Well, yes, I made up my mind. The last few weeks I have been testing a MetaTrader 4 platform with forex trading. My trading activities gave mixed and interesting results. This is why I decided to document this trading journey with this online investing blog. It will be an online diary for me, where I will post my conclusions and my learnings, and in the same time a forum for discussions for you, my readers. Therefore, if you have any comments on my trading methods, style, my tools I used for forex, please land on the comment side and leave me a sign. I am very interested in upgrading our common forex trading knowledge…
How did I start trading? I was flirting with the idea for several months. As you can see here, on doitinvest, I have done lots of reviews lately for forex trading books. These are my lectures. Despite the (quite wide) theoretical experience I gained in the last years, via the trading books and the forex blogs I was reading day by day, I felt like I was missing a bit more practical experience. The occasion came at a forex trading seminary held in my home town, where a broker presented the MetaTrader 4 platform and practical issues in trading.
For me, it was a revelation. MetaTrader 4 is the widest used trading platform for forex and for other financial assets. It is relatively easy to use and gives you access to trading instantly. It is actually so easy to use, that it is scary how easy you can gain or loose large amounts of money.
This is why I decided to test further the results of my trading. I re-embarked on the technical analysis reading. I extensively re-read several trading bibles and made more careful note of their learnings. And of course, I started trying different strategies out. Which I will detail in the incoming investing blogs here, on doitinvest.com, of course…
So let us start, right?
One of my favourite trading forex pairs is GBP vs JPY (called by traders GBPJPY). This is because I have a certain knowledge on the UK and Japan markets. And because I like this pair. This is a very important lesson for any trader, especially for the beginner traders – start with a pair that you like and try to spend some time with it. Try to find out its idiosyncracies – its own characteristics where you could find profitable entry and exit points. Any profitable forex strategy stats with this simple method – choose an investing vehicle that you like.
The recent Dubai world has shattered quite substantially the investing world. Many financial institutions (mutual funds, banks, investing companies) have dumped the Dubai World assets and found a refuge in the currencies perceived havens. One of this was the Japan yen – many investors bought yen against the other currencies, making the yen appreciate versus the other partnering currencies.
An illustration of this loosing trade can be found below:
Interestingly enough, I was following a Bank of Japan statement which said that they intended to devalue the yen. As a consequence, on 25.11.2009 I placed a buy order for 0.5 lots of GBP/JPY at the exchange rate of 146.56 GBP/JPY. Remember, when you place a buy order you consider that the exchange rate will increase (in my case I was placing a take profit order at 147 GBP/JPY). Yet, the trend reversed shaply on the next hours and until 26.11 the yen dropped to 140.95, causing me huge losses. Unfortunately I had enough leverage to wait until the trend reversed and I exited only with a small loss, on the 4th of December. Remeber, this is a demo account I am trading on. If these were my real money, I would have had sharp losses… (300% of my used leverage or trading capital).
So much for today folks. Please drop by and leave me you comments, i would be happy to read them…