. But, as in most tradeoff situations, there are more of them.

I wouldn't have any problem encouraging someone to follow the concept for trading. But, I would be willing to bet that less than 1 percent of the people who have downloaded his material are trading it, and probably an equally small percentage of them will profit long term from trading with it.

Trading as a lifestyle is like being a fireman who gets paid per fire. You don't make any money until a fire happens, and you don't make any money if you die in the fire or quit before the fire is over.

I know that posting this may not encourage trading as a career, but if I can shine a little light on the reality of trading, I'm happy to do it. I wish someone had illuminated for me what I was in for 25 years ago when I got serious. It wouldn't have stopped me for a second, but it would have helped me prepare for the future differently.

I know that anything I could say would never discourage someone who is meant to be a trader, because nothing can dissuade a real trader, which is as it should be.

I personally love trading, and believe that it is the one thing I am best suited to do on earth. There are times trading is fun, but mostly it is details, details, and risk management. The best times are after a long trading campaign (fire) and you are relatively flat for a while. You can take time to get perspective. And get mentally prepared for the next one.

Most people think that communities like this forum make it easier to learn how to trade, but I am certain the opposite is true. If most of the posts are from non-winners the only logical reaction for an individual who wishes to win is fade the advice you see in these forums.

Everyone posting has a motive, even me. Most motives are simple self promotion, aspiring traders trying to make themselves feel good, look smart. A few posters have the motive to help others. Many figure that if they can't win, maybe they can help someone else and that makes them a winner somehow. Maybe so. But likely it is a case of the blind leading the blind.

I'd bet you'd rather make money from trading the markets the way things really are, not the way some very literate, but non-winner says they are. Think of that the next time you read a "helpful" post. 99.9% odds the post is from a non-winner.

Trading is a solitary business, with few peer get-togethers except by phone. And when you get discovered by people hoping to accomplish what you've done with extreme care and trial by fire (amazing fireman analogy again!) they demand your help and time (hard won by now) but don't want to compensate you because they think you should just give to them because you've been so fortunate.

Perhaps this missive will be useful to someone. If no one believes it, that is ok too.


Source: forexfactory.com
READ MORE - Another great post from a great poster

95% forex trading failure rate? By Dopey

Another great post from a great poster:

"Another part of this is the low-entry barrier to trading. If you wanted to be a lawyer or doctor and eventually make a 6 figure income every year, you have to pass a slew of gatekeepers beginning with your first four years of university.

Then law or medical school gatekeepers ensure that only those that are academically suited enter the the school. Then during your years in the school, their are numerous tests that judge your emotional abilities to handle the job along with your intelligence.

Once you finish school, you know have to pass another gatekeeper, the licensing boards of each state.

Once you have your license, you now have to join a law firm or hospital which means you have to get by their gatekeepers.

Once you're in, you now have to bust your ass for years to make partner or get to the point where you can open your own private practice.

The end result is that after 7-9 years of universities and 5-7 years of busting your ass for someone else then, and only then, will you consistently make a 6 figure income.

Now, let's look at trading forex. What do you need to become a trader. A frigging computer and $500. Yet everyone thinks they'll be making a consistent 6 figure income in a few months or even years. Forget the fact that the industry is full of some very, very intelligent people who have spent years learning how to be a consistent trader. Forget the fact that you're going up against organizations that have millions of dollars to throw behind their traders in the form of support such as analysis and system testing. Forget the fact that these same organizations are playing on a different field then you are. All you need is a few indicators, a broker that doesn't screw you too much, some money management and in a year or two you'll be living the high-life.

Is it any wonder so many fail?"

By Dopey, a trader from a great forum

Source: www.forexfactory.com
READ MORE - 95% forex trading failure rate? By Dopey