American economy worst in the world?? I think not.

Markets are going insane.. or are they? We have seen the US dollar rally against the Euro almost limitlessly as it has dropped 4000 points over the last few months and continues to break new highs. The equities market has insanely reversed and left hedge funds constantly disappointed. But is it really that crazy? Is it really that amazing that the US Dollar continues to rally? Why is it rallying?

Well it doesn't surprise me. You see, over the last couple of years the United has been heading towards a recession. During 2007 we watch the Euro rally extensively against the dollar. We watched the British pound dominate the market over the last few years. Why? Yes, interest rates have a lot to do with it, but realize that at this moment the US Economy has one of the lowest interest rates ever and we still may need more cuts.

We are breaking strong technical levels, but fundamentally the time was due. British and Euro economy have been extremely overbought over the last couple years and all it really took was recognition for people to wake up and smell the coffee. These moves are absolutely fundamental moves helping to push technical levels.

Also.. It is not just the United States that is in the crapper right now, it is the entire world. Did we know that rest of the world was doing so badly? No! We had no idea. Japan just recently admitted it is headed into a recession... People are always talkeing so negatively about the United States; however, it is because any time the United States has the smallest problem, we have people jumping all over it and trying to fix it. USA is still the best in the world, believe it or not. Yes we have a Federal Defecit and are constantly borrowing money from Japan, but our role in the world is so important that as soon as we start to show red, the whole world shows red also. We are the center piece of globalization and everything fails along with us.

Another huge reason the US Dollar is rallying is because the FDIC's move to insure up to 250k dollars. Why is this important? Well, earlier I said that the US is still the strongest in the world. Meaning, that even our banks have a higher chance of holding up than other country's banks. So, people from other country's are moving money into the US in order to get the 250k FDIC insurance. This along with the low volume in the Forex market combined is what pushing the dollar so far! You would be surprised, many people that generally are a miniscule part of any major move in the Forex market are now big players. We have 1/5th the volume we normally do at this time in the market.


Let's keep it real people. Just because we as Americans are quick to point out our imperfections, doesn't necessarily mean the rest of the world is perfect.

I traded London again last night. Another great night. Japanese Yen and US Dollar continue to dominate. Let's hope we continue to see this volatility till Summer comes around.

New York Money is too wild. October 24th

The problem with New York money is that it has no idea what it wants to do with its money! We have a market full of scalpers and nothing ever moves in the right direction. One second its equities, next second it gold, then its the Euro, then Oil.


The Asian and London boys rock! I am never trading New York again. I got up to +1200 last night trading Asian and European session and New York took 400 of them back from me.

I have to say, I have never in my trading career experienced the volatility in the Foreign Exchange market that we encountered over the last 15 hours minus New York consolidation. Yes, I traded 15 hours and it was damned worth it. Just trading 100k lots at 800 points would have pulled in 8k last night..

Unfortunately, I didn't have the courage to use so much leverage but I can tell you that it was like a dream scaling into positions and adding to them at the exact right fib retrace and just watching it ACCUMULATE!

Gold Dollar Inverse Correlation

Alright folks. Took a trade tonight that gave me about 50 points. I thought I would post this trade to show the strong correlation between EUR/USD and gold.

My gold chart is the first one. As soon as I saw gold selling off, I knew that the dollar was going to rally as far as the sell off of gold continued. Literally 2 min after gold started dropping I was in the short eur.usd trade. Meaning I was using euros to buy dollars. I was in it from the beginning of the move. I exited when I saw gold making a higher low in the fib area and soon after the eur.usd pair did the same. Exit time.

Things are looking good. Markets are about 5x as volatile as they were 6 months ago. It has really been great. This crazy market is a great practice and signals are all over the place.


1st chart gold
2nd chart eur.usd

Friday. October 17th

Today was interesting. Started my morning off listening to s&p 500 Chicago pit. I realized something today. The overnight futures market turned red this morning prior to NY open. We've been in the red as of late, so, its not a surprise to see it red. However, shortly after open, it flies up!!! Listening to the pit I am hearing orders from Big players like JP and their orders right..
When you have huge players with tons of money (hedge funds), who are they going to sell their positions too.. They need to create a market. So, if I was a big hedge fund manager and I wanted to setup a frenzy that I can buy into or sell into.. What would I do?

I would short futures prior to NY Open and when the speculators see all this red during the open it creates a shorting frenzy! What happens.. Well, 30 min later the same Hedge fund that was shorting futures prior to open, runs in and starts longing and wiping all the short players off the table! These are the smart money players and you DO NOT want to play against them. First 30 of the day, even up to the first hour is too unpredictable..

Anyhow, we've seen equities holding up today.. Seen T notes drop as they should.. Meaning today was a good day for yen pairs to gain some speed up. (Yen Pairs means yen weakness) and I will tell you! We saw it for sure. I constantly longed gbp/jpy and usd/jpy today. I reloaded on pullbacks and sold on 5 8 crossovers. Really, great day!

Heres a picture of my current trade. Sorry, its hard making charts for every trade I make.
This one is a eur/usd short inside of a symmetrical triangle with downside bias. I am currently up 50 points or so..

Account Update.

Things are looking good so far. My account has grown about 5% since October 1st. I have seen people make 100% returns in a month. This would be amazing and why I prefer Forex to equities. You don't have to have a huge account to make nice returns because of the leverage you receive. I definitely recommend anyone who has had good success in equities market to give Forex a try.

Anyhow, I am sorry I haven't posted for a few days. This last week has been rough on me with school and trading. As we all know, we have a global economic disaster at hand which is creating fear among investors and speculators. It doesn't affect me and my market in any way. I am still able to profit-but it has been much more difficult. I had a couple days where I speculated like an investor instead of being the day-trader that I am and it cost me a bit. The day that the SEC removed the shorting ban, I was expecting a strong day for US Equities market. I decided to short US Dollar expecting that a strong stock market would decrease it's value like it should. Well, I placed my trade an hour before NYSE opened and place a 100 point stop. With a 100 point stop, my profit expectation is 300+ points. Somehow, I talked myself into believing this could definitely happen. My position size was only 35% of my full lot size. Unfortunately, that same day we saw the stock market drop like crazy! Good thing I had a stop right? Well, if I had placed my trade and actually paid attention to what was going on in the stock market, I could have stopped my position early; however, I placed my trade, placed my stop, and left for school.

That cost my account a bit more than I wanted it to. On the plus side, I gained around 150 points on a gbp/usd short at full size position.

It's been a little difficult staying focused on both school and economics of the world- so, I apologize to those of you who actually visit my site on a regular basis and don't see any updates.

I will try harder to post my trades and such as we move forward throughout the school term.

exit trade

+89 points. Hit the major support area. I re-evaluated my strategy and decided that if it does break the monthly support, I will re-enter. Yes, this is my biggest problem as a trader. I plan for long term trades, but, as you can see, my trades are highly successful for big gains in a short amount of time.

US DOLLAR/JAPANESE YEN

So, I decided to buy a bunch of Japanese Yen using the US Dollar. For those of you who aren't into Forex market and maybe another instrument, this means that I am looking for the price on this chart to drop.

Here is a monthly and 5 minute chart.

monthly is in a descending triangle formation.
5 min has broken out of a descending triangle formation.
I am currently +45 on the trade.

Fed chair Bernanke stated possible fed cuts in future. Yen is strong right now.
This is the third time it is testing monthly support. I really do believe its gonna go under and we
are going to see some major JPY rallying.

I don't have a target for this. I will risk a good 30 points and just sit on this for a while hopefully.
If all goes to planned and usually it doesn't because I get scared, I should walk out of this one with a nice profit.

Nothing

Nothing goin on last couple of days. I'll update when I see something.

GAPPED UP

Ah! Forex rarely gaps! Today it gapped up hard.. Unfortunately, I got filled on my order and stopped out at the same time...

-27 points..

Never going to setup a position in market close again. Lesson learned.

Sunday October 5th

At 2:00 pm today the foreign exchange market opens up. If no gap is present, I will be shorting USD/CHF again. I am loving this pair. The technicals on it are playing out well.

Reasons for this short.

1.) 15 min elliot 5th wave is coming.
2.) Bulls are letting go of this pair, the resistance top is tough to break.
3.) Overbought on 15 min.
4.) Overbought on daily
5.) Weekly pivot is at 1.1174 (making this my target)

I am putting a stop of 20 points on it. My target is 95 points.
On Friday I told myself I am only choosing setups that are low risk and this is
nice. The 5 min chart is perfect on it also.


Here is what this looks like on a 15 min chart.

GOAL!!!!!!!!!!!!!!!

My target of 112 points was hit! My third day into my trading year (my trading yr starts with my school yr) and I had my first fully successful trade. The reason I say fully successful is because I risked 35 points for 112 which is around 1/3 risk reward and it hit my limit target point exactly on the dot and pulled itself back.

I really don't need to trade at all for the rest of the day.. Honestly, with the last couple of days I've had, I don't NEED to for the next month.. So, I am going to preserve my capital and wait for the same type of trades I have had success with. That means a double top or triple top pattern off of heavy support or resistance in long term trending markets. I was lucky my trading year started when the dollar has been rallying to new highs.

Friday October 3rd,

+112 points.

5 min later

So literaaly, 5 min after my last post it has already dropped 50 points. Im excited yes, but I am trying to control it and am even thinking about taking my dogs for a walk just to get my mind off of it. Its hard though! As soon as you're in good profits, any pullback you see makes your hear drop and you want to take the profit.

But you have to stay professional regardless of what your inner child tells you.

Overnight pull back usd/chf

Yesterday usd/chf drop 112 points and overnight it has pulled back up to resistance. I shorted the bounce. This is the third time it is testing that level. It has become a significant resistance level.

I have a 35 point stop. And looking for the same type of drop that happened yesterday at least.

stopped out

My original idea of usd/chf held true. I got stopped out of my position. This helps reinforce my discipline to stick to your guns. I spoke with people who continued to say "stay dollar long" which I KNEW was wrong, but they got to me and I changed my position.

Total profit for October 2nd.

+4 Points.

Took profit

Noticed a bottom forming on 5 min chart and took a 20 profit. I have switched my position
to long for 40 points, my stop is 12 points. My pivot points are redrawn for new day and it is right above the pivot line. For me that means we need to be long here.

Nervous.

So, I am +9 points on my position. 5pm starts the new forex day. At which point I will re-analyze my pivot points. What's got me nervous is that everyone I have talked is long dollar still. What I am trying to do is get in early before the reversal happens. I think I picked a good spot and generally the PUBLIC is wrong. Lets see what Tokyo does to the overbought dollar.

usd/chf short cont..

1 hour chart showing a rising wedge pattern accompanied by oscillation divergence.

USD/CHF Short

I have decided to take a short position on USD/CHF for a number of reasons.
1.) It looks like it has topped out and is into forming a dbl top pattern.
2.) Hourly chart shows stochastic divergence on a large scale.
3.) Probably the most important. Weekly chart shows the top exactly at the Fibonnaci retracement level of 50%.

This is huge. the exact moment in time we are in is exactly the 50% retracement level on a weekly scale level.

I have to use a very wide stop which is expensive if this doesn't play out right. The stop is right around 60 points. I am looking for 300 points off of this play within the next week.

This is a 1/5 risk/reward and I think it is a good play. I'll continue to think so till I get stopped out of my position. Right now it is in negative territory, but I don't feel too worried yet.



The three charts attached are a 5min chart, daily chart, and finally the brown chart is the weekly chart.

index vs world The US Dollar top. Possible shorting in the near future.

Here is the USD Index vs. USD-CHF and the inverse reverse of USD-CHF is the EUR-USD.
As you can see, they all look almost identical. The USD is almost at a top. The USD/CHF looks to be
at a dbl top right now, but, the fact the EUR-USD failed to create a dbl bottom and the fact that the USD Index hasn't reached it's top is making me feel a little worried about going against the trend right now. Keep an eye on the index and when it makes its double top, it is time to short the dollar for a looong while (that is, if it tops out there.) Anything is possible, but I would risk a good 20-30 points for 200-300 points. Good Risk/Reward there.

10/2/08

So, I was so excited about the success of my first day back that I ended up celebrating all night and overslept. Lesson learned. Probably won't be trading anything today unless I see something I really like.

1st trade cont..

Here is a 5 min of what this trade looks like. The prior chart was a 4hr.

As you can see, it played perfectly. Could not have asked for more.

Usually at this point being so far into profits, I would close my position.
However, my new money management strategy requires me to stay in this
trade till it reaches my target.

Going to be an interesting day for gold and commodities. The dollar is reaching its
final push and I am riding it till it gets to that critical point!

1ST TRADE OF OCTOBER!

Here is the chart.

I have a 40 pip stop. It is a little loose but I am looking for 200 points profit.
At $10 a point thats 2k in bookings. I am already in the profit 50 points.

My decision was to short this for 3 reasons.

1.) Trend is down on daily.
2.)Momentum is strong.
3.)Tested Pivot point level.

My target is the pivot point support 1 ; however, if I see any indication of reversal I will start selling off my position.

The first live trade in a while, lets stay positive even if it doesn't turn out as expected.

September 30th, 2008

Finally back after my summer vacation. One of the most amazing summers of my life. I feel refreshed and ready to continue where I left off back in May.

The magic word of our next month is "Positive." Positive energy, Positive numbers, Positive attitude will all play a role in the success of my account. Negative energy needs to be as far away from you as possible when you are setting yourself up to make big decisions in order to protect yourself from any type of slippage and unassociated risk's. I can't tell you how many times I have run into someone who asked me what I did for a living. When I told them that I traded Forex, their ignorance of the financial markets lead them to believe it was some type of business pyramid infomercial scam. "Oh, did you buy the infomercial program?." I never really take the time to explain to them that it is NOT a program you buy for your computer and click one button and make money. I have NO program for my computer nor did I see the infomercial they are talking about. Only charts and a schedule of Economic data that needs to be interpreted. Some people also believe it is fun. Well, it is not. It is quite boring actually. It would be fun if day traders were just picking directions and gambling, which 90% of people do and get washed out of the markets completely FOREVER. Those of us who stick around a little longer, we are bored out of our minds.

Anyhow, the misconception of what exactly our job titles entail is sometimes negative because it is so new. The creation of internet and trading the financial markets from the comfort of anywhere is such a new phenomenon that nobody has had any exposure to it quite yet. The days of the broker are coming to an end. We can now directly access online brokers with the click of a button.

Now, this next moth will deal with statistical variances. I have made some changes to my strategy that I feel will increase my overall edge.

1.) Make sure you maintain a small initial position size upon entry for each new trade.

2.) Risk/Reward ratio will be increased to 1/5. This would be optimal, but 1/3 would be profitable also. In order to achieve huge gains like these, I will need to look for tops and bottoms and be correct around 20% of the time. I think this is very doable.

3.) Look for capitulation in upward trending markets. I want to find bottoms in upward
trending markets and tops in downward trending markets.

4.) I need to pay more attention to my 5 minute chart for entries.

5.) "Positive"


We all remember the first days we stumbled upon paper trading stock trading programs online and said "what the hell are all these numbers?" Making your first paper trade and seeing the size of the account go up and down not know how any of it worked. For me, it was the summer of 05'. Probably, the craziest summer of my life though maybe not the funnest. I remember having all the windows open in my apartment because it was so damned hot. Me and some buddies would just chill back, throw down a bottle of Jack D on ice rocks or some hard vodka and enjoy our youth. This one night was different though.. I was researching the internet for different franchise's and investment idea's when I stumbled up a website for FXCM. "Download our program with game account, blah, blah." So, I did. The next week, me and my buddies would sit their staring at the computer screen while listening to the little ticker bubble sounds tick.. trying to figure out how in the hell were the prices changing and why??? Unfortunately, my buddy's got washed out of the business very soon after. However, my curiousness continued to drive me into libraries and bookstores trying to make sense of it all...

I am now in my 4th year. Because of the experiences of my 05' summer.

The best summer.. I miss summertime already.

I'll be posting my trades starting Wednesday. October, here I come!

Current situation

Haven't had a lot of time the past couple weeks. In the process of moving. Took a larger loss on a long term play, got stopped out and too much going on economically right now for me to pay attention to. I did have a good run for a couple of weeks but made the mistake of increase my position sizes after some good profits.

Interesting enough, I am in the process of reading a book right now by Bo Yoder. Optimizing your trading Edge. He talk about profits and losses as a cycle. When markets are giving money, they always try and take back. It is a traders job to test the waters appropriately to determine whether or not it is one or the other. In my situation, I had a good couple of weeks and took profits. It would have been responsible of me to slow down and even decrease my position size after my run of profits, just to test the waters of the market. I realize that I may be right about the the longer term outlook of the market, but short term can stop you out of a position constantly even if YOU ARE RIGHT. I've only been trading a couple of years and mostly on paper. The book talks about traders who test a strategy on paper and it works out great, only to jump into the live market and get destroyed. This is because of the payout/payback cycle he talks about which I believe related to and is similar to the cyclical business cycle modern economies encounter. As soon as the trader goes live.. the market has switched on him. He then turns around after taking losses and tests his strategy again on paper and is profitable again.

Point being. After a run of profits. Do not increase your position size assuming that your market strategy is the holy grail. The holy grail is your psychology and the way you approach the market. Test the waters of the market out with smaller positions to figure out if the run is still valid.

Anyways, the book is good reading. Check it out.

GBP/JPY update

POUND/YEN has retraced and seem to have found resistance. I have decided to pull the trigger on my short. I have a very wide stop on this trade because it is a long term play. Slightly in the profits so far. I have a tendency to exit my trades too early and this is going to be my biggest challenge in this position.

May 12

Took the day off. Woke up late so I missed out on some big moves. NYSE is bullish today, that was a nice sign. I am putting the government IRA I manage into aggressive mode throughout the rest of the week.

EUR/USD Quick profit

Eur/usd pair retraced over the last few daily sessions. Opening today only to hit and bounce off of resistance. This has been my favorite pair since last FED cut rate. Technicals on it seem to be playing out very well.

+50 points in less than an hour and still move to room. I decided to exit the trade at support because it was such a fast move. I will re-enter with a pullback, but, there is a good probability it continues down.

05/09/08 End of day

I didn't trade today. I wasn't really feeling any trades. I did set up some trades for next week which I will post Sunday before European session.

GBP/JPY UPDATE

First chart is GBP/JPY now. It has done what I expected it to do 2 days ago (see archive). I haven't taken a position on this because I planned on shorting this for long term swing. Its still a to-watch.

The second chart is its condition 2 days prior.

Third chart is long term chart indicating elliot wave theory principle. I really like the way this

looks and maybe should have not hesitated a couple days ago, but, I am not as familiar with this pair as I am with the rest of the majors.

End of Day.

Not a whole lot happened today. Took one trade home for a loss of 40 pips. Just a sloppy day.

-40 points

GBP/JPY

Much like the EUR/JPY yesterday, it is testing support and I will pull the trigger on a clean break.

Evening update.

EUR/USD Broke down as expected. I got in exactly at the right moment. Here is an updated 4 hr chart. There is no real resistance till 1.49. I will hold this position as long as I can while locking in profits along the way. Currently up around 35 points, and have 25 locked in.

USD/CHF Broke out also. I expected these to happen earlier in the day. I entered this position with the break of resistance a short while ago. I have started off with a very small position because this pair did fail me earlier in the day.

05/07/08 End of day

USD/CHF I got into the position with a tight stop hoping we would break through resistance.
-20 points.

USD/EUR Locked in 40 points early. Sad thing is, last night my broker GFT stopped me
out of my position early because the charts they provide me have click n order on charts.
Somehow I moved my stop last night playing with trend-lines... Should have locked in over 120 pips on that trade. Good thing I got stopped 3 points from entry last night while I was sleeping.

+40 points


EUR/JPY Finally broke down from support and am currently in the trade as we speak and will hold it overnight or till it reaches my limit.

+59 points

Really good day for me today. What excites me is that it really should have been even better. Maybe tomorrow or tonight.

DOLLAR/SWISS FRANC

US Dollar is testing resistance against the franc. This is a buy with a break of 1.06.

The dollar is testing resistance on this pair and support on eur/usd pair. A break of one or another will help the rally.

Eur/USD Update

Started Rallying. Slowed down. Support break is still not clear but I have locked in 40 points.
10:00 am bring around the pending home sales index. I have never traded this before but anything regarding the housing industry that is positive will help the Dollar continue to rally. This news could help pull the USD out of deep water.

BRITISH POUND/US DOLLAR

THIS PAIR BROKE SUPPORT AND HAS BEEN RALLYING. THIS IS A GOOD INDICATION THAT EUR/USD SHOULD FOLLOW IF SUPPORT ON THAT PAIR IS BROKEN.

EUR/JPY

This is a TO-WATCH. It has test resistance for a 3rd time and bounced off with no success. This
could help this pair move lower and I will pull the trigger with a break of support lvls.

eur/usd Today will could be a huge day!

Daily of Eur/USD. As you can see, it is 4:07 am, and testing key support level. It doesn't look like there is any significant support until 1.4879. This is the move the world has been waiting so long for. A break of this level I would consider to be a reversal of the pair.

I am in the trade short right at the support level with a TIGHT stop. I did this because of the overnight momentum we experienced with prayers that it continues through this support with a vengeance.

USD/CHF Possible reversal

Although the dollar has been strong for a short period of time now. Direction is still not conclusive. Here is a 4hr chart for DOLLAR/FRANK. Symmetrical triangle breakout followed by
a rising wedge. This could push the pair lower if broken.

POTENTIAL SETUP I GBP/JPY (short)

Weekly chart by Tahir. imanov.tahir@hotmail.com

blog- http://u-traders.blogspot.com/

I am looking at this for a long term trade. This is a weekly chart and it is setting up nicely for the 5th swing.

also, look at 4 hour chart! triple top, macd divergence, MA's signaling the sell. Could this be the start of our 5th SWING!