Tuesday, November 20, 2007

Success With AUDJPY

Finally, I seem to be able to make a few dollars. This is significant as it represents a ray of sunshine in my quest to become a Forex trader.

I'm still playing with a small account balance, but hey, if I'm able to grow this into a more serious stake, I'll be willing to trade with it.

Anyway, to give you what might be a trading tip or two, my process currently is to start out by looking at a 1hr chart, identifying any potential trends. Once I've scoped out this level, I'll drop down to the 15min chart, again looking to identify any apparent trends.

Once the above have been done, I'll use the 5min chart to look for entry points into the trend. When the market is "rational" then simply buy low and sell high.

Of course, it is particularly difficult to execute this strategy, and it is very difficult to know when the market will become "irrational", but you only need to be right more often then wrong if you do this right.

One hint, when you approach the end of a trend, a boundary between two trends, or major resistance levels, the market may or may not behave rationally. Trends often break, prices halt, drop or pop unexpectedly, and bets on the trend get even riskier than they are under the best of conditions.

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