Questions And Answers For June 2010 (Part II)

Below are the questions that the subscribers to this newsletter have asked and I hope that all of us will benefit from it. Keep it coming!

• Question #1: In the news…China will be revalueing the Juan. How do you think this will affect the other currencies. I am mainly interested in the Greenback, the Aussie and the Euro.

Frankly speaking, I am unable to advice you on this issue as I am not into fundamental. I am a 100% technical trader, in case anyone of you reading this post has something to add to this question, do feel free to comment below.

• Question #2: What is the best method of trading?

There is no such thing as the best method of trading. All strategies that is available have its good and bad depending on the traders preference and trading style. However if you were to ask me to suggest one strategy that is easier to trade with and reliable, I will definitely recommend Breakout Strategy.

• Question #3: I need some help setting up the robot as I can not tell if they are active or now. I cannot tell if the toggle switch is on or off.

I am personally not into robot as I have not use any before. Maybe someone here can be of help to you.

• Question #4: I want to do the forex trading for living. How should I proceed to achieve my goal?

This should be the question that most of you are interested in. First of all, let me tell you that trading forex for a living is not a easy task and definitely not like what most advertisement are saying.

Below are the steps you should take to achieve your goal:

1) Spend sometime to read up forex books and attend at least one good forex course. Having a course can greatly shorten your learning curve. This whole learning process shall take about 1 to 2 months.

2) Practice what you have learned at the course on a demo account. At this point, you should check to see if the strategies that you are taught in the course are suitable for you or not. As you are practicing, you should fine tune the entry and exit to better suit your trading style. At a start, you will face more losses than win and this is where you can learn from your mistake and adjust your trading plan. This whole process takes about 4 to 6 months.

3) As long as you can produce profit on your demo account for more than 2 months in a row, you are ready to go live. You may start with a micro account that trade 1 pip for $0.10 to have a feel of real trading. At a start, you will feel that there is a difference between trading demo and live as your hard earn money is at stake. This is where you should execute your discipline and trade according to your plan.

4) Once you are able to generate profit for consecutive 3 months on a micro account, you can now move on to standard account where 1 pip = $10

This is how I got started and I hope that it can be of help to you.

• Question #5: I do not know, the best time to open position (buy or sell). I more often loss than profit. Can you explain to me?

The problem you had in the above question tells me that you have difficulties in finding entry position. The problem I had when I first started trading a few years back is the same as you, when I go Long, the market moves down and when I go Short, the market moves up. It gives me a feeling that the market is going against me.

Here could be the reason why you are always entering wrong trade:

1) New trader are always very eager to enter a trade. You can find them entering numerous trades within a day and the worst thing is they enter trades based on emotion and not conditions.

In fact, professional traders something can go without a trade for days as they are always waiting for the best opportunity to enter a trading position. What I mean the best opportunity is the time when there is a confluence of events in his trading conditions. With a properly plan trade, you will usually have an edge against the market and this is what really makes you money.

2) You fail to understand the market conditions of the currency pair you are trading. When I first started trading, I do not care whether the market is trending or not and I will continuously enter reversal trade. This causes my stop loss to be triggered constantly and I thought that the market is going against me.

In fact, if I were to do a proper analysis on the market and know that it is currently in a strong up trend. I will not be trying to enter a SHORT position and instead I should be looking for opportunity to ride the trend.

If you have been reading my weekly forex signal post, you will find that I always do a trend analysis to see if the market is trending or ranging. If it is trending strongly, I will not be looking for reversal trade. Therefore it is very important for you to look for the market conditions before trading.

In reality, the problem does not lie in the market but in ourselve. There is no best time to enter a possible as trading is a game of probability. You need to look for a series of conditions that gives you a higher probability of success before you enter a trade.

All the best to your trading

Other Related Posts:

1. Questions And Answers For June 2010 (Part I)
2. What is the Best Forex Entry Signal?
3. Biggest Forex Trading Mistake To Avoid
4. Best Forex Trading Strategy Recommendation For Beginner
5. Is Trading Forex For a Living Possible