The Musings of Faith

Tag Results: trader

Don’t buy too many different securities. Better have only a few investments which can be watched.

Bernard Baruch’s 10 Rules of Investing | The Reformed Broker

Of the 10, this is my fave. In my limited experience, I’ve always advocated speciality in investing and trading.


Hilarious
(via theeconomist: KAL’s cartoon: this week, queuing up.)

Hilarious

(via theeconomistKAL’s cartoon: this week, queuing up.)


Love this! Pretty accurate according to my experience.
(via The Anatomy of a Forex Trader | Raghee Horner)

Love this! Pretty accurate according to my experience.

(via The Anatomy of a Forex Trader | Raghee Horner)


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. Elder stresses that traders must control costs (one of the few factor we can control) and to change brokers if necessary to do so. Every trader is different so my main criteria for a broker is:

  • 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.


Confessions of A Forex Trader

Greed

I got greedy last week. I admit it. But I didn’t start the week like that. Quite contrary, I approached the markets very humbly having wrongly made a bear call on the GBP/USD last week. But even in analyzing a bear case, I rightly saw the clear signals of the beginning of bull run that took price above 1.5250.

Moral of the story: Plan your trade.

Once the price break above 1.5250 happened, I traded the new trend that took price from 1.4946 to 1.5070 with very shallow retracements. I set targets very tentatively at all the resistance levels (1.5320, 1.5460, 1.55). A trade that developed the course of the week was increasingly profitable. Sounds good so far.

Moral of the story: Trade your plan.

But my ego allowed pips to blind me to the fact that I didn’t have a solid action plan for 1.55. I expected 1.55 would be met with resistance but failed to establish what I should actually do if I was still in a trade because my target was not achieved in addition to what I would do if my target was achieved. I needed to not only pay attention to that level but I needed to exit my trades after the first attempt at that level took prices below 1.5400.

Instead, greed told me that this was only a first failed attempt that would surely end with another successful assault at 1.55. This had been a strong rally all week, after all. Do you hear the insane sanity? Rational thought should have led to the conclusion that it had been a solid run all week and that 1.55 is a major half point level that would be met with resistance. And with resistance would come a correction so rather than looking for more longs, I should have exited my longs and looked where I could reset longs or go short for the correction. In addition, I set my limit too aggressively at 1.55 so my limit was missed by 30 pips.

My greed caused me to add to the trade rather than exit it. Now instead of sitting on a mountain of pips, I am having to manage now a loosing position.

Moral of the story: Don’t add to a position. Rather, build a position for a trade and manage that position until the trade is completed.

Please note that these rules and morals are specifically geared toward me and my performance last week. Please do trade what you see.


Defined by A 4X Trader

Timeout

Despite my analysis, which has been spot on, my trading has been shotty the past 2 weeks. Since the start of the year, I have had now 2 down weeks. I know this week will be the second considering the drawdown I suffered earlier in today’s session (unless the EUR/GBP, which is still on my books, rips down ridiculous prior to week’s end).

So I’m putting myself on a GBP/USD timeout for the rest of the week. During this time, I will do the following in order to clear my mind and get back on track:

  1. SLEEP!! - The 24/6 per week schedule that us forex traders keep is one reason we choose this market. However, it can be extremely draining. My best times to trade is in the middle of the night (Los Angeles time). The kids are asleep, the house is quiet and calm, and I am able to concentrate with virtually no distractions. But when do I sleep? Come morning, its time to deal with children (7, 6, and 2 so they need seemingly constant attention), deal with the demands of managing a household, and the demands of being a professor. Not to mention check in with the markets constantly throughout the day and by the time the day winds down, I’m back to the markets full time. 

    This has never been a real problem until now. I realize now that I need to rest. I need to rest my mind as well as my body. That may mean days I just don’t trade. Looking at markets is pleasant. Trading, however, can be stressful. I need to allow myself more than 1 day some weeks to refresh and recoup for battle.
  2.  CLOSE THE COMPUTER - Technology is great and Lord knows I utilize it to the upmost. I connect with friends and family on FaceBook, traders on Twitter and StockTwits, and colleagues via email. It’s great!! But all this connectedness is also leaving me drained and a little too wired. When I take long stretches with the computer off, not just away from the computer but with it OFF, I find that my attention and thought get more focused. I can see things clearly and with more forethought and wisdom. And being focused mentally gives me even more of an edge in my trading as well as in my businesses. In fact, the more LED lights I can cut off the better. The buzz of the computer, TV, and even clocks can be maddening without us even noticing. Take time to turn off the technology and breathe in the silence that comes with it.
  3.  GO OUTSIDE - Fresh air and sunshine have always been great medicine. Even when I’m sick, probably especially so, I love to take neighborhood or beach walks. I feel clearer and even healthier. I’ll sometimes take the kids with me and let them dictate the pace of the walk. Which leads me to…
  4. SLOW DOWN - Our entire society has become faster. The now web. Instant gratification. Fast food. So many times we are rushing through our day. Ripping and running from charts, to meetings, to school, to dance practice, through dinner and off to bed. Phew! Now I can get back to my charts. Even my time outside, I’ve rushed the kids through our walks constantly asking them to walk faster or not stare at that flower for so long. NO MORE OF THAT! Children slow us down. At least during these walks and times outside, I will simply let them. And it is GREAT. In fact, I’m looking to see where else I can add slow in my life. SLOW is good for the mind and soul.

These are just 4 things I will look to do more often during my trading week so as to avoid traders burnout and, ultimately, eliminate mistakes. I hope this helps other traders as well, particularly my fellow lady traders.

Happy trades!

P.S. This really can apply to all people, not just traders.


DEFINED By A 4X Trader

Mistakes

  1. Set the price alert.
  2. When price gave up the 20 level after achieving 50, that warned of a deeper correction (EUR/GBP). Trade what you see.
  3. SET a new limit to sooth the ever bougoeining ego.
  4. Move stop after target achieved and after 3 days in the trade.

I didn’t do the above and didn’t get the trading outcome I carefully planned and managed for. The moral of the trade is this! Always cover yourself - in trading and in business. It’s a mistake not to.


Whatever you choose in life, be the best you can be. Life’s too short — and you’re too important — to compromise.


I Do It. Do You?

  • @beanieville:

    Investors do it much longer. $$

  • @Prospectus:

    Forex Traders do it with the whole world $$

  • @Prospectus:

    Futures Traders do it under contract $$

  • @Prospectus:

    Options Traders do it with Greeks $$

  • @Prospectus:

    Position Traders scale in and out $$

  • @Prospectus:

    Day traders do it all day long $$


Trading costs are one of the most important reasons most active traders fail in the long run.


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