Forex war zone

7th October 2010, Thursday, one of the typical day that most of the traders get confused on the break through of the highest calculated resistance line for the day for Aussie vs USD.  Some friends rang me up on query whether the price will goes up to another high?  Or will it reverse base on the highest resistance level?  It seems like a break-out in price as it keep forcing up with no limits that we can anticipate!  Base on the chart below, any trader should be in short position once the price reach the resistance point, but price still shoot up further especially when the US announce their initial claims data when it was less than expected in numbers.  I recalled where similar case occurred before.  And this is what my husband called it the Forex war-zone.

He told me that as long as the highest level had been conquered, and everything else have an indication of overbought situation from chart of different time frame, chances are it will not be able to sustain for long even though some data may come out to be positive. At these point, some traders will enter a trade for long believing that the price will be pushed up further and on the other side, some traders will go for short position relying on their technical analysis.  With the crash of the two forces, price become uncertain especially when it comes to electronic trading when we have all sort of traders with different knowledge base as well as different categories that they belong to.  
There's one thing that my husband keep reminding me about is that there will always be a force of gravity.  No matter how high the price goes up, it will still subject to retracement or reversal!  WHAT GOES UP MUST COME DOWN!  At this particular scenario, where we could not see any price ceiling it is heading, even if there is, it is much too high for the Aussie to attain as the market cannot sustain too much of the overbought situation.  Couple of new traders got caught on early entry for hours without evaluating it carefully.  Therefore, the possible solution will be to avoid this WAR ZONE if you are not too sure or you have no confidence about.  Another point to take note of will be to liquidate your position after your profits or calculated losses before the announcement of any important data.  Experience traders know it best to take advantage of these situation, a strategy that I had wrote on my previous blog post.  If you have queries on technical analysis, you may visit http://forexoceanview.blogspot.com/ for more information.  Cheers!
    

Why does the market moves against me?

Have you ever encounter the market went opposite way once you enter a trade position?  You start to wonder if you are the target in the trading market where the big players are trying to squeeze you out of it!  You also start to query on what you had learned and you start to get suspicious if there is any new theory on trading strategy or some astronomic indicators have being invented for the big time players!  
Recently when I sit down with my husband to discuss on the current situation where some traders faced, it seem to them that there's a change in the pattern as compared to the past.  "Haha!  The rules never change, but the strategy did!" my husband explained.
Can you imagine during ancient time that there are thousand of people who studied Sun Tze art of war, some won great victory but most got defeated.  Why is it that when all of them study the same theory produce different result?  
In forex market, it function the same way.  If people think trading is easy, then they are making a very BIG mistake!  For example, some expertise from other field may have achieve extra-ordinary result that they may think trading it's just a matter of putting the extra cash in and let it run.  When it's time for harvest, they just liquidate their position and happily leaving the capital behind in hope that they will ripe the profit again.  WRONG! 
Many profitable traders are also good observer!  They had realized how the pattern of the market have normally works.  They will come up with a plan to capitalize the market first!  When most traders are going into a position to long or short, they are out of the market with profit pocketed.  For example, when we look at the resistance or support level for an entry of a trade, you may probably face the situation where it suppose to have gone to the direction that you may anticipated according to the theory but it went opposite!  "How annoying!"  That's how you may feel, but the worst is that it headed to the direction that you are looking at not long after you have liquidate your position.  

Possible solution

• If you have encounter a string of losses from the similar situation, then you should start to slow down on your entry.  Test different methods that you had learned and observes! (for more understanding of technical trading please visit http://forexoceanview.blogspot.com/ for more info) There will be some indicators that will able to produce more accurate signal!   
  
• It wouldn't be possible for the market to change the rules overnight!  When it is at oversold or overbought level, price must retrace or reverse.  You can be slightly late to enter a trade, as price start to shift towards one direction, that also mean more players are coming in and it is a safer time where you can go in and harvest it.  
• If you are not comfortable in using a live account to trial, use a demo account then.  Until you are confident again, then get back in to the market.
• Always update yourself with the latest data or reports release!  Market normally react according to it.  With the latest information, it sure help to get you out of trouble!  There's really nothing much technical traders can do about data and reports, but there's always a telltale sign to be spotted technically! 

• Avoid trading if you are confused by the indicators!  It is either there is a market uncertainty or it maybe you who are not sure which indicators to use at difference market condition. (market always change, indicators can only used as guide-line) 

Never expect market to stick to the strategies that you may have proved success in the past!  If it is really that easy, there will be million of billionaires around!  But it is also not that difficult!  You just need some times to really understand how financial market really works!  As my husband said, if everyone can execute the ideas of the art of war then all our lives will be very difficult!  Hahaa!   \(^o^)/



  
    

Trading edge

Couple of traders had been asking why some traders are doing far better than them?  They were all taught the same theories and execution of trade, but the results were very much different.  Some even query whether that those who have done well have a certain trading edge above the others where they don't want to share.  "Why are scores different when a class of students were taught by the same  teacher?  Does that means that those students who did well have a cutting edge on learning compared to others?  NO! NO! NO!"  My husband exclaimed. 
So, what contribute to the edge where some traders are doing better than others?  According to my observation, I would say there are the 3Ps that contribute the differences.  There are:

1. Physical stage
2. Psychological stage
3. Preparation stage        

  
Physical stage

This is the stage to test on the trader's physical condition.  What do I mean by that?  Just imagine to sit in front of the a computer screen for hours to enter a trade position, what will happen?  Most traders will either fall asleep, surfing internet, playing computer games, reading books or going for a long break, etc.  But the most worrying situation is that most traders will make wrong decision after the long STARING on the screen as their body and mind are telling them "I'm tired!  Let's get it done and get over with it for the day QUICK!"  That is common experience I believe most of us had.  In order not to wear out ourselves, do bear in mind that there is always TIME where markets are more volatile.  Knowing different time to trade will help to reduce the unnecessary waiting time.

Psychological stage

With physical tiredness, trader tend to make mistake psychologically.  As mention early, traders has the tendency to rush into a trade and hopefully they can end with quick profits.  
Another scenario would be when traders see a sudden move in price range, they tend to jump into a trade and get themselves SCARED when price suddenly retrace upon their entry.  Understand that nobody want to miss any opportunity to profit from trading, but there are methods to calculate risks and entry level.  But most have forgotten the basic trading rules at this point of time.
The psychological impact on the rush hour make a lot of traders behave irrationally.  Looking at long term prospect of trading a trend rather than trying to scalp it quick will benefit more in monetary terms.  Therefore, learn to ignore the temptation on sudden movement of price.  Keep a clear mind and stick to the rules!

Preparation stage 

I must say that most traders rather look at the charts and hope that they are lucky enough to catch a trend once they on their laptop or desktop.  A successful trader don't make profit by LUCK!  They are prepared!  They do their research to understand the market of the day, what are the time to get ready, which country are closed for trading due to holiday, calculation of support and resistance for the day, week or month, etc.  To them, they don't count on LUCK!  The definition of luck to them are just happen to earn more than what they are expecting for.  

That's why there are saying why 80% of traders lost in the game of trading.  There ain't any edge in any trading, but there are an edge for success if you stick to the rules strictly.  For any technical trading information, please visit http://forexoceanview.blogspot.com/ for tips on trading technically. 

Winning everyday?

People always like to ask if you can profit everyday from forex market?  Initially, I thought if you know the rules and follow it strictly you should be profited everyday from it.  Well, only 3/4 right!  So what contribute to the 1/4 of the trade that fails?  There are couple of points that I believe could have created the impact of losing a trade, there are:-

1. Hunger for big time victory.
2. Misinterpretation of market sentiment and indicators used.
3. Living in the pass historical days of glory.

Hunger for big time victory

History had proven many times that some generals got themselves killed or surrendered when in pursue for a major victory rather than to retreat with a minor gain.  There are nothing wrong about winning BIG!  But there ain't always opportunity for being a BIG TIME WINNER!  
In forex market, it works the same.  A lot of traders may have experience this before.  When they caught one time huge profit with one single entry, they'll look for the same opportunities everyday!  They'll hold longer on their position in hope to generate the same
profits as they had before at that "LUCKY" moment which they had experience.  It's had being an advised from my husband that there will be a lot of small victories awaits you rather than the major one in a day!  If you are thinking of catching one big one so that you can call it a day, then it will be one whole day that you will need to spend just to catch that big one or sometime even NONE!  
Do not underestimate the small amount of victory that you have achieve, when you added it up, the contribution can exceed what you are expecting from the BIG one.  Not everyday is a holiday anyway! 

Misinterpretation of market sentiment and indicators used 

Not surprised if I hear you saying "Why the market do not respond to the news or reports that was released?" or "How come the indicators didn't works in the way that I had usually interpret?"  Why!  Why!  Why!  
In any war, there are always a combination of different factors that contributed to a victory!  Depending on one single factor will not guarantee you success!  Same thing like wise, market sentiment can be very different from data or news when it is release.  Indicators can have a sudden change in direction that catch you off guard!  Such factor is unpredictable, when traders are caught in such a situation, all you have to do is to get out of your position when your stop level is reach to avoid further damage.  Do remember to get a rest or stop for a day or two, regroup yourself!  Such incident do not occur everyday!  Do not have the REVENGE trading attitude!  
A minor defeat shouldn't destroy you!  But if you believe that market sentiment are always going against you, then it may be you that are the problem!  Beware!

Living in the past historical days of glory 

How many times have we heard our elderly keep repeating their glory during their young days!  Station our memory in those days have blind most of us in seeing what's happening now.  Investors, traders or scalpers have different kind of game plan as compared to the previous day!  If you are not in the same frequency with them, most likely you are on the wrong track today.  It is not difficult to decode their behaviour in the way they play the game, but it will be difficult if you still live in the past and still believe that the old golden rules still apply in today's world. 
If you happen that you get defeated by the market today, be a GRACIOUS loser!  Admit the mistakes you had made and source for answer!  You will be surprised by what you will find!  

Like war, forex market is a high-risk venture if you do not keep yourself up to date.  Most important of all, you need to have a complete peace of mind in order to perform well.  With the support from your loves one may not guarantee you success, but hostility from the closest will definitely result in failure.  Do comments if you have anything to share, I will be glad for your contribution!  Do visit http://forexoceanview.blogspot.com/ if you wish to know more on technical trading.       










    

Important rules

These blog is a further elaboration of my previous blog-post on "Rules upon entries".  I always believe that to win a game, you must first study the rules well.  By understanding it then you will be able to increase your stake of winning!  In forex market, it works in the same way as like in any other games, or even in a war, our career and our daily lives.  Five simple rules to take note of, and they are:-

a. Choose your market wisely.
b. Know the stage of your entry.
c. Ability to analyst information correctly.
d. Ability to use indicator tools.
e. Ability to identify risks.

a. Choose your market wisely

Which currency pairs you decided to trade will affect your profit margin at the end of the day.  Most retail traders will choose those that are most volatile and are enable to generate profit within the frame that they are looking at.  Couple of things to watch out for would be:-

1. Studying of chart by using technical indicator tools.
2. To study and analyse news and data which will have the most  impact on the currency pairs which will also create a trend on that particular day or week.
3. Timing of your entry.        

It'll definitely need some time to prepare such information.  But if you plan to succeed in forex trading, these steps are essential.  Just like planning for a war, there must have a proper preparation.  If not, heavy casualties will be unavoidable!  No one want to get themselves trap in a trading or worst, injured!  And it can be prevented if you have done enough research for it!

b. Know the stage of your entry

I had mention it before at my previous blog-post, difference stages will have difference profit margin that can be generated.  If you are able to identify if the trend are at its ending stage, then you are able to avoid losses.  A lot of retail traders try to enter their position as early as possible at the early stage of the trend, but very often it turn out to be the mid-trend level when they spotted it.  The reason is pretty simple, no trader  want to expose themselves to danger by be the first one to enter position.  Especially at the early stage of the formation of trend, where things don't normally present itself so clearly.  So, smart traders rather wait for price to settle at one clear direction through the help of the indicators and place their entry and earn less rather to expose themselves to a higher risks.  There are nothing wrong with these tactic, but your timing of entry must be right!  As there are always a retracement when prices reach a certain level, without knowing where its retracement level is, you will get freak-out even if you are right about the trend. 
In any war, the general don't get his soldiers just charge straight ahead to attack their enemy.  They will pause, retreat if necessary to lure their enemy.  Whatever tactics that are use, very much depends on the stage of war they are in.  Same thing for forex trading, knowing different stages you are in will help you to decide what are the cause of action to take to minimize risks and maximize profits! (to know more, please refer to my previous blog-post on Rules upon entry or visit http://forexoceanview.blogspot.com/ for more technical info)

c. Ability to analyst information correctly

Got to confess, sometimes it is quite difficult for me to get it correct too.  Very often the market may not react according to how you and your team analyst it, even if the data or reports that can be very positive or negative.  Unless you are very well verse at macro-economic, if not, to get a 100% correct on analyzing the information can be a very difficult task! (on saying that, sometimes experts can get it interpreted wrongly too!)  Therefore, the best thing to do is to wait for the market to react first upon the news or data that is release if you are not sure about your analysis.  It is usually very tough when it comes to analyst too many data announce on the same day! 

d. Ability to use indicator tools   

All these tools that helps to analyst chart pattern at different stages are important.  Use it correctly it will help you in your trading.  If you can use all these tools like an army that is well trained, chances of winning the war will be very much higher.  
Just like in a war, the leader will have to know the different characters of his generals in order to gain victory at different situation!  Same thing goes for forex trading, knowing different characteristic of different indicators for different stages will increase your chances to profits from the market!  For more details on usage of indicators, please visit http://forexoceanview.blogspot.com/ 

e. Ability to identify risks

Before any news or reports release, many retail traders will tend to anticipating the result and place their entry to the direction that they think it should be heading.  No doubts that it's going to be a lucrative profits if you are right, but on other hand, the impact can be disastrous if you are wrong!  If your trading is only base on assumption of what you think without a concrete base of evidence, then the risks of your entry will be very high!  By identify these risks, you are not just able to safe guard your capital but also ensuring your profit that you are going to generate.  Try to avoid those timing when reports or data that are going to release, especially when you have no idea what the figures are going to be.  Let the market makes it crazy move within that seconds, wait and observe.  Enter your position when you know your risks are at the minimum. (by then, most indicators are able to provide a more firm direction indication.) Beside entry of position, exit of your position are equally important!  Do not hold your position if your are not sure if price are still heading your direction upon data release.  Minimize your risks are always the priority.

Do remember that trading currency are like fighting a war, only when you know the rules well, then it can ensure you your victory!  Enjoy trading! 
 
     

Account Management

  Always wonder how ancient army fight a distant war where it was thousands of mile away.  Aren't they exhausted after a long walk?  Can't even imagine where are they going to summon their strength to fight their enemy.  Looking at my husband, he smile and said," There is a strategy in it, but most importantly, is how you manage the army to fight a distant war.  It works the same way as managing your forex account."  
  Hmm...here he go again!  Carry on with his explanation," In ancient time, when one country decided to declare war with another country, they normally will choose the nearby one first.  After conquering, they will station a portion of their army at their new territory and recruit new soldiers from this country that they had conquered.  In this way, it will reduce casualties rate from their own army and at the same time they had increased their army strength to proceed with another journey of conquering."  It make sense to me know why there is a link in between the art of war and forex.  In facts, there are 3 basic principal that i have apply on managing my account, they are:-


1.) 80/20 rules

• After conquering of land, most general will leave a portion of their soldiers behind to guard the new  conquered land, and he will recruit new soldiers from the the new place and proceed to another place for war.  Same thing in forex account managing, if you withdraw 80% every week of profits that you have generated and left 20% behind, you will be able to cover your initial capital very fast.  The logic behind this is very simple, many traders make mistake by thinking that with their account increase in revenue, they will also have more room to hold their position where thing goes wrong.  They have the tendency to hold longer even the losses get bigger, hoping that with the profit that they had generated can withstand the current situation of wrong entry.  It end up with more profits being wipe off and can even damage the initial capital.
• With 80% withdrawal from profit generated, these 80% will compound very fast to cover what you have invest as a initial capital.  These 80% can then be re-invest in other financial products to generate more revenue.  That 20% left behind may not seem much initially, but will increase subsequently, and at the same time it does help trader to remain caution on their entry.  When traders know they do not have much room for losses, naturally they will minimize the risks.    

2.) Recruitment from new land

• Just a further illustration from 80/20 rules, when the 20% have compound in to a substantial size, it is also the time where you can increase the lots of entry.  At these point, most of your capital should be returned back into your pocket. (Some may argue that it will take one or even two years for some traders to make it, and it take too much time.  Why not leave what you have earn and increase the size of entry?  Of course you can!  But can you overcome your psychological barrier to liquidate your position at a minimum loss?  Like I mention in 80/20  rules, most traders tend to lost more when they know their account get bigger, forgetting the basic rules of forex game.)

• With return of capital covered, these new force of account will keep generate revenue for you!  At these point, you should have cultivate a habit of not reinforce your existing account as all losses have being minimize.  Never have the thinking that you can always top-up your capital even there are losses or worst, got a margin call!  It will turn out to be a habit of being a LOSER!

3.) Safeguard your capital

• One tactic to maintain the capital is to allow only a portion of your profits generated to be sacrificed.  Only by sticking to the targeted stop-loss level that it will ensure you the safety your capital, it will also ensure that you will still have enough capital to re-generate back what is loss.
• Always remember not to risk your new force of "army" even though you have your capital generated back.  If you feel that it is not much of a problem to loss it, very soon you will see yourselves pumping back your own "army" back to the war!  

   Always remember  A GOOD LOSER WILL BECOME A LONG TERM WINNER!  It means that you accept your targeted losses and move forward rather than holding on to your wrong position entry until your capital  is harm.  Bad loser always end-up with nothing!  You choose what you want to be, a GOOD LOSER or  a BAD LOSER?  Please do not hesitate to comment if you have any queries.  Hope Forex art of war helps you in your trading, if you are interested in technical analysis, do visit http://forexoceanview.blogspot.com/ for more information.

Rules upon entry

Never being through the army, have enjoy listening to my husband telling me about his army's life. How they were trained, punished & having fun together. But the interesting part of all is during their battle-field training, stimulate enemy's attack & how to defend. He said there was one incident where he was able to alert his platoon before enemy attack, saving a lot of casualties that might been cause! " How you do it?" I asked curiously. He said all you have to do is to know the rules of the game! Anything in lives has their rules to follow, forex game is non-exceptional too! Once you make your entry, please follow these rules:

1. DISCIPLINE
2. SENSITIVITY
3. POSITIONING
4. FLEXIBILITY
5. OBSERVANT

1.) DISCIPLINE
  - I have mention in my first blog on trader's attitude discipline is one of the most important factor to any trader. You set your targeted profit to hit, never hold your position even if the price goes up further. A lot of trader tend to get greedy & were trapped when a sudden U-turn of price occur.
 - There is always time where a trader enter a position and realise it was wrong after certain movement of price range. Never hesitate to liquidate when you have your calculated damage is reach. (Plenty of traders, at this point, still holding on. Hoping that there will be lucky star shining on them and reverse the situation.)
 - But the worst attitude of most traders is that they tend to recoup their losses by increase their lots on the next entry. It may works sometime, provided you are right on your analyse. But if you are wrong, the damage will also double!


2.) SENSITIVITY
 - In any war, you have to be sensitived to the surrounding of where you are. Just like in forex, you have to be sensitive to news & data. The time where they are release  & what kind of impact it is going to create. These factor will sometime give you the advantage of holding on to your position or liquidate.
  - Be sensitive to the calculated point of price ceiling or base. It may reverse when the calculate level is reach. (Most financial institution & traders use these level to trade for short term or long term positioning.) For more detail, please visit: http://forexoceanview.blogspot.com
 - Beside calculated range, indicators used in forex provide some good signals where you should be prepared to liquidate. Normally a retracement occur at these point of contact. Be sensitive to the indicators used will help to reduce risks!


3.) POSITIONING
 - Always remember to check your position before entry. But if you forget, make sure you didn't position yourselves towards the end of the trend where people start to retreat.
  - When we talk about positioning, there are 5 stages to watch out for, they are:


a.) Beginning stage (Traders start to enter, but slow.)
b.) Advance stage (Price start to move forward, indicating more traders are joining in.)
c.) Holding stage (Price whipsaw within certain range, indecisive on traders decision. This is a point to be   cautious.)
d.) Testing stage (Price goes to a wide range but was not closed. Can be signal of continuous advance or retreat.)
e.) Retreating stage (Price normally reached the extreme targeted range and reverse.)


- Knowing which stage you are in will definitely be an advantage. It is normally the mid-range level that is hard to predict, especially when you enter at holding or testing stages. To know more, please visit: http://forexoceanview.blogspot.com/


4.) FLEXIBILITY
- To assert flexibility means that if there is a sudden change in condition, get out of your position even if you have not reach your targeted profit! Some traders advised to set your limit and let it run on it's own. But situation change everytime, if you intend to be a successful trader, than watch your screen for tell-tale sign. Just like you cannot predict the weather, also there to prepare for the reversal.
- If you are on the trend where price are moving towards your advantage, upon reaching your target, set a stop-loss level where profit margin is & let it proceed further. (Just like during a war when you conquered a land, a fortress is build to prevent counter attack from your enemy.) It will build-up your profit level and at the same time, safe keep your already gain profit.
- Alternatively, you can also increase your entry lot upon your targeted profit is met. And set a stop-loss at your already profited level. (It's the same where you increase your army strength to further attack but still safe-keep the place that you had already conquered.)


5.) OBSERVANT
- During entry, if you have been holding position for quite sometimes, and your profit margin still not reach. Do observe the timing of news & data release. Price react upon release of news & data, be it positive or negative. If you believe that these data release will be at your advantages, of course, there will be no worry on holding it. But what if it is not? (To observe the timing on entry & exit are very important. Will you launch an attack on your enemy when  you do not know if they are preparing for you?)
- A very bad habit of some traders are, their eyes tend to stick to the price ticket more than the chart itself. Very often they forgotten that signal from the chart are much more important to observe than price ticket movement. By observing the chart, you will know if  your position are in the flow of trend or the end of it. (You don't ask your soldiers to keep on charging forward without knowing what is ahead! Do observe!)


Sticking by the rules helps to prevent losses, even if there is, it should be minimised! 90% of traders who failed are not because they do not know how to trade, but they just simple try to ignore the rules or try to break it. By understanding the rules, is like 90% chances of winning the game. But after winning, how to manage your profit will be an issue deciding your further victory. I'll discuss on my next blog, and hope that you enjoy it. Do comments if you have any on Forex Art of War.

"WATCH YOUR ATTITUDE!" yelling at my son very often with sentences like this. But my naggy husband always have to link every-words coming out from my mouth to something else. He told me it's easy to tell others to watch their attitude, but how about watching our own attitude? Never like to lose out, I query him back! " Is there any attitudes we should have while in forex market?

                                       "YES!"

He said these are very important to know even before we start doing any trading at any fields. Checking at myself on this five points he had mention, they are :

1. Responsibility
2. Self-control
3. Self-motivated
4. Emotionless
5. Self-improvement

 1.) Responsibility

• A trader is like a general who will be responsible for their own army safety. NEVER HAVE A NEVER-MIND attitude! Some people think that putting money to invest, must unavoidably accept the result of having the whole capital been wipe-out or end up with  a margin call. If you intend to trade, take full responsibility of the safety of your capital! sometimes, it may unavoidable to have losses, but at least you can reduce the damage to the minimum level. Ensure the safety of your army is always the first priority and your 

                
                               RESPONSIBILITY!

2.) Self-control

• It is always difficult to resist temptation when you think that it is a perfect opportunity for you to profit from it. Having the ability self-control is very important! It will help to avoid risks and withstand lure from your market. Sometimes a sudden widening of price may lead to a misunderstanding that the price is heading towards one direction. Very often, traders get trap at these level, where price refuse to have any further upward movement and end-up in a whipsaw stage or worst, a REVERSAL! Without understanding why such price movement occurs may end-up yourselves in a disastrous situation. (It's like in a war, enemy lure you thinking that their retreatment because you are too powerful. Never realize that you have fall into their trap!) In another scenario, if you cut losses at this stage, will you recoup your losses by increasing the lots to trade? A lot of traders lost their self-control ability in this situation. It is never advise to increase your entry with additional lot, unless you are 100% confident! On saying that, my husband  would rather advise to increase it gradually as you enter position. (It's a simple strategy that I will discuss on my next blog.) Never be too greedy! You'll lose control of yourselves! Been patient always help! Remember, you'll need to find out what happen first before any declaration of war. In order to avoid major casualty, you need to exercise

 
                                   SELF-CONTROL!

3.) Self-motivated 

• It is quite difficult for most people! That's why we have so many self-motivation courses and books around! Having waited for hours or sometimes the whole day for a entry trigger signal is rather common experience for most traders. So you must have a NEVER GIVE-UP attitude! It's the same thing when it come to recoup your losses. (Always tell yourselves there will be always opportunities!) Imagine that a general leading his army to a war, after a long distance travel, most soldiers (including the general) will be exhausted. At this point of time, the general has to motivate himself first so that his army is able to motivate by him. Even if you face a small defeat, brace-up! It's not the end of the world! Anyway, I'm not a motivator, can't tell you ready much. (Got a husband motivate me every-time, that's a blessing! Gee...) If you can't motivate yourselves during war, then don't risk the life of your army! In order to win, you must be able to be

 
                                  SELF-MOTIVATED!

4.) Emotionless

• When you are overwhelming with your previous victory or angry over losses your had made, please avoid any entry! Many people tend to be careless when they get too emotional! Forex is like in a war-field! You give opportunity to your enemy when you are less guarded! Be emotionless means that you should keep a clear mind in any situation. Winning once doesn't guarantee you another victory if you are careless. Sometimes traders like to anticipate result even before any release of data! They are overwhelm by some prediction from news that make them got into an early entry situation and end up on a wrong move! A general who is impulsive always get his army into danger! In the cold and cruel and financial market, you need to be

 
                                     EMOTIONLESS!
 
5.) Self-improvement

• There will be different tactics apply to different situation in war. There wouldn't be only one trick that will be ensure you to every victory! It is very important to keep improving ourselves by finding out more. A good general will keep upgrading himself to improve on strategy use in the war field. There will always be better weapons around, but first, he will has to learn how to operate it. In forex market, it works in the same way. There will be some new knowledge around to improve on your entry. In order to adapt to the ever changing world, you have recognise the important of

                              SELF-IMPROVEMENT! 


Check on the five points, how many do you possess? Do comment if you have anything to share or how you feel about my blog. I'll share on strategies upon entry of position in forex. Hope you can continue to support! >_< 
For more technical information, please visit http://forexoceanview.blogspot.com/ 

Hi all!

Hope my six rules of self-preparation of investment tactics are useful to you. Before I explain my strategies in forex market,  let me recap again on my six rules.

They are:

1. KNOW YOUR STRENGTH
2. UNDERSTAND YOUR OPPONENT
3. KNOW YOUR TERRAIN
4. CALCULATION OF RISK
5. DISCIPLINE                 
6. LOGISTIC          

Very often when come to investment, most of us will depart our army (CAPITAL) & let the general (BROKER) that you engaged to fight the war. Hopefully they'll come back with victory. "STOP DREAMING! WAKE-UP-YOUR-IDEA! SOLDIERS!" That's my husband always say to me. He said investment is like a war, you have to lead your army personally. The  lives of the army is in your hands, you are responsible for it. So he summarized into 5 different strategies that the generals (TRADERS) are using.
These are:



1.) WAIT FOR OPPORTUNITIES
The most common tactic that most traders are using. There are predefine price range that had been calculated base on daily, weekly and monthly charts. Depending on what kind of investors you are. For intraday trader like me, I do calculation base on daily & weekly charts, so that I would roughly know where the price ranges are and where to enter a position for my war. (I'm not a long-term war fighter, do not want to worry about my army's safety while I'm sleeping. So I retreat everyday.)
Traders will set a targeted price after they have it calculated, when price cross the line. (Where your opponent comes into your territory.)  
Traders start to enter position. (Whether this ambush tactic works very often depend on how far your opponent had travelled. If price have been going up too much, even though the line is cross, it normally won't go too far, a retracement would occur.) 
Of course there are weapons ( INDICATORS) used where you can attack your opponent while they retreat. Do bear in mind that great patient are needed while waiting for opportunities. (Just FYI, in forex market, you are not just enter the market where price is moving up. You can enter the market when price is moving down as well.)

2.) FOLLOW THE FLOW OF STRENGTH
Imagine you are rowing a boat in a river, will you go against the current or follow it. In currency market, it happen to work in the same way. This is what we call a trend market, where price go towards one direction. It will be very dangerous to go against the trend! A lot of boat got capsize & a lot of traders who try to fight it, ended up seriously injured. ( There are a lot of ways to detect the trend, for more detail please visit http://forexoceanview.blogspot.com/) 
When things are in your opponent favour, befriend him! Join force with him & he will make you stronger! (Please note that not everyday you can encounter a trend in forex market if you are a intraday trader!)


3.) SPY WORKS
Using spy to keep track of your opponent movement & progress are one of the complex work. If you are not well train in analyse the information's, you may find yourselves get into the market too early, which may exposed to yourselves to a higher risk even though you maybe right on it's move! (Traders use technical tools to identify whether the trend is coming to an end or if it is a starting of a trend! And there is time where you got non-trend situation. Different indicators will be cater for it. For more info please visit http://forexoceanview.blogspot.com/) 
It may not be easy, but you will love it when you know the tactics and when to use it. So, learn to spy your target! Your target will pay you everyday even in a non-trend market condition. 



4.) ATTACK WHEN YOUR TARGET ARE WEAK
Isn't it easy to take down your opponent when they are weak or exhausted? In forex market, currency fall into prey when there are important news or data are release. In today's world, all news and data are easily available instantly. All you have to do is to identify & understand which data & news will create an impact to your target. (Do be careful when using fundamental analysis tactic, the respond from the market may react differently at time. It would still be advised to learn about technical analyzing if you are serious about investment.)

5.) FIGHT A SEASONAL WAR
In the past, countries go into war at spring & autumn season. This is at these time where weather are at it's best and soldiers are more in condition to fight! (Do not get mistaken that I advised you to trade only at spring or autumn.) 
In forex market, there are these seasonal traders who trade & hold their position for months. These people normally come into war with huge army strength. (But that doesn't mean they will not get injure! Very often they either get great victory or suffer great loss!) 
These tactic are base on historical price range where investors believe that the price will not go up any further and will reverse around the range. They enter position to sell the targeted currency & exit the market until it reach a point where they believe a reversal will occur base on historical price range and vise-versa.


The above mention tactics greater depend on situation of different market condition. It would be good to know the execution of different methods so as to avoid risk whether you are in forex, stock or commodities markets, they works in the similar ways! Remember, the more strategies you know, the more easier for you to deploy your army! Do feel free to share your opinion at my comments column. On my next post, I'll be discussed on attitudes of most retail traders should be prepared before entering a war!