About Me

This is my Forex Trading practice journal, please feel free to read and comment about my trading techniques, we can exchange ideas and experience to become a much better trader.

Tuesday, June 10, 2014

Forex Trading | Non Farm Payroll

On our Forex Trading last friday, I traded the US Non Farm Payroll, this news event is known to cause big movements in the Forex market, every trader out there knows these and is usually waiting to trade this event or dodge it. Well for me this event is an opportunity to earn and there is no way I'm dodging this.
Since I know in an event like this you can earn or lose approximately 100 pips in just 1 or 2 minutes, I decided to use my pre-news release technique to deal with this.

First I checked what other traders predict of this event are they Pro USD or against is, mostly you will be able to tell this by looking at the D1 chart and adding the Simple moving average indicator with a period of 10, now 15 minutes before the news release, if the candle was above the SMA then you trade for long, if it's below then you trade for short, and if it stays at the middle, don't trade.

Most of the time in my Forex Trading, I would trade the currency pair USD and JPY on this event because from my history this pair usually makes the biggest movement in this event, but this time, if you looked at the D1 chart you will see that the candle is above the SMA which is Pro USD, but if you look at the D1 chart of EUR / USD and GBP / USD, you will see that both of them is against USD and it makes sense since the consensus predicts that it will go against USD. So the best choice for me is to trade the pair GBP / USD, because this pair has a history of big movement on this event although lesser than JPY but definitely bigger than EUR.

But to my surprise, the trade did go my way but the movement was almost as if there was no news release, the movements was so small, so after I saw it reach a + 5 pip I immediately closed my trade even if it increased up to 10, I felt it was safer to just stop the trade before it drops. So that wraps up my Forex Trading Last week.

Forex Trading


Non Farm Payroll


  

Tuesday, May 27, 2014

Forex Trading | Forex 35

Back to my Forex Trading on May 22, 2014, I traded for the currency pair of GBP/USD, knowing that there will be a news blast later that afternoon about GBP's Gross Domestic Product, I have decided to use the technique called the Pre-News Release trade.

With this Forex Trading technique it lets you place your order five minutes before the news release, now the question is how will we know if it is going long or short, my reading is that I look at the consensus of our live calendar to see if their prediction are for long or short trade, but remember they are also not 100% correct it's like a wild studied guess, then after knowing which side is has the better end, I look at the chart, I put on the Daily Chart and then added the indicator called the Simple Moving Average with a period of 10.

Now if you see the candles are above the SMA line 15 minutes before the news release then you go for long but if it is below the SMA line, we go for short. That simple, and we put our Take Profit 80 pips away and Stop Loss 40 pips away. We leave it there and wait for the news release. Here are my actual trade pictures.

Forex Trading

Forex Trading

And really a lot of times we are going to experience this thing called losing, but anyhow I am still sticking to my trade plan.

On this Forex Trading I really did not expect GBP's Public Sector Net Borrowing to drop 9.631B from previous of 6.073B especially when the consensus was 3.500B and that is the main reason why we loss, everything was well except for that.



Thursday, May 22, 2014

Forex Trading | Pivot

On my last Forex Trading post we talked about Fibonacci Retracement, fibo's are great support and resistant analyzer, but it can't do it all alone you'll need another indicator to help lower the risk on your entry point, others use trend lines which I also do it sometimes but commonly I use Pivot with my fibo.

Unlike Fibonacci Retracement, Pivot automatically computes its own resistant and support so this only means that everyone's Pivot points are the same, so if every traders out there respects the pivot point then you're trade is safe. Pivot has these levels, R1 means first resistance so obviously it is the weakest among the 4 levels, there is the R2, R3, the Final R4 the strongest resistance normally a trade wouldn't reach this point, usually R3 is already one of the extreme turning point of the currency pair, same goes for the S1 meaning first support and the S2, S3, and final support S4.

Pivot recounts its pivot points every day, meaning the points changes everyday, so whenever you see your candlesticks are below the "P" line of the pivot point most probably the day is biased to short, but if the candlestick is above the P line  then the bias goes to long, but these are just the probability not 100% accurate reading, remember nothing is for sure in Forex Trading.

The P line is also a strong bouncing point especially when there is a 0.618 fibo near it, if that is the case, it is very wise to enter your trade at the 0.618 of your fibo and place your stop loss behind the P line, making the P line as your second bouncing point after the 0.618. See the second image for a sample.

Forex Trading

Forex Trading

Did you see just how exact the P line lets the candles bounce from our Forex Trading chart, it holds it back from dropping, this just shows us that there is a resistance line on the P.