Choo Koon Lip

3. Successful forex traders do not trade all the time. A good trader will understand that the forex market does not move in a straight line, it moves in waves. For example, the trend may be an uptrend, but there will certainly be retracements, so conservative traders may only want to wait for forex trading signals to buy and will refrain from selling during retracements.

Having said that, it all depends on the market conditions and if it allows for trading during big retracements, so be it. You have to learn how to judge the market condition on whether it is trendy or choppy. For me, I’ll always avoid trading when the market is choppy because it’s too unpredictable. Furthermore, the current strategy I frequently used trade average once in every 2 days.

That’s all for the 3 short episodes of the book. There are more in-depth trading examples and analogies in the book!

2. Make sure you follow the trading rules. A forex trading system is meant to help you make accurate trading decisions, so please be sure that all the conditions are met before you even place a trade.

Sounds easy? Indeed it seems real easy for anyone to follow a rule right? But there are many traders who can’t control their temptation to trade when not all the rules are met, they often trade earlier even before the forex signals are generated. This is also an important part of forex trading psychology, you must not let excitement, fear or other people’s influence ruin your trading system that works.

1. Learn to trade forex with a disciplined plan and not by hindsight. There is a problem with many traders and that is they take shopping more seriously than forex trading, and I’m serious! An average shopper will not spend a $200 on something without much research or if he/she has not done some research on it. But I have seen tons of people risking their trades with a few hundred dollars based only on their intuition or ‘feeling’.

So what people need to do here is to have a trading plan at the starting of the day and follow it thoroughly. The trading plan should consist of stop loss (it’s a must!) and profit target levels (and preferably with multiple scenario planning), so that your trade is planned to be taken out early when the market goes against you and yet also there is a profit target to aim for if the market goes in your direction.

Stay tuned for next posting!

Anyway, I went to Santana Concert with my dad on Monday 7 March. Finally got to see the legendary guitarist!

I’d been super busy this month, preparing the recent Forex Graduates Gatherings. I only managed to catch 4 shows (and a concert)!

I Am Number Four – 1 Mar, 7.20pm @ TGV Cheras Selatan (KL)

Gnomeo and Juliet – 5 Mar @ GV Marina

Ghost: In Your Arms Again – 11 Mar, 3.00pm @ Shaw Serangoon NEX

Rango – 16 Mar, 12.15pm @ MBO KSL City (JB)

I posted now, knowing that it’s unlikely to catch a show on the last day of this quarter. It’s a fulfilling quarter where I have learnt a lot and experienced things I may never dream I will get close to.

Anyway, I went to Santana Concert with my dad on Monday 7 March. Finally got to see the legendary guitarist!

Just read a news about NFA is instilling a new rule (or a way to tax the brokers)…

Few hours back, NFA just announced that its assessment fees increase. Effective January 1, 2011, NFA’s Futures Commission Merchant (FCM) assessment fee will increase from $0.01 per side to $0.02 per side. In addition, the Forex Dealer Member (FDM) assessment fee will increase from $0.01 per $10,000 of notional value to $0.02.

The increase will mark only the third time in NFA’s 28-year history that it has increased the fee. Conversely, NFA has decreased the fee eight times during the past 10 years.

In January 2008, NFA reduced the FCM assessment fee by 50% to $0.01 per side. When Members were notified of this fee reduction, NFA noted that the fee reduction may be sustainable for two years. In fact, NFA has been able to sustain the fee for the past three years despite a reduction in public trading volume. However, in order for NFA to continue to fund its operations and maintain adequate reserves, an increase in the assessment fee has become necessary.

Bluntly speaking, NFA wants a bigger cut of the very profitable forex business – and who can blame it? NFA is looking to charge 40 cents per each standard lot while most brokers profit around $10 per 1 standard lot.  Conservatively estimating the US market at around $2-3 trillion a year NFA can expect to make around $8-12 million a year. No wonder NFA wants all US clients back in US subsidiaries.

I just received an email from GAIN Capital (also known as forex.com commonly) this morning. The email content is as follows:

——

On October 27, 2010, GAIN Capital entered into a settlement with the National Futures Association to resolve the pending proceeding against the firm, which included three claims relating to execution practices in its Metatrader platform and its former weekend liquidation policy. The company entered into a settlement without admitting or denying NFA’s allegations and agreed to pay a fine of $459,000. As part of the settlement, the company also agreed to provide appropriate refunds to those customers who were adversely affected by the practices described in the NFA complaint. We estimate that, in total, the trades affected by both issues represented approximately .05% of all customer transactions during the period.

In accepting the offer of settlement, NFA also dismissed a separate claim alleging that the company failed to cooperate with the NFA’s investigation and issued no finding with respect to a claim alleging any failure to supervise the operations of the company.

GAIN Capital is fully committed to compliance with all applicable laws and regulations affecting its business. We will continue to review all operations of the company to ensure that our operations are world class, transparent and that the interest of our clients and partners are fully protected.

——

After researching about what happened, here’s what happened. The market market broker apparently reduced half the leverage level over the weekend (where there was no trading) and caused lots of ‘margin calls’ in their clients’ accounts. Complaints were all over and you can read more about the NFA orders at http://www.nfa.futures.org/news/newsRel.asp?ArticleID=3676.

I’m very glad to announce that I launched my book on my 28th Birthday 10 days back. This is another small milestone to me where I FINALLY FINALLY completed the book ‘The Lemming Trader‘.

The inception of this book was trying to be forex related, but somehow conceptualising the book halfway, I realised there were already too much ‘forex forex’ books and also ‘secrets of ***’ books in the market. The whole initial idea was thrown away and I began thinking into what matters most by traders. The answer was simple – trading psychology and money management.

The next important component is to make the topic interesting and so I decided to use animal to create a metaphor. The rest is history and I chose Lemming over here.

Oh ya, what’s a lemming anyway? A lemming is a rodent believed to mass commit suicide by jumping off a cliff and then drowning to death after swimming for a long time. Why lemmings choose to do this or whether or not lemmings are really into mass suicide is not what this book will tell you. Rather, what’s more important to you and me is how this supposedly oddball (and fatal) behaviour of lemmings parallels that of many traders.

A short introduction of the book:

The Lemming Trader is a first in trading psychology books that introduces us to the suicidal behaviour of lemming traders, and how we can convert that to winning behaviour for consistent profit.

The best reward I hope for all my readers is seeing your trading profits increase steadily as you apply what you’ve learnt in each chapter.

The Lemming Trader lets you learn from the fatal mistakes of lemming traders so you don’t find yourself drowning in the harsh, cold sea of the financial markets.

A small advertisement: You can now buy the book online at https://www.createspace.com/3469285 (nope, this is not an eBook) and get it shipped to wherever you are! Hope you have a good read!

Once and again, I would like to extend my gratitude to our participants at our Forex Asia Congress 2010.

I thank all of you for the kind participation and I would like to share some of the great feedbacks emailed from the audiences in commerating our presenters. Thank you for writing in!

“‘Da Shi Xiong’ Chee Seng and Yeanjie (Ipoh guy) really impressed me in the Forex Asia Congress. Their sincerity attracted many interest and this must the reason why the 2 of them got the loudest applause.”

“Ram, watched your Kallang Roar movie before… didn’t expect to see you in person, and definitely not in a forex event… great to meet you in person, your session enlighten our mood throughout the meaningful congress…”

“Out of the sea of fx trading, i didn’t expect you guys can use forex as a tool to invest in aussie properties. hope KS can come more to malaysia to enlighten us…”

“Mr Loh really ‘li hai’ – wow no tech indicator wor, what he draw on the flipchart really appear on the chart on the friday gathering before congress… his theorist method (hope i spell correct) really really ‘li hai’… and also thanks for the USD50 trading credit.”

(on Elvis) “Despite not having EA or fanciful indicators, you really share a lot more than with his fibo lines and fractal. tq for ur kind sharing and was very impressed by ur unique strategies…”

“even though Billy have limited time in sharing his speed strategy, but i can sense the passion from him in scalping.. looking forward to the course conducted by him and you…”

Words from the Financial Experts!

“Koon Lip, Congrats to your Seminar in KL, Very Successful.”
- Peter Tai, Founder / CEO, PT Investment Academy (via Facebook)

“kawan, take care.. lets do a bigger one.. Your Singapore gang is all gear up for it . .. I believe so.”
- Kee Wah Soong, President, Malaysia Financial Planning Council (via Facebook)

…and finally, a thumb up for my admin and logistics team!

Finally, our Forex Asia Congress finally ended with a high note!

Thank you everyone and our always supportive graduates for coming to Forex Asia Congress! I really hope you people learnt a great deal!

Thank You Mr Kee Wah Soong and our media friends for gracing the event.

Thank you my presenters (Chee Seng, KS, Loh, Yean Jie, Billy & Elvis) and emcee-host Santhanaram Jayaram and Lily Chee.

You guys were great! Solid contents, great chemistry!

Thank you Lowie, Ong Bak Yam, Mei Chen, Gavin Chong, Lee Wai Chon & Ken Chin on helping out in the admin, logistics and everything else.

The whole team really worked hard mainly due to the intense preparation (which included lack of sleep and meal!!) in preparing for the Friday gathering and Saturday Congress for the both weekends.

Thank you thank you.