Starting out in Forex (2)
Knowing the fundamentals alone allow you to guess in a good probability the direction of the currency pair.
Knowing the technicals allow you to determine when to enter and when to exit.
But before I go into the technicals and technique I used, lets talk about some strategy I employed.
The technique I use is based on momentum as well as trend. It means at times I can hold on to a position for days and sometimes weeks. By doing so, I am not emotionly attached to the whip saw and the swings that happen throughout the day. This means that once I determine my position (early in the morning of each day), I can choose to close some positions or to alter some positions. All these are done first thing in the morning before the Asian market starts. Sometimes, I will take a look before the European market as well as before the US market starts.
I use 2 trading account. One for buying pound and the other for buying USD. In general, the technique I employed do not set stop loss. CAUTION: make sure you have enough margin. I normally trade upto 30% of my available capital and set a leverage of only 50:1. In the event, when I predicted the direction wrongly, I will trasfer money into the other account and trade accordingly, while holding on to the other position. Again, I will like to remind all that there is interest in holding to a position. http://www.bloomberg.com/markets/rates/index.html
As such, if you feel that there is a chance that the price will swing back in your favour, please hold on to that position, forgoing the interest, and you might end up with a profit.
I used this method and at transaction I have a short a position and at its height it is losing 600 pips. But during the climb up, I make profit on the other account and as it swing back, I make again. Finally I still managed to close this position with a 20+ pips minus the interest I have to pay.
I like the trading platform http://www.oanda.com. It allow me to deposit fund only to one primary account and allow me to create sub-account. It has the facility for me to transfer funds from the primary account to the sub-accounts with ease and within a minute without cost.
I will continue in the next blog to talk about the technicals.
Knowing the technicals allow you to determine when to enter and when to exit.
But before I go into the technicals and technique I used, lets talk about some strategy I employed.
The technique I use is based on momentum as well as trend. It means at times I can hold on to a position for days and sometimes weeks. By doing so, I am not emotionly attached to the whip saw and the swings that happen throughout the day. This means that once I determine my position (early in the morning of each day), I can choose to close some positions or to alter some positions. All these are done first thing in the morning before the Asian market starts. Sometimes, I will take a look before the European market as well as before the US market starts.
I use 2 trading account. One for buying pound and the other for buying USD. In general, the technique I employed do not set stop loss. CAUTION: make sure you have enough margin. I normally trade upto 30% of my available capital and set a leverage of only 50:1. In the event, when I predicted the direction wrongly, I will trasfer money into the other account and trade accordingly, while holding on to the other position. Again, I will like to remind all that there is interest in holding to a position. http://www.bloomberg.com/markets/rates/index.html
As such, if you feel that there is a chance that the price will swing back in your favour, please hold on to that position, forgoing the interest, and you might end up with a profit.
I used this method and at transaction I have a short a position and at its height it is losing 600 pips. But during the climb up, I make profit on the other account and as it swing back, I make again. Finally I still managed to close this position with a 20+ pips minus the interest I have to pay.
I like the trading platform http://www.oanda.com. It allow me to deposit fund only to one primary account and allow me to create sub-account. It has the facility for me to transfer funds from the primary account to the sub-accounts with ease and within a minute without cost.
I will continue in the next blog to talk about the technicals.
posted by Ernest Seng at 12:41 PM
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