Forex Plaza

Time To Buy Eur/Usd

2008-08-20T06:01:00.000-07:00

Since 5 weeks ago, we were watching Eur/Usd dropped from 1.60xx until 1.46xx this week. There are some fundamental factors that support this movement and off course, mostly are giving bad effects to this pair. But I have an opinion, when people think that a pair is finished then it is time to start a new wave. In my analysis, Eur/Usd will be still in bullish condition whenever US economics is still in recession. In early of this week, we listen that there is a prediction that US will loose its Mortgage Bank (Freddie Mac n Fannie Mae) because of home sales recession.

I try to put fibonanci level retracement at Eur/Usd chart, and I think that I found a pattern to 0 - 100 of the bearish wave. If my analysis is true, then this level 1.46xx is the end of the bearish wave. Start from here, Eur/Usd will begin a new wave. We still dont know what is the next wave but I predict that this will be a bullish wave.

Gold vs Silver (2) : Thoughts From Izzy

2008-04-02T03:44:00.000-07:00

By Israel Friedman

(Israel Friedman is a friend and mentor to Theodore Butler. He has followed silver for many decades. He has written articles for us in the past. Investment Rarities does not necessarily endorse these views.)

The U.S. mint sold 2,170,000 silver eagles and only 26,000 gold eagles in the month of January. By my calculation 83 times more silver eagles were sold then gold eagles. This is an enormous difference that shows you how much more interest there is in silver. Investors are starting to understand that silver is a better investment then gold. I congratulate Mr. Butler that by his writing about silver, more and more people are buying physical silver.

In my opinion, the beauty of silver is that any amount of silver you buy will reward you tremendously. Maybe only 0.5% of the world population has heard about silver and they are mostly American investors who bought in the last 15 years around 400 million ounces of silver.

Today, many silver investors are asking why silver doesn't achieve all time highs like gold. Mr. Butler answers this question every week by emphasizing the control of prices on the COMEX by 4 or less traders that hold more than 50% of the net short position. When you hold a position of more than 50%, you control the market. This may be changing now. The short position is the main reason why the price of silver is behind the gold price, but this creates the opportunity to buy silver.

Different people have different opinions or expectations for future prices. I personally believe that only silver can be characterized as real precious metal and gold is a second violin. I made this decision by understanding the rarity of the metal and its world stocks. Let's look at gold first: its world stocks increase almost 100 million ounces annually. Contrast this to silver, which is in a yearly deficit and is decreasing yearly. World gold stocks are around 5 billion ounces and silver around 1 to 2 billion ounces. I say with conviction that silver is more rare than gold and, in my eyes, is the only precious metal. I think investors are beginning to understand that a shortage can develop easily in silver, but not so in gold, because it is not used that much industrially. It is a lot easier for people to pay $15 or $20 for an ounce than $900 or $1,000, especially when the cheap one has the most value.

If 90% of the world population knew this, the prices of silver and gold would be different. In the short term, with gold prices over $900, silver would be in the hundreds. Mr. Butler doesn’t like my numbers. He says that they are too extreme and people are going to lose confidence in my writing, but I hope he will not censor me, because this is my opinion. Silver in the hundreds of dollars will come only with a shortage of silver. The 4 or less shorts will give up. With a shortage, world investors will recognize the rarity of silver.

Gold and silver seem to trade together, tick by tick. It is easy for many people to think they are the same commodity. Not true. Gold and silver are very different, even if they behave now as one. I am certain that will change, and perhaps very soon. You don’t have to look very far to see just how different silver is from gold.

Some of you want to hear how I see the future in silver prices and what I think about the world in my crystal ball.

(1) Life expectancy will rise tremendously and most of you will live over 100 in years to come.

(2) It will be very important to save and prepare for a long life.

(3) Investment in education----silver----farmland, in my opinion, will do the best.

(4) At some point, in 15 to 20 years, silver prices will be 5 times higher then gold prices. If my calculation is correct, a dollar invested in silver will do many times better than gold. In real estate value, I think 1,000 ounces of silver will buy a 3-bedroom apartment in Manhattan in Trump Towers.

I am a different thinker, and some gold investors don't like my opinion, but that is their problem.

Those who believe in silver value should buy eagles and force the mint to work overtime.

Gold vs Silver (Part 1) : Deep Into The Danger Zone

2008-03-17T03:49:00.000-07:00

TED BUTLER COMMENTARY

February 19, 2008

(This essay was written by silver analyst Theodore Butler, an independent consultant. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)

The extreme market structure in COMEX silver (and gold) continues to get more extreme. In other words, the concentrated net short position held by the largest four and eight traders in COMEX silver continues to grow.

The most recent Commitment of Traders Report (COT), for positions held as of Feb. 12, indicates the four largest short traders now hold a record position of 59,564 contracts, or almost 298 million ounces, That’s 170 days of world mine production. The eight largest traders are now net short 73,987 futures contracts, or nearly 370 million ounces, That’s 211 days of equivalent world mine production. Let me repeat, these are all records. Never have there been larger concentrated short positions in silver.

Since this data comes directly from the COMEX and the CFTC, the figures must be assumed to be correct. Why would they make it up, since it makes them look so bad? The regulators should be ashamed of themselves to have allowed such a lopsided short concentration to develop. History shows they never would permit four large long traders to hold 300 million ounces of COMEX silver futures. After all, they charged the Hunt Brothers and their associates with manipulation when they held a position only a third the size of what the big shorts hold today.

For whatever the reason, it is obvious that the regulators won’t regulate when it comes to short side manipulations. But silver investors must still deal with the consequences of this manipulation. The good news, of course, is that the concentrated short position has kept silver prices lower than they would have been otherwise, affording accumulation at lower prices. Also good news is the super-bullish impact on price once the manipulation is terminated, as it must be eventually. The bad news is the potential of another sharp engineered sell-off, that enables the concentrated shorts to buy back a portion of their short position. But I don’t see how it is possible for the entire short position to be closed out on a sell-off.

It seems reasonable to conclude that this concentrated silver short position can’t go on indefinitely. Sooner or later, something has to give. But what and when? The short answer is I don’t know.

I do know that commodity shorts, in general, have been under pressure never witnessed before, in every market possible, from energy, to the grains, to the softs, to the precious metals. In large part, the money-center banks guarantee, or even hold, a variety of these short positions. These money-center banks are under extreme financial pressure in many lines of their businesses. This raises the odds of a general short-side capitulation and panic buyback that could cause prices to melt up. Given its concentrated record short position, no commodity is structured to melt up more than silver.

On the other hand, the danger to the concentrated silver shorts is so extreme that it is almost imperative that they rig one more, and maybe final, sell-off to relieve some of their obscenely large short position. The only question is, can they do it?

The course for the silver investor seems clear. Fully paid for, real silver held with a very long term perspective holds as much future promise as it has over the past few years. Such silver will allow you to ride out any near term turbulence and participate in the long term gains.

Warren Buffet : 1st Richest Man in 2008

2008-03-12T13:18:00.000-07:00

A few weeks ago, I just wrote an article about tips for successful from Warren Buffet. In that article, I wrote that he was 2nd Richest Man. Today I just read from Yahoo! Finance that he is already number 1 right now. That is fantastic, he takes Bill Gates out from his position that already had for a long time. This is the original article from Yahoo! Finance.

The World's Billionaires 2008

Wednesday, March 5, 2008.

The number 13 has long been considered unlucky by superstitious people around the globe. How fitting, then, that Bill Gates' reign as the world's richest person ends after his 13th year at the top.

Despite being worth $58 billion, $2 billion more than last year, Gates is now the world's third-richest person, ceding the top spot ranking to his good friend and partner in philanthropy, Warren Buffett, whose net worth jumped $10 billion to $62 billion. Ranked No. 2 is Mexican telecom tycoon Carlos Slim Helú, whose fortune has doubled in just two years to $60 billion.

The Top 20

Warren Buffet
Helú Slim & Family
William Gates III
Lakshmi Mittal
Mukesh Ambani
Anil Ambani
Ingvar Kamprad & Family
KP Singh
Oleg Deripaska
Karl Albrecht
Li Ka-shing
Sheldon Adelson
Bernard Arnault
Lawrence Ellison
Roman Abramovich
Theo Albrecht
Liliane Bettencourt
Alexei Mordashov
Prince Alwaleed Bin Talal Alsaud
Mikhail Fridman

Congratulation to Mr. Warren Buffet. Hopefully your story will inspire me to become a successful trader, too.

Here's the New Carry Trade.....

2008-03-12T10:29:00.000-07:00

While most of the world's major economies are either lowering interest rates (or about to do so), Australia remains the ONLY country still in "rate hike" mode.

They also have one of the highest interest rates of any industrialized nation 7.25%.

Then I got to thinking....okay, who (on the other hand) is lowering interest rates. Because if we "paired these guys up" it would be the only remaining carry trade left standing.

The Bank of England has been cutting rates. But as of today, they went "on hold". Plus their rates are still far too high to make a good "funding currency".

Then I thought of the U.S....After all, they'll be cutting rates more...but the only problem is that the exchange rate is already at 30 year lows. So if you believe that the USD could fall a lot further, then of course AUD/USD could be your current "carry trade candidate"...and there may be some more room left in that one of course.

However, the Bank of Canada is cutting rates like that of the U.S. ..The only difference is that it is coming off of some of the highest levels we've seen in a number of years. So anyone could see where the CAD could fall quite a bit more as they continue to cut interest rates. Plus their currency has an interest rate of 3.50 currently and they'll probably "chop" that by another 50 basis points in the coming months.

If it's true that the global economy is slowing (and I think it is)....then oil won't remain above $100 a barrel. I'm with Boone Pickens on this one. A global slow down will "cool" the demand that's being placed upon oil right now. As that happens, this oil exporter...Canada..will have their currency fall downward.

We also know that the U.S. will continue to slow down a bit further also in the near term. This will only help bring Canada down (as we're their biggest trading partner). When their "buyer" suffers, they suffer as a "seller" to the U.S.

The ultra high exchange rate of the CAD to the USD is hurting their exports and aiding in their economic slowdown.

So there's a lot of reasons why Canada should "cool off" especially when you're comparing it directly to the economy of Australia.

This makes AUD/CAD the "perfect carry trade" for the moment when ALL others are failing.

Now this trade would need to be bought on pull backs in AUD/CAD. You can see that it started a new upward move...but it's also forming a triangular consolidation on a larger scale.

So buy this pair on pull backs and earn the daily interest. Remember that you'll probably have to only buy 1 mini lot per 10 to 20,000 dollars in your account. Carry trades are long term positions that last for months to years. Therefore they take quite wide swings along the way. Your account balance will have to be able to handle these along the way. So the biggest mistake would be to over-leverage or to have too close of a stop.

A stop would literally have to be below the black triangle pattern forming. So you need a "strong stomach" to handle the wide swings....but the daily interest starts to add up over the coming months and actually helps to make your entry price much lower when you take this into account.

However, the key is to buy it on a good dip and not today.

Click on the weekly, 10 year chart below to enlarge it.

AUD/CAD: The New Carry Trade with the right ingredients to succeed where others (are and will continue to) fail.

written by : shmcc2000

Warren Buffet : 2nd Richest Man

2008-03-01T00:20:00.001-08:00

There was a one hour interview on CNBC recently with Warren Buffet, the second richest man who has donated $31 billion to charity. Here are some very interesting aspects of his life:

1. He bought his first share aged 11 and he now regrets that he started too late!

2.. He bought a small farm aged 14 with savings from delivering newspapers.

3.. He still lives in the same small 3-bedroom house in mid-town Omaha that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.

4 . He drives his own car everywhere and does not have a driver or security people around him.

5. He never travels by private jet, although he owns the world's largest private jet company.

6.. His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis.
He has given his CEO's only two rules.
Rule number 1: do not lose any of your shareholders' money.
Rule number 2: Do not forget rule number 1.

7. He does not socialize with the high society crowd. His pass time after he gets home is to make himself some pop corn and watch TV.

8. Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.

9. Warren Buffet does not carry a cell phone, nor has a computer on his desk.

His advice to young people:
'Stay away from credit cards and invest in yourself and Remember :

A. Money doesn't create man; it is the man who created money.

B. Live your life as simple as you are.

C. Don't do what others say, just listen to them, but do what you feel good.

D. Don't go for a brand name; just wear those things in which you feel comfortable.

E. Don't waste your money on unnecessary things; just spend on those who really are in need.

F. After all it's your life so why give the chance to others to rule your life.'

Winners Simply Do What Losers Won’t Do

2007-09-26T00:12:00.000-07:00

Thought the forum might enjoy this quote - copied from Van Tharp Sep 28th Letter

"Winners Simply Do What Losers Won’t Do

Adopting the belief that “winners” simply do what the “losers” will not do is very useful in many aspects of life. After all, that is the case in the field of investing and trading. So let’s step into that belief and see what naturally follows.

Here are some winner/loser opposites. If you find yourself disturbed by any of these, you may have stumbled across a clue to an area in which you need to spend some time. Use all the tools you have learned from the Peak Performance Course to investigate ways to step beyond and overcome your limitation.
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1) A winner crafts a detailed business plan which includes on-going reviews and sticks to the plan.

A loser thinks a business plan is something he’ll get to one day in the future after he has achieved some success trading.

2) A winner designs systems with high positive expectancy, sound money management strategies, minimal degrees of freedom to avoid curve fitting, and then puts the system into his business plan for implementation. He lets the market determine the outcome.

A loser has a continually changing system/methodology based on whether or not the last few trades were winners or losers. He is scared of what "may happen to him" in the markets in the future. His position size is controlled by whims and notions. His exit points vary depending on how fearful he is of giving up open profits or how hopeful he is that a losing trade will turn around.

3) A winner knows that his method will provide the long term return he is after if he implements it correctly. A loser thinks he has to continually be looking for a new indicator to eliminate having to enter trades that lose money. A winner knows deep in his heart that he is completely responsible for the outcome of each and every trade.

A loser assumes responsibility for winning trades while blaming floor brokers, brokerage firms, hedge funds, international news events, or simply "the market" for losing trades.

4) A winner is not trying to prove anything about himself through his trading activities.

A loser thinks he’s the master of the market, closing a big winning trade,and then gloats in his outstanding success he had "beating" the market.

5) A winner knows he’s a winner even after an expected 12 losses in a row.

A loser is sure he’s almost worthless as a person after 5 losses in a row.

6) A winner realizes that he produces the emotions he experiences related to trading and assumes responsibility to resolve deep-seated root causes for negative emotions that interfere with his trading business.

A loser knows that it’s the market that causes him to feel depressed or angry, and he’s determined to fight this beast.

7) A winner gladly shares trading advice to less experienced people.

A loser thinks that he needs to look cool as a suave trader and talk down to those less experienced than him.

8) A winner is aware that his methods and systems may require modification as time proceeds, and he develops appropriate boundaries of performance which will indicate whether or not he needs to review his system.

A loser is sure that all he has to do is find "the right system or method" and then he will forever more be able to sit back and enjoy easy profits. He feels slighted by professional traders since they claim not to have any great secret indicators, and he "knows" they’re lying to him.

9) A winner understands the level of capitalization required to successfully implement his trading business plan.

A loser thinks that his $5,000 account is a great start for trading highly leveraged commodities, and the day he opens the account he feels like he’s really off to the races now.

10) A winner knows that it is up to him to develop the skills necessary to create, test and evaluate sound trading systems and methods.

A loser knows he just hasn’t looked hard enough to find that special system someone has created which will bring him all the wealth he’s ever dreamed of ("damn those professional traders - if only they would tell me their secret indicators").

11) A winner looks forward to opportunities to give back to the world some of what he has learned along the way to becoming a successful professional trader.

A loser knows he has to keep everything he learns secret since if anyone finds out where he places his one lot stop orders, then they will try to run the market to his stops to hurt him.

12) A winner who goes long on an upside break-out only to be stopped out at the bottom of the correction of the failed break-out four days later can simply reenter on another upside break-out a few days later.

A loser in the same trade gets mad that the market retraced all the way to his stop and then reversed. As prices rally back through to a second break-out he gets even madder since he’s not in the trade he tried to take. Two months later after a tremendous rally, the loser is so angry at the market for what "it’s done to him" that he finally buys (just days from the top of the move).

13) A winner runs his trading business wisely—carefully managing his fixed and variable costs of doing business and making capital investments which provide a worthwhile return to his business.

A loser spends all the money he can afford to buy the latest computer hardware and the hottest (best marketed) trading software he can find—with no understanding of the return expected from his investments.

14) A winner knows he needs to continually work on his feelings and emotions related to his trading business as he grows in success and equity.

A loser knows that he only needs to buy additional software and systems and perhaps attend the "latest guru’s" trading method to achieve what he’s after.

15) A winner knows what his goals are and he has criteria established to measure his level of achievement.

A loser’s goal is "being rich", and he’s sure that it’s only a matter of finding the "right" answer for how to trade.

10 Tips for Online Forex Traders

2007-09-21T01:58:00.000-07:00

By Abe Cofnas

Without a doubt, trading is more than a few quick tips for success. You need experience, fortitude, capital and, above all, a solid trading system. However, for beginners and those who are perhaps losing their focus amid significant drawdowns, keeping things simple can introduce much-needed focus into your trading.

To that end, here are 10 tips for trading e-forex that can help you get a handle on these exciting markets.

1. For small accounts especially ($25,000 and under), trade with the trend. Many beginners look for trades in any direction. While forex trading easily permits bi-directional trading, trading in the direction of the trend improves your odds over the long run.

2. Have two accounts. One real account and the other a demo account. Learning doesn't stop when trading real dollars begins. Keep the demo account and use it to test alternative trades, alternative stops, etc. For example, you can shadow your real trades with identical ones in your demo account, but widen your stops in the demo in an effort to see if you're being too conservative.

3. Stop looking for leading indicators. There aren't any. While some firms make a lot of money selling software that predicts the future, the reality is that if those products really worked, they wouldn't be giving the secret away.

4. Examine daily charts, four-hour charts and one-hour charts to time your trades. While trading at 30- and 15-minute time increments is doable, it takes a great deal of dexterity.

5. Don't trade the time frame. Trade the pattern. Reversal patterns, hesitation patterns and breakout patterns appear often. Learn to look for the pattern in any time frame.

6. If you're properly funded, trading two lots is safer than trading one. Trading three lots is safer than two. Trading is a synthesis of emotions, technical analysis and money management. One lot makes it difficult to weigh these elements in deciding to enter or exit. Two lots is easier and, providing you have the capital, three lots is optimal.

7. Extreme trading can be the most conservative trading. Trading at the extremes when prices touch or break or bounce off trend, support or resistance lines increases the odds that you have chosen the correct direction.

8. Scan the Big Five - the dollar/yen, euro/dollar, Swiss franc/dollar, euro/yen and pound/dollar before you decide to take a position in any one of them. There might be something obvious you're missing.

9. Follow the Upside Down Rule. If you can turn a chart upside down and it looks the same, stay away.

10. Don't count profits in your first 20 trades. Keep track of the percentage of wins. Once you know you can pick direction, profits can be increased with multi-plot trading and variations in using your stops. In other words, now is the time to get serious about money management.

38 Steps To Becoming A Successful Forex Trader

2007-09-20T06:05:00.000-07:00

1. We accumulate trading information - buying books, going to seminars and researching.

2. We begin to trade with our 'new' knowledge.

3. We consistently 'donate' and then realize we may need more knowledge or information.

4. We accumulate more information.

5. We switch the currencies and time frames we are currently following.

6. We go back into the market and trade with our 'updated' knowledge.

7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.

8. We start to listen to 'outside news' & other traders.

9. We go back into the market and continue to donate.

10. We switch currencies and time frames again.

11. We search for more trading information.

12. We go back into the market and continue to donate.

13. We get 'overconfident' & market humbles us.

14. We start to understand that trading success is going to take more time and more knowledge then we anticipated.

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Many Traders Will Give Up At This Point As They Realize That Forex Is Not As Easy As It Looked And That Hard Work and Study Will Be Required

But Some Do Not Give Up ...
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15. We get serious and start concentrating on learning a real methodology.

16. We trade our methodology with some success, but realize that something is missing.

17. We begin to understand the need for having rules to apply our methodology.

18. We take a sabbatical from trading to develop and research our trading rules.

19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute.

20. We add, subtract and modify rules as we see a need to be more proficient with our rules.

21. We go back into the market and continue to donate.

22. We start to take responsibility for our trading results as we understand that our success is in us, not the trade methodology.

23. We continue to trade and become more proficient with our methodology and our rules.

24. As we trade we still have a tendency to violate our rules and our results are erratic.

25. We know we are close.

26. We go back and research our rules.

27. We build the confidence in our rules and go back into the market and trade.

28. Our trading results are getting better, but we are still hesitating in executing our rules.

29. We now see the importance of following our rules as we see the results of our trades when we don't follow them.

30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.

31. We continue to trade and the market teaches us more and more about ourselves.

32. We master our methodology and trading rules.

33. We begin to consistently make money.

34. We get a little overconfident and the market humbles us.

35. We continue to learn our lessons.

36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our position size.

37. We are making more money then we ever dreamed to be possible.

38. We go on with our lives and accomplish many of the goals we had always dreamed of.

Trader Level #5

2007-09-18T01:54:00.000-07:00

Level #5. Unconscious Competence

Now were cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level.

you are running on autopilot. You start to pick the really big trades and getting 100 pips in a day is becoming quite normal to you.

This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.

you're a star in the trading chat room and people listen to what you say. you recognise yourself in their questions from about two years ago.

you pass on your advice but you know most of it is futile cos they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two but a few will.

Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.

You can now say with your head held high "I'm a currency trader"

I hope you've enjoyed this text and can recognise yourself in some stage or another - personally I'm at stage four now and am constantly making good amounts of pips - I've been trading in total for about 3 years and the first two were hell on earth.

for those of you reading this who stick with it, ill look forward to the banter we have together in the future when we are both bored to death during the trading day

Trader Level #4

2007-09-16T23:23:00.000-07:00

Level #4. Conscious Competence

Ok, now you are making trades whenever your system tells you to.

you take losses just as easily as you take wins

you now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it loses and when you're on a loser you close it swiftly with little pain to your account

You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money.

you are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away.

You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

you'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again.

you will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.

this lasts about 6 months

then comes level Five

Trader Level #3

2007-09-15T21:37:00.000-07:00

Level #3. The EUREKA Moment

Towards the end of stage two you begin to realise that it's not the system that is making the difference.

you realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right

You start to read books on the psychology of trading and identify with the characters portrayed in those books.

Finally comes the eureka moment.

The eureka moment causes a new connection to be made in your brain.

you suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.

You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold.

You start to take every trade that your 'edge' shows has a good probability of winning with.

when the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade will have higher odds of success cos you know your simple system works.

You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what.

You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile

you weren't ready then, but you are now.

The eureka moment came the moment that you truly accepted that you cannot predict the market.

Then comes level four

Trader Level #2

2007-09-14T06:21:00.000-07:00

Level #2. Conscious Incompetence

Level two is where you realise that there is more work involved in this and that you might actually have to work a few things out.

you consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.

During this phase you will buy systems and e-books galore, read websites based everywhere from Russia to the Ukraine. and begin your search for the holy grail.

During this time you will be a system whore - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. every time you came upon a new indicator you'll be ecstatic that this is the one that will make all the difference.

you will test out automated systems on Meta-trader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today.

you'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them cos you are so sure you are right.

You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be making that amount cos you've studied and you don't make that, you know as much as they do and they must be lying. but they're in there day after day and their account just grows whilst yours falls.

You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and over leverage your account even though everyone says you are mad to - but you know better.

you'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you either.

This phase can last ages and ages - in fact in reality it can last well over a year - My own period lasted about 18 months.

Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times.

Then comes level 3

Trader Level #1

2007-09-14T04:42:00.000-07:00

Level #1. Unconscious Incompetent

This is the first step you take when starting to look into trading. you know that its a good way of making money cos you've heard so many things about it and heard of so many millionaires.Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be?? - price either moves up or down - what's the big secret to that then - lets get cracking!

unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. you take lots of trades and lots of risks. when you enter a trade it turns against you so you reverse and it turns again .. and again, and again.

you try to turn around your losses by doubling up every time you trade - sometimes you'll get away with it but more often than not you will come away scathed and bruised

Well this is stage one - you are totally oblivious to your incompetence at trading.Stage one can last for a week or two of trading but the market is usually swift and you move onto level #2.

10 Most Deadly Thinking in Forex Trading

2007-09-13T09:41:00.000-07:00

10 Thinking that forex traders must not leave in their minds

Thinking that they can control the market
Using indicators are 100% safe
Following market prediction without analyzing
Doubling their lots to replace their loss
Stop learning and analyzing when already get some profits
Hold a loss position in order to wait the price back
Underestimate writing daily journal
Opening new position without plan
They will never lose
Brokers can't lose

A Series of Trader's Level

2007-09-13T08:52:00.000-07:00

According to this article, there is a classification for forex traders based at their achievement. Start from today, I will post the level of classification. Hope this is useful to consider your trading level.

The trading level of a forex trader

Level #1 : Unconscious Incompetence
Level #2 : Conscious Competence
Level #3: The Eureka Moment
Level #4: Conscious Competence
Level #5: Unconscious Competence

Read them all at my next post!

Think like Real Trader

2007-09-13T08:10:00.001-07:00

In principal, trading forex is same as any trading form in this world. The basic strategy is buy at low and sell at high. But why this simple strategy is so hard to do? Because nobody can control the market. High and low are decided by conclusion and psychology level from all traders in this world. The basic economic law about trading is there must be a balance between supply and demand. When a resistant level of price is broken, the balance is changing.

Why we must think like a real trader? Because trading forex is same as like any trading form in this world. In real life, real trader acts in same way. If an item is too expensive for him, he would not buy it. He will wait until he feels the price is acceptable and profitable. And of course, when an item is too cheap, he would not sell his item because he will lose his money. This very basic formula is also very basic trading psychology for man.

Many beginner traders act just like they are professional. They think that they could control the market. So, when the price is rather high they will follow with all their money, thinking that price will go higher and higher. The wise action is analyzing the movement. Remember the basic economic law. When price is high, the demand will reduce and the supply will over. But when it is low, demand will rise and supply will reduce.

Understanding Fundamental News

2007-09-13T02:02:00.000-07:00

There are many fundamental news that are watched by traders. Among of them, I select several news that have big influence in price movements. I figured that not all of "good news" is good and vice versa. Let's discuss about them one by one sorted from the most important news (remember, the qualification for most important is based at my experience).

Interest Rate Statement. The mother of all fundamental news is this one. If a central bank release higher rate, bigger possibility their currency will increase and vice versa.
Inflation report (PPI,CPI). Many traders follow the perspective of forex sites but for this one, I choose to follow mine. Usually in many forex sites, if inflation report of a country is going up, they will say that is a bad news. But in my understanding, if inflation is going up then Central Bank has to raise the interest to cooling down the economic growth. So, if inflation is going up then currency will be follow in the same way.
Non Farm Payroll (NFP). Since US$ is still the mother of any currencies in this world (at least until I write this article LOL), then we must accept that any reports about their economic will have a big influence in forex market. This news has a big impact for a short moment.
Retail Sales. This report indicates the actual economic but be aware of season. In winter, usually it doesn't show right situation. If retail sales is up then the national economic is in good shape. So, inflation will follow and the interest rate, too.

Software : Forex Strategy Builder 2.4.2

2007-09-13T01:00:00.000-07:00

Forex Strategy Builder (FSB) is a complete system for creating and testing of Forex trading strategies. It provides an easy way for building strategies as a combination of technical indicators.

Language:	English
Publisher:	Miroslav Popov
License:	Freeware
Category:	Business & Finance / Business Finance
Price:	USD $0.00
Filesize:	1.7 MB
Date Added:	05/27/2007
Link Broken?	Report it

Forex Strategy Builder (FSB) is a complete system for creating and testing Forex trading. It provides an easy way for building strategies as a combination of technical indicators. All parameters and logic can be selected from menus, so that you don't have to write formulas and scripts. FSB uses history forex quotes to perform a reliable back-test on different markets and data periods. It gives you detailed charts and statistics, and the automatic journals show all orders and positions as well as the changes of your bank account. Even though FSB deals with forex trading, it is not a commercial product. It was developed with the pure purpose to be useful and practical. Forex Strategy Builder is an irreplaceable guide to deeper understanding of technical analysis.

Platform: Windows 98, Windows Me, Windows NT, Windows 2000, Windows XP, Windows 2003, Windows Vista

Download

Maximize Your Profit

2007-09-12T22:53:00.000-07:00

Until now, I still don't find a holy grail forex system that can win 100%. Maybe someday, one of us will find that. But until that day, do we stop trading forex? Personally, I won't wait for the holy grail. No one is perfect just like forex system. So, what can we do to survive at this forex jungle?
The answer is simple but hard to do, minimize your loss and maximize your profit. If you want to survive, your profit must be greater than your loss.

Ok, let's talk about maximize the profit. There are several ways that I would mention it below. Here they are :

Divide your position into several trades. The goal of this system is gaining higher level TP (Take Profit) and keeping the profit step by step.
Use Trailing Stop after position is profit. This could be a good way to eliminate the fear factor and saving a lot of time beside doing by manual.
Use some meta scripts to handle your position easier. There are some scripts for MetaTrader Platform that can help to handle position much easier. For example, there is a script for closing all profitable position. They can help a lot for trader who trade in a short time or scalping.
Use different strategy in different market time. As we know, there are some market in a whole day. Trading day begin from Asian Market, European, and US. Those market has a different pattern as we know sideways and trending. In common case, at Asian market price usually is in sideways moment then stop at European to move as in trending and continue in US market. Find the suitable strategy for each of market time.

10 Secrets of Successful Forex Trader

2007-09-12T05:59:00.000-07:00

These are 10 tips that I think must do to become successful forex trader :

Learn from your losing
Find what factors that made you lost
Do not repeat the loss factors
Change your loss factors into winning factors
Make a plan for your trading
Do your plan and stick with them
Always use Money Management
Use strategy to maximize profits
Take your loss like your profit
Learn about market psychology

Hope these things can help you to become a successful trader, too.

Trading Forex is Simple or Complicated?

2007-09-08T22:41:00.000-07:00

That is a question for me after doing trading forex for almost a year. I have been looking for the answer for a few moment until I found the answer for myself. Trading forex can be simple or complicated depends on our knowledge about forex itself. Trading forex is same as many kinds of trading terms in this world, what makes it different are the items that being trade and the influence factors.

For beginner, there are a lot of things that should to be learn to become successful in trading forex. I think the word "learn" is making it looks complicated (I am a lazy student, LOL). But there are almost no man in this world that become successful without learning. From we born, we have been learning a lot to become like today. Stand up, walking, running, eating, writing, typing, bla.. bla.. bla.. (that I should mention all?) are things that we have learnt until today. So, if you want to become a successful trader, you should LEARN it. There are a lot of site that gives something to learn, one of them is www.babypips.com. They have good and structural lessons to learn forex for beginner or even for pro trader.

If you already pass the phase of learning, than you should practice how to trade in your platform as often as possible. Remember, practice makes perfect. After doing many trade, you will be familiar with the platform and start to have a habbit. Yes, the good thing is habbit makes you love each other with forex itself (if you hate it then you should not continue to trade forex ha ha ha) . The bad thing is usually you already loss many times until you find a good habbit (where is my money LOL).

After learn and have a good habbit, then you will find out that trading forex is simple. You weak up every morning, read the economic news, watch and do some exercise in your chart, take a position, and then go for your daily activities. Then profit will follow you everyday.