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Frequently Asked Forex Questions - Part 2 Q: Can you recommend any good book(s) on forex candlesticks and their patterns? - Philip A: One of the best is by Steve Nison. His web page is http://www.candlecharts.com/ Q: Hi, Jeff, First of all I feel that your product is great and we need more people like you! I've been paper trading the Forex Profits for about 2 weeks and I started off pretty well. Now I've run into a problem. It seems as though when ever I trade on a 30 minute chart such as the GBP/USD, I keep getting losses but when I trade on the hourly charts I win a lot of the time. It has been pretty consistent lately and now I am even catching myself doing a big no no which is comparing charts (60min Vs 30min) before I trade. I've been pretty good at controlling my emotions and letting the trade go until it hit my stop. The stops are set per your manual. The emotional thing is starting to kick in where I no longer trust the 30min chart for any currency but I feel that the hourly chart misses to many good trades. So I have 3 questions:
1. Do you think that my broker has something to do with this?
2. Is the market you too choppy for the 30min chart but it hard
for me to see because of my software?
3. What timeframes have you been trading lately?
Thanks! Dave H
A: Thanks for the "Thumb Up" Dave. If you haven't done so already, check out the video down below as it will help place your stop so that you get stopped out less. That may do the trick for you. Also keep in mind that there is a lot more "noise" on the 30 compared to the 60 and therefore you are more likely to get stopped out more often. Not sure if your broker had anything to do with it. There is always a compromise in trading. For example if you trade the 60 minute you get less trades, but get stopped out less. If you trade the 30 you get stopped out more, but get more trades. I like the 1 hour and 2 hour as it gets rid of a lot of the noise. Q: Hello: I have purchased your Forex Fast Profit and greatly appreciate it. Now I have a question regarding "limit order". The other day, I placed a limit order but when the price touched the order, it did not process the order and the price went opposite way. I have inquired the broker and he said, sometimes, there are other people placed same orders before me and therefore their orders have been processed fast and mine did not get a chance. And there is no way to know how far my limit order it in terms of priority. I wonder if its true for other brokerages. Since if that's the case, there is a risk involved like a trade without "placing limit order". I would appreciate if you can let me know about it. Thank you, Ayako A: Yes Ayako, what your broker told you is true. Limit orders have the lowest priority. Also, the market needs to trade 1 pip beyond your limit price to get filled. For example, if you want to buy at 1.960 limit, it will need to hit 1.9601 to get filled. If it just touches 1.960 then it may not get filled. That example is how a broker explained limit orders to me. There is a "risk" involved with limit orders in that you may miss getting into a great trade. Like I said above, there is always a compromise in trading. Using limit orders help you get in at exactly the price you want, but... As I said you may not get in the trade at all.
Q: I'm used to looking at 1 min. 3 min. 5 min. charts
and getting in and out while watching those time frames. Since
you recommend longer time frames than I'm used to (30, 60, 120
minute) do you recommend holding positions overnight? As
you know, if you are watching a longer time frame, a trade might
not develop until late in the day.
I realize there is no real "overnight" with Forex since they are traded around the clock but there is an overnight for me since I go to sleep each night and can't watch the market. Should I close out all positions before heading for bed or do I just leave stop orders in place?
If these questions are answered in the manual and I haven't
gotten that far yet, please ignore this message and I'll find
out when I read the rest of the manual. Robert (like what I see so far)
A: Robert, "holding overnight" is purely a personal decision. Many times holding your positions can lead to more follow-through which translates to greater profits. Some traders however find that they can't stomach what might happen while they are sleeping so for these individuals I say just close out your positions each day. If you are comfortable leaving a stop loss in the market then that is cool. Stop loss orders will protect your position just in case a sudden reversal in the market occurs. I personally like holding my positions as I know that often the market takes awhile to gather momentum. Once again, you must do what feels best for you. Q: Hi Jeff, I am studying your ebook and I really find the explaining very good and clear. Now I have only one question. You recommended 30min or 60min bars. Sometimes I find out that the MACD and set up bar for both are different and the trend too. That is for me not logical. What is the correct trend? Best Regards, Andrzej A: A big mistake that many traders make, especially earlier in their trading careers is to try and get all the time-frames to line up. I did the same and it drove me crazy as I was getting conflicting messages from each time-frame. For example the 5 minute trend would be up, but the 30 minute trend would still be down and the daily would be up. So which one is right? They all are! Let me explain... If you are trading the 5 minute chart then the only thing that matters here and now is that the market is going in your direction. It doesn't matter what the 30 or daily is doing. The bottom-line Andrzej, is that each time frame is independent of another and will have an entirely different look and feel than other time frames. Don't worry about what another time-frame is doing and simply concentrate on the trade setup. In other words, if I find a setup on a 60 minute chart, I don't worry what's going on a 30 minute or 2 hour chart.
Q: Hi Jeff, Thanks for getting back to me. Your comments
continue to help my understanding and confidence. Last
week I did quite well, went 5 for 5 and am now at 80% over the
past 3 wks.
One additional question. On almost a daily basis I
see qualifying candles with 5+MACD, but I don't enter
because the time when the candle occurs is not within the open
market hours for that pair. For example, I would see a long
signal for GB/US but it would be 3-4 hours before the Euro/GB
trading day begins. Often these trades work out for big gains,
but I also understand that there can be large swings in the
first 1-2hrs of EU/GB trading. So far I have decided to only
trade these pairs when their trading days have begun. Since I
live now in Thailand I can trade all 3 trading time periods, so
I'm just wondering if I should stick to trading when a pairs
market is open, or should I consider trading a signal anytime I
see one.
Also, I've been considering looking at the US/YEN and EU/YEN during my mornings. I've resisted looking too much at these pairs because in the past I've been burned when the BOJ interceeds to manipulate the prices. Do you trade these pairs and if so, is there anything in particular that you've found that one should note which would differentiate them from the pound and the euro using your method?
Finally, I must say I had become quite a skeptic about FOREX
systems over the past few years. What's helped me the most
about just accepting your system and the results I've been
obtaining so far is when you emphasise in your e-book that
"trading is not logical". This hard to accept reality is
slowing sinking in. As I slowly increase my pip size per
trade, I feel that finally I may be on the right path.
Thanks again for making your system (and education)
available to us.
Kind Regards,
- Gerrie A: Gerrie, when I created this strategy I did so without looking at when the signal was occurring or during which session it took place in. I personally will take a signal whenever I see one. You are right about big potential swings and that is why it is important to have protective trailing stops in place. They will help protect you if a big swing occurs opposite to your position. One other thing to consider... Say you see a signal on the pound/us dollar, but the European session is not officially open yet. Nothing says that market can't blast off as it may react to news that just hit the Asian market. I primarily stick to the USD/EURO and GBP/USD Q: Hi Jeff, entry question, when placing entry at 1-2 pips in front of setup bar high, do you also add on the spread? Example setup bar high was 122.00, you want entry at 122.02, but spread is 3 pips, so entry at 122.02 is really at 122.05? Sell signal should be low minus 1-2 pips as spread is simply deducted from entry? - Michael A: Yes Michael, you have it exactly right!
Jasveer asked me a question and it would require too
lengthy of an email, so I have made a video instead. As
they say, "a picture is worth a thousand words".
To view click here:
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I
have just finished a new video that will show how to avoid
getting stopped out as much. I also highlighted a few trade
setups as well. Enjoy!
