Forex Trading Thoughts and....

This trade is the result of using the 240-min horizontal support/resistance and hourly trend lines. The idea is to initiate the trade using either rejection or continuation signals at the 240-min horizontal lines in combination with the hourly trend lines. The optimum entry would have been another 20 or so pips lower, but unfortunately yet again, I was unable to be at the screens monitoring the situation.

This trade was taken as a direct result of the horizontal 4-hr support/resistance lines and trend line confirmation on the 60-min chart. I would have preferred an entry at ~195.00, but instead entered short at 193.90 due to not being at the screens early enough. The news regarding B&B(the UK banking giant) being taken into public ownership(nationalized) certainly did not hurt the situation. In fact, it may have been the gasoline on this fire.

The past two weeks of learning and testing are finished and I'm ready to get back at it by putting cash on the line. It turns out this strategy demands quite a bit more time from me than the previous Asian session close to London lunch time frame. I'll basically be monitoring the market, in fact the GBP/JPY pair or geppy as it's called, all day. That is if congress comes to some sort of an agreement on the financial rescue/bailout plan before Sunday evening's market opening.

The market has been pretty much locked in a small range this past week as the U.S. congress tries to pull together some kind of a financial rescue/giveaway plan to save the wealthy citizens of this great country. You know the situation is dire when even free market wingnuts like Larry Kudlow are saying they have no probem with government socialism for the rich every 20-30 years. Make no mistake about it, this current crisis of confidence in the financial system can be placed squarely on the shoulders of Phil Gramm(former U.S. senator) and his conservative cronies, when in December 2000 he slipped the Commodity Futures Modernization Act at the last moment possible into an omnibus spending bill making it's way through congress. The act, he declared, would ensure that neither the SEC nor the Commodity Futures Trading Commission ( CFTC ) got into the business of regulating newfangled financial products called swaps—and would thus "protect financial institutions from overregulatio

I've been working on and testing a new and some what different strategy utilizing 4-hr, 1-hr and 30-min charts. It uses the same support/resistance lines as my previous wider time frame strategy, but the entries are derived from the 1-hr and 30-min charts. Exits are trailed as support or resistance lines are broken and daily ranges are kept in mind. This strategy is mainly used on geppy(GBP/JPY). Stops are typically 50-65 pips. Profits run 100 pips or more. I'll be posting some screen caps of trades in the future.

This has been a couple of tough nights. Last night was break even, which is better than a loss any day. Tonight is just plain ugly with three trades totaling -68. A little more caution was probably in order since Thursday morning's economic calendar is chock full of important market moving data releases. The great thing about trading is there's always another day.

...this can all be done using any computer hooked to the internets. My broker, Oanda, is a net based java app for entering trades. My charts are from Oanda (java) and ProRealTime (java) charts. For you geeks out there this means you can use Windows, Mac or Linux to power your way to financial freedom. Here's a list of software I use day in, day out to make oodles of cash trading currencies: Oanda(broker) ProRealTime Charts (main charting package) Mozilla Thunderbird (email) Mozilla Firefox 3.0.1 Photoshop, Irfanview(free) or GIMP(free on Linux) for screen capture annotation. Windows Vista or openSUSE Linux

This trade was just great. It ran for over 100 pips. I used monthly and 4-hr support/resistance as described in the two previous posts. The chart is notated. Click on it for a larger view:

Here are some ideas from Art K. as to how to go about preparing to find a good, high probability entry. He's a serious hedge fund pro.: One of my regular (technical) port of calls is to the Dollar Index to see what that’s up to. It’ll offer a snapshot of $ weakness v/s strength. You might then choose to cherry pick your candidate of choice if it's playing ball & quickly then proceed to leaf through the appropriate pairs to adjudge a likely opportunity. For instance, if the buck is weak v/s the basket, I’d want to be homing in on the candidate which is displaying the dominant & aggressive behavior patterns. If it’s the Pound, then I’ll trail through the cross instruments associated with the Pound to locate whether it’s also a Pound story (of strength) or exclusive to the buck. I’m always on the hunt for value v/s risk. I want an easy life wherever possible. If the buck is mired in heavy range traffic, then I’ll look outside for maybe a decent cross opportunity. Perhaps s

I've changed my trading strategy again to include a more overarching way to determine high probability trades. During the past month I ran across some new postings by some old mentors from back east and London. They are employees in a mid sized hedge fund that deals specifically in currencies. In their postings they went over in detail how it is they determine areas(or levels) where they want to get involved in the market. It doesn't matter which currency pair, but they(like me) want to trade the more liquid and volatile instruments(i.e. gbp/usd., gbp/jpy, eur/jpy, etc.). It's amazingly simple. For the longest time I looked at larger time frames for trend determination, but that's only a part of it. The strategy is based mainly on 4-hr(240-min) chart support and resistance. The reason is that the mid sized and larger players consider time frames below the 4-hr chart noise. This is the chart they use to make determinations for entry. Here it is: Open a clean monthly char