WTF = What the Fibs or What the @#$%
The world is becoming unhinged. Thank God I made my pips at the beginning of the week and have since stayed OUT. My broker is discouraging trading with these insane spreads: Warning. Do. Not. Dabble.
Tag Results: trading
Hi Lydia, this is Arturo from Mexico, a currency trader looking for some opinion about the pairs from I was profiting last year but apparently the nice downtrend is over now. What do you think about eur/aud & eur/nzd? I have been thinking about switching to aud/usd or aud/jpy, what do you suggest?
Regards and happy trading.
Arturo
info@nimbus.mx
Anonymous
Hello Arturo!
First and foremost, I suggest trading currency pairs that you are comfortable trading. If you are comfortable trading the AUDUSD or AUDJPY, then by all means! However, if you have been trading the EURAUD and EURNZD profitably for a year, then it seems that you are very comfortable in trading those pairs. It is easy to trade when a pair is trending so don’t be discouraged by the latest trend change. In fact, both pairs have nicely reversed the long-term downtrend and the fundamentals fully support the new rallies especially in the EURNZD. Instead of fighting the new trend, embrace it! Bears will have to be more nimble.
Please note, that I do not trade any of the pairs you seek advise for. But I do know about sticking to a very select few pairs to trade. You have to be adaptable to the changing market environment. But I believe true sucess in forex trading comes when a trader is very familiar with the pairs he trades not from catching every trend available in the market.
I hope that helps put things in perspective for you in your trading. Happy trades!
“The great man is he who in the midst of the crowds keeps with perfect sweetness the independence of solitude.”
Emerson
50’s thought for today is perfection. Had to reblog it.
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.
“A man must believe in himself and his judgment if he expects to make a living at this game.”
Jesse Livermore
“There is a persistent overall tendency for equity to flow from the many to the few. In the long run, the majority loses. The implication for the trader is that to win you have to act like the minority. If you bring normal human habits and tendencies to trading, you’ll gravitate toward the majority and inevitably lose.”
William Eckhardt
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.
“Don’t think about what the market’s going to do; you have absolutely no control over that. Think about what you’re going to do if it gets there. In particular, you should spend no time at all thinking about those rosy scenarios in which the market goes your way, since in those situations, there’s nothing more for you to do. Focus instead on those things you want least to happen and on what your response will be.”
— William Eckhardt
Thought of the Day… « 50’s Blog
Trade your setups. That is where your concentration, focus, and patience must remain.
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.
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)
