Category Archives: FOREX

The 14 Stages of Trading Psychology

1. OPTIMISM – It all starts with a hunch or a positive outlook leading us to buy or sell.

2. EXCITEMENT – Things start moving our way and we get excited. We start to anticipate and hope that a possible success story is in the making.
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3. THRILL – The market continues to be favorable and we just can’t help but start to feel a little “Smart.”
At this point we have complete confidence in trading system.

4. EUPHORIA – This marks the point of maximum financial risk but also maximum financial gain. Our investments turn into quick and easy profits, so we begin to ignore the basic concept of risk and now start trading anything that we can get our hands on to make a quick buck.

5. ANXIETY – Oh no – it’s turning around! The markets start to show their first signs of taking your “hard earned” profits back. But having never seen this happen, we still remain ultra greedy and think the long-term trend is higher.

6. DENIAL – The markets don’t turn as quickly as we had hoped. There must be something wrong we think to ourselves. Our “long-term” view now shortens to a near-term hope of an improvement.

7. FEAR – Reality sets in that we are not as smart as we once thought. Instead of being confident in our trading we become confused. At this point we should get out with a small profitand move on but we don’t for some stupid reason.

8. DESPERATION – All gains have been lost at this point. We had our chance to profit and missed it. Not knowing how to act, we attempt to do anything that will bring our positions back into the black.

9. PANIC – The most emotional period by far. We are clueless and helpless. At this stage we feel like we are at the mercy of the market and have absolutely no control.

10. CAPITULATION – We have reached our breaking point and sell our positions at any price. So long as we can get out of the market to avoid bigger losses we are content.

11. DESPONDENCY – After exiting the markets we do not want to trade ever again. The markets are not for us and should be avoided like the plague. However, this rare point marks the point of maximum financial opportunity.

12. DEPRESSION – We drink, cry and/or pray. How could we have been so dumb we think to ourselves. Some start to correctly look back and analyze what went wrong. Real traders are born here, learning from past mistakes.

13. HOPE – We can still do this! Eventually we return come to the realization the market actually does have cycles. We begin to start analyzing new opportunities.

14. RELIEF – The markets are turning positive again and we see our prior investment come back around. We regain our faith (although small) in our ability to invest our money.

FX Update – End of Week 2

After a tumultuous trading week which saw me gain 80% at one point in time, and losing up to 30% in another, I (luckily) ended the week in the green. A series of ill-timed and ill-decision trades took a dampener on my profits.

And so I decided to do something about it.

I set up totally new accounts for trading, now that my IFX and Alpari accounts are up. They will revolve on 2 different risk profiles, one aggressive account in USD and a conservative account in SGD. To fund the US account, I will withdraw my Oanda account balance next month.

And so next week begins with:

Aggressive USD – USD3750

Conservative SGD – SGD3418.21

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It was quite a bad week for forex on Week 4, with my SGD account up 13% (only) and my USD account yoyo-ing up and down but eventually heading into the week in the red. However, there are still floating positions which are currently heavily in the black.

Week 3

Aggressive USD – USD5136.07

Conservative SGD – SGD6260.02

Week 4

Aggressive USD – USD4802.66

Conservative SGD – SGD7068.22

Total account equity stands at SGD11558.07. An amazing figure when all of it is profits from my initial risk capital of 3.5k a month back.

—–

Here’s my money management plan going forward.

Conservative SGD position size is 15x account equity, with a view to reduce it to 10x when it hits $15k

Aggressive USD position size is 30x account equity, with a view to reducing it to 20x when it hits 12k

USDCAD Dampener

I woke up at 2.30am to receive an SMS that my stop losses for EURGBP and AUDUSD had been hit. Wah shit. -$600 ggxx.

Time for calculated and rational revenge trading. What an oxymoron.

Went long AUDUSD at 0.9120 at ~3am and woke up to +160 pips and $1600 in my account but not before a margin call warning on my account.

Account Equity Update for 11 July 10am

Risk – SG – $3575.94

Conservative – US – $3899.44

Total – $7475.38 (up from $6339.92)

NZDUSD Dampener

Yesterday I earned $2600 from my NZDUSD long and today I gave $900 back to Mr Market fading NZDUSD. How miserable. I’m waiting for the time where my NAV will hit 10k. ^_^

Account Equity Update for 10 July 11am

Risk – SG – $3699.47

Conservative – US – $2639.82 (withdrew $500)

Total – $6339.92

Building My Trading Workstation

It all begins with the dual/triple-monitor setup and I’m inclined to go with the Palisades Monitor Matrix now. Looks pretty darn good!

Full Workstations

http://www.digitaltigers.com/

http://www.pugetsystems.com/go/trading.php

http://www.elitetradingcomputers.com/trading-computers.asp

 

 Monitor Stands and Mounts

http://www.tradingcomputers.com/TC_matrix_articulated.html

http://humanscale.com/products/category_detail.cfm?category=monitor_arms

http://www.lcdarms.com/app_financial_markets.php

http://www.ergotron.com/Products/MultiMonitorMounts/tabid/159/language/zh-SG/Default.aspx

Workstation Desks

http://www.ikea.com/us/en/catalog/products/S89842465/#/S89836332

http://www.biomorphdesk.com/products/ergonomic-adjustable-desks/maxo-desk-series/maxo

http://www.hermanmiller.com/products/workspaces/desks/envelop-desk.html

Chairs

http://www.ikea.com/ca/en/catalog/products/00103102/

http://www.hermanmiller.com/products/seating/performance-work-chairs/aeron-chairs.html

Setting Up

https://www.osha.gov/SLTC/etools/computerworkstations/positions.html

https://www.osha.gov/SLTC/etools/computerworkstations/components_desk.html

A Fresh Start

Maroon 5 - Won't Go Home Without You     

It was one hell of a ride trading FX the past 1.5 weeks. I booked almost $4.2k during this period, a 40+% return which went way beyond expectations. (see http://www.myfxbook.com/members/brianho/brianho/399145 and http://www.myfxbook.com/members/brianho/act333/622210)

This made me seriously consider once again the possibility of trading forex for a living.

Here are some figures to make heads roll…

If I start with a 2.5k account, at 10% ROI per week for 40 trading weeks, I will end up with $113150. Double that ROI and I’m seeing it hit 3.674 million O.o Of course, that is just plain optimistic.

Starting Afresh….

I restarted my Oanda SG account with SGD2200 last Thursday and while trading NFP, got it to SGD2516. As for my Oanda US account, I am still considering converting it to a USD-denominated account since after all, I will be studying in the States.

Meanwhile, I have already settled on Alpari as my ECN/MT5 broker, IronFX for its eye-popping 50% deposit bonus and Pepperstone for its Razor ECN solution. I will be deciding how much to transfer soon since I’m a bit short on liquid funds right now.

GPGT…

Some highlights from last week!

fx1 fx2

I envisage this blog becoming a forex blog in the near future ><