WHERE WILL THE DOLLAR AND YEN GO FOR 2010?

Today is the final day of 2009, as well as the trading day. The market will close early (with European Banks already close for New Year's Eve) and will open a new calendar on 4th January 2010. Anyway...

Most of us may wonder and think what would it be and how would the market behave in 2010, including myself. If only Nostradamus is still alive, I believe most are willing to pay thousands just to get his prediction on the market so that we all can position ourselves precisely with maximum profit potentials.

The question is... should we predict the market or should we just react base on what the market is doing in 2010?

I bet the answer is YES and NO for both of the questions above. Why?

Depending on the way you trade, swinger, position or scalping mehod, the best is always to analyse and emphatize on what the market is doing on daily, weekly as well as monhly basis.

The main reason to this is simply because that the market is made of humans. Though humans behavior are predictable in certain ways, you must remember that sentiments do change from one point to another, mostly clouded by the fear and greed factors of these market participants.

So, for us to predict the whole year movement? No way... I bet even Mr Soros would probably put a general analysis on probabilities rather than a specific one. Why am I saying this? This is because the fact is NO ONE REALLY KNOWS.

Yes, no one really knows. Do not talk about a year from now, even what will happen in the next 5 minutes remain as a big question to everybody.

In some cases, yes you have to speculate where the market is going base on technical and fundamental probabilities. But most of the time, all you have to do is actually wait, see and follow what the market is doing. Pretty simple actually provided you have a strong heart as well as good money management in hand. You can't win it all the time after all...

Talking about speculative skill, this is something that I develop from within in year 2009 that I hadn't discover in 2008. I knew most gurus would say that you don't have to... but if you ask me, I don't believe it. I knew this based on my own experiences from the past 2 years.

The thing is, when you do speculate, you must not afraid of being wrong. This is normal and it's just part of the game. All it takes is simply a good risk management in order to protect you from total burnout. To remain in the game as long as possible with wealth creation along the way, you just have got to play the game by its rule.

Some of the important rules of trading that you must know are:

1. This is not a fair game. Not everybody will make money here. It's a zero sum game but... do it correctly with a winning-edge sytem plus splendid risk management, you surely can make it.

2. Trend is your friend, but not the market. The market's intention is always to take away your money from your pocket. So always be careful... and exit your trade when it is not in your favor. Stop giving away your money! Protect it and take it back later...

3. There are lots of gamblers in this market, just don't become one. The one who stays at the top 10% who makes money all the time are those who learned to become traders, not gamblers. Gamblers do win big at times, but they don't survive.

4. Market is made of humans, not signals. So, do not blindly buy or sell base on signals. You have to check several other things too before taking any trade decision. At times during thin liquidity, yes the market makers can and will manipulate the price by attacking stops and creating price spikes. I learned this from Beat The Forex Dealer book, and base on my experience, I have reasons to believe that it is true. The point is - avoid the market during thin liquidity period especially during Asian Session or holiday seasons like these past 2 ending weeks of December.

5. Focus on quality rather than quantity. Making money in forex is all about getting into the right trade. If you can get it right 100% of the time, then money management is not applicable. But then, the reality is - no one get it right all the time, NO ONE and that is the sole reason you need to have a good risk management system in order to protect you in case you are wrong.

6. You must have your own style. If you don't have one, develop it slowly. Honestly, I learned more about myself rather than the market since I started my trading career. You must know who you are in the first place, learn to be patience and remain discipline all the time in following your own pre-define system. The fact is, it is so easy to become impatient and undiscipline in many cases, and this is the fact to the majority of market players, the bottom 90%. So, if you wish to become the top 10% or 3% in the market, really all it takes is to master yourself in behaving appropriately in the market. There is no guarantee for sure, but chances are better that you will become successful.

7. Last but not least, never add to a losing position and always use STOP LOSS. Just define it upfront because anything can happen here. I did burn my account a few times when MAMA calls (ie margin calls)... Main reason was simply trading without stops. You could survive with a well funded account, but the fact is market can go against your position indefinitely. There is no point holding a losing position with -1000 pips and no clear sign of come back... It hurts man.. just dont do it... I knew a guy who has to wait 7 months before the price ever come back to his entry point... 7 months!

In a nutshell, my simple advise, read all you can read but do not trust them blindly. The best guru is no other than the market itself. Look at the market objectively and try to understand what the market is doing, especially on the pair that you choose to trade. If either the bulls or bears are in clear domination, just don't go against them... simple. This is because you just don't know how far these bulls or bears can go and you alone can never fight the strength of their stampede... you can hold on in certain cases but you must define your limit before they crush you.

So if you plan to trade without Stops, think back... you may survive especially with well funded account, but it only take one mistake to burn you out. Just learn to position your stops accordingly... simple rule of thumb, put your stops at location where you see/believe the market will likely not to go technically or fundamentally. If happen they go there, raise your white flag, surrender and come back later... Do this and you'll become a better trader with higher precision.

So now... What is my forecast on the US Dollar and Yen in 2010?

Hmmm... Actually I don't have one. I would prefer to see what happen in the 1st week, trading what I see rather than what I wish to see. Or frankly speaking, I don't care. All I care is my account and whether I make money or not.. haha.

Anyway, from market fundamental and technical point of view, I would say that if the US Feds keep on broadcasting the idea of increasing interest rates and exit strategy on all these TARP Funds, chances are dollar will continue to rally, depending on the market buy-in's on such sentiment.

Further to that, there are also worries on the Eurozone economic's climate that may further push the Euro as well as Sterling down even further.

And the Yen? Aha this one from the way I see it will become a funding currency, taking back its status from the dollar this year since Yen has been rallying crazily in the past two years against everyone else. The Japs do not like the yen strength either so the outlook for Yen in 2010 is more on the bearish side, whereas dollar on the bullish side.

As usual, I could be wrong. But let's see what happen in January 2010 first...

Finally, adios to year 2009 & Happy New Year 2010 to everybody... especially to my fellow traders and you as a kind reader of this blog.

Take care and safe trade for 2010 and beyond...

As for my trading, I am committed to reach my first 6 & 7 figures this year... It's definitely not easy, but I'm going to try... ;))

MY 7 COMMON WEAKNESSES AS A TRADER... LATEST...

1. I always have this feeling that if I don't take the trade now, I would probably be left behind by the market. Most of the time, these results in taking bad trade rather than good one.

2. I always have this feeling that the market would behave accordingly to my expectation... but most of the time, it doesn't.

3. I do love to take 'stupid trades' (i.e. I don't want to use the "g" word) once in a while, playing along with my profits gained during early weeks. You see, when I follow my system & rules, I do make money 80% of the time. Consequently when discipline is taken for granted, "shit happens" and I gave back my profit to the market at the end of the week. Reason being : Playing around = Not serious = Punished by the market = The market isn't my friend = Hazardous = Don't play around.

4. I do not time my entry accordingly to 15 minutes, or 1 hour intervals as planned. At times, I do love to speculate the news as well. Though bad for trading, the reward is awesome if I get it right. Still this is a bad habit to retain as a trader. Need to unlearn this immediately.

5. I do ride my losses once in a while. When you are stucked somewhere in between -10 to -50 pips, it is not easy to make decision whether to stay or pull out... Why? When you pull out, the market come back, when you stay, it goes even deeper into the red zones. So what to do? Can someone tell?

6. Mostly, I trade what I see. When market swing against my original plan, the tendency to change my plan is high. At times, I get it right. Most of the time, it's better to stick with the original plan.

7. Sometimes, I am simply unfit to trade but due to "love of the game" spirit within me, I still force myself to have at least one position in a day, though the setup is hardly good or trad-able.

You see, the summary to these weaknesses are all about self-control, and it takes lifetime to correct them if we fail to identify them accordingly.

To me, these are my most common weaknesses that I am still working on to unlearn. We humans can never run away from weaknesses but it is our job to identify them and rectify them one by one. Otherwise, I would never reach the top 3% that I always dream of, making tons of money with unconscious competency within me...

What about you? Are they the same or is it just my problems?

I SEE 'NO' BIG MONEY IN THE MARKET...

Christmas is approaching fast and New Year is just around the corner.

I guess most (if not all) institutional traders are already out of the market, mainly with their swing profit. We could see clearly since yesterday that daily volume as well as range has significantly decreased, unlike weeks before.

Does this mean that the market is no longer tradable in the coming 2 weeks? I guess the answer is close to yes, though not a definite one.

You see, one of the simplest indicator is when "the beast" (ie GBP/JPY) was hardly making any significant range (yesterday was barely above 100 pips range : 145.45 - 146.46 = 101 pips), it's kind of a clear sign that most participants are already out of the market.

Though I may still scalp a few pips here and there, still with lower volume and liquidity, the best is to stay out until new year comes.

Nevertheless, looking at the sentiment and technical structure of the market, definitely the dollar is still on the bull run. No one dares to pick a bottom with this kind of setup so better stay with the bears, at least for a while. After all, the bulls have had their fair share since March 2009 already, so perhaps the bears are taking turn now, at least until first week of 2010.

So, rather than going long on EU or GU, I would prefer to wait for sell opportunities on these pairs, until at least it reaches any of the Fibonacci key support levels on both EU (1.4000) and GU (1.5706).

Till next week, Merry Christmas & Happy New Year....

;)

HAS THE TREND CHANGE... YET?

The majority always re-act rather than act. The fall of Euro and Sterling for the last 2 weeks seems giving an alarm to those who are staying long with their position as taking the top into consideration, it's been over 800 pips declined for the Euro as well as Sterling since their previous top in December.

The question is... what do we do now? Should we go short all the way till New Year, stay aside or just defy the market's movement.

Clearly the third option is not a wise decision.

Now, looking at the gold price as well, it seems like investors are starting to cash-out their dollar investment in this precious metal. The Bloomberg as well as CNBC were talking about the gold support price at 1008.00 but the way I see it the gold could go down to 1000.00 before making a serious rebound or trend to a new high beyond the 1226 level.

At the same time, year 2010 is approaching fast in the next 2 weeks and some speculators are still talking about the fall of Dollars to continue in 2010. Is this a true claim or is it just a blind opinion base on what they believe?

What about us as retail traders? It is up to you actually. If you asked me... of course for now I will remain bearish with the Euro and GBP but of course, will be caution along the way especially with the Fibonacci levels on this new downtrend for these 2 pairs.

So, what's the verdict for next week?

Though I clearly mentioned that I will remain bearish on these 2 pairs, it doesn't mean that I will blindly shorting them without any safety precaution. As of the daily candlestick is showing a doji formation on the last day of trading for this week (on both pairs), it could be an early sign that the bear is running out of steam.

Hence, for next week, though bears are clearly in control, the bulls are likely to make a brief come back and push the price a little bit higher to the 1.4600 level for Euro and 1.6350 for the Sterling. Those 2 levels are the 38.2% retracements for the price falls between 1.5144 - 1.4262 (Euro) and 1.6879 - 1.6050 (GBP).

Contrarily, if these 2 pairs ever continue its downward journey straight away on Monday, Euro could probably try to break the 1.4122 levels and the Sterling will probably move South towards its next support at 1.5706.

On the long run, as long as the Euro do not breach the 1.3500 level and the Sterling stays above 1.4900, chances are they are still on the bull run. But if any of these levels are broken, then prepare for a long term downtrend for these pairs as well as long term uptrend for the dollars.

Yeah sure I could be wrong. But you must remember that in this "anything can happen" market, the market will do whatever it believes. And the reality is :- there is no such thing as top or bottom because if you look closely, the market can either be topless or bottomless... as far as there are buyers or sellers who are willing to push the price further...

In summary, my advice is always :- just be careful with your trade... The tribe has spoken and the price itself is the real indicator above other indicators that you could be using... Hence, always stick to the market's decision as they are always right no matter what...

BE HUMBLE GUYS...

I happened to discover that there are just too many people around me who seems busy and trying hard to tell people how superior they are, though the fact is clearly otherwise.

The thing is, I do love to get around and be around wonderful people who are skilfull, knowledgable and experience in what they are doing. The more good people we know the better we become, especially if we have the chance to learn from their experience.

Nevertheless, unlike these people, the common trait that I used to discover with people or persons who are really good is:

THEY ARE EXCEPTIONALLY HUMBLE...

They never tell people that they are good. Instead they simply demonstrate their goodness, competencies and skills via their actions and results. Normally they are down to earth type, never humiliate anybody and always treat people with respect regardless of who they are. To certain extent, some may perceived that they are weak though the fact is they are laying low beneath their actual strength.

Well, though I knew the fact that this writing would probably not going to change anyone, I am just sharing my thoughts on dealing with these "they thought they are good" type of people...

Still remember one of the golden advice from my former BM Teacher in Victoria Institution, Datin Maimun. She always reminded me that "if you want to be the best, never ever think that you are the best... just do your best" (ie kalau nak jadi yang terbaik, jgn sekali kali fikir kita ni yang terbaik... usaha sahaja)....

Hmmm... I guess after 15 years of leaving my secondary education in VI, I believe that is one of the best advice I had ever received.

Yeah sure you can be good and arrogant, but what do you get by doing that? People may curse you, they are hypocrite upon you and probably God won't bless you either. Just think about it.

• Being humble doesn't make you weak.
• Being nice doesn't mean you are not firm.
• Being considerate doesn't mean that you are not strict.

These are all poor perception and beliefs for those who are stucked-up with their limited knowledge and experience.

Guys, why not take a step behind and look back into yourself and define what you want in life.

To me, who you are in this world is hardly meaningful to anyone else but you. So, my point is... there is no point of being snobbish, stuck up and arrogant (ie. keturunan syok sendiri dan perasan best) because you get nothing from it.

Be strong in terms of who you are from the inside is much more important than what you want people to perceive you from the outside. Just remember, quality speaks for itself... you don't have to tell people that you're good coz if you're good, even a 5 year old kid can tell.

Belows are some of the most successful people that I personally knew are humble but with dragon hearts inside. I believe if you plan to become arrogant and/or snobbish, you must at least achieve a step higher than these humble Dato's, Tan Sri's and Tun's... Otherwise, you don't deserve to be haughty with your limited achievement...

Just to name a few... you think you knew these faces? Trust me... They are exceptionally humble...

TAN SRI SYED MOKHTAR AL-BUKHARY

TAN SRI DATO SRI MOHD HASSAN MARICAN

DATUK ADUL SAMAD HAJI ALIAS

TUN DR MAHATHIR MOHAMAD - OUR FORMER PRIME MINISTER

NOW WOULD YOU BELIEVE ME THAT REAL SUCCESSFUL PEOPLE ARE MOSTLY (IF NOT ALL) HUMBLE?

SO IF YOU'RE NOT HUMBLE, CHANCES ARE YOU ARE NOT REALLY SUCCESSFUL...

:))

DEVELOP A WINNING MINDSET... always tell yourself that "I AM THE TOP 10%"...

One of the common question that we would always ask ourselves after taking losses or being attacked by a sudden big move in the market is: -

"Why the h**l did the market went against me in such a cruel manner? Why can't it happen before I entered this position so at least I can refrain myself from taking this trade, or at least do the reverse?"

Sounds common huh? Well... that is just part of the game. At times, you just feel that the market is always against you. Whatever you did, the market will just do the reverse. When you buy, it goes down and when you sell, it goes up... and it feels like the market is playing against you all the time. If this is true, then how are we suppose to make money from this market? The answer is...

Though you may feel that you are being bullied, or perhaps someone somewhere like the trading brokers or tycoons are controlling the market etc... the fact is indeed otherwise.

The fact is - the market doesn't even know that you're there in the first place. It's just you and yourself... whether you make or lose money, whether you're there or not, whether you ride your losses or profits... the market doesn't even care at all...

That is why I always like to use the phrase of taking advantage on the market. Second phrase is always keep yourself emotionally detached from the market all the time. Last but not least the third one is - regardless what your indicators are showing, always analyze the price actions first.

Let me explain in little bit detail why those 3 phrases are important.

1. Making Profits by Taking Advantage on the Market

- I never consider my presence in the market as important. I am nobody and any transaction that I am doing with my trading have no or maybe some pico-effect on the price movement. So, never ever think that you could move the market - NO WAY. But... it is the collective actions of traders who choose to become either bulls or bears that really create the big moves, apart from the BIG BOYS (ie Banks, Market Makers, Tycoons, Institutional Traders etc) whom normally provide the kick-start to these movements that later fuel up by the collective trades by the retail traders like us. The point is - the market is BIG and we small traders can only make money by taking advantage on this movement made by the market itself. We alone cannot move the market. That is the reason why instead of chasing the market, we should wait for the market to come to us and take the advantage accordingly. Never ever go against them.

2. Keep Yourself Emotionally Detached From The Market

- The main idea of keeping yourself emotionally detached from the market is to ensure that you could always make the correct assessment and analysis on the market. You see, normally when we do not have any open position floating in the market, we don't care and we look at the market objectively without any bias or prejudice opinion on the market condition. What we see is what we believe is happening. The case is different when you have an open position though. When you're emotionally attached, your judgment will favor your position and no matter what is happening in front of your eyes, you keep on looking for excuses for you to hold that position, especially a losing one. Try to be emotionally detached and you will feel the difference. The best part of this is on the defensive side, in which an objective analysis will either provide you with justification to hold or exit that particular position.

3. Always Analyze the Price Actions First


- This is another simple mistakes that new traders tend to neglect every now and then. Even if you have a proven winning system that wins 90% of the time, still you need to study the current price action itself, especially on the 1hr and 15M chart. Normally price action is in direct relation with market volumes and hence the higher the volume on that respective time frames, the clearer the price action is. My favorite time frame for intraday trading are always the 15M and 1HR candlesticks. In fact, using these two TF without any further indicators are good enough for me to scalp the market every now and then, by using the price action itself. But of course, the point of analyzing the price action on each TF here is to get the best possible entry regardless of what your trading decisions are, long or short. So say it is clear on the daily and 4hr bars that the market is going down, you need to check on the 15M as well as 5M chart on where the price is heading towards at that moment. If it goes up on these two candles, it may be worth for you to wait a little bit until it settles down due to small-bull fighting or due to short-sellers profit taking. Trust me, it's worth to wait.

So, in conclusion... this article is all about developing the correct psychology for trading. If you do not plan to develop this top 10% winning mindset from the beginning, chances are you can hardly survive in this market, blaming the market every now and then.

Remember, trading is a zero-sum game. There is no way for everyone to make money here because not everyone is like you willing to read this article until this line. But if you put enough effort and will power in mastering this market, the reward could be beyond your imaginations.

Just like Manchester United who won the Premier League last year, they didn't have to win every game for them to retain the title. It is the winning mindset and consistent performance in winning most of the games that counts towards becoming a real Champion...

Safe trade...

THE FOREX Micro-BASICS THAT YOU MUST KNOW BEFORE YOU START YOUR TRADING CAREER...

I've been told by some of my close colleagues that most of my postings are too technical for beginners to understand... Is that true? I thought I myself is a beginner... ;) Mmmm... Anyway...

Ok, so now why not we talk about something basic about forex that I personally believe each and every aspiring traders should know, base from my own experience in live trading. I just share the keypoints here but of course, I would recommend you to visit babypips.com if you wish to learn in detail. It's free... really.

Let's begin.

MUST KNOW NO 1 - You must know that FOREX is the biggest market in the world, even after you combine the total turnover of all the Stock Exchange around the globe, still forex is a clear winner with over USD3,000,000,000,000 traded daily (yes, that is trillion with 12 zeros). That is HUGE bro...

MUST KNOW NO 2 - Currencies are traded in pairs. The majors are EUR/USD, GBP/USD, USD/JPY and USD/CHF. First currency (ie EUR in EUR/USD) referred as base currency where the second one is referred as counter currency. The value shown for each pair, say bid price for EUR/USD is 1.5000, meaning that every 1 base currency (Euro) equals to 1.5000 of the counter currency (USD). Same goes to any other pair.

MUST KNOW NO 3 - Most of us can access and trade forex because we have leverage offered by brokers. If no leverage is offered, I myself will not have the financial capability to start this trading career. Leverage is the power to control bigger amount of money by using small amount of capital deposited with your broker. You must understand what leverage means so that you can control your risk exposures to the market by not putting a too-big position that minimize your free margin. Read more about forex leverage here.

MUST KNOW NO 4 - To become really good at trading, or perhaps anything, there is NO SHORTCUT. I'm not saying that trading forex is too difficult, but you just have to follow certain typical procedures for you to success. Ask someone who already earned millions from forex and I can guarantee you he would tell you the same thing. Regardless of what or where you might read about trading forex is easy, do not trust them as those claims are DEFINITELY NOT TRUE, especially if you receive emails from so-called the insiders who have put it all together after trading the market for over 20 years bla bla bla... I tell you most (if not all) of these emails are purely B***S**T. Why? I have bought them, try them, no results, email them to ask why and I didn't even get a reply. Even if they reply, they would ask you to check this and that setting and so on, especially when you buy EAs or forex robots. The point is, if you look for quick-rich-method with forex, trading is not for you. Chances are you will get the quick-poor-method instead. If you want to success in trading, just learn & do what the successful traders have done. This is indeed the real holy-grail in trading... work harder but smarter by duplicating the successful traders.

MUST KNOW NO 5 - You must understand both the technical and fundamental aspect of the market. Just learn them one at a time. Don't overwhelmed yourself with too many things so that you could keep your motivation high. Imagine you are driving a car. Though technically the car is designed to take corners at 120km/h (for example), you don't have and prefer not to do it due to other considerations like weather, road conditions and the passengers in your car that may feel unsafe, which could exemplify the fundamental part of your driving. That is why though I am using a lot of technical analysis, I still balance them with market's fundamental and sentiment outlooks prior to taking any trade decision. This doesn't mean that you have to complicate matters, it's just that the better you know who your opponents are and what they are doing, the brighter the chances for you to play and defeat them. To me, trading is just like a big game that one must know all the tips and tricks in order to success. It is not a fair game after all and that is the main reason why most lose their money.

MUST KNOW NO 6 - Risk Management Techniques. Ok, when someone told you that never risk more than 3% of your account equity in any single trade, do you really understand what he is saying? The fact is most of you probably have heard this before but chances are you have no idea on how to translate this 3% into your trading decision and position sizing. Let's take one simple example - a straight forward one. Imagine you have a USD1000 account. 3% of 1000 = 30 dollars. It means you should not risk anything more than 30 dollars per trade with this account size. From this 30 dollars, you should decide at how big is your stop loss is going to be. If you wish to trade with 30 pips as your SL, then simple formula = 30 dollars/ 30 pips = 1 dollar per pip. Considering you have either a mini or micro account, You can have a 10,000 (with mini lot position) position comfortably. But, say if you wish to risk 50 pips instead of 30 as your stop loss, just do the same by dividing 30dollars/50 pips = 60 cents per pip, thus telling you that you can have a 6k micro position. Simple right? Try it... you'd feel safe all the time. What if you wish to risk 10%? Go ahead, it's your money. Only one thing, just like driving, remember that unsafe driving habits is just an accident waiting to happen. If you develop a bad trading habit, chances are you could make money, but it is only a matter of time before you crash your account into flames. Get the point?

MUST KNOW NO 7 - When you're right, stay. When you're wrong, get out. You need to understand the fact that indicators are just helpers for you to take your trading decisions. These indicators are lagging indicators and only show you the trend that has happened. What lies on the next corner, no indicator could tell you exactly what would happen, NONE. The fact is, the market is made of people who are dynamic (keep changing) and somehow unpredictable at times. Most of the time, they are predictable and this is where technical indicators are designed to be used in the trading world, in order to predict the next move base on the patterns develop by the price actions. So, it's just a matter of getting into the right trade and reap the profit or get out from a bad trade before it's too late. Remember what I told you about George Soros? Check out my previous post.

Ok gentlemen. Of course there are many others as well. If you are really a beginner, focus on this 7 first and we'll talk about some advance topic later on this month. As per my normal disclaimer, I am genuinely sharing what I knew to those who have the interest to read and develop themselves into becoming a good trader who make money most of the time.

Just remember that a good forex guru will always tell you that he only provide the means and methods to trade successfuly base on what he knows and his personal experience, but it is you who is ultimately responsible towards your own success or failure as a trader.

Contrarily, if someone ever came to you claiming that he is a forex master, telling you that he has a secret system to beat the market all the time but you have to pay him 100 dollars with money back guarantee, chances are he is lying, or just like a shovel seller. I've seen too many of these "gurus" and I tell you they are no better than any salesmen. They just want to get you to buy their system. Whether you make or lose money, it is your problem, not theirs...

Till then, safe trade for next week.

p/s: By the way, the dollar is showing signs of comeback since the NFP release last Friday. Watch out as I could probably shorting the EU for the rest of the month.

;)

MESTI BACA KALAU SERIUS TENTANG TRADING FOREX ...

Taken from Nogold.com's Forum.... Really worth reading... So decide at which level are you in currently? Think... Are you ready to go all the way to Level 5?

PROSES MENJADI SEORANG TRADER BERJAYA

Tahap 1 ( Unconscious Incompetence )

Ini merupakan langkah pertama yang anda ambil apabila anda mendengar pelbagai perkara menarik berkenaan forex dan bahawa pendapatan seorang trader forex mengalahkan pendapatan seorang pengarah syarikat. Bagi anda, apalah susah sangat untuk trade forex, ia hanya menentukan harga naik atau turun. Lagi pun ada disediakan akaun demo untuk latihan sebelum memulakan trade sebenar. Lalu tanpa berfikir panjang anda pun mendaftar akaun sebenar dan mendepositkan wang ke akaun tersebut bagi memulakan trading sebenar setelah anda dapati trade di akaun demo anda dapat menghasilkan keuntungan yang berlipat-ganda.

Anda mungkin mendapat keuntungan dengan hasil yang menakjubkan di antara 100 ke 200 pip per lot sehari,. Anda percaya bahawa dengan hanya berdasarkan 1 indicator saja, atau bahkan hanya dengan gerak-hati anda dapat menghasilkan keuntungan. Namun itu semua hanyalah nasib saja (beginner luck), pasaran akan mengalahkan anda. Tidak ada trader yang berjaya hanya dengan faktor TUAH/LUCK. Kerugian demi kerugian akan mula menghampiri anda, anda akan cuba bertahan, namun kalau sampai margin habis, siapa yang dapat bertahan??.

Anda sama sekali tidak menyedari bahawa anda tidak mampu untuk trade forex, namun anda tetap mengatakan pada diri anda bahawa yang anda mampu untuk melakukan trading walaupun semua fakta berkata sebaliknya (Persoalannya: Apakah bulan ini profit?, atau Bulan lepas profit?, ataupun Tahun ini profit? ).

Anda tetap mengatakan bahawa anda adalah orang yang hebat, orang yang akan mampu mendapatkan kunci kekayaan dari trading. Dan anda tidak menyedari bahwa 90% trader yang gagal juga mempunyai perasaan seperti itu. Anda tidak mempunyai sistem yang lengkap, anda dikuasai oleh emosi anda, anda selalu cuba mengimbangi perasaan anda jika kerugian dengan MARAH pada pasaran, anda selalu mengambil keuntungan dalam jumlah yang kecil atau membiarkan ia berubah dari keuntungan jadi kerugian karena anda dikuasai oleh sifat TAMAK, adakala anda tidak pernah trading karena anda TAKUT. Anda membiarkan diri anda dikuasai oleh emosi sehingga margin equity anda menderita.

90% orang yang trade forex hanya sampai pada tahap ini, mereka biasanya kehabisan modal, berhenti trade dan menganggap ini semua hanya mimpi buruk belaka. Sebahagian lagi tetap mencari modal dari rakan-rakan/investor dan trade seperti orang gila. dalam sebulan atau dua bulan margin habis lalu mereka mencari mangsa lagi. Ini akan mewujudkan masalah moral yang teruk.

Mereka masih mengaku sebagai trader namun sebenarnya mereka executor. dan biasanya yang moralnya teruk ini dengan senang hati akan mengambil wang dari rakan-rakan dengan menabur pelbagai janji-jani (pulangan lumayan) dan kononnya akan trade sebagai manage fund untuk mereka. Sebahagiannya lagi akan tetap terus seperti biasa dan mengaku trader tetapi tidak pernah trading, mereka biasanya menyalahkan diri mereka sendiri.

Hanya waktu yang menentukan segalanya, sampai bila mereka dapat bertahan di tahap ini dan biasanya waktu selalunya menang. Proses ini selalunya dalam lingkungan waktu SEMINGGU hingga SEBULAN.

90% traders akan terus gagal dan kekal ditahap ini, hanya 10% dari mereka yang sedar ini akan pindah ke Tahap 2.

Tahap 2 ( Conscious Incompetence )

Di tahap ini anda sedar bahawa anda tidak mampu untuk trading, anda tidak memiliki kemampuan untuk trading yang menghasilkan keuntungan secara konsisten. Dan anda tahu penyelesaiannya, Anda sedar bahawa selama di Tahap 1 fikiran anda dikaburkan oleh emosi anda sehingga anda tidak dapat berfikir secara bernas.

Di tahap ini anda akan mencari ‘Holy Grail’ ( sistem yang sempurna/keramat, sistem yang memberikan keuntungan 100% , sistem yang tidak ada kerugian), anda mulai membeli sistem yang ada di internet, anda membaca semua website yang ada tentang trading mulai dari Malaysia hingga ke USA, anda baca semua ebook yang ada, anda praktikkan semua sistem yang anda perolehi, anda dahagakan ilmu seperti seorang pengembara di padang pasir yang dahagakan air minuman.

Pada tahap ini anda akan membaca semua perincian tentang sistem automasi trading/indicator, anda akan test semua indicator yang ada di Metatrader, bahkan anda mungkin akan membuat indikator sendiri ( biasanya gabungan 2 atau 3 indicator), anda akan bermain-main dengan Moving Everage, Fibonnacci lines, Pivot Point, Camarilla Pivot, DeMark, Fractal, MACD, DMI. ADX, Bollinger Bands, dan ratusan indicator yang lain.

Anda tahu bahawa pasaran terlalu rumit untuk dijangka hanya dengan 1 indicator saja. Anda akan mengabungkan kombinasi ideal dari setiap indicator. Anda tahu keunggulan indicator tersebut dan juga kelemahannya. Anda akan mencuba menanda TOP dan BOTTOM di pasaran dan meneka titik perubahan pergerakan pasaran dengan indicator tersebut. Namum anda dapati yang anda terus gagal walaupun anda rasa yang anda telah melakukan yang terbaik.

Anda kini akan cuba bergabung dengan chat room trader dan menanyakan pelbagai pertanyaan di forum-forum kerana bagi anda kalau anda tidak bertanya sekarang maka selamanya anda tidak akan tahu. Anda ingin mengetahui bagaimana trader lain membuat keuntungan walahal anda tidak.. Ketika ini anda akan memikirkan mereka yang mengatakan mendapatkan keuntungan ratusan pip sehari adalah penipu - anda rasa anda tahu semuanya dan telah cuba melakukan apa yang mereka lakukan.

Anda akan jadi seperti seorang remaja - trader yang lebih berpengalaman akan menasihati anda supaya mencari guru yang betul dalam menuntut ilmu tetapi anda degil dan memikirkan yang anda tahu apa yang terbaik - anda meneruskan pembelajaran anda melalui bahan2 diinternet dan overtrade akaun anda walaupun semua orang kata anda gila (anda sesat dalam kebijaksanaan anda - overload information). Kini anda akan mempertimbangkan melanggan isyarat berbayar melalui perkhidmatan SMS dan sebagainya - serta termakan janji-janji manis penyedia khidmat pembelajaran forex yang menjanjikan pelbagai teknik mudah dan cepat untuk berjaya dalam trading tanpa memikirkan jika benarlah ia semudah yang dinyatakan, sudah semestinya ramai yang menjadi jutawan.

Pada akhirnya anda akan mendapatkan 5 hingga 10 sistem yang lengkap dan mencuba mencari sistem mana yang paling sesuai dengan keperibadian/stail anda. Namum di tahap ini anda akan sentiasa kebinggungan kerana mendengar ramai trader yang mendapat keuntungan dari hari ke hari dan anda pula terus kerugian.

Ramai trader yang berada ditahap ini lenyap dalam masa sebulan yang pertama dan jika ada yang mampu bertahan untuk mengharunginya berakhir sekitar 3 bulan.

Dari 10% trader yang ada di tahap ini, hanya sekitar 7% yang berhasil pindah ke Tahap 3.

Tahap 3 (The EUREKA Moment)
Pada akhir Tahap 2, anda akhirnya menyedari pokok permasalahan bukan terletak di sistem. Anda menyedari bahwa anda mampu mendapat keuntungan bahkan jika hanya menggunakan sistem yang mudah seperti Trendline sekali pun tanpa ada indicator lain, jika anda mampu melakukan sedikit kajian melalui pemerhatian yang menyeluruh dan mempelajari pengurusan trading yang baik.

Anda mulai membaca buku tentang psikologi trading, dan mengidentifikasikannya pada diri anda dengan karakter yang dijelaskan dalam buku itu. Akhirnya membawa anda ke Tahap 3 iaitu Tahap Pencerahan.

Proses pencerahan ini membuat otak anda menyedari satu hal yang penting, di dunia ini tidak ada seorang pun yang mampu meneka secara tepat apa yang akan terjadi pada pasaran 30 detik berikutnya. Apa yang anda perlu hanyalah satu sistem trading yang sesuai dengan stail trade anda serta bimbingan seseorang berkenaan pengurusan trading yang sepatutnya sehingga anda dapat cara bertrading yang betul.

Anda mulai menguasai satu sistem trading dan memodifikasinya sehingga sesuai dengan karakter anda, dan mampu memberikan lebih banyak profit dibandingkan sistem yang asli.

Anda mulai trading jika anda tahu kemungkinan untuk untung lebih besar daripada untuk rugi, anda hanya trading jika ada signal dari sistem anda, anda selalu menggunakan stoploss, karena anda tahu stoploss adalah risiko bisnes yang ada dalam dunia trading.
Ketika stoploss anda kena, anda tidak emosi kerana anda tahu tak seorang pun mampu menjangkakannya, dan itu bukan kesalahan anda. Trading berikutnya akan meningkat peluang keuntungan anda kerana anda tahu sistem anda itu sistem yang menguntungkan secara keseluruhannya.

Anda secara tidak langsung menyedari bahawa dalam dunia trading hanya ada satu hal yang penting iaitu konsistensi pada sistem, psikologi trading dan pengurusan wang yang betul. Dan kedisiplinan anda untuk dalam melakukan trading mengurangkan risiko kerugian anda.

Anda mempelajari tentang perlunya ada guru/teman yang dapat memberikan anda bimbingan yang baik dan sokongan berterusan serta hal-hal lainnya. Ia mengingatkan anda suatu ketika yang lalu di mana anda diberi nasihat tersebut dari trader yang berpengalaman dan anda memilih untuk mengendahkannya ketika itu. Kini anda tahu kenapa anda hanya perlukan seorang guru yang baik yang dapat memberikan didikan dan bimbingan yang diperlukan untuk berjaya dalam trading dan bukannya seorang super trader yang menjaja kehebatan sistem/strategi beliau.

Trader akan mengharungi tahap ini sekitar 6 bulan sebelum akhirnya menerima hakikat sebenar bahawa tidak siapa yang mampu meramalkan pergerakan pasaran.
Dari 7% trader yang ada di tahap ini, hanya sekitar 5% yang berhasil maju ke tahap berikutnya.

Tahap 4 ( Conscious Competence )

Sekarang anda hanya trading jika dan hanya jika sistem anda memberi signal. Anda menggunakan stop loss atau cut loss apabila menyedari terdapat signal yang bertentangan kerana anda tahu sistem anda akan lebih banyak memberikan keuntungan daripada kerugian, dan cut loss yang anda lakukan adalah resiko bisnis yaitu max 2% dari account anda.

Di tahap ini anda memulai pandai memperingkatkan target keuntungan trade anda dan setelah anda mampu melakukannya secara konsisten selama beberapa minggu, anda meningkatkan target tersebut ke semaksimum yang boleh. Dan hal itu pada akhirnya mampu anda lakukan.

Anda memang masih harus kerja keras untuk mendapatkannya, memperbaiki sistem anda (dengan menambah 1 atau 2 indicator yang sesuai bagi menyokong system anda), menguasai emosi anda, dan melaksanakan pengurusan wang yang anda pelajari dan pegang. Anda mulai mendapat pengalaman bertrading sebenar.
Tahap ini biasanya berjalan sekitar setahun atau lebih bergantung kepada kemampuan penerimaan seseorang trader itu.

Dari 5% trader hanya sekitar 3% yang sanggup maju ke tahap berikutnya.

Tahap 5 ( Unconscious Competence )

Nah! Sekarang anda telah sampai di Tahap 5, ini adalah tahap yang paling diharapkan oleh seluruh trader di dunia ini, di tahap ini anda mampu trading secara rilek, anda telah menguasai semuanya, anda mampu berdansa mengikut rentak pasaran, kemanapun arah market berjalan, anda telah berada di posisi yang benar, jadi anda tinggal melihat keuntungan anda bergerak dari 2 digit ke 3 digit.

Inilah tahap puncak bagi seorang trader, inilah tahap Utopia/Optim, anda telah menguasai emosi anda dan kini anda trading dengan account yang terus membesar setiap hari dari keuntungan kumulatif yang anda peroleh.

Anda akan jadi bintang di bidang trading, dan orang sekeliling anda akan mendengarkan apa yang anda katakan, anda faham dengan pertanyaan mereka, kerana anda pernah berada diposisi mereka suatu masa dahulu. Anda akan memberikan saranan bagi mereka, namun anda tahu bahwa kebanyakan dari mereka tidak akan mendengarkannya karena mereka masih trader Tahap 1.

Anda tidak akan mempunyai masalah kewangan lagi, anda mampu membeli semua benda yang tersedia untuk dijual, anda mampu membeli sebuah pulau dan trading disana asalkan ada jaringan internet, anda mampu pindah ke hotel 5 bintang, dan menjadi penghuni tetap disana.

Anda mempunyai penghasilan seperti seorang superstar, anda mampu membuat buku sendiri, anda mampu trading dengan margin yang tanpa batas, dan account anda akan berlipat-ganda dari account awal.

Jangka masa untuk sampai ke tahap ini adakalanya bertahun-tahun lamanya. Namum sebenarnya bergantung kepada trader itu sendiri.
Hanya 3% trader yang mampu mencapai tahap ini.
Sekarang anda mampu dengan bangga berkata:

” SAYA SEORANG TRADER “

THE DOLLAR HAS YET TO SHOW REVERSAL...

Today is 30th November 2009, the last day of the month and as of this writing, the dollar has yet showing a clear sign of reversals.

Let's look at EUR/USD fundamental & technical analysis for example...

1. Though this pair made a yearly high last week at 1.5145 on Wednesday, market were hit by the Dubai news last Thursday and instantly react to safety, in which the pair were rallying down to 1.4829 before closing at 1.4966, 140 pips above the daily/weekly low.

2. This tail between 1.4829 to 1.4966 shows that bulls are still indeed in control, meaning that despite of reports saying that traders start taking flight to safety, the price actions indicate that risk appetite among market players are still there.

3. As of this writing, the bulls are still in control with daily high so far at 1.5065.

4. The question is, will this rally continue or is this just a trap to bring in suckers before market could make a significant reversal in December?

5. Some traders may perceive me as hoping for the dollar to reverse, though the fact is not.

6. What I am trying to share here is since this pair has been climbing up since last March with one little Doji in June (refer to monthly candlestick), I have no confidence in going long for this pair, at least in December.

7. The trend is indeed clear, but what I see is a technical correction is coming.

8. It probably not a reversal, but at least a correction to the 1.4500 (23.6%), 1.4100 (38.2%) and 1.3800 (50%) fibonacci levels.

9. My simple rule of thumb always says - Anything that goes up will eventually come down, anything that goes down will eventually come up... or so called the Ying & Yang in trading... the cycle will continue.

10. The only thing that we need to be careful with is not to over-speculate in a way we tend to stand in front of a running train (sell when market rally up) or catching a falling knife (buy when market is rallying down)...

11. No matter what you believe, the market is always right and we have no right to argue. Period.

As usual, my disclaimer is always -> I could be wrong, but at least this is my stance for the moment.

I am waiting for the opportunity to go short on EUR/USD, but 50/50 on GBP/USD. Best thing to do is to sit and watch how the market behave today before deciding on what to do for the rest of the week.

By the way, do not forget that this week we have NFP on Friday... chances are swinger will likely to off-load their positions prior to this BIG NEWS... hence creating good opportunities for us small traders to take advantage on this volatility.

Have a blessing week & safe trade...

;)

STAY CAUTIOUS ON WEEKS AHEAD...

Though I personally insists on taking action on my 100th post, still being cautious will do more good than harm to your account.

From simple perspective as a trader, we hardly care, or maybe we don't care at all, on which is which since as long as we are riding the right trade and make profit, we're good. Yup, that's it... and I believe this is what Soros has in mind when he got the title of "the man who broke the Bank of England" back in September 1992, making USD1.1billion in the process.

If he were to care about England's welfare or Asia countries in 1997 when he launched another pack of currency attacks, then he wouldn't do what he did as a speculator.

Anyway, back to the caution topic, if you look at technical and fundamental analysis' across the boards, most of them are saying that range-bound is likely on weeks ahead as the strength of bulls and bears are at equal stage.

One thing that we as retail traders must be aware of is that those reports are reported base on something that has happened and is happening. Hardly anything on the potential future movements.

So, my key point here is - engage safety at all times and do trade base on what you see rather than what you wish to see. Breakeven the position if you wish to swing for days or weeks ahead... so that we can call it risk free. If you're wrong, or feel wrong... re-assess and decide.

Why am I telling this? This is because if you refer to wikipedia written about George Soros...

He ascribes his own success to being able to recognize when his predictions are wrong.

I'm only rich because I know when I'm wrong... I basically have survived by recognizing my mistakes. I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or [take] flight. When [I] make the decision, the backache goes away.[20]

Have a profitable week ahead... ;)

 

WHERE THE US DOLLAR IS GOING?

Since the beginning of March this year, the US Dollar is severely on its way down towards a bottomless bottom. Major correction seems near but nothing can be confirmed yet, especially on the EUR/USD pair where double tops are likely to be seen at 1.5060 and 1.5047 respectively, but still the bulls strength are there trying to continue the upward trend further, with lesser and weaker momentum.

As a trader in this extremely volatile and dynamic market, where do we position ourselves? Are you in control or is it fear or greed that is more dominant in your decision making? Or... should we wait for the right signals and confirmation in which by that time, you are likely 100 miles behind, or should we take a bet on either to further short the dollar or taking some calculated risks on betting for the reversals.

You see, this is where currency analysts play their cards wisely. I take the Dailyfx Plus signals for instance. Though you can blindly follow the signals at your own risk, I still trust my own due diligence and analysis of the market rather than relying on these signals. Let me tell you why...

The way I look at the trading signals that are provided, it seems like someone behind the scenes is giving all these trade ideas simply by rolling a dice, or after a significant spike or short term rally occur on any pair. Statistically, most of the time, you would be more profitable if you just do the reverse instead of following these signals... but of course, not necessarily all the time.

The point that I am trying to share here is that... no one really knows how the market would behave in the next 30 seconds, 30 minutes or 30 days and hence, even these experts are giving these signals base on probability accordingly to their technical & fundamental analysis in which, to my observation, is hardly accurate or any better than your own analysis.   

Therefore, the choice is yours and you should know at what you are doing in the first place. Rather than relying blindly on these signals, analyze & justify your trade decisions accordingly to your own analysis, and of course... stick with it.

Back to the US Dollar topic, I guess the best word  that you may heard from most analysts out there is caution. But if you ask me, I would say take action instead. Look closely at those candlesticks on EU especially, this could be one of the rare opportunity for you to enter as a swinger.

Why? Though no one can ever tell you what is going to happen next, somehow my gut feeling and analysis is telling that sooner or later, the trend is coming for a major technical correction, probably not reversal as the dollar is likely to continue its journey downward from the bigger perspective.

If you're interested, feel free to read further on the dollars fundamental & technical analysis from Actionforex.com since their analysis has no bias on any direction. Personally, I really like their technical analysis as it makes my job a lot easier.

Then, you choose base on what you think and see likely to happen. Don't be either too greed (as in putting big positions with no clear direction...) or too fear (as such you do not pull the trigger when everything is indeed clear for you to act). Balance these two beasts within you accordingly...

So... once again, where the US dollar is going for now? Personally, I don't know but for sure it has been on sideways and choppy movement during these past few days and weeks but... you must remember that normally a range bound movement will likely be followed by a major breakout that will for sure happen in the next few days or weeks. It's just a matter of when...

Base on the current setup, I am bullish bias on the dollar looking at the date today approaching December and high probability of profit taking of the big boys who had shorted the dollar since February or March this year... Look at the monthly/weekly chart and surely you know at what am I talking about.

This is what I see for now and for sure, I could be wrong as well. So if you choose to follow, please take your positions accordingly to your comfort risk level as well since you must take accountability on each trading decision that you made, regardless of making profit or losses on the outcomes.

All the best...

TRY THIS 50 PIPS DAILY STRATEGY....

This is my 99th post of this blog and hence the next one shall be something special that I would like to share with my fellow traders who are kind enough to read my writings...

As I have always mentioned before, the reason for me to have this blog is more on sharing, genuinely on what I have learned and experienced so far in life especially in this trading journey, towards my own destiny of financial freedom... You may or may not believe, but the fact is... those writings are honestly written without any prejudice...

Ok... so what shall I share this time... Listen up...

First, I have a few requests from my close colleagues on conducting classes on how to trade forex profitably... and unfortunate enough, lately after having a new baby boy coming on-board, I am a little bit extra occupied in balancing a new routine... well, extra commitments mean got to sacrifice a few things initially... you can't get everything in life right... so need to prioritize things accordingly...

Secondly, there is no such thing as getting a winning trade all the time. I had heard a few traders claimed that they never had a lost trade and later discovered that these guys are actually cruising their losing positions without stop loss for weeks and even months... yeah sure, if you have a strong margin with relatively small capital at risk, you surely can even ride your position for years... or perhaps decades... but what's the point?

So, back on your feet... be true and frank with what you're doing and your intention in trading. We are here to make money, no others... and there is no place for average traders to survive in this market.

Hence, to make profit consistently... you need 5 things at least...

1. Get into the right trade... find and use a reliable trading system...
2. Risk appropriately... 3% and below... the lower the better...
3. Time your entry well... avoid especially big news like NFP if you do not know how to trade the NEWS.
4. When in profits, lock it at breakeven or higher...
5. When in losing position, decide your tolerable risk and stick to it with a fix stop... Avoid margin call at all costs...

Ok, so what's with the 50 pips strategy ?...

You see... by looking at the daily candlesticks chart, everyday when the New York close at 5am (now 6am due to Daylight saving), you will see that normally for all the major pairs, plus some exotic crosses like the GBP/JPY and EUR/JPY, there is for sure the tendency for the pair to move either...

50 pips UP or
50 pips DOWN...

during the early Asian Session... especially when the trend is clear and the force is dominant on one side.. either bull or bear on the previous day...

Taking advantage on the momentum or trend, plus of course some smart risk management application at all times, you could easily get these early days 50 pips during the early mornings each day...

Surely it doesn't happen everyday, but there are more days when catching these 50 pips early in the morning seems easy than after London Session and beyond...

Ok ok, you may miss the points here... let me reiterate...

1. Trading is all about a game of probability... so..
2. The way I see it... you can test your probability speculative skills by looking at the daily chart... and
3. Visualize the possibility of today's chances of movement (any pair you like)...
4. Either 50 pips up or 50 pips down... or a 1 to 1 Risk Reward ratio...
5. Try this on any pair you like, starting with EU and GU... avoid UJ for the time being...
6. And set your SL and TP both at 50 pips...
7. Record the statistics and see how you perform...

If you can get it right 6 out of 10 attempts, meaning hitting your 50 pips TP instead of SL, then well done! You are already a good currency speculator... BUT...

If you hit more SL rather than your TP... then you must check back your system and setup...

A good system will give you good returns on average, with at least 60% accuracy...

So, why 50 instead of 10 or 100...?

Ok, frankly speaking, 10 pips are just too little... you can get out at 10 if you want but then, it takes you only one mistake with 50SL to wipe out your 5 profitable trades with TP @ 10 pips each...

Now what about 100... ok, hundred is too big on normal days, especially during Asian Session and hence I do not recommend you to use this strategy with 100 pips coz on normal average days, currency pairs normally range between this 100 pips channel until later during London Session or big news hit the market...

So, 50 is the best range, or perhaps you could even try with 25 to 30 pips as well... this is a 1:1 risk reward strategy so you must discipline yourself to maintain your TP and SL at the same value... simply to test your accuracy in speculating the market...

One more thing... look around and ask yourself... is this a fair game? are there many losers or winners in this market? Be true and surely you knew the answer...

So, base on my experience, like it or not, you do have to speculate at times, but of course, using both the technical and fundamental approach in trading by reading the market's psychology correctly at the same time...

Just like in visualizing the probability of 50 pips movement up or down... you need to apply your analytical skills instead of blindly putting position base on gamblers instinct or guess works, even though you can do it with profit probabilities as well....

Last but not least, I knew most newbies & dummies guide would tell you bla bla bla just follow the system, don't guess, don't speculate etc etc but the fact is... most of us who follow the system blindly would end up being dissapointed... right?

So, bear in mind that...
- it is not easy to trade forex...
- if you want to be an expert, do it with all your heart...
- I myself is still learning and will keep on learning...
- I will share what I knew with the hope that there is someone who is better than me who could and would share his trading intelligence with me in the long run... so that I could expedite my financial freedom goal sooner than expected...
- You too can become good if you keep on looking for ways to improvise things...

Till my next 100th post... take care and stay safe...

;)

I'M STUCKED @ 1.4839 WITH EUR/USD...

Holding your breath too long under the water is one of the thing that any trader should avoid. I am holding to this principle too but sometimes, as human, we do have the tendency to make the same mistake too.

Last week's Thursday at around 9am local time here, I entered short on EU pairs and keep it affloat with 200 Profit Limit and 200 Stop Loss or 1.4639 as TP and 1.5039 as SL.

During Friday's NFP released, I was out and didn't watch the market's action until later that night. Very unfortunate though as the market did turn to my favor briefly at 1.4812 but then went up all the way until market closed slightly above my entry at 1.4847. I didn't close the position because I was too busy & tired preparing for the Project Team's Team Building activity that was held on that Saturday morning.

When Monday morning came in which at the same time I was hit by serious flu fever, the EU price opened at 1.4877, went down briefly till 1.4852 and later all the way up till 1.5021. At this point of writing, the price is playing around the 1.5000 level, 39 pips below my SL.

You see, this is the kind of dilemma that I personally believe most traders would face. The test on your discipline and patience. If yesterday's price had hit my SL, then it would be end of the story.

But now, though the momentum is convincingly still on the upside, no one can really tell whether today's price will break yesterday's high or not. Though gold has made a new high yesterday that contributes towards dollar's meltdown, it doesn't guarantee that it could go higher for today.

So what now? Since the dollar is definitely under pressure and I am very clear that this is already a wrong trade to stay in, I'd rather come up with a realistic exit strategy.

This is what I am going to do...

1. I must accept the fact that this is already considered a lost battle, with over 170 pips in the losing territory in which I do not plan to hedge this position or else I could be stucked even longer if the price go even higher.

2. Yearly high so far is at 1.5060 (26th Oct) and hence I will move my SL 50 pips more to 1.5089, around 29 pips higher than this yearly high.

3. I leave it to the market to decide the faith of this position. Technically speaking, there is a chance for correction but no one can really tell until it happens.

4. To hold this position even higher than 1.5089 would definitely be a big NO-NO as you just don't know where and when the new highs will stop, could be at 1.55, 1.60 or even higher than that.

5. If I were to close it now, it would be pathetic to see if say it hits either that 1.5039 or 1.5060 price level and later make a serious correction to my original profit target.

6. Why 1.5089? Well, as you can see the yearly high is so far at 1.5060. Chances are that level could be a very strong resistance where most bidders would wait to enter. If it is not, then surely the price will break beyond 1.51 and so on... So i can consider that level as my last defense, around 29 meters from the last defensive wall...

7. What if it hits 1.5089 and come back? Ahaha... What to do... Eat the bullet and come back... That's all I can say. See, this is where no one can really tell. You got to calculate your risk and be emotionally detached with your decision. Otherwise, you would have gone all the way until you get that margin call. Sorry I'm not goiing to risk my whole batallion for this one bad trade... no way...

In fact, looking back at what happened yesterday, I could have close this position and ride it long instead. But how was I supposed to know? I bet on short and I must say it was a wrong decision, price and time to enter.

One thing for sure is anything can happen in this market and we have to be realistic with our target. My forecast for now, of course considering my position which somehow has emotional attachment... haha... is for the price to hit the 1.5060 level (max) in order to create a double top formation before it can come down all the way to the 50% Fibonacci Level at 1.4480 (taking lows on 8th July @ 1.3832 and high at 1.5060), though my profit target would still maintain at 1.4639.

We'll see what happen today or in the next few days... Like it or not, I do have to put some hope this time, though I hate to hope...

Till then... Have a good trading week... though doesn't look like a good week to me now...

;)

ANALYSING THE MARKET'S PSYCHOLOGY...

What Does Market Psychology Mean?
The overall sentiment or feeling that the market is experiencing at any particular time. Greed, fear, expectations and circumstances are all factors that contribute to the group's overall investing mentality or sentiment.

Investopedia explains Market Psychology
While conventional financial theory describes situations in which all the players in the market behave rationally, not accounting for the emotional aspect of the market can sometimes lead to unexpected outcomes that can't be predicted by simply looking at the fundamentals.

Technical analysts use trends, patterns and other indicators to assess the market's current psychological state in order to predict whether the market is heading in an upward or downward direction

Ok... Let's begin. In laymen term - Market is the market and there is nothing we can do about it. Nothing at all. The big question that we need to know is...

WHO ARE THE MARKET PLAYERS?

- The Central Banks?
- The Feds?
- The Institutional Traders?
- The Brokers?
- The Retail Traders?
- The Fishes... you and me...

The next questions then...

What do these people have in mind and what's their next move?

What causes the market to rally or remain static during certain period of time?

Are they thinking that the USD is undervalued? Or perhaps the Euro is overvalued? What about the Yen? The Swiss and the Cables?

Being a technician in this market is surely one of the easiest way to read the 'what's next' simply by analyzing the Candlesticks, Moving Averages, Stochastic, RSI, CCI and whatever indicators that you choose to apply.

But then, the real movers of these prices is a direct consequence on what these big boys and the majorities are doing, regardless of what the signals tells you to believe.

This is where most new traders, or the fishes fall as prey. The failure to read the market from the bigger perspective, and the tendency to enter the market when the big boys are not around. Yeah sure trend is your friend, but not the market. The market is full of "robbers" who have no mercy upon you and your account.

The point here is... I am trying to share my views that we, yes you.. and I are simply the small fishes in this market, at least most of us... we can't move the market but we can take advantage if we're able to read, analyze and anticipate the movement by reading the market's psychology correctly.

The reason I'm sharing this is because there are just too many trades that I personally tend to become emotionally attached when I got it wrong, no matter how rational am I when the position was opened. To hold or to pull out... which one? It's not easy... Why? Let's see...

1. At times, when you pull out prior to hitting your stop loss, the market later reverse and went even beyond your entry without even touching your stops. Sounds common huh! Why the hell did I pull out? I should have trust my trade... but surely it's too late to regret.

2. Another instance, you insist on discipline and stick to your stops as planned. The stops are hit and that seems to be the lowest/highest point of the day. Haha... Another frustration! I should have move the stops a little bit just now. Again... it's too late to regret.

3. Later, you thought this is the best... no stop loss at all. When the trades go wrong, you ride the losses up to a point of no return. Just imagine those who went short on Euro at the 1.4000 price level... Where are they now? minus 700 pips... phew... Will it ever come back? When? And yeah, if you didn't get the margin call... otherwise those positions have been long gone under the oceans... of course together with your account... ;)

So, now we go back to the trading school of thought in which the old timers has always remind us that...

TRADING IS AN ART... IT'S NOT AN EXACT SCIENCE... Bro...

Hold this principle by heart and you won't question when any of the above situation hits you.

So, the way I'm doing it now.... as per my latest fundamental market approach's revision...

1. Stop Loss is a must, regardless of how small or big the value is... say USD500 converted to 100 pips will allow me to have a 5 mini lot position (USD5 per pips). The reason is, we just don't know when the big waves could hit the market, without it, you're like having free-sex without protection. So, always say NO to NO Stop Loss...

2. Always stay out. I knew that there is no way for me to get it right all the time so regardless of what my technical system tells me what to do - buy or sell - I have a built-in system within me that tells me to stay out most of the time, the one that lock-out the adrenaline rush. Only when this internal signal tells me that I am ok to trade then only will I check on what the technical system is telling.

3. I watch closely my timing now. Asian Sessions are trad-able but not as good as London Session. Monday is tricky as well as Friday. But not to trade on Friday is kind of wasted opportunity since lately big moves did happen on Friday. You just have to be extra careful. One more thing, I enter only at 15 Minutes to 1 Hr interval... not anything in between.

4. Still relate to timing, Economic News Release is of prime importance to my trade now cause it is time when big players are around where we should take advantage of. Nevertheless, it is easier to trade when there are no big news around. For this week... with interest rate of Feds, BOE and ECB plus NFP on Friday, I just knew that it is not a time to play around.

5. The Japanese Candlesticks. This is indeed the easiest way to see on what the crowds are doing. Study the Monthly, Weekly, Daily, 4 hrs as well as 1 hr candlesticks in terms of price action, especially the direction, volume and momentum. The 15M and 5M are used mainly for my entries but the hourly and above are used to get the general psychology of the market.

6. System-wise, still holding on to my old KF indicators plus the Black Dogs (I call it BD) principles. I do not rely on those arrows blindly but using its 50 & 15 EMA's concept to my advantage. Guys, i don't care what others say, but these two work so well for me...

7. My simple thought always tell me... Join the strong one, but of course, time your entry well.

In short, you need to know and believe that trading is not easy and it's not a fair game either. Unlike us the traders, the house (ie Broker) always win. But using the right tools and statistics in anticipating what the next move could be... chances are we could always turn the odds in our favor... especially with some smart risk management applied in each trade.

Otherwise, trading forex purely based on hopes and wishful thinking will probably give you some profits initially, but surely will not make you survive in the long run... just like gamblers... And I am very sure about this...

Have A Good Trading Week...