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My approach to forex trading

  • #1
  • First Post: Jun 27, 2007 5:14am Jun 27, 2007 5:14am
Hi everybody,
new on this site, but not on forex trading, i’m gonna let you know my trading approach (pls forgive my not so perfect English, I am Italian).
I've read lot of smart and interesteing people here at FF, people that share their efforts for free, and would like to participate in this positive environment.

My approach is not mechanical, automatic, needs some discretionality and feeling of the market, but is based on sound and objective analysis.
I've been trading (real money) this way since 2002, with profit and satisfaction, after a couple of years workin as a retail, internet based forex broker. Now I work no longer in the forex, but always in the financial sector.

Pls find below the first doc, others qill follo asap with some grapgical examples, but my approach basically doesn't need any charting tool.

Let me know your valuable opinion.
Greetings from Italy
Attached File(s)
File Type: pdf Vella_way.pdf   26 KB | 3,685 downloads
  • #2
  • Jun 27, 2007 5:31am Jun 27, 2007 5:31am
Quoting vellaItaly
Hi everybody,
new on this site, but not on forex trading, i’m gonna let you know my trading approach (pls forgive my not so perfect English, I am Italian).
I've read lot of smart and interesteing people here at FF, people that share their efforts for free, and would like to participate in this positive environment.

My approach is not mechanical, automatic, needs some discretionality and feeling of the market, but is based on sound and objective analysis.
I've been trading (real money) this way since 2002, with profit and satisfaction, after a couple of years workin as a retail, internet based forex broker. Now I work no longer in the forex, but always in the financial sector.

Pls find below the first doc, others qill follo asap with some grapgical examples, but my approach basically doesn't need any charting tool.

Let me know your valuable opinion.
Greetings from Italy
Hi VellaItaly,
welcome to Forex Factory... and thanx for sharing your observations. It's a nice, relaxing way to look at the markets. Will definitely look at it in more detail.

Take Care
Habeeb
Keeping it Simple
  • #3
  • Jun 27, 2007 6:02am Jun 27, 2007 6:02am
Hi there, thanks for the info in the pdf file. It looks extremely interesting. I'm definitely going to take a closer look at the details in it.

I'm also wondering whether a mechanical strategy could be developed and tested for it also. I'm going to give it a go when i get chance.

Thanks.
  • #4
  • Jun 27, 2007 7:17am Jun 27, 2007 7:17am
Hi vellaItaly,
it's a pleasure to see another italian here in this great forum
I will take a look at your system, if you want let me know your skype contact so that we can speak a little bit in italian about forex

Ciao ciao
Skyline
  • #5
  • Jun 27, 2007 8:31am Jun 27, 2007 8:31am
Hi there,
thanx a lot for your reply.
Find here a couple of examples I traded.
Needless to say i am presenting only successful examples but it doesn't mean i traded only that!!!!
Money management is of course the most important side of trading. What i find interesteing in this approach is that i have points where placing an assuring (for me) stop.
The real ability in trading is idenfying sound critical point that denies your chosen direction, not guessing market's direction. The latter is almost impossible and too much time consuming eventually (for me, of course).

Another point: i am not saying that you have to tarde exactly at the sixth (seventh for GBP crosse) day of a month, just after the HOT period. I trade whenever price is near enough to either HOT Ligh or HOT Low.

I will set up a skype account soon, so we will be able to discuss in italian, but here we use so many english terms speking about trading that is almost easier to use english for us too!!!

I must come back to my work.
Attached File(s)
File Type: zip Vella.zip   42 KB | 1,584 downloads
  • #6
  • Jun 27, 2007 8:32am Jun 27, 2007 8:32am
Skyline: where are you from?
  • #7
  • Jun 27, 2007 8:42am Jun 27, 2007 8:42am
Quoting vellaItaly
Skyline: where are you from?
Italy
Keeping it Simple
  • #8
  • Jun 27, 2007 8:45am Jun 27, 2007 8:45am
Hi Vella,

Interesting observations. Thanks for sharing. Are you setting Buy and sell stops at the "hot period" high and low?

Chris
  • #9
  • Jun 27, 2007 8:49am Jun 27, 2007 8:49am
Quoting vellaItaly
Skyline: where are you from?
Sono originario di Messina ma abito a Pisa da diversi anni. E tu ?
  • #10
  • Jun 27, 2007 10:09am Jun 27, 2007 10:09am
Cmartin371:
i set stops at least 30 pips away from HOT high and low (slightly more for JPY crosses), but that's not a strict rule.
It can happen that either monthly HOT high and low is near a quarterly HOT spot.
For example, if the monthly high is near a quarterly high, i can place a tight stop going short.
Again, if the monthly high is 40 pips under the quarterly HOT high, either i place a stop 30/40 pips above the QUARTERLY HOT high, or i wait for a price closer to the quarterly hot spot. The quarterly hot spot are more reliable than monthly's, tha are in turn more reliable than weekly hot spot.

Another aspects is the period's range. If monthly hot high happen to be defined after the pair did an above average quarterliy range, i place a tighter stop than otherwise.

Now, i am a little puzzled regarding EURUSD. Since the birth of euro, this market never experienced a quarter with a range less than 480 pips (just one time, all of the other quarter it didi more than 500 pips).
Now we are three days to the end of the quarter and it did a range of only 416 pips. To complete a "normal" minimum quarterly range EURUSD should dive to 1.32, or jump to 1.375 area. Or, this is a disappointing quarter!!!!!!!!!!!

Have fun
  • #11
  • Jun 27, 2007 10:13am Jun 27, 2007 10:13am
Skyline:
i live in Milano. I answer in english not to disappoint other forum users, who wouldn't understand what we are saying in a public space.
  • #12
  • Jun 27, 2007 10:17am Jun 27, 2007 10:17am
Quoting vellaItaly
Cmartin371:
i set stops at least 30 pips away from HOT high and low (slightly more for JPY crosses), but that's not a strict rule.
It can happen that either monthly HOT high and low is near a quarterly HOT spot.
For example, if the monthly high is near a quarterly high, i can place a tight stop going short.
Again, if the monthly high is 40 pips under the quarterly HOT high, either i place a stop 30/40 pips above the QUARTERLY HOT high, or i wait for a price closer to the quarterly hot spot. The quarterly hot spot are more reliable than monthly's, tha are in turn more reliable than weekly hot spot.

Another aspects is the period's range. If monthly hot high happen to be defined after the pair did an above average quarterliy range, i place a tighter stop than otherwise.

Now, i am a little puzzled regarding EURUSD. Since the birth of euro, this market never experienced a quarter with a range less than 480 pips (just one time, all of the other quarter it didi more than 500 pips).
Now we are three days to the end of the quarter and it did a range of only 416 pips. To complete a "normal" minimum quarterly range EURUSD should dive to 1.32, or jump to 1.375 area. Or, this is a disappointing quarter!!!!!!!!!!!

Have fun

Thanks Vella,

That is good to know about your stop loss, but i was asking about your entries ie buy/sell stops or limit orders.....Sorry for not being clear.
  • #13
  • Jun 27, 2007 10:25am Jun 27, 2007 10:25am
Cmartin,
sorry, you are right!!!
I 99% enter the market with limit order, or more exactly at the market.
When price is sufficiently close to and above hot low, i buy. When price is sufficiently close to and below hot high i sell.

I know that "sufficiently" means nothing, but i don't have a more precise rule!!!!
  • #14
  • Jun 27, 2007 10:27am Jun 27, 2007 10:27am
Quoting vellaItaly
Cmartin,
sorry, you are right!!!
I 99% enter the market with limit order, or more exactly at the market.
When price is sufficiently close to and above hot low, i buy. When price is sufficiently close to and below hot high i sell.

I know that "sufficiently" means nothing, but i don't have a more precise rule!!!!

Fair enough. Thanks for sharing. I will be watching this thread! I like simple systems of S/R along with P/A from the James16 peeps.
  • #15
  • Jun 27, 2007 10:34am Jun 27, 2007 10:34am
Quoting vellaItaly
Skyline:
i live in Milano. I answer in english not to disappoint other forum users, who wouldn't understand what we are saying in a public space.
Yes you're right I'm sorry But it's so a pleasure for me to see some italian interested in forex that I forgot to write in english
Anyway let me know by pm when you'll setup your skype account

ciao ciao
Skyline
  • #16
  • Jun 27, 2007 11:06am Jun 27, 2007 11:06am
VellaItaly,

Can you please post a G/U and E/U chart for the month of June '07 with your entry and stop loss.

TimeFreedom
  • #17
  • Jun 28, 2007 4:22am Jun 28, 2007 4:22am
Quoting TimeFreedom
VellaItaly,

Can you please post a G/U and E/U chart for the month of June '07 with your entry and stop loss.

TimeFreedom
TimeFreedom,
here below monthly trades i've done in june.
I have not showed a completely wrong, absurd trade on USDCAD that resulted in -120 pips, of course 'cause i didn't respect my rules!!!!!

Vella
Attached File(s)
File Type: zip Vella_june07.zip   44 KB | 1,009 downloads
  • #18
  • Edited 2:10pm Jun 28, 2007 1:54pm | Edited 2:10pm
Vella,

Is playing the 4th day on the E/U chart against your rules? I know the 3rd day was a pin par and a good play on your part realizing that it would most likely be the hot high.

Do you automatically stop and reverse if your entry stops out? I am looking forward to more descriptions on your system. So far I like and look forward to demoing next wee with the start of the new quarter.

Sorry one more question. On E/J obviuosly the quarterly hot high was blown away as this pair just kept trending up. Do you use it as support once the resistance is broken? Or do you ignore and go with the monthly high and low? Thanks for your time


Chris
  • #19
  • Jun 28, 2007 6:47pm Jun 28, 2007 6:47pm
Vella,

Sorry for all the questions. Why did you not play the low of the hot spot on E/J? You would have made some pip there, of course only if you had a large stop. But it seems the rules of your system would have got you in. And either stopped out or in profit depending on where you placed your stop.

Chris
  • #20
  • Jun 29, 2007 3:31am Jun 29, 2007 3:31am
Quoting Cmartin371
Vella,

Is playing the 4th day on the E/U chart against your rules? I know the 3rd day was a pin par and a good play on your part realizing that it would most likely be the hot high.

Do you automatically stop and reverse if your entry stops out? I am looking forward to more descriptions on your system. So far I like and look forward to demoing next wee with the start of the new quarter.

Sorry one more question. On E/J obviuosly the quarterly hot high was blown away as this pair just kept trending up. Do you use it as support once the resistance is broken? Or do you ignore and go with the monthly high and low? Thanks for your time


Chris
Hi Chris,
just an important point: i don't have hard rules. Sometimes i enter a trade on the fourth day of the month (or on monday for the week). Please consider this information an "approach", a tolols that give you some valuable clues, not a "system" as intented usually.

I am often out of office, and often i miss some good trades. On EURJPY i missed the low, returned back at the office a couples of days later and tried to play the hot high. Wrongly!!!!

Moreover, i never take into account a hot spot once the market told me it is not really HOT for the rest of the month/quarte/week. In EURJPY case, when the hot high was blown away, the market is telling me it was not an important level. Forget it!!! Maybe more research could reveal other precious characteristics of those lelevels, i don't know. Let me know if you discover something!!

I don't automatically stop and reverse. It all dpends on the range covered in the hot period (and on my stomach). For example: EURUSD do at inimum 250 pips per motnth, 400 on average. If the range of the hot period is 150 pips for example, i can consider to reverse having enough space to exploit the movement in the other direction. But if the range of the first period is 250 pips, surely i dont' reverse 'cause i have little chance to see a market movement big enough.
And usually when i reverse, i try to gain what i've lost in the first stop, not much more.

Hope this will help

Have fun
Vella
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