Equity:816.74 - Market watch GBP 2

GBP is again testing the Resistant Zone again (see previous post).
Lets see how it develops the next few days.

Equity:816.74 - Market watch (GBP)

Equity:816.74 - Just reading and watching (AUD)

My Kathy Lien's book arrive. Quite optimistic about the knowledge I can gain. It is always great to keep reading and learning, and not think that you can stick to a winning formula forever. If I want to become a successful trader, I got to read alot harder more than most people.

Besides reading, I am also watching the market, and see if I can apply anything I learn from the 'Naked Trader' book. Below is my watching activity.

Step 1

Using the Weekly chart, draw out the resistance lines which are obvious and close to the current price. This is to get a better picture of the story.

Step 2

Zoom in to Daily charts again. I tried changing to Hourly charts, and it just don't make sense to me. Daily charts tell the best story for a naked trader.

When you zoom in to Daily chart, just see how the price reacts when it is closed to the resistant lines which you drew from the weekly chart. Watch out if there is any Kangaroo Tails or Big Shadow developing around the resistant zone.

Equity:816.73 - sick of waiting

From reading the book, I gained many methods to trade. But it seems like if I follow the methods of the book closely, I won't really have many trades in a month.

The above seems the most likely for something to happen. It is trying to poke out of the zone.

Since I am so tired of following the book religiously, I will try trading with the basic idea of Price Action. That is just to use resistant and support lines.

The previous post, I mentioned that these zones are like a magnet. It draws the price to it, and then resisting it once it reach the zone.

So from now, I will just try using the resistant/ support line to trade.

Equity:816.74 - Kangaroo tail setup, and some new knowledge

Forex knowledge of the day : Resistance/support zones is a force that tends to repel prices, but they also work like a magnet. That is it will attract the price to the zone before repelling it away again.

Personal knowledge of the day : Previously I wrote about some of the social barrier that I face. I tend to get angry with some people for stupid reasons, and it affects my mood. The solution I posted in that blog no longer seems valid, and today I realized something else that might help it. The root solution to it might actually be not talking when you don't want to.

Sometimes, there are just some situations where your brain has something to say, but you are feeling otherwise. Maybe you are tired, maybe you think that saying it will cause awkwardness. Or maybe you feel you need to say something for the sick of putting someone down or just for attention sick. Maybe you think that you should say something just so that the someone will like you more.

Trust your feelings more than your brain on this one. When you choose not to talk rather than saying something for the sick of it, you realize that you blend in to the situation better. Understanding what people say is one thing, but understanding how people are feeling is another. And by blending in, you can fully relate to a deeper level of understanding. Which is how people are feeling.

Even though sometimes you might not have many things to say, but at least whatever you say out comes out of you more genuinely. With every sincere sentences that come out of you, you create a momentum for a better conversations. Maybe that is why there are some people that are more smooth than others.

Back to Forex, I placed the below trade. It is the same currency I tried to trade a few posts ago, the AUD/USD. I cancelled the Stop Sell, as the trend went the other way. However today, the trend start to form a different signal, which is the Kangaroo Tail.

The tail poked through the resistant line and went back down again, causing a Tail. One thing that is not perfect about the setup is that the range of the Kangaroo Tail signal (the high and low) is not really that long. The book says that it is supposed to have the longest range within the last 10 Candles.

Equity:816.75 - Observation about the king of Fruits

Bought the above durian just now and ate half of it already. It cost $7, instead of $8, after I ask the seller to give me a better price (I am very cheapo). Since I am buying, I took the chance to shamelessly ask about how to choose a good one from just looking at the box.

There are many videos on how to choose a good durian, but I never seen one about how to choose from boxes. One of the methods is actually to press the durian. But most durian sellers will give you a good scolding if you try that.

Below are my observations

• Do not choose the one with wrinkled skin. It can mean it is already watery due to being over-ripe. 
• Some durian meat seems to have some bruises on them, like dark spots on it. Avoid them, the meat is hard.
• Choose one which look shiny and fresh. A dry and dull looking one is usually under-ripe, and they are hard and taste horrible.

The one in the picture taste pretty good. The meat looks fresh and shiny, the skin is firm and not wrinkled. And by the way, the type of the durian is called 'Butter'.

Equity:816.75 - The 6 stories

I spent the week in my office reading the 'Naked Forex', and typed out the 5 important things taught in the book below.There are a total of 6 signals to look out for, and the Last Kiss was covered earlier.

• Last Kiss
• Big Shadow
• Wammies and Moolahs
• Kangaroo Tail
• Big Belt
• Trendy Kangaroo

The Big Shadow

It is a 2 Candlestick formation. A shorter candle followed by a bigger one (the bigger the better) engulfing it in the opposite direction.

It should only be used at a resistance or support zone. It is meant to bounce off away from the zone.

The engulfing candle should close very near to the opposing high of the previous candle

It should also have a lot of space to the left, meaning that it should be a new high/low with little activity in the zone.

Stop loss should be placed few pips away from high/low

Entry point should be placed with a trigger buy/sell few pips below the high/low of engulfing candle. This is to ensure it is a higher probability trade, and not one that simmers backwards again.

Limit stop should be placed a few pips before the next resistant zone.

Wammies and Moolahs

Double Tops and Double Bottoms are one of the most common patterns you will see in any charts. They are even more common than single touches (like the Big Shadow).

But they often fail as well, so a more accurate version of trade the 2 patterns are Wammies and Moolahs.

Basically, the improved version of a Double Bottoms is that the tail of the first bottom must be lower than the tail of the 2^nd bottom. It shows that the market is more ready to move upwards and away in a ‘W’ shape.

Stop loss can be set few pips below the tail of the 1^st bottom.

Entry point can be set at the high of the bullish candle after the 2^nd bottom.

Limit Stop can be placed before the next resistant zone.

There must be a gap of at least 6 Candlesticks apart, otherwise it just seems like it is gearing for a breakout. The best whammies are not quick touches, but rather a solid pattern of short rise and falling back to touch the zone again. 

Kangaroo tail

 There are many names for this, Nial Fuller calls them ‘pins’ (I think), Conrad Lim calls them ‘spinning top’ or ‘black star’ (not sure). It seems like many traders do see this as a very strong signal.

It has a tiny body, and a long tail.

The body of this Candlestick must be within the range of the previous Candlestick.

It must have the greatest range of previous 10 Candles. If there are long Candle bodies before the Tail, the momentum may be too strong to cause a reversal.

This is also used with a zone. The Kangaroo tail is supposed to poke deep into the zone before retracing back again, causing a small body. And the trend should not be visiting the zone again anytime soon.

The tail must be at least 2/3 of the whole range of the Candle, the longer the tail, the better.

Closing price is higher than opening, for bullish tail.

Stop loss can be placed at 75% of the range towards the end of the tail, similar to what Nial Fuller taught.

Trigger entry can also be set above the tip of the trending Kangaroo Tail.

Limit stop placed near the next resistant zone.

The chart should also be empty on the left of the signal. It is because the tail is supposed to breakthrough a new zone before being strongly rejected.

Big Belt

This occurs when the markets open after the weekend rest. People will think over the weekend, and many will rush to place their trade when the market re-opens on Monday.

Use of Daily Candlesticks produces more stable e results.

Opening price for bullish Big Belt is much lower than previous low of Friday Candle.

The Opening and Closing price of the Big Belt is close to the high and low of the Candle.

This Candle should print on a zone to be considered Big Belt.

Big Belts with no rooms on the left also have low rate of success.

Target Profit is next zone

Stop loss is below Big Belt low for bullish signal.

Buy stop at Big Belt high.

Trendy Kangaroo

Together with Big Belt, this signal is also not very common.

Firstly, you need to determine the overall direction of the currency pair. Sometimes the trend will take a break, and form a Consolidation stage. Trendy Kangaroo is very similar to Kangaroo tail, just that Trendy Kangaroo signals the end of the consolidation stage, and is ready to continue moving in the direction of the overall trend again.

The consolidation period should have around 3-10 Candles, and the tail should be protruding out of the consolidation. The longer the tail, the better.

Unlike the Kangaroo Tail, there is no room to the left, due to consolidation patterns.

To qualify as Trendy Kangaroo, the previous Candle must not be another pin bar in the opposite direction. It will just signal a correction. 

Equity:816.75 - Changes to previous trade, and how to use 'Parent and Contingent' order

I realized the trade which I entered in the previous post has a wrong step for 'Big Shadow' strategy. I was supposed to set Stop Sell below the lowest range of the Candle, instead of selling it at market price. Below is my amended order.

I also spent some panicky time trying to figure out how to use the 'Parent and Contingent' order. I was simply unable to set the Stop Sell just now. In the midst of chatting with an online operator, I found out the reason why.

When I select the 'Parent and Contingent' order, I am supposed to click at the correct spot on the chart! In this case, it is at 0.9213. You are unable to amend the Parent order once you click it on the chart!

Equity:814.02 - Trade first, talk later

Today is the day I assume trading again, still halfway digesting 'Naked Forex' book. I have to say it is really a great book, and gives me a different perception how I view the market.

Nial Fuller's website, if you do not pay for it, really lacks alot of info. I suppose many of the things taught there might be similar to this book. So, if you want to save money, you can consider buying 'Naked Forex'.

I am still writing what I learnt from the book. But today, I will enter a trade taught by the book. It is called 'Big Shadow'. I will not explain the rationale, as I will be posting about the strategy soon. But below, it is the first trade of my different approach to trading forex.

Basically, the first and most important thing that I do now for trading is planting the resistant/support lines. After that, I just try to see what story the trend is trying to tell, by linking it to the 6 strategies I learn from the book.

All the best!

Equity:814.02 - Naked Forex (Last kiss)

Finished another chapter of the book. It talks about a Last Kiss technique. It is one of the simplest and most important strategy for  Naked Traders.

All charts have 2 phrases, the Trending and Consolidation phrase. Trending is when the market only seems to be moving in one direction, while in the Consolidation phrase, the market is calmer and settled. It is just drifting up and down in a zone (Support and Resistant), not knowing where to go.

But sooner or later, it will breakout into a Trending phrase again. Just like when Japanese PM Shinzo Abe announced that he wants to devalue the Yen. The Consolidation phrase no longer becomes confused and know what direction it wants to go. You can see the chart below. The blue box is the period of Consolidation.

So, what is the 'Last Kiss'? I like the strategy firstly because it is the title of a Pearl Jam song. Very nice lyrics~ They are not the original song writers, but they are one of my favorite bands.

But what about in terms of Forex?

When there finally a breakout from a Consolidation phrase, the author mentioned that we can be cheated around 30% of the time. There are many false breakouts that eventually simmers back into the Consolidation zone again.

The Last Kiss means the time when it breaks out of the box, it returns to give the box one last kiss. One important thing to note is that, the Candle after the Last Kiss has got to be a long and Bullish/Bearish one, not turning back ;)

That is the rough idea of it. I believe that not all breakouts will give the box a Last Kiss, but I believe that it will try to retrace back close to the box one last time before flying away and leaving behind the sad memories, just like the song.

Equity:814.02 - Naked Forex

Today I am on leave, and hopefully I can spend my time more meaningfully by gaining knowledge.

I am currently reading 'Naked Forex', a book which introduces how to trade without using any indicators. And it stresses the importance of a clean Candlestick chart.

As of now, I just finished the topic on Support and Resistance line, and below is the summary:

• They are the most important thing for a Naked Trader
• They are zones rather than lines
• They are zones that are frequent rejects a trend from progressing further
• Funny thing about them is that even if you take a Daily chart from a few years again, they might also be the same Resistance or Support line. The author mentioned about once he got burnt by a hot pizza stove and never forgot it. It is the same as these zone, people remember them from way back.
• To better identify them, you can also reference it with a higher period chart. Lets say you use Daily charts. What you do is you open another Weekly chart, which is the next level, and draw the lines from there. The method which I use is that I instead of 100 Daily Candles in one chart, I open 250 Daily Candles. I get a clearer picture from there.

Equity:813.93 - Priceless

http://www.askmen.com/dating/curtsmith_400/488_youre-not-a-man-until-youve-traveled.html

The above article from Askmen.com tells you why you should travel.
I have always have the same thoughts as well, not by logic, but by people I knew who are well-traveled. They are usually people that are not so bothered by minor things, and are more open at heart. Something that I really need soon in my life. But I have not done so because I have doubts about myself travelling alone. As I am an introvert, I will always feel awkward when I am outside on my own.

Maybe that is the reason why I am slightly socially awkward in the first place. But I hope to do it soon, regardless of how it turns out, though I am financially tight. I might use one of my bonus and go for a 2 weeks budget trip around Europe. I reckon it might turn out to be a humbling and life-changing experience for many people.

And I believe the best learning experience you can get is only when you travel alone. Unless if you travel with your friends or partner and you are able to absorb the culture and essence of the other country. Travelling in big groups tend to protect yourself in the comfort zone and you are just bringing your culture and habits to the foreign country.

Equity:813.93 - New strat

After 1 night of watching Nial's videos, I got a rough idea how I am going to try trading again. 3 things to look out for to form a Confluence. The below should be fulfilled and drawn on the chart in order.

1. Overall trend
2. Resistant Line
3. Pin Bar

Equity:813.93 - Pin bars

I have read many Price Action traders, and many of them mentioned the Pin Bar to be the most basic and also very profitable signal.
Below is another video by Nial Fuller about Pin Bars. I am starting to like him because his teachings are very clear and easy to understand.

Pin Bar is a candle that has short body and very long tail. The longer the tail, the better. Pin Bars are signal for a reversal to happen.

And the video goes on to explain how you should place your Stop Loss, as it is too much if you set it at the ends of the tail. So he gives a brief suggestion, maybe you can set it at 30% of the Pin Bar itself. But it is really your own estimation and method.

Nial likes to use the word 'Confluence', which means that there is another evidence that can support your trade. And like the previous post, the Confluence is with Resistance Line again. It would be better if it is a Pin Bar and it is bouncing off a Resistance Line.

Equity:813.93 - Great knowledge in 7 mins

I have been reading Nial Fuller's webpage, and the video below really gives me a clearer idea what is really going on. I also listed the 3 steps of the strategies in the video below.

• First he determines the general trend
• Then he see a confluence, which happened at the intersection of a resistant line
• After that, he zoomed to observe the patterns of the candles. 2 Candles failed to break through the resistant zone, and the 3 candle is the entry point.

Equity:813.69 - Diary and symphony

After reading Nial Fuller, he recommended keeping a diary of a particular currency. He says each currency tells a story, and to learn the story, you have to write something short about the currency daily.

Since blog is like a diary, I shall try his ideology. From his posts, he usually use horizontal lines and also SMA on his charts.

This is a story of the battle between the Samurais and Uncle Sam. The horizontal line seems to be a resistance, and Samurai has been reluctant to proceed further above it. It seems like the same case for now, forming 2 Ts'.

End of story. lol stupidest story ever. But when I make a million dollars trading, this will be my best story ever.

Equity:813.97 - Holding on

Stopped trading.

Will be back, just reading and devouring more knowledge at the moment.

Anyway, I am now reading a website from by a young man by the name of Nial Fuller. He should be even younger than I am.

And I saw that his logo was similar to mine, or rather mine is so similar to his.

Not sure is it because I stumbled upon his website before and sub-consciously remembered the design when I thought of designing mine.

Hope I do not cause any discomfort to anyone. Of course now I am fine, since no one gives a shit about this blog. lol

That aside, this is a good read to give you a rough idea what to expect from being a great trader.

http://www.learntotradethemarket.com/forex-articles/how-to-trade-like-the-market-wizards

Some important things I learnt from the link :

• Do not trade to predict where the peak or bottom is. It is better to enter the trade when you can confirm a trend has started.
• Many traders have low winning ratio, maybe 20-30%. But when they win, they win big.