Is this the confirmation of US Dollar weakness?

Interesting longer term views found in the UsdCad and the AudUsd Daily charts.  Time to keep an eye on the longer term ramifications of confirmed breaks from these wedges.

You can see from the UsdCad, that a break has already occurred, but not so on the AudUsd.

Will continue to watch these two charts to see if they both provide confirmation of sentiment.

Thanks for reading.

Reference Guide for Futures

PFGBest has provided a great reference tool to help filter through the myriad of symbols and tick values sizes of your favorite futures contract.

Follow this link to a wealth of info. Futures Contract Specifications

Free $50,000 Simulated Futures Trading Account

Forex Kiss your Momma Example

Here is another example and a brief explanation of a Kiss your Momma Forex setup on the Eur/Usd.

Video update UsdChf 4 hour chart

Here is a video describing a potential consolidation break on the 4 hr chart and why to be careful trying to trade this on the 1 hour chart only.  Below the video is a picture showing what would have happened if you would have attempted to trade this on the 1 hour chart only. With the 20 pip stop that I use for this pair a 1 hour consolidation trade would have failed.  Still waiting for the 4 hr candle to give me an open and close outside of the consolidation level.

TraderCisco

Forex Market Update for January 6 2011

More Dollar Specifics

Dollar Set For Sharp Decline

On Wednesday Goldman Sachs forecast that the dollar will decline during the next 6 months. Well, for us that is old news. But what is interesting about this new announcement is in the specifics.

they are suggesting that the Gbp/Usd will reach 1.7900 and that the Eur/Usd will reach 1.5000

This is good news for the users of our new Skky Auto Trader because these big moves will most likely be best suited for the algorithm that it utilizes. Everybody loves a trending market and a quick look at the Eur/Usd Day chart tells it all. Can it possibly last another 6 months? It looks like Goldman Sachs is banking on it.

See full article Here.

Do you have the right return

You may or may not have ever thought about your RR when a trade is taken. When I first learned how to trade I knew nothing about it. I was risking 80-100 pips to make 10, 20 or 30 pips and thought that was normal. Put you stop above/below support or resistance and get paid. It worked for bout 3, 4 trades but one failed trade and my account is below break even. God forbid that next trade fail, if it did I would now have to take 4-5 trades that HAVE to pay perfectly just to get back to par. you can see how this can affect your account significantly.

Negative ratio:
I personally think there is no way you can be profitable over time with a negative ratio like stated above. -5:1 return (risking 100 pips to make 20) is just not wise. Lets think about it this way. If I said “I got this perfect investment idea. Its going to cost you $1000, you might lose all of it, but you can make $200.” Does that even make sense, even COMMON sense? Not to me, at least not any more. lol. With a negative ratio you have to be right 100% of the time to be successful.

1:1 ratio:
Ok, now we are talking, kinda. A 1:1 return is not bad at all.  ”I got this perfect investment idea. Its going to cost you $1000, you might lose all of it, but you can make $1000.” I can manage that, but the questions that arise are:

How accurate is the trade?
Do I have to take every trade when it sets up to be profitable?
What is the success rate of the trade?

To be profitable on a 1:1 risk trade you need to be around 51%. Not to say this isn’t possible or that there aren’t trades like this, but you have to be pretty spot on. What if you have to scale out of a position BEFORE you hit 1:1? Now if you have a 35 pip stop and have to take profits at 20 pips, that just made it a negative ratio trade instantly.

2:1+ ratio:
Now we’re talking.  ”I got this perfect investment idea. Its going to cost you $1000, you might lose all of it, but you can make $2000+.” The only time I came close to this in the real world was when I did real estate. Buy a house, put $10k into the deal and walk away with $20k+ when the house is sold. That is right up my alley, I understand those returns. How does this relate to trading? Well, with a 2:1 ratio you only have to be right 33% of the time to be profitable. Think about that.

W L L          W L L          W L L         W/L = w (small win, but a win none the less)
+20-10-10   +20-10-10    +20-10-10  +20-10= +10

I hope the above makes sense. We have ten trades here, 3.3 winners and 6.7 losers. Because the losers are half the size of the winners, it takes two failed trades to bring the account to break even. So at the end of ten trades the account is still profitable which is all that matters at the end of the week, month or year.

Hope this shines a little lite on trading ratio’s. Hope you are in the right area.

Out of the mouth of babe’s

As you may or may not know, I have been teaching my 9 year old son about trading. Throughout this last school year, whenever he had the assignments of “What do you want to be when you grow up,” he always wrote about being a trader. As a father, there is nothing I would love more then to see my son grow up to be successful, more successful then me in anything that he does.

For a son to want to be like his dad is nothing new. When I was doing real estate investing there was one morning Tao, who was about 3 at the time, comes and has me sit down at his playschool table. He says “I have this property here, and this property here, which one do you want?” As I pick my jaw up off the floor I couldn’t help but notice that he pays attention to EVERYTHING that I do and wants to be like me.

So now that he is older, and see’s some of the monetary benefits that trading affords our family, he wants to learn how to make his own money. I give him $5 a week right now for doing his chores and cutting the grass. It’s not much but my folks spoil their only grand kids. So I set him up with the mini account I have that has $125 in it and he will trade mini’s. His goal of 20 pips a day will make him $2 a day or $40 a month not taking into account % risk and compounding. I will manually take care of that for him.

I don’t want you to think that I’m forcing this on him, but I am taking advantage of him. How? By teaching him my basic rules and the rules for the trades, it FORCES me to follow the rules. If you knew my son, you would know he is big on right and wrong and never breaking rules which is a very good thing for a trader to have. He also has Zero fear of losing money or making money. Yes, I think at times traders can be scared to make money, taking full losers and half winners. I’m guilty of it ALOT and I feel like teaching him to stay in until your profit target is hit is making me do the same, and believe it or not I have made more money with him sitting next to me then me sitting by myself.

How committed is he to his trading? I woke up Saturday morning around 7:15am, and I found him sitting at his computer looking at charts and says “Nothing’s moved yet.” Another jaw dropping experience. “Tao, markets are closed on the weekend son.”

I will keep you all informed on how @MiniPipTee’s trading is going.

Help Wanted- TraderCisco is looking for an Intern

We’ve gotten to a point where we need some assistance, someone already asked me if I’ve have found a magical 40 hour day. I have not.
I’m looking for a couple of interns that may be available 5+ hours per week, for specific projects that we may need some help on. Time of day is not important as they are goal oriented task assignments.

Requirements: Strong desire to become a professional forex trader, this is the most important aspect. Must have a decent ability to use a PC and savvy enough to get around the internet. You need to be familiar with Twitter and YouTube and be willing to learn the ins/outs of a few other sites. You need to have the ability to follow directions and be disciplined.
If you have had success in anything competitive, poker, sports, life, whatever, I want to know about it.

Benefits: In return for your help you will receive free access to Tim Chandlers trading room and personal mentoring to help you to develop the skills to become a professional trader. If you can hone your ability as a trader and can put up consistent profitable returns, we are always looking for team members who could make advancement and work on larger trading projects. We have investors with seed money looking for the right candidates to sponsor.

Email me at scott@euodootrading.com and tell me why we should work together.

I am IRONMAN – I mean MR_ANSWER

I was asked to write a few things about the way I trade, especially about my 3% risk 260 trades 10k to 21 million journey using ONLY a perfect, highest probability confirming trade setups  called the FX260 plan (don’t confuse it with FX260 team ).  I get asked about various things through twitter, Skype and all possible channels so I decided to write about the most common and most useful (IMHO) topics that are fairly easy  to read and give a little insight into my trading head.

First though I just want you guys to get familiar with my profile a bit so here you go:

I would like to state that I don’t feel like a teacher or writer and I’m not pretending to be any of those things. I am a professional trader, ex. Sales Rep, ex. Telecomm. Worker and ex. semi pro Poker Player and I will write about MY trading style and experiences. I know a lot of other great traders that have completely different styles and views who are doing exceptionally well. That’s actually what I love about trading itself. There are so many successful strategies that everybody can find something for themselves. I prefer the easiest possible way and the lowest “Effort 2 Reward Ratio”

Ever since I started trading I was looking for that Holy Grail which for me is getting the highest return at lowest possible risk. For this I designed a compounding interest model and figured out the optimum risk level etc.  As most people that are familiar with my plan know I love compounding interest.  I always thought that if you can master a high probability system that allows you to unleash this beast you will gain access to unlimited resources. So I had my model ready. I knew exactly what I wanted and thought I could conquer the world. That was 3-5% risk per trade with compounding interest per trade. I had enough money to do it and IMO enough skill to make a killing. To cut a long story short it didn’t happen.  Instead of succeeding in my sleek, paper (or excel sheet) plan I hit a brick wall of day to day trading struggles. Loosing trades, being stopped out by a pip or 2 or 5(doesn’t matter), no optimum risk reward balance, taking profits prematurely etc.  I could go on about those forever ^__^.  I was lacking the most important thing of them all – a strong portfolio of high probability trades.

I zeroed quiet a few accounts and made some money on the others but over time I learned how to profit from trading the hard way. Technical courses, seminars, broker trainings you name them. The final affect was a fairly successful 85% technical 15% fundamental trader.

I was making good money, went full time in October 2009 and enjoyed it a lot. I was trading 12-18 hours a day and sometimes traded for 3 days nonstop with like 2-4 hr sleep .  I have to say the money was great and I loved this game so much that the long hours didn’t bother me as much as they bothered my girlfriend and friends .  I also started to feel that my level of fitness became significantly reduced so I decided to make a change and started looking for ways to reduce my “Effort 2 Reward Ratio”. I found Euodoo and Tim Chandler in the first quarter of 2010 and thought pure price action made sense so gave it a shot. I attended a few free webinars and was pretty impressed by the fact that I could reduce my hours to 3-7 a day and learn a high probability system but most importantly I saw an opportunity to dust off my old utopian compounding interest plan.

I committed 5% of my net worth and created a 10k account to experiment with and having already a fairly good idea on what confirming trades are I asked Barry Louks(@barrylouks) for a free day with Tim. The rest is history.  A 260 trade plan with 242 to go so watch this space guys it works but… yes there is a but and it’s a big BUT as there is much more to it and only previous experience and great technical execution prevented me from messing this up. Now that I feel very comfortable with judging probabilities and knowing my perfect confirming trade setup I want to try to put some of the ideas and crazy thoughts from my head on paper instead of telling everybody the same things all the time I can just refer whoever is interested to my posts. If you are passionate about trading, maths, statistics, poker, making $$$ etc. you should enjoy them  d^__^p. I plan to cover a few topics starting with [The Big Picture, Probabilities and Statistics]. After that I plan to write a few more posts about my style in more detail, forex and poker, my ideal portfolio of high probability trades, the work that I’ve put into being a successful trader, missing trades, importance of discipline and a few more . I hope you will enjoy them and get a few ideas to incorporate into your strategies.

These are going to be my own personal opinions and ideas so if what you do is different or you disagree with what I am writing about then just keep doing what you are doing and you will be fine.  In case you would like to get in touch to discuss your ideas, display your dissatisfaction or simply like what you are reading please do not hesitate to contact me preferably by email @checkmatt@yahoo.com

Maciek Janas