Forex Training Blog

Considerations:  I do not hold a holy grail, a crystal ball or rub a rabbit’s foot. If that is what you are looking for, you won’t find it on the computer where I’m seated. If you want a holy grail, the best I can offer you is this… max risk on total exposure should not exceed 1.5% of base (notional) non-diversified equity. Even that’s a little high. If you are a “holy grail seeker” it will cost you more than you will earn and I’m sorry I can’t help you.

My Trading Approach:  I trade FX cash/spot, outright forwards, DCI’s and some options, when necessary. It is important to be cognizant of the micro and macroeconomic environment and what is driving price, whether it makes sense or not. We engage in short, medium and long term trades combining both technical and fundamental aspects. Shorter term are more technical and less fundamental while longer term are more fundamental and less technically driven decisions. I trade technical patterns that consider volatility, range, time of day, fractals and Fibonacci. Fundamentally, my decisions are based on perspectives driven by Interest Rate Spreads/Differentials and Economic Growth.

I specialize in AUD/JPY, but also have a predilection for GBP/USD and consider other G10 pairs depending on where opportunities are presenting themselves per rate spreads and economic growth/weakness. My approach can be difficult to adapt, but once done so, it is surprisingly straight forward and simple. I know exactly what I am looking for in market dynamics. The approach suits a certain temperament and is not for everyone.

You can read the whole perspective for August 2008 at this link:
http://www.forexmentor.com/forex-trading-articles/aug08outlook.html  

Most of us, when we are “newbie’s”, have the perception that trading is easy, or at least it is not rocket science. We think that we can acquire a certain basic knowledge, both fundamental and technical, then find a methodology and start trading. Most of us quickly get a rude awakening when we find that our account does not grow as we had expected it to. Interesting enough, in our search for the reason for our failure, we choose not to revisit the total experience noted above, but to focus on the methodology with which we had selected to trade. Why? I am not really sure. Perhaps it is because our newly gained fundamental and technical knowledge is learned and the methodology is generally acquired from some outside source. A trading system, if you will.

Most traders, including myself, at one time or another spend a great deal of time and energy trying to resolve the initial trading failures by looking for a system. The idea is that if we can just find a system that works, that fits our newly discovered style of trading, we will be successful. We quest for that Holy Grail.

I submit to you this thesis, that the most significant problem the new forex trader faces is getting over the idea that a trading system is a necessary ingredient to successful trading. If you were to “Google” the words “Forex Trading Systems”, you would receive approximately 1,400,000 hits. That should give you an idea of how many individual trading systems might be out there. Most of these systems were developed by traders, some who are very successful traders, and some who are unable to trade, however are great salesmen. Some of these systems work, some don’t.

I have been fortunate over the years to become acquainted with a number of very fine, professional traders. Some are authors, some are teachers, and some are fund managers. Many of their names are well known. What is important is that they all have certain common characteristics. I will not go into detail on this; there are some very fine books written about some of these people. But briefly it comes down to this:

 You can read the whole article at this link:
http://www.forexmentor.com/forex-trading-articles/the-trading-edge.html 

http://www.forexmentor.com/forex-trading-articles/using-leverage.html

http://www.forexmentor.com/forex-trading-articles/fibonacci-trivia.html

http://www.forexmentor.com/forex-trading-articles/probability_continuum.html

http://www.forexmentor.com/forex-trading-articles/risk-control.html

http://www.forexmentor.com/forex-trading-articles/fibonacci_ratio_forex_1.html

http://www.forexmentor.com/forex-trading-articles/trading-plan.html

http://www.forexmentor.com/forex/noble/consistently-inconsistent.html

http://www.forexmentor.com/forex/trading/overtrading.html