Ah, finally something Forex related! I have previously posted about getting your start in Forex. You can check out that link for some info on how I feel you should start your journey in this world. And, if you already started, it can’t hurt to go back and learn some shit! Now this is something that is probably the most simple topic in theory, and the most difficult in practice. Not trading. That’s it. It sounds so easy. Right now you are reading this so you aren’t trading. That’s how easy it is, right? Wrong. This is probably the biggest mistake people make especially when they are new traders. I won’t lie, this was something I struggled with when I was first learning the ropes. I would sit there at my computer looking for a trade even though I knew I had to be out the door in 5 minutes. The problem was that I made money so if I just got to get in on a deal I could make some quick cash. More often than not it screws you over. You force a trade by seeing something that isn’t really there. You see it because you want to see it. Trading is all about pattern recognition and if you really want to you can make a chart look like anything. Not trading is something that must be practiced. I know that sounds weird. Practice not doing something. It actually works. If you trade with a demo account you need to work it like you would if it was real money. I know nothing can actually simulate the feeling of using real money, but use your imagination. Practice firing up the charts when you are in a bad mood or when you are rushed for time and force yourself to not make a deal. You will try to rationalize it sometimes and say it is only fake money. Slap yourself on the wrist and try not trading again! You have to think that you aren’t paid to trade. You are paid to wait for the perfect trade! Waiting for that perfect setup is your job. This isn’t like using a machine gun, trading is like a sniper rifle. One shot. That brings me to my next point. Rebound trading. You just screwed the pooch on a trade and you bailed on it. You are sitting on a loss for the day. This is probably the hardest time to not trade. It is for me. The problem is that you know you have a winning strategy. Odds are your next trade will score you money. Let’s get right back in there and make back what I lost. Hell no! This is the best way to drain your account dry. This is gambling and not trading. It sounds similar, doesn’t it. Only one more. Let me win my money back. This is why most people kill their accounts within 6 months. You can have five and a half months of wins and 2 weeks where you attempted trade after trade just to win back any losses. At the end you are broke! A loss is a loss. Walk away. You are paid to wait! The last reason not to trade has to do with outside forces. Anyone who has read my blog for a while knows that I avoid news announcements like the plague. Some people trade these times and make a lot of money. It is way too risky for my liking. The spread goes up and you can jump 50 pips a second. I can’t handle that roller coaster. I like smoother movements. So, anytime a news announcement is scheduled I stay away for 30 minutes leading up to it and 30 minutes after. Sometimes more, sometimes less. You can tell when the impact of that news is no longer driving the pattern. Staying away from the news announcements was a bigger issue when I was trading in the mornings. Since I switched to the evenings it doesn’t affect me nearly as much. The best way to find out when all these announcements are coming out is by going to Forex Factory. That link gives you a daily calendar with everything you need to know. They even rank the impact of the announcement which is a great thing. Low impact announcements are fairly safe to be in on a trade at. Don’t even think about going in when those impact symbols are red! Once again, this is all based on my style of trading. I don’t like risk. I don’t need Forex to provide me with excitement. I am getting plenty of that with my attempts to become a firefighter. Forex is my little cash machine. Part of keeping myself in the black is knowing when not to trade. There is a reason why my account hasn’t taken any hits this year. I know when to stay away! Learn that skill and you will find your win percentage will shoot right up!
I really do need to spend some more time working the charts. I suffer from the same problem as many of you though. Time. I just don’t have it. When I do have it, I tend to rush thinking that I have to make a trade to make the most of the time. That is a dangerous mentality to have when trading. I managed to get some time yesterday evening and I did manage to make a little bit of money. My problem was what my problem always is when I am rusty. Timing. I got into the trade too early and then exited too early. The reason I exited so quickly is because I was tired from being in the negative as a result of my bad entry. Had I got in when I should have, I wouldn’t have felt beaten up and would have been able to stick this one out for about 10 pips. Instead I walked away with just over 2 pips. I know that isn’t bad but things setup well enough that I should have made this easy hunting. This trade went against me almost immediately to the tune of 9 pips. It almost hit my stop loss but it stayed on the nice side of things and came back down. Oh well. It was nice to shake off the rust and get back in the game. I probably won’t have time to trade for the rest of the week unfortunately. Like I mentioned before, I am still in exam mode in school. From what I hear our 2nd semester is a little more practical and a little less academic so I am hoping that translates to more trading time!
Holy shit it has been a long time since I made a Forex trade! I just haven’t had time with school and everything. So, last night I finally had a little chance to fire up the charts and see what was going on. I honestly didn’t want to do too much thinking. I just wanted to take the most basic information and pick my direction. More than anything this trade was just about getting my feet wet again. Lucky for me my timing was perfect. I noticed a large downward movement earlier in the evening. Normally this would keep me off the charts but I really needed to trade. I saw an opportunity for a sell trade and I jumped on it without hesitation. I sold the EUR/USD at 9:46pm. I was in the trade for about 1 minute and then I walked away with a 3 pip profit. I know, not a huge gain. It did feel good to actually make some money in the brokerage account of mine again. Hopefully with the end of my first semester on the horizon I will be able to get more trades in! Here is the chart and details of last nights deal.
Oh my poor little robot. I had already mentioned that last Friday my robot got the shit kicked out of it on a couple of bad trades. This was mostly the result of having weighted these trades very heavily. It’s tough when one loss is about 10-15% of your capital. Things started to look back up for the start of this week. I was hoping to be able to report that the robot managed to get back to where we were last Wednesday. No dice. The robot got pimp slapped on some trades during the day and I am now down about 23% from my initial deposit into the demo account. Again, I am using a demo because I don’t know anything about this robot. I plan to give it another couple of weeks to see how things go and then I might scale back the pip target/stop loss down from the default setting of 40 pips. But, you do need to give these things time to work out. Every trading system will have some losses. As you can see from the details below, I do have one large trade still open and it is in profit. If it hits the target I will be back to last weeks total. One thing that you should notice is the drastic rise in buy trades. It was something I bitched about over the last two weeks. I noticed the EUR/USD rising and couldn’t understand the sell trades. It seems the robot figured it out and has been buy happy all week. Since the currency actually was rising I think the timing on the entries was poor because these stopped out even though the currency ended higher. One obvious way to solve this is to make the stop loss much larger. That is not what I will do. I like the security of the 1:1 risk:reward ratio. You can click on the image below for more specific details on the robot’s activity to date. The graph is a great visual as to what has happened. You can see the very sharp drops.
I know I haven’t been very personal with my posts lately. Unfortunately I am in the middle of a crazy-busy schedule. I barely have time to eat and sleep! Wednesday is supposed to be my day off where I can catch up on school work and study for tests. Instead, I will be going to the fire training grounds in Mississauga (near Toronto for you outside of the area). Although this fucks my schedule pretty hard, it is going to be pretty cool! We are going into the training buildings to do some search and rescue. They smoke the place out so you can’t even see your hand in front of your face and then get you to move around in teams doing rooms searches. It can get pretty tough with all the bunker gear and breathing apparatus. They also make you go through some confined spaces that are barely large enough to squeeze through so you need to remove your air pack while staying on air. This is definitely not something to do if you are claustrophobic. They run things like the military so it probably wont be a good idea to stop and take pictures, but I will see if I can snap a few pics off my blackberry after I am done. On Saturday we go back to the training grounds and do live fires! Now that will be really cool. Anyways, as a result of all this madness I really haven’t been looking into the charts. I know the EUR/USD has risen sharply over the last week so the timing works out for me. I don’t like these sharp rises because it usually means new highs are created in the evening hours. That isn’t good for my style. My robot is still trading though and I will let you know if he was able to recover from an absolute ass kicking he took on Friday. More details on that will come tomorrow. So, for today, I give you a comic from SMBC that is related to the life of a student….a student whose mom is Chuck Norris!
I figure the middle of the week is a good time to bring you an update on what my Forex robot is doing. It is excellent timing for this little experiment because I really do not have the time to trade right now. When I do manage to find some time to fire up the charts I find patterns that I don’t like. What turns me off is when I see new highs and new lows being hit during the off hours when I trade. That is a big warning sign for me to stay away. These last couple of days have been steady risers for the EUR/USD so I have been staying out of the market. Remember, I need a nice up and down range for my type of trading. It works great in sideways markets but not so great in rapid ups or downs. Anyways, when I last reported on the Forex Robot, the thing was getting it’s ass kicked by the market. It had a really bad 24 hours that hit my account hard. I still liked what the robot was doing, although I didn’t like the number of sell trades it was in. In total the robot is still getting into sell trades twice as often as buys, but that is actually an improvement from last week. The robot has gained almost 13% from one week ago today! It would have been higher had it not been for a trade that was entered right around a major news announcement. Obviously the logic doesn’t take this into play and lets the robot go ahead and make deals around news time. Not my cup of tea. Even though it didn’t work out, I will let the robot do it’s thing for at least a complete month before I criticize it. And, you can’t argue with results. Overall I am up almost 5% in two weeks. That’s awesome! Imagine if your mutual funds would bring you 5% every two weeks. Here are the details of the activity so far. I know this image is a little crunched, so just click on it to get a larger version.
Yesterday I mentioned that I would be posting the results of the Forex Robot I was testing. I mentioned in this post last week that Expert-Advisors has a free robot to test out. I figured I might as well give it a shot, the price was right. When I mentioned that I was going to give an update on results I had it up and running for almost a week and was up about 7%! Unfortunately the robot got it’s ass kicked as the EUR/USD has risen sharply over the last day. For some reason, this robot seems hesitant to get into buy trades. It has made a total of 36 trades in the last week which seems pretty high to me. Of those trades, only 6 were buy trades. Considering the upward movement in the Euro over the last 24 hours and the fact that the robot made 9 sell trades I question the logic. But, it doesn’t take a genius to trade this market. It takes a system that can make money and an ability to follow your own rules. The robot can’t break it’s own rules as it has a hard stop set for all trades at 40 pips. Let’s see if it can recover and bring the account back to profit over the next week. Here is the account summary. You can click on the image to get a larger version if you can’t read this.
This is just weird and cool. Man, I miss the days of science experiments. This is the kinda stuff that I always find fascinating. You really just need to watch the video. Nothing much else going on for me today. I have more experience with my Forex robot to report, but I will do that later in the weekend or early next week. I have shut the robot down over the weekend to avoid carrying any trades over the weekend dead zone. I will fire it back up Sunday night and let it do it’s thing. As always, I will report what happens. Enjoy your Friday!
I previously posted about how to get your start into Forex. Some people will tell you that robots are the easiest way. Some people will tell you to avoid them like the plague. I sit somewhere in the middle. I think it is critical for someone to know how the market works before trusting their hard earned money with a robot. You really need to know how things work before a robot can help you out. The marketing pages always play these things up as something that requires no experience. That is a load of bullshit. There are many customizations you can make to a robot and unless you have experience trading you won’t know what to do. Hell, if you aren’t used to manipulating charts you probably will have problems even getting the robot up and running properly. Used properly, these robots can be a huge help in your trading. I am the perfect example of someone to benefit from a robot. I know how to trade. I know how to trade successfully. Unfortunately, I am not able to trade as often as I would like. Having a disciplined system running for me 24/7 can be a massive boost to my income. The key is finding, and tuning the right robot to fit my needs and goals. I am testing out a free robot from Expert Advisors. Yes, FREE! You can download the thing yourself and give it a try. As always, you should thoroughly test a robot on demo before risking real money. It uses the Metatrader4 platform, so you can use any compatible broker you want. I just want for the easy setup for FXDD on a demo. I have been running the thing since the night of March 3rd. This robot appealed to me because it’s risk/reward ratio is 1:1. Meaning the target is 40 pips and the stop is 40 pips. You would be surprised at how many strategies have a small profit target but have a massive amount of risk. Who cares if you win 10 trades but then wipe out 20% of your account on your first loss! So far this system seems interesting. I would prefer a smaller profit/loss level of maybe 25 pips, but I am not sure that is realistic. I will run it as is without any tinkering for a while. As of right now it has lost 5 trades and won 4. I still have one trade open. This means I am sitting at a loss of about 40 pips. Not enough time has passed for me to make some accurate assessment, but so far this thing has not done well during the day. All losers have been during the daytime and the winners have been at night, including 3 winners last night! This is where knowing about the market helps. I didn’t agree with any of the trades this robot made yesterday during the day and sure enough they lost. There were some news announcements and a weird chart pattern and the Euro was trading fairly low. Difficult time to get in on a sell trade. Had this not been a test I would have shut down the robot until things calmed down. These robots are powerful weapons. When used properly, along side your own trading, they can help you make a lot of money. If relied on blindly, you will lose your money. It is that simple. Here is the summary of what the robot has done for me so far…
No trade for me last night. I was hoping to make up for a bad (yet profitable) trade from the previous night. I went to the gym and when I got home I planned to fire up the charts. Instead of trading, I went to see “Taken” with a buddy. I posted about how I was dying to see this movie quite a while ago. I finally saw it and was not disappointed. It was exactly what I expected…non stop action! This thing was like a slightly longer episode of 24. Liam Neeson kicks ass. He kills everyone in this thing. So, I don’t have something Forex related for you today. I will probably not be trading tonight because I have a hockey game in the evening. But, you never know! Instead I will give you another comic from Explosm. This really takes hangman to the next level!
