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Saturday, August 30, 2008

August Result

I'm very happy to announce that I have gain back my capital, and with some profit:) (See Mid-August Result). This was indeed a very good month for me. But of course, I can get back my losses by adding new capital, and it was quite a lot of capital for me. I feel like my journey in Forex is getting serious more than ever. Okay enough of this happy thing! Below is August daily return. Zero percent means that I didn't trade that day.

I got 934 pips this month, which is 34.20% profit. I trade smaller risk than I used to. I didn't trade on Tuesday and Wednesday last week as well as yesterday. I got 23 winning trades and 10 losing trades in 2 weeks, with only one losing day. This is just one month and what I know is the market takes a lot faster than it gives. So we'll see next month;P I hope I can be consistent.

True Balance Sheet

I have another journal that kept all my results since the very beginning, which is in July last year. I used to calculate them as my learning costs;P Apparently, the profit this month is able to cover it all, boost my portfolio to the positive number.

I also calculate the operating cost (internet provider service). My parents still paying them so I calculate them as debt. I'm still quite far to pay this debt and it is a challenge for because the debt increases each month. Well my parent might not expect me to pay the internet cost, but I just like to know the cost. One day I will have to pay it myself.

I will talk about the system more next month and post the third part of Pairs Correlation about beta analysis. I hope that all of you had a good month also. September is ahead of us and we'll enter Ramadhan for moslems. Have a nice weekend guys!

Thursday, August 28, 2008

Pairs Correlation Part II

In the first part of this topic, we know that GBP/JPY followed USD/JPY. And to know where USD/JPY movement, I use the Dow Jones Index. Of course I can only use it in US session by hourly chart. I don't use the Dow for the Asia or Europe session. I'll talk about it later. Now let's see the DJ Index correlation table below.

I use daily close price data for this anaysis. I think hourly close price data is more reliable but daily price seems fine by me. The table above shows that USD/JPY moved to the same direction as the Dow 53.74% of the time in May, 75.86% in June, and 63.88% in July this year.

So how to use those data? Well the simplest way I can think is when the Dow is bullish, then USD/JPY also bullish, we long on GBP/JPY. So if I know where USD/JPY going to move, why don't I just trade the pair? Well because GBP/JPY is more volatile than USD/JPY and I feel more comfortable with that;)

Sample Trade
USD/JPY Chart 1 Hour

GBP/JPY Chart 1 Hour
I long GBP/JPY yesterday and today at the circled candle on the picture above. I entered based on 3 reasons: USD/JPY was at support level, GBP/JPY was also at support level, and GBP/JPY has been on a down trend (5-13-21 EMA System) since Monday, meaning that it could reverse anytime soon. What happened after that was the trend remains;P But the pair did retrace about a hundred pips:)

I will post the Beta Coefficient analysis next on the third part.

Continue to part III

Wednesday, August 27, 2008

Pairs Correlation Part I

Since I trade GBP/JPY, I spend time a lot watching USD/JPY and GBP/USD chart, also DJI chart. Like some other tools in Forex, what I looked for is the correlation. Is GBP/JPY move the same way as USD/JPY or GBP/USD? Is USD/JPY move the same way as DJI?

I made some entries based on those pairs lately. Some entries didn't even confirmed by the EMAs. Nevertheless, I gained some pips with that method. However, without historical data and numbers, it was pretty much looks like gambling. So I made some analysis using correlation coefficient between those pairs as well as the Dow.

Correlation, in the financial world, is the statistical measure of the relationship between two securities. The correlation coefficient ranges between -1 and +1. A correlation of +1 implies that the two currency pairs will move in the same direction 100% of the time. A correlation of -1 implies the two currency pairs will move in the opposite direction 100% of the time. A correlation of zero implies that the relationship between the currency pairs is completely random. (Investopedia)

The table shows the correlation between GBP/JPY-USD/JPY and GBP/JPY-GBP/USD. On May, GBP/JPY moved 79.38% of the time whenever USD/JPY moves. We don't see any perfect positive correlation there but we can conclude that on May until June this year, GBP/JPY related more to USD/JPY than GBP/USD.

I will talk about the DJIA correlation to USD/JPY next in part II and beta analysis in part III.

Monday, August 25, 2008

Marketiva Deposit Methods

Okay, I just want to put a bit of technical matters aside from the market. The issue of how to fund our account is very important. There are several ways to fund our account. And since I trade in Marketiva, this post would be pretty much about deposit to Marketiva.

The first method is through wire transfer. I've done this method once. The money go to JP Morgan and then to my account. However, Marketiva use a different bank now, which is Crnogorska komercijalna banka (CKB) in Montenegro. The problem was my bank (BCA) cannot transfer the money to them for some reasons and they said that I will lose my money if it got transferred. Marketiva told me to use another bank (Mandiri) but I didn't check again. I use the other method instead.

The second method is via services like e-bullion, WebMoney, Liberty Reserve, and e-dinar. I use WebMoney and Liberty Reserve. In this method, first we have to transferred the money to them using another service before we transfer it to the broker, which are the exchangers in our city. For example, we can use Sentraegold or FastChanger (Indonesia). Of course, this method have higher exchange rate than bank rate. We need to work twice on this method but it is faster.

Some people like my mother didn't feel comfortable using the second method. But it never dissapoint me so far:) It's your choice really. Well I hope this information is usefull. The market will open in about 1 hour so have a nice trading week guys.

Wednesday, August 13, 2008

Update on Result

Since I have added more fund to my account, I will summarize my recent result to separate it from my future result. The result is very good. I got 277 pips which is 43.95% profit from my beginning balance this month (3.71% of my capital). I hope that I can gain another 20% of capital at the end of this month.

Limiting my trading day has been successful to kept me out from bad trades. I did not trade on Thursday and Friday last week, as well as yesterday. Although, I may trade several times a day (13 trades of 5 trading days). With more fund that I have now, I won't use as many quantity as before. However, my target is still 25 pips a day.

I cannot talk a lot about the system because it is not complete yet, but basically I trade based on 5-13-21 EMA system, QQE indicator, Fibonacci retracement, Pivot Points, and Trendlines. I trade the trend and reversal. I also use DJ Index, USD/JPY, and GBP/USD as indicator. That is all and I will update again at the end of the month. Happy trading all.

Sunday, August 10, 2008

Bar Close Alarm & Fibo Price Indicator

Here are two indicators that I put on any templates I use. First is Bar Closed Alarm which give sound alarm 2 minutes (adjustable) before a bar/candle closed. It is very useful for any breakout system since most traders will wait for the closed candle and see where it open.


Second is Set Fibo Price indicator. I like to use Fibonacci retracement as support and resistance level but it only shows the percentage. Adding the Set Fibo Price indicator to your chart and the Fibonacci retracement indicator will show the price anytime! Do I sound like I'm selling something? ;P Anyway the credit goes to the person who made those indicators as I can't remember where I got them. You can download it below.

Friday, August 1, 2008

July Result

Hello guys. It's been 2 weeks since my last post and the result is not so good. Bad news is I lose 2.44% of my capital, which you can see on the sidebar later. The good news is, of course, I do not lose more than that;P just kidding. Although the result is negative, I am confident with the system that I've been use.

I also want to add more money to my account to help me cover the huge losses and I will be happy to know what you think about this idea. Below is my daily return since the last post minus today's trade. I'm done for today with 31 pips and now I want to see how the market respond to the NFP:D It's kinda fun watching how the market fluctuate and the spread become wide. Well it's not so fun if I have an open position;P So, have a nice weekend everyone.