Trade Update - USD/CAD Short CLOSED

Update 03-08-08 7:30am:
Guess what? we have closed the first 2 lots for +50 and +100 profit each and the 3rd closed at break even. I am pretty impressed with OzFX's trade calls and the success rate. Its not just based on the signals, but also with an eye on the general market data & fundamentals. So thats what I need to try to learn.

The general weakness of the US dollar continued and this pair tested the lows before bouncing back. The NFP numbers were worse than expected and the stocks are extending their lows from the previous sessions. So as of now, the stocks are at their worst levels for entire 2008.

Lot 1 (closed at 5am): +50 pips
Lot 2( closed at 5am): +100 pips
Lot 3( closed at 7:30am): 0 pips
Swap: $1.48

Total Pips: +150
Total Profits: $152.32

The Trade:
This trade was recommended in the OzFX forums. I don't quiet see the signal on my charts, but I will go ahead with the trade. With the dollar getting weaker by the day and falling against all currencies, I don't see why we can't take some risk with this trade.


Lots: 3
Entry (Short): 0.9845
Stop Loss: 0.9945
TP1: 0.9795
TP2: 0.9745

Trade Update - EUR/GBP Short CLOSED

Update 03-12-08 11pm:
Made the mistake of holding on to this trade for too long. The signal had basically reversed. Plus we entered the trade against the long term trend, which was long. I finally decided to close the trade for a loss since the price doesn't seem to move much.

Total Pips: -75
Total Profit: $152.24

Update 03-09-08 9am:
This position seem to be trading in a narrow range and not moving much. The profit has now come down to +20 pips, so its something to keep an eye out for. While the AC and AO are still showing red and decreasing in value, the stochastic has almost reached oversold territory and the RSI is slowly starting to hook upward. This is worrisome as the major trend has been to move higher. I might close this position by tomorrow if I dont see the signals improving or the price moving a little bit.

Update 03-07-08 7:30am:
We still haven't closed any positions on this trade, but at least the trade so far is up +35 pips. I am hoping we would soon reach the 50 pip mark and lock in at least some profits.

The Trade:
As I had mentioned in my previous trade idea posts, all the signals (OzFX in daily chart) for this pair are looking good. The price being over the 200 SMA on a short trade is the only drawback. But we will soon see how important that is.


Lots: 3
Entry (Short): 0.7644
Stop Loss: 0.7744
TP1: 0.7594
TP2: 0.7544

Trade Idea for 03/06/08

Update:
Tomorrow is apparently the US Non-Farm Payroll (NFP) report. This is supposed to be important data for Forex market. So ideally you should not have too many trades open. But lets see how it plays out. Since I have 3 trades open now, it will give me first hand experience how the positions react to important data.

Possible trades for today given below.

EUR/GBP Short:
Price way above 200 SMA. Seem to have only limited profit potential.


EUR/JPY Long:
Price below 200 SMA


GBP/JPY Long:
Again price below 200 SMA

Broker Comparison

This past month or so, I have been demo trading in FX and have been using numerous brokers. Part of this is for me to get a feel for the different trading platforms and to see which one I liked the most.

Here are the list of brokers I have tried or am still trying.
1. Forex.com
2. FXCM
3. GFT Forex
4. FX Solutions
5. FX Pro

Now I shall beirfly describe my impressions on each of these.

Forex.com:
Their platform is very user friendly, especially for a newbie. The major currency pairs are shown as big icons and the tab for current rates gives the Bid/Ask information including the spread. The trading platform also has news feed built in.

The main drawbacks is their charting. It looks very outdated and limited in its functionality. It does not allow for trading from the charts, and there aren't too many technical indicators available. The other drawback is their reporting. I cant seem to get the information I really want, basically something like a trade journal hat keep tracks of the gains & losses.

FXCM:
Their interface is as good as, if not better than Forex.com. They probably have the best UI in the whole lot I used. It may not be the most flexible, but it provides most functionalities I need. The big currency pair icons even show the spread eight away. The platform also provides more information regarding the equity & margin details.

FXCM's charting pretty good and visually pleasing. Unfortunately, they do not have too many technical indicators in the charting package, at least the ones I want. But they do allow me to place trades from the chart.

The main drawback include the news not being integrated with the trading platform. You have to visit their website to get the news.

GFT Forex:
GFT Forex's trading platform is called Deal Book 360. This is one of the most powerful and flexible platforms I have used, but its also the most confusing one. The UI is not very easy to use, even though it lets you customize it the way you want. The color scheme is another thing I dont like. I know its minor, but its hurts my eye.

Their charting platform is very robust and sophisticated. It includes all kinds of indicators, allows you to trade from the charts, lets you place complex orders and offer upto 120 currency pairs. But like the rest of the platform, it dose not look pleasing to the eye.

One of the most confusing element is the report. I tried different reports, but I cannot make sense of any of them. And yet another drawback was that its not registered with any regulatory agency even though its one of the biggest and widely known.

In summary, very flexible & powerful but unwieldy.

FX Solutions:
They must have one of the worst desktop based trading platforms out there. I tried it on multiple machines, and the software is just plain slow. It just bogs down any system and is just bad software. The chart package is however very powerful & stable. And its one of the bright pointsof the system. Surprisingly, their web interface is one of the best and most elegant around. I have just been using the web interface since I can't get to do anything with the desktop one.

Other good things include market news feed built into the trading platform. Reports that I can actually make sense of and do find useful. Good details regarding the margins, equity and P/L for my account.

One of the things that makes this broker stand out is the availability of flexible leverage and flexible lot size. You can change these on the fly which lets you stick to your money management rules even with a small account. Also available is the ability to place multiple stops and limits on each trade which gives lot of flexibility wrt risk management.

What I didn't like about this broker was their spread and fees. The spread was larger than other brokers, by an average of 3 pips for every currency pair. The rollover interest rate that they charge also is higher as it includes additional interest rate when your leverage levels increases. This is of particular importance to me as I tend to hold on to my trades for 3-5 days on average.

FX Pro:
Finally the first non US broker that I tried. They seem to be regulated vis some European agency which is good. They also use the MetaTrader platform for trading which is one of the most useful charting tools & trading platform I have tried. The ability to write your own script and back tetst makes MT4 one of the best tools around. However the drawback of this platform seem to be the lack of flexibility to place more than a single stop or limit on a trade. However I found this wonderful script in one of the forums which basically lets you customize your trade management. Now THIS is one of the biggest advantage of this platform.

The other things I liked about this platform is the tighter spreads no matter what the account size and leverage is. They provide upto 70 currency pairs, not that I will be using any of these. They also provide some commodities and futures that you can trade using the same account. In case I am looking to do that in the future. So with the new EA that is available for this platform to managem my trades, this is definitely one I am keeping my eyes on.

Trade Idea - EUR/GBP

The daily chart for this pair is indicating a downward trend according to the OzFX system. However the price is way above the 200 SMA. And the pair has been trending up for a long time. So I would be cautious entering the short trade just yet. So I am going to do a wait & see approach for this pair.

Trade Update - CHF/JPY Long CLOSED

Update 03-10-08 12pm:
As expected this position went against us and I decided t0 cut my losses and close it for a -50 pips loss.

Total Pips: -150
Total Loss: $150

What Went Wrong:
Couple of things went wrong when I entered this trade. First the stochastic was very close to overbought terriroty. You i deally want the stochastic to rise form oversold terriroty and show a definite upward trend to minimize risk. And next, the RSI was also in overbought territory. These two factors indicate that we are probably close to the top, and there isn't much room to the upside. So this was basically a bad call.

Update 03-09-08 9pm:
Its been 3 days since I opened this position, and the price hasen't moved much for this position. As of now, I am down -27 pips, and there seem to be significant resistance to the upside. Or I should rather say, the upside is limited. The signals are still valid according to the OzFX system, so I am going to stick with this position for now.

The Trade:
Got this signal in the OzFX system. The AO & AC are green and the price is above the 200 SMA. Even the stochastic is trending up. The RSI is however hooking downward a little bit. Lets see if I have entered the trade at the wrong time.

The other consideration when entering the trade was the chart pattern. Looking back, we can see there is a up trend followed by a small consolidation period. And this is followed by another up trend. So we may currently be in one of those consolidation period just preceding the up trend.



Lots: 3
Entry (Long): 100.35
Stop Loss: 99.35
TP1: 100.85
TP2: 101.35

Trade Idea - GBP/USD

Cable is moving higher today but it seeing resistance around 1.99660 level. It would be interesting to see if its able to break this resistance. Twice before, it has failed (double tops around these levels). If this resistance level holds again. it would once again be a good short play.


Update 03-06-08 8am:
Oh how lucky I was. I had a sell limit order for this pair at 1.9950 all day yesterday. The idea was to catch some pips on the downside since the upside was limited. But by the time I went to sleep, the AO bar had turned green, and I didn't want to take a chance. So i canceled all limit orders. That was the best move since the pair has broken through the 2.0000 barrier today.

Lesson Learnt:
Do not try to re-enter a pair after you have finished a successful trade. There is always a tomorrow and a different trade elsewhere.

Update 03-06-08 11am:
With the Pound moving past the 2.0000 mark and even hitting the 2.0100 mark, I feel a fall is imminent and a good chance for us to collect lot of pips. :) Going to add this to my watch list and wait patiently till I get the signal. Wouldn't want to miss out on this one when the party starts.