Introduction
Hello Forex Factory.
I’m going to begin learning the foreign exchange market and how it works, and would like to include other people in it. The main reason I am posting this here is to involve more people with me, which is for my own benefit, as it seems like an exciting prospect to have some input in my learning, to keep me motivated/disciplined enough to keep learning, and to maybe help any of you. I will try to update this thread as often as I have a certain amount of new substantial information(New things I have learned, updates on trades, etc.) to post. I think we should expect a new post every other day or so, but don’t call me out on it if I don’t post so.
So a little bit about me to give you a background:
I am an early 20’s student at a state university in the US studying physics. I have been meddling with Forex trading on and off since I was 15 when I blew my first $500 account. Have had a few hundred dollar accounts since then, they didn’t blow out but I usually ended up withdrawing the money for one reason or another. I don’t have much “real” knowledge of the currency market, which is something I want to fix. I believe I have the necessary philosophy for trading, I just don’t have the knowledge/information to make informed trades, which is mainly what I plan to change.
A couple of days ago I transferred $237 into my Pepperstone account, and this is what I will begin trading with. My goal is to learn before I earn, so I am not afraid of blowing out this account. Of course, I will do my best to not allow that to happen, as I prefer to build this account into my future “real” account.
Macro Goals
Develop self discipline/Mastery of the self. This is my biggest goal out of all this. I want to change my future and not be stuck/constant in one mental state, as that is stagnant.
Learn how the foreign exchange and other markets function. I put in other markets because if I see another interesting opportunity to make money, I will try my best to understand it. However, for now, my focus remains mostly on the foreign exchange market.
Make money. Be financially independent. I don’t have/want to set a time frame for this to happen because that will skew how I am supposed to trade to meet my arbitrary time expectations.
Micro goals:
2 hrs/day active Forex learning/trading.
Trade my $237 account.
Daily 10 minute meditation. Helps concentrate/think clearly. So does not using your smartphone, which I do not.
And there’s a ton of other stuff that would bore you guys so I will leave it out for now.
Philosophy
My forex philosophy is simple: trade when you completely understand why you are doing what you are doing. I do not accept “technical” analysis and will not use it at all in my trades/learning. I don’t find it useful at all, as I believe it’s just many different ways of following the short term trends, and that actual Forex movements do not “depend” on these technical analyses to occur, nor are they reflected by them. I prefer to trade on the reason they actually move, which we can find by fundamental analysis. Which is why most of the trades you will see me make will be dependent on strong fundamental reasoning I can back up with historical data and other facts that make a strong case for why a certain movement should be expected. I believe there are no “secrets” other than just having a common sense philosophy. My money is a way to show confidence in my predictions.
Just because it works doesn’t mean it’s right. I prefer to know the reason I expect a certain trade to act a certain way, rather than hope for it. I believe internal influences are vastly more important than external ones. Self-mastery and being honest with yourself are more important than just making money. I realize the markets are not what I want them to be, I don’t exist to the markets. Therefore, the market doesn’t care about me, nor do I care about it. Being stressed over trades does not change/alter reality in any way whatsoever, so just relax and work on what I can actually control. I know these are basic ideas, but I’m just putting it out there as it’s part of my philosophy.
Trade without any expectations. I believe arbitrary limitations(eg. You should only expect to consistently make ~1-2% of your capital annually, 300 runs are a high/rare score in ODI cricket, you can only run so fast, etc., all such arbitrary limitations were different in different eras, which is why I believe they were only the effect of mental limitations put on for no reason) affect us more than any external influences, so I’m going to go for whatever risk/trade I deem reasonable with complete disregard for such limits. When there is a will, there is a way. Which is another reason why I will not go with expectations/hope into a trade, but with investments that after thorough analysis I have determined to act in a certain way. If what is supposed to happen happen does not, I will look at the fundamental reasoning behind why and go back to the drawing board. Not to “make x amount of pips,” but rather to correctly predict market movement. I don’t need to make money, I’m happy living on basically pennies/day, I have a very frugal lifestyle anyway. Which is why I’m not emotionally invested/will try not to be(eg. checking trades nervously every 5 minutes to see what happened, etc.) and won’t get excited/dejected over it.
I am going to trade my account as if it were a percentage. I wish I could completely remove the dollar value, but alas I can not. I will only make trades that after creating, I can peacefully sleep at night. I once read money making should be a boring activity, as the most interesting way is most likely not the most efficient way to make money. I will bring that philosophy and try to keep my personal biases out of the way. Make small profit trades I am completely confident of rather than a large profit ones I’m not confident in. Do not be “stressed” in the slightest.
Stay the hell away from fads, but know when a good business opportunity shows itself. I’m usually quite good at spotting fads and bullshit, which is why I expect to be investing in fundamentally strong investments only.
I will prefer if the posters replying to my thread do not respond to any piece of information I have posted with their “opinion” if they believe I am wrong. I have an impressionable personality, and would prefer to keep my own mental frame in dealing with things. However, if there is a certain objective piece of information that I have posted, which is blatantly false, please feel free to correct me. I think everyone is just as clueless as the next person and most people are just pretending to know, so I’d prefer to be wrong on my own shoulders than on someone else’s. There is no room for self-doubt.
I’m a nihilist anyway, nothing matters. The reason of posting this above is so you know what type of a trader you're dealing with, and to help you make a decision whether or not you're interested to continue reading my posts.
Learning objective/What to expect for the future
I’m going to hit the library tomorrow and have a look at some financial documents/books. For starters I am going to study solely USD/JPY(I am not a fan of the EUR/USD because the Euro constitutes of way too many countries which would make getting a good picture unnecessarily harder) in order to gain an understanding of the factors that affect currencies. So I will begin by comparing different economic indicators(GDP, growth rate, population, exports, interest rates, etc.) at various times and see how they correspond to the currency values in order to try to see which factors affect it the most. I think a good timeframe to compare them will be 1996, 2003, and current date as these are not abnormal periods of economic collapse.. I will also read up on central banks, their functions, and the importance of the interest rate. I will note down my observations and post them here in the next post and hope they will interest whoever is going to follow me.
I want to follow that up later on with:
What are currency values based upon? What are they "pegged" to? How often is currency printed? Total value of the USD/JPY in circulation?
The central banks' interest rates make it easier for private individuals to take loans, but do they actually promote economic growth so much so that currency rates would be affected compared to another country's? What other factors promote/obstruct economic growth? Quantify the economic growth made/created after certain interest rate changes.
Who are the biggest currency traders? When/why do they trade? What are the effects of these trades?
Compare the trade between the US and Japan and try to see if there is a trend. To which country is there a net outflow? What effect does this have on USD/JPY?[Will probably use Wikipedia for this]
Do businesses that are originally German, but have offices in Japan, trade in JPY or EUR when dealing with the USA? [Not sure where to find an answer for this]
Reading/understanding central bank reports, [I can get these from the banks’ websites]
Create a sheet of data comparing the currency rates and various economic indicators of Japan and the USA at different times, and to try to weigh what value each indicator has.[I plan on using TradingEconomics for this]
Create a market freedom report which measures the free market-ness/heavy regulation-ness of the Japanese and American markets, and the effects of government policies on both.[Not yet sure how to achieve this]
I have read somewhere in the past that the Japanese government invests internationally in certain specific time periods. I want to read more about this and try to figure out if there is a maturation date for their bonds/upcoming investments. Find more details on Japanese public investments. What do the US and Japan trade/invest in mostly?
Compare USD and the JPY with respect to other currencies in different time periods. Figure out which country had the effect on the USD/JPY pair at a certain time. Figure out why.
Basically, I want to know what moves currencies and how much it moves them. I hate uncertainty, I don’t gamble. I want to invest.
If you have any reading recommendations related to the material/questions above, please feel free to post them. I will try to follow up this post with answers to the questions above and more questions that I have thought of. Hopefully this will help you guys as well.
I will also post any trades I decide to make and the reasoning behind them.
Daily music
All of these posts will come with an accompanying music video which reflects my mood. Here is the one for today by one of my favorite singers. Fear of Fear - Passenger:
Hello Forex Factory.
I’m going to begin learning the foreign exchange market and how it works, and would like to include other people in it. The main reason I am posting this here is to involve more people with me, which is for my own benefit, as it seems like an exciting prospect to have some input in my learning, to keep me motivated/disciplined enough to keep learning, and to maybe help any of you. I will try to update this thread as often as I have a certain amount of new substantial information(New things I have learned, updates on trades, etc.) to post. I think we should expect a new post every other day or so, but don’t call me out on it if I don’t post so.
So a little bit about me to give you a background:
I am an early 20’s student at a state university in the US studying physics. I have been meddling with Forex trading on and off since I was 15 when I blew my first $500 account. Have had a few hundred dollar accounts since then, they didn’t blow out but I usually ended up withdrawing the money for one reason or another. I don’t have much “real” knowledge of the currency market, which is something I want to fix. I believe I have the necessary philosophy for trading, I just don’t have the knowledge/information to make informed trades, which is mainly what I plan to change.
A couple of days ago I transferred $237 into my Pepperstone account, and this is what I will begin trading with. My goal is to learn before I earn, so I am not afraid of blowing out this account. Of course, I will do my best to not allow that to happen, as I prefer to build this account into my future “real” account.
Macro Goals
Develop self discipline/Mastery of the self. This is my biggest goal out of all this. I want to change my future and not be stuck/constant in one mental state, as that is stagnant.
Learn how the foreign exchange and other markets function. I put in other markets because if I see another interesting opportunity to make money, I will try my best to understand it. However, for now, my focus remains mostly on the foreign exchange market.
Make money. Be financially independent. I don’t have/want to set a time frame for this to happen because that will skew how I am supposed to trade to meet my arbitrary time expectations.
Micro goals:
2 hrs/day active Forex learning/trading.
Trade my $237 account.
Daily 10 minute meditation. Helps concentrate/think clearly. So does not using your smartphone, which I do not.
And there’s a ton of other stuff that would bore you guys so I will leave it out for now.
Philosophy
My forex philosophy is simple: trade when you completely understand why you are doing what you are doing. I do not accept “technical” analysis and will not use it at all in my trades/learning. I don’t find it useful at all, as I believe it’s just many different ways of following the short term trends, and that actual Forex movements do not “depend” on these technical analyses to occur, nor are they reflected by them. I prefer to trade on the reason they actually move, which we can find by fundamental analysis. Which is why most of the trades you will see me make will be dependent on strong fundamental reasoning I can back up with historical data and other facts that make a strong case for why a certain movement should be expected. I believe there are no “secrets” other than just having a common sense philosophy. My money is a way to show confidence in my predictions.
Just because it works doesn’t mean it’s right. I prefer to know the reason I expect a certain trade to act a certain way, rather than hope for it. I believe internal influences are vastly more important than external ones. Self-mastery and being honest with yourself are more important than just making money. I realize the markets are not what I want them to be, I don’t exist to the markets. Therefore, the market doesn’t care about me, nor do I care about it. Being stressed over trades does not change/alter reality in any way whatsoever, so just relax and work on what I can actually control. I know these are basic ideas, but I’m just putting it out there as it’s part of my philosophy.
Trade without any expectations. I believe arbitrary limitations(eg. You should only expect to consistently make ~1-2% of your capital annually, 300 runs are a high/rare score in ODI cricket, you can only run so fast, etc., all such arbitrary limitations were different in different eras, which is why I believe they were only the effect of mental limitations put on for no reason) affect us more than any external influences, so I’m going to go for whatever risk/trade I deem reasonable with complete disregard for such limits. When there is a will, there is a way. Which is another reason why I will not go with expectations/hope into a trade, but with investments that after thorough analysis I have determined to act in a certain way. If what is supposed to happen happen does not, I will look at the fundamental reasoning behind why and go back to the drawing board. Not to “make x amount of pips,” but rather to correctly predict market movement. I don’t need to make money, I’m happy living on basically pennies/day, I have a very frugal lifestyle anyway. Which is why I’m not emotionally invested/will try not to be(eg. checking trades nervously every 5 minutes to see what happened, etc.) and won’t get excited/dejected over it.
I am going to trade my account as if it were a percentage. I wish I could completely remove the dollar value, but alas I can not. I will only make trades that after creating, I can peacefully sleep at night. I once read money making should be a boring activity, as the most interesting way is most likely not the most efficient way to make money. I will bring that philosophy and try to keep my personal biases out of the way. Make small profit trades I am completely confident of rather than a large profit ones I’m not confident in. Do not be “stressed” in the slightest.
Stay the hell away from fads, but know when a good business opportunity shows itself. I’m usually quite good at spotting fads and bullshit, which is why I expect to be investing in fundamentally strong investments only.
I will prefer if the posters replying to my thread do not respond to any piece of information I have posted with their “opinion” if they believe I am wrong. I have an impressionable personality, and would prefer to keep my own mental frame in dealing with things. However, if there is a certain objective piece of information that I have posted, which is blatantly false, please feel free to correct me. I think everyone is just as clueless as the next person and most people are just pretending to know, so I’d prefer to be wrong on my own shoulders than on someone else’s. There is no room for self-doubt.
I’m a nihilist anyway, nothing matters. The reason of posting this above is so you know what type of a trader you're dealing with, and to help you make a decision whether or not you're interested to continue reading my posts.
Learning objective/What to expect for the future
I’m going to hit the library tomorrow and have a look at some financial documents/books. For starters I am going to study solely USD/JPY(I am not a fan of the EUR/USD because the Euro constitutes of way too many countries which would make getting a good picture unnecessarily harder) in order to gain an understanding of the factors that affect currencies. So I will begin by comparing different economic indicators(GDP, growth rate, population, exports, interest rates, etc.) at various times and see how they correspond to the currency values in order to try to see which factors affect it the most. I think a good timeframe to compare them will be 1996, 2003, and current date as these are not abnormal periods of economic collapse.. I will also read up on central banks, their functions, and the importance of the interest rate. I will note down my observations and post them here in the next post and hope they will interest whoever is going to follow me.
I want to follow that up later on with:
What are currency values based upon? What are they "pegged" to? How often is currency printed? Total value of the USD/JPY in circulation?
The central banks' interest rates make it easier for private individuals to take loans, but do they actually promote economic growth so much so that currency rates would be affected compared to another country's? What other factors promote/obstruct economic growth? Quantify the economic growth made/created after certain interest rate changes.
Who are the biggest currency traders? When/why do they trade? What are the effects of these trades?
Compare the trade between the US and Japan and try to see if there is a trend. To which country is there a net outflow? What effect does this have on USD/JPY?[Will probably use Wikipedia for this]
Do businesses that are originally German, but have offices in Japan, trade in JPY or EUR when dealing with the USA? [Not sure where to find an answer for this]
Reading/understanding central bank reports, [I can get these from the banks’ websites]
Create a sheet of data comparing the currency rates and various economic indicators of Japan and the USA at different times, and to try to weigh what value each indicator has.[I plan on using TradingEconomics for this]
Create a market freedom report which measures the free market-ness/heavy regulation-ness of the Japanese and American markets, and the effects of government policies on both.[Not yet sure how to achieve this]
I have read somewhere in the past that the Japanese government invests internationally in certain specific time periods. I want to read more about this and try to figure out if there is a maturation date for their bonds/upcoming investments. Find more details on Japanese public investments. What do the US and Japan trade/invest in mostly?
Compare USD and the JPY with respect to other currencies in different time periods. Figure out which country had the effect on the USD/JPY pair at a certain time. Figure out why.
Basically, I want to know what moves currencies and how much it moves them. I hate uncertainty, I don’t gamble. I want to invest.
If you have any reading recommendations related to the material/questions above, please feel free to post them. I will try to follow up this post with answers to the questions above and more questions that I have thought of. Hopefully this will help you guys as well.
I will also post any trades I decide to make and the reasoning behind them.
Daily music
All of these posts will come with an accompanying music video which reflects my mood. Here is the one for today by one of my favorite singers. Fear of Fear - Passenger:
Inserted Video