Resources Learning Centre

Wednesday, October 28, 2009

The Importance of Having a Trading Plan

When most people start trading, they do not put much thought into their trades. They will either buy or sell a currency pair (probably the EUR/USD) because they think they see a trend or maybe even because they put a moving average on the chart. Sometimes there is no reason at all for the trade, they just want in. Either that trade nets a small profit or the trades starts going against the new trader. The trader that gets the small profit will feel invincible and likely base trades in the near future on the same reason as the first one. Of course they expect every trade to win. The trader whose position moves against them leaves their position open, stares at the their computer without blinking, and laments that they will get out if the market only goes back to break even.

Sooner or later, the trader who won their first trade puts on a loser and acts much like the trader above who lost their first trade. After a large loss to the account, the trader then puts on a large position trying to win it back. Inevitably that trade crushes their account, or a trade soon after will. Sound familiar?

The reason that new traders blow out their account is that they assume trading is easy, they don't realize the role their emotions play in trading with real money, and they have no trading plan. Well, it doesn't take long to learn on your own that trading isn't easy, so we won't spend too much time discussing that. However, using a consistent trading plan is the only way to reign in your emotions and develop consistency in your trading. If you enter at random places and exit when your "gut" tells you to, you are in for a lot of pain.

Every remotely successful trader I have ever spoken with has a trading plan. These traders do the same thing every time, occasionally tweaking one aspect of their plan at a time. Trying to change everything at once makes it impossible to tell what is working and what is not. We will go through the important aspects of a trading plan below, and we will go over how the FX360.com technical analysis works with these principles.

First off, I believe it is imperative to identify your entry, stop, and profit target(s) before entering every trade. If you try to determine your exits once you enter the trade, your emotions will skew your view of the facts unless you are a robot. If the exits are planned before entering, it is tough for your emotions to screw you up. By placing your exits in the system when you enter the trade, it is much easier to stay disciplined to your plan. Another advantage is that you don't have to stare at your computer 24 hours a day waiting for a place to exit.

I also feel it is important to know your risk:reward ratio before entering a trade. How on earth can you determine your risk reward:ratio if you don't plan your stop and profit target(s) before entering the trade? It can't be done. To measure this ratio, simply divide the distance between the entry and the profit target by the distance between the entry and the stop. Everyone's concept of a "good" risk:reward ratio varies, but I prefer to have a risk:reward ratio around 1:1.5.

Once you have planned your entry and stop, you can also determine your position size. Your position size should generally be the same percentage of your equity each trade. Most traders risk 1-3% on each trade, using the same percentage for every trade. In other words, all trades are weighted equally. The same amount of capital should be risked on a trade with a 300 pip stop as a 30 pip stop. In order to determine your position size, simply multiply your total equity by your percentage risk per trade (typically 1-3%), which is the amount of money you should risk per trade (X). Next, multiply the number of pips between your entry and stop by the currency's pip value (Y). You can also draw a line from your entry to stop using the value calculator to get Y. Then divide X by Number Y to get the number of lots you should trade. Once you practice this, it is easy.

The methodology we use (geometric pattern recognition) makes it very easy to follow this plan. Everything is already planned out, all you need to add is your total equity and percentage you want to risk for each trade (typically 1-3%). By planning your trades out before you enter you can now trade on any time frame because you are risking the same amount for each trade. This will lead to much more consistent results that using static numbers when determining position size.


From the Desk of

Aaron Reid

Tuesday, August 25, 2009

USD/CAD Forcast

I am expeccting a pull-back of the USD against the CAD from their current rally of 1.08500. The pull back is part of a fibanocci wave pattern that suggests it will retract before resuming it's up-trend to the 1.10 area. I have placed an order to sell 2 units of USD/CAD at 1.08600. Here are the further details of the trade:

USD/CAD
Sell 2 units at 1.08600, SL=1.09, TP=108.20
Risk: 27 pips, $250/$25
Reward: tba

From the Desk of:
Aaron Reid

Tuesday, August 18, 2009

EUR/USD Trade Strategy

For those night hawks, I am still tracing the EUR/USD count and have just placed the following trade. FYI: The wave count from the previous trade looked like it could have been part of a larger wave correction, and protecting profits is not a bad strategy when another entry point when the direction the market is going to take begins to reveal itself.

EUR/USD
Sell one unit at 1.41400, SL=1.41600, TP=1.40
Risk: 25 pips
Reward: 140 pips

From the Desk of
Aaron Reid

Monday, August 17, 2009

Weekly Evaluation August 9 to August 14, 209

BDI TRADE EVALUATION: WEEK COMMENCING AUGUST 9, 2009

WEEKLY PIP TOTAL: -288
WEEKLY REALIZED GAINS: ($3100)/($310)

CUMULATIVE PIP TOTAL: -145
CUMULATIVE REALIZED GAINS: ($2600)/($260)

EUR/CHF
Invalid
Closed the order to buy 2 units at 1.5187 and 1.5170, entry prices never reached
Result: NA

USD/CAD
Closed
Sold 3 units at 107.350, 108.440, 108.440
Result: -200 pips, ($2080)/($208)

AUD/NZD
Invalid
Placed order to buy 2 units at 1.2346, 1.2320, pattern became invalid
Result: NA

AUD/CHF
Invalid
Placed order to buy 2 units at 88.45 and 88.35, entry prices never reached
Result: NA

GBP/USD
Closed
Sold 1 unit at 1.65750
Result: +100 pips, $1000/$100

EUR/USD
Closed
Sold 1 unit at 1.4175, second unit entry price not reached
Result: +61 pips, $610/$61

GBP/USD
Closed
Sold 1 unit @ 1.67010
Result: -75 pips, ($750/$75)

USD/CAD
Open Position
Buy 2 units @ 1.08475
Result: TBA

USD/JPY
Closed
Buy 2 units 97.100 and 96.600
Result: -120 pips ($1330)/($133)

EUR/USD
Closed
Buy 1 unit @1.41140
Result: +11 pips, $110/$11

NZD/JPY
Order Pending
Placed order to sell 3 units @ 67.260, 67.550, 68.00, pattern still valid
Result: TBA

EUR/USD
Closed
Sold 2 units @ 1.41590
Result: +2 pips, $20/$2

USD/JPY
Closed
Sold 1 unit @95.704
Result: -40 pips, ($400)/($40)

USD/JPY
Closed
Buy 1 unit @ 95.778
Result: -4 pips, ($50)/($5)

EUR/USD
Closed
Sold 2 units at 1.42 and 1.43
Result: -38 pips ($380)/($38)

USD/CAD
Open Position
Sold 3 units at 1.0880
Result: TBA

EUR/USD
closed
Sold 2 units at 1.42800 and 1.43
Result: +15 pips, $150/$15

EUR/USD
Open Position
Sold 3 units at 1.42400
Result: TBA

USD/JPY
Open Position
Sold 2 units @94.650
Result: TBA



Please note that all pip gains/losses and realized profits/losses are estimates and may not be exact.


From the Desk of
Aaron Reid

Thursday, August 13, 2009

EUR/USD Gone Flat

Hi Traders,

Sorry I haven't been able to add much commentary to my most recent posts. I have been posting more trades than usually and have been busy with the research and tracking them. Most recently, I abandoned my EUR/USD position with a 38 pip loss. I am looking for the best entry point for a considerable move down in the pair but I am not comfortable with our entry point given the poor US economic data this morning. Will keep you posted.

For the most timely updates, follow me on twitter!

From the Desk of
Aaron Reid

EUR/USD Trade Alert

To quickly update you, I made the following trade today:

EUR/USD
Sell 1 unit at current levels @ 1.42, SL=1.43800, TP=1.4080
Ordered 1 more unit at 1.43, SL=1.4380, TP=1.40500
Risk: 177 pips, ($1770/$177)
Reward: 123 pips, ($1230/$123)

From the Desk of
Aaron Reid

USD/JPY Strength Expected

A quick trade update:

USD/JPY
Bought 1 unit @ 95.778, SL=95.100, TP=98.950
Risk: 67 pips ($710/$71)
Reward: 318 pips, $3300/$330

Monday, August 10, 2009

NZD/JPY Bearish Butterfly Potentially in Progress

A bearish Butterfly pattern may be emerging in the NZD/JPY pair. As a long-term trade I am ordering the following trades should the entry prices be reached:

NZD/JPY
Sell 1 unit @ 67.260, SL= 68.30, TP=63.84
Sell 1 unit @ 67.550, SL= 68.30, TP=63.84
Sell 1 unit @ 68.000, SL=68.30, TP=61.30

As mentioned this is a longer-term trade which will be invalidated should the price fall below 56.86 before reaching the entry price. Also, the trade is more likely to become invalid if the pair shows gaps or longer-than-average candles (2 to 3 times longer). These are indicators that the pair may be moving to 70.5 or beyond to the 73.5/74 range.

I will post if I cancel the trade.

From the Desk of
Aaron Reid

Fibonacci Wave Analysis on EUR/USD

Taking advantage of a wave analysis suggesting that EUR could rebound somewhat from current levels. I am trading to take advantage of that. I have abandoned the open and active EUR/USD position at a 63 pip gain and re-entering as follows:

EUR/USD
Buy 1 unit @1.41140 with a SL=1.4088, TP=open
Risk: 30 pips, $300/$30
Reward: open

From the Desk of
Aaron Reid

USD Expected to Strengthen with Poor Cdn. Data

Disappointing economic data is currently plaguing the Canadian dollar and the USD may be digging itself out of it's hole. Even with the Trade Balance due out later this week, the data isn't expected to be able to knock the wind out of the sails of the USD for long, even if it's better than expected. Below is my trading strategy for the pair, and I may be looking to add to the position as this weeks data is released.

USD/CAD
Buy 2 units @ 1.08475, SL=1.0800, TP= open
Risk: 48 pips, $880/$88
Reward: open

From the Desk of
Aaron Reid

Dollar Strength to Take Toll on EUR

The Dollar has benefited from the better than expected NFP last week, and the sell off is expected to continue, potentially to the lows seen in mid-July (the low 1.38 range). In the longer term the EUR is expected to recover unless the GDP falls more than 1%, due out later this week. Here is the strategy I am taking to take advantage of the remaining strength of the EUR before this trend reverses:

EUR/USD
Sell 1 unit @ 1.4175, SL= 1.42790, TP=1.3900
Risk: 100 pips, $1000/$100
Reward: 275 pips, $2750/$275

May look to add to position later and will keep you posted on twitter.

From the Desk of
Aaron Reid

USD Short-term Strength against the Pound

The GBP has lost significant ground against the USD with the NFP report that came out last week, but further sell-off is expected. We could see it drop up to 4 or even 5%. I am going to take advantage of the USD strength with the following trade:

Sell 1 unit GBP/USD @ 1.65750, SL= 1.66500, TP=1.64825
Risk: 75 pips, $750/$75
Reward: 100 pips, $1000/$100

From the Desk of
Aaron Reid

Friday, August 7, 2009

Forex Week in Review August 2 to August 7, 2009

BDI TRADE EVALUATION: WEEK COMMENCING AUGUST 2, 2009

WEEKLY PIP TOTAL: +143 pips
WEEKLY REALIZED GAINS: +$500/+$50


USD/CAD
Closed
Sold 1 unit @ 1.0770, SL=1.08, TP=1.0685
Second unit ordered for 1.0780 not filled.
Result: +85 pips, $810/$81

USD/JPY
Invalid
Placed an order to sell at 95.50 and 95.80, entry price never reached.
Result: NA

USD/CAD
Closed
Sold 2 units @ 1.6880, SL=1.07310, TP=105.980/open
Result: -40 pips, ($940)/($94)

USD/JPY
Invalid
Place order to sell 1 unit each at 96.300 and 96.500, entry prices never reached.
Result: NA

GBP/USD
Invalid
Placed order to sell 1 unit each at 1.70350/1.70400, entry prices never reached.
Result: NA

EUR/CHF
Order Pending
Placed order to buy 1 unit each at 1.5187/1.5170, not yet filled, still valid.
Result: TBA

GBP/AUD
Closed
Sold 1 unit @ 2.0210, SL=2.0267, TP=2.0117
Second unit ordered for 2.0250 not filled.
Result: +130 pips, $1200/$120

USD/CAD
Open Position
Sold 1 unit at 1.07350, SL=1.0881, TP=1.0635
Sold 2 units at 108.44, SL=1.0881, TP=1.0635/open
Result: TBA

USD/CHF
Closed
Sold 2 unit @ 1.0675/1.0690, SL=1.0726, TP=1.0540
Result: -51 pips/-95 pips, [($280/$28)]/[($480/$48)]

AUD/CHF
Order Pending
To buy 2 units at 0.8845/0.8835, not yet filled, still valid.
Result: TBA

AUD/NZD
Closed
Sold 1 unit @ 1.25200, SL=1.25900, TP=124.00
Second unit order for 1.25600 not filled, price not reached.
Result: +73 pips, $490/$49

AUD/NZD
Order Pending
To buy 1 unit at 1.2346/1.2320, not yet filled, still valid.
Result: TBA

AUD/USD
Closed
Bought 1 unit @0.8400, SL=0.8375, TP=open
Result: -30 pips, ($300)/($30)


Please note that all pip gains/losses and realized profits/losses are estimates and may not be exact.


From the Desk of
Aaron Reid

AUD/NZD Buy Alert

The emerging AUD/NZD pattern I've been tracking is still valid. It is not unlikely that the Fibanacci retracement extend to the lows seen July 21. If this happens, it would also be forming a potential double bottom. I have already place the following orders:

AUD/NZD
Buy 1 unit at 1.2346 with a stop loss of 1.2290 and take profit target of 1.2423
Buy 1 unit at 1.23.20 with the same stop loss, and a take profit of 1.2484
Risk: 56 pips on the first unit, 30 on the second unit
Reward: 77 pips, and 164 pips

I am placing the order to be good until EOD (End of Day). The trade will become invalid if the price reaches 1.2590, or if it comes within 20 pips of our entry price before reaching our first target price of 1.2423. If my order expires at the end of the day without these negating conditions being met, it is likely I will place the order again over the weekend should the pattern still be valid. I will certainly post if that is the case.

From the Desk of
Aaron Reid

Thursday, August 6, 2009

AUD/NZD

Made a quick trade here and wanted to keep you posted.

I just went short (Sold) a unit of AUD/NZD at a price of 125.200. I placed the stop loss at 125.90 with a take profit target of 124.00. Second unit will be sold if the price reaches 125.600 with the same target and stops.

Risk: 73 pips
Reward: 117 pips

From the Desk of
Aaron Reid

AUD/CHF

Hi,

Lots on the go tonight. Here is another trade recommendation for you:

AUD/CHF
Buy 2 units at 0.8845 with a stop loss of 0.8812
Take profit at 0.8890 and 0.8925.
Risk: 33 pips on first unit, 23 pips on second unit
Reward: 45 pips on first unit, 90 pips on second unit.

From the Desk of
Aaron Reid

USD/CHF Poised to Move Downward

Hi Traders,

Looking at a USD/CHF trade that is nicely set up. We are getting close to the entry point, and we are looking for a possible collapse.

USD/CHF
Sell 2 units at 1.0675 with a stop loss of 1.0726. Initial take profit on the first unit is 1.0540, and the second is 1.0440.

From the Desk of
Aaron Reid

Taking Advantage of Remaining USD/JPY Strength

Hi Traders,

I am placing an order to sell a couple of units of USD/JPY should the price squeeze a bit higher.

USD/JPY
Sell 1 unit at 96.300, stop loss at 96.720, take profit at 95.73
Sell 1 unit at 96.500, stop loss at 96.720, take profit at 95.25
Risk: 42 pips, 22 pips
Reward: 57 pips, 123 pips

ALSO! Please note that twitter is down! I've been trying to post my updates on twitter but I've been having trouble. Hopefully they will get the problem rectified soon.

From the Desk of
Aaron Reid

Looking for EUR/CHF Entry Point

Hi Traders,

EUR/CHF has been climbing fairly steadily, but I am looking for an entry point. I may be away from my computer for the afternoon, so I am placing an order to buy-in if the price once again becomes attractive enough. Here are the details of the order, good until cancelled, so I'll keep you posted if I cancel it.

EUR/CHF
Buy 1 unit at 1.5185 with a Stop Loss at 1.5151 and a Take Profit at 1.5230
Buy 1 unit at 1.5170 with a Stop loss at 1.5151 and a take profit at 152.62
Risk: 36 pips and 19 pips
Reward: 43 pips and 92 pips

From the Desk of
Aaron Reid

Wednesday, August 5, 2009

USD/CAD Adding to Position

Hi Traders,

If you traded USD/CAD this morning you will have closed at our take profit point and enjoyed a nice +85 pips, but we did not reach our entry price for our second unit. I am now looking add to the trade as the down-trend is still in our favor unless it pops up over 107.20. The stop loss is reasonably tight here, so I am going 2 units, but trade 1 unit if you have a lower risk appetite. Here are the details of my trade:

USD/CAD
Sell 2 units at 106.880
Stop Loss at 107.310
Take Profit on 1 unit at 105.98, second unit left open for now but move stop loss to break-even.

From the Desk of
Aaron Reid

Will the USD Weaken Further Against the CAD?

Further weakness in the USD is expected. Here are the details of our trade strategy which may be added to upon further analysis even if the second unit is not filled. Be sure to get up-to-the-minute alerts on your mobile phone by following us on twitter.

http://twitter.com/BDIForex

USD/CAD Sell 1 unit at 107.70 Stop Loss at 108.0, Take profit at 106.85
Risk: 46 pips ($420/$42)
Reward: 85 pips ($810/$81)


From the Desk of
Aaron Reid
Trade Analyst

Friday, July 31, 2009

AUD/USD Trade Recommendation

The analysis all adds up to the USD gaining strength against the AUD, but thin trading my cause some wacky price action, so I am going pretty light on this one.

I am selling AUD/USD at 82.750 with a stop loss of 83.00 and an open take profit at 82.00.

From the Desk of
Aaron Reid

Wednesday, July 29, 2009

Closing USD/CAD

Hi,

I am closing my open USD/CAD trade for a small 17 pip ($150/$15 per unit) loss. I don't like what I am seeing and think we are on the wrong side of this trade. Look to re-enter at a later date.

From the Desk of
Aaron Reid

USD to Benefit from the End of Risk Rally

Hi Traders,

I am looking at the USD/CAD pair, and I think that we may be looking at the end of the rally in riskier stocks and currencies. I am going to go very light on 1 unit of USD/CAD in anticipation that the US Dollar will strengthen as stocks decline. Due to the fact there is only preliminary evidence that the risk rally is over, I am keeping my stop loss quite tight.

USD/CAD buy 1 unit at 109.175, SL = 108.900, TP is open at the moment. Stay posted as I may look for a quick exit as things develop.

Risk: 30 pips or $280/$28 per unit
Reward: Open

Trade Recommendations in Anticipation of Beige Book Report

Hi Day Traders:

The Beige Book is due to come out tomorrow at 2pm, and analysts are anticipating a less than stellar economic report. The BB will be reporting on the economic data from early June through July. A poor report will likely result in the selling of riskier assets such as stocks and commodities. Riskier currencies such as the JPY-crosses (EUR/JPY, AUD/JPY, GBP/JPY, etc) are the ones most likely to be affected by this report, I am placing orders to go short (sell) a couple of those currencies. Below is my recommendation:

EUR/JPY sell at 133.250, stop loss order at 134.160, take profit at 132.25
Risk: 80 pips or $900/$90 per unit (1 unit is $100,000, or $10,000 for smaller accounts)
Reward: 105 pips or $1100/$111 per unit (1 unit is $100,000/$10,000 for smaller accounts)

GBP/JPY sell at 156.100
Risk: 30 pips or $320/$32 per unit
Reward: 229 pips or $2410/$241 per unit

From the Desk of
Aaron Reid

Tuesday, July 28, 2009

AUD/NZD Sell Recommendation

Hi Traders,

I am going short on 1 unit of AUD/USD at 125.650 which has already been filled. The Stoploss is 126.510, and the take profit is set at 126.300. I may add to this position later, so I will keep you posted.

From the Desk of
Aaron Reid

Thursday, July 23, 2009

EUR/USD Long Position Ordered

Hi,

I am going to go long (buy) on EUR/USD at 141.250 . The stoploss is 140.800 and take profit is 1.43500. The pair is still trading strangely, but the over triangle is in tact. So giving it a go with a light trade and a tight stoploss.

FYI, looking for a good entry for the USD/CAD. There is long-term trade potential here.

From the Desk of:
Aaron Reid

Closing EUR/USD Early

Hi,

I closed my position early for a small profit of 40 pips. Turns out it would have hit the target of 141.500 that I was looking for, but seeing at it was a bit of a riskier trade to begin with, I saw my 40 pips and took it. Looking for another entry point to go long, stay tuned. My entry point will be calculated shortly.

From the Desk of
Aaron Reid

Wednesday, July 22, 2009

Making a Move on EUR/USD

The markets are incredibly flat right now. There is no real signal indicating direction, and until that changes we remain in limbo.

As a bit of a riskier trade, I am going to sell a unit of Eur/Usd at 1.42500. The stop loss will be at 1.4300, and take profit at 1.41500. If you haven't got much of an appetite for risk but want to get in on something, enter at 1.42750 with the same stop loss, and take your profit early, such as 1.4200. Although it may be prudent to sit this one out, the market really could go anywhere from here. Take the night off and relax.

This mundane price action is typical for the summer, so this is nothing out of the ordinary. Things do improve as traders return to the action from holiday.

From the Desk of
Aaron Reid

Sunday, July 19, 2009

Going Short on USD/CAD

Good Evening!

Making a trade (at long last!) I am going short (selling) on a unit of USD/CAD at 1.11250, and 2 more at 1.11600.

I am expecting the USD to weaken further into 1.09800, but I will take profit at 1.10, and if I have the other units hold onto them to see if we can squeeze out 1.09800 or lower.

Recommended by:
Aaron Reid

Saturday, May 30, 2009

Evaluation of Week Ending May 29,2009

This week might seem like a week of missed opportunities, but really, it only seems that way because many of our entry and and exit points were cautious. Not a bad thing, but it means the temptation to kick yourself when every trade would have worked out. The key to be a successful trader though, is to go on what you know, and to recognize that you can't see into the future. You've got to assess the risk on every trade you make, and if you start letting previous trades get to you, that's when you make emotional mistakes that cost you money. Erring on caution is less likely to lose you money, but erring on emotion and non-calculated risks can wreak havoc on your bank account. You've got to bide your time, and then strike when the reward is in tune with the risk and your bank balance, and your appetite for risk. Trading is a game of patience, and we've been tested in that all week. All said and done, we're in the black, so while the missed opportunities can hurt a little, we can come away saying we've done alright this week.

USD/CAD (closed, profit)
There were signs that the USD was bottoming out and we timed our entry point to go long on the pair (Buy USD) on Monday May 24th. As the trade matured, a reassessment of a number of factors lead me to dump the pair for a small 15 pip profit. The news of the 101 billion dollars of government debt notes to be auctioned off this week certainly indicated that the USD bounce we were hoping to get in on was more likely a blip. It didn't help that the markets were pretty thin due to the holiday Monday in a number of countries. A thinner market makes for more unpredictable fluctuations.

EUR/USD (closed, profit)
The thin market also made me nervous about the EUR/USD short (sold EUR) initiated on the holiday Monday, and I decided to bail at the break even point. It turns out it was overly cautious, and the pair did eventually drop, but hind sight is always 20/20.

AUD/USD (never an active trade)
The entry point to get short on this pair (sell AUD) was just missed, but all systems pointed to go in terms of leaving the order open and sell the pair when the price came back up to our entry point. I got word that some of you got in, and others did not. I was one of the ones who missed the entry point and my order was not fulfilled. The price of the pair hit our entry point just barely and so briefly that not all orders were fulfilled before the price fell shy. Our take profit point of 74.75 was not reached, but I believe many of my followers got out at around 77.7 as it didn't look as though it was going to mature any further in our favour.

USD/CAD (open, in profit)
On May 27th I sold a unit at 1.1110 and this trade is still active, up about 200 pips. Our take profit level is at 1.087, but I may adjust that to somewhere in the 1.05 range, and adding another unit is not out of the question either. Keep posted on my trades as I make them by following me on twitter. The pair has been in decline because of the treasuries, but if stocks continue to be on the rise, that decline is set to continue. Some speculate that USD/CAD could trade at par by the end of the year, but we'll see what the markets have to say about that.

USD/CAD +15 pips
EUR/USD 0 pips
USD/CAD (still open, at approximately +200 pips)

Weekly Evaluation and Performance:
Weekly Gains: +15 pips, $15
Total Gains: -265 pips, down 53% of original investment

Sample Portfolio:
Initial Investment: $500
Weekly Pip Gain: +15
Weekly Monetary Gains: +$15
Current Balance: $265

Portfolio Activity and Performance:
Status - Pair - Action - Result
closed, USD/CAD, buy 1 unit, +15 pips or +$15
closed, EUR/USD, sell 1 unit, +0 pips
open, USD/CAD, sell 1 unit, (unrealized profit at 208 pips, or $190)

Weekly Trade Total: 2 completed trades this week
Weekly Report Card: 100% or 2/2 trades profitable, +15 pips

Trade Total: 6 completed trades
Trade Report Card: 50% or 3/6 trades profitable, -265 pips

Want to get up to the minute details on my trades? Join me on twitter and you can get my most recent orders and trades emailed to you or sent to your mobile phone. Go to www.twitter.com search for Aaron Reid or BDIForex

Sunday, May 24, 2009

Weekly Evaluation May 17 - May 22

Hello Fellow Traders:

For those who are following along, last week was a rough week for trading. Here's my analysis and retrospect on the week gone by:

Evaluation:

AUD/JPY
(Closed, Targets Reached)
We made a quick and easy trade at the top of the week selling AUD/JPY for a 30 pip profit. A small but successful trade. (100% successful)

AUD/JPY (Closed, Stopped Out)
Our second attempt in one week at an AUD/JPY short (a.k.a. sell the pair) did not turn out as well as our first attempt. We hit both our entry points at 73.80 and 73.55, but the pair just kept rising until we got stopped out at 74.20. We lost approximately 60 pips on that one, but the reward, had our target been reached, made it worth the minimal 60 pip risk. (0% successful)

EUR/JPY (Closed, Stopped Out)
We got stopped out on the EUR/JPY short. We were trading against the trend on that one making it a little riskier, but it was played fairly tight, risking approximately 150 pips. The S&P, and stocks in general, were over-bought and looked poised to fall, and we were expecting the JPY to fall as the market became averse to risk. As mentioned, this was against the greater trend, but there was plenty to back up the decision to sell the pair. If you are following me along on twitter, I do my best to follow up trade actions with the risk assessment and reasoning behind each one so that you can evaluate for yourself whether the trade is one you are willing to make. I am going to try to add sections to my blog soon to help you make the best trade decisions given your risk appetite and start-up investment. So pleased stay tuned for them. (0% successful)

USD/CAD (Closed, Stopped Out)
Last but not least, I bought 1 unit of USD/CAD because the USD is so ready to bounce. It didn't happen for us last week, but it's going to happen. I am currently re-assessing a new entry point so we don't miss out on what will likely be a considerable move. (0% successful)

AUD/USD (Ordered, Not Yet Open)
Our entry point to this sell this pair has not yet been reached. My order is still active, and I will update you if anything changes. For immediate updates on my trading activities, follow me on twitter (open an account and search for BDIforex (all one word) in the search bar). See below for more details.

Overall, it was certainly not the best week, but in re-evaluating the numbers and trends, there was nothing reckless about this week. My stops were kept tight, and the risks were calculated. There was nothing flimsy in my reasoning or research. Weeks like this provide as stark reminders of the Number 1 Rule in trading (or investing in general): Never invest more than you can afford to loose. Again, be on the look out to find out exactly what that means to you in future blogs. I will help you to know how much you to trade depending on how averse you are to risk and how much you are willing to invest into FX Trading. I win when YOU win! And to win, you have to take a couple of losses in the process. The key is to maintain enough of a nest egg to continue making smart trades even if a few of them don't work out as expected.

Expect updates on trades soon, as there are some pairs that look quite good at the moment.

Sample Portfolio:

Initial Investment: $500
Weekly Pip Gain: -280
Weekly Gains: -50%
Current Balance: $250



Portfolio Chart:
Status: Pair: Action: Result:
closed, AUD/JPY sell 1 unit, +30 pips
closed, AUD/JPY sell 1 +1 unit, -60 pips
closed, EUR/JPY sell 1 +1 unit, -150 pips
closed, USD/CAD buy 1 unit, -100 pips

Weekly Total: 4 trades, Trade Report Card 25%, or 1/4 trades profitable (25%) -280 pips

Life Total: 4 trades, Trade Report Card: 25% or 1/4 trades profitable (25%) -280 pips



Want to get up to the minute details on my trades? Join me on twitter and you can get my most recent orders and trades emailed to you or sent to your mobile phone.
www.twitter.com, search for Aaron Reid or BDIForex


Monday, May 18, 2009

Bought AUD/USD

Evaluation:
AUD/JPY trade was successful. The entry point was met, and very soon after the price rose to our take profit level.

New Trade:

I sold 1 unit of AUD/JPY at 0.7380. I will sell another unit if it reaches 0.7385. My stop loss limit is set at 0.7420, and my take profit point is 0.7260.

Success Rate:
1/1, 100%

Hypothetical Portfolio:
AUD/JPY: +30 pips


Want to get up to the minute details on my trades? Join me on twitter and you can get my most recent orders and trades emailed to you or sent to your mobile phone.
www.twitter.com, search for Aaron Reid or Forex Trader

Sunday, May 17, 2009

Buy AUD/JPY

The AUD/JPY has been on decline as fears in the market grow and people become risk averse, but I am expecting the AUD to bounce and recover slightly.

Buying 1 unit of AUD/JPY at 70.80, and another unit at 70.45 if it gets that low. Stop loss will be at 70.30. Plan to take profit at 71.65 for the first unit, and at 72.00 for the second unit.