Simple Forex System Trading

I have remained on the sideline for a long time, mostly because the spread has been wider than normal.  During the past month or so, the spread of the EUR/JPY pair stayed between 6 to 10 pips on Oanda.  So I thought I’d just keep myself out of the market and see how things unfold before me.

Last night was the first time I re-entered the market after a long period of idle time with two orders, stop buy at 123.43 and stop sell at 122.30.  The stop buy actually produced a profit.  The 30-pip profit target was reached.  However, the sell order produced a 30-pip loss.  So, we are break-even today.

This is not a breakout system but looks fairly easy to set up.  It does not require you to glue to the screen.

Here is a system I have been testing since the beginning of the month. I am 3000+ pips and still running strong. I like this system because you only need to trade once a day (I trade w/IBFX so @ 00:00GMT). I trade most of the pairs (all majors & crosses) offered through them.  Here are the details.

Originally appeared on babypips.com

All it takes is some crook in a company to make unauthorized trades and bring the company down.

Oct. 21 (Bloomberg) — Citic Pacific Ltd.tumbled the most in 18 years in Hong Kong trading after predicting HK$15.5 billion ($2 billion) in losses from unauthorized currency bets…  The losses are based on an exchange rate of 70 cents to the Australian dollar, $1.35 to the euro and 6.84 yuan to the dollar, it said. The outstanding Australian contracts have a weighted average strike price of 87 U.S. cents to the Australian dollar, it said.

On bloomberg.com

I came across this discussion on the Oanda board today about someone’s margin call experience.  Somewhere in the thread, someone mentioned that always use a stop loss and never use the margin call as the stop loss.  I couldn’t agree more.  Don’t let each trade lose more than 2% or 3% of your total investment capital.  Strict money management is king to the successful Forex trading.

This is not a set and forget method, but it is a well documented breakout system using candlestick patterns as well as support and resistance levels.  You can find all the details about this strategy on forex4noobs.com

I just wrote a post about my search for a second Forex firm besides Oanda not long ago.  One of the critical criteria I was looking at was the firm’s capital.  Thanks to the CFTC website which made the research a lot easier.  Coincidentally, I came across a post on the Oanda forum talking about the same topic - the Forex brokers’ net capital rankings.  It also mentioned that the NFA will raise the capital requirement to 10 million dollars in October, which I was not previously aware.  Many thanks to ForexFigure, a senior member on Oanda, for the excellent post.

Here we go again - another loss of 30 pips.  This month is almost a repeat of last February and it could be worse.

The stop buy of 156.19 was filled at 7:16 AM GMT and in ten minutes or so, we were stopped out.

We somehow can’t stop the stream of losses.  Today is yet another blow to us.  The stop sell of 155.39 was filled at 9:13 GMT.  The price went as low as 155.21 before it turned north.  It’s another 30-pip loss for us.  We need to get out of this twilight zone fast.