By
Adam in
Forex on March 14 2008
I have been very busy with my study of the EUR/USD charts and the FX Insights way of trading. I have the utmost respect for the FXI Team and their approach to the markets. I have tried many different strategies and systems, you can read about it компютри втора употребаhere. But there is nothing that compares to having a tangible understanding of the movements of the market. I chose to explore what FXI is teaching because I felt as though I was lacking something important with every other strategy. I figured out that I like to understand what is going on.
As readers may or may not know, I am a Mechanical Engineer, so I naturally like to understand things. Would you drive over a bridge built by Fibonacci Forex traders? Engineers need to understand it all to make things work. Forex is a market of people, not machines, nor mechanical and mathematical function. It is my current belief that Forex traders are looking for an easy way out of the necessary understanding, an alternative to hardwork. This easy way out is what I consider mathematical indicators. They give us signals without any actual understanding of the market. Why do we trust these things? I believe we trust them because they appeal to our Something-for-nothing mentality. Fibonacci only works because there are other mindless people who place big enough orders to half-way validate it. If you actually try to use the tool, you will be approximating its results to fit your beliefs anyway. I think people can still be successful with these signals and indicators, I believe everyone needs to find a style that suits them.
By the way, I officially gave up on working a job as an Engineer, the corporate job life and standard of living for a University Professional is deteriorating. I refuse to be bound by a salary and take what is given.
Through FXI, I am learning to :
- recognize price patterns with more confidence
- understand when the market is likely to move and by how much
- use only a small amount of my equity in my trades- never let the market keep me hostage
- understand why the market is moving
- understand who is moving the market
I just typed up a new trading plan for how I plan to trade with the FXI method. Take a look here.
I took a couple months off of trading live capital to develop a new direction and method to trade. I plan to start back again with $2000 and build up a buffer of profits to trade upon. I hope to reveal more about my learnings and offer some things to use and things to avoid to help readers develop their own winning strategy. Send me a comment on your own trading plan. I would love to read it.
By
Adam in
Forex on February 5 2008
Euro/USD just fell off the back of the wagon 2 hours ago when it plunged out of its tight trading channel. It had been seeing upwards pressure with continued weakness from the USD. There has not been a lot of interest to buy the dollar with the Fed hacking interest rates. Just to clarify, when the Fed cuts rates, it makes buying that currency less attractive because the return on investment is lower. And if the Fed continues to cut rates, less and less buyers will emerge and the dollar will fall in value. The Fed continues to try and mop up the domestic messes caused by a faltering economy with cutting interest rates. Look for the US government to start giving signs of inflation risks before the dollar can recover with strength.
EUR/USD is falling on EUR weakness today with some poor data released earlier. EUR/USD just came off of all-time highs and is struggling to keep the upward pressure. This slide could continue until there is reason to buy more Euros. Look for some support in the 4680-4650 range and a possible stop to this fall. Take a look at the currencies from other countries as well because they correlate with the Euro in times like these.
By
Adam in
Forex,
Related Ideas on January 26 2008
I just started a new chapter in my forex trading, but I thought I could share a little bit of history on what I have tried so far. Let me first explain, that any of these methods could work for you, I just could not make them work for me.
1- Paid $1000 for training with Market Traders Institute. Although I now have doubts about the services, at the time, they provided a good way for traders to learn the basics of the market. Learned about Fibonacci and trendlines. Not a lot of support when I needed it.
2- Started training with The Trading Institute and their Thinslice Methodology. They are a spin-off from MTI and a much better and complete training that focuses on looking for a couple quick scalp on the 10 minute charts on the 4 major currencies only. A great way to get unlimited support with 1 on 1 and new training material updated every week. It fulfilled a need to get quick scalps, but you have to constantly watch price action and have only a small window to enter. You also need to use high margin or a big account to make money, trades are 1:1 risk/reward and best winning percentage is 70%. A great way system, but I was not successful with their methods.
Next, I started devouring new trading methods and reading all I could. I was a change from trying to learn from a mentor that has their proven style; it was time to find a style that I could make work.
3- I started learning about a method where to take 5-10 pips when price breaks beyond yesterday’s high or low. I started making more trades, a lot of them worked in the beginning. I didn’t have any understanding of when it would work or not. This was another good example of a fine strategy that works well combined with an understanding of price action. I tried to do it too mechanically.
4- I tried a method where I stayed in a trade for the entire day and just tried to pick a direction. A good trending strategy, but when price went the other way, you do a stop and reverse to try and capture it that direction. Works OK if you have more of a strategy. Fails miserably in a ranging market.
5- Tried a carry trade/ hedging strategy that ties up a lot of margin in order to try and gain interest on swaps. I buy and sell 4 currencies that are supposed to inversely correlate while giving me positive swap interest of about $10 a day per 4 standard lots of margin. Works OK but fails miserably if correlation does not coincide with market moves. I lost about $2300 trying this. I caught the market on a bad couple weeks and I got margin called. Oh well, carry trades can work, but you need to have more of a plan, mine was to hold.
6- I started working with James from the Babypips’ forums. He is an ex-bank trader who taught a great price action system based on Inner Bar Candles. This is the best way to get in at the beginning of a move. Can be used on any time frame and it actually works well. I could be capturing profit from it, but I need something more robust. I want to understand more of the market moves. James provides a chat room where he talks and we can all type, he takes trades and shows us how to make money like him.
As you can see, most of these are based on Price Action. I learned early on that indicators are simply methods by which your broker steals money from you. They provide you with a false sense of security and no real understanding of market moves.
7- I started learning about FX Insights and their trading methodology. They are a group of traders who operate a business for profit, trading their own money. But they operate FXInsights.com for free to provide traders a way to understand price action in the Forex Marketplace. Their information is top notch and totally honest, they have nothing to gain or lose, nothing to sell, and they love to help traders like us!
I put their trade signal to the test, by trying it out. It is only a buy signal on EUR/USD for 20 pips with possible drawdown. You never exit the trade until you hit profit, or breakeven. Sounds crazy, but if you follow the margin standards and enter when they say, you will never lose! Yes, this signal is 100% accurate at giving pips, or breakeven at the worst.
Also, I want to learn how these guys do it so I started tracking price the way they do it. I take price from my broker’s sell price every 30 minutes that the Forex market is open. I track that as my graph. I also track the fundamental releases and data behind it to get a better understanding of the market movements. This gives me more confidence than the other systems and keeps me looking forward, instead of focusing on past price action like all the other systems. I am confident this method has the best opportunity for me. I will list more as I follow it.
