tips & strategies

USEFUL TIPS

1. In plain simple term, trading forex is about :
2. "PREDICTING PRICE MOVEMENT & MANAGING RISK"
3. In Philosophical term, trading forex is: 
4. "THE ARTS OF READING THE MIND OF MAJORITY TRADERS", because, they will dictate & initiate the price movement


5. The single most VITAL job as a trader is to accurately  IDENTIFY:  
6.  WHERE THE PRICE IS GOING RIGHT NOW?   
7.  WHERE IT WILL END? 
8.  WHEN IT WILL REVERSE?


9.  In order to make an ACCURATE PREDICTION, you must know: 
10.  What factors that move the price?  
11.  What tools to use to predict price movement?


12. Factors that move the price: 
13. Economic data releases  
14. Central bank activities & policies  
15. Government policies 
16. Politic  
17. War & natural disaster
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19. The word PREDICTION means, you can't guarantee 100% winner, you can go wrong & lose everything. Therefore, it is very important to enforce a measure to avoid losing badly.


20. RISK MANAGEMENT is to ensure that you "WON'T LOSE" all the PROFIT you have made, while preserving your CAPITAL. I bet, you won't listen to me, until you experience it yourself.


21. Rules of Risk Management:  
22. RULE 1: Take PROFIT regularly at key support & resistance levels. Exit out once you have made a GOOD PROFIT 
23. RULE 2: Enter the trade, ONLY when you have HIGH WINNING PROBABILITY price set-up, otherwise, STAY IN SIDELINE   
24. RULE 3: Stop the BLEEDING, Get rid of BAD TRADE ASAP at pullback, after Daily candle closes
25. RULE 4: Set a REASONABLE STOP LOSS that allow the trend to develop sufficiently 
26. RULE 5: Stay away from US NON-FARM-PAYROLL release, If you want a piece of action, enter at pullback 
27. RULE 6: Don't enter NEW positions at key support & resistance levels; wait for PULLBACK and BUY & SELL signal
28. RULE 7: Follow other rules that applied in risk management
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30. Single most important indicator is CANDLES FORMATION PATTERNS or PRICE ACTION (this is the most recent & up-to-date indicator)


31. Second most important indicator is KEY SUPPORT & RESISTANCE levels in DAILY chart, and Fibonacci retracement & expansion


32. Third most important indicator is TREND LINE & CHANNEL LINES


33. Forth most important indicator is MOVING AVERAGES (widely watched EMA :  8, 21, 50, 100, 150, 200, 365)


34. Always start your entry with ONE lot, no matter how confidence are you. Add-up later when you start making profit. Do THOROUGH ANALYSIS before entry.


35. Analyze RELATED PAIRS before entry, it could avoid the MISTAKE in reading candles signal. For example, to enter "LONG" AUD/JPY, you should analyze AUD/USD & USD/JPY. You want to see the AUD is strengthening (Aud/usd is rising) or/and JPY is weakening (usd/jpy is rising) in order to confirm the VALIDITY of your new entry. By analyzing related pairs, It will ALERT you about incoming trend REVERSAL.


36. WAITING for a right moment to ENTER is the name of the game. You just need to be PATIENCE in order to win.


37. ENTRY is very important, It's the FIRST STEP of EXIT. Good entry will EASE your exit. The pro will smell entry signal miles away from the actual entry.


38. Enter new position when the price CALM  DOWN or SETTLE DOWN. Many traders will enter at a bounce of key support & resistance levels.


39. Never enter trade at :
40. Beginning or ending of Tokyo, London, NY sessions
41. During economic data releases
42. Major support & resistance levels
43. Fibonacci level
44. Psychological no 1.0000, 1.2000, 1.2300, etc
45. Trend line and at top/bottom of channel lines
46. 200 ma, (price normally will react to it)
47. Wait for possible break-out or retracement & correction
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49. Before entering trade, always check for  :
50. Up-coming economic data releases
51. News headline
52. Market sentiment (what issues that matter traders right now)
53. Risk appetite or risk aversion (Dow and S&P 500 are up or down)
54. How's Asia, Europe, NY stock market doing? (red or green)
55. Gold & oil prices (up or down)
56. US 10-year treasury bond's yield (up or down)
57. USD index (up or down)
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59. The price always test support & resistance level TWICE. If you miss the bus, just wait for another bus coming in


60. Exit at the RIGHT TIME to TAKE PROFIT can be a determinant factor between a winner & a loser


61. If there's no schedule data release, forex mkt will follow the lead of stock mkt. Bullish stocks mkt in Asia will be passed on to Europe then NY, and vice versa


62. Don't overly confidence. Mkt can do impossible, unthinkable, unexpected & it could surprise you, I have seen it many times. So, manage your risk properly. Leave some  margin to re-enter at the top or bottom, in case you're trapped by unthinkable move.


63. Diversify your positions, don't bet too much in one single pair, you'll get burned


64. DAILY chart is your MAIN GUIDE to enter & exit positions, and I will enter my trade after DAILY candle closes


65. WEEKLY chart is your guide to FORECAST for the next (2-8 weeks). I will be cautious to take the trade if weekly chart doesn't point to the same direction


66. 4-HOUR chart is used to micro-manage your daily positions


67. ONE-HOUR chart is used to zoom in for any sign of early & initial price movement for TREND REVERSAL or TREND CONTINUATION 


68. Many good traders lost simply because they don't do good job in managing risk. Making money in forex is easy, but losing money is much more quicker.


69. Nobody really knows of what's going to happen in the market, even the experts. In many occasions, I notice, the experts were wrong. Just stick to your candle formation pattern & price action, & aware of incoming related data.


70. Always pay attention when these guys speak: US Federal Reserve Chairman & FOMC, Governors of cental banks of EURO, England, Japan, Swiss, Canada, Aud, NZ, Finance Minister of German & Japan. Price will spike immediately in big time as soon as they made remarks


71. Euro will normally follow the stocks market trend but not all the times
72. When the Traders Panic, They will sell first and think later


73. In market uncertainties, investors will seek shelter in gold, US-10 yr bond, USD, yen, swiss franc, and sell euro, aud, nzd which are considered riskier


74. The 200ma is widely watched by traders. If price is above 200ma, it's an up-trend & if below 200ma, it's down-trend


75. Pay attention to German economic report like GDP, growth, ZEW, CPI, PMI, and listen to what their Chancellor & finance minister have to say. Euro will react because German is the ANCHOR of EURO, and they are the one who bail out other problematic members


76. Gbp/jpy is a wild ride, you need a large margin to absorb the swing


77. When the price touches the lowest point, for example, the lowest price in 10 years; it's very possible it will go down further by 300-600 pips, and stay right there for 1-3 months before rebound back upward. Similarly, when price touches the highest point.


78. Don't enter trade simply because you want to be in action. Entering new trade is solely based on opportunity, after watching them for days or weeks. It's wise to stay on sideline rather than risking your capital.


79. Focus on couple pairs & currencies that you are comfortable with, and study them thoroughly. I am comfortable with usd, euro, yen, aud, nzd, gbp, chf, cad and pretty much entering my positions based on those currencies, because I know them very well. I know their behavior & character, just like knowing my friend for over 20 yrs


80. Trading ROBOTs don't seem to work and I tested several of them. You should stay away from them. Similarly about Trading SIGNAL, many signals are poor quality, you should do your homework before signing -up for one


81. Many inexperience traders simply don't know how read the signal in single candle & group of candles formation.This skills is the KEY to win forex, and it took me 16 months of continuous TRADING, PRACTICING, TESTING in LIVE MICRO ACCOUNT.


82. To become a PRO, you will need :
83. (1-2) YEARS TRADING EXPERIENCE IN LIVE MICRO ACCOUNT. (This is accounted for 60%)
84. Continuously for one year, following the pro's daily commentary of any one major pair. (This is accounted for 25%)
85. Continuing Education like reading BOOKS, articles, & attending seminars or live trading room. (This is accounted for 15%)
86. (1-2) yr trading experience in STANDARD LOT in DEMO account, will enable you to feel the amount of money you are dealing with in actual trading
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88. Live Micro Account will prepare your TRADING SKILLS & EMOTION:
89. Ability to learn the CHARACTER & BEHAVIOR of each currency pair
90. Ability TO READ the PRICE MOVEMENT with deep understanding
91. Ability TO SEE THE REACTION of each particular currency pair in economic data releases
92. SKILLFUL in using all INDICATORS and understand their appropriateness for a particular market situation 
93. Experience the EXCITEMENT of winning, FRUSTRATION & DISSAPOINTMENT of losing, because you will be going through this feeling millions of times
94. You must remain RATIONAL & emotionally in control if you were to win
95. This is THE MOST IMPORTANT LEARNING PROCESS that will help you become a skillful trader
96. Unfortunately, there is NO SHORT CUT, and if anybody tells you otherwise, obviously, they are not telling the truth
97. At some point in an early stage, you may feel that it is impossible to win in forex, but as you are gaining more experience, thing will change
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99. At least, One year following the pro's daily commentary of any one major pair. Things you will learn :
100. To identify key support & resistance levels    
101. To understand the price movement & how does it reacts to key support & resistance levels
102. To identify the trend direction
103. Most important, you will be in the SAME PAGE with the Pros as how they analyse & interpret the market, and finally, BOARDING THE SAME TRAIN
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105. Classification of trading methods :
106. Using price Action
107. Using technical indicators
108. Using fundamental data
109. Combination of ALL the above methods
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111. Most CORRECTIONS or pullbacks occur at FIBONACCI levels: 38.2, 50.0, 61.8
112. MACD offers an ACCURATE signal for TRENDING market but the signal is Lagging (behind 2-3 candles)
113. If you don't have trade opportunity, don't force yourself to find one. It's better of to stay in sideline. Maybe the market is waiting for something big to happen.
114. Bollinger Band at (2 & 3) standard deviation can provide a Alert signal of over-bought & oversold position, and incoming trend reversal