A new trading e-book has been uploaded to my site today. It’s Money Management and Risk Management by Ryan Jones. As the title of this book goes, it’s about money management — one of the most important parts of Forex trading (and not only Forex, but any other financial trading that involves risk and probability). The author wisely divides the money management into two kinds — the proper and improper money management. Where the first type refers to the one that always keeps in mind both the risk and reward parts of each trading action, while the improper tries to amplify the importance of only one of those to vital parts. Unfortunately, the majority of traders, especially newbie traders, that see the possibilities opened by the on-line Forex market and its huge leverage, fail to see the full picture and all the more so they can’t apply the proper money management to their trading strategy. But now you can download this book to learn more about the proper money management:

• Money Management and Risk Management

(...)
Read the rest of Money Management and Risk Management (18 words)

From now on every trader that opens a demo or real account with the eToro Forex platform will receive the first lesson from a professional Forex training course for free. To get the rest of the lessons of this course, trader just need to contact eToro via one of the available methods to get the information on how to obtain this course for free. I’ve browsed through the first lesson of the course and it seemed quite introductory to me (as it’s probably supposed to be). There are ten lessons overall and they cover the following topics:

1. Basics of Forex.


2. A quick guide to eToro’s revolutionized trading platform.


3. Fundamental analysis.


4. Technical analysis basics, charts, chart types, timeframes.


5. Trends, trend lines, support & resistance lines.


6. Fibonacci and pullbacks.


7. Popular indicators.


8. Breakouts and swing trading.


9. Trading examples.


10. Adapting technical analysis to commodity trading.

Looks quite interesting to me, especially the last topic since I’ve been trading commodities a lot lately. You can get more information about eToro and open account with this Forex broker.
(...)
Read the rest of Free Professional Forex Course from eToro (21 words)

Another MetaTrader expert advisor was added to my site today — MACD Pattern. It’s based on the MACD patterns (Moving Average Convergence/Divergence), specifically for EUR/USD H4 chart. It shows quite interesting back-test results but, unfortunately, has also two major problems. First, it has more than 27% maximum relative drawdown (that’s more than $6,000 drop during one moment). Second, it doesn’t explicitly control bar opening and uses stop-loss and take-profit levels, which means that the backtests aren’t very accurate and the resulting data should be treated very skeptically. But 60% profit over the course of less than 19 months is quite nice. Here you can see the test results graph (click to enlarge):

A strong drawdown can be seen close to the end of the test — its reason is unknown to me, but I guess it’s tolerable.

You can also view the complete testing report. Go directly to MACD Pattern expert advisor page to download this EA or get more information about it. If you don’t like MACD Pattern, you can check other MetaTrader expert advisors.
(...)
Read the rest of Expert Advisor Based on MACD Patterns (20 words)

Looking at the weekly chart of the EUR/USD currency pair it’s easy to say that it’s currently trading in some kind of a long term triangle pattern with the narrowing boundaries. Although, the upper boundary offers a strong resistance far below 1.5000 level, there is a high probability of the bullish breakout. Fundamental analysts talk about the inevitable dollar’s weakness that will come soon as the global economy starts to recover from the crisis. On the other hand, the U.S. dollar still remains a global reserve currency, while the euro still haven’t managed to gain the proper reputation, which suggest a bearish breakout in EUR/USD. And what do you think about it?

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.
(...)
Read the rest of Will EUR/USD Reach 1.5000 Before September? (23 words)

Trend indicators seem to be the most popular ones among the Forex traders. Indeed, Forex market is quite trendy and if a trader manages to catch this trend in its early stage and exit not long after the trend ends, considerable profit can be made. Today, a new free Forex indicator for trend detection was uploaded to my site. It’s quite accurate and shows where the trend starts and also where it ends; the zone without a trend is marked with a straight horizontal line, which also serves as some kind of support and resistance level. This indicator is easy to use but you should be aware of the fact that it’s redrawing on the current bar and thus only completed bars can used as signals:

• Easy Trend Visualizer Indicator

(...)
Read the rest of Trend Visualization with ADX Based Indicator (21 words)

A new trading e-book has been uploaded to my site today. It’s Money Management and Risk Management by Ryan Jones. As the title of this book goes, it’s about money management — one of the most important parts of Forex trading (and not only Forex, but any other financial trading that involves risk and probability). The author wisely divides the money management into two kinds — the proper and improper money management. Where the first type refers to the one that always keeps in mind both the risk and reward parts of each trading action, while the improper tries to amplify the importance of only one of those to vital parts. Unfortunately, the majority of traders, especially newbie traders, that see the possibilities opened by the on-line Forex market and its huge leverage, fail to see the full picture and all the more so they can’t apply the proper money management to their trading strategy. But now you can download this book to learn more about the proper money management:

• Money Management and Risk Management

(...)
Read the rest of Money Management and Risk Management (18 words)

From now on every trader that opens a demo or real account with the eToro Forex platform will receive the first lesson from a professional Forex training course for free. To get the rest of the lessons of this course, trader just need to contact eToro via one of the available methods to get the information on how to obtain this course for free. I’ve browsed through the first lesson of the course and it seemed quite introductory to me (as it’s probably supposed to be). There are ten lessons overall and they cover the following topics:

1. Basics of Forex.


2. A quick guide to eToro’s revolutionized trading platform.


3. Fundamental analysis.


4. Technical analysis basics, charts, chart types, timeframes.


5. Trends, trend lines, support & resistance lines.


6. Fibonacci and pullbacks.


7. Popular indicators.


8. Breakouts and swing trading.


9. Trading examples.


10. Adapting technical analysis to commodity trading.

Looks quite interesting to me, especially the last topic since I’ve been trading commodities a lot lately. You can get more information about eToro and open account with this Forex broker.
(...)
Read the rest of Free Professional Forex Course from eToro (21 words)

Another MetaTrader expert advisor was added to my site today — MACD Pattern. It’s based on the MACD patterns (Moving Average Convergence/Divergence), specifically for EUR/USD H4 chart. It shows quite interesting back-test results but, unfortunately, has also two major problems. First, it has more than 27% maximum relative drawdown (that’s more than $6,000 drop during one moment). Second, it doesn’t explicitly control bar opening and uses stop-loss and take-profit levels, which means that the backtests aren’t very accurate and the resulting data should be treated very skeptically. But 60% profit over the course of less than 19 months is quite nice. Here you can see the test results graph (click to enlarge):

A strong drawdown can be seen close to the end of the test — its reason is unknown to me, but I guess it’s tolerable.

You can also view the complete testing report. Go directly to MACD Pattern expert advisor page to download this EA or get more information about it. If you don’t like MACD Pattern, you can check other MetaTrader expert advisors.
(...)
Read the rest of Expert Advisor Based on MACD Patterns (20 words)

Looking at the weekly chart of the EUR/USD currency pair it’s easy to say that it’s currently trading in some kind of a long term triangle pattern with the narrowing boundaries. Although, the upper boundary offers a strong resistance far below 1.5000 level, there is a high probability of the bullish breakout. Fundamental analysts talk about the inevitable dollar’s weakness that will come soon as the global economy starts to recover from the crisis. On the other hand, the U.S. dollar still remains a global reserve currency, while the euro still haven’t managed to gain the proper reputation, which suggest a bearish breakout in EUR/USD. And what do you think about it?

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.
(...)
Read the rest of Will EUR/USD Reach 1.5000 Before September? (23 words)

Trend indicators seem to be the most popular ones among the Forex traders. Indeed, Forex market is quite trendy and if a trader manages to catch this trend in its early stage and exit not long after the trend ends, considerable profit can be made. Today, a new free Forex indicator for trend detection was uploaded to my site. It’s quite accurate and shows where the trend starts and also where it ends; the zone without a trend is marked with a straight horizontal line, which also serves as some kind of support and resistance level. This indicator is easy to use but you should be aware of the fact that it’s redrawing on the current bar and thus only completed bars can used as signals:

• Easy Trend Visualizer Indicator

(...)
Read the rest of Trend Visualization with ADX Based Indicator (21 words)

A new trading e-book has been uploaded to my site today. It’s Money Management and Risk Management by Ryan Jones. As the title of this book goes, it’s about money management — one of the most important parts of Forex trading (and not only Forex, but any other financial trading that involves risk and probability). The author wisely divides the money management into two kinds — the proper and improper money management. Where the first type refers to the one that always keeps in mind both the risk and reward parts of each trading action, while the improper tries to amplify the importance of only one of those to vital parts. Unfortunately, the majority of traders, especially newbie traders, that see the possibilities opened by the on-line Forex market and its huge leverage, fail to see the full picture and all the more so they can’t apply the proper money management to their trading strategy. But now you can download this book to learn more about the proper money management:

• Money Management and Risk Management

(...)
Read the rest of Money Management and Risk Management (18 words)

From now on every trader that opens a demo or real account with the eToro Forex platform will receive the first lesson from a professional Forex training course for free. To get the rest of the lessons of this course, trader just need to contact eToro via one of the available methods to get the information on how to obtain this course for free. I’ve browsed through the first lesson of the course and it seemed quite introductory to me (as it’s probably supposed to be). There are ten lessons overall and they cover the following topics:

1. Basics of Forex.


2. A quick guide to eToro’s revolutionized trading platform.


3. Fundamental analysis.


4. Technical analysis basics, charts, chart types, timeframes.


5. Trends, trend lines, support & resistance lines.


6. Fibonacci and pullbacks.


7. Popular indicators.


8. Breakouts and swing trading.


9. Trading examples.


10. Adapting technical analysis to commodity trading.

Looks quite interesting to me, especially the last topic since I’ve been trading commodities a lot lately. You can get more information about eToro and open account with this Forex broker.
(...)
Read the rest of Free Professional Forex Course from eToro (21 words)

Another MetaTrader expert advisor was added to my site today — MACD Pattern. It’s based on the MACD patterns (Moving Average Convergence/Divergence), specifically for EUR/USD H4 chart. It shows quite interesting back-test results but, unfortunately, has also two major problems. First, it has more than 27% maximum relative drawdown (that’s more than $6,000 drop during one moment). Second, it doesn’t explicitly control bar opening and uses stop-loss and take-profit levels, which means that the backtests aren’t very accurate and the resulting data should be treated very skeptically. But 60% profit over the course of less than 19 months is quite nice. Here you can see the test results graph (click to enlarge):

A strong drawdown can be seen close to the end of the test — its reason is unknown to me, but I guess it’s tolerable.

You can also view the complete testing report. Go directly to MACD Pattern expert advisor page to download this EA or get more information about it. If you don’t like MACD Pattern, you can check other MetaTrader expert advisors.
(...)
Read the rest of Expert Advisor Based on MACD Patterns (20 words)

Looking at the weekly chart of the EUR/USD currency pair it’s easy to say that it’s currently trading in some kind of a long term triangle pattern with the narrowing boundaries. Although, the upper boundary offers a strong resistance far below 1.5000 level, there is a high probability of the bullish breakout. Fundamental analysts talk about the inevitable dollar’s weakness that will come soon as the global economy starts to recover from the crisis. On the other hand, the U.S. dollar still remains a global reserve currency, while the euro still haven’t managed to gain the proper reputation, which suggest a bearish breakout in EUR/USD. And what do you think about it?

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.
(...)
Read the rest of Will EUR/USD Reach 1.5000 Before September? (23 words)

Trend indicators seem to be the most popular ones among the Forex traders. Indeed, Forex market is quite trendy and if a trader manages to catch this trend in its early stage and exit not long after the trend ends, considerable profit can be made. Today, a new free Forex indicator for trend detection was uploaded to my site. It’s quite accurate and shows where the trend starts and also where it ends; the zone without a trend is marked with a straight horizontal line, which also serves as some kind of support and resistance level. This indicator is easy to use but you should be aware of the fact that it’s redrawing on the current bar and thus only completed bars can used as signals:

• Easy Trend Visualizer Indicator

(...)
Read the rest of Trend Visualization with ADX Based Indicator (21 words)

Sometimes it’s necessary to copy all your MetaTrader chart settings to another PC or save them while you are reinstalling Windows on your current PC, or in case you are moving to a new broker and have to download their platform. If you keep only one or two charts open — that’s not a problem, but if you keep more than 10 open charts and each of them employs some custom settings it’s a real pain to set up them on a new platform manually. It’s easy to avoid doing such work by using the Profiles feature in MetaTrader platform. Here’s a brief tutorial on how to move all your chart settings from one platform to another:

1. Save all your current charts in your current platform to a new profile:

2. Give this profile some distinctive name:

3. It’s now available as a separate folder in your MetaTrader’s directory in the «profiles» folder. You can copy it and then paste into the same «profiles» folder in the new platform’s directory (on your new PC or in your new broker’s platform):

4. Finally, load a new profile by selecting it in the Profiles menu in your new platform:

(...)
Read the rest of Copying MetaTrader Chart Settings — Tutorial (21 words)

Last week I’ve posted a pattern spotted on AUD/USD chart that seemed to be a descending triangle. It turned out to be false (with several features pointing on that fact even 7 days ago) and the whole pattern has now transformed into a falling wedge with a very gradual narrowing, which suggests possibility for another pattern transformation. But nevertheless you can already start looking for a breakout to have good entry opportunity. Click the image to get the larger screenshot.

AUD/USD, Daily, Falling Wedge:

(...)
Read the rest of Forex Chart Pattern — AUD/USD (15 words)

Sometimes it’s necessary to copy all your MetaTrader chart settings to another PC or save them while you are reinstalling Windows on your current PC, or in case you are moving to a new broker and have to download their platform. If you keep only one or two charts open — that’s not a problem, but if you keep more than 10 open charts and each of them employs some custom settings it’s a real pain to set up them on a new platform manually. It’s easy to avoid doing such work by using the Profiles feature in MetaTrader platform. Here’s a brief tutorial on how to move all your chart settings from one platform to another:

1. Save all your current charts in your current platform to a new profile:

2. Give this profile some distinctive name:

3. It’s now available as a separate folder in your MetaTrader’s directory in the «profiles» folder. You can copy it and then paste into the same «profiles» folder in the new platform’s directory (on your new PC or in your new broker’s platform):

4. Finally, load a new profile by selecting it in the Profiles menu in your new platform:

(...)
Read the rest of Copying MetaTrader Chart Settings — Tutorial (21 words)

Last week I’ve posted a pattern spotted on AUD/USD chart that seemed to be a descending triangle. It turned out to be false (with several features pointing on that fact even 7 days ago) and the whole pattern has now transformed into a falling wedge with a very gradual narrowing, which suggests possibility for another pattern transformation. But nevertheless you can already start looking for a breakout to have good entry opportunity. Click the image to get the larger screenshot.

AUD/USD, Daily, Falling Wedge:

(...)
Read the rest of Forex Chart Pattern — AUD/USD (15 words)

Sometimes it’s necessary to copy all your MetaTrader chart settings to another PC or save them while you are reinstalling Windows on your current PC, or in case you are moving to a new broker and have to download their platform. If you keep only one or two charts open — that’s not a problem, but if you keep more than 10 open charts and each of them employs some custom settings it’s a real pain to set up them on a new platform manually. It’s easy to avoid doing such work by using the Profiles feature in MetaTrader platform. Here’s a brief tutorial on how to move all your chart settings from one platform to another:

1. Save all your current charts in your current platform to a new profile:

2. Give this profile some distinctive name:

3. It’s now available as a separate folder in your MetaTrader’s directory in the «profiles» folder. You can copy it and then paste into the same «profiles» folder in the new platform’s directory (on your new PC or in your new broker’s platform):

4. Finally, load a new profile by selecting it in the Profiles menu in your new platform:

(...)
Read the rest of Copying MetaTrader Chart Settings — Tutorial (21 words)

By Jeffrey Kennedy

Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit – and more importantly, do it consistently. How do they do that?

That’s an age-old question. While there is no magic formula, one of Elliott Wave International’s senior instructors Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don’t claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person’s life. Maybe you’ll find one in Jeffrey’s take on trading? We sincerely hope so.

The following is an excerpt from Jeffrey Kennedy’s Trader’s Classroom Collection. For a limited time, Elliott Wave International is offering Jeffrey Kennedy’s report, How to Use Bar Patterns to Spot Trade Setups, free.

Why Do Traders Lose?

If you’ve been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn’t seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can’t seem to prevent that invisible hand from depleting your trading account funds.

Which brings us to the question: Why do traders lose? Or maybe we should ask, ‘How do you stop the Hand?’ Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.

Fatal Flaw No. 1 – Lack of Methodology

If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won’t work over the long run. If you don’t have a defined trading methodology, then you don’t have a way to know what constitutes a buy or sell signal. Moreover, you can’t even consistently correctly identify the trend.

How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn’t matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can’t fit it on the back of a business card, it’s probably too complicated.

Fatal Flaw No. 2 – Lack of Discipline

When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously.

Fatal Flaw No. 3 – Unrealistic Expectations

Between you and me, nothing makes me angrier than those commercials that say something like, “…$5,000 properly positioned in Natural Gas can give you returns of over $40,000…” Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations.

Yes, it is possible to experience above-average returns trading your own account. However, it’s difficult to do it without taking on above-average risk. So what is a realistic return to shoot for in your first year as a trader – 50%, 100%, 200%? Whoa, let’s rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them – and achieve them – you will fend off the Hand.

The fourth finger of the invisible hand that robs your trading account is Lack of Patience. I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction.

That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you’re a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week.

All too often, because trading is inherently exciting (and anything involving money usually is exciting), it’s easy to feel like you’re missing the party if you don’t trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade.

How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don’t worry about missing an opportunity today, because there will be another one tomorrow, next week and next month … I promise.

I remember a line from a movie (either Sergeant York with Gary Cooper or The Patriot with Mel Gibson) in which one character gives advice to another on how to shoot a rifle: ‘Aim small, miss small.’ I offer the same advice in this new context. To aim small requires patience. So be patient, and you’ll miss small.”

Fatal Flaw No. 5 – Lack of Money Management

The final fatal flaw to overcome as a trader is a Lack of Money Management, and this topic deserves more than just a few paragraphs, because money management encompasses risk/reward analysis, probability of success and failure, protective stops and so much more. Even so, I would like to address the subject of money management with a focus on risk as a function of portfolio size.

Now the big boys (i.e., the professional traders) tend to limit their risk on any given position to 1% - 3% of their portfolio. If we apply this rule to ourselves, then for every $5,000 we have in our trading account, we can risk only $50-$150 on any given trade. Stocks might be a little different, but a $50 stop in Corn, which is one point, is simply too tight a stop, especially when the 10-day average trading range in Corn recently has been more than 10 points. A more plausible stop might be five points or 10, in which case, depending on what percentage of your total portfolio you want to risk, you would need an account size between $15,000 and $50,000.

Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade. And that doesn’t even address the size that they trade (i.e., multiple contracts).

To overcome this fatal flaw, let me expand on the logic from the ‘aim small, miss small’ movie line. If you have a small trading account, then trade small. You can accomplish this by trading fewer contracts, or trading e-mini contracts or even stocks. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the rough spots. Conversely, if you risk 25% of your portfolio on each trade, after four consecutive losers, you’re out all together.

Break the Hand’s Grip

Trading successfully is not easy. It’s hard work … damn hard. And if anyone leads you to believe otherwise, run the other way, and fast. But this hard work can be rewarding, above-average gains are possible and the sense of satisfaction one feels after a few nice trades is absolutely priceless. To get to that point, though, you must first break the fingers of the Hand that is holding you back and stealing money from your trading account. I can guarantee that if you attend to the five fatal flaws I’ve outlined, you won’t be caught red-handed stealing from your own account.

For more information on trading successfully, visit Elliott Wave International to download Jeffrey Kennedy’s free report, How to Use Bar Patterns to Spot Trade Setups.

It’s just a few hours away before the announcement of key interest rates from Reserve Bank of Australia (RBA) for AUD. All technicals seem to be pointing a bear for the AUD.

AUD/ USD 4 Hour Chart

200 EMA/SMA is right at the bottom with a trendline which looks very vulnerable to break. MACD/ Stochastics is looking and waiting for the decisive moment to crossover as well.

AUD/ USD 1 Hour Chart

AUD/USD 30 Minutes Chart

200 EMA/SMA is on top, MACD is below, we’re looking at a perfect setup for entry with the MACD converging to the bottom. I’m always referring to 30 minutes chart for entry, 1 hour/ 4 hours chart for trend and indication.

I’m opening a position at 0.9539, with a stop loss position of -30 pips, I’m expecting AUDUSD to breach the trendline at 0.9507.

Here’re some supportive Fundamental Anaylsis from Others

1. TradeTheNews’s Eben on A few thoughts on trading AUD/USD ahead of RBA rate decision at 0:30 EDT


2. DailyFX’s John Riveria on Will A Hawkish RBA Lead To A Fresh AUDUSD Multi Decade High?

Shalom, and good luck.

Share This

Despite my inactivity, Jaclyn still faithfully updates me on FXCM’s happening. FXCM is now offering free email education, a 12 installment email tutorial on forex trading,

FXCM (www.fxcm.com), the official currency-trading sponsor of the CNBC.com Million Dollar Portfolio Challenge, announced today that it is providing all contestants of the virtual trading competition with free forex education and trading signals to optimize their currency-trading experience.

Free Education: Contestants can sign up for FREE education lessons on trading in the currency market. Written by DailyFX.com analysts, the lessons will help traders gain an edge in trading their currency portfolio. The lessons come in an e-mail cycle, and registrants will receive 12 e-mails in total (1 lesson per day).
Sign up here: http://www.fxcm.com/cnbc-signup.jsp

Free Trading Signals: Contestants of the CNBC.com Million Dollar Portfolio Challenge contestants can also take advantage of full access to proprietary forex trading signals from DailyFX + for the duration of the contest. These proprietary trading signals will help new currency traders to construct trading ideas.
To login to DailyFX + http://plus.dailyfx.com
To learn more about DailyFX + http://www.fxcm.com/dailyfx-plus.jsp
To view the video of DailyFX + https://admin.acrobat.com/_a205571165/p67648316/
General Discussion: FXCM is happy to welcome all traders to the DailyFX.com forum, which is designed to open lines of communication between traders and to answer any questions they may have about trading foreign currencies. Contestants can discuss their currency trades and strategies with other traders participating in the challenge.

Start a discussion here: http://www.learncurrencytrading.com/fxforum/forumdisplay.php?f=171

FXCM would like to wish all traders, Good luck!

About the CNBC.com Million Dollar Portfolio Challenge:

The CNBC.com Million Dollar Portfolio Challenge is a virtual trading competition that was previously limited to stock trading only and will now feature both stock trading and currency trading. Competitors in the Challenge, which began on May 12, 2008, are given $1 million in virtual “CNBC Bucks,” $900,000 for trading common stocks, and $100,000 at ten-to-one margin for currency trading.* For 10 weeks, traders compete to win exciting weekly prizes for the highest percentage of weekly portfolio growth. At the end of the 10-week period, the top 6 players with the highest overall holdings in his or her portfolio will receive an aggregate of $1,000,000 in cash prizes, paid as annuities.

For a complete set of contest rules, and to register for CNBC.com’s Million Dollar Portfolio Challenge, please visit https://milliondollar.cnbc.com
*Leveraged foreign exchange trading carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

I’m not so much fan of forex signals, but I’ve signed up on their forex course to see what’s going on. Free anyway!

Share This

By Jeffrey Kennedy

Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit – and more importantly, do it consistently. How do they do that?

That’s an age-old question. While there is no magic formula, one of Elliott Wave International’s senior instructors Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don’t claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person’s life. Maybe you’ll find one in Jeffrey’s take on trading? We sincerely hope so.

The following is an excerpt from Jeffrey Kennedy’s Trader’s Classroom Collection. For a limited time, Elliott Wave International is offering Jeffrey Kennedy’s report, How to Use Bar Patterns to Spot Trade Setups, free.

Why Do Traders Lose?

If you’ve been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn’t seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can’t seem to prevent that invisible hand from depleting your trading account funds.

Which brings us to the question: Why do traders lose? Or maybe we should ask, ‘How do you stop the Hand?’ Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.

Fatal Flaw No. 1 – Lack of Methodology

If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won’t work over the long run. If you don’t have a defined trading methodology, then you don’t have a way to know what constitutes a buy or sell signal. Moreover, you can’t even consistently correctly identify the trend.

How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn’t matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can’t fit it on the back of a business card, it’s probably too complicated.

Fatal Flaw No. 2 – Lack of Discipline

When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously.

Fatal Flaw No. 3 – Unrealistic Expectations

Between you and me, nothing makes me angrier than those commercials that say something like, “…$5,000 properly positioned in Natural Gas can give you returns of over $40,000…” Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations.

Yes, it is possible to experience above-average returns trading your own account. However, it’s difficult to do it without taking on above-average risk. So what is a realistic return to shoot for in your first year as a trader – 50%, 100%, 200%? Whoa, let’s rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them – and achieve them – you will fend off the Hand.

The fourth finger of the invisible hand that robs your trading account is Lack of Patience. I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction.

That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you’re a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week.

All too often, because trading is inherently exciting (and anything involving money usually is exciting), it’s easy to feel like you’re missing the party if you don’t trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade.

How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don’t worry about missing an opportunity today, because there will be another one tomorrow, next week and next month … I promise.

I remember a line from a movie (either Sergeant York with Gary Cooper or The Patriot with Mel Gibson) in which one character gives advice to another on how to shoot a rifle: ‘Aim small, miss small.’ I offer the same advice in this new context. To aim small requires patience. So be patient, and you’ll miss small.”

Fatal Flaw No. 5 – Lack of Money Management

The final fatal flaw to overcome as a trader is a Lack of Money Management, and this topic deserves more than just a few paragraphs, because money management encompasses risk/reward analysis, probability of success and failure, protective stops and so much more. Even so, I would like to address the subject of money management with a focus on risk as a function of portfolio size.

Now the big boys (i.e., the professional traders) tend to limit their risk on any given position to 1% - 3% of their portfolio. If we apply this rule to ourselves, then for every $5,000 we have in our trading account, we can risk only $50-$150 on any given trade. Stocks might be a little different, but a $50 stop in Corn, which is one point, is simply too tight a stop, especially when the 10-day average trading range in Corn recently has been more than 10 points. A more plausible stop might be five points or 10, in which case, depending on what percentage of your total portfolio you want to risk, you would need an account size between $15,000 and $50,000.

Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade. And that doesn’t even address the size that they trade (i.e., multiple contracts).

To overcome this fatal flaw, let me expand on the logic from the ‘aim small, miss small’ movie line. If you have a small trading account, then trade small. You can accomplish this by trading fewer contracts, or trading e-mini contracts or even stocks. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the rough spots. Conversely, if you risk 25% of your portfolio on each trade, after four consecutive losers, you’re out all together.

Break the Hand’s Grip

Trading successfully is not easy. It’s hard work … damn hard. And if anyone leads you to believe otherwise, run the other way, and fast. But this hard work can be rewarding, above-average gains are possible and the sense of satisfaction one feels after a few nice trades is absolutely priceless. To get to that point, though, you must first break the fingers of the Hand that is holding you back and stealing money from your trading account. I can guarantee that if you attend to the five fatal flaws I’ve outlined, you won’t be caught red-handed stealing from your own account.

For more information on trading successfully, visit Elliott Wave International to download Jeffrey Kennedy’s free report, How to Use Bar Patterns to Spot Trade Setups.

It’s just a few hours away before the announcement of key interest rates from Reserve Bank of Australia (RBA) for AUD. All technicals seem to be pointing a bear for the AUD.

AUD/ USD 4 Hour Chart

200 EMA/SMA is right at the bottom with a trendline which looks very vulnerable to break. MACD/ Stochastics is looking and waiting for the decisive moment to crossover as well.

AUD/ USD 1 Hour Chart

AUD/USD 30 Minutes Chart

200 EMA/SMA is on top, MACD is below, we’re looking at a perfect setup for entry with the MACD converging to the bottom. I’m always referring to 30 minutes chart for entry, 1 hour/ 4 hours chart for trend and indication.

I’m opening a position at 0.9539, with a stop loss position of -30 pips, I’m expecting AUDUSD to breach the trendline at 0.9507.

Here’re some supportive Fundamental Anaylsis from Others

1. TradeTheNews’s Eben on A few thoughts on trading AUD/USD ahead of RBA rate decision at 0:30 EDT


2. DailyFX’s John Riveria on Will A Hawkish RBA Lead To A Fresh AUDUSD Multi Decade High?

Shalom, and good luck.

Share This

Despite my inactivity, Jaclyn still faithfully updates me on FXCM’s happening. FXCM is now offering free email education, a 12 installment email tutorial on forex trading,

FXCM (www.fxcm.com), the official currency-trading sponsor of the CNBC.com Million Dollar Portfolio Challenge, announced today that it is providing all contestants of the virtual trading competition with free forex education and trading signals to optimize their currency-trading experience.

Free Education: Contestants can sign up for FREE education lessons on trading in the currency market. Written by DailyFX.com analysts, the lessons will help traders gain an edge in trading their currency portfolio. The lessons come in an e-mail cycle, and registrants will receive 12 e-mails in total (1 lesson per day).
Sign up here: http://www.fxcm.com/cnbc-signup.jsp

Free Trading Signals: Contestants of the CNBC.com Million Dollar Portfolio Challenge contestants can also take advantage of full access to proprietary forex trading signals from DailyFX + for the duration of the contest. These proprietary trading signals will help new currency traders to construct trading ideas.
To login to DailyFX + http://plus.dailyfx.com
To learn more about DailyFX + http://www.fxcm.com/dailyfx-plus.jsp
To view the video of DailyFX + https://admin.acrobat.com/_a205571165/p67648316/
General Discussion: FXCM is happy to welcome all traders to the DailyFX.com forum, which is designed to open lines of communication between traders and to answer any questions they may have about trading foreign currencies. Contestants can discuss their currency trades and strategies with other traders participating in the challenge.

Start a discussion here: http://www.learncurrencytrading.com/fxforum/forumdisplay.php?f=171

FXCM would like to wish all traders, Good luck!

About the CNBC.com Million Dollar Portfolio Challenge:

The CNBC.com Million Dollar Portfolio Challenge is a virtual trading competition that was previously limited to stock trading only and will now feature both stock trading and currency trading. Competitors in the Challenge, which began on May 12, 2008, are given $1 million in virtual “CNBC Bucks,” $900,000 for trading common stocks, and $100,000 at ten-to-one margin for currency trading.* For 10 weeks, traders compete to win exciting weekly prizes for the highest percentage of weekly portfolio growth. At the end of the 10-week period, the top 6 players with the highest overall holdings in his or her portfolio will receive an aggregate of $1,000,000 in cash prizes, paid as annuities.

For a complete set of contest rules, and to register for CNBC.com’s Million Dollar Portfolio Challenge, please visit https://milliondollar.cnbc.com
*Leveraged foreign exchange trading carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.

I’m not so much fan of forex signals, but I’ve signed up on their forex course to see what’s going on. Free anyway!

Share This

By Jeffrey Kennedy

Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit – and more importantly, do it consistently. How do they do that?

That’s an age-old question. While there is no magic formula, one of Elliott Wave International’s senior instructors Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don’t claim to have found The Holy Grail of trading here, but sometimes a single idea can change a person’s life. Maybe you’ll find one in Jeffrey’s take on trading? We sincerely hope so.

The following is an excerpt from Jeffrey Kennedy’s Trader’s Classroom Collection. For a limited time, Elliott Wave International is offering Jeffrey Kennedy’s report, How to Use Bar Patterns to Spot Trade Setups, free.

Why Do Traders Lose?

If you’ve been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn’t seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can’t seem to prevent that invisible hand from depleting your trading account funds.

Which brings us to the question: Why do traders lose? Or maybe we should ask, ‘How do you stop the Hand?’ Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.

Fatal Flaw No. 1 – Lack of Methodology

If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won’t work over the long run. If you don’t have a defined trading methodology, then you don’t have a way to know what constitutes a buy or sell signal. Moreover, you can’t even consistently correctly identify the trend.

How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn’t matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can’t fit it on the back of a business card, it’s probably too complicated.

Fatal Flaw No. 2 – Lack of Discipline

When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously.

Fatal Flaw No. 3 – Unrealistic Expectations

Between you and me, nothing makes me angrier than those commercials that say something like, “…$5,000 properly positioned in Natural Gas can give you returns of over $40,000…” Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations.

Yes, it is possible to experience above-average returns trading your own account. However, it’s difficult to do it without taking on above-average risk. So what is a realistic return to shoot for in your first year as a trader – 50%, 100%, 200%? Whoa, let’s rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them – and achieve them – you will fend off the Hand.

The fourth finger of the invisible hand that robs your trading account is Lack of Patience. I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction.

That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you’re a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week.

All too often, because trading is inherently exciting (and anything involving money usually is exciting), it’s easy to feel like you’re missing the party if you don’t trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade.

How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don’t worry about missing an opportunity today, because there will be another one tomorrow, next week and next month … I promise.

I remember a line from a movie (either Sergeant York with Gary Cooper or The Patriot with Mel Gibson) in which one character gives advice to another on how to shoot a rifle: ‘Aim small, miss small.’ I offer the same advice in this new context. To aim small requires patience. So be patient, and you’ll miss small.”

Fatal Flaw No. 5 – Lack of Money Management

The final fatal flaw to overcome as a trader is a Lack of Money Management, and this topic deserves more than just a few paragraphs, because money management encompasses risk/reward analysis, probability of success and failure, protective stops and so much more. Even so, I would like to address the subject of money management with a focus on risk as a function of portfolio size.

Now the big boys (i.e., the professional traders) tend to limit their risk on any given position to 1% - 3% of their portfolio. If we apply this rule to ourselves, then for every $5,000 we have in our trading account, we can risk only $50-$150 on any given trade. Stocks might be a little different, but a $50 stop in Corn, which is one point, is simply too tight a stop, especially when the 10-day average trading range in Corn recently has been more than 10 points. A more plausible stop might be five points or 10, in which case, depending on what percentage of your total portfolio you want to risk, you would need an account size between $15,000 and $50,000.

Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade. And that doesn’t even address the size that they trade (i.e., multiple contracts).

To overcome this fatal flaw, let me expand on the logic from the ‘aim small, miss small’ movie line. If you have a small trading account, then trade small. You can accomplish this by trading fewer contracts, or trading e-mini contracts or even stocks. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the rough spots. Conversely, if you risk 25% of your portfolio on each trade, after four consecutive losers, you’re out all together.

Break the Hand’s Grip

Trading successfully is not easy. It’s hard work … damn hard. And if anyone leads you to believe otherwise, run the other way, and fast. But this hard work can be rewarding, above-average gains