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The Forex Trader

The Diary of a Novice Forex Trader

Hi! First off, don’t read this expecting to get any useful tips on how to beat the market, mug the market or even take 10 pips a day out of the market. This diary, in the greatest of British traditions, will allow you a feeling of Schadenfreude.

For those of you out there who have just seen your 9pip gain turnaround and trigger that carefully placed, out of reach, stop you can turn to this page and realise that it wasn’t just you that got it wrong. And if you’re the smart-arse who just took 50 pips out of the market this afternoon you can feel a warm glow, whilst reading about some-one who didn’t!

My e-mail address and forum link follow:
Forextrader@proactiveinvestors.com
Novice Forex Trader Forum

Friday, February 29, 2008
Diary of a Novice Forex Trader (Issue: 93)

 Watch out, the straw man?s at it again. Ex-wet lettuce, now Justice Secretary, Jack Straw is the latest to think he can solve the problem of overcrowded prisons. He suggests reducing the number of criminals that should be sent to jail! I sense a new TV series coming on here. Each week a group of lags appear on TV with Ant and Dec and a token blonde (woman) and the public get to vote which one goes to jail; the rest of them get a slap-up meal and an increase in their benefit payments.

 

My favourite quote of the week is the reaction of the European Broadcasting Union to Ireland?s entry for the Eurovision song contest (Dustin the Turkey, in case you missed it). ?A puppet on Eurovision would make a mockery of all that the contest stands for,? sniffed a ?highly placed source?. Do What!

 

So, who?s the odd one out, England, Ireland, Scotland or Wales? It?s Scotland of course; the others all won their 6 Nations rugby over the weekend. Big hand to Jamie Noon, it?s great to see one of the lesbians tackling like a back-row forward. Unlucky Bristol would have beaten a depleted Wasps side if Cyclops the ref hadn?t been wearing an eyepatch and had allowed Blowers? perfectly good try.

 

The Chimp and my fortunes were about as comparable as Mother Theresa and Jordan this week. Poor old Chimpy must be the softest ape around, he?s been taken to the cleaners so often. He maxed out with a 1000-pip loss, taking his year to date to ?2500 pips. At this rate we might need to revise his strategy that worked well for most of last year, but has been hopeless this year. Bingo! My 757-pip gain on the week took me through the 1000-pip barrier to 1079 for the year. Bring on the dancing girls.

 

Monday 25th February. It?s bad news for me, but good news for open running rugby. A week of nasty tests and injections concluded that my rugby days are over; no more playing, no more training, nothing that involves heavy contact (Mrs F-T is selling the wardrobe on e-Bay). So, I?m allowed to coach and watch, and share the occasional drink. Cheers.

 

Are currencies dull at the moment, or am I just distracted by equities? Since writing an article suggesting the Euro was set to dump, it?s become the most favoured currency. There appears to be the beginnings of a trend, but it?s too near major resistance to be tempted yet. Cable just looks dull, dull, dull. I sold some Friends Prov that I?d bought a couple of week?s ago. The trouble was every time I looked at the price I thought my screen had frozen. It was like watching Scotland play rugby.

 

Tuesday 26th February. That?s more like it. I made just short of 500 pips today, buying Euro$. And, to be honest, with better stop loss management I?d have made a whole lot more. I must admit to feeling pretty damn good about today?s trade. The Euro was already suffering in early trade, when poor GDP figures from Germany gave it another boot. The Euro$ rate shot through key support like last night?s curry, but I wasn?t tempted to join in, not with the IFO numbers coming out at 9 o?clock. These numbers turned out stronger than expected so I backed the bigger trend and bought Euro$ at $1.4800 in a tenner. After locking in some early profits on a fiver?s worth I ran the balance, selling at $1.4840, ?60 and ?80 before my trailing stop was taken out at $1.4873. I tried the same trade in a fiver in the afternoon session, but with the rate hitting an all time high I suffered from shrivelled testicle syndrome and after selling £2 for a 15 pip profit saw my tight trailing stop loss taken out. As a sort of professional trader the really gut-wrenching bit was that I left the trade at $1.4875, the price in late US time was over $1.50!

 

Wednesday 27th February. It wasn?t quite up to yesterday?s standards, but I had another tasty trade in Euro$ today. I bought £10 not far off the high at $1.5051, and after letting £5 go for my customary 10 pips I trailed the balance up, letting go of the odd £1 as the rate continued to make new ground. I think my trading ability is evolving slowly; that?s three consecutive winning trades with the trend (I even ran the £2 balance overnight). Of course the masterstroke will be when I can run the first trade the whole distance, rather than jumping in and out like Ashley Cole at a party. The total trade brought in another 252 pips. Lovely Jubley.

 

The time was ten to three; probably the most important event of the week was due to kick off at three o?clock. Beardy Ben Bernanke was all set to make his semi-annual testimony to Congress; the markets were on hold waiting for his pronouncements on the state of the US economy. I just had time to nip downstairs and make a cuppa to help me through the event, but was greeted by Mrs F-T,

? I?m just off to pick up youngest from school. There?s some scones baking in the oven, but I?ll have to leave you to take them out. I?ve set the timer.?

 I looked at the timer; at bang on 3 o?clock instead of seeing the most important news of the week I?d be turning into Delia bloody Smith!

 As a footnote, they were worth it, served up with fresh cream they went down a treat.

 

Thursday 27th February. As sh*t days go, this was a very bad case of diarrhoea. It started around midnight last night (I was working stupid hours on an article) when I noticed a breaking news item on the FT web site, ? Vale bid for Xstrata faces collapse?.

 

?Oh dear,? I thought, ?I?m the proud owner of a £4 bet that was worth 4140p a share when the market closed. And it?s not going to be there in the morning.? With no proper hedge available I tried the next best thing and sold FTSE in £2. This morning the opening price wasn?t as bad as I?d feared. I sold half my holding at 3956p, but as the price was pushing better I left the other half and rushed down to the local Dracula Clinic to donate yet another blood sample. I returned to find that a savage dip down had stopped me out at the bottom, and to pour a whole condiment of salt on the wound, FTSE was higher than when I sold it. Later, a slight easing in the price allowed me to close out for a £20 profit (little compensation for losing my nuts on the Xstrata trade). No sooner had I closed out my FTSE short then a rumour that a UK hedge fund had gone tits up hit the market. Great!

 

I wasn?t really in the right frame of mind, but decided to buy ?$ in a fiver after the weak US GDP figures. I paid $1.5124 and sold £2 at $1.5146 not long after. I was still struggling to trust the extent of the new trend and once again was too hasty in bringing my stop loss up to neutral. Later, I noticed the price up at $1.5230. I need to find a cat to kick! 

 

Hah! OK, I fell for it. Amongst a deluge of post this morning was a plain white envelope that read, ?Not to be opened by women or children?.

?Great,? I thought, ?that can only be one thing.? I hadn?t ordered anything, but it was probably a mail shot from Amsterdam or Essex. Inside was a begging letter from Cancer Research, nice one lads.


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