How to work and trade at the same time.

stock-footage-shot-of-walking-people-on-a-big-street-in-london

Most of traders who first started their trading career still have a regular job during the day or run businesses of some form. Let’s face the fact for those who have a regular job, your boss is paying you your monthly salary, so it is only fair that you should give him your undivided attention on your work. As for those who own businesses, your workers need your leadership to steer the ship. So regardless of what job, career or business you might have, it probably consumes most of your available free time each day leaving you a small window to look at the market every day. Furthermore markets do not open during the weekends, so that would not help either.

In this article, I would like to address the issue of working and trading. Like everyone else, I too had manage my time during the early days when I started trading. I also had to take care of my new born daughter to boot. Like everyone else who is new to the trading arena, you probably need to spend more time at first to get use to the trading nuances and chart reading. Eventually it would take 30 minutes to 1 hour of your time a day, MAX!

 

How did I do it

First of all I would recommend you have to change your analysis into daily time frames. Automatically this would reduce your dependence to monitor your trades constantly. I trade mostly the Forex and Commodity market as I come from a place which does not give conducive trading hours for the US equity market. The Forex market opens each day in Asia and Australia and ends the day in New York, at 5pm New York time. There is a saying you probably must have already heard, “the noobs open the market and the experts close the market”. In my trading methodology, the closing price is the most important price on any price bar on any time frame. Why you may ask? This is because the closing price simply tells you who won the price war for the particular period, the bull or the bear.

At the end of the trading day in New York, the closing price would provide us this vital piece of information and we use it to understand price action especially when it reacts to the established support and resistance areas. Once you are used to see the price action, all you have to do is analyze the trading instruments each day after they have closed and make your trading decisions accordingly. Another good point trading the daily time frame is that the support and resistance do not change often compared to the lower time frames. This type of market study does not take up more than 1 hours or even 30 minutes. It’s a matter of just getting used to it.

 

The risk of trading smaller time frames

I usually ask my traders this question when they ask me if they could trade smaller time frames. My answer is YES, however he or she has to think, if one crosses the road once a day versus one who crosses the road a hundred times a day. Which one has a higher percentage of getting knocked down by a car. The trader who crosses a hundred times a day. So if one wants to trade smaller time frames, off course there would be much more trades and off course they will have to deal with more losing trades than the person trading the daily time frame. So are you really missing out on anything important if you ignore trading lower time frames? No, you are not, in fact what you are missing out is stress, over trading and more losing trades. I have no problem to miss it. Most of times, it is the greed and fear and a need to make money all the time that makes us want to trade more.

Just today, I took profit from my AUDUSD long term sell trade. On how I came to my conclusion to short this trade, please click here. This trade netted me a whopping 722 pips. It took me 47 trading days to achieve the 722 pips. That’s an average of 15.4 pips a day. Most intraday trading techniques I know net traders anywhere from 5 – 20 pips per day. To get the 722 pips, the trader has to win 47 times consecutively. Any losses, then the number of trades would have to be increased. SO let’s say, the traders manages to do it. Let us just then compare what I manage to complete during this period. I manage to go work on my charity projects in another country. Have a stress free relaxing period of time. scalping whenever time permits and have time with my family and friends.

So trading the closing prices is a much better way to trade. It almost seems too good to be true but I promise you it’s not , if you learn to properly take advantage of it. For many classes, I proved theoretically that once can make 1000 pips per pair each year and by monitoring 10 pairs a year, we could make 10000 (10 thousand) pips or more each year. Now I am able to show the live account of step by step process how this trade came into fruition. Your day job or business should be viewed as a good thing, not an inconvenience or impediment to your trading activities as many traders falsely believe.

 

Does this mean I should not do intraday trading?

Of course not! You can always do intraday trading. I am just telling the facts that intraday involves more time monitoring prices. Your brain has to be in tip top condition to read the prices. So if you are up to it, by all means, have a go. What I am saying is that you can always have an option to rest from the stress and do only longer term trades.

 

Overtrading

Most traders trade way too much and this is the cause of their accounts imploding. Sometimes, traders go through a losing streak and they develop a frantic and frustrated mindset. This is a vicious, self defeating cycle that becomes worse the more you do it.

 

How to trade around your job

Let’s have a look at the sample trading routine about analyzing market and trading which fits around your current daily schedule:

6:00am – Scan the market in the morning before you leave for work. Don’t do it straight our from bed. Your mind might not have the time to think properly yet. Look especially at trades which you think have setup the night before. Enter your pending trades.

12.00pm – It is your lunch time. See if your trades were executed. Make the changes if necessary.

9.00pm – After you have arrived home from work and had your dinner / gotten comfortable, you can trade the US market opening hours which is usually volatile and good for scalping. Once you are done, scan the market again for the long term trades which might setup the next day or manage your current trades.

This is an example of how a more relaxed trading style. However do remember that this method could be executed once you have a solid understanding on how to trade with price action.

AUDUSD and USDX nearing target profit.

audusd

My AUDUSD trade is nearing my target. Currently I am 624 pips in the money. My target is 710 – 734 pips. From the diagram above, I captured the screen on my trading terminal which shows where my entry is and also my target profit. To understand why I took this short and keep it for so long, please refer to the posting here. This methodology is my favourite methodology as it does not require much monitor. A single trade and we net hundred and hundred of pips. My humble target is about 1500 – 2000 pips per pair and I trade around 10 pairs.

#USDXMonthly

The USDX is also one of my long term trades. On September 11th, I mentioned that the Dollar Index (USDX) might slow down. However there was no indication that price was finally coming down. However I have always maintain a long term buy for USDX and my current targets are 87.41, 89.11, 90.51 and 91.85. You need not exit once price hit the given targets. Only exit when price show bearish patterns like bearish engulfing at those said levels. I have called for a buy since 09.05.2014. You can refer to the mandate here.

Possible Reatracement for FX Majors plus your Gold update.

GBPUSD

GBPUSDDaily

Gold has hit the support of 1.6115 . At that particular level, Bank of England’s Carney said that Bank of England may start to increase interest rates next spring if labour market conditions continue to improve. Of all places to release the news, they choose a support level. A morning star formed at the support and price then traded higher. I personally believe that the GBPUSD is over sold. However for the GBPUSD to move higher, it first has to close above 1.6282. I am still weary of a strong GBP. Possible sell levels are marked in the bigger blue box area.

 

EURUSD

EURUSDDaily

Like the GBPUSD, EURUSD is also oversold to me. Price is trading near the support of 1.2834. However I am not buying the EURUSD as it is in a very strong downtrend backed by poor fundamentals. If price manage to reject the support area of 1.2834, possible retracement areas are 1.3126 and 1.3196. If price reject those level, continue to sell the EURUSD.

 

USDJPY

USDJPYDaily

USDJPY are currently trading at the 6 year high levels. I am holding a buy view on the USDJPY. Since prices are quite high at the moment and also trading near the resistance of 107.60, I am waiting for the USDJPY to retrace. If 107.60 is indeed the resistance level which the USDJPY will reject, I would target the 105.66 – 105.55 , 105.07 – 104.94 or 104.45 to look for buy. Any price action of rejecting the mentioned levels, buy USDJPY.

 

GOLD

GOLDWeekly

I mentioned in my earlier postings that I have a sell gold view. If gold manages to close strongly below 1180.11, we could see gold testing 1041.56. Stay tuned to the 1228.18 support level which it is trading now to see if price will reject this support area.

 

 

 

AUDUSD possible bearish engulfing on weekly chart

AUDUSDWeekly

Patience pays. If we have a close which looks like this come Friday 12th Sept, we would then have a bearish engulfing pattern on the weekly chart which is a good thing if you had shorted the AUDUSD. I have been holding this trade since July 24th, 2014 riding the ups and down believing the main trend is down as explained in my article 710 pips on the Aussie trade, which is a step by step explanation on why I shorted the AUDUSD.

AUDUSDDaily

What we have here is the daily chart. Yesterday’s price action showed that 0.9242 support has finally been broken. This morning, Australia showed positive employment news where jobs increased by 121k versus estimates 15.2k and unemployment rate dropped 0.2% to 6.1%. So what we will potentially see is a potential of AUDUSD going up and the place to look out for is 0.9242 where old support become new resistance. The maximum area which I think AUDUSD should retrace if the downtrend continues is around 0.9282 area. So look for shorts at this area.

3 reasons why USDX momentum slowing down

On #USDXDaily
On Monday, I posted that we should look for US Dollar index short. This is because last Friday 5th Spetember 2014, we had a doji after a big white candle. Price on Monday this week however manage to close above the high of the doji which indicates that the uptrend momentum will continue.

3 reasons why the momentum is slowing down:

1) Price on Tuesday manage to rally above the high of Monday but was not able to sustain the buy momentum. At the end of the day, price close below previous day high. Both candles on Tuesday (9th Sept)  and Wednesday (10th Sept) shows a spinning top candle which signifies the momentum is slowing down.

2) Price is trading resistance at 84.13. Price trading at resistance is one thing but spinning tops at resistance indicates that there is a potential reversal at this resistance. This area is the 2 year high of the dollar index.

3) The US Dollar Index buy trend is truly over extended. There was no reversal at all. As we all know the law of gravity, what goes up must come down especially if they did not go up gradually. The move was just too fast.

What to look out for:

I have highlighted the high of the spinning top in purple. That is the current de facto resistance to be broken. If there is a price close above that level, then price will test the 2 year high of 84.75.

Any bearish indication as published in my candle stick article, would see price retracing down to these possible areas of 83.59, 82.91, 82.41, 81.92. These areas are valid as long as the current year high stands at 84.52.

As usual, you can always have an option not to trade against the main trend is a buy. Alternatively you can wait for price to retrace to the said area and wait for bullish reversal signals before you attempt your buy again and ride the main trend.