Forex Trading Strategies Notes - Making money from forex trading

I will be on the sidelines until the market gets volatile.

2008-05-05T01:54:00.000-07:00

I have been watching my PC screen all day to catch the move of USD/JPY, but nothing has happened so far today. The trade volume seems to be very thin. Situations like this happen often in the Asian session. I just try not to make an unnecessary entry that could lead to holding a shitty position. I will be on the sidelines until the market gets volatile.

Non-farm payroll trading on 4/4/08

2008-04-05T07:00:00.001-07:00

Non-farm payroll trading (News Trading)

As I wrote before, I like trading currencies when they are volatile. As usual, I took advantage of the release of non-farm payroll on 4/4/08 to seize the opportunity to make money in a relatively short period of time.

What is non-farm payroll?

A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding the following employees:

- general government employees
- private household employees
- employees of nonprofit organizations that provide assistance to individuals
- farm employees

This monthly report also includes estimates on the average work week and the average weekly earnings of all non-farm employees.

(For details about non-farm payroll, please visit Investopedia.)

How I traded on the release of March NFP

My basic strategy for this trading session was going short on USD/JPY. When I trade on the release of news that moves the market significantly like NFP, the first thing that I do is to spot the trend's direction of the currency pair that I am going to trade AFTER the new was released. I never hold a position BEFORE it is released in order to avoid getting trapped in a fake movement of the price as it happened on 4/4/08. As a matter of fact, USD/JPY shot up about 40-50 pips right before the non-farm payroll was released as if the actual number would be better than the market was anticipating - it turned out that it was NOT in the end! I assume that a lot of traders got trapped in this big fake movement and whipsawed. As soon as I confirm the direction of the trend, I go long/short depending on the direction; no brainer. What is important is to check the important resistanse/support points BEFORE trading on the news. I keep holding the position until it reaches to the points, but tend to close it without any hesitation as soon as it shows some hesitation or a strong counter movement. I have one more tip to minimize the potential big loss from the sudden counter movement - when you see the price movement starts hesitating or stalling, immediately set a stop loss of 10-15 pips.

I also tried to wait the price to bounce back until it showed a sign of exhaustion so that I could make safer short entries again - this is probably a safer way to make money in news trading based on what I have observed as I made +58 pips for one short trade Friday. Overall, it worked as I planned.

The result of my non-farm payroll trading on 4/4/08

As you can see in the image above, I gained 129 pips and lost 19 pips within five hours after the non-farm payroll was released.

The total pips gained were 110 pips on that day. That news trading was going pretty well except that I was stopped out twice. I was not going to trade for five hours, but ended up doing so because it was a Friday night here:)

Forexfactory - The forex forum where you can learn forex trading strategies for free

2008-03-24T17:08:00.000-07:00

Forexfactory - The online forex forum where you can learn forex trading strategies for free

I have learned so many things about forex trading on forexfactory which is probably one of the best online forex forums. I have been a lurker on the forex forum since I started forex trading in March 2007. It is surprising to me that such valuable information is available for free.

The forex trading strategies or trading systems that I have found more effective after so many trials and errors, at least for me, are...

Until I found Spudfyre's thread, I had known nothing about how to use stochastics indicators. His explanation on stochastics is easy enough for a newbie to understand the theory. If you want to incorporate stochastics indicators in your trading system, I would recommend reading his posts.

I am also indebted to Harold4x's "Key to the Mint" system for my current trading system. I like the simplicity of his trading system.

There are other great systems on forexfactory. So if you are interested, just explore the site to find forex trading strategies that meet your needs.

Forex News Trading Strategies- Federal Open Market Committee (FOMC)

2008-03-19T19:29:00.000-07:00

Forex News Trading Strategies - Federal Open Market Committee (FOMC)

I prefer trading currencies on volatility. Although some people say that forex news trading is risky, and could erase one's account in a matter of second. It is true, but I would rather see forex news trading an opportunity to make money in a very short time period.

Below is an article on "Trading On News Releases" from Investopedia.

"One of the great advantages of trading currencies is that the forex market is open 24 hours a day (from 5pm EST on Sunday until 4pm EST Friday). Economic data tends to be one of the most important catalysts for short-term movements in any market, but this is particularly true in the currency market, which responds not only to U.S. economic news, but also to news from around the world. With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to inform the positions they take. Generally, no less than seven pieces of data are released daily from the eight major currencies or countries that are most closely followed. So for those who choose to trade news, there are plenty of opportunities."

How I traded on the news release of the rate decision by FOMC on March 19, 2008

The picture on the left shows how I traded upon the news release about the interest rate decision by FOMC on March 19, 2008. I traded USD/JPY for about an hour 1o times from upon news release. I went short almost immediately after the direction of the price movement was confirmed.

The initial strong downward movement lasted 1 minute or so. Surprisingly, it bounced back to the original place as you can see the long candle stick in the chart soon. I managed to exit from the initial trade earning 45 pips when it shows the definite rebound move.

Then, I waited for the price to complete the rebound, and went short again, but this time I made 5 trades separately selling on the small rebounds.

Lastly, I kept going long several times. The total pips earned for this news trading this time was 92 pips. All went well.

About Forex Trading Strategies Notes

2008-03-18T23:00:00.000-07:00

About "Forex Trading Strategies Notes"

Welcome to "Forex Trading Strategies Notes" - a Blog that helps beginners in forex trading accumulate knowledge and skills required to be a profitable forex trader.

My name is Ken and I’m a part time forex trader who is learning to make a living from forex trading. Although I'm not a native speaker of English, I have decided to write this forex blog in Englsh in order to get to know other people from all over the world who have the same interest, namely, making money from trading currencies in the foreign exchange market.

What you will find on this forex blog, "Forex Trading Strategies Notes"

On this forex blog, "Forex Trading Strategies Notes," I am going to show my own trading strategies that I have applied to my actual trading so far, and also to review other forex traders' forex trading strategies that may or may not be helpful to you and me;)