I am featured on BabyPips.com as one of their featured traders this month! So awesome!!! BabyPips.com is one of the top forex websites in the world so this is quite an honor. Check out my interview! My second forex interview…wow.
Tag Results: forex
In your opinion, is it better to limit ourselves to a certain number of currency pairs (and what would be a good number?), and a particular time frame? Why or why not?
Anonymous
Yes. I think most traders (except the brilliant few) do concentrate on only a few instruments. It comes down to focus and experience. When you limit yourself to a few pairs, you increase the time you have to concentrate on the moves, price points, levels, and news events of that particular currency pair. That’s a lot of information to analyze and digest in order to come to the correct trading decision. You maximze your efforts and, ultimately, your success when you can concentrate all that effort on a few rather than the many. With repeated and concerted focus on one pair, you gain valuable experience in trading that particular pair. That experience allows you to really know a currency pair. The better you know it, the better you’ll become at trading it.
I would apply the same logic to timeframes. Limit yourself to studying the timeframes that fit who you are as a trader. You have to trade who you are. Again, the brilliant few can adapt and change the way they trade depending on what the market is giving trading both long term AND short term timeframes. I am not one of those traders. I trade very particular timeframes. If my few pairs do not present opportunities in those timeframes, I don’t trade. I will not switch and begin to trade another timeframe. I will not force it. I simply will not trade.
Limits on the number of pairs and particular timeframes also means, of course, that you will miss trading opportunities elsewhere. WHO CARES! I missed the entire 1200 pip rally in the EUR/USD and the 980 pip rally in the AUD/USD. I’m not concerned. I don’t trade those pairs. I haven’t traded cable much lately because it is mostly consolidating right now so the opportunities on my timeframes have been few. But I have been able to catch opportunities elsewhere so no worries! I only concerned with trading MY pairs well. PERIOD.
The ultimate number of pairs you trade depends on you, the individual trader. Start with 1. Trade that one pair so well that you know how it moves withOUT the chart. Meaning, you can look at the price and KNOW how the pair is moving. You get to that point, then add another. You can’t trade every single move on every single pair in the market. Pick your favorite pair and trade the hell out of it.
This week illustrator Derek Bacon pelted rocks through the windows of a euro note: a fitting image for our briefing on the future of this badly damaged single currency.
The euro has rallied almost 1000 pips in the last 14 days. Despite this impressive rally, many market participants feel this way about the euro. Eventually the market will again too.
I always know either (1) what the market is going to do or (2) whether I know what the market is going to do. It's a pretty cool gift. My problem is: I am a terrible trader. I don't know how to catch the train. I mean, it's ridiculous. I tell other traders: "Get out." And they save tons; or, "That's a short." And they get in and make money. But I can't find the entry myself. What is wrong with me?
Anonymous
Nothing is wrong with you. Sounds like you need a more objective methodology to confirm your gut feeling. See, I think you know that your gut is not enough to form trading decisions. As a result, you hesitate and/or fail to pull the trigger. These other people that use your advice are probably making money because your are simply confirming what they are already see in their charts. Otherwise, they are lucky….and won’t last very long in the markets themselves.
Practice using unambiguous trading tools to determine the entry price for you and confirm your gut feelings. When you find the tool that works, stick to it and keep using it. Moreover, keep trading! Trade demo until you are comfortable trading real money and make the transition. The psychology is different when you start to trade your own money, as you may already know. So if you really want to be successful, you will have to make money with real money. But keep trading! Nothing worse than fear in this business. Only continual exercise of your gift AND technical analysis in the actual markets to turn you from a terrible trader to success.
Confessions of A Forex Trader
Trading New Pairs
So I’ve decided to expand my portfolio and trade the GBP/AUD and the GBP/CHF. So a few things I do before placing any trades on a currency pair that I have never traded before.
1. Watch Price Action
I watch price action. And I watch it for a couple weeks.
2. Study The Daily Chart
I am a swing trader and the daily chart is my bible and foundation for all my trading decisions. I study the daily chart for 3 things:
- Trend
- Trend waves
- Support and Resistance levels
3. Study The Hourly Chart
On the hourly chart, I study the current price action. I’ll check for support and resistance and draw Fibonacci levels to see how price behaves or behaved at those levels.
4. Study The Fundamentals
I think the most important aspect of any pair’s fundamentals is how the central banks stack up against each other.
5. Trade It!
It can be argued that you should trade a new currency pair in a demo account before you trade it live. I think it depends on a trader’s level of comfort and expertise to make that determination. It might be prudent, however, to trade smaller positions as you get to know the pair and how it moves and reacts to news releases.
This checklist can be adjusted depending on a trader’s style and preferred timeframes. But I think it is a good approach to any new trading or investment vehicle.
Confessions of A Forex Trader
I HATE Changing Brokers
I hate looking for a new broker. My word, it is exhausting. I remember my first broker experience and I remember reading Trading for a Living by Alexander Elder
- No slippage and if so, then be courteous enough to ask me if I want to continue on with a requoted price
- No commission
- Not a market maker
- Offers GBP/USD, EUR/GBP AND GBP/AUD. I wanted to start trading the GBP/AUD but my former (and current) broker didn’t (don’t) offer it.
Spreads are not a huge deal for me. If you can deliver on the above, then I don’t mind paying for it (via higher spreads). Because trading with FXCM left me so scarred, I am very wary of the big bank market makers. However, with the new CFTC regulations, I can no longer rule them out as they will probably be the only ones left standing. Also, many smaller brokers are just introducing brokers to the market makers anyway so I may as well deal direct, if I must.
Day 1
My search started with a website that compares brokers. I found a great website in Forex Peace Army (FPA). You always have to take rating and reviews with a grain of salt and try to determine between real traders and the whiners. But it does help to have 2nd opinions as they certainly do help allay doubts and some uncertainties. Through this painstaking search I did find Zecco Forex (through the Google ad, I’ll admit lol). Since Stocktwits partners with Zecco and they met my above criteria, I decided to give their platform a try.
Days 2 & 3
After crawling FPA and checking out different brokers for a day, there had to be a better way. And there is now! I finally turned to Twitter. I have a wonderful crew of traders there so why not ask them? I did and got a slew of recommendations:
- Advanced Markets
- dbfx
- Oanda
- PFGBEST.com
- MB Trading
- Dukascopy
- MIG Bank
- InterbankFX
- Interactive Brokers
- thinkorswim
- Forex.com
- Saxo
- twowayspreads.com
- CitiFXPro
I traded with Forex.com early in my career - don’t like them. In my experience, they have a tendency to permanently widen your spreads once you are trading well. I have an account with InterbankFX already and not too crazy about MT4 (sorry folks). So that left me to judge the remaining brokers based on my criteria. (Most of the links are directly to the page that helped make my decision.)
Advanced Markets- They have commissions based on initial deposit (which is unfair in my opinion) and trading volume (which as a swing trader I won’t make the cut).dbfx- Thanks to the reviews on FPA, it looks like dbfx works through FXCM. I LOOOATHE FXCM.- Oanda - They meet my criteria though they *may* be a market maker. And I can trade on the iPad?! Beautiful.
PFGBEST.com- I can’t find any information on their website about fees, spreads, or any other costs involved. That’s a big fail.MB Trading- They have commissions. 4 different commissions to be exact. Too much nickel-and-diming for my taste.Dukascopy- They have commissions based on initial deposit (which is unfair in my opinion) and trading volume (which as a swing trader I won’t make the cut).MIG Bank- They have different leverage, margin requirements AND spreads based on your initial deposit. Too much differentiation for my liking.- Interactive Brokers - They charge a commission. But it seems fair so I am willing to give them a try. I’m not used to commissions in this market so I am biased against paying them. However, things are changing with the new CFTC regulations so maybe it’s an idea I should get used to. Plus, after researching so many brokers, it seems that commissions may actually be to my benefit.
thinkorswim- My equity trading friend complained about this platform just last week. Plus, I don’t understand their commission structure - too complicated.Saxo- They have a required distance on your stops. Not too crucial for me, as I am not a scalper, but 25 pips minimum stop on my favorite pair is kind of a deal breaker for me.twowayspreads.com- I just don’t get it. Are they a broker or a rebate program? Believe it or not, there are forex rebate programs out there. And I’m not going to figure it out with my money.CitiFXPro- I researched them a couple years ago. I consider them a market maker. Plus, I wouldn’t bank with Citibank. There is no way I’ll trade with them.
Day 4
Having whittled away at this list, I tried out the platforms of those left standing via a demo account with each broker.
Interactive Brokers- YIKES! Where are the charts? So confusing as the platform allows one to trade stocks, futures, options. Too many options (no pun intended) for this simple forex girl.- Oanda - I like the platform. Not thrilled with the chart tools but I think I can work with it.
- Zecco Forex - I love the access to all the different gold charts! Gold/EUR, Gold/GBP!!! That’s about it though. The charting tools here are even worse than Oanda. Plus, they are powered by Forex.com. But the gold charts do keep them in the running.
I plan on trying out these platforms for all of this week but I think I have made a decision.
Conclusion
I like things simple just like in my trading. When it starts to get complicated, whether it was the platform or the fees schedule, I bail. I will miss MGForex. Only time will tell if I made a good choice. If not, I will give Saxo and Advanced Markets another look. I’m not afraid to change brokers even if it is a painful process. As a trader, neither should you.
BOOK REVIEW
I admit I dragged my feet in picking this book up. Ilian became a trading mentor to me when he first shared his Quarters Theory (QT) with listeners of his 4X Talk Live radio show in 2005. I studied the QT furiously, filling notebooks with notes and sending my analysis to Ilian for critique and feedback. I have been trading the QT for 4 years after all so I thought I knew it all already.
I was pleasantly surprised by the book. Not only as a thorough review of the QT but also as a very comprehensive reference book of every economic release and technical indicator. Definitely a fantastic addition to my personal library.
Hi; Lydia am very new to forex trading, but you amaze me how you trade cable with so much confidence; do you coach students on trading forex?. from forx2
Anonymous
Hey! Thank you so much for your kind words!!
No I don’t currently coach students on trading at the moment. I have been asked this question before so I can say I’m thinking about it. I love to teach and I love to trade so we’ll see. Stay tuned.
The “Women in Forex” Series on FXStreet
I know Raghee (she is brilliant) and I so admire Kathy Lien. There are not many women in trading and even less in the forex world. This is a great opportunity to learn about more fellow lady forex traders who have been in the business for more years than I. An homage to some forex queens.
(via RagheeHorner.com)
Hi Faith (I know that's not really your name, lol),
How long did you have to practice Forex before you went live? I don't know anything about currencies but I've been able to do OK virtually on just technical analysis. Do you think one can just do this based on TA? Finally, are you a career trader? That is my dream for retirement.
Thanks,
Mimi
Anonymous
Hey Mimi, thanks for your questions. Faith has become something like a pen name lol so no worries!
I went live 2 months after trading demo. And that was WAY TOO soon! I would never advise that. Inevitably, I blew up that account and several thereafter before putting down my ego and returning to demo. It wasn’t until I could really understand risk and how I use it and manage it in my trading before I could make the successful transition to real money trading.
There are many technical traders who do very well without the fundamentals. So can you be successful solely using technical analysis? ABSOLUTELY! As you trade you will learn the fundamentals and learn more about currencies, so just keep trading and staying disciplined to your rules. If you are successful doing what you do as you say you are, why change it? Too many times, we learn another’s approach because it works for that trader. So test new techniques in demo and if it doesn’t work TOSS IT. Most importantly, TRADE YOU! Much like the saying, “trade your style, not your mentor’s.”
I like your choice of “career” trader. Yes, I am a career trader. However, I am not yet a full-time trader. I think I am making a transition in that direction but I have interests and talents right now that I am blessed to do while trading. I’m enjoying life as it comes!
Best of everything for you in your trading :)
Lydia
This is so so SO true. Probably why I love currency trading over stock trading.
Last week I had the tremendous honor of receiving word that my interview aired on my birthday (June 18, 2010) to launch Euodoo Radio.
This is my first forex interview, my first traders interview, and really my first time being on the other side of the camera and interviewed. Being hard on myself, I see where and how I could improve but Scott Cisco is a really great interviewer and the interview itself came out excellent, I think. Thanks again to Euodoo Trading for giving me the tremendous honor of having my interview be the inaugral episode for Euodoo Radio. The response and feedback have been TREMENDOUS. I am truly humbled by it and thrilled that so many traders find value in my experience.
What do you think?
