Auslanco - GBP/JPY and GBP/USD (newstrade)

read with me

save this darn thing on u screen and read it every day befor u start trading

10 GOLDEN TRADING RULES FOR SUCCESS IN FUTURES & FOREX TRADING


It is a well known fact that 90 percent of investors lose money in futures and forex trading, 5-7 percent break even and only 3-5 percent make money. Given the high casualty rate, it is all the more important for investors to approach futures and forex trading in the correct manner. Below are some of the rules that traders should consider following if he is to make money consistently in the futures and forex market:

RULE 1 : USE MONEY THAT YOU CAN AFFORD TO LOSE

Trade only with "extra" money, i.e, money that is not earmarked to pay bank loans, car installments, housing loans, telephone and electricity bills, etc. One of the major reasons for investing only with extra funds is that your trading judgment will remain objective.

RULE 2 : DON’T OVERTRADE

Inexperienced traders can easily become overconfident after a number of winning trades. This can lead to overtrading – which is dangerous. One can be right 7 times out of 10 but the three times that you are wrong can wipe you out if you had overgeared yourself because of overconfidence. Success comes from prudence in money management. Never overtrade.

RULE 3 : CUT YOUR LOSSES SHORT, LET YOUR PROFITS RUN

Learn to be very impatient with losing positions. Learn to resist the temptation of taking your profits too early. Success comes from holding on to profitable positions and riding with the trend for maximum gains while keeping losses small by getting out quickly when you are wrong. One way to protect you from suffering catastrophic losses is to place stop loss orders for every trade entered.

RULE 4 : IF YOU GET INTO A LOSING STREAK, TAKE A BREATHER

When things don’t work out right, when your best forecasts fail you – get away from the market and take a trading break. A period away from the market can be refreshing and will recharge you.

RULE 5 : BUILD A PYRAMID WHEN ADDING TO A PROFITABLE TRADE


As the market moves up and you are long much earlier, you must learn not to double up your positions. Instead, reduce your positions each time you add to a position. If at first you had 10 contracts, the second should not be more than 5-6 contracts and the third should be 50% of your second (i.e. 3 contracts). An upside down pyramid will be top heavy and could wipe out all your hard-earned profits should the market reverse.

RULE 6 : NEVER ADD TO A LOSING POSITION

Adding to a losing position by averaging is very dangerous. Remember you are investing with "margin" and did not pick up scrips. The contract is not yours; you merely paid a percentage of the total value. Averaging a losing position is equivalent to not admitting your mistakes, that you were wrong in the first place. Successful traders cut their losses short.

RULE 7 : DON’T RISK YOUR ENTIRE CAPITAL ON ONE TRADE

Divide your trading capital into 10 equal parts and never lose more than 10 percent on one trade. If you lost the first trade, you still have nine more opportunities to be right. Putting all your capital on one trade is suicidal.

RULE 8 : NEVER MEET MARGIN CALLS

When you are wrong about the market, get out. Once you start procrastinating, very often prices will go against your position, further triggering a margin call from your broker. A margin call simply means that you are wrong in the market and your position should be closed out. Margin calls are made because people do not want to admit being wrong and take a loss; they hope the market will eventually go in their direction. To avoid this mistake, you should never meet margin calls. Just cut your losses and "get the hell out".

RULE 9 : REMOVE PROFITS FROM YOUR ACCOUNT

Probably no more than 1% of traders have a rule to take profits out of their trading account. The few wise investors I know have bought a house, a car or simply put part of their winnings into a fixed deposit account, otherwise the chances are high that they may lose them all back.

RULE 10 : HAVE A GAME PLAN

Lack of a game plan is not knowing what to do when you are wrong – and not knowing what to do even when you are right.

Here are a few guidelines:

1. Know when and at what price you are going to enter the market.
2. Know how much money you are going to risk on each and every trade.
3. Know when and at what price you are going to get out when you are wrong.
4. Know when and at what price you are going to take your profits if you are right.
5. Know how much money you are going to make if you are right.
6. Have a safety stop in case the market does the unexpected.
7. Have an approximate idea of when the market should meet your objectives or when it should begin to make a move; and if it has not done so, get out.

SUMMARY:

You will note that none out of the ten rules of trading mentioned above are on money management. Only Rule 10 describes the importance of having a trading system to determine "when to enter and exit". This just goes to show that good money management is the key to your success in making money in the stocks, futures and currency markets. A good trading system comes second. Nick Leeson, the rogue trader for Barings in Singapore, got into trouble because he did not respect some of the 10 golden trading rules.

SUMMARY

You will note that none out of the ten rules of trading mentioned above are on money management. Only Rule 10 describes the importance of having a trading system to determine "when to enter and exit". This just goes to show that good money management is the key to your success in making money in the stocks, futures and currency markets. A good trading system comes second. Nick Leeson, the rogue trader for Barings in Singapore, got into trouble because he did not respect some of the 10 golden trading rules.[/quote]

---------- TRADE OF THE WEEK ------------


i will be focus on one pair this week and i reckon it will be the trade of the week.. gbp/jpy still looks a bit scruffy for me ..

but have a look at this one .plain and simple

enjoy

Japans economy grows over 4.5% Which is significant due to the fact that a weaker Yen typically encourages growth in Japan as it stimulates exports due to attractive prices of Japanese goods. Since Japan is quite active in the currency market and the second largest in the world it would be worth monitoring Japans actions should the yen increase in value due to the slide amongst other currencies. ie. Japan has no problem in doing whatever it takes to keep their currency over valued. Bottom line, it's just a matter of time that GBP/JPY, USD/JPY, EUR/JPY are very attractive buys

http://www.tradingeconomics.com/Econ...spx?Symbol=JPY

he Indian rupee posted its biggest weekly decline in nearly 14 years after swaying within a large band on Friday as domestic shares extended losses as concerns remained over the euro zone's growth prospects. ( Watch )

The partially convertible rupee closed at 46.95/96 per dollar, 0.3 percent weaker than its previous close of 46.81/82. In early trade, the unit fell to as 47.33, its lowest since Nov. 3, 2009, at which point it was down 1.1 percent.

However, on the week the rupee dropped 3.8 percent, its biggest fall since a 11.7 percent decline in mid-July 1996. "The market was very very volatile, 47.33 levels could not be sustained as there were several corporates who came in to sell around those levels," said Naveen Raghuvanshi, an associate vice president with Development Credit Bank in Mumbai.

"Despite the recent euro gains, the rupee has not gained much. So for the near-term looks like 46.75 to 47.25 range will hold. Only if the Dow closes in the positive zone today, will we see some rupee strength next week," he added.

Indian shares dropped 3.2 percent this week, its third decline in four weeks to close 0.5 percent lower on Friday, on continued foreign fund outflows as euro zone jitters reduced risk appetite, sending world stocks lower. Emerging market stocks extended losses to hit new 8-month lows and bond spreads were the widest in 8 months as investors remained sceptical about euro zone members' will to enforce austerity measures to solve the debt crisis.

So far this month, foreigners have pulled out $1.45 billion from domestic shares, bringing down net inflows in 2010 to $5.1 billion. The rupee has lost 5.5 percent so far in May due to the outflows, and is down 0.9 percent in the year to date. Last year, record portfolio inflows of $17.5 billion had helped the rupee gain 4.7 percent.

"The central bank has stayed out of the markets so far, but if there is a lot of volatility of any particular day, they may step in to limit the volatility," Development Credit Bank's Raghuvanshi said. The central bank has said it intervenes in the foreign exchange market to prevent excessive volatility but does not target any particular level for the currency.

Reserve Bank of India deputy governor K. C. Chakrabarty said on Friday the dollar's rise against major currencies would impact the rupee too and the central bank cannot stop the local currency's slide.

http://economictimes.indiatimes.com/...ow/5959068.cms

Exactly what I am doing and thinking, got the last upleg from 1.425 to 1.445 planning a short if 1.45 does not break next week.
Resistance could send it back to 1.425
Very interested in your reasoning why we first get back to 1.425 first and then get a break of 1.45 ?
It's exactly what I am thinking, but can't tell you why

Question for the better mathematicians under us
In the first 20 weeks of this year I had:
13 weeks gain, 7 weeks loss
That makes on a weekly basis a profitability of 65%
Now the average $$'s in winning weeks is exactly 50% higher than the average lost $$'s in losing weeks
So how do I incorporate that in the equation to figure out what my real profitability is?

ANYONE?

Thanks in advance for the one who can help me with this!

Example

Suppose a base capital of $10,000 on Jan 1 this year.

Wins Losses

1 $600
2 $600
3($400)
4 $600
5 $600
7 $600
8 $600
9 $600
10 $600
11 ($400)
12 ($400)
13 ($400)
14 $600
15 ($400)
16 ($400)
17 $600
18 ($400)
19 $600
20 $600
Totals
$7,800 ($2,800)

Net Result
$5,000

Anyone who can help me with this?

SHAMU

something like:

(current balance/start balance) ^ (number of days from start/365) -1

would give you a yearly return

ps, do not substract or add money during time, because then it gets complicated.......

really depends on what you trying to figure out? "Profitability" is such an ambivalent term.

Thank you for your answer,
What I'm trying to figure out is this:

I trade currencies for 5 years now, the first 3 years I lost money because I was very stubborn and impatient. I thought I could influence the market with my fundamentals. Well that didn't work out.
Now since some time I go with the market and that pays of very well.
I guess I want to get some sort of number where I can compere my past trading to my current trading.
That's why I gave the statistics.
But maybe no-one can do anything with these numbers except for myself.
Anyway, thanks for trying.

At least at this moment I think I have reached the elite group of "permanent winners"

SHAMU

Thank you Bear for your response.
I'll try the formula and see what it gets me.
And NO, I don't substract or add any money to this account. It is supposed to grow until it is 1 million dollars.
Then I can quit my job and live the good life for the rest of my life.

Shamu

Oh and .....Bear, I sent you pm.
Please read.

Shamu

In that case Bear's formula will work, although if you are going to be measuring everything with weekly snapshots then you could probably change the formula to:

{(NAV/Initial Capital) ^ (number of weeks/52)} -1

Just a suggestion.

here is my 5 psirs i will be watching and possible enter all of them ,if they play according to my charts i posted..

gbp/jpy is actually my least favourite pair for next week. (we are running at extreme levels now) watch for daily spikes all week retesting the lows.. but we have a confluence area @ 131.70/132 ,where i might sell for a possible double bottom,but aint not target lower than that...thats all what i can see on gbp/jpy right now..

gbp/usd ---- nice setup on that one --all over this week we have buy's and sells' quiet obv levels and pretty safe according to my view. i will be waiting for a false break above key ress @ 1.4519 for a sell ...then watch that 1.4250 again for a buy ! . and also look at that confluence area for a sell ,what i think is,we will break above key ress at 1.5219 and go str8 to that confluence area ,,,then we will come back to test that key ress,and it becomes supp.. from there on we will see if go to higher levels or not ...doesnt bother me now... but look at that levels (1.4519)--key ress. (1.4250)----supp (H&S) and (1.4720) -confl area --

aud/usd-- i mention alot awhile ago the aud/usd double top and it will drop like a rocket ..its all on the screen . we break double top supp level,and it will becomes ress level.. so round about that levels,,is a possible sell for me (we can have spikes above that ress) i mention also the double top target is 800 pips from the breakout of supp level @ 0.77 so that will be a safe spot target ..an easy 800 pips still to go after we test ress level ...the chartr explain it all ..

aud/jpy ---here it comes tricky for me with the crosses --why does it look like the gbp/jpy is near a medium bottom,but the aud/jpy tells a whole differant story for me...we just broke outside LONG TERM (12 months) support level ,so that mean we gonna go DOWN !!!!! supp/ress and down we go .... but we still running on extreme levels on all of them...so i will be carefull --- what about a false break ??? that is also possible !!

then the last one .. usd/chf --- watch for a break of supp level at 1.1450 ,then a possible H&S is on the making ... dont have to explain it ..its on the charts i posted... only a break below supp would turn me into a sell ,,and then another sell if we spike beloow 1.1265 at top of right shoulder at 1.1450 ,,so that supp would become ress and a possible right shoulder... then down we go !! ... we need to spike below the neckline for a valid H&S ..so watch that...

ok thats me ..thats my trades for the comiing week...

im off ... HUGE rugby game in 1 hour !!!!

( ALL THE AUSIES AND KIWI'S HERE ) NICE TRY IN SUPER 14,but unlucky ... 2 SA teams in the final !!

ill catch ya all on sunday

the current price of GJ is very important because it presents the super S/R level on monthly chart; geppy travels back and forth around that level only 3 times in 20 years. we still don't know yet whether January 2009 low (118) is absolute low or not but general view on world economy suggests that the bottom of crisis is still lies ahead in the future.
and since sentiments are negative we might expect further weakness more reasonable than substantial recovery of world economy next month

I agree. I expect further weakness all around.

123.80
123.80
123.80
123.80
123.80
123.80
123.80

to

137.40
137.40
137.40
137.40
137.40
137.40
137.40

nice graphics

Fullhouse,

Care to explain why to 137.40?

that kind of "weakness" should be threated with caution because it could happen that geppy is just at the historical bottom and if it is the case then the collapse of global economy shall be extended for decades

I'm all for profits, but I'm just targeting the lows again. I like my profits, but call me anti-global economy collapse. That said, if it breaks it... I'll ride the GBP into oblivion. I buy physical gold with profits. At least I can trade it for food at some point. See? Once a trader, always a trader.