Update pt. deux

After analyzing my trendlines I decided to get out of USDCHF, EURCHF, and GBPUSD while they were in profit territory (I believe they are all going to retrace now).  So, account balance is now...$2936.23.  Also, I got in to the USDCAD trade AGAIN (third time's the charm)...there is an IB fakey pinbar set-up on the daily chart that also bounced off my trendline.  This is a very strong signal...so I am giving it another shot at a BUY order.

Update

That USDCAD trade stopped out on me again...must be something there that I missed.  I will review it more and comment later.  All three of my other trades are going well though, GBPUSD close to TP again, and EURCHF and USDCHF are both in the positive territory...so that is good!  Account balance is now $2905.00, I found an interesting thread on babypips yesterday about a guy who trades levels using supply and demand concepts with price action...it was enlightening.  I want to review it again, not all of his method is good, but I think there is something there that can add to what I already do with reading my charts.  But, yesterday, I got a new book I've been waiting a few years for (The Land of the Painted Caves, by Jean M. Auel)...so I am a little distracted at the moment.  It's good so far :)

USDJPY

I am still watching this pair and the support is holding right around 76.000...whether this is a bottom or not, only time will tell, but I bet when something does happen - it will be big!  I rather think it is a bottom and will rise from here, but it has been in a downtrend for a longtime, so it is also likely that it may continue...interesting!

As expected...

As I expected, my trades are moving my way now (came close to stopping out EURCHF, but didn't luckily).  USDCAD was closed out if you recall, but I reopened it (buy) at a better position anyway.  Also, GBPUSD (which I TP on last week) retraced, and I am in that trade again (sell).  So, to recap, I have four trades going:  USDCAD (buy), GBPUSD (sell), EURCHF (sell), and USDCHF (sell).  We'll see how this works out for me probably by the end of the week :)

Risk must be "on" at the moment...

All three of my trades are going against me for the time being, and USDCAD already stopped out (loss of $6.19) which brings my account balance to $2908.85.  I say risk must be on because my pairs involve either the USD or CHF and both are safe haven currencies, and both are down at the moment.  That's ok, it's only a matter of time before things reverse...

The Euro

I am just baffled as to the continued strength of the euro.  That currency could fall apart at any moment, and yet it continues to rally.  All of the news reports indicate that it is a highly unstable and doomed currency...I just don't get it.  That's the weird thing about currencies, they are valued at what people think their value is...like stocks, it's a reflection of the consumers confidence level in the item at that moment.  Also, supply and demand come in to play as well, this is one of the reasons that I want to study economics in school - so that I can understand these relationships better.

Thoughts on strategy

Initial thoughts on my strategy for the CNBC million dollar portfolio challenge...

I should probably stick to what I know, which is price action forex only....it is tempting to try my hand at stocks, indexes, commodities, etc., since there is a lot of play money available (what would Warren Buffet do?)...but I don't understand these markets, so I will stay out of them.  That's ok, can make money with forex markets only.  Now, to be aggressive (the person with the most gains, wins), or play it as I would if it were really my money to lose?  I think I will go for a medium risk plan of choosing high quality trades only, and risk more than I normally would.  Still a few weeks to think about this...

USDCHF and EURCHF

Well, there have been few trades worth considering for the past couple of weeks, but the meeting of Ben Barnake et al at Jackson Hole in Wyoming has finally set things in motion.  I decided to sell USDCHF and EURCHF (double exposing myself to CHF) because they have been retracing for awhile now and I think are ready to resume their strong downward trend.  The charts for these two pairs look very similar with both starting to reject price at an important S/R level.  The H4 charts show pinbars on both pairs at this S/R level.  There is an element of risk to these trades since there are rumors of the SNB stepping in with an intervention to drive down their currency's value (there are always rumors of that though)...frankly, I doubt it will happen, because the price is actually quite a bit lower than it has been for a while now.  The other aspect of my risk is that I double exposed myself to CHF, but my lot size is very small and I think I have good potential of winning these trades or I wouldn't have taken  them in the first place.  So, if I do win, I am double exposed to winnings also...we shall see what happens.

Economics

I decided that when I return to school in the spring semester, that I am majoring in economics.  It just makes sense, it's what I am interested in and it could only help my understanding of what I am trying to do with forex.  It's a rather dry subject though, but now that I have more perspective and direct interaction with the forex market, I am hoping that I will find it fascinating.

USDCAD

I had a buy limit order in for USDCAD which was hit when price dropped to .98300.  It was perfect, price just dropped down to touch my desired entry (giving me a tighter stoploss), and then started to rise up again.  My stoploss is .97700 and my TP is 1.00000.  This pinbar setup comes at the end of a bullish penant (price consolidation), so I believe that price should continue in the upward trend.  This is following a double bottom which appears to be a trend reversal for this pair, and history also says that it should not go much lower than it is currently.  The lowest that this pair has ever traded is .9 and the lowest it ever closed at was .94, so it is fairly close to that extreme at this time.  The market is really not offering up many good opportunities right now (this is one of those times when you are sitting out hands as the poker player, cause you're just not getting anything good)...but I think I may be able to get a few good pips with this trade. 

USDJPY

Well, yesterday this trade was moving in my favor, it got up as high as 77.695 (my target profit was 78.000), so I moved my stoploss up to 76.750 to minimize my risk in the trade.  Unfortunately, price reversed dramatically to 76.480 which stopped me out.  Due to my minimal risk though, I only lost -$2.53 (this is the key to forex...wins must be larger than losses!)  I will continue to watch this pair, as the "bottom" still seems to be holding...will be interesting to see what it does in the coming days.  Current account balance $2,914.99

GBPUSD closed out at Take Profit Target!

Made 212 pips on that trade, yay!  Unfortunately since I am playing it conservatively for the time being, that amounts to $19.60...lol, oh well, a win is what I was after and I got it.  Also, my other trade, USDJPY is in the positive about 43 pips :)  still a ways to go on TP for that one...I'm hoping that it is either a reversal or that BOJ will intervene and cause a spike, either way, I win.  Current account balance is $2,917.52

Update on my trades...

The GBPUSD trade is now more than halfway to my profit target...it has taken longer than I expected it to, but price was pretty much stalled out for the past couple of days.  I think that the markets are waiting for the possible announcement of QE3 (which may be alluded to this Friday).  The other trade, USDJPY (buy) is a little bit in the negative at the moment - but still hovering around the record low of 76.00.

So, what next?

I am not going to sit here and become a victim, I believe that I see the warning signs, feel it coming, so I am trying to prepare myself and my family for whatever the future may hold.  I am trying to become more independant, my ultimate goal is to be self-sustaining.  I just hope that there is enough time left before it all starts to unravel...

My arguement...

This is an excerpt of a comment that I made to someone who I was debating with online who claimed that it didn't matter who had the money (the rich/poor ratio), he argued that it was our overspending habits that had put us in this situation.  This was my response: 

Actually, "who" has the money is the crux of the problem. If the majority of consumers don't make enough money to spend beyond the needs of survival of
day to day life, they cannot consume and drive the economy. I am not talking about the irresponsible spending of Americans who have made poor decisions that have
led them to this point, but the many hard working Americans who cannot afford to vacation, have any sort of luxuries (such as eating out at a restaurant - not
McDonalds, buying Christmas presents for their kids, or for instance - paying for college). These are not unrealistic expectations to have as an American citizen,
trying to live the American Dream. There are millions of Americans who are not living irresponsibly, who nonetheless have struggled for years and live paycheck to
 paycheck...there are millions of elderly who are finding their purchasing power declining as well, and on a fixed income. I am not against the wealthy having money,
 but this imbalance was created unnaturally by horrible decisions by the govt and the fed, decreasing the value of the dollar AND funneling millions of dollars to
 those who need it the least (the already wealthy, the failing banks and businesses they bailed out, other countries, wars, etc.) and we WILL pay for it. Some people
 here are talking about household debt, but the nations debt is our debt too. Our nations leaders have acted like irresponsible American consumers. Worse, they have
bought each other off and acted illegally in our name, with our checkbook. The day will come, it is unavoidable, when we must pay this debt back. The lower and
 middle class will suffer greatly when this happens. There will be I dare say, another "Great Depression". The alternative of not repaying our debts is a collapse of
 the US dollar, our credibility, and probably the USA. I hate to be so dramatic, but it is either or, worst case scenario: both.

Wealth Distribution in this country...

I have a few hot-button issues that get me worked up...this is probably the number one issue.  I am really ticked off at the government for the changes that they have progressively made in the past 30-40 years that have led to the rich getting richer/poor getting poorer.  Not to mention the FED, which should be done away with.  We are in the same situation that we were in right before the Great Depression where the top 1% richest Americans hold 25% of our nations wealth, and the top 10% hold 50% of our nations wealth.  The economy crashed then, and it will crash again, because most of the consumers (the bottom 90%) can't afford anything more than necessities.  This is not even taking in to consideration the HUGE problems that our government faces concerning our tax system and our budget deficit, and the world-wide recession/depression/stagflation...whatever the case may be.  We are all teetering on the brink of a very scary future in my opinion.

CNBC's Million Dollar Portfolio Challenge

Guess what?  CNBC is having a contest where they give you a million dollars to "pretend" invest, and whoever wins - wins the grandprize of 1,000,000.00!  Hell yeah, I'm gonna enter...might as well try :)   I have a few weeks before it starts to come up with an investment plan, and I definately could use a million dollars.  The other prizes are pretty cool too...check it out at http://www.cnbc.com/id/44207374

Long on USDJPY

Today, I decided to place a trade going long on USDJPY.  I had been holding back from making any yen trades due to the possibility of BOJ intervention and due to the fact that it is against trend, however after further consideration, I decided to go ahead and risk it.  First of all, there are a couple of indecision bars on the daily chart in the past three days, indicating that a reversal may be imminant...and price has basically stalled out around the 76.000 level for over a week now.  This is a record low for this pair.  There was even a very large pinbar on the H4 chart.  Also, if the BOJ does intervene, it would push price higher in my favor probably causing me to meet my profit target immediately, so that isn't really an issue.  After placing this trade, I was reading on DailyFX that they speculate that this may be the formation of a very important bottom (and trend reversal) for this pair...so that makes me feel even better about the trade.  The article said that these bottoms often occur after the classic triangle formation, which just occured. 

The fundamentals on this pair are that both economies are struggling and both are regarded as safe haven currencies, but Japan's has been winning out lately (hence the downtrend).  But perhaps that is about to change, or maybe enter a sideways channel.

Regardless, I didn't risk much, so if it doesn't work out, I won't lose much :)  This is all about the learning experience, it's not real money yet...

Freedom

my goals...

I call this post "freedom", because I don't want to work in an office, on a schedule, for someone-else, and I don't want to be anyone's boss either.  Most of my "work" can be done anytime after NY close and before I go to bed, and much of it (research, news, etc.) I find enjoyable anyway, so I don't know if you can really call it work.   Actually analyzing the charts and making my trades would take no more than an hour or two a day, maximum.

I don't care if I ever become a millionaire, but I would like to own my home (that I designed) outright with no mortgage. 

I would like to start everyday with breakfast with my family, and then getting the kids off to school.

I would like to use the free time while the kids are at school to "be productive", whether that is cleaning, gardening, grocery shopping, helping my husband with his business, getting some more college classes under my belt, excercising, yoga, whatever...

I would like to have time to read a book and take a nap...

I would like to have dinner with my family everynight, hey, maybe even eat at a restaurant now and then :)

I would like to have have the time to help my kids with their homework, and have them all participate in some afterschool activity like archery, horsebackriding, karate, dancing, sports, whatever interests them.

On the weekends, I would like to do something as a family like visit a museum, National Park (CAMPING! YAY!!!), opera, or take a small road trip...

I would like to be able to go on vacation every summer, and have the holidays to spend together as a family/going to visit family around the country.

I would like to have emergency savings, and savings for kids college, and retirement.

I don't think that my goals are extravagant, but I haven't made any progress on them in the past DECADE, so it's time to do something different!!!  If I keep doing what I've done before, I'll keep getting what I already got...

Skype Buddies

I forgot to mention that I also belong to a skype group, me and a few others, who follow the price action method of trading.  Its really important I think, to have people to talk to about this, because it is dry and boring to most everyone I know.  Let's face it, most of my friends have no interest in talking to me about this stuff!  Not to mention, we encourage each other and bounce ideas off of each other, so I think that is helpful as well.  Although, I am the least knowledgeable of the group...so I think I am getting more out of it than they are ;)  Thanks guys!

Trade for 8/22/2011

Going short on GBPUSD.  My reasoning is as follows: 

On the technical side of things, I identified an inside-bar / false break set-up on the daily chart.  In addition to this promising sign, the false break candle was also a pinbar candle, AND this occurred near the top of a current channel that GU has been trending in.  If I had to call it bullish or bearish, I would say bullish...but mostly it seems to be in this channel lately, so until it breaks out of that I don't think that it is too risky to go short.  My stoploss of 150 pips is plenty big to give me some room for price fluctuation and is set near the top of this channel which is also a significant support/resistance level.  My profit target is about two times my risk.  Normally I would do three times, but since this is technically against the prevailing trend...I'll be more conservative.

As for fundamental support, this is difficult, because most pairs are in a chaotic ranging pattern right now due to all of the economic problems being experienced around the world...seriously, noone seems to know what to do.  Price may be consolidating and preparing for an upturn, but anything could happen - with the news causing huge volatility practically everyday.  I would go crazy if I were trying to trade on fundamentals right now.  I always rely most heavily on technical support to make my decisions anyway, so that helps me in this kind of environment.

One of my #1 goals of my training right now, is to control my emotions while in a trade.  So, I am not risking much, and I am practicing set and forget.  In other words, my stoploss is set, my order is set, my profit target is set, and now I must leave it alone for better or worse.  I am either right or wrong. Current Demo Account Balance:  $2897.92 (started with $2500)

First things first

"Forex" is foreign currency exchanging or trading.  It's a risky business for the average person to endeavor to get involved in, they say that about 90-95% of those who try to do it - fail.  So, why would I think that I should give it a chance?  I cannot afford to lose money, that is for sure.  But all my life, I have not really known what I want to do...and when I was introduced to forex, it was like a fire lit inside of me.  It's driving me to learn about this and it's gripping and serious and fun at the same time.  I don't know how to explain it really, other than that my internal compass is telling me that this is the right thing for me to do...that I have to do this.  So, the only thing left for me to do is to know the risks, take them seriously, figure out why others fail so frequently and not make those mistakes myself.  Besides, there are people out there who master this and make very good livings at it and live the life that they want to live.  I'll get in to that more in a separate post...my goals.

Lets talk about that risk a little more...why do others fail so often?  There are a few extremely common mistakes that all newbies to forex make:  failure to properly manage their risk per trade, trading with real money before they have any sort of system or know what the hell they are doing, and trading far too often (like a gambling addiction).  Good trade set-ups are plentiful, but they are not ALL good and most new traders just feel the need to be in a trade (or multiple trades) all the time, just to be "making money"...but usually they are picking bad trades and losing money.  Trading is like poker, you should wait for the hand, not just play whatever you're dealt. 

The first thing that I did was to check out some recommended sites to see what it was all about.  "www.babypips.com" was my first step, they have this cool "school of pipsology" that basically teaches you the verbage, ins and outs etc., that you need to know to get started with forex.  I also started reading tons of other forex sites and this is where the obsession began.  I started a demo account right away, and in the beginning was basically just pushing buttons, learning how the format worked etc.  I was advised by my forex friend to start a realistically small account to practice on (how much will your first real account be?  practice with that amount), so that is what I did.

I was really just playing around and not getting anywhere for the first couple of months, because as much as I read about fundamentals and other people's systems...nothing was consistently working for me.  Then, I stumbled upon "price action" and found some videos on youtube, as well as a fantastic site by Nial Fuller, who runs an educational forex service called: "LearnToTradeTheMarket.com".  This was my breakthru moment.  I learned tons from his site, and though I haven't paid for membership to his program yet, I might when I have the money to spare.  Just because I feel that I have learned so much from him for free, that it is worth the small fee he is asking for membership.  Besides, who knows what other nuggets of wisdom he might be holding back.  Anyway, that is when I really started making some progress.  Basically, price action is all about learning how to read the chart and analyzing what the price movement is telling you.  You don't need a lot of fancy indicators, infact I believe that they are mostly worthless and an impediment to the user learning how to actually analyze the charts. 

Introduction

I am on a new path!  I quit my restaurant management job, and now I am returning to college and waitressing part-time.  My reason for making these changes is to increase my quality of life, have more time with my family, less stress...and most importantly carve out room for my new endeavor - becoming a retail forex trader.  It is my dream to work from home, supporting myself and my family solely from my investment choices someday...eventually turning that "living" into great wealth.  But, you must crawl before you walk, and walk before you run, so this blog is meant to record my struggles and victories, help me to analyze my actions and learn from my mistakes, and maybe help others if anyone chooses to follow it. 

I do not nor have I ever worked for any banks or institutions, and have received no professional training in forex trading.  I am just your average woman trying to scratch out a better life for myself and my family by trying my hand at forex.  I was introduced to forex by an online friend who I met while playing a game, and from there I have plunged myself deeply and obsessively into the world of forex - learning all that I can as quickly as I can via the internet.  There is actually a wealth of information available for free online, you just have to put in the time.  I have opened several demo accounts to learn and practice with over the past six months and I feel that it is time to get serious with my first real account with actual money.  I will be opening this account in the next month I believe.  Until that happens I will blog about what I have done to get me to this point...