Archive for the ‘Active Trading’ Category

Posted on August 19, 2010 - by Chee Wan

Be your own boss

Forex trading involves dealing in international currencies. Here, one can sell currency of one country to buy that of another. The trader deals in Foreign Exchange [Forex] at the most appropriate time to profit from the transaction. Good ability to forecast plays a vital role here. One may wonder how Forex trading can be such a lucrative earning opportunity since fluctuations in exchange is so little.

But remember, when done in big volumes, a minor change can mean a lot. There are many non-monetary advantages to it as well. Anyone who wants to deal in Forex can do so, since only the basic knowledge is required for it.

Forex can help you earn a lot of money. But there are certain conditions to follow before trading in Forex. Firstly, one must have a thorough knowledge about the trends in the stock market, the basics of trading and risk-taking ability. You will get all the help you need for attaining these conditions very easily.

A good reason why Forex trading can be considered is the fact that there are frequent fluctuations in currencies, though in percentage terms it may be small.

You gain if the fluctuation favors you and the reverse holds true as well. No one can accurately predict the trend of the currencies. Liquidity is another reason why Forex trading is so popular. Read more…

Posted on August 16, 2010 - by Chee Wan

329 pips profits was generated for the 1st half Of August 2010

329 pips profit was generated for the 1^ST half of August 2010. 13 trades were executed: 8 trades won and 5 trades lost.

If you are trading 1 full contract (100,000) per trade, your profit for 329 pips will be around US$3290.

Here are the details of my trades:

1. USDCAD: 34 Pips Loss

Not looking good again, cut loss at 1.2010. Loss is 34 pips.

Original trade:

Buy USDCAD at 1.0244
Stop level at 1.0180
Target level at 1.0364 Read more…

Posted on August 9, 2010 - by Alvin

How to Choose a CFD Broker Part 2

CityIndex

I just closed my Forex CFD trading account with them. What I like about them is the withdrawal procedure. Unlike the other brokers, you do not need to fill in a withdrawal form (hardcopy) and mail/fax it back for processing. I just dropped an email and supplied some details for verification to complete the request. The cheque was deposited in my account in the same day.

As for the platform wise, I have no complains. I particularly like the customer report generation. I can configure the time frame and generate my trade history. It even create a pdf form for me!

The commission is a little higher than other brokers but they always maintain a fixed spread. So for those who do not like surprises, this may appeal to you.

The reason why I switched away from CityIndex is because I want to have an account that I can do both Forex and Stock CFDs at the same time. CityIndex currently offer 2 separate accounts.

POEMS

Loyal readers will know that I have a Sharebuilder account with POEMS. This is also my first stock account so you can say there is some sentimental value with it. If CityIndex is convenient for funds withdrawal, then POEMS will be super fast due to the availability of Electronic Payment of Shares (EPS). The locally bred brokers have this EPS function which I believe they tied up with the local banks to facilitate fund transfers between the client’s stock and bank accounts. The funds can be transferred within the same day. Read more…

Posted on July 21, 2010 - by Chee Wan

Forex Charts: How to make sense out of mountains of data

Every newcomer to the forex arena is confronted by information overload.  Every tutorial councils that to be successful you must have knowledge, experience and a disciplined approach to the market, free from emotional influences, but all of these efforts require an investment of time.  The fact is that forex trading requires specialized training and hours of practice to gain important experience before committing real money to the market.  There are no shortcuts in this business.  Preparation can begin with websites, articles, charts, tutorials, demo accounts, and training classes of all types and sizes.

One of the most important tools for forecasting financial market behavior is technical analysis, which is the chart study of past pricing movements in order to forecast their future direction.  Although the ability to use chart analysis has increased greatly over the past few years, it is anything but new.  Forex charts come in a variety of styles and types, most two-dimensional, some even three.  Let’s keep it simple and use the figure below as our guide, courtesy of one of many free educational papers on the web. Read more…

Posted on July 16, 2010 - by Alvin

Lessons Learnt as a Trader (so far) Part 3

I have slowed down my trading pace recently. Taking a step back and review my trading behaviour and psychology. It was apt to pick up Conrad Alvin Lim’s “Secret Psychology of Millionaire Traders” from the library to aid in the analysis of myself.

Find Reasons NOT to trade

I confessed I am a compulsive trader. I am quite fearless before I enter the market, which is bad as I tend to take unnecessary risks. I have conviction in the system that I used and protected by stop loss, I always think how bad can it go? But what if I missed the trade and the profits when I did not participate? It is a combination of “no fear” and greed that propelled me to enter trades carelessly. Conrad believes traders should take a defensive approach to trading. Instead of looking for signals to make an entry, traders should look for reasons NOT TO TRADE. This is like playing the devil’s advocate. By finding just one reason NOT TO TRADE, one shall not enter the market. If I have adopted this mentality earlier, I would have rejected many trade signals and save myself from unnecessary losses. Read more…

Posted on July 5, 2010 - by Alvin

Meeting with a Full Time Trader – TW

The good thing about sharing in this blog is that, it is presenting the opportunities to meet some people that I would not have met. Talk about TW, a full time trader, who emailed me for a chat. As usual, with the defensive nature of humans, I was trying to figure out “what does he want out of me”. I even asked him if he was selling something to me :D But I mistook his good intention that he just wanted to meet a fellow trader to talk about trading and exchange views and ideas. TW, I apologise :)

I forgot to ask his age, but my guess is probably early thirties. Humble and sincere person. “Down to Earth” kind of guy. He begin to introduced himself and probably the most surprised thing is that he quitted his job even before he becomes proficient in trading. It was a year since turning full time trading and he admitted that he only managed to make enough to survive. To me, this is tremendous achievement for first year of trading. I cannot even make enough to survive. But maybe this is the difference, when you are at the brink of survival, you tend to be very determined to succeed.

Risk Management
(more…)

Posted on June 4, 2010 - by La Papillion

SGX – trade review

I was reviewing some of my past trades. This is one of them. The counter here is SGX. It’s not exactly good for trading because the cost of 1 lot is quite high, so while the absolute value might be the same, a higher amount of capital is tied up in case the trade goes wrong. But I do like the cannot-die type of company for trading, so SGX fits perfectly.

Here’s my two trades all depicted in the chart shown below:

What a roller coaster ride we have here…

I had 2 full round trips of SGX. The first was in 15th June 2009, bought at a price of 7.54 (the chart did took into account the drop of the price after its final dividend declared, hence it looks ‘funny’) and sold on 23 July 2009 at a price of 7.84 (again, the chart took into account the drop in price after its final dividend). Since the holding period is rather short, I did not get to enjoy any dividends declared.

Profit: $0.30

The second trip was in 5th Nov 2009 bought at a price of 7.88 and sold on 14th April 2010 at a price of 8.05. I managed to hold for a round of dividends declared at 0.0375, hence it boosted up my profits a little. Read more…

Posted on June 1, 2010 - by Chee Wan

Opportunity of a lifetime

In forex trading we have to analyse the fundamental and technical of a currency in order to make a trading decision.

Fundamental Analysis

There are 3 fundamental criteria to determine which currency to sell:

a) The currency must have low interest rate. Naturally investors want to invest in currencies for their yield. Hence those currencies that has higher interest rate will be attractive to investors. Those currencies that has low interest rate will be dumped by investors. Euro has interest rate of only 1% so Euro is not attractive to investors.

b) The nation has budget deficit. Budget deficit means that the nation is spending more than it earns. Eurozone is in a huge budget deficit now.

c) GDP growth is negative. Healthy GDP growth increases confidence to investment community and hence higher probability of capital appreciating. Contrary when GDP growth is weak, investors will dump the currency of the nation. Eurozone has a very weak growth growth hence investors will prefer to dump Euro rather than investing in Euro. Read more…

Posted on May 30, 2010 - by Chee Wan

312 pips profit was generated for the month of May 2010

312 pips profit was generated in the month of May 2010. 14 trades were executed: 9 trades won and 5 trades lost.

If you are trading 1 full contract (100,000) per trade, your profit for 312 pips will be around US$3120.

We do not have a single losing month since start of 2010.

Here are the details of my trades:

1. AUDUSD: 127 Pips Profit

AUDUSD has spiked up very strongly since yesterday. We may see a correction due to profit taking. So we decide to close our AUDUSD trade now at 0.8527, profit is 127 pips Read more…

Posted on May 13, 2010 - by Chee Wan

How do we trade Forex?

Risk comes from not knowing what you are doing.

There are 3 criteria to determine which currencies to buy:
a) The currency must have relatively higher interest rate than other currencies. Naturally investors want to invest in currencies for their yield.
b) The nation must have budget surplus. Budget surplus means that the nation is earning more than it spends.
c) GDP growth must be healthy and positive. Healthy GDP growth increases confidence to investment community and hence higher probability of capital appreciating.

After determine which currency to buy, we will check out the trend of the currency. The saying that “the trend is your friend” is always true. We will use our trend strategy to determine the medium term trend of the currency pair. It is easy to ride with the trend rather than the go against the trend. Move onto next step if trend shows uptrend. Read more…