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13 Responses to “Forex Trading on EUR/USD”

1. 1
   Lucky Tan Says:
   February 29th, 2008 at 11:44 am

   To make so little after 1000 trades is a statistical fluke.

   I go to the jack pot pull 1000 times a few luck 777 also get a +ve return.

   Forex markets are quite random. It is no different from gambling…given you’re a person who gets addicted to things easily. I would recommend you stay away from this type of activity and concentrate on your studies.

   Hang Wei says:
   You’re the first person I hear that says a 20% return in 20 days is little. I’m just playing with a very small sum of money, which is why it is only a few dollars of profit and each movement can be less than cents. Of course, I am not dismissing the possibility of luck element just yet, which is why I said I may not ever fund my account with more money than it has. Anyway, you may be too busy trying to find any single chance of putting me down that you did not read through my post carefully.

   I do respect your comment, but please respect me by not simply concluding that I am a person who gets addicted to things easily. How would you feel if I will to simply conclude that you are a person with nothing better to do than to go around blogs and put people down just to satisfy your own ego? When I trade, you call me a gambler. When my friends and I start a business even with funding from Media Development Authority, you associate me negatively. Maybe when I eat meat, you will call me a killer.

   Anyway, if the markets are as random as you say, then it’s pointless for me to continue studying Banking & Finance, which is my specialization. Since the markets are random, nothing I learn will improve my investing and trading knowledge right? Financial instituitions should also hire random people to be their traders, since it doesn’t make a difference. Therefore, should I still continue studying or drop my studies because a mere stranger who hides behind a screen name tells me that markets are random?

   You’re a smart person, but maybe all the knowledge that you have amassed made you a close-minded person. Additionally, what harm will it do for me to spend some time and experience trading with funding only $15? Most university students spend the spare time to have fun with their friends or get drunk, which costs much more than $15 definitely.

   Anyway, I can face up to everybody I meet, because I have been supporting myself (except housing and meals from home) since the age of 18, which is really rare for university students my age. If you’re genuinely concerned about me, I hope that you can trust that I take responsibility for my own actions and that I do not take more risks than I can afford.

   If I hadn’t acted responsibly in the last 5 years, I would not be able to survive monetarily and would still be getting allowances from my parents. Do note that my expenses aren’t light and the insurance premiums I’m responsible for alone add up to $4,000+ per year. If you have any constructive advice, I will be willing to accept them. However, please refrain from simply declaring me as a person who gets addicted to things easily or a gambler.

2. 2
   KY Tay Says:
   March 1st, 2008 at 12:06 am

   Will like to know in basic how does forex trading works… abit of the concept will also help.

   Thanks.

   Hang Wei says:
   Refer to babypips.com, under their school. They have a pretty comprehensive introduction to forex.

3. 3
   Lucky Tan Says:
   March 3rd, 2008 at 6:42 pm

   If you believe your 20% in 20 days is due to your skill, then so be it. Who am I to say it is not. But if you make 20% in 20 days do you know you will make 600% in a year.

   There are a few simple rules in investing. Any return more exceeding the range of 30% a year is not sustainable. Buffett at his best returned 27% consistently. Soros at his best returned 28% for 10 years on Wall Street.

   The key to growing investments is finding consistency. If your 20% in 20 days is a sustainable performance, then there should 100 Warren Buffetts in the currency trading world walking around.

   There are many temporal patterns that appear and disappear. One friend of mine double his money every month for 3 months only to find that the next 8 months his strategy was a useless loser.

   20% in 20 days means either you are the greatest investor in the world. Or simply stumble upon this return by chance and the pattern will disappear…

   Sit down and think carefully what you have done and how to validate what you did. Maybe you have the Holy Grail and on the road to your first million. But be more rigorous before you conclude.

   Hang Wei says:
   You really don’t read my posts carefully. I was just saying that 20% is a huge return, because you said “To make so little”. I have never ruled out the element of luck. To further show that I do in fact think that I am merely lucky during this period of time:

   “With my new broker, I’m pretty happy with my results, but I have not traded enough to conclude that I can trade this well consistently”

   “I am not going to fund my account with too much money yet, because the luck element may still exist even though I have already made close to 1,000 trades”

   “Of course, I am not dismissing the possibility of luck element just yet, which is why I said I may not ever fund my account with more money than it has.”

   Hope that you read my words carefully next time before shooting me for no reason. Anyway, I do agree with you to a certain extent regarding patterns being ruled out and that is why I said this “I believe that I need a stable source of income first, just in case the markets change too fast and I’m not able to keep up with it. I may be able to keep up with it now, but who knows what will happen when I’m older.”

   That is also why I said ”I may never fund my account with more money than it has now”. If you read my post carefully, then we won’t be discussing all this in the first place. I will need to reiteirate just in case you missed all my previous sentences.

   I think I have just been very lucky during these 20 days and my trading account may go the other way any time.

4. 4
   Qin Says:
   March 8th, 2008 at 3:15 pm

   Great to see you are still learning, from previous post abt forex I thought you stopped learning.

   Never know can trade with just that amount but I guess is good to learn like that. Real experience yet something that is affordable to lose.

   Still very new in investing (still at the stage of mutual fund + maybe IPO / some shares)

   Just to note, when amount of $$ in the basket increases…our mind might think differently

   Curious…if you do day trading…arn’t you very busy in the day? No class? Cos i see li xiang like very busy this period. (she at NTU too)

   Hang Wei says:
   I do daytrading mostly at night, plus I only have a 3 day week after skipping lectures. There are quite a few times that I oversleep as a result and did not attend my tutorials though, but in terms of keeping up with the studies, there’s no problem at the moment. Probably can’t score well in class participation, but so far all the quizzes and tests are quite alright.

   That being said, daytrading is tiring having to stare at just one chart for a long time and wait for movements. I don’t want to go into position trading yet, because of the larger risks per trade and it will take me too long to reach a statistically significant number of samples. Anyway, my account now has grown again and has slightly more than $20 now. This market is very easy to trade if you just go long the EUR/USD, but to make things difficult for myself, I purposely short the EUR/USD quite a lot of times.

5. 5
   Apprentice Says:
   March 9th, 2008 at 11:06 am

   Nice rebuttal from Hang Wei to Lucky Tan!

   Anyway, wish you the best of luck for your trading progress and future.

   Hang Wei says:
   Not really considered a rebuttal, because I’m just correcting some misconceptions that Lucky Tan has about me. Anyway, I don’t think I will ever live as a professional trader, because the stress will be immensely strong. I still have dreams about building a small web empire, but the downside is that because of a weakening USD, paychecks from internet marketing will be smaller.

   Right now, my main focus is still to clear all my modules, since the projects for modules I’m taking this semester are quite tough and I’m taking quite a lot more modules. Well… work harder, finish studies earlier, it’s a good tradeoff.

6. 6
   geargina Says:
   March 10th, 2008 at 1:42 am

   Hey, good to see ya still going on strong for you dream. =)

   I did some research for forex, I feel it require a hige appitite for risk. Haa I am still not there yet. Anyways we have a long overdued meal to catch up on. Haa. My apologies.

   Maybe when the holidays comes hope to meet up with you and qin too.

   in the mean time, Jia you! =)

7. 7
   He Shuhan Says:
   March 10th, 2008 at 5:50 am

   Hangwei may be lucky after all. These few weeks the EUR/USD market has been trendy and so is the USD/JPY. It is also fair to say that from observation any pair involving USD has pretty decent movement, especially with all the data released. (I myself had a 1 lag long on the EUR/USD and a consecutive 1 lag short on the USD/JPY and its given around $12k unrealized profits, minus swap rates and comms, using a 1:100 margin broker)

   Although we should not mistake trends for brains, we cannot deny that there is still some level of skill involved and be overly pessimistic about it (trading skills are not easy to quanity though)

   Hang Wei, day trading so many times and trading off rejection of prices is very tiring. Great testing effort though brother, but I wouldn’t recommend doing it like this for long. If you really want to do it, you probably need counterparties that can give you 1/10th grade pips Eg. Barclays spoiled market by giving a 0.4pip on EUR/USD…don’t we all hate them! Haha!

   Oh as for Buffett and Soros’ return being capped at 30%, I only have the following to provide as reference:

   1. Its not that impossible to make 600% p.a. on 1 lag. However, it gets exponentially hard to trade or invest anything ranging from a dollar to a yard

   2. The plateau of ROI comes in due to many intangible reasons including but not limited to liquidity issues, discretionary ordering, difficulty in iceberg matching, political/social/moral pressures of grim triggers etc

   “There are a few simple rules in investing. Any return more exceeding the range of 30% a year is not sustainable.” … Hmm…I wonder where this absolute, undefeatable statement, or rather, rule/law came from.

   “Maybe you have the Holy Grail and on the road to your first million. ” … Wow, after so many negative comments, such a positive comment looks like a statistical fluke.

   P.S. Babypips.com is as its name suggest, an elementary start to piping the market or being piped off by the dealers… (see below for hint!)

   “Client: What’s euro in 10?
   Dealer: Hold on Sir!
   Trader: 47/48
   Dealer: 47/50. My Risk!
   Client: Errr… I’m still considering
   Dealer: Market moved. Off. Requote
   51/55. Still on sir?
   Client: Ok ok. I want it. On!
   Dealer: Done! Thanks for dealing
   with Peter Piper Broker”

   Hang Wei says:
   Yes, daytrading like this has proven to be extraordinarily tiring. In fact, after I grew my account to more than $20, I have stopped trading for a while because it’s simply too tiring. I just consolidated my trades for February and the result is that on an aggregate, both my sell and buy market trades were profitable. Of course, due to the trending market, my sell market trades were less profitable. Anyway, I will try position trading instead of daytrading now. Let’s see how it goes.

8. 8
   Jerome Says:
   March 20th, 2008 at 1:15 pm

   Have you program your strategy and simulate the performance for past 3 years.

   It will prove for strategy then guessing

   Hang Wei says:
   I do my simulations year by year for 5 years. Then I see if the trend of the signal is becoming stronger or weaker. That’s how I do my testing, but I have an interest in tape reading too. So far, my position trades have fared badly. Through daytrading, I brought my account from $14 to $30+, but since I switched into position trading, I brought my account down to its current level of $9. My losing rate for position trades is close to 100%… since my previous experience with daytrading set very tight stops and I constantly adjust them as the price moves.

   Since I switched into position trading, my trades all triggered the stop loss at some point since I didn’t set any take profit price, because I wasn’t sure what price to set them. When I was daytrading, I was deciding exit mainly via tape reading and that has worked much better for me. However, daytrading is too tiring though and take up too much of my time. I’ll see if I have time after this term since a lot of my projects are due before I build up my account size with daytrading again.

   Either that or I have to test strategies on a daily time frame so that they work for position trades, instead of my previous test on 5 minute time frames. In any case, I’m really glad I tried position trading when my account size is small and made me see some key differences between position trading and daytrading when it doesn’t hurt much.

9. 9
   a red coloured stone Says:
   March 22nd, 2008 at 8:10 pm

   I wonder will USD continue falling or will it hover around 1.3. Hmm…

10. 10
    Jon Says:
    April 12th, 2008 at 6:49 pm

    Hey hi,

    Stumbled on your blog and read up on some posts. Admire your desire to gain financial freedom but allow me to give you some honest advice, although whether you choose to take it or not, its up to you.

    Plz focus on your studies. Going from 1st class to 3rd is seriously such a big waste. Since you have proven yourself to be of 1st class calibre, you should focus on your academic grades and not let trading etc coz you to do so badly.

    I of cuz know that grades in itself is meaningless. But grades = a safety net in cause bizness ventures or other investments go wrong. With strong grades, you can at least secure a decent first job, and with it… more contacts and lots more benefits which cannot be merely quantified in monetary terms.

    All in all, just make sure your results do not suffer so much just because of your strong desire to get out of the rat race ASAP.

    Remember, you still got a long way ahead. Most imptly is to enjoy it every step of the way.

    ALl the best,
    Jon

    Hang Wei says:
    Thanks for your honest piece of advice. To be frank, I only wanted to get into Dean’s list for a year and that was why I always attended lessons in my first semester. When I knew I can get into Dean’s list with ease, I began to skip lessons and subsequently my coursework was heavily penalized. I did managed to get into Dean’s list, but my subsequent semesters were disatrous with my attendance getting even worse than before.

    Now that my first class has flown away, I do feel a bit of regret that I gave up something that I know I can achieve without too much trouble if I want to. It’s now impossible to achieve 1st class even if I score perfect 5 GPA for all the other modules and I may always live with the regret of sacrificing 1st class for no good reason. Then again, it may be a blessing if it motivates me harder to succeed in my own ventures. Whatever it is, I have decided not to work in my first year after graduation to strive in achieving something by myself.

    Someone once told me after a visualizing exercise that my visualizations suggest that I’m confused, yet I know what I want. It sounds contradictory, but I thought about it and realized what it meant. It simply means that I know what I want at the end of the day, but because I had explored so many disciplines in the past, I do not know which to focus on to get there. Every path seems logical to take and I have the knowledge and confidence to tackle any of them. Yet, the multitude of paths open to me provides a trap, a trap whereby I don’t pursue a single path with focus until mastery. It could be termed as information overload, where sometimes knowing too much may not be a good idea, until I focus on mastering each before moving on.

    My friend helped me in getting my focus right by asking me to join him in a business idea. It may or may not be the best path, but that gives me a stronger focus, since my friends are involved as well and I seek to value-add to any projects that I’m part of. I view this business with high optimism and know that I can really put myself to work for it. To prepare myself, I have already planned to finish my remaining 4 months NS liability early and have maxed out all my university modules so that I can complete my course early to concentrate on the business.

    I will most likely graduate with 2nd class, but I hope that I never have to apply for any job until the day where I’m rich enough to retire and live off my investments at risk-free rate. At that time, I just want to settle down and lead a normal life of teaching in either university or polytechnic just for passion. Life may not turn out the way I want and I may just end up being another low-salaried worker in some bank in future, but at the very least, I have given myself a chance to spend some time on trying to be an entrepreneur.

11. 11
    goldfish Says:
    April 21st, 2008 at 12:07 pm

    hi there,

    well, seems many ppl also interested with forex trading.

    Mr.Low, i wonder why don’t u try combine different methods other than those u mentioned? honestly i have no experience using SMA, but i think, MACD is a good reference but it hardly help in real trading. Fibonacci is good but mostly work for long trade, but not day trade like u mentioned. my indicator consist of 3 EMAS, RSI 14 or 20, and some custom stuff.

    ooh yes, just to mention that i did a typing mistake in SunshineEmpire related blog, my actual trading experience is 5 yrs, not 3 yrs.

    i can consistently made 10-20% return monthly. with good indicators, experiences and discipline, that shouldn’t be a problem. if i’m not mistaken, the so-called ~30% return annually of buffet and soros is not calculated as what we might think. (but unfortunately i’m not sure how its) the actual figure is more than that. some one correct me if i’m wrong.

    so, Mr.Low, i’m please if u would drop me a email and we can discuss more on forex trading and strategies. i need more info and comment regrading my work.

    have a nice day.

    goldfish

12. 12
    goldfish Says:
    April 21st, 2008 at 12:10 pm

    for additional, i don’t trade all pair consist of USD. its too volatile and unpredictable, and making heart beat up to 200 per min is usual.

    perhaps i need a different method and indicators, still i dont have confidence to trade any pair with USD.

    takecare.

    goldfish

13. 13
    questor Says:
    April 24th, 2008 at 1:32 am

    You are going about trading the right way, with small money until you can be reasonably sure of your trading methodology. Still 20 days is too short to really be sure.

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