Forex Forays

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Nice Chart to Wake Up To
2007-10-22 18:27:00
If you were short the EUR/USD today, that is - which as luck would have it I was. I haven't seen volatility like this in quite a while...over 200 pips of movement. Hope you're all short the Euro today as well!
More About: Wake , Wake up , Nice , Chart

Your Trading System Needs Internal Controls
2007-10-17 02:16:00
I've said this before, but it's worth repeating - especially after reading about the rise and fall of Soul Trader's Grail forex system, which I always regarded as one of the most advanced automated systems around. Reading his explanation of why this system finally had to be shut down really brought home to me the need for rigorous internal controls on your trading system. By internal controls I
More About: System , Trading , Internal , Stem , Needs

Back in the Market After Some Forward Testing, a Bad Carry Trade, and a Bit
2007-10-11 19:35:00
Hello again, and apologies for this blog's recent suspended animation. For various reasons hinted at above I decided to give forex a rest for a while - but I'm now back and have just made my first foray into live trading the EUR/USD again. The principal reasons I took a break were: I was frankly a little bored and disappointed with the progress of my EUR/USD trading system. Out of impatience
More About: Market , Testing , Trade , Back , Forward

Crazy Candlestick Pattern
2007-06-05 04:59:00
I just thought I'd point out this rather rare candlestick pattern from last week's EUR/USD daily charts. This unusual creature emerged on May 29, undoubtedly in response to some piece of news I wasn't paying attention to at the time: What you're seeing here is a 100 pip range, and a closing price just 1 pip above the open. In candlestick parlance it looks like a Doji Star to me, or possibly a
More About: Crazy , Pattern , Stick , Candle , Candles

Beware of Sloppiness
2007-06-02 00:37:00
Yesterday I made a trade I shouldn't have, and I made it because I was rushing through my trading routine and not paying enough attention to important little details. In short, I was sloppy. And the result was I lost 21 pips I should never have even risked in the first place. That's the great thing about forex - you can usually put an exact cost on your mistakes. In retrospect it's pretty clear
More About: Beware

Back on Track with FXCM
2007-05-24 18:39:00
Yesterday I made an overdue switch of trading platforms from FX Engines to FXCM's TradeStation II. If you've been following the last couple posts you already know the reasons: FX Engines has been down for several days (still is, in fact). As a result I missed three winning trades in a row, and would've missed another winner last night if I hadn't made the switch to TradeStation. Fortunately
More About: Back , Track , Trac

The good news: a seven trade winning streak. The bad news: the last two don
2007-05-22 00:04:00
As if to prove that nothing can ever go completely right in forex, I woke up today to find that my trading system made its seventh winning trade in a row - definitely a new record for real trade predictions, not just theoretical ones in my historical backtests. The problem was, I couldn't make this trade, just as I couldn't make the sixth winning trade last Friday (as I mentioned in my previous
More About: News , Good News , Bad News , Trade , Good

Missed a winning trade. But I'm not upset. Really. OK, maybe a little.
2007-05-18 18:39:00
If you've been following the blog much lately you'll know that I currently get a lot fewer trading signals because of some strict filters I've set up. So when a trading signal does come along, it's a big deal. And yesterday I got one to go short the EUR/USD for 22 pips, and in the ranging price action that followed it turns out it would have been a winning trade. Which would make it the 6th
More About: Trade , Really , Winning , Litt , Ally

Current Trading Strategy: Slow and Steady
2007-05-10 20:13:00
There's a lot less daily drama and a lot more sitting on the sidelines in my forex trading these days, and so far it's a strategy that seems to be working. Because of the filters and meta-signals I've added to my trading system, it generates a lot fewer signals than it used to, since it's switched off during periods when it's likely to underperform. So in an average week I'll now make 2 trades or
More About: Strategy , Trading , Current , Rent , Slow

Global Forex Trading Launches DealBook Web
2007-04-30 23:08:00
The first forex trading platform I ever used was Global Fore x Trading 's DealBook FX software, which I liked for its many charting options and indicators and fast trading performance. But I always felt a little limited by the fact that it wasn't a web-based application, which meant I always had to access it from the same computer unless I went through the install process on every PC I planned to
More About: Forex Trading

Hoping for Whipsaws
2007-04-30 17:35:00
Strange as it sounds, my current trading system has me looking forward to days with extreme price swings, or whipsaws, which I used to anticipate with dread. The key to this change in perspective was shifting my strategy from primarily trend-based trading to a system that looks for profits in ranging behavior as well. The result is that a whipsaw no longer looks like one of the nastiest patterns
More About: Ping , Whip

Content Thieves
2007-04-25 19:36:00
This isn't really forex related, just a rant about the rampant content theft that goes on out there in the blogosphere. I keep discovering sites that are lifting my content and publishing it verbatim on their own domains and with their own ads, and it's pissing the crap out of me. The only positive side, if there is one, is that I get a little traffic out of these bastards since they're so lazy
More About: Content , Tent

British Pound Hits 26 Year High Vs. US Dollar
2007-04-19 22:01:00
While I'm not currently trading the GBP, I thought this was an interesting bit of news - on Wednesday, April 18 the British pound hit its highest level versus the dollar since 1981, breaking $2.010 for the first time in 26 years. And here I am looking at daily, weekly and monthly highs and lows - sorta puts your own little trading timeframe in perspective. The big rise against the dollar
More About: Dollar , High , Hits , Pound

April 17 Tax Deadline
2007-04-13 23:22:00
For all you US forex traders out there who've put off your taxes to the last minute (like me), I just discovered some good news you may not have known about. I'd just assumed the 2007 IRS deadline was Monday, April 16...first business day after April 15, right? Well it turns out April 16 is a little-known holiday in Washington, DC (Emancipation Day, my new favorite holiday) and because of an
More About: Deadline , Line

Forex may be chaotic...but some things are still predictable
2007-04-11 20:43:00
I was just reading this post over at Trader Rich's Fore x Project about a study at MIT that concluded that "treasury bonds are random, the stock market is correlated, and forex is chaotic." Firstly, let me say I haven't actually read the study in question, and probably never will. What I have read is Rich's summary of the study author's summary of his findings in Currency Trader Magazine. Also
More About: Things , Thing , Predict

Home, Home on the Range
2007-04-02 20:25:00
If you've watched the forex markets for any length of time you've probably noticed that they spend an awful lot of time in ranging activity, ping-ponging back and forth between support and resistance levels without breaking above or below them. So if you've come to forex expecting high drama every day, it's a good idea to adjust your expectations and get as comfortable with range-based trading as
More About: Home , Range

Most Popular Posts
2007-03-27 07:24:00
Finding myself in a self-referential mood, I thought it would be interesting and maybe even useful to share the most popular blog posts and subject labels on the site. I'll add this list to the links over on the right and do my best to keep it updated regularly. But remember, just because they're the most popular doesn't make them the best - a principle as applicable here as it is to Britney
More About: Popular , Posts , Pula

The Unlikely is Not Impossible
2007-03-26 18:30:00
And sometimes it's even likely. This is a paradox I often find myself wrestling with as a trader, particularly since I like to think I approach the forex market with a statistical mindset. Why do you think I go on about Bollinger Bands so much? They're one of the more statistical indicators out there, based on a measurement of 2 standard deviations from a specified moving average. But if you
More About: Impossible , Like , The U , Ossi , Not I

How many pips do you need to make a million dollars?
2007-03-22 20:44:00
When you're sitting around waiting for the market to do something a fun way to pass the time is calculating how many more pips you'll need to reach $1 million. Of course before there's any point in doing this you'll need a disciplined trading strategy that's been thoroughly tested and has at least a half-decent chance of earning you the necessary number of pips. Got that? Then let's proceed...
More About: Make , How Many , Million , Dollars , Doll

Finally a little EUR/USD action! I was about to fall asleep...
2007-03-21 19:38:00
So I've been sitting on a long EUR/USD trade all week getting more bored by the minute, and finally today the pair exploded upward through my limit order following the Federal Reserve's decision to keep US interest rates at 5.25%, based the weak US economic indicators and continuing inflationary pressures. The US stock markets are way up today as well, with the Dow Jones up over 1% at the moment.
More About: Action , Finally , Fall , Fina , Litt

Signals and Meta-signals
2007-03-19 18:55:00
If I had to categorize the different ways I've used trading signals in my brief forex career, I'd break them down into something like this: 1) I have no idea what a trading signal is, but I'm very eager to find out so I can get rich this year. 2) I'm trading with the first signals I read about in a book/website because someone said they work. But for some reason I'm not getting rich. In fact
More About: Meta , Signal

Improve Your Trading Odds - Aim Lower
2007-03-12 17:10:00
One of the simplest ways to improve your odds as a trader is to get less greedy. Leave more potential money on the table and satisfy yourself with a smaller profit after each trade. After a bad run of trades in ranging market conditions, I've switched to a take-profit strategy that aims for just 33% of the previous day's trading range. It's far more likely to make money off of a whipsaw than my
More About: Trading , Improve , Lower , Odds , Rove

Good Investing Advice from Henry Blodget
2007-03-07 04:15:00
While this is a forex site and this article by investment columnist Henry Blodget is about the stock market, I'm featuring it here because it's got good general advice no matter what market you trade in. The article takes a critical look at the recent stock market declines and the panicky headlines that accompanied them, as they always do. Back in the day, Henry made a name for himself as one of
More About: Advice , Investing , Good , Vice

My Signal Flipper
2007-03-06 18:02:00
I had a pretty ugly run of failed EUR/USD short signals in the past month or so, so ugly that I stopped my manual trading entirely for a while and switched over to automated trades while I rethought my original strategy and tested out some new ones. One of the new strategies I considered seemed a little strange, since it called into question a lot of my assumptions about trading signals, but
More About: Signal , Flip

The Onion Does Currency Humor
2007-02-27 02:01:00
U.S. Dollar Drops Against Counterfeit U.S. Dollar "At the close of trading Monday, the U.S. dollar dipped to a record low of $.60 against the counterfeit U.S. dollar, which also outpaced the dollar against the euro and the yen." Interesting fact they forgot to mention is that the North Korean won is pegged directly to the counterfeit U.S. dollar. Actually that's more true than it is funny.
More About: Humor , Currency , The Onion , Humo , Onion

FXCM Technical Difficulties
2007-02-27 00:40:00
I just got an email from Drew Nive, CEO of Forex Capital Markets (FXCM) apologizing for technical difficulties with their software that apparently shut down trading yesterday and part of today (Feb 25-26). I trade with FXCM via my FX Engines account, but was actually complete unaware anything had gone wrong - the reason being I've just switched all my trading to completely automated execution
More About: Technical , Diff , Technic

Risk/Reward Ain't Always What It Seems
2007-02-20 19:41:00
It's very easy to get caught in the illusion that a tight stop-loss and a generous take-profit/limit order are going to earn you profits in that ratio. You know, setting your stop at 20 pips, your take-profit at 50 pips, and waiting for those consistent profits to start rolling in. This is a newbie error I made plenty of times before learning my lesson. What I've found since then is that a very
More About: Risk , Reward , Always

You can't change the weather
2007-02-14 19:11:00
I just came across this line in a good novel I'm reading, "Brooklyn Follies" by Paul Auster. And it struck me as a worthwhile axiom for forex trading as well as lots of other things in life. The best a trader can hope for is not to take the "weather" in the markets personally, and instead adapt tactics and strategy to the current conditions. Carry an umbrella. Avoid puddles. Try not to get
More About: Weather , Change , Chang , Chan

Subject Labels
2006-12-08 09:32:00
Just wanted to highlight a new site feature: you can now jump between related topics using subject labels that appear at the end of most posts. Here's the list of labels I've used to tag the posts so far - I'll probably be adding more soon: Affiliate ProgramsAutomated Trading Ben Bernanke BlogsBollinger Bands British Pound Brokers and Market Makers Cable CalendarCandlestick Charting Carry Trading
More About: Labels , Abel , Subject

Starting up live FX Engines GBP/USD trading
2006-12-06 04:15:04
I had a really mediocre November, with very few trades going my way...and that was before I got caught flat-footed by the huge declines in the dollar around Thanksgiving. In the meantime one of my automated FX Engine s was quietly cranking away earning hundreds of (demo) pips trading the British Pound. It managed to catch a lot of the action I missed while I was traveling and sleeping off turkey dinners. So I've decided to give this engine a shot at the big time (well, the pre-big time), and am allocating 20% of my trading capital for it to buy pounds with.This particular engine looks for upward breakouts of the GBP/USD pair at the opening of US East Coast trading, and jumps on them when they happen (invariably while I'm fast asleep). Interestingly it only racks up fewer than 40% positive trades, but its risk/reward ratio works out very profitably - over 3 years of backtesting its trading performance was over 5000 pips.The fact that this engine can help hedge against losing EUR/USD...
More About: Trading , Start , Star , Live