Forex Trader Chat

Qui totum vult, totum perdit

Jim — Tue, 07 Feb 2012 16:36:54 +0000

Translation: The one who wants the whole thing loses it all.

I heard this today while watching one of my favorite TV shows of all time, Regenesis available on Hulu.com. It REALLY applies to my trading.

I can’t count the number of hours I have spent in the past searching for a fool-proof indicator, one that will never give me a losing trade. A total WASTE of time!

Also, I have learned to let go of trying to catch the entire move. Realistically, it is unlikely that I am going to consistently be able to call both the bottom and top of a trend one way or another.

Find a method that works most of the time. Manage your risk and trade it. Do your best to take consistent winners every day and keep your losers small. It isn’t as hard as we sometimes might make it out to be!

Got Targets?

Jim — Tue, 07 Feb 2012 15:43:49 +0000

I had this pretty cool indicator coded for me which gives decent profit targets on a 3 minute chart.

The trade below had an initial entry at 1.3122 and a final target of 1.3221. That’s 99 ticks (pips) of profit, scaling out along the way at each level.

So for simplicity sake, let’s say we saw we had an opportunity to hit 4 profit targets. We would trade at least 4 contracts, or any amount of contracts that will give us 4 lots (8 contracts would give us 4 lots of 2 contracts, etc.) With this in mind and an entry at 1.3122, we would have taken 10 pips on our first target, roughly 40 pips on our 2nd target, roughly 70 pips on our 3rd target and roughly 95 pip on our final target. Assuming just 4 mini lots in the trade, this equates to approximately $215 in profit.

The swing low below this long entry was 1.3098, so that is about a $25 risk per contract or $100 total. This give you a 2:1 reward:risk ratio trade and clear targets and stop loss.

7 February 2012 – 0621 EST – EURUSD Short

Jim — Tue, 07 Feb 2012 15:04:45 +0000

I took 2 shorts in the EURUSD this morning, the first short was at 0621 EST at 1.3115 and then again at 0630 EST at 1.3127, giving me an average entry of 1.3121. Each trade was 3 mini lots. I bought 1 back at 1.3111 for a 10 tick profit and another back at 1.3101 for a 20 tick profit, and then set my stop to breakeven because I had to leave my trading computer for a little while.

When I came back I was stopped out on the short at breakeven and I had missed the long entry which would have been a great trade. Here’s the chart….

The 4 hour chart seems overbought now, so I am looking for a short opportunity on the 3 minute chart.

18 November 2011 – 1106 EST – 6E Short

Jim — Fri, 18 Nov 2011 16:47:12 +0000

I had to leave my trade room for a few hours this morning and I missed out on a lot of good volume profitable trades. I took this short trade in the 6E as soon as I got back in and it worked out very well for a 12 tick profit.

Entry was at 1.3519 and target was 1.3507.

18 November 2011 – 6E 12 Tick Short Scalp

Jim — Fri, 18 Nov 2011 10:47:27 +0000

Not many trade setups for me during the European trading session this morning. I passed on the less probable long trade at 0356 EST and then took a 12 tick winner an hour and a half later at 0528 EST.

Short entry was at 1.3527 on a pullback to the signal line and since the trade signaled an extended move, I used a 12 tick target.

Scalping Method. Coming soon…

Jim — Wed, 16 Nov 2011 19:04:23 +0000

Recently I was introduced to a scalping trade method that I will be sharing with you soon. It provides clear entry signals and has a very good winning trade record.

Stay tuned for more info…

FOREX Commissions and Spreads

Jim — Mon, 25 Apr 2011 01:10:32 +0000

Commission and Spreads ~ Commissions are the amount you pay your broker for entering a trade. Some FOREX brokers don’t charge a “commission” but they do charge a “spread” which is the difference from the bid and ask price of a currency. My broker (PFG Best) charges a small commission and has a very tight spread. Other brokers have no commission but have much larger spreads.

I prefer to pay a small commission and enjoy the tighter spreads, because it lets me be more precise in my entries. When the spread is larger, I might end up entering a trade (if I am using a limit order, which my strategy calls for) that true price action never really would have executed.

Trading with the Overall Trend

Jim — Sun, 24 Apr 2011 06:14:44 +0000

Trading with the overall trend means that we just take trades in the direction of the trend based on a higher time. This time frame shouldn’t be too much higher than the time frame you want to enter trades on (in our case the 4 hour charts) because then the two frames just aren’t related enough. In the same way, we don’t want to look at time frames too close to our trading chart either, because the data will be too similar and not useful in our trading decisions.

We use Daily Charts to determine Overall Trend

Here are some examples of good trade and trend time frame companions:

tick chart and range chart
range chart and 5 minute chart
3 or 5 minute chart and 15 minute chart
15 minute chart and 2 or 4 hour chart
4 hour chart and daily chart
daily chart and weekly chart

A related saying is that “you can’t see the forest from the tree.” It’s the same with trading. It’s hard to determine the overall trend from the chart you are entering your trades on. It’s better to zoom out on your chart, or simply look at another chart in a higher time frame, to determine the overall trend of the market you are trading.

You can determine the trend in a variety of ways:

Look for a series of higher highs and higher lows to determine and uptrend, and lower lows and lower highs to determine a downtrend
Use a custom indicator
Use a series of standard indicators, like EMA (exponential moving average) crossovers, which come built in to most trading platforms
Ask a kid younger than 10 years old (while adults tend to over-analyze trend direction, kids seem to always know right away which direction a trend is in whether it be up, down or sideays.)

4 Hour Chart Entry Indicator

Jim — Sat, 23 Apr 2011 06:50:45 +0000

People love an indicator, especially new traders. An ideal entry indicator shows you when to enter a trade long or short and tells you when to stand aside when price action is choppy.

Our FXTC entry indicator helps us position our trades right when the market turns, giving us an ideal opportunity for substantial profits.

The chart below shows a recent long trade of the GBPUSD, which produced a trade worth a total of 260 pips using a 2 lot strategy.

The chart also shows a few short trades that didn’t work out. We don’t take these short trades because they are against the overall trend. How do we know this?

Take a look at the next post to see how we easily trade with the trend….

4 Hour Chart Trading Strategy

Jim — Fri, 22 Apr 2011 17:22:02 +0000

Although the FOREX market is a 24 hour market, it trades most actively during the cash stock market sessions of the various financial centers around the world, including Australia, New Zealand, Asia, Europe, London and New York. If you take a look at a 4 hour chart of any FOREX pair, for example the EURUSD, you will notice that each 4 hour price bar tends to match up with the morning and afternoon trading sessions of each of the world’s financial centers. The most active trading tends to occur when these sessions tend to overlap, such as the afternoon London session and the morning New York session.

With this in mind, an effective strategy that I use to trade FOREX is to look for entry opportunities on 4 hour charts and trade in the direction of the trend. I use daily charts to help determine the overall trend and I use weekly pivots levels to determine profit target or targets that I will aim for.

There are lots of other advantages to trading a 4 hour price chart strategy over lower time-frame trading, and I will go into detail on many of these advantages in future posts.

Until then, trade green!