The Official FOREX Thread

[Bible_Belt]

http://www.bollingerbands.com/

Bollinger bands are popular, but remember that they are just one tool. You still have to be able to sort out the noise. They will work best in a sideways, channeling market without a strong trend, the prediction of which is a trader's judgement call. If bands worked as an automated system by themselves, then John Bollinger would not still have to work for a living.

 

[Fletchrush17]

fwiw, those indicators are just another way of looking at price action. And I think you may be using them the wrong way.

RSI above 50, stochastic goes up = price is going up fast. BUY if it's not overbought.
RSI above 50, stochastic goes down or sideways = price is stagnant or dropping very slowly. Buy if the RSI is staying in place.
RSI below 50, stochastic goes up = price is stagnant or rising very slowly. Sell if the RSI is staying steady.
RSI below 50, stochastic goes down = price is dropping fast. SELL before it's oversold.

Oscillators are overbought/oversold indicators. They are meant to be used in a sideways choppy market to buy into dips and sell into bounces. In a strongly trending market, an oscillator is nearly worthless. But in a sideways market, a trend line is just about as worthless.

What you are doing is trading like 95% of people trade - panic buying as it goes up and panic selling as it goes down. I'm almost certain that the simulator is giving you fills that you would never get in real trading. There are no rules to require them to execute your orders. 98% of Forex traders are losing, but all the brokers are pushing those sim accounts. I'm guessing 90% of people probably make money on the sim, but all it does is reinforce the bad habits that make you lose money in real life. The only way to ever have a good idea that your order would have been filled in real life is for the trade to immediately go at least a little in the red before it becomes profitable.

If you are interested in indicators, Fibonacci, Gann, and Elliot are the way to go, imho. The others are just crutches; they compute price, and with practice you can approximate the same thing in your head from a simple bar chart. New traders tend to want to junk up their charts with too many indicators.

I haven't been able to do any trading recently, but I was doing some thinking, and was trying to figure out on average how often those ideal conditions occur, and if there was anyway to look into the past to see how those conditions have went.

It seems that it isn't too rare that you will get a cross and the rsi right, but the stoch is not right. There has to be a small window in which everything will line up. Then you have to factor which chart you are looking at, do you put more stock in the 1hr over the 15m, what about the 4 hr? I seem to want to believe the 1h, and use the 15m when about to enter/exit based.

Guess more testing is in order...

 

[Bible_Belt]

I was never a system trader, but there are guys who make a living that way. They are still making judgement calls and practicing the art of trading, but they make their decisions when the market is closed and let the automated system run itself during market hours. Whatever system they have is constantly being tweaked to change with the market, which is why 'black box' systems don't work.

 

[Brian20o2]

How many of you guys have made significant profit with the demo?

 

[MetalFortress]

http://www.bollingerbands.com/channeling market without a strong trend,

That's why I said the pattern has to be consistent. I don't invest in anything unless there as little room for error as possible.

 

[Krassus]

Update

http://www.sosuave.net/forum/showthread.php?t=108598

 

[Bible_Belt]

This is slightly off-topic, as oil is not forex, but fwiw we are seeing a rare dip in oil prices. People who are interested in oil as swing trade of a few months or even as a longer-term hold might see this dip as a buying opportunity.


http://today.reuters.com/news/artic...3_RTRUKOC_0_US-MARKETS-OIL.xml&archived=False

Sep 4, 2006
Oil falls below $69 as tension over Iran ebbs

 

[MetalFortress]

How many of you guys have made significant profit with the demo?

I made profit a few times, only to lose it again on ill-advised trades, but I've gone more conservative and now I've rebounded from 95,000 to 142,000 in about two weeks, which is my record thus far on the demo. I hope my trading judgment continues to give me good results like this, cuz if I'm still constantly making positive gains come December, I'm going to start trading real money.

 

[Bible_Belt]

This is the new forex system that I was talking about. They are saying it will be up by early 2007.

http://www.fxmarketspace.com/

http://www.cme.com/about/press/cn/06-60AnonymousProject18424.html

 

[DarkLight]

I made profit a few times, only to lose it again on ill-advised trades, but I've gone more conservative and now I've rebounded from 95,000 to 142,000 in about two weeks, which is my record thus far on the demo. I hope my trading judgment continues to give me good results like this, cuz if I'm still constantly making positive gains come December, I'm going to start trading real money.

How much money does your demo acct. start off with?
How many trades a week are you making? (on avg.)
How many lots are you trading per trade? (on avg.)
How many pips is your avg. stoploss?


BibleBelt:
How is CME Globex different from say trading through an ECN network like MBTrading? Or is it?

 

[DarkLight]

That's why I said the pattern has to be consistent. I don't invest in anything unless there as little room for error as possible.

So what is your criteria for an entry signal?

 

[MetalFortress]

Well, now I'm trading the nice, reliable, diversified, boring way. Basically, I have between 6 and 15 trades open at once, with take profit points set for each, but no stop loss. I observe Bollinger band bounces and those are mostly my criteria for entry. I started on 1,000 and am up to 1,681.96 in the last three weeks. This is how I'm going to invest once I put real money in, at least until I absolutely master the NZD/USD combo.

 

[Adone]

Where can I learn the basics of FOREX? I've just started my Business lessons at the local College, so I don't know much about Finance. Give me a URL that explains with basic words what is it and how it works.

 

[DarkLight]

Well, now I'm trading the nice, reliable, diversified, boring way. Basically, I have between 6 and 15 trades open at once, with take profit points set for each, but no stop loss. I observe Bollinger band bounces and those are mostly my criteria for entry. I started on 1,000 and am up to 1,681.96 in the last three weeks. This is how I'm going to invest once I put real money in, at least until I absolutely master the NZD/USD combo.

I gotta tell you man... thats absolutely insane.
Nobody trades that way REAL money. You'll lose your a$$ big time!

First... YOU HAVE TO HAVE A STOP LOSS! ALWAYS!
Real money doesn't forgive. And especially in FOREX, with the leverage and volatility. Market swings against you... especially with that many trades going... YOUR DONE!

Which is my second point. No way can you monitor 6-15 trades competently. Pro's don't even hold that many positions. Probably like 5-6 max. This isn't the stock market. So the need to "diversify" doesn't apply in the same fashion.

Next... to derive your complete understanding of the market simply through Bollinger Bands, is a pretty naive thing. Thats like gathering all your information from driving just from looking through your side mirrors.

I would definetly reccomend you decrease your number of active trades, use a stop loss, and check out some other indicators and how they can be utilized for market signals. When several parallel, telling you the same thing... its added confirmation that what your seeing is potentially tradeable.

Its good that you have pip goals. To try to hit every trade out of the park, is foolish, and lacks trading wisdom. Once you build your account up, you can just stack multiple lots, and achieve the same amount of big money a huge pip trade would yield, in less (say 20 pips x 5 lots = $1,000). Much easier to capture a 20 pip move.

With that said... def. try to manage your position as best you can. Cut your losses, let your winners ride. Have several pip goals, and close out lots on the way. Move your stops up, and lock in the rest of the profits, etc.

Adone........... a great intro site into the FOREX, and trading it, is...
www.babypips.com

Check it'

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Anybody make some money this morning from the NFP's?
Was a quick massive headfake... but the following move from the Dollar's strength was pretty big. I caught 25pips earlier in the night, Pre-NFP's. Held off on the actual NFP move, but would have made plenty. Was considering selling the first pullback on the pound back up to 1.8820. It now trades... 1.8700

 

[Bible_Belt]

Darklight gives good advice.

It is frustrating to keep getting stopped out, but that is the only way to survive. Small loss, small loss, big gain is the way to go. Your 'batting average' will have little to do with your overall profitability. Most beginners think that if they make money on more than half their trades, then they will be profitable overall, but it does not work that way; a couple big losses wipe you out. I once ran some stats on a trader's account with a computer program, trying to help him improve. He made money on 90 to even sometimes 95 percent of his trades.... and he lost over a hundred grand that year. He hated losing so badly that he would hold every losing trade until it eventually went into the green. But sometimes they don't come back, or when you are on margin, they only have to drop a fraction of their price to wipe you out. And keep in mind, this is with the 2:1 margin of stocks. Trading with the ridiculous 100:1 margin of forex, stop losses become that much more important.

 

[DarkLight]

Yop!

I hear you BB. Besides the technical advice you mentioned, in regards to the importance of cutting your losses small and quick, and the def. need for a stoploss. You mentioned something else that was critical. The pyschology of trading.

So critical!
This guy you spoke of had so much resistance to accepting he was wrong, that he couldn't take a loss. And ultimately thats exactly what he did... and BIG TIME! The issue of psychology in regards to trading is so huge. It can either make or break you! Depending upon your behaivors/reactions.

One thing I learned about "playing" the market is... you even have to "play" yourself. Your part of the trading process. You have to be able to count on yourself, and a big part of that is ignowledging your own errors in the process of succesful trading. When your having an "off" day... reckognize that, and trade that fact... by NOT trading that day. You feel me!?

You have to see the market's moves for what they are, as well as yourself.

Would you invest in your clear ability to trade, when riled emotionally, desperate for a winner, and tired? No... neither would I. So include yourself in the process of evalution.

Are you percieving this trade opportunity through hope? Or is it actually a sensible trade, based on parallel objective information?

So the key is... Trade yourself along w. the market.
Its all 1 process... see it as such!

 

[Bible_Belt]

Speaking of acknowledging errors, if I had gone long oil at anywhere near where I mentioned it earlier I would have had a loss. It's a something like $58/barrel now. A stop loss set at the time of entering the trade and adhered to when the stop price was hit would have kept me from getting wiped out.

I don't know that I can have the patience required for multiple-day positions. I was always a very short-term scalper, and swing trading is very different. If I can get a $25K account to trade when the time comes, I may just go back to stocks instead of learning forex. My own trading psychology needs the quick-fix that scalping provides, and I think that maybe I would be a better forex trader, or at least a more patient one, if I was only trading forex as a second priority with smaller amounts of money to gain experience.

 

[DarkLight]

I hear you... I'm the same way. Thats why FOREX appeals to me. More immediate gratification. I've never held a real money trade longer than 24hrs. Not to say that, maybe I should have. But my personality is too quick to snag the money... and secure it!

And I would definetly advise entering FOREX w. smaller money. Like you said, build the experience, and learn to trade it from a different perspective. FOREX is an entirely different beast from the stock market. Volatile, Leverage, Shorter positions, etc.

On avg. what would be your daily goals, in stock-scalping?
Or what would be your avg. win?

Personally I love the dynamic of FOREX. Maybe later in my life, I'll put some long term money into stocks that I see fit. But right now I'm young, and to trade the market, swooping a few hundred a session, or so... is plenty enjoyable to me.

Woke up yesterday... and 15min later I was up $220, after the FOMC Minutes data broke. Was up a little more, but my damn trading software took a second and dropped me 80 bucks or so. But........... A damn good way to start any day off. Took a shower, had some breakfest... then went back to sleep. lmao

Peace'

 

[Bible_Belt]

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/08/ccview08.xml

Commodity crash flashes warning for world growth

By Ambrose Evans-Pritchard
08/01/2007

Somebody, somewhere, is using far less oil and copper then they were six months ago. Less wiring, less piping, and less plastic. Trucks are moving fewer goods.

If demand is slipping for the two great staples of modern economics, it is hard to credit International Monetary Fund claims that blistering world growth near 5pc will carry on into 2007.

Brent crude has crashed 11pc since New Year to $54.79 a barrel. It is down a third since May, despite an Opec cut of 1.2m barrels a day, falling output in non-Opec (Norway, Britain, America, and Mexico) and sabre-rattling by Iran. The slide matches the onset of the 1998 Asian crisis and the 2001 dotcom bust.

Copper – or "Dr Copper" to those calling it the best macro-forecaster in economics – is looking just as bruised. It crashed through resistance to $5,749 a tonne last week, a third below its peak in May.

Stocks at LME warehouses have doubled since October to 230,000 tonnes. "People are saying it's all over as far as copper is concerned and clearly it is," said Jim Lennon, a strategist at Macquarie Bank.

 

[ICEHOCEY77]

Bump.


I got tied up in school and have been itching to get back in. Anyone else still doing it?