Two sides of a coin

Just a quick update on my take on the G/U. Apparently, the market didn't stay quiet for very long...take a southwards direction for about 150 pips before a minor trend set in. Butright now it's readjusting to the overly strong southward move, hitting a 60 pips north from the low set just hours ago. Since it managed to hit the fibo of 38.2, I believe there's a strong reason to believe the downward trend might continue for a while.

I pretty much wanted to write quite a bit when I was at work today. Seems like I kinda forgot what there is to write.

Oh! 1 issue is that I decided I shall be disciplined enough to track my expenditure for the whole of feb...this is part of the wider move to regulate my income into savings, expenditure and investment accounts...

And I might someone who actually has 10K in stocks right now. Well...quite interesting as he said it's all from his savings...but like I told him...forex is what it is for me now...

Fluctuations

As it is, the G/U is experiencing a trend, from what I heard in videos, called market noise. Classic indication of not knowing where to go or the general direction from here. From it's peak of 1.9916, it slide to slightly below 50% fibo level, which I thought would mean it is likely to continue it's downward trend. But for now, it's stabilised - in a period called consolidation? The up trend is not strong though. And the last active period of around 10pm to 12pm local time traders didn't seem to be able to decide which way is better.

Now, that makes me wonder...when does the market enter into cosolidation? And how do I tell it is not a reversal? It seems the market is cyclical. As long as I have enough funds, and patience, I will get earnings?

Anyway, my job is mundane. And I might only have 1 month at it. Wonder what's my next move.

Mild disappointments

Two things. One, the job wasn't as good as I thought it would be. Yes, the pay is pretty acceptable. And after calculation the CPF contributions will add up to close to 3k...which means I can help with the home installments is needed. But it was very much admin...the time talking to customers is far lesser than the cut-and-paste operations. I can't believe they don't have a integrated system to capture and transfer info easily.

In any case, my 3 months contract might not be fulfilled...not due to any of my fault...but we'll see how that goes.

Two, the G/U is fluctuating. Given my not-strong-at-all trends analysis, I totally can't tell where it's going. I know the fibo levels of 31.8, 50 & 61.8 are important, but I don't know how to use such knowledge. I can't even tell if the trend if supposed to go up or down. Right now, there seems to be a possibility of an upward movement, but, again, I don't know how to gauge how strong is this reverse trend.

Day 2 of work tomorrow. Maybe I'll call my employment consultant.

I've a job!

Ok...I really can't remember if I mentioned that I've officially a contract full time job for at least the next 3 mths...I believe it can easily become a 6 mths affair anyway...

Can't disclose the company...but my job is to be an ah long...haha...meaning debt collector...not the physical way of going to the door...but to call customers to remind them to pay their bills..

I know I am courteous and polite enough not to offend any customers because of my attitude or manner of speaking...but I still gotta be careful of the mines which are present in every battle..

Alright, it's time to go...this being my first day at work...I'm sure I can let my "work ethic" shine through...

This means I've lesser time to learn in the forex field...but I've already made more progress these 2 days as compared to before...Just a tip for everyone who is learning...look for videos sources which show you on the graph how people analyse and draw all their fanciful lines...

For now I'm still going short on G/U, because the overall trend says so...and just before I go...I will set exit target at 62.8...haha...I learn slightly about fibo too...

So all the best and hope you guys have a great week ahead!

Library visit

Today I felt an urge to pay a visit to the library to see if I can gain some insights into forex trading from some books.

Well, I was rewarded with a pretty cool beginner's guide to technical analysis...but it so happened that it was the last of the pile of 8 books i picked.

And basically today I read about identifying trends and some basic guidelines as to note when trendlines are breached and whether or not the trend is sustainable etc...

I kinda come to the conclusion that I might be better off with online resouces...but indeed the book covers the topics in much more details...

Just as a note...I've a very nice forum mate who posted some very relevant links to videos on forex trading and skills involved...here's the link...http://intelnova.net/forum/index.php?showtopic=3111...

What's in progress now is still my model of pips los tolerance applied to my current strategies...but I could go very far today...tomorrow I should be able to fgure it out...

A useful formula

It's not something new. Just that I needed to find an easy way to find out how much I can trade out of my margin. I know unless one is an expert at spotting trend reversals, one can never be sure how many pips sometimes the trend can go against you before it goes your way. So using 100% of the 1:100 margin to trade is not an option.

In any case, I came up with a simple formula.

Given x is the amount in the account (i.e. your own cash)
therefore the margin is 100x, and
given y to be the amount traded (using the 1:100 leverage)

Then,

One's pip loss (risk) tolerance = [(10,000x)/y] -100

In the case of having 1000 in the account, and therefore can trade up to 100,000, and using 20% = 20,000 to trade,

Then the maximum pips can lose before a margin call = [(10,000 X 1000)/2,0000] - 100
= 500 - 100
= 400

This trader, under such circumstances can lose up to 400 pips before he is forced by the platform to close his losing position instead of waiting for the trend to reverse.

In other words, this simple equation allows you, my dear readers, to calculate how much of your margin you can trade given your risk appetite or what you believe is the appropriate pips you might lose.

As for it's application for me, since I use a recurrent opening of positions if the trend is against me...I'll have to do a few more sums before I can fully use this model.

Inactivity...

I was in the midst of typing this entry some 10 hours earlier...but my itchy hands accidentally switched the power for the computer off.

But anyway...I forgot about it. This morning I decided to take profit from another one of my 130 pips positions, the last one anyway.

I did that because I have no way to tell if there's gonna be a further drop in the trend of it'll reverse like it did a few weeks back. The US figures don't look bad though...and the economy seems to have avoided a housing crash...too soon to tell...

Anyway, I opened another short position on G/U, just before I headed out from home. And it's 30+ pips in the red now. I'm not gonna make any move now, but I'll wait for further price changes. If it goes north another 100 pips or so, I'll double my current 1% margin usage and short it again using 2%. That will bring the average shorting price to 2/3 higher than the lowest one I am at now.

Of course, if things go the other way round...well...I'll need to learn or figure a way to handle that...esp when to take profit.

That means I need to learn the fibonacci...I'll put that down as one of my must-learns for now.