millionaire traders in the making

hakim in memory...born on novembersecond 1991...prayer or al-fatihah"

                         بِسْمِ اللّهِ الرَّحْمـَنِ الرَّحِيم

my dad said to me, "son, life is a revolving door, you will get back what you gave-out. Offer them help...give them your hands...if you can't afford, give them your words, your hearts"..."If you can't help, just don't harm them" .... my dad in memory...prayer or al-fatihah

DISCLAIMER

All materials presented in this website are intended for educational purposes, and it is not in anyway being regarded as an advice for your investment or trade recommendation. Trading forex is a high risk of losing your capital & profit, therefore you should seek professional advice. This website is a non-profit and solely dedicated to teach & educate FOREX traders. "my mission is to reach out as many traders; to educate and train them to become skillful traders that capable of making a living in trading" 

"plain truth"


"It's easy to win, but it's much more easier to lose money in forex. It's hard to win consistently & most traders lost & only few winners. Most traders lost badly & closed their accounts in 6 months. I have lost badly & closed my 2 accounts in less than 6 months"

"To WIN, you must focus ONLY long term trade, holding you positions for days up to 8 weeks. I have tried many, and this is the one that produces consistent profit over time, Why? because we could predict price movement accurately in longer term, & probability of winning is 70-80%"

"To WIN, you should avoid short term trade, because it's risky, and probability of winning only 50-55%.You won't listen to me now, but, you will at some point of time, after finding the truth. In reality, It's hard to predict price movement accurately in shorter term, because too many factors that can spark price movement, which is beyond our knowledge"

"I have no doubt, you can win"


Focus & specialize in one-pair: EUR/USD, trading in daily chart, holding positions for couple days up to 8 weeks, we have been winning, inshaallah, we will win .... this is how you would start !

COMMENTARY : EUR/USD  

most important thing in trading is "PRICE" & you need to know "PRICE BEHAVIOR"
1) it moves in ZIGZAG, and it never move in straight line
2) it will REPEAT it's previous trends over & over again
3) it will PULLBACK at key support & resistance levels, and also 200 ema

August 1, 2014

July 31, 2014 

July 31, 2014

July 30, 2014 

July 29, 2014

July 28, 2014

July 27, 2014

July 24, 2014

July 23, 2014

July 22, 2014

HOW TO WIN


A) WHY do people WIN? It's simply because they can read price movement
with certainty

B) WHY do people LOSE? 1) They trade excessively & unable to cover price
swing  2) They never reached the skills level that able to read price movement  

C) To WIN, you need to identify the TREND as soon as it started. Then, verify 
them, so that you won't fall into WRONG path. Verify the trend with multiple indicators in weekly, daily & 4-HR charts 

D) To exit for profit (75% of your position) when price approaching key support 
& resistance, and let the 25% run

How to read price movement with certainty?

1.You need to know the pair very well in & out, ONLY focus on 1 or 2 pairs
at a time, until you become expert.Why? you can tell of what the price will do in any given situation, based 
on it's previous behavior, because it will likely behave the same way

 2.You need to master candle formation pattern or price action
Why? it will tell you on how, where, when, to enter & exit

3. You need to identify & recognize key support & resistance levels
Why? it will tell you, how price reacting to it, and how would you proceed

4. You need indicators that can signal & alert of an EARLY price movement
Why? You can enter new position ASAP after verifying trend direction 

5. You need to follow daily economic data releases & read head line news
Why? price is sensitive to news & it may react to it instantly  

How did I master the forex puzzle :

1. trading in live micro account continuously for 16 months - accounted for 60%  
2. following the pro's daily commentary of eur/usd, continuously for a year - accounted for 25%  
3. observing the pro executing trades in live trading room for 3 months - accounted for 5%  
4. reading & teaching continuously on my own - accounted for 10%


HOW TO VERIFY TREND

1) TO VERIFY TREND USING : HIGHER "HIGHS"

2) TO VERIFY TREND USING : LOWER "LOWS" 

3) TO VERIFY TREND : USING CHANNEL LINES

4) TO VERIFY TREND USING : 8 ema & 21 ema CROSSING

5) TO VERIFY TREND USING : KEY SUPPORT & RESISTANCE LEVELS

6)  TO VERIFY TREND USING : SMA (5, 10), PARABOLIC SAR, MACD (12, 26, 9), RS1(9), ADX
(THESE ARE IMPORTANT CHARTS, THEY WILL PREVENT YOU FROM FOLLOWING THE WRONG TREND)

7) TO VERIFY TREND USING : ADX (average directional movement index)

8) TO VERIFY TREND USING : MACD CROSSING

9) TO VERIFY TREND USING : BEARISH DIVERGENCE (MACD 12,26,9 ema)

10) TO VERIFY TREND USING : BULLISH DIVERGENCE (MACD 12,26,9 ema)

WHEN YOUR TRADE DOESN'T WORK

Trading forex is about speculating or PREDICTING PRICE MOVEMENT. For bankers or institutional traders, it is about reaching the LEVELS, and you heard them saying; "price is reaching the top, it's breaking the support, it's making correction". Basically, their mind-set are preoccupied with key SUPPORT & RESISTANCE levels, and we want to be in the same page with them, because they can influence the market with billions of capital. 

If the trade DOESN'T WORK OUT, close your positions and take your profit out & absorb some losses. BUT, you must CHECK the following, before closing your positions: 

1. Head line NEWS  (http://finance.yahoo.com/)  (http://www.bloomberg.com/)
2. Dow, USD index, Gold price  (http://www.investing.com/)
3. Most recent Economic DATA releases  (http://www.forexfactory.com/)
4. Weekly, Daily, 4-Hour, and One-Hour charts; to find out, how BAD the situation is
5. RELATED PAIRS, if you are trading usd/jpy, check all USD & JPY related pairs
6. Sometimes, it is just a SPIKE, and you could re-enter NEW position AFTER the spike, at PULLBACK
7. Sometimes, it is a serious move, SLOWLY & continuous for hours, like water, dripping non-stop, & you need to GET OUT  

KEY SUPPORT & RESISTANCE

I would say, this is the most important indicator, and the key factor in making my trading decision.

Support is the point where price reached to the lowest level before it climbs back upward
Key Support are the points where prices had reached to lowest levels & climbed back upward multiple times


Resistance is the point where price reached to the highest level before it pullback downward
Key Resistance are the points where prices had reached to the highest levels & pullback downward multiple times  


THE IMPORTANCE OF KEY SUPPORT & RESISTANCE

1. Most traders will wait for a bounce at key support level to enter new position for continuation of up-trend move

2. Most traders will wait for a bounce at key resistance level to enter new position for continuation of down-trend move

3. Most traders will wait at key support or resistance level to see if the price closes below or above that level, in order to confirm for the next move

4. Key support & resistance level may create a false break, so, just be careful, don't make mistake by entering your position in the wrong trend direction, because you can easily being misled to the wrong path.

5. Most traders will wait at key support & resistance levels for clues of incoming trend reversal, which normally will occur in several daily sessions, and you could see a stalling move due to waiting for confirmation signal

6. Most traders will wait at key support & resistance levels for a counter-trend-move (temporary move in opposite direction)

7. Most traders will take profit out or exit of losing trade at key support & resistance levels

8. Key support & resistance levels may create "a stalling move" or "ranging side-way" or "consolidation", before continuing upward or downward. You just need to wait for "buy" or "sell" signal before entering new position. As usual, I will be looking for clues in one-hour, 4-hour, daily, weekly charts. To be specific, I'm looking for "candles formation pattern or price action signal" for possibility of trend reversal .... If no sign of reversal, then the current trend will continue ... as simple as that


9. What clues that I'm looking for at key support & resistance levels? In Daily, 4-HOUR and ONE-HOUR charts, I will be looking for signs of REJECTION to upside or to downside at key support & resistance levels, like PIN BAR or LONG TAIL CANDLE. If, no sign of rejection, then the current trend will continue after consolidation ... as simple as that

10. Key support & resistance levels could also be at "psychological numbers", such as: 1.0000, 1.3000, 1.3200

11. Key support & resistance levels could also be at 200 ema or Fibonacci levels: 23.6, 38.2, 50.0, 61.8

12. Key support & resistance levels could also be at the "trend line"

13. Obviously, if you choose to, you could trade successfully by using ONLY these two indicators: Key support & resistance levels & Candle formation patterns or price action

BAD TRADES

BAD TRADES or losing trades are actually unavoidable as long as you are actively trading. At some point, in my early trading, it caused me a lot of headache and very demotivating, and I was really tired of it. One thing I can say, there are three types bad trades:


1. You are in losing trades simply because your trading system or trading indicators just didn't worked this time, but they have been working fine in previous trades. It is called good "bad trades"


2. You are in losing trades simply because you didn't follow your trading system or trading protocol. It is called bad "bad trades", and you need to avoid them in future trading


3. You just don't know of what you're doing, you are an inexperience trader, and lacking knowledge & skills to understand, to interpret, to execute your trades. But, with practice, you will improve gradually.

HOW TO MINIMIZE "UNAVOIDABLE BAD TRADES"

Follow strictly your trading system & trading protocol such as:


1. Before entry, to check for headline news, Dow, S&P 500 futures, USD index, Gold price, Oil price, Yield of US-10 yr bond, and Upcoming economic data release  (http://www.investing.com/)  (http://finance.yahoo.com/) 

2. Wait for the right candle signal or appropriate indicators signaling for new entry. Do not enter new position SPONTANEOUSLY without plan, and do not trade in NEW PAIR that you are not familiar with

3. DO NOT enter new position at key SUPPORT & RESISTANCE levels, because the price may PULLBACK, then, continue the same trend or it will REVERSE the trend. Wait for pullback and the next BUY or SELL signal
4. Enter new position in small unit, at the right time, when the market is "CALM" and settle, and add-up later

5. Set up a reasonable stop loss, allow SUFFICIENT SPACE for your trade to grow

6. When you are in the wrong trend, exit out at the close of daily candle; at PULLBACK; at key support & resistance levels

7. Avoid new entry at beginning or closing of NY, London, Tokyo; 
avoid new entry RIGHT BEFORE or RIGHT AFTER economic data release or speech by US Federal Reserve Chairman, FOMC or Governor of Central Bank of Eurozone, England, Japan, Canada, Australia, New Zealand, or Finance Minister of German & Japan (http://www.forexfactory.com/)


8. Focus on couple pairs that you are comfortable with, and move on to others, once you become expert.
Every pair is unique and has different character & behavior. They are different in many aspects :
8.1) the way they move : abrupt vs gentle     
8.2) the distance they move, and the frequency of making big movement    
8.3) the degree of volatility    
8.4) the distance of pullback, and the frequency of making pullback     
8.5) the relatedness to other pairs' movement     
8.6) the degree of sensitivity to USD & US economy, to China's, Japan's, Eurozone's     
8.7) the degree of sensitivity to the price of raw materials and oil

9. Do not trade heavily in ONE or TWO pairs or related pairs. Diversify your portfolio with non-related pairs
10. Review your trading system & indicators, if the losing trades continue




ECONOMIC DATA


To become a skillful trader you need to understand a broad inter-relation between currency market vs Dow and S&P 500, USD index, US 10-yr bond yield, and gold & oil price. These factors will directly or indirectly affect the currencies' prices movement, and they will provide some clues of which direction they will go next. You can refer to these websites for latest update: (http://finance.yahoo.com/) and (http://www.investing.com/)



(1.0) DOW and S&P 500 . They indicate investors' willingness to take risk, which is called, RISK APPETITE, or investors' unwillingness to take risk, which is called, RISK AVERSION.

In risk appetite situation, we see a spike in Dow & S&P 500, and a decline in demand for US 10-yr treasury bond, and a spike in demand for high interest rates' currencies.  

In risk aversion situation, we see a decline in Dow & S&P 500, and a spike in demand for US 10-yr treasury bond, and low interest rates' currencies. This occurs during market uncertainty. When investors panic, they will sell first and think later.
One of an early sign of investors' unwillingness to take risk, is the declining in yield of US 10-yr treasury bond, because in supply & demand rule, when the demand increases, the yield (pay-out interest for borrowed funds) will decline, and vice versa.  

The bullish or bearish market in New York, will be passed on to Tokyo, and later to London, and if there are no schedule economic data releases, the currency market will follow the lead of stock market. 



(2.0) US NON-FARM PAYROLL. This is the most important economic data releases by US Department of Labor;  at 8.30am eastern time, on EVERY FIRST FRIDAY OF THE MONTH. It reports, the number of jobs added or lost in the economy over the last month, not including jobs relating to the farming industry. An increase in employment indicates that the businesses are hiring, and they are growing. More employment means, more consumer spending on goods and services, and it will further fueling economic growth. Normally, the market will react immediately in big time, right after data releases (http://www.forexfactory.com/) 

(3.0) FOMC statement (Federal Open Market Committee). FOMC is a committee within US Federal Reserve System, which is authorized to make decision on interest rate, the growth of money supply, and the purchase & selling of US Treasury bonds. The committee is scheduled to meet eight times a year, and often follow up with statement releases. As usual, the market will react instantly in a big time after the statement releases.  

(4.0) US Federal Reserve Chairman testimony to congress. US Fed Chair will testify to congress twice yearly. The market will wait & react instantly relating to interest rate, stimulus program, monetary policy changes, state of economic performance 

(5.0) European Central Bank (ECB) monthly press conference. The market will wait & react instantly to President's remarks about interest rate, stimulus program, monetary policy changes, state of economic performance. 

(6.0) GOLD price. Five currencies like AUD, CHF, CAD, NZD, USD, are very much influenced by the movement of gold price. Aud/usd, Nzd/usd, Usd/cad, Usd/chf, Gbp/chf will react, when gold price appreciate or depreciate. AUD is the world's 3rd largest gold producer is strongly correlated to gold price. NZD has nothing to do with gold, but it economy is closely linked to AUD, therefore it will react the same way as aud. CAD is the 5th largest world's gold producer is strongly correlated to gold price. CHF is not a gold producer, but it keeps 25% gold reserve to back up every note issued, therefore, chf is strongly correlated to gold price. No wonder it's the safest currency around. US is the world's 2nd largest gold producer behind South Africa, but it's negatively correlated to gold price. When gold price appreciates, USD will depreciate, and gold is called " anti-dollar", because it's an alternative to USD. Investors buy gold for 2 reasons: (1) to seek shelter during market uncertainties (2) to hedge against inflation. Gold price is determined by supply & demand, and does not affected by stocks or bonds market.

(7.0) USD index. It measures usd against six currencies according to percentage weight: EUR (58.6%), JPY (12.6%), GBP (11.9%), CAD (9.1%), SEK (Swedish krona 4.2%), CHF (3.6%). An increase or decrease in USD index will affect USD related pairs, like EUR/USD, GBP/USD, USD/JPY, USD/CAD, AUD/USD, NZD/USD. A decline in USD index will spike in EURO because it's the heaviest weighted currency being measured against. 

(8.0) US 10-yr Treasury Bond. It shows the real value of USD, and a steady increase in yield, followed by a decline in gold price, may indicate a significant rally of USD. If stock market goes bad, investors always seek  shelter in US-10 yr bond, and you will see it's yield declining due to high demand. It may serve as an alert signal of incoming market uncertainties & risk aversion, followed by declining in AUD, NZD, and rising in JPY, USD, CHF. An increase in demand of US 10-yr treasury bond (during market uncertainties) will cause it yield to decline, and a decrease in demand of this bond (during stable market) will cause it yield to rise. The movement of yield will serve as an indicator of when to enter safe haven currencies vs high interest rates' currencies  

(9.0) OIL PRICE. It has weak correlation with oil producers GBP & CAD, but has major impact on energy-sensitive US economy & USD, since it is world largest oil importer. High oil price adds up to cost of production, thus increases products' prices, thus increases inflation, thus increases interest rate. It has major impact on world economy. Strengthening USD will lower oil price because oil is priced in USD. A decline in oil price could signal a weaker demand in manufacturing products or services, a decline in export, a slow down in economic growth, and an early sign of recession. A rise in oil price may signal a better prospect of world economy or a sign of workable solution to previous economic problems, and an optimistic future of economic outlook. On the other hand, the act of war or terrorism that often disrupt the oil supply route, may increase the oil price as well. In general, the oil price is determined by supply & demand factor, and nobody has absolute control over the price. 


(10.0) About Japan, an increase in YEN will cause a decline in Nikkie stock index, and vice versa. A strong YEN will increase the cost to Japanese exporter, therefore Japanese products will become less competitive in world market. Since Japanese economy is heavily depending on EXPORT, a strong YEN will hurt it economy, and we will expect an intervention from BOJ & Ministry of Finance from time to time to weaken the Yen. Another, Japan is the proxy of Asia including Australia & New Zealand, therefore, any changes in Yen and Japanese economy will likely to affect those countries' currencies, including AUD, and NZD. As an ongoing issue, Japanese economy inherited a huge public debt, and still suffering a continuous & stubborn DEFLATION as a result of it.   


(11.0) China, the world 2nd largest economy, the world largest exporter, the world 2nd largest importer, is set to become the world largest economy in 2030 according World Bank economist. China GDP in 2012 was 7.8%, and its growth rates was averaging 10% over the past 30 years. With its current standing in world economy, China's slow growth in economic activities will affect its major trading partners across the globe, like US, Germany, Japan, South Korea and Australia, thus affect the world economy. The release of China economic data may trigger a spike or a decline in USD, EUR, JPY, AUD. Also, China is the largest creditor nation that owns approximately 20.8% of US Treasury bond, totaling about US $1.32 trillion.