Student of the market

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I've opened up a forex account. I haven't made any trades yet. Just watched the chart layout and changes in exchange rate. Its a whole new world to me. I have a feeling none of equity trading experience will apply to currency trading. Perhaps candlestick charting will work.. But that split second price movement scares the shit out of me.. Usually in equities, I can minimize the news risk by covering on other exchanges to cut losses when NYSE gaps up or down.

Quote from sKaLpZ:

mm... possibly.

yeah, in forex it's not like we really have a Level II system or anything to watch.

It just kind of explodes sometimes and you got to deal with it.

when I first went live I was trading short EUR/USD for about 3 or 4 days I was stuck in a trade that kept going higher and higher on me - I was going into deep red and getting very worried.

Suddenly one morning at about 8:30AM EST... it couldn't have been more than a blink of an eye... the whole market fell out from under me - less than a 1/10 of second the market dropped 100-points - then in the next few minutes it fell another 75-points.

I was so deep in the black I couldn't collect the money fast enough. :D

Lately, when the bombs first went off in London I was long the British pound at about 2:30AM my time and the market tumbled on me something like 400-points in a few hours - that was brutal - it took a chunk out of my trading account (that I later recouped).

Lon Eagle said he was trading GBP once and in one 24-hour session the market tanked 10%!
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8.15.05 Monday Trading

I spent the morning agonizing great entry I missed buying DJ on first pull back. I pondered to buy out the offer with market order.. I pondered on the size.. I thought 5k (size i am comfortable with).. maybe 8k(not very comfortable with).. or go for 10k!!! (never done it yet) then the offer went 1.. it was too late.. For some reason, when I miss my initial entry, I can't seem to make myself "buy late". I watched DJ run up 2 points and made nothing.

I went out to eat lunch and missed great long move in REIT sector. I also missed the great down move in DJ and all the other publishing sector.

However, I netted surprising $900 today. I didn't do anything special.. Just grinded every cent I can make scalping. I always try to think what I could have done differently in my trades after the trade is done. Today I feel like there wasn't much I could have done except for the DJ trade. Hopefully someday I will be so damn decisive that I can input orders automatically when it comes to large position trades.
 
Here's something that even decade+ veteran traders have trouble understanding:

<b>The market does not know or care where you got in!</b>

Flame away, but all the best equities daytraders I know will ALMOST NEVER USE STOPS. 'Being up' or 'being down' on a position shouldn't ever change the way you trade it. The market has no idea where you got in. If you're long and the stock is slowly inching up during a general market selloff- would you cash out just because you're up? That's not a winning way of thinking. If you have a good feel for the market, trade based on what the stock is doing, never based on your entry.
 
From my previous experiences, summer trading has never been so exciting. I traded 87200 shares today twice more than what I usually trade. There were so much movement in the morning and the afternoon. I hope this continues on.

Perhaps, August weakness is really going to do damage this year after hitting 5 year highs.

My best and worst trade today was BBY. The moment market opened, I started to look at HD, BBY, WMT, and TGT. WMT having negative news expected to open lower. I looked to short the other retailers. I started to short BBY from 40s. When it approached the large bid at 26, I used ERCO hit out the 26. I covered all my position at 11. and the moment I covered I realized that this would be my usual big hack of the day.

I spent the rest of day in agony knowing that only if I held a little longer this time around or listened to advices here and covered 1/3 or even HALF, today would have been great netting day for me.

In the afternoon, I watched WMT approaching 150k shares at .25. It was amazing to see it break down and run up 40 cents. So much money exchanged hands. I wasn't in it but it sure was exciting to watch some of the finest traders grueling it out.
 
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