Forex Trade and Travel Challenge intro

Hard work is about to be put to the test.  I have booked tickets to the Canary Islands, Spain of the coast of Africa leaving July 1...the picture on the left is the view from Jarratt's place.  He is going to be my mentor on this 'creative' internship.  This challenge is a stepping stone to prove that trading post college full time is achievable.  If it goes sour...need to start drafting up plan B.

The Forex T&T Challenge:

• Trade enough to cover expenses.
• Expenses so far: $1,550 (round trip ticket), Food, and leisure...every euro-cent will be updated daily both the expenses and the trades.
• If you are in country with tradeable currency...in this case the EURO.  Make a post worthy trade on any pair tied to the EUR.
• Create a blog series to update the journey.
• Bonus Points:
• Network with YPO members around the globe.
• Create a web tv mini-series to document the challenge.
• Rack up enough pips to upgrade to first class ha!

Milestones:

• 1-2 interns are going to help with strategy optimizing this Summer.  They will be trained at my house for few days then off to back test old data and producing results on how my strategies work for different pairs.  The Idea is to be able to have the most efficient ideas for more than one currency so that money can be made everyday no excuses.
• Verbal offer from Jarratt to possibly trade for Wealthbuilder FX pending:
• Written trading plan that explains strategy and risk management.
• Positive results on their demo account for 6 months.

There is a lot to do...website will be getting a makeover shortly.  I have received feedback from some of my readers...will try to post charts of my trades.  Check back for more updates.  July is going to packed with posts!!!

I'm a Currency trader

Our everyday conversation typically leads to, "So, what do you do?" Most people do it out of curiosity and pretend to care about what the other person really does...hoping that maybe just maybe he or she is a professional base jumper or a Hollywood agent for Matt Damon.

Here have been my responses in my lifetime:

• High school student at NCSSM

Zz

• Real Estate broker

Zzzz

• Loan Officer

Zzz

• Civil Engineering student at NCSU

Zzzzzz

• with a minor in entrepreneurship

Zzz

• Professional Currency Trader

?!?!?!

Curious friend: What is that?

Me: Have you ever traveled outside of the country (typically yes)...oh really where?

CF: Names xyz country...typically one from Europe (if ever studied NLP...this has made a visual impression. The conversation has taken their mind to their overseas trip.)

Me: That's real awesome! When you visited France you had to convert your USD to Euro and when you came back to the states you converted it back...you either had more or less than Euro to USD than when you started with. The fluctuation in rates regardless if it going up or down is essentially how I make a living.

Continue asking questions about experiences and site seeing and build a conversation that wouldn't have otherwise been brought up. He or she initiated the question...it doesn't come off as a boasting or getting into people's business.

I find that talking about staying up at 2am est(Frankfurt open) to sunrise (mid-NY) fun to talk about.

Just an interesting observation I felt like sharing.

Trader Update

Mini-Term was a awesome Experience!!! School has been an opportunity killer. I've found that I can't handle managing a trade while in the middle of class...so I slowed down the number of trades I take per month. I had an awesome month in January which ended my cold streak (see picture). I'm currently a little below my peak. I plan to make some positive gains during my Spring Break!

Below is an opportunity I am ecstatic about. Sometime in November currensee.com called me and told me that they would be interested in having me as one of their first trade leaders. The site is 'like' a facebook for forex traders. The members are able to view the trades and pick a trade leader to invest in. I trade as I would normally do but the investors that are following me have my trades and risk management duplicated on their accounts. It's a great win-win-win scenario!

1. Currensee.com gets the commission from their IB business not only on my account but the investors...plus most traders lose or bust out quickly. Currensee will have longer and better residual income from TLP (Trade Leader's Program). Very Smart.
2. Traders/Investors can tap into talent that would normally be exclusive to elite (30%+ yearly gains). Also learning traders can 'hedge' their live accounts by using TLP. Say I make 30% they lose 10%. They are still up and have the live learning experience.
3. I am paid like a Wall Street fund manager. I will be taking 25% of the profits. For every 4 investors that match my account my profits will double for the same amount of risk taken...sweet RRR!

Mini-term

Mini-term - noun

An eight day intense study on a subject of interest by North Carolina Science and Mathematics students hosted by a professor or alumn. I have the privilege...nay...the honor to teach introduction to forex trading to these high school kids! The curriculum will include online education by forexmentor and live trading during the London open (3 am EST). I'm adding an interesting spin to the normal mini-term. I will be dividing the class into two-four groups that are going to complete tasks and assignments in 'The Apprentice' format. Team leaders and positions will be divided and switched up evenly. This 'game' is to add some flavor in what would be a boring mini-term. I see the benefit in creating experiences not just a class for the kids to rollover to their future. Think about it. When an employer asks for work/business/life experience: I want them have at least one interesting story under their belt to separate themselves from sheeples.

Getting IN: Dealing with Fear

How to mitigate fear of trading by desensitizing your to losses.

The bad feeling of getting stopped out feels 2x emotionally than the good feeling created from a good trade. How to psychologically 'stay' in the game?

Win twice as much as one loss. What do you mean? Shoot for RRR of at least 1:2 or develop your skills so that you have a 75% winning trade ratio (with proper money management of course). Tour trades need to offer a 1:2 psychological risk reward to keep your mental game balance.

Closing a winning trade brings a sense of relief rather than a joyous celebration. I remember my first four digit day...I thought I would be extremely excited. It was joyous for about 2 minutes after closing the position...that was it? I guess I need to shoot for a 5 digit day next!

Pull the trigger! This is tricky. It requires a few entries to build or observance that the strategy does indeed work.

Beginner: Use the smallest position possible (in my case 1 mini-lot...even better with micro-lots). Getting stopped out (20pips = $20) will still hurt because it's still a nice lunch. But the information gained will build the much needed 'faith' in the strategy.

Advance: Detachment. My suggestion is to calculate how much you are going to to risk today...and say to yourself "I have done my back testing, research, and seen this strategy perform with an EDGE on this pair. In the LONG run I will be profitable. Today I am going to throw X dollars, %, Pips, etc into the market with no expectation of the result."

We tend to go in with this mentality: "I have seen my mentor's trade this strategy with decent results. There have been times where they have been stopped out. Not sure if it's going to happen this time. Not sure if this strategy is going to be profitable because I haven't been profitable. When I enter this trade I with X% risk I expect to have a winning trade!"

With the detachment mentality...there is no expectation on profits after the trade has been set. When your trade closes at breaks even, you are NOT disappointed because you came out ahead in experience. Winners are a treat when managed properly. And Losers...you have already given your money to the market both financially...but this time mentally. Losing is to trading what pain is to life: without either, it would be a bland existence. Visualizing pain in term of ultimate profits will help you move forward.

Keep trading. Build your edge.

Series: Getting IN

Forex tuition - Food for thought NCSU Undergraduate In-State tuition is $2.8k+ (not including typical fees) per semester. Most people who trade are college educated...they have invested 4+ years and a minimum of $22.4k (unless they are on scholarship) to their education. Get a job. Pay off college loans.

I bring this up because most people who start trading do NOT take the same time and energy before throwing considerable monies into the market. This struck me because I am in my last year as senior and I have put time into a major I am working hard NOT to get into. Trading is my calling and the minute I can put ALL my time into studying and trading I can foresee my expertise increase exponentially. If you are serious about trading (options, forex, equities, etc.) invest the time and energy the same way you did for your degree. Thoughts?

My One word for 2010

Every year people around the world makes new year's resolution but it's hard to keep tabs on it after the first month. Instead of remembering a list it's much easier to remember ONE word to sum up your goals and feelings you want to project into 2010.

For 2010 it's 'Lifestyle'

By the end of 2010 I will be done with the College life. It'll be a shake down for most of my peers that enjoyed their sleeping in, classes skipping, girl chasing, and hanging out lifestyle. It doesn't help that our economy is not aiding mediocre students get jobs.

My college lifestyle will be shaken up. It's part of the reason I have invested a lot of time in forex education...to create a new and better lifestyle after what is suppose to be the best times of my life. ha.

To be true: My New Year's 5 F's are as follow:

Faith - Finish reading the Bible...I started the One Year Bible on August 1st. Almost half way through the book that has shaped the world in many ways. It's one of my most exciting goals this year!

Family - When I think about my family...make no hesitation in giving them a phone call...even if it's for a few minutes.

Friends - Build and shape quality/high caliber relationships with new and old friends. It's becoming difficult to hang out with friends after they depart school and start their new and exciting life

Fitness - Lean out to 185 lbs or get 4 pack...which ever comes first.

Finance (or forex haha):

• Raise $100k in mini-investments for my currency fund.
• Continue trading and shoot for 3.5% for month it comes out to be 51% annual return by the end of the year.
• Attempt to remove/desensitized fear and loss from trading...I am in the 5% got to have the mindset of a successful trader.
• Find niche to fill in forex blog and make more quality posts more often.
• Develop Forex Nutshell...my future blog/site.
• Place in the IBFX mini Challenge

Cheers and Happy New Year!!!

-2010 is going to be EPIC

RRR and Riskmanagement

Here's a subject I'm glad I grasped at an early stage on my trading career...Risk management. I win only HALF of my trades (bc of recent sting of losing trades my win ration is down to 49%). But bc I have an average loss of -13 pips and profit of 22 pips. It's not showing my strategy behind my trades. RRR I usually risk 20 pips to make at least 40-100+ pips. I also my my stop to break even after 20 pips in the black. That is why my profit and loss are smaller than my performance shows. A LOT of my trades end up at break even. Risk Management I risk a max of 2% of my trading net worth. Most of my trades are risking less than 1%. Which allows me to have a string of losing trades without a huge drawdown (like I have been having recently). That's my thoughts and observations on most traders on currensee. Improve your RRR and Riskmanagement and you can have a decent return by flipping a coin...just kidding guys (you still need the edge to make sure that the RRR works...but just a funny example). I've been doing this for one year now. With proper education and mentorship I've been able to be in the black after 7-8 months in the red. Irwin

Halloween...going as a pip

Whew this has been a psychological month! 8+ losing trades in a row...started taking 1 mini lot positions to try out new strategies like tokyo gaps and weekend gap trades. Constantly finding ways to gain pips in all time zones!

This morning...I loaded up on the GBP and it broke out against the dollar. Quickly put the stop to break even (BE) and went long EUR for a MACD divergence trade...BE. I shorted the USDCHF shortly after because of MACD divergence trade...BE. All three trades were taken in a 15 minute time period and against the dollar. Because of the way the trade was stacked...I didn't risk more than 1.5% of my entire trading account (bless volatility spike). Pipping out 120+ pips total.

Since early Summer I have taken 250 trades! I find that my entry is getting acute...allows for tighter stops (for better risk reward ratio...rrr). A little less than half my trades go sour...I have only managed less than 100 target reached winning trades. This GU pair could have been a $2k trade but I cut it off early because of fear of loss...hindsight is 20/20 sigh.

Next Goal: Grow fund and take 500 trades systematically. Focus on maximizing profits.

I ending today strong with my 2nd four digit day!!!

Account: 28.8% since day 1 of trading.

"The entry is a science...the exit is an art"

8 dimensions

Trading has been less stellar. Have had 7 tiny losses in a row. Going pro dollar has been a bad idea lately (check the news). The worse is missing out on 4-6 trades that would've made me a lot of money...still young when it comes to dealing trading psychology.

Because of proper risk management account is down to 21.56% from 28%.

I have been working with a fellow from California since the beginning of Summer...who goes by 8 dimensions (Kangaroo Steaks was a trade guided by dimensions himself). He has been extremely helpful in my growth as a trader. He's been in the business for 10 years and doesn't use any indicators...just price, time, and fibs...along with the knowledge of how the banks took my 7% haha. He is my new mentor. We'll see if the 10 years of experience can rub off.

No Need to panic or be greedy. Just be patient and protect capital

-8 dimensions

Kangaroo Steaks

My last set of AUD/USD trades took me over the top. I had my first 4 digit day!!!

Below is a screenshot of the program I use to keep track of my performance since I have signed up (May 2009). The name of the game is capital preservation and risk management. I don't want to donk off my hard earned/long time coming/hours sitting watching screen starting capital.

After watching the most recent episode of 2 Months 2 Million. I've decided to make an effort to teach a mini-term session for Science and Math students. By teaching others...it'll enforce the methods taught by Forexmentor.

Enjoy.

The 5%

95 % of traders lose money (had a drawdown of 7.8% over the Summer)...I am beating the return one would get parking in an Wachovia savings account!!! Big step forward.

I had a record 4 winning trades in a row but two very bad trades last night...it's all a numbers game. Even if I have a 1-1 win-loss rate...I'll still but up due to risk/money management. Risking 1 to make 3.

Total account change (been live since January): +8.8%

As of today...I am part of the rare 5%!!!

New Venture

I am in the process are creating a new site for forex broker review...with friend/business partner Josh Staab of Carolus Apparel. We should be launching in the coming month.

Right now it's underwraps but I'll keep ya'll posted.

Trading is going well!

Total account change: $101.69

*Averaging $12/month

How to become a trader for a forex hedge fund

Yesterday's Forexmentor Coach's Corner was held by Jarratt Davis a twenty something who is a currency trader for Wealth Builder FX. A question was brought up...how does one become a trader for a fund?

To sum it up:

• Risk Management is the #1 concern for funds (risk no more than 1% per trade)
• Consistantly make 5%/month on own account for at least 6 months
• Have the account audited
• Show results to fund
• Chances are...you'll get a fund/introducing broker to fund your trades

As of today I have broke even with a solid trade on GBP/USD

Total account change: $28.04

*Averaging $4/month...big money

three weeks to break even and bank

Summer trading has been intense!

Daily schedule:

1-3pm wake up and have 'breakfast'

3 Online class for 1 hr on Monday and Thursdays

430 gym 'lunch' with the family

afternoon study charts/smallgroup/work/I am learning from four highly qualified forex traders each with different strategies...trying to learn from all four.

12am prepare for early London swings

1am 'dinner'

3am London opens

8am New York Opens

11am London closes...sleep and repeat.

Looking back at my goals I set:

Haven't finished studying for my series 3 yet...but more than half way through the study material

5 F's

• Faith - been highly involved with a Wilmington Small group and a men's group that meets at the Dockside restaurant. It has been a very thought provoking Summer.
• Family - spending time with the family...
• Friends - small group
• Fitness - gym 3-4 times a week mix with different fitness activities
• Finance: Summer peak account draw down $1000

Current account change $275

I have had some great Summer reading: Tipping point (Gladwell), Trading in the Zone (Douglas), The new paradigm for Financial Markets and Globilization (Soros)

Before end of Summer goal:

• Finish series 3
• Break even (for the 3rd time in 8 months...sigh talk about working for less than minimum wage) and make $1k
• Work on University Entrepreneurship Network's marketing plan
• Work on pilot

2 steps back hopefully 30 steps forward

I've had a couple of rough trades since school has been out it has been my only steps back...current account change  $358.65

Instead of typing all of my trades...I joined meetpips.com and currensee.com for a more forex family feel.  Currensee is a lot like Covestors except for forex traders instead of equities.  They linked my account at MB trading and everytime I trade they record my results and post it for the members.  Saves me a lot of time.

Summer plans:

• Spending 50+ hours of chart time per week
• Working with Forexmentor to promote site and get into the introducing broker business
• Take and pass series 3 exam
• Finish writing my tv spec pilot for an Asian drama
• Work on the 5 F's...faith, family, friends, fitness, and finance

Steps forward:

• Invested in Forex Tester 2 a back testing software that runs old data at an accelerated speed to help accelerate and apply my learning.
  
• Joined Live Connect with Forex mentor...this service allows me to ask questions to the pros in a live trading setting.  Jarratt Davis is the main guy...he's 24 and run his own Hong Kong Forex based fund.  Simply amazing.  Basically an old Forexmentor student who came back to start Live Connect...learning so much.
• Purchased a series 3 exam study packet...thinking ahead...once I can manage money I want to be able to help invest for others.

April practice

April 39 pips

4/2

USD/JPY 22 pips (two mini-lots)

NZD/USD 30 pips 

NZD/USD 7 pips

4/3

USD/JPY 20 pips

4/6

AUD/CAD 46 pips

First position trade attempt...not so good.

4/7

USD/JPY 10 pips (2 minilots)

USD/JPY 90 pips

4/8

GBP/USD 17 pips 

4/9

USD/CHF 16 pips (2 minilots)

4/14

AUD/USD 15 pips

4/15

USD/CHF 25 pips

4/16

USD/CHF 9 pips

GBP/USD 20 pips

EUR/USD 26 pips

4/19

GBP/USD 30 pips

EUR/USD 1 pip

4/20

EUR/USD 20 pips

4/23

AUD/JPY 24 pips

USD/JPY  5 pips

EUR/USD 3 pips

GBP/USD 34 pips

4/27

GBP/USD 20 pips

USD/JPY  5 pips

5/6

GBP/USD 20 pips 

5/12

GBP/USD 40 pips (2 mini-lots) 

GBP/USD 25 pips (3 mini-lots)

GBP/USD 30 pips (3 mini-lots)

5/13

GBP/USD 7 pips (3 mini-lots) 

GBP/USD 1 pips 

Total account change: $230.83

March Madness

March 120 pips

3/6

USD/JPY 1 pip

USD/JPY 1 pip (one standard lot)

USD/JPY 33 pips

USD/JPY 37 pips

USD/JPY 30 pips

USD/JPY 21 pips

USD/JPY 10 pip

3/10

USD/JPY 19 pips

3/11

USD/JPY 12 pips

3/12

GBP/USD 1 pip (2 mini lots)

GBP/USD 11 pips

3/16

USD/CAD 5 pips

3/23

USD/CAD 20 pips

3/24

USD/JPY 1 pip

USD/JPY 1 pip

USD/JPY 6 pips

3/25

EUR/JPY 11 pips

3/26

USD/JPY 6 pips

3/30

USD/JPY 12 pips (two mini lots)

Total account change: $74.84

NYC Trader's Expo

Here is a summary of what I learned at the International Trader's Expo:

Kathy Lien and Boris Schlossberg with GFT

*Most informative speaker

• A quick lesson in current Macro-economics
• EUR/GBP may have topped
• GBP may be first currency pair to rebound...
• *Extension Fade* by taking the history of currencys if a pair has 7 up days in a row...chances the next day will be a down day.

John Person

• Use Person pivots to confirm trends

Jeffery Baskin with FXDD

• Look into Ichimoku cloud for another technical analysis tool...it is a future looking indicator.
• Cash is a position...don't always feel you have to be in a trade
• In this market trade technical...fundamentals are out the window
• Look into Vegas Tunnel on the 1 hour chart

Timothy Sykes 

• Cut your losses quickly...to survive as a young trader

Peter Bain with Forexmentor

• Never trade a pair that isn't trending properly
• Buy the dips on a bullish trend
• Sell the rallies on a bearish trend

Highlight of first trader's expo experiance:

• Exploring NYC with good friends
• Learning a lot from free seminar
• Inexpensive mini-vacation
• Trading currency against a hedge fund manager (Who can say they will ever have the chance to do that?)
• Treasure hunting-signing up for countless drawings (from laptops to multiple monitors...probably going to end up with inbox full of junk mail)
• Meeting young traders or trainees...they inform us what life is like working in NYC
• Meeting and seeing my mentor's Tim and Peter present their material
• Seeing my friend Aynul attend his first expo and win a $500 raffle!
• Great food

Small Ball Poker and Day Trading Currencies

Daniel Negreanu is one of the few professional poker players that never seizes to amaze me. He is well know for to reading player's hand on national television (ESPN). If you go through the poker forums, Google, or his vblog...you'll be sure to find that small ball poker strategy is the strategy that successful pros use for tournament poker.

Daniel's tutorial that has shaped my poker play tremendously and I use the same fundamentals on arbitrage.

Small ball in a nutshell:

1. Keep pots small
2. Try to get into as many hands as possible without paying much
3. Play small suited connectors...to see the flop. If you miss...easy lay down...If you hit HUGE pay out.
   
4. Bet out in consistent amounts to hide strength of hands

Uses in day trading (in mini-lots):

1. Risk 3-8% of account portfolio (In my case trade 1 mini-lots until comfortable with Forex)
   
2. Stop loss set at 20 pips I 'cap' my pot commitment to $20 per trade...trading a lot has actually burned me (my broker probably loves me).
   
3. If the trends run the correctly I rake in a 20-200 pip gain. The idea is to risk very little to rake the reward (kinda like drawing on straights and flushes). Reset stops once you're on a run to cap profits...example: set stop at 10 pips once it breaks +20 pips...set 20 pips otb +30 pips...etc. Basically protect your hand.
   
4. Don't get cocky and put the entire fund at stake on a 'hunch'. Play this game by the books and grind it out.