BIG UPDATE 2014

Ok so you probably noticed I havent posted since 2013, well I have just made another 1 year world trip, met a lot of new people, tested new projects. All in all, very productive 14 months !!

BUT, I decided to give some feedback here again, and I have a very exciting (for me) project, wich is to have a online community / forum for traders…. who are actually making money on forex.
No EA selling.
No indicator selling.
No BS magic strategy selling.

It would be a private place where real traders share their real trades, with real profits.

Of course I would be the first to give feedback and post real trades.

This is coming very soon (next week!), but for now, here are a few photos from the last 14 months:
PS: just finally got myself a new camera, so things can get a little experimental…

Q&A with readers #2

Even if for the last year I didnt update much my blog, I still receive tons of emails.. some of them asking for help recommendations, or some just thanking me for cutting the bullshit about forex.

I try to answer to all of them, and sometimes the discussion gets really interesting so I will post a few here on the blog, to share the love.

************************* first email

Hey Forex Trading Nomad…I came across your posts on forexfactory so I thought I\’d visit your blog. It\’s cool, thanks for posting your knowledge and ideas. I even found a copy of The Zurich Axioms and am taking a look. I\’m kind of like a \’break even\’ trader at the moment but am now starting to see some equity growth.

I am just wondering if you always post your Gap trades on every Sunday ? If there are indeed Gaps. I\’ve been studying gap trades but still don\’t quite have the confidence to trade them…but I\’d like to.

cheers dude, and thanks again
Bryan

************************ my answer

I just decided this weekend to start posting all my gap trades, so yes starting from now they will be on the blog every sunday. (edit: shit sry for that didnt have time)
But not all gaps are created equal, be sure to watch the video on “novice vs pro gaps”. I made a post on the blog with a youtube link, video is not from mine but the guy knows what hes talking about.

************************ second email

Nice blog you have here
I\’m a bit the same love to travel around the world
in 2012 I came home from thailand and is now moving to germany
a few questions about your trading strategies
do you only trade on 5 minute chart what is the MA on your chart
do you look at higher time frame for the trens and S/R
do you put S/R on a line chart

-Kenn

*********************** my answer

hi,

I only trade 5 minute chart, because i am a short term trader with high leverage, my trades last usually around 1-2 hours

and the MAs are 200 and 50, but i dont use them that much, it was from a previous trading strategy

I quickly look at higher time frame to be sure there are no gaps or huge candles nearby (i dont want to be stuck in a stophunt spike)

S&R are extremely important, I dont have to put my lines as I can just see them on the chart because of experience
please remember that s&r levels cannot be defined as a simple line, they are more like a “zone” of the price (between 2 lines) where there are more demand or offer

************************* his answer

Is it also at 5 min chart you spot S/R zone?
when you contrarian trade do you buy when the price touch support?

*********************** my answer

yes as i said s&r are the most important in my trading, in 5min also of course

here is sam seiden talking about “zones” of support & resistance (supply & demand) instead of a simple horizontal line

http://www.fxstreet.com/webinars/sessions/session.aspx?id=50e3f4dc-9c40-41df-a732-b166dd3ce99e#

so yes i would be willing to buy on support and sell on resistance, but even better than that (with contrarian strategy), i will enter a bigger trade on a spike/breakout of this zone, as i believe the odds of retracement will be even higher

******************* third email

Hi Nomad,

Are you still out trading travelling? I came across your blog in a google search..I’m preparing to travel and trade leaving in a few months..I have ben trading form some years already and have a similar short trading style to yourself.
If your still around out there in the world it be great to meet up and talk shop..I found it hard to find another experienced trader to have a face to face chat with in a social sense apart from seminars with newbies wanting to pick my brains for hot tips and fast money lol
Im in Melbourne Australia probably heading to Asia first.

Look forward to hearing from you,
Elk

***************** my answer

Hey Elk,
sorry for the late late reply, but yes I have been traveling for the last year and gmail filtered the message.

You still trading exclusively forex? How you trading been?

I only do day-trading, and I am 100% contrarian. I wait for for spikes and counter the movement. I also made a big adjustement in my strategy.
Before, I would have more than 10k$ in my trading account. I would be profitable for few months then have a big loss. Wich is completly random, for example a natural disaster or a big failed company would fuck up the price and there is no way out. Just like recently the BOA governor made a random wire at midnight telling he wants the AUD low and is willing to print money. I was stuck.
Basically at some point of an other, you will not be able to get out of a trade.
So now I have maximum 2-3k$ and I trade high leverage.

Have you been to asia?
I am actually flying to Thailand in a week. Maybe you can recommend me few spots/cities.

24feb gaps : probably the biggest sunday I ever traded

First let me say im late for posting, I have been very busy the last 2 weeks as I am planning another big world trip for 2 years. I will probably be flying straight to Bangkok thailand first, then head towards Europe for summer.

Thus I didnt have time to trade that much…… and on the 24th I made so much &#%*%# that it was ok with me.

It was to be honest probably the biggest gap trade I ever took.

What happened was talks about the next BOJ finance minister. Rumors. Chit-chat. Bla-blas. So obviously for me it wasn’t worth 200 pips of gaps !!!!

I shorted all the Yen pairs and mostly took a partial profit at 50% retracement. With that kind of pips, I dont even need to wait for the full retracement of the gap (wich can take more than a day in some cases).EJ 24feb gap UJ 24feb gaps AJ 24feb gaps cadj 24feb gaps

 

 

17th feb Sunday Gap Trade – this is how you make money

CHFJPY gap trade 17th febCADJPY gap trade 17th feb USDJPY gap trade 17th feb Another very slow sunday that turned quite big.

There were no major gaps, and to be perfectly honest, I wouldnt recommend trading on a day like that.

The fact that the trades were made on the Yen, is even more risky due to their recent monetary policy. The gaps on CAD, USD or EUR pairs are more safe, since we enter the asian session first, and the European/American session much later.

As you can see in the screenshots my exits are almost perfect, probably only a matter of experience.

 

Heres are some tips:

  1. I prefer taking small averages instead of one big large trade.
  2. When in a nice profit, I usually close half of my positions to cash-in a little bit
  3. I dont accept going negative after I was in the money by a good margin, wich explains the close of CADJ at breakeven.

 

Newsletter and email collection

Because I am new to the blog thing, many of my friends with more expertise recommended me to start collecting emails to build up a newsletter list.

Well I just decided that I want all my content, posts, and trade examples to be available at any time to any one, on the main blog, without any kind of “registration”.

So basically the only goal of this blog is for me to pay the hosting and domain name so you can enjoy my 5years+ profitable trading experiences for free, great deal ! ahah

One possible downside tho, you will have to expect more personal ramblings, and more pictures of damsels in distress who needed my help ;)

 

Weekly Sunday Gap Trades – 11 feb edition

So this sunday I started to check pre-market quotes at 15.30H EST and quickly realized this wasnt going to be a big gap day.

As usual I check the forex factory calendar, and look if any important news were coming up, since I dont want to be in the middle of a fully technical trade when a surprise fundamental data is released and f*ck my trade. Sorry for that.

I saw that the Japanese market was closed for holiday, and personally I always appreciate that, as this means less liquidity, more volatility, and in english, better gaps.

Sadly tho, there was only an interesting gap on the CHF, and on all the majors, only UCHF made a clean breakout. I then readed on forexlive (a great live blog I would recommend) that there were some comments about further devaluation of the CHF, so I might have to say here that this was a more risky than usual trade, and I wanted to exit quick. ECHF also made a great movement, but there wasnt any clear resistance, and the pattern looked more like a pro gap than a novice one (the price jumped higher from the bottom, pros are the one who buy low and then sell high).

So here is my UCHF trade with a trade description, I also took a screenshot of the missed EU trade. Questions?

missed EU gap 10 feb

UCHF gap 10 feb

 

 

Weekly Sunday Gap Trades

If you have read my other posts about “finding a strategy” in Forex, you know that im pretty straight to the point, and recommend to go technical, and to look for precise patterns in price, or even irregularities that you can profit from.

I also talked about gap trading, and even posted 2 videos about that (how to get pre-market quotes for free, and how to know what gap is good to trade )

Well I just decided to show you my own personal live trades, for every sunday, when there is a interesting gap formation.

So here are last week trades (3 february 2013). Tomorrow I will post live my trades if theres anything good!UCHF gap 3 feb AU gap 3 feb ECAD gap 3 feb

 

 

 

 

 

 

 

Q&A with a reader

I recently received an email with many interesting questions from a fellow trader reading this blog. I asked for permission to post the transcript and here it is. Hope you will get something from it.

 

************************* the email

Hey Forex Nomad,

I just found your blog not to long ago, and while I confess that I have yet to read all your posts (I will, promise!), your ability to travel the world and support yourself through forex really speaks to me. As someone who sees forex as a means to live a life such as yours, this blog brings so much hope. Like you, I was 18 when I discovered forex, and probably like you, I’ve been digesting so much forex knowledge since then (I’m 20 now). Though I am no where close to being a great trader, I can turn a profit. If you don’t mind me asking however, what was your initial capital before you started your world-traveling-fun-filled-trading adventure? If you aren’t comfortable providing me with an exact number, that’s very understandable. Did you have to raise any initial capital before starting your journey? Also, does your trading coupled with your lifestyle manage to net you any profit that allows you to grow your trading account? Thank you for your time, and now I will enjoy reading your blog!

James

************************* my answer

Hello James,
well I don’t usually talk about my initial capital for the simple fact that it sounds to good to be true… and I don’t want to give false hopes to newcomers. I did had to trade 2-3 years in the stockmarket to start getting in profit, but still couldn’t make a living out of it. I started to be profitable in forex after at least 1 year.. Basically I was testing multiple strategies on multiple accounts, with something like 100$ in each. One of these strategies really stood out (thats the one I’m still trading currently), and I went to 20k$ in a 3-4 months period because of compounding.
So basically the initial capital was not spent on trading, but on paying my rent and food WHILE I was looking for a sustainable strategy. It’s a big difference, and I see it more as an investment or a down-payment. Yes I was in the red at the beginning, but that was the only way to have the time to work and study the charts.
For the lifestyle question, I can say that yes I grow account while traveling, but at the same I risk less while on the road (and thus gain less) for the simple fact that my schedule become more random, and I don’t have all my equipment with me (trading with a laptop is a little less convenient than trading with two 24″ inches widescreen monitors…)
I hope I answered all your questions!

The book that changed everything

There is one book that introduced me to investment.

Zurich Axioms

The Zurich Axioms (amazon link) by Max Gunther.

I will not even try to describe how powerful that book is, I will just quote the first chapters or axioms so you can understand why it’s so important to read this book.

On Risk:
- Worry is not a sickness but a sign of health – if you are not worried, you are not risking enough.
- Always play for meaningful stakes – if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either.
- Resist the allure of diversification.

On Greed:
- Always take your profit too soon.
- Decide in advance what gain you want from a venture, and when you get it, get out.

On Hope:
- When the ship starts sinking, don’t pray. Jump.
- Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.

Averaging in Forex – should you?

 

“Forex averaging is great!” -Lisa, 28yo

Everywhere you look for advices about Forex, you will mostly read how averaging down (or up if you are short) is a dangerous strategy. The arguments is usually about how you are putting more money in a loosing trade.

But like of most mainstream advices, the few successful trades are doing the exact opposite.

Let me show you why I average all the time.
First, even for someone with great experience in forex trading and following a custom strategy, its still very difficult to pick up tops or bottoms. (Well not that kind of bottoms you pervs).  So if you are waiting for a perfect entry, its all good, thats what I advocate, but at the same you have a big chance to miss that opportunity.

As you all know, I trade exclusively contrarian. And yes that pic of a girl trading upthere is a joke, girls cannot trade. Anyways if you combine the averaging mentality with contrarian trading, you get something very interesting. Let’s say I want a maximum of 10 lots in a pair. If I see an opportunity, a up spike for example, I will enter short but with a first trade of 2 or 3 lots depending on the high of the spike. If price goes down already, I will take my profit. But if price goes up, I will be looking to average another 2-3 lots. Basically if my strategy predicts the retracement of that spike at that specific time, all I am doing is spreading my risk over the chart. Instead of putting one big order, I follow the price movement.

Let me show you a real life trade example, from yesterday actually. The Yen pairs were quite green near the end of the session so all I was waiting for was a nice up spike. It was a bit slow so I decide to instead take a short early. Well price didnt go down right instead but started to breakout as I wanted previously, so I just added 2 shorts. Then when price crashed I closed all my 3 orders (you could notice the first one was breakeven).

forex averaging – 3 shorts

So here you go folks, I hope I convinced you that averaging is not necessarly a bad thing. Again just to resume I think its good because of 2 main reasons:

- To pinpoint exactly the highs or lows for a perfect entry is fantasy
- Instead of one big chunk of order, you can spread your risk over the evolution of the chart

I just updated the comment section so feel free to post if you have anything on your mind. Ciao.