Forex Trading Diary Mon 18th 2010

Lets hope this week is far better than last week! I ended up 40 pips down...Not good, having said that I think it was one of the few weeks, that I have not really been focused. The other problem is the continued channeling of cable.

Getting pips is proving difficult due to lack of volatility in the morning and small range breaks. Last week I noticed that more breakouts occurred between  2 - 4pm around when the yanks started trading.

I also followed a few forums and looked at some expert analysis, and none of them are very clear on direction. The question is are we out of recession? Has the dollar recovery began and faded away? I am not sure anybody is any wiser than you or me?!

Because I am focusing less on the other currency, I am a bit out of touch with the slower moving pairs. In addition, I have two new strategy's on my plate which I am testing at the moment. At the end of the week I celebrated my day of birth, I had an interesting weekend!

Onto this morning, Happy Martin Luther King Day if you are from the US and reading this blog. Because of this the Americans are on holiday today. For all my complaining, cable gave signs for a slow long trend this morning.

No yanks later to stir the market did not  worry me too much on volatility. The Americans are normally not awake anyway at this time of the morning. My only concern was a small possibility that no over night US news could keep volatility low.

It proved correct and it was a slow march up this morning. I entered the trade after it broke the pivot, I should have been in earlier but wanted more certainty. 16332 and exit at resistance 50 level, It so happens I got out way too early, had I used a trailing stop loss I could have easily taken 60 - 80 pips .

After last weeks performance money in the bank is whats required. I took the 20 pips and very happy with them too! Cant leave without touching on the horrific earthquake in Haiti, they have many peoples thoughts and well being with them at this time.

To Your Trading Success!

An Introduction to Investing, What do you need to start investing?

1) Decide on what type of investor you want to be
Active investor or passive investor (There are many types of investors - each with a different style and time frame. Investors can be long-term or short term or even active traders. On-line traders are more common now.)

2) Evaluate your capital
How much money do you have to invest? What are your net earnings? What is your net worth? It is important to know how much you have before deciding how much of it you want to invest. This will in turn affect what type of investor you become or how much risk you take.

3) Set up a Broker account
There are many types of brokers: full service, deep discount, execution only, discretionary dealers, spread betting service providers etc. with different services and prices. On-line brokers are more cost-efficient and common.

4) IT Facilities
A fast computer with high-speed internet broadband connection, preferably wifi compatible.

5) Market Analysis Tools
There is a wide range of tools available for investors depending on the type of investors they are. Long-term investors may rely more on fundamental analysis and use annual reports, economic data and news information while traders may rely more on charting packages. For shares look at free US charting web sites like http://www.advfn.com/ or http://www.bigcharts.com/ and for UK look at http://www.ft.com/ and also http://www.advfn.co.uk/ . For currency trading free packages include Metatrader, FXpro and some Brokers have good charting software incorporated with real-time live data like www.fxcm.com.

6) Set up book marks for useful websites

a) http://www.iii.co.uk/ (UK market general information)
b) http://www.ft.com/ (UK general + charting)
c) http://www.selftrade.co.uk/ (Uk fundamentals + charting)
d) http://www.digitallook.com/ (UK fundamentals + Charting)
e) http://www.bankofengland.co.uk/ (UK economic data)
f) http://www.bankrate/ (US economic data)
g) http://www.moneyam.com/ (general + charting)
h) http://www.advfn.co.uk/ (Live UK charts)
i) http://www.smartmoney.com/ (US fundamentals + Charting)
j) http://www.bigcharts.com/ (US Charting)

7) Decide your strategy and time frame
Depending on the type of trader you want to be. Do you want to be a Scalper, Day-trader, a Swing Trader (from 2/3 days to 2/3 weeks), Position trader, Momentum trader or a long-term investor, and how much time are you willing to spend in your trading every day/week.

8) Practice virtual trading
Start with paper trading or virtual trading in order to build a routine and develop a style, then progress to live trading with small capital to get a feel for the market. Keep a record of how long as it takes, to make sure that when you put real money into the floor, you already have a winning strategy. Look at it is as a business; you have to invest your time to make money.