RESPECT THE NEWS... BUT LISTEN TO THE MARKET

Believe it or not, there are so many instances when technical setups were ruined due to sudden economic news released that either accelerate or reverse the existing trend and market momentum, creating gigantic spikes that either hit your TP or SL (if you have one). One of the best Central Bank that likes to surprise the market from time to time is no other than the BOJ. (Bank of Japan)

To make it worse, retail traders like us especially the newbies have no idea on what was going on. If they got lucky, they may be riding a favorable move that happened to be breaking out right after their entry. Nevertheless for those riding on the opposite site, most will probably be clueless on what was happening and only realized that they were on the wrong side of the market once the official news hit the wire.

So, please be careful.

The point here is simple. If you are a serious trader, regardless whether you are a swinger or (especially) a scalper, please take serious note on all potential economic news for the day, weeks and months. There are many websites out there that highlights these daily and weekly economic news and one of my favorite is forexfactory.com. On top of that, you can also have these on your i-Phone or Android by simply downloading free applications like MyFxBook from the Play Store.

At the same time, do not forget to also check the major news channel and website like Bloomberg, Telegraph, FT, CNBC and CNN since keeping yourself update on the latest central banks policy as well as the current geopolitical sentiment like Brexit, US Presidential election, Turkey Coup attempt, terrorist attacks, QE and stimulus plan is a must since these news will somehow move the market.

I do not ask you to become a market specialist or an expert economist, but again keeping yourself update is a must. All you need to do is just read the headlines, to say the least. It will keep your market views between technical and fundamental in balance at all time. This in return will provide you with the additional edge that you definitely need in making sound trading decisions, regardless of going long, short or simply stay out from the market for any pair that you wish to trade.

You know why this is important? Regardless of how technical you are, the market is always fundamentally driven by humans. Traders are made of humans that conceal the emotional feeling of greed and fear at all time.

Therefore as a serious trader, it is our task to continuously analyse and understand the market's behavior and psychology based on the latest sentiments. Sentiment in my simple definition, is the market's believe that will normally last longer than you expected until the next news hit the wire.

On the other hand, no doubt that technical move works best when there is no big news around the corner, in which market technicians will utilize all sort of technical tools available in their trading platform to speculate the next potential move by market participants, especially the Moving Averages', Fibonacci, Support and Resistance Levels, RSI etc just to name a few. You too should take advantage accordingly when this is happening since the conditioning of market's psychology will be probably based on equal technical perspective.

But when big news like the NFP, FOMC, Interest Rate, GDP, CPI/PPI etc, most market technicians will stay away at least for a while due to potential high volatility that these news will bring once the figures are released. So again, please be careful.

Now back to the original topic above, again please respect the news but listen to the market.

What is meant here is very simple.

Whenever there are significant economic news for the week or the day, say NFP at 8.30am EST on the first Friday of the month, take note on the data released at that particular time. So unless you want to gamble with your trade, it is worth to respect these specific time and do not assume how the market will react. No one knows for certain.

Now it comes to the listening part.

After the news release, do not bother about the economic figure so much. What matters now is how the market response to that figures? What sort of sentiment is created after this news released?

This is definitely more critical to your trading decisions since you should not blindly going long for the USD even though the US data were super positive. How the market response must be observed and listened closely since there are many underlying reasons that generates the bullishness or the bearishness of the market participants in general. Movement could be in favor to the USD due to Risk Aversion but can also go against the USD due to Risk Appetite.

The easiest way is let the market settle down, and follow the trend afterwards.

In short, pay attention to the news release, understand the sentiment and later just follow the trend based on the price action. The good thing on paying attention to these news release as well as observing the market's response is that it will provide you with better entry opportunities, regardless what position that you are taking in the market.

There is no need to be emotional here. Just accept the fact that the market is always right, regardless what they are doing. If you cannot stand the heat, just stay out at least for a while. Period.

IT IS ALL ABOUT PATIENCE & DISCIPLINE...

Refining a technical system, understanding the fundamentals of the market, absorbing the markets' sentiment as well as studying the price actions are all the basic elements of making good entries and identifying good setups for your trade.

But none of these are useful unless you have blend them well with true self-patience and discipline.

Trust me, even after 9 years of trading forex, I still regard these 2 components are the remaining 20% of the subject that I have yet to fully graduate. It's definitely easy said than done for sure. By looking at the figure itself, clearly it is a Pareto Rule in which these 20% gaps consistently contribute to the 80% of my trading problems.

PATIENCE... PATIENCE... PATIENCE...

If only I could wait a little bit longer, I would have gotten a better entry or probably exit price for the trade. If I could be a little bit more patience, If, If and If... the story lines remain the same.

DISCIPLINE... DISCIPLINE... DISCIPLINE...

Same thing here. Why didn't I stick to the Risk Management plan that I have developed upfront? Why was I so impulsive to jump in without really seeing the big picture? Why didn't I stick to the set TP and SL target? and so on. Lack of discipline making you into a highly emotional trader that decides impulsively from time to time.

Sounds common right? I knew you agree with me.

Nevertheless, there is a solution to these problems.

PRACTICE... PRACTICE... PRACTICE...

Yes. Practice makes perfect. What else?

Patience and Discipline can be practiced indeed. Though it may take a while, but through a systematic approach for your trading, you will improve your patience and discipline as time goes by.

Let me give you some tips on how to practice patience and discipline for your trading. I call it the RWAPD Method. Of course I developed this myself and self-applied on day to day basis. Trust me, it works!

1. Relax - Always start your day with a deep breath. Just relax. If caffeine can help you on that, go get a cup of coffee before you switch on your MT4.

2. Wait and Watch - Sit in front of your notebook and watch what's going on. As you know, the markets are basically having 4 kind of moves in general, so just watch what the market is doing right now whether it is ranging sideways, choppy, trending or about to break out.

3. Analyse and Assess - After doing the first two, then only you start analyzing and assessing the overall market's condition. What time is it now? Is the market tradable? Who's in control - The Bulls vs The Bears? Is there any news coming up? Where are the support and resistance? Etc etc. Analysis should cover all the 4 elements of technical, fundamental, sentiment as well as price action.

4. Paper Trade - Now that you have analysed the market accordingly, doesn't mean that the market will move accordingly to your analysis. Unless you really see a very good setup in front of your eyes that gives you no reason not to enter, the best is always to paper trade. This is how you develop your patience and discipline accordingly by not jumping into the market straight away. Just open imaginary positions by writing the intended short or long position on a piece of paper, or probably in your trading journal if you have one. From there, see how it goes. If the Paper Trade turns out to be good, wait for the next wave to enter. If it turns out to be bad, you knew that you saved yourself for a better trade then. Don't worry on missing a good trade, worry more on entering a bad trade. Yes, it is that simple.

5. Decision - Now after doing all the 4 things above, it is time to decide. Should you enter or should you just stay away from the market. Of course you can also set pending orders, which is totally up to you. If not sure, take my advise just by staying out, at least for a while. Why? This is because to me "NO TRADE IS ALWAYS BETTER THAN A BAD TRADE". So you decide wisely. The make or break of your account is just a click away from the market. If you are not careful, the market will always have this power of mass destruction to your account, and vise versa.

Alright. I hope it helps especially to those aspiring new traders out there. I am not an expert but for sure I know what I'm doing.

Till then, have a nice day!

IT'S BEEN 3 YEARS SINCE MY LAST POST

Wow. Surprisingly it is 3 years indeed. Now that I am working in the middle of the Iraqi desert, I guess the photo below is pretty relevant. Nothing to do with forex though. :)

Nevertheless, at the time of this writing:
1. Brent Crude is at USD 34.74 and WTI is at USD33.62 (had hit as low as USD27 on previous weeks)
2. The world economy looks gloomy in general.
3. The crisis in Middle East continues. (you can Google since I am not qualified to write about this)
4. Kedah is about to change it's Chief Minister.
5. Malaysian PM still Najib Tun Razak.
6. Ringgit Malaysia (RM) is at 4.15 against the greenback.
7. Gasoline price is at RM2.05 for RON97 and RM1.75 for RON95. Thanks to the Government, finally some sensible reduction with regards to World's crude price.

Well, as far as forex trading is concern, I guess the skill remain intact as it is since I still monitor the market as well as price action on daily basis. Accounts remain alive with minimum amount of investment. The fact is I am not a millionaire to date since I still need to keep my day job for security reasons. But of course there is always Plan B in case of anything, and definitely trading is one of it.

Looking at the trending of the market, I just want to share one of the fundamental knowledge that I learned previously. Among the key things that every forex trader must know with regard to market movement are as follows:
1. Trending Up or Down (Bullish vs Bearish)
2. Sideways within certain price range (Sheepish)
3. Breakouts - a tsunami of either up/down side, especially during news release (i.e. NFP, Interest Rate, BREXIT, CPI/PPI etc)
4. Choppy or Zig Zagging - this is my own definition based on experience. Something that is not in the Economic Calendar but certainly can kill your account. Normally an equal strength between the Bulls and the Bears.

There you go. 4 type of market movements that you need to understand. plus one more as below.

5. Quiet & Thin - hardly move either way wit low liquidity. Normally during Bank Holidays, Monday morning as well as late evening after London session is close. Careful not to trade during these hours since it is subject to market makers manipulation with bigger spreads on every currency pairs.

Back to daily life, I have been working in the Middle East for the past 18 months (yes, same job with same company) and with average internet connection over there (luckily still has connection) definitely trading the forex spot market will be a big NO NO. Well never mind. Until next time (perhaps another 3 years LOL), take care folks.

THE XIII GENERAL ELECTION FOR MALAYSIA

Guys and Girls...

Vote wisely. Changed is not necessarily required if the current government is doing its jobs very well. Think and choose.

The facts are:
1. No government in the world is perfect.
2. Most leaders are good at speeches, but the one that inspires and do what he says are the one that matters.
3. Stability is the key. Riots will only kill business.
4. Work hard for your own prosperity. It's not the government's job to make you rich. Instead, you should use the government in helping you becoming rich. Do not abuse the facilities and opportunities arise.
5. Extremist go nowhere. Be rational and moderate in your making your selection.
6. Face it. Politician nowadays are hardly working for the people. 9 out 10 are individualistic who are more concern about his/her own prosperity instead for the people in general.
7. Take chances. Don't just sit and do nothing. Even the immigrants can make more money than us... so why not you?

As age is increasing with more and more white hairs on the head, common sense starts to kick in more than anything else. This is the time when your knowledge, thinking pattern and what you believe in come to a test. No one can force you... it is definitely your choice to choose. Worry about things that are under your control instead of those beyond your control. Do not believe and speculate things base on hearsays. Work on facts instead...

Finally, we won't live forever after all... so decide what you want and by all means... do all you can to achieve it. Give up only when you die...

Happy voting...

p/s: SAYA PILIH UNTUK MENGUNDI... but I'm not in Malaysia now... so how?

PLANNING IS JUST AS VITAL AS PROPER EXECUTION...

There are too many instances when people did question me about the planning that I have or currently doing. Yes although they have a point in saying that there is no point of good planning if we can never execute it as per plan, but still planning is still everything in any single thing that I do in a day.

Without doubt, I believe most will not argue on this point.

Just in case those who questioned me do read this article by accident or purpose, let me re-iterate the importance of having a plan in anything that you do, no matter what.

1. Every single minute spent on planning will save you 10 minutes in terms of execution. Have heard this before? Yes, I really believe in this phrase.

2. You are like committing suicide when you embark or adventure into something without first knowing at what you're playing with and without proper entry or exit plan.

3. Fail to plan and you are planning to fail. Sounds common too...

4. Planning will provide you with a benchmark whether everything is on track or otherwise.

5, Planning will give you better chances of success.

6. If you read Sun Tzu's Art of War... it is all about planning on how the Chinese Ancients are preparing themselve for Wars... and even applicable to today's business world.

7. You jump I jump... No such thing man... I must know where you are planning to jump first... So, planning to me... is almost everything.

If I have 10 hours of getting the jobs done, I would spend at least 6 hours on the planning works...

Even in your marriage and relationship with others... you need to plan what are the things that you are going to embark and achieve together.

Trading forex? Of course... I would spend hours and days on the planning side.

So much to write indeed but I decided to cut it short coz the point is... Start planning now! It is something that you should enjoy doing at the same time because it's give you a vivid image of the futures...

Even in golf I need to plan every shot before making one... Whether the execution is 100% according to plan or not, that is different story...

THINGS ARE HAPPENING... I SUPPOSED...

Having a glance on the forex market today, I have a bad feeling that things are falling apart, indeed. The worries that we read, watched and listened from previous years are turning into reality, NOW rather than sooner or later.

Gooossshhhh... It's like a big tsunami is on its way... Where is Captain America? WHAT IS GOING ON WITH THE US DOLLAR?

Will it collapse as per what everybody is saying? The consequences of printing money at will...

Even the Americans are losing confidence on its own currency. Then what about us?

Let's look at gold prices and precious metals for instance. No one is dare enough to hold the dollar any longer, well at least from a laymen point of view.

Well, my view doesn't really matter indeed at this point as what matters are what is happening next?

What I knew for sure is that the biggest holder of US bonds and treasuries are liquidating their assets in US Dollar in stages... meaning getting away from the dollar as soon as they could...

The NIA (National Inflation Association) of the United States are sending alerts for Americans to be prepared and ready for hyper-inflation and how they correctly predicted the rise of metal price almost perfectly...

I am scared indeed. The video that I watched a few months back was telling the truth...

IT IS HAPPENING GUYS!

Could this be the collapse of the world financial system or would it be the United States alone? In due time, we shall see...

For now, take care of your money and don't keep it in your savings account... Buy properties, lands, metals or whatever investment mechanisms that you could trust since the paper money is losing its value... faster that you could imagine.

But of course, you need to keep some for your roti canai and groceries... ;)

Have A Nice Day.

UNDERSTANDING THE MARKET'S PSYCHOLOGY...

It's been 3 months without a single article updated in this blog. I had been very busy and occupied with my day job (as well as golfing) that I had even forget that I have a blog to update.

From an oil refinery, project, operation and maintenance nature to a new environment where technical skills are pre-dominantly vital, I believed I need more time to settle in and to re-awake my technical strength in engineering in order to survive with this new assignment.

For now, I am working in KL and no longer in Melaka for good. From Oil Business to Corporate and I'd probably be joining one of the nation's mega project soon in Johor.

Anyway, still the same as before, my key interest is still here with forex trading, a game of probability where 90% of traders lose money. In fact I am still analysing the market on daily basis and open positions accordingly with my demo account. I am still passionate and enjoy the thrill of forecasting the market, though I could and would be wrong on certain cases.

With my live account perhaps only one or two trades per week as I am not really watching the market as closely as before due to time and location constraint.

Perhaps the best tip that I could share with my colleagues adn followers out there who may be asking where were me for the past 3 months is... focus on your timing and risk management regardless of what technical indicators that you may be using.

The deeper you explore this market, the simpler it becomes. Trust me you will know it once you are there. It's just a matter of whether you survive... or give up. You choose.

The best thing is you don't really have to guess where the market is going in this money-makingandlosing-game. You just have to understand on how to read the market properly accordingly to the trend, signs and patterns that were left behind. What the crowd is doing & could be doing has always been my first question whenever I open up my trading charts. The reason I put could is because no one knows exactly... so anyone could be wrong inclusive me.

Though the question may sound fundamental, it is indeed technical as it will be followed by technical analysis on the statistic probabilities.

Keep in mind that guessing blindly is just like gambling. So be wise with your trading decision... and be yet wiser. Don't chase the market... instead let it come to you.

One thing that dissapoint me is that most new traders who were seeking my advice are hardly listening to the advice given until they crashed their account. Perhaps this is normal huh... but what can I say. This could be the nature that brokers want to maintain in order to attract more losers into the market. So be it...

Anyway in short, all I want to say is I am still here and will keep on updating this blog whenever I have the time and ideas on what to write. As mentioned earlier in my first year as a blogger, I am not really looking into becoming a celebrity in this blogging world, instead it is a journal of my own where sharing is the key word apart from keeping them as my own personal referrence.

For those aspiring forex traders out there who just started and wish to make millions from this arena - please take my advice - stick with your dreams but make sure you learn the fundamentals.

If you have 10k for examples to start your trading, spend at least 30% of it on your trading education. It's worth it since even if you lose the rest 70%, chances are you will improve from your 30% investment in education for your next deposit.

Otherwise, you are no better than a pure gambler. You'd never learn and always remain on the bottom 90% who loose 100% of the time. Brokers would love it though...

Have A Nice Day... ;)

A DIRECT EQUATION INDEED...

The longer I stay and watch the market without doing anything, the more I realized and agreed on what trading is all about, regardless of what system or indicators that I am using.

I come to a conclusion that it's always the basic principles that prevail. This is just a game of probability and proper risk management.

The bare candlesticks of  the weekly, daily, 4 hourly and hourly movement are always the best things to study and analyse, plus some Fibonacci levels to watch, moving averages, market volume as well as RSI and Stochastics (and some others as you wish to use) that really serve as road signs on where are the likelihood of these bulls and bears could be running.

Initially, back in January 2008, I thought trading was indeed simple. I can always make money simply by using a 97 dollar robot or system that later proven to be otherwise.

Then I made it into a complicated beast by really studying every single thing that I could, buying every forex book available at amazon.com, reading every single article that I could find from google, and participate in forums that I thought could give me some edge with my trading decision. In the end, I still lose money along the way, as 90% of traders always do. Sounds common and pathetic right?

So, where is this going? I knew by heart that most (if not all) traders felt the same way as I did and 90% of them either keep on losing money or totally pull themselves out of this trading arena.

To me, the key is always about learning. Learning is a must and a continuous process. But not many, and I mean most traders forget about the basic principle of achieving success in whatever they do.

It's all about hard work and perseverance on top of their learning efforts. Nothing comes easy guys...

Something that I learned from golf, life is full of hazards and risk that you have to face. It's always there. It's either you embrace them or stay away from them. You have the options and you got to take it accordingly to your capability rather than emotional basis.

So when I look back at trading, I always see the hazards and risk involved whenever I start planning to open a position in the market. It is a direct equation of my own action and decision.

What I meant by direct equation is really simple...

1. BIG RISK = BIG REWARD
2. SMALL RISK = SMALL REWARD
3. CALCULATED RISK = LONG TERM REWARD

So, which one do you prefer? For No 1, you all knew the consequences. The aftermath of such risk taking attitude is normally, short and painful.

So, stay out from No 1.

For No 2, small risk could result in long term survival but chances are, you may not make it to the top. Base on research and analysis, small businesses could only prosper if and only if you have the consistent volumes. In this case, unless you have a 100,000 dollar account, then keeping your position small would not be very wise as it could take 100 years for you to build up a strong account. Even that, if you keep on losing on small risk, the final numbers would still be big and equivalent to No 1, considering that you keep on losing, which to me, could and had happened occasionally.

So, use No 2 only on highly uncertain situations. Or best still, don't take risk at all in such condition.

Hence, now it comes No 3 which is calculated risk. This is the risk that you have to embrace accordingly to your capability and calculative skills. The big question is on when and how to take calculated risk accordingly.

This is the secret that i wish to share with you guys... it works very well...

1. Stay out from the market as long as possible... don't even bother to watch... pretend that you are not interested... just do something else...

2. Watch the market without any interest and make your own analysis base on the movement that had happened... treat yourself as a currency analyst and produce an opinion...

3. Factorised both the technical and fundamental aspect of the market and emphatized on what is really going on... still... stay out...

4. Read action forex, check the economic calendar and browse through bloomberg in order to see whether there is any key geo-political news that you may miss out (ie tsunami and nucklear issue of Japan).

5. Last but not least, look at the charts and ask yourself whether is there any reason for you not to enter the market at this point of time? If yes, stay out and wait for the next day...

Those written above may sound conservative at first... but trust me guys... try it and you'll see... Base on the 5 elements, then take risk accordingly to your account size... perhaps 3% to 5% of your account size should be good enough. Sometimes, I do risk up to 10% when the situation is really favorable.

So, in conclusion, risk accordingly and embrace them... you can't get it right all the time anyway. But one thing for sure, if you're wrong... just get out and raise the white flag... don't ever fight the market force.

Fighting the market is like you alone fighting your own government... there's no way you can win.

Till then... take care and have a nice day.

ALL TRADERS MUST SEE THIS...

This video is not produced by me... but rather a reknowned economic expert whom is worth for you to pay attention to. Thanks Sanusi for pointing this out... it is scary indeed...

Just click here.

Have A Nice Day

MY LATEST RULES OF ENTRY...

I've been pretty busy lately due to some ongoing works and personal matters that need to be resolved. Anyway, just to share some of my written rules of trading that I apply personally whenever I am in front of my trading screens... it works so well for me...

1. NO MATTER WHAT... DO NOT ENTER THE MARKET BLINDLY... WE’RE SNIPING HERE SO DON’T WASTE YOUR BULLETS OR BE TRAPPED UNNECESSARILY. THE ENEMIES ARE SMART!

2. Check out Action Forex. Get the general ideas on what’s going on fundamentally.

3. Mark up the key technical levels mentioned in action fx on the trading whiteboard.

4. Check the Bloomberg for any potential breaking news.

5. Later, checkout the weekly and daily economic news release. What and when will be the high volume trading hours probability. Plan.

6. Then technically, check the Fibonacci levels on pairs that you see tradable. Check level on all timeframes from 4 hrs, Daily to Weekly.

7. Analyse the price action on each pair for the day. BULLISH, BEARISH OR SIDEWAYS?

8. What is the current direction and range so far?

9. Main pairs would be EUR/USD, GBP/USD and AUD/USD.

10. Crosses would be EUR/JPY, GBP/JPY and AUD/JPY.

11. Remaining two’s are USD/JPY and USD/CAD.

12. NOT SURE? Demo trade first and feel the market’s psychology. Watch the 15EMAs closely.

13. Generally we have equal buyers vs sellers, buyers dominance or sellers dominance.

14. LOOK AT THE BIG PICTURE. See what is happening and make a choice. Mark it up on your whiteboard. Buy/Sell ONLY at these critical lines – pivot, support, resistance and MA.

15. REMINDER : Normally it is not easy for an established trend to change direction, but you must time your entry and exit accordingly.

16. DO NOT BE TOO CONFIDENT OR TOO FEAR IN TAKING DECISIONS.

17. POSITION ACCORDINGLY BASE ON CALCULATED SAFETY MEASURES.

18. HOW MUCH ARE YOU WILLING TO LOSE IN CASE IF YOU’RE WRONG? ONLY TAKE CALCULATED RISKS...

19. THINK...

20. ACCOUNT PROTECTION IS THE MAIN OBJECTIVE IN EVERY SINGLE TRADE.

21. WHEN YOU ARE WRONG, GET OUT… OR AT LEAST STICK TO THE DTR (Dollar To Risk) DECIDED EARLIER.

Have A Nice Weekend... ;)