Forex Books Worth Reading

Just want to share with you all the books that I think worth reading. The books that I currently possessed are "The Forex Mindset" by Jared Martinez and "The Secrets Of Economic Indicators" by Bernard Baumohl.

The Forex Mindset gives you further understanding on how does the brain works and also give guide on how  the brain can control the emotions and feelings before trading, during and after trading.  Among the emotions and feelings being discussed are anger, anxiety, frustration.  The greediness of human is also discussed thoroughly.  After reading this books, you will know and able to control your emotions and feelings so that you does regrets in your trading decisions.

The Secrets Of Economic Indicators provide information about all the economic reports or indicators which majority comes from United State Of America economic reports.  This book also provide very detailed explanation on why is the report or indicator is very much important to be considered.  The information about the source of report and frequency of release is also given.  It also mention about economic indicators from other country also such as Japan and China.  After reading the books, you will  learn many things regarding the global economic indicators.

Cyprus Bailout

I was interested to find out why is this Cyprus country gaining so much highlights from the traders worldwide. So, I did some research on the current economic issues from this 9,251 sqkm country which is one of the European Union member.

The present economic situation is that a deal is arranged for 10 Billion EUR  bailout from European Union to  Cyprus for not getting into bankrupt. As a return Cyprus need to sacrifice its banking sector to settle debts.  According to the deal, deposits above 100,000 EUR will be frozen and used to settle debts.  Deposits below 100,000 EUR are insured and being transfered to Bank of Cyprus.

The reactions from the Cypriots now is to withdraw as many money from the ATMs. They fear of loosing money to the banks.  The biggest concern is from the Russians companies or individuals because they are the largest customer of Cyprus banks.  The banks responded by reducing daily withdrawal limit from 260 EUR to 100 EUR.  Banks were closed and would only open on this Thursday.

As for me, I would see the market reactions after the Cyprus banks open on this Thursday.  Maybe a sell off for the euro will happen.

The link from www.businessinsider.com on trucks carry cash for Cyprus banks would aid for your trading mind.

Forex Robot

For those who is new to the jargon "forex robot" , it is the other name for expert adviser or short formed EA.   To be described further, it is program developed for the famous trading platform called Metatrader 4. The program is synchronize to your real forex account inside the Metatrader 4 platform and need to be run full time in your computer.  It means, that the computer need to be powered on and the Metatrader 4 needs to be open for the forex robot to work.  Otherwise, you will missed the trading opportunity because the program is design to analyze and enter after all the criteria for entering trade is met. 

In order for the traders to analyze and find the best trading setup of signals trading they need for a tools which can spend 24 hours daily 7 days a week look into the price action, analyze and entering trade.  So, the traders with the help of coding knowledge or computer programmer managed to develop programs that can trigger buy or sell position and can maximize returns.

Today, you can find hundreds or even thousands expert advisers in the internet.  Just search from the google box "forex robot" or "expert adviser" you will find so many names.  Some of the forex robot that I can recall are Megadroid, Forex Funnel and Fapturbo.

Forex robot is not free.  Some will only give you annual subscription or pay for every release and some will give you lifetime subscriptions.  

Talking about the success of these forex robot did to forex traders, I myself do not know actually if it give profitable returns or not.  But from my experience, you will be assured that you will got to spend sum of money for the forex robot to work for you. First spend money to buy the forex robot and secondly, pay all the electricity bills for keeping the computer powered on all time because forex robot need to be run all time together with Metatrader 4.  Thirdly, if not need to power on the computer, park your forex robot in an online/virtual machine for a subscription cost.  Then hopefully you will be patient to wait for the forex robot give profitable trade for you.  This is because, the stricter the conditions setup by the forex robot, the more time it use to look for the correct setup.  

EURJPY CLOSE GAP

Forex: EUR/JPY closes the gap at 124.50 http://www.fxstreet.com/news/forex-news/article.aspx?storyid=dfa2c254-b52e-4333-bf82-91235a5789e9

This is what I hope before and it came through. My patience rewards me green pips.

I have said in my last post that the weekend gaps must be closed and it is an opportunity grab for traders.  If you did follow my step, you are happy now with green pips.

Trading the gaps

In forex, the price gaps can be seen clearly and very large between closing trade on Friday and opening trade on Monday. Some traders avoid this gaps by closing their positions either early or late Friday. This is because, they are not sure where is the price go on opening Monday.

Some traders also consider this gaps as an opportunity to trade. From my experience, the price will always tends to cover the weekend price gaps.  The simple method is just open position to the direction to close the gaps. For example see the price charts below.
The gaps has occured, I opened buy position with a target profit in direction to close the gaps. We'll see the price closing the gaps.

USD currency affected so much by fundamentals

I glimpsed through the Forex Gump's article at Babypips.com and found out that, the USD most probably affected by the economic reports from 2012 and onwards.  This means to me that any position whether buying and selling better be based on the economic reports.  Technical analysis is also to be considered but, the fundamentals should come first.  Trade using the technical analysis when there is no major high impact reports.  

No open trade for this Friday night.

Last night trading refering to economic release did not give any favourable profit.  I am currently on the loosing mode because I left my trade opens, have not set any stop loss for it.  But this night, I hope that the situation going to be better.  Looking at the EURUSD daily chart, the bearish trend should continue after the release of the positive value from the US PPI which I intrepeted an opportunity to open sell position even though the stochastic shows an oversold condition.  Well, I am not afraid of loosing further because I have experienced this so many times.  After a few days or weeks, the price will reach the target anyway.  I only have to get rid of the emotions and the urged to pull the handbrake.

This night, I will not trade, because I have open position set up yesterday.  I will just look into the economic report whether positive or negative for the US Dollar.

Specific currency trading by high impact economic report

I would like to disclose one of the many strategies that I have implemented and have benefited me.  I named the strategy as currency focus trading by high impact economic report.  This strategy is merely depends on the economic reports that are published on that day.  I usually visit the Forex Factory to view on the lists of economic report that are to be published on that day. I go further by using example for today economic report as can be seen below.

 On Malaysian time, the high impact report that will be released is on 8.30pm.  The report affects USD currency.  After 5 minutes of publication of the PPI and unemployment claims, I will look into the actual release.  The system in forex factory website is already set up to display green colour for a positve figure and red for negative figure.  I will only see the colour.  If it is green, I buy, if red, I sell.  Most of my trade using this strategy are success, which means that my target profit is met.  

For this night, I will trade on EURUSD and USDJPY.  Both pair are having the USD currency which will be affected by the high impact economic report.  Oh by the way, the high impact is coloured red on the Impact column from the report.  If the colour is orange or yellow, I do not consider further because the report affecting very little to the currency.  Furthermore, the reports at 8.30pm will be the most report anticipated by traders globally for the time period between 6.00pm till midnight.  All traders eye will be glued to the reports, hence a direction for the pairs are clear.  What I mean is that, it will be not a choppy trading. If positive report, the EURUSD will go north, I buy. If negative, go south, I sell.

Try it out, if not confident, practice with a demo accounts. In demo account, you will not loose money, you will only loose your time but you gain knowledge.