Skip to main content

FX

It started with a demo account.
FX, or foreign exchange trading, is a market not many desire to charter.
Why?
3 simple reasons.
1) Extreme volatiliy in the short term.
Within seconds, minutes or hours, when FX market turns, you could lose your whole life savings, or win a lifetime freedom. The swing between the observed short timing is unforgiving simply because it reacts violently and  instantaneously due to the sentiment (supply and demand) of the majority player in the market. In the longer term - days, rather than weeks, it moves slightly slower and more in line with news that has a more longer-term impact, i.e. BOJ decided to keep their interest rates low, so it is probably safer to trade longer time. But...
2) Who has the nerve to risk it all (including your life)?
The FX market isn't for the faint-hearted. Trading it longer term - in days - is unnerving enough, especially for early traders. Once you enter a position, you could probably not eat and sleep for days comfortably for fear of an extreme market upturn or downturn - depending on your positions (buy/sell). This situation is generally exacerbated by the fact that early traders have the tendency to keep checking their positions and hence, worry themselves incessantly.
Successful trading is supposed to be patient, mindful, and non-emotional with a long period of inaction.
3) No matter how experienced you are in this, there is no way you could've predicted only through the fundamental analysis (not reading the charts).
Spikes of activities happen when the market first opens, records high are held on Mondays, as well as nearing the weekend, when U.S. market finally opens. News must be folowed, but insofar technical analysis is still the best. Being able to read the charts is essential, but this doesn't guarantee correct direction reading. That's pretty much the knowledge you could at least rely on.
So after saying all of that, I should have already chartered the unfamiliar seas, right?
Ah, no, it is still a demo account. I have yet to complete a timeline I set to myself to constantly profit through more winning the trades rather than losing. Six months. So far, records have been good. But experience doesn't teach me to predict the market, it only shows KFC (knowing where I am, finding where to go, and change the focus when required). Knowing this differentiates trading with gambling.

Comments

Popular posts from this blog

2017 Lessons

Receiving the feedback from my boss and my mentor was easy - they are all very positive. Those that are not, they have been work in progress. But I'm going to push my limit further - I'm still not satisfied with where I am now. A few learning points for 2017 (which haven't ended yet - I might have an update) below, however:1) Never be afraid to speak up - be it on a new, more efficient approach on doing things (ofc, research them well first before presenting it), be it saying no and pushing things away (due to lack of capacity and inevitable compromises of quality), be it asking for help (you'll be surprised on how people are happy if you ask for their help as they feel that they're worth much more than they think of themselves). You need to speak up to get what you want. Nobody can read your mind and nobody will know what you want unless you say it out loud. 
Moving forward: Learn to be more tactful. Learn to speak with confidence in front of a few more people th…

Working Tips

Growing up is growing pains. Hurts, but it's necessary to go through. When I first started working, the transition was hard, but I learnt a lot. Here are 3 lessons I found the most invaluable till now. 1) Setting expectations too high. It's true that in order to shine we have to give a 100%, but often times, when we were still young and energetic, we overestimated our measure of 100%. It is usually our 120-150%. Giving this overpowering 100% everyday is not sustainable - eventually you'll reach a burnout point. Reduce what you thought is 100%, not so much, but enough for you to do your job well, make your supervisor happy, and sustain for a much longer period of time. 2) Smile. An often underestimated value in the workplace. Everybody loves people who always smile to them, acknowledging their presence instead of ignoring them. You don't necessarily have to greet them cheerily and ask them sincerely how are they doing (although this is a super good time to practice the …

13 Reasons Why (by Jay Asher)

The Netflix TV series of Hannah Baker, the girl who committed suicide and recorded her side of story with the 13 people who contributed to her final decision to take her life, sounds like any other chick flick. Hannah Baker is a teenage girl who has just moved from a city to a suburban and is in the process of searching for a new identity, which unfortunately was steadfastly defined and sexualised by her new friends. Things went spiralling down after that but this is pretty normal, isn't it? Why did Netflix aggressively advertising it? (apart from the reasons that having these series cost them a lot of money) Listening to her suicidal reasons was rather intriguing. As a self-proclaimed adult myself (although I'd still think I'm a kid at heart) my first thought as an observer is that her focus was wrong. So much effort is being put into recording herself before making her final decision, but it doesn't actually change her initial decision to take her life in the end. He…