Singapore Forex Courses

When I started trading, I was looking the forex chart at the time frame of 15 mins. After a few days. , I went to 5 mins chart, then back to 15 mins chart… My strategy then was earn 20 pips daily and trading using the support and resistance lines. I was thinking, “hey! Earning 20 pips must be easy man! Everyday the market move more than 20 pips, so it shouldn’t be a problem hitting my take profit level!”

I have forgotten one thing also. It may be extremely easy to hit my take profit level, but it is also extremely easy to hit my stop loss level too.

After hitting a series of loss trades, although it is just a demo account. I can still feel the pinch… I want to be financially free, not financially embarrassed. And from the looks of it, I am going to be financially retarded… So when a student has problems, where do go to? To his mentor. I am very luckily have Huang Yong as a mentor as a just a sms, we arranged a time to meet up and discuss my series of loss trades ‘flu’.

He changed my perspective on the time frame chart.

He pointed out what isn’t optimal with my initial strategy:

• I am trying to be a ‘day trader’ but I don’t have the time to do it, thanks to my job.
• Small time frame charts needs a lot of attention and I have other commitment to fulfill. (For example, this blog)

However, during the discussion, I voiced out that these factors doesn’t suppose to affect my trading, if the strategy or system suppose to work.

He shook his head and explaining further, “These System and strategy may work for others, because they have the time, resources, and most importantly the right state of mind to use it. You need to use other strategies that gives you a different benefit and more leeway due to your time and commitment needs.”

Seriously, I don’t fully understand what he means. Even up to now… However, I am sure of one thing, doing the same time and expecting the different is insane. So I ‘pretend’ I understand (hope he never read this part) and go along the flow.

“Now, just change the time frame to 4Hr chart and do the same”

“Huh? So big ar? Why?”

“Aiyo~~ Why you ask so much? Try first la, I ask you to do things got reason one la. You try first, experience first than you understand more.”

Right now, although I don’t really the way he is going, but I have to trust him. He does has a point, experience is irreplaceable.

After a week, we met up again.

“So how? What you think of using a larger time frame chat.”

Then I told him what I found out, he nodding his head in agreement.

Bigger time frames’ advantages are they let you see the market in a boarder view, showing reliable trend lines. I started as small time frame chart like 15 mins and 1 hour, aiming to earn money DAILY, which means I been playing the clicking game.

“That’s right, however you probably didn’t notice some other advantages you have already leverage on but didn’t notice.” Huang Yong trying to supplemented more to my learning.

“Larger time frame charts also can act as a filter. There is so much movement in the forex market, which much of them does not give any meaning at all. Those movement are what I called ‘noise’. However, monthly chart has less noise than a weekly chart, so is a weekly chart has lesser noise than a daily chart, etc etc.”

“Making your judgment based on noise is dangerous. So, larger time frame shows what are the major trends, right?” I am trying to figure out where is this going to take me to.

“Of course la. Smart la you.”

He carried on and pin out that no matter what trading strategy is used, the entry point in the currency market using the higher time frame is more dependable than smaller time frame. One hour time frame and below is usually very unreliable and it is extremely not recommended. Experience, again, play a role. Because we need to know what works for us or not. With experience, we can develop a trading plan with more particular entry and take profit levels.

“It isn’t that to say small time frame chart does not earn money. There are a lot of traders making a lot of money using small time frame chart strategies. It is just that taking that path is simply more intense and does not really allow any traders that still need a full time job to maximize those strategies’ fullest potential.

“Last but not least,” Huang Yong finalizing the lesson, “since you just start up as a trader, you should concern yourselves with large time frames like 4 hourly and higher charts. Once you profit often from these charts in the forex market, you really can achieve financial independence. Just remember that small time fram charts’ signal isn’t really reliable.”

Last blog post, we discuss on trading Forex with the news. This blog post will discuss how to handle an open position when there is a major news that is coming. Before we carry on, I would like to make clear that there are some forex strategies wouldn’t be that ideal for this plan . This blog post is meant to show you how important to have an idea what to do with a forex open position when there is a major news going to announce.
Do bear in mind that major news are relevant here. We also care about the announcements that affect the currency pair that you are trading then. For example, a Greece’s debt issue wouldn’t affect my USD/JPY open position.

Does it matter? I mean we learn the importance of having a stop loss and take profit levels and and apply it. We have money management. So what do we suppose to be afraid of?
Major news affect the forex market a lot. I do really mean A LOT. Here are some examples that show how these major news announcements can create more risk than usual for you when you are trading forex market.

Example 1: The position is not profitable anymore.
Generally, we suggest to leave the position on. However, if the trade is 90% on the way to hit stop loss, close the trade. The reason is that when the news is announce, it could create a gap. If the gap go beyond the stop loss, resulting in losing more than what we can risk.
Otherwise, leave the trade on, and see what might happened.

Example 2: Your Open Position is even.
In this case, just leave the position as it is. However, there are a few things you should consider.
One, if you think there is a chance the news could gap beyond your stop loss. Close the trade, since you didn’t make a loss or profit. This is extremely rare, and usually apply by traders whom trade short term.
Two, if the original pattern does not seems to valid anymore, close the trade. Because the original reason why you make the trade does not exist, it doesn’t make sense at all to carry on.

Example 3: Your Open Position is profitable
Let’s revise the other two examples we talk about just now.
The first example, your trade is most likely going to hit stop loss, but you might get lucky if the news goes in your favor and win if you stay on.
The second example is extremely rare, but staying on still pose some benefits.
Now, on the third example…
Let’s say your trade is 50% to your target. Or maybe farther…
As we all know, news is totally unpredictable… As for now, you are the winner. But after the news announcement, the market changed and might hit your stop loss.
Oh bugger…
So, I am suggesting that since there is profit at your opening trade, take it first.
Of course in this example this is very subjective. If you holding 30% profits, I really think you take the profits. If it is just 10% profits. Why not stay on?
Bear in mind the risk to reward ratio. If you are risking a lot just to earn just a bit more, I guess taking the profits sounds logical.
Remember this also, news dismiss forex technical analysis in a lot of case…

Conclusion
Ask yourself questions like “What are the odds that the pair is moving up or down?”
Of course, even with these thoughts helping the forex strategy you have, it is still very grey area that you will have a lot of different ideas. Some of them may even contradict each other.
The simplest way is of course ignore the news after you enter the trade.
However, if you follow those guideline I suggested, I am sure your forex results will improve a lot whenever there is a major news announcement coming your way.

Trading Forex with the news is very unpredictable. Personally, I don’t like unpredictable and irrational events. Not just in Forex, but anything in life. It makes me feel stupid. So my best defense against irrational, unpredictable events will be stay away from them. I mean, will you like to take a lift from a drunk driver or a flag a sober taxi driver? No matter how good that driver is, being drunk doesn’t mean you can do things better…

So, the basic strategy to deal with major news is to Avoid Them. When it comes to news, there is a “forecast” and a “previous” number listed before the news is announce. The trouble lies in the assumption of the Forex traders will respond the same way the relation between the actual number, forecast number and the previous number. It will be extremely hard to make any trades during this period of chaotic time because the forex market is moving too fast.

In my point of view, these announcements have few long term significances and extremely unpredictable in the short term. Some Forex traders may achieve some profits using these figures. However, I have yet to heard or read any success stories that you can profit with these announcement figures in the long run.

One thing that is constantly happening when major news has been announced. The extremely fast price movements. These price movements can be so unpredictable that it looks like it going to be one direction but it goes back the point where it all started just as fast.

These price movements are so irrational that they totally ignore the logic of the news itself. The movements also brush aside the logic of the technical analysis we learn. To simply put it, news makes traders to become irrational. Take note the timing of these major announcements and do not place any trade before these announcements.

Wait till the pattern completed farther away and the market has calm down to enter any trade. If you have make any trade before the news announcement, it will be wise to close it before it comes out, hopefully with a little profit. Trading with the News is simply too risky.