Why I choose to trade in Forex?

I use to trade in stocks and shares. But that means big capital - big as in you need some 10K and above to make during a bullish market some hundreds to a thousand over a period of months.

I began to calculate and coined the term % profit per $1000 per month. Shares in general gives some 2-5% per 1K oer month o a bullish market.

The word I use is bullish market - basically in Singapore, you can only trade long and if you short, you need to buy back at the end of the day. I called in uni-direction. In a bearish market, you can only starve.

Moreover you need to understand the fundamentals on the company and sometimes information does not come that easily. Therefore, unless you are going for a long term investment (the same term I use when you the price fall), trading in shares has big limitation - no leverage.

I begain to search for such leverage. The answers lies in options. With my understanding of shares, options being a derivative is the next best choice. You have big leverage. Moreover you can do a call as well as a put - both direction.

It work out to be more than 50% profit per 1K per 1 month. Not bad.

But I switch. Why? Because Singapore does not have a volatile options market. I trade in U.S., meaning staying late into the wee hours. Hard work.

Moreover, unlike shares, the time decaying factor can work with or against you. Your options can expire. You need special trading skill to handle such case - such as changing it into a bull put spread, or a bear call spread .... Yes I know them - not a problem, but I begain to coined another term - % profit per 1K per month per hour of effort.

Effort can be measured in two ways - how hard and how long. How hard refer to whether you need to work at night or in odd timings not of your convinence.

I search, and there is commodities (gold, silver, crude, sugar, pork bellies...), index, index futures, futures in forex, forex..

Commodities like futures has time decaying factor. Not quite fun except for gold and silver.
Index like Nikkei, HangSeng, Dow etc - I failed to master them - basically as index involve in a basket of shares, plus the fundamental factors from politicals..

I don't really like futures - because of the time decaying factory, so finally I chose spot forex.

Forex - with margin trading (I normally use 50:1) I managed to buy a standard lot ($100,000 worth of currency) at less than $5K.

Forex is 24 hours. Forex is both direction. Forex either you short or long, the contract does not expire.

At current, I only concentrate on GBP/USD and EUR/USD. Only two, just three economies.

Arm with both fundamental and technical knowledge, I have used method with some success for 5 min method, 1 hour method, 1 day method, and now 1 week or until the price swing in oppsite direction.

I managed to get 40-60% profit per 1K invested per month with about less than 10 minutes a day.

The result not only give a steady income (during bullish or bearish market condition), plus time to spend doing the things I want to do.

The next topic, I will talk about how much capital and how to conduct your investment.

Moving Long Term - 8 July 2007

It has been a year and more that I embarked on forex. As the time passes, I concentrated on only two currencies GBP/USD and EUR/USD.

I used to play by the minutes, than by the hour, than by the day. Now I catches the movement by days and week. The simple reason - used less time to earn more. In the last month of June, I began testing a new method (have not give it a name), but basically, with only a handful of trade, I was able to made more than 300pips/ lot for that month.

The buying and selling signal uses two BB over CCI, couple with the usual EMA and WMA. See below chart. I will try to explain the trading mechanism later.