FX trading - general

Discussion in 'Forex' started by bl2001, Apr 16, 2007.

  1. bl2001


    Hi, I'm new to this site (not new to trading fx however) and was interested if anyone on these boards actually trades regularly and profitably.

    Would like to have general trading chatter with serious traders. I'm particulary interested in others' ideas re trading psychology and reliance on technical indicators for entry, exit or both.

    By the way, I trade mainly Eur, gbp and Yen but occasionally make a in trade Aus or Cad if I see an opportunity. I would say 98% of my trades are based around economic news/data releases and about 2% or less is down to technicals.

  2. hey bl2001 - I actually am an experienced trader - don't let the 1980 fool you: I've been trading since 1980. Of course back then I mainly traded futures and stocks. Started forex in the late 90's.

    I guess the best advice I have is what more traders will tell you: you'll win some and you'll lose some. The most important thing that has always helped me: don't overleverage your account and make sure you are not willing to lose more than you could potentially gain....this is sometimes referred to as risk:reward ratio.

    Oh, and also make sure you find a good broker. I cannot stress how important that is. So many traders go to these small firms and think that because they offer them 1 pip spreads on EUR/USD that it is the right thing to do. No way. 1 pip spreads are what banks give eachother. If they offer you 1pip - they're shading the market.

    I'd be interested in hearing what experiences you have had so far. Do you trade technicals or fundamentals?
  3. I guess you already answered that in your post. What is your strategy in terms of execution during those events?
  4. bl2001


    Hey got a reply at last. thanks.

    Well, I've been trading my own account now for about 1 year now, after about 3 years working in the city in London, so I've got a fair understanding of how it all works re: good brokers/bad brokers, strategies/analysis etc.

    I mentioned being interested in trading psychology because I've found it the hardest thing to master, in fact harder than finding a strategy that works.

    As for technical analysis - well, frankly, I was wondering whether anybody actually uses it successfully, because I've found that it can make a chart look all very complicated without really telling anything that you couldn't tell from the chart already without it (thats just my view). Now, I do use a bit of technical analysis - looking at support/resistance - but that's about it.

    I suppose I do trade fundamentals in the sense I trade depending on the outcome of economic data. But really, I am only trying to capture a short term swing in the volatility that often occurs after an important news release (eg non farm payrolls), and not any long term movement based on fundamental strength/weakness in economies.

    I never hold overnight positions.

    Would be interested in your views.

  5. Great B! I agree psychology is the hardest part of trading to master. In terms of technical analysis, I use it pretty much to the same extent as you do. I think support and resistance are key because they truly give you the guage for where market value for a pair lies. I sometimes use RSI, Bollingers or MACD - simply to give me something to look at and sort of confirm what I am feeling. And as you already mentioned, fundamentals are key. Trade and capital flows are ultimately what make this market.

    As I mentioned before, my risk:reward ratio very much helped me with psychology because I let the positions run their course. Of course, if I see that it is close to hitting my stop, I might get out at a slightly better price (or smaller loss :).

    I've recently become interested in Elliot Waves. Have you ever used them? I find them quite fascinating and I was told to check out this analyst who works for DailyFX and apparently uses them and has been calling the market quite a lot. I haven't placed any trades using them yet, just sort of browsing. Here is the link in case you want to take a look: http://www.dailyfx.com/story/dailyf...erm_Price_Action_Indicates_1176988494456.html

    We should continue this thread discussion. I feel as though if we got a good group together we could maybe get some good ideas flowing.

    BTW, what is the last trade you placed?
  6. jjrvat


    Hi B,

    I mainly trade currency futures in particular the Eur/Usd and Yen. I avoid trading important news. I wait until the news settle down and after that follow the direction of the fundamentals behind the news. I definitively prefer to trade the European session especially during the London opening.

    I use 36SMA in the long term timeframe and MACD and RSI in the intermediate. BB and daily pivot points only for reference and simple candlestick analysis for entries.

    I have a full time job so I usually take one or two trades per day. This has allowed me to only take the trades that are very clear. Introducing a time stop component, sometimes reduced my profit, but it has been a great help on the psychology side (reducing anxiety and bad trades).

    If you don’t hold overnight positions and you do trade the news, what is your time frame in such a volatile time, M1, M2, M5?

  7. Hi, I don't trade forex currently but am looking at starting. 1980 you mentioned a good broker is the most important thing for a new trader. Who do feel is a good broker? Also do any of you trade fx SPOT options? Thanks.
  8. bl2001


    Thanks for the link - I've had a look at Elliot Wave in the past but don't use it. I find it quite hard to apply. I need to have have 100% confidence in a system to use it and I don't think I can have confidence in something that seems so arbitrary.

    Risk Reward:
    Yep, along with psychology i agree this is pretty important. Generally I aim for at least 2:1 (I'd be happy with >30 ticks) on all my trades.

    Last trade:
    I made two yesterday both in Eur/Usd. Short just after 7am and long just after 13.30pm (london time).

    Time frame:
    Generally I don't have a trade open for longer than about 3hrs, but it depends on whats going in the market.

    FX options:
    No. I don't trade any options.

    What kind of risk/reward ratio are you chaps after?

  9. Hey Guys,

    Glad to see we have a good group coming along! I use a risk to reward generally of about 2:1 or 3:1. The most I will go is 2:1. I guess it generally depends on the pair and the time you\'re trading. Generally I use Support/Resistance to scope it out. If I feel I can make 100 pips but I know that support gets broken in 25 pips, I\'ll use 4:1.

    Heavyhitter78 - I actually trade SPOT FX Options with my broker, FXCM. They\'re the largest out there. Their staff is great, very helpful. I know there is a lot of talk about them online but I have never had an issue with them. Slippage, etc is part of every market and you\'ll find it at any company. The best thing to look for is size. These guys have capital requirements that are at times almost 10 times larger than other companies. I definitely feel better about keeping my money with them. If you are interested in getting started with FX, just give them a call. They\'re nice and will sign you up for one of their paper trading accounts and walk you through.

    Otherwise, I have wrapped up trading for the week. Any ideas for the week coming up? I am trying to decide about what to do about the cable.

    If I don\'t speak to you guys before then, have a great weekend!
  10. ForexTrader1980 - many thanks for that link. I'm always interested in professional daily TA reviews of various markets, this certainly fits the bill for the FX majors (though I do not yet follow Elliott wave theory).

    heavyhitter78 - Out of curiosity, what are your motives for wanting to trade FX? You seem to be one of the top guys on the P/L thread as far as pulling down consistent bank trading ES and CL. Just looking to diversify your strategy?
    #10     Apr 20, 2007