NOTE: This text heavily peddles the service of a particular fx training company. JPYforexfan is in no way related to them. In fact, I’d rather stick to quality free web-based learning aids.

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by Leslie vanWinkle

You can learn a lot about yourself on the road to making a profit. When I discovered foreign exchange trading five years ago, I thought it was the answer to my prayers. Retail forex trading could be done around the clock in an up, down, or sideways market with only a handful of currencies to monitor, as opposed to 5,000 common stocks on the exchanges. I didn’t realize I would be embarking on a journey that would stretch my intellect, flatten my emotions, test my resolve, force me to confront money management, and lead me revise many of my beliefs about myself. Since then, I have learned a great deal about forex and only now am I beginning to see a trader emerge. So read up and learn from my mistakes.

MONEY FOR NOTHING
I became interested in forex trading in 2005 after attending a workshop held by a group called FX Trainers. They began by showing trades that earned 40, 75, 100, and even 300 pips. When they multiplied those pips by lots, my jaw dropped at the potential. The presenters emphasized the use of technical over fundamental analysis in forex trading. I understood technical analysis from my Read the rest of this entry »

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A profit of 102 pips was registered.

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Do rising credit spreads and tumbling stock prices signal that the U.S. is in for another shock like the one that sent the economy into free fall in 2008?

Don’t bet on it. While there are problems all over the globe and stocks could easily head still lower after a recent correction, there are signs the domestic economy is strong enough to weather the storm.

“People are completely ignoring any good news domestically,” said Matthew Keator, a partner at the Keator Group wealth management firm in Lenox, Mass. “We’ve been here before, in 1994 and 1997-1998. We can handle an international crisis.”

While the United States faces serious problems, ranging from a persistent trade gap and bloated government spending, to painfully high unemployment, there are signs that conditions are improving. The Philadelphia Fed said Tuesday its coincident indicators of state economic activity — tracking jobs, wages and hours worked — rose in 43 states over the past three months, while falling in four and staying flat in three.

What’s more, Keator said, corporate balance sheets are in good shape after big companies slashed spending and boosted productivity. That should help the biggest corporations to keep growing, even as small businesses struggle to get financing and compete for penny-pinching customers.

Keator concedes that there are plenty of problems around the world for investors to consider, from a double-dip in real estate, to the problems in European banks, to the fiscal health of the United States and other rich countries.

But he says that stocks rallied so sharply from their March 2009 lows that “everyone has been looking for some bad news” that would justify a decision to cut equity exposure. As troubling as the European banking problems are, he believes policymakers will sooner or later devise a response that will stamp out the current political rancor among euro zone members and stabilize the situation.

Ironically, a further source of strength against European contagion may come from a failure to resolve the question of how to deal with too-big-to-fail financial firms.

St. Louis Fed President James Bullard (above), who has previously called the existence of too big to fail firms “intolerable,” said in a speech Tuesday that, for now, regulators’ most vexing problem is actually a plus.

“Governments have made it very clear over the course of the last two years that they will not allow major financial institutions to fail outright at this juncture,” Bullard said. “Because these too-big-to-fail guarantees are in place, the contagion effects are much less likely to occur.”

Naturally, taxpayers enraged at having to pick up the tab as reckless bankers visit their vacation houses in the south of France may not find this comment uplifting. And it’s far from clear how a bank rescue now would be received in the market for sovereign debt, which, like other markets, has been shaken in recent weeks by volatility.

The price of insuring against a default on Spanish government debt surged 22% Tuesday, according to CMA, while the price of credit default swaps on Irish debt rose 16%. Banks in both countries were among the losers Tuesday as investors fled risky trades.

Nonetheless, Bullard sees even creaky government backstops as better than nothing, which is what was in place before the failure of Lehman Brothers pushed the global economy off a cliff.

“‘Too big to fail’ is a controversial policy, but it does have its upside in the current situation,” Bullard said.

\Credits: Colin Barr/CNN

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It’s 04:46am GMT, Wednesday.
I’m selling EUR / USD at 1.2302
SL: As per my trading plan
Target: 1.2200
I’m not able to provide a chart because I am using my laptop on the road.

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1. Don’t trust the opinions of market gurus. Remember that it’s your money at stake, not theirs. Listen to what they say, then step back and do your own homework.

2. Don’t believe in a company. Trading isn’t investing, so you need to focus on the price action and forget the balance sheets. Leave the American Dream to Warren Buffett.

3. Don’t break your entry and exit rules. You made them for bad trades, just like the one you’re stuck in right now.

4. Don’t try to get even. This isn’t a game of catch-up. Every action you make has to stand on its own merits. Take your losses with detachment and make your next trade with absolute discipline.

5. Don’t trade over your head. If your last name isn’t Kass or Cramer, stop trading like them. Just concentrate on playing the game well, and stop thinking about making money.

6. Don’t seek the Holy Grail. There is no secret trading formula, other than good position choice and solid risk management. So why are you looking for it?

7. Don’t forget your discipline. Anyone can learn the basics of the trading game. Sadly, most of us will fail because of a lack of self-control, not a lack of knowledge.

8. Don’t chase the crowd. Tune out the groupthink and dance to the beat of your own drummer. Get out of the chat rooms and off the stock boards. This is serious business.

9. Don’t trade the obvious. Everyone sees the most perfect-looking patterns, which is why they set up the most painful losses. Simply stated, if it looks too good to be true, it probably is.

10. Don’t ignore the warning signs. Big losses rarely come without warning. Don’t wait for a lifeboat before you abandon a sinking ship.

11. Don’t count your chickens. That delicious profit isn’t yours until you close out the trade. Trail stops, take blind exits and do everything possible to get that money into your pocket.

12. Don’t forget the plan. Remember the reasons you took a trade in the first place, and don’t get blinded by greed or fear when the position finally starts to move.

13. Don’t have a paycheck mentality. You don’t need to get paid every week or every month, as long as you take advantage of the opportunities as they come. Classic wisdom: traders book 80% of their profits on just 20% of the days the market is open for business.

14. Don’t cut corners. There are very smart folks out there working full time to take advantage of your mistakes. Fight back by examining your results, updating your plan and finding working themes for the next session.

15. Don’t ignore your intuition. Listen to that calm little voice that tells you what to do and what to avoid. That’s the voice of the winner trying to get into your thick head.

16. Don’t hate losing. The best traders lose money on most of their positions, so get used to the pain of losing. And there’s a side benefit: the losing teaches more about winning than the winning itself.

17. Don’t fall into the complexity trap. Traders who can’t see the market are looking for it everywhere except in the price action. In truth, a well-trained eye will find more profits than in a stack of technical indicators.

18. Don’t confuse execution with opportunity. Expensive software won’t help you trade like a hedge fund. Pretty colors and flashing lights make you a more nervous trader, not a better one.

19. Don’t project your personal life onto your trading. Trading gives you the perfect opportunity to find out just how messed up your life really is. Get your own house in order before you play the financial markets.

20. Don’t think that trading is fun. The trading game should be boring the vast majority of the time, just like the real-life job you have right now.

\Credits: The Swing Shift by Alan Farley

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