The Standard account: With this type of account, there is usually a minimum of $2,500 to open it. You are trading in lot sizes or contracts of 100,000. However, due to leveraging, you only need 2% of the value of the position to trade 1 lot. That means that approximately every $2,000 in your account allows you to trade 1 lot. You are also either profiting or risking approx $10 per pip. That can mean big dollars when added up or especially when the market makes big moves. This will also mean that you are risking approx $10 per pip, so keep that in mind. It can add up to big losses should you take a loss.

The Micro or Mini account is a bit less risky in that you are risking approx $1 per pip. This may not seem like big profits to gain, but it can be nice to risk less if you are a beginner and are just learning how this market works. The minimum to open this type of account is usually $250, but it will depend on what broker you are trading with, so look around.

As an option, you can always start with the Mini account and change over to a Standard account once you feel comfortable with your trading knowledge and with the market in general.

I will be posting videos and trading zones on where you can keep an eye for profitable trades. Once the price has reached the trading zones, use your own trading system to look for reasons to trade. Or you can use my reasons for an entry.

Catch it all on the link below!

http://vimeo.com/39247937

Also, I did a quick video update as prices have moved from my first video that I did on Sunday.

http://vimeo.com/39248173

Till Next Time!

A good trade is independent of winning or losing. Independent from a profitable trade and a losing trade. A good trade is:

A trade that is executed according to the plan!

You’ve heard it before, Plan the Trade and Trade the Plan. Therefore, whether you lose that particular trade or not, as long as you follow your trading rules, it was a good trade.

If you won on your trade according to your rules, it was a good trade

If you lost on your trade according to your rules, it was a good trade.

If you broke even on your trade according to your rules, it was a good trade.

What you are doing is proving that your trading system works! If you lose, move one. Remember that is not a single trading system that wins all the time. And keep in mind that you can win 34% of the time and still be a profitable trader with good money management skills.

To make your trading system even better, keep a journal of all your trades and analyze it as a set of 30 trades and at the end of the week. With data, you can see if you can do minute changes to your system to make it even better or to adjust it to the current market movements.

Remember to trade GOOD TRADES!

Till Next Time!

A day later; however, a clue to go short on the EURGBP showed up! As I usually mentioned to you is to use my Support and Resistance level to go both short or long depending if the Support and Resistance hold (with candle formation) or if it breaks out, pulls back, and test the new Support or Resistance (with candle formation). The EURGBP this week is a prime example how Support turned into Resistance and where price showed clues to short when 2 Pin Candle formation formed rallied back to Resistance.

I took my profit 1:1 risk at about 25 pips SL. I took half of my profit at the 25 pips and moved my SL to break even. Currently price pulled back and almost took me out at break even. However, I am sticking to my guns and waiting to break the double bottom that formed and break through it. As you can see in the Chart below, I am already preparing to enter short again if price breaks down, rallies back to a confluence trading (I will enter on a candle formation on a confluence of both Resistance and the Round Number 0.8300)

Till Next Time!

That meant that even though that was a set up to take a trade, I did not take it because the candle formation was just too small and insignificant compared to the previous candle.

On the EURGBP, I have been very patient waiting for an opportunity to trade a long at my trading zone along the trend line. Discipline and Patience are very important. Just because I waited for SEVERAL WEEKS and a set up finally formed according to my rules, I was disciplined to pass the trade as the bullish candle formation was not significant to indicate that price will turn around from such a sharp drop.

If you take a look at the previous Bullish Candle formation in 15FEB12, that is the type of bullish engulfing candle that I was looking this week. It did not happened, and therefore, I passed on the trade and I avoided a losing trade.

Follow your rules and keep adjusting your trading system.

Till Next Time!

This trading system not only works for me but also for many other traders that I know! I have seen this trading system being sold for more than $500 and as much as $1,000 at one point.

and No, I am not trying to selling you the system. But I am trying to get you to have it on your arsenal of trading systems when trading Forex.

I am urging you to make your own rules, follow them, analyze the results, and adjust!

I do give you my method of trading which is pretty simple. I look for a strategy that matches well with my personality and what I feel comfortable such as the 1-2-3 systems or the divergence system or even the confluence system and I only trade when I see a candle formation to my liking; which 90% of the time are pin and engulfing candles.

Look at the chart below and please comment if you see what I see on the trade yesterday which I entered. Please post your comments of why you would enter or why you wouldn’t enter. Let’s face it, we are all different and therefore, we should have a few different reasons of entering trades and not entering trades. I think it will help everyone to have different perspectives than just mine.

As you can see, I entered this trade at the end of the Bearish Engulfing candle on a divergence of price and stochastic. Price was making newer highs while stochastic had a double top. If you had MACD on default, you would see the divergence a bit stronger and more clear than the stochastic.

In this trade a had a SL of 35 pips and a TP of 100. I always aim for a 1:1 to take half of my profits and move my SL to break even. After that I let my trade ride and manage it very loosely. The only times I would close early is when I see a shift of directions such as pin candle on previous support or other clues that price may turn around and take me out on break even. This is where your rules on how to manage the trade will kick in. Follow through it, record it on your journal, analyze it, and make adjustment as needed.

Till next time!

Last post, I showed you how I used the 1-2-3 to profit on the GBPUSD. This time I am going to show you how you could have used the same trading system to profit on the USDJPY.

In the trading system of 1-2-3, you would want to go with the trend. Below are a few of my rules when trading the 1-2-3 system

1. Overall trend must be headed where I want to trade. For example, If I want to go long, the overall trend must be bullish.

2. I need to enter a trade on a break out in a pull back. I want the price to pull away, then have a small wavy pull back where I can draw a trendline. The trendline will be in the opposite direction of the overall trend. (see graph below USDJPY 4hr chart)

3. Enter the trade 1-2-3 after a clear break of the trendline. Price will need to break the trendline, pull back, and then break the mini support created at the clear breakout. I will then place the stop loss at the low of the candle in the pull back. (See graph below)

I hope that shows how you can use higher time frames to plan your trade, and use lower time frames to pin point your entries!

Now go make some pips!

This week we look to repeat what we have done last week. It is a bit more slowly as I see many consolidation. So I am waiting for break out of the support and resistance with an entry on pull backs.

The GBPUSD is a great example on how to use you knowledge and execute it so that you can keep making those profitable trades.

On the GBPUSD 4HR chart we see the Head and Shoulders have formed. What I liked even more about the Head and shoulders is that the support seemed to be right around a round number 1.5800. So I plan the trade to enter in one of the 2 ways.

As you can see the price had a clear break of Support at 1.5800. By now, you must have realized that this the pattern that I trade the most. A clean break out then I look for clues to trade the pull back with a confluence and the entry on a candle formation.

However, this time I used the 1-2-3 system in the 1HR Chart to enter the trade as I didn’t find a suitable candle formation and I wanted to short on this break out. The 1-2-3 system is pretty wide known and popular. The simple reason is that it works! I entered at the break of #1 when price broke the small support, and I placed my Stop Loss about 5 pips above the #2. My stop loss was about 50 pips. The Price has fallen over 50 pips where I took half of my profit and move my Stop Loss to Break Even. I am looking to win 2 or 3 times my risk. If price retraces and take me out, it is a good trade as I followed my trading system. Plus, that is also the reason I take half my profit at 1:1 risk reward ratio.

Till next time!

And this week it finally broke resistance and I was looking for the opportunity to enter long. The NZDUSD price reaction below is the reason why I enter only candle formations of my preference. In the past I have been burned many times on fake break out and pull backs that did not hold its ground just like the price on NZDUSD did in the chart below.

I am looking for clues that the NZDUSD support (previously resistance) will hold. The way I look for clues for entries on the trades is the candle formation. Being patient and waiting for the candle formation works very well for me. It keeps my win lose ratio high! Since I am filtering and only entering trades that I have a high chance of winning. And what happens if I lose? I take the loss and move on.  Then I look forward to my next trade because I know that the law of probability is that much higher for my next trade to be a winner!

Now, please advise that break out and pull back strategies solely based on bounces from Support, Resistance, and Trendlines do work. It is just that  I can’t seem to make them work for me. So I usually stick to my own trading system that works. I do know traders that profit from trading bounces and from I have talked to them, it seems to be again that they filter which bounces they trade. They cherry pick the best looking one. There is always something to learn when trading Forex. It is a never ending learning experience.

Hopefully by seeing the way I trade, it can help you get a different perspective in trading so that you can be more profitable.

I look forward in interacting with you guys via email or comments.

I was actually keeping my eye on the .8400 handle, as I figured that it might serve as a potential resistance-turned-support level. However, thanks to a strong drop in EUR/USD, we saw the euro take a hit everywhere, with EUR/GBP sliding all the way back down below .8400! So much for potential support!

For now, I’m going to stick with a short euro bias. I think that with the lack of enthusiasm following the passing of the Greek debt deal, the International Swaps and Derivatives Assocation (ISDA) meeting, and the EU Summit in Brussels later today, market players will be hesitant to load up on long euro positions.

I’m waiting for EUR/GBP to retrace back up a bit to the .8400 handle. I think we could see a lot of interest here again, with other traders looking at this level as a potential entry point for their short traders.

I’m going with a tight stop loss of just 35 pips. I think if price breaks back above .8400, it may signal that the pair may be headed back to the recent high around .8500. Once again, my profit target will be at support at .8280.