Discussion in 'Forex' started by Osiris, Jan 16, 2006.

  1. Osiris


    Anyone on here trade the GBP.USD? I am curious to see if anyone would have called this reversal of Fridays up move.....
  2. I didn't "call" it, but not surprised at this 50% retracement of the advance from Jan. 11th lows (rather than a reversal, in my view), in thin holiday trading.

    Still a long bias, scaling into long positions and targeting north of 1.7800 this week. (Current 1.7660s)
  3. Osiris


    Yeah, sorry, that is my novice speaking for just the pullback from Friday. Retracment is a much better description.....rather than reversal which would have suggested maybe a change in directional bias. But yeah, i am still thinking long as well....but i thought it was going to have more trouble breaking down below the 7720ish area.

    What sort of analysis do you do of the currencies you trade Late? Is it a blend of fundamentals/technical charting? So far, I have really just been looking at some very simple chart reading. I have not yet got that book you mentioned (Bird Watching...) but am just in the process of opening an account at IB and one at Questrade. I had been doing ok on judging the intermediate term trend from the daily chart until today :( I would most likely have gone short in the 7790 area and then closed short for a long around 7740 with a small 10pip stop or so. So i would have been out of my short waaay too early and lost a bit on my waay too early long.

    I guess i will just have to get used to being wrong :)
  4. siki13


    GBP/USD just blindly follows EUR/USD ,nothing else to call
    Last week my "short" trade in GBP/USD was turn in to whipshaw
    only because EUR/USD start going up
  5. Osiris


    Heh, yeah, i was worried about the EUR/USD not moving up over 1.2180 - 1.2205 area....and should likely have read that better for leaving open a GBP/USD SHORT from the 7790 area...which would have been fairly well in the money at 7740ish. Tough call for me though, and i blew it.

    But the EUR/GBP does have some variance to it...for sure the GBP/USD seems to follow around the EUR quite closely....but i don't have access to the software to get the actual correlation of the two, nevermind the changing correlation. But still...looking at the EUR/GBP daily....if the GBP/USD had continued its upward move faster than the EUR/USD...then the EUR/GBP could have just dipped back down to the recent 0.6719 low of December12/2005. But yeah, the ATR and volatility on the EUR/GBP is definitely much lower than the USD pairs.....

    Still...i am trying to get a better handle on if I could have seen today's retracment better...going live in about 2 days and i dont want blow up my tiny account :)
  6. You know, what's important is not whether you are right or wrong. Rather, it's how much you make (overall) when you're right and how much you lose (overall) when you're wrong. (Stanley Druckenmiller)

    You don't need any special software. Daily and hourly correlations and volatilities may be found at .

    Osiris, why exactly do you seem to be in a rush to go live in 2 days? The market will still be there tomorrow, and next month, and next year. And, given your account size, what made you decide to go with IB and Questrade? Don't know about the latter, but IB's minimum forex trade size is 25,000. If your account is worth anything less than $10,000, your're under-funded, likely grossly so. That, in turn, does at least 2 things:

    - forces you to employ higher leverage than you could otherwise, whether you want it or not; and

    - requires you to use tighter stops than you could otherwise.

    The more under-capitalized you are, the less likely you are to succeed. This is one of the few absolute truths in trading.

    My strong advice to you would be to either stay with demo for now or go with a dealer where you can practice proper risk management and position sizing from day one, regardless of your account size or strategies. If your account is small (as defined above), Oanda is the only such reputable dealer that I'm aware of. Good luck.
  7. Osiris


    I am curious...anyone with better software (or just smarter) know how strong the directional correlation of the EUR/USD and GBP/USD is?

    Wondering if either of the EUR/USD or GBP/USD moves out of direction with the other....naively it would seem to me that they would at least have very high directional correlation and that most of the volatility in the EUR/GBP would be due to differences in the proportional moves of each the EUR/USD and the GBP/USD.
  8. Lucrum


    although you'll probably get somewhat different numbers depending on the lookback period.
  9. Osiris


    Thanks apex. Yeah, i am basically just in a rush because watching the Forex has started to cut into my stock trading. I missed a good LONG stock trade on Friday that I normally would have taken, but happened to be watching the Forex for about 10 minutes too long :( With the stock trading I do, often I will only have about a 10minute window or so where the maximum risk/reward ratio exits for a great entry.

    So I want to get started with the Forex before the end of FEB and later when the earnings season kicks back into high gear.

    You are right about my account being under most analysis it will be significantly under funded, with only around US$4000. And yes, I will be using stops that are likely to be much too tight, and I will definitely get whipsawed around a bit. But i figure that, barring some terrible slippage on my stops (of upwards of 40pips/stop rather than my target stop range) I should be able to withstand a 5 - 10 trade losing streak without completely blowing up. After say 10 bad losses in a row, without any winning trades....i would likely be down around 50% of my account. Then I will have to reconsider whether or not I can be successful with such tight stops and if I am even able to get the market direction right on the daily charts. If not....maybe I have to call it quits for a while in the Forex....and it will be back to the stocks :(

    But the money I am funding into my Forex account...while it is not nothing to me, is also not as highly leveraged as it seems. I am position sizing in the Forex based upon my total trading portfolio....including my stock account. So my leverage overall is much less than it is in the IB account. I am planning to use price alerts from Quotetracker and essentially be around ALL day/night to enter trades at what I think are the optimal entry points. Likely....i will not be able to do this very well.....but I am going for a trading system with a win ratio of upwards of 5:1 .... so I can definitely be wrong 70+% of the time and still do ok.
  10. Osiris


    hhmm... +78, thanks TL...for what period was that?
    #10     Jan 16, 2006