My Trading Style

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Here is a quick breakdown of my style of trading (Forex).

The red horizontal lines are support and resistance. These are prices that have been hard to get above or below in the recent past. When a price approaches support or resistance, there is more chance that the price will reverse it’s current trend, so it should be watched.

The chart uses Japanese candlesticks to record price. There are other styles of displaying price available. A red candle indicates that price is falling, a green candle indicates price rising.

My profit to loss ratio is a minimum of 1.5. If I can get more, I will, but I will not take a trade lower than this ratio.

Chart

  1. The candle approaches the support line, and the 2 candles with the long lower tails indicate to me that prices are likely to rise.
  2. I place a long trade to buy at 1.23856, with a stop/loss at 1.22119 and an initial “take profit” target at 1.25957.
  3. I place my stop/loss below the long tail on the last candle before price rises to make it harder for it to be reached but still keep to my profit to loss ratio.
  4. The price falls after the initial rise and makes me nervous but it doesn’t stop me out and I leave it alone to see what price will do next.
  5. Price rises again, falters for a couple of days, but eventually continues on up and triggers my “take proft” (sell order).

Any candles that are in the green area between the times that I bought and sold mean that I have profit. If they are in the red area, I am at a loss, but unless price goes lower that my stop/loss order I stay in the trade.

As you can see (in hindsight), price continued to rise significantly after I took my profit and closed out the trade and would have made me a huge profit if I had stayed in the trade but I decided to take my profit before price hit the next red resistance line.

The actual profit all depends on how many units you are trading, for example 10,000 units could have made about $200 profit, 100,000 could have made $2000. The chart is showing daily prices where each candle represents one day of price movement. This trade took 10 days to hit my sell order and produce the profit that I desired. $200 profit for 10 days is ok, $2000 for 10 days is great. The size of the contract can be scaled up or down depending on the size of your trading account.

Traders usually trade on margin which basically means that the trader only needs a small percentage of the total trade value in their trading account in order to place the trade. This allows the trader to have much larger trades than would be possible without margin. Each broker has their own limits and policies for margin trades.

I caution you not to trade anything until you have found, and you are comfortable with a trading style. It does not really matter which style/system you use as long as it works for you and keeps you in profit. You will have to investigate different systems¬† in order to find the one that you like. If you don’t know where to start CLICK HERE for several trading styles

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Retire Early?

 

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Today, I have been having serious doubts about my decision to retire early. First on my list is that the retirement check is not enough. I knew this before retiring but the plan was to retire to allow us to move several hundred miles away from the big City in which we lived, to a much smaller City several hundred miles away. I planned to continue the same job in the smaller City and I did, for about 6 weeks until I could not stand it any longer.¬† The new job managed to perfectly blend the worst aspects of working in the 1970’s with the worst aspects of working in the present day. I doubt that it was planned that way but that’s the way it was and I couldn’t stand it, so with the small pension giving me a little more freedom than I had in the past, I politely told them to shove the job and went back to “retirement”. One day I will be specific about the profession that I was working in and I expect that you all will understand me better. All I am willing to say now is that the job can be dangerous and I was always coming into contact with crazy people and very emotionally needy people. Dealing with these people was not strictly part of the job, but over the decades, they have been unofficially added to the job responsibilities. The reason? who knows but I would guess that some smart ass somewhere figured out that he/she could add it to our job responsibilities and thereby save money by eliminating whole social services departments.

I also have a suspicion that I do not like small Cities. I have always liked to be an unknown when going about my business. This is the first time that I have lived in a small place and I am getting the impression that I cannot keep a low enough profile because it is small. Time will tell.

I was not particularly happy in the job that now supplies my retirement check, but I was known, knowledgeable about the job, knew all of those little procedures that are vital to the job but strangely never make it into the operating manual (funny how that works ?) and respected mostly. I had very serious doubts about retiring before I did so but my wife could not take the large crime ridden City anymore and she could take her job with her, so we took the chance that my employment would work out. For the last few weeks I have been applying for part-time jobs that require little thought. I have not received one positive reply, I have hardly received a reply at all. I only need a few dollars to make up my pension but it seems that I am not qualified for the most tedious and modest of jobs.

Tomorrow I will be back to looking for self employment ideas and testing them out, that would make me much happier anyway. As I test the contractor and self employment opportunities, I will let you all know the details and if it is worth trying.¬† My first contractor work will be Instacart, I will update the blog and the Generating Money page with the details. At this time, it looks ok and will probably generate more cash for less time worked than traditional employment as long as you don’t take benefits and social security payments into account.

Stay tuned for more info………..