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Trader Contest at Dukascopy

This contest is a good chance to help discipline yourself,
I like the rule where you must setup limit entry, target and stop loss order,
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So You must look and join if you want to turn into better trader.

I myself join this contest and here is my profile,
please visit, and give support, thank you ^_^
http://www.dukascopy.com/tradercontest/?action=blog&trader=hawman

28 June 2011 EUR/USD


Just follow the trend, EUR/USD overall still downtrending, not so strong, but the situation still support for EUR/USD short. I'm taking chance to short this pair while it break the MA 200 at hourly chart and having retest of it. Setting my cut loss level just above the 200 and waiting the result. Hoping for good result.
Following other prediction and rumor, I hear rumor that market going to collapse in 2 days and up to 2 weeks, situation is the same like 2008 only bigger. Well my bias is short, so if this issue come true, my position get benefit from it, but I still fear what will happen next if world throw into turmoil. Scared but if must then just happen fast.

27 June 2011 EUR/USD

It's a strong move down today, we have already expected this movement from very long time ago, where I set the sentiment for EUR/USD at 1 June. What is the next move, is it able to go further?
I think yes, we might have 1.3880 this week or next month, to fulfill monthly chart test of low and breach.

Surely in line with fundamental news that QE2 end this June,
Time for a chart


A triangle formed at EUR/USD, If I want to buy this thing, surely it's time to do it with tight stop loss, But seeing all the momentum down that is very strong, I won't do it yet, waiting for any clear sign from reversal candle. Otherwise it is going to break nicely today.
Let's wait, If break, test of low 1.3975 is on the table and further down to 1.3930, 1.3880 in card.

Have a nice day

5 Steps to becoming a trader

The 5 Steps to becoming a trader

Step One: Unconscious Incompetence.

This is the first step you take when starting to look into trading. you know that its a good way of making money because you've heard so many things about it and heard of so many millionaires. Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be? Price either moves up or down - what's the big secret to that then - lets get cracking!

Unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're trying to do. You take lots of trades and lots of risks. When you enter a trade it turns against you so you reverse and it turns again .. and again, and again.


You may have initial success, and thats even worse - cos it tells your brain that this really is simple and you start to risk more money.


You try to turn around your losses by doubling up every time you trade. Sometimes you'll get away with it but more often than not you will come away scathed and bruised You are totally oblivious to your incompetence at trading. 

This step can last for a week or two of trading but the market is usually swift and you move onth the next stage.

Step Two - Conscious Incompetence

Step two is where you realise that there is more work involved in trading and that you might actually have to work a few things out. You consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.

You now set about buying systems and e-books galore, read websites based everywhere from USA to the Ukraine. and begin your search for the holy grail. During this time you will be a system nomad - you will flick from method to method day by day and week by week never sticking with one long enough to actually see if it does work. Every time you come upon a new indicator you'll be ecstatic that this is the one that will make all the difference.

You will test out automated systems on Metatrader, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence, DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today. You'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even adding to them because you are so sure you are right.

You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be making that amount because you've studied and you don't make that, you know as much as they do and they must be lying. But they're in there day after day and their account just grows whilst yours falls.

You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice and overtrade your account even though everyone says you are mad to - but you know better. You'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you either.


You might even approach a 'guru' like Rob Booker or someone on a chat board who promises to make you into a trader(usually for a fee of course). Whether the guru is good or not you wont win because there is no replacement for screen time and you still think you know best.


This step can last ages and ages - in fact in reality talking with other traders as well as personal experience confirms that it can easily last well over a year and more nearer 3 years. This is also the step when you are most likely to give up through sheer frustration.

Around 60% of new traders die out in the first 3 months - they give up and this is good - think about it - if trading was easy we would all be millionaires. another 20% keep going for a year and then in desperation take risks guaranteed to blow their account which of course it does.


What may suprise you is that of the remaining 20% all of them will last around 3 years - and they will think they are safe in the water - but even at 3 years only a further 5-10% will continue and go on to actually make money consistently.


By the way - they are real figures, not just some ive picked out of my head - so when you get to 3 years in the game dont think its plain sailing from there.


Iv had many people argue with me about these timescales - funny enough none of them have been trading for more that 3 years - if you think you know better then ask on a board for someone who's been trading 5 years and ask them how long it takes to become fully 100% proficient. Sure i guess there will be exceptions to the rle - but i havent met any yet.


Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded accounts and all but given up maybe 3 or 4 times but now its in your blood

One day - im a split second moment you will enter stage 3.

Step 3 - The Eureka Moment

Towards the end of stage two you begin to realise that it's not the system that is making the difference. You realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right You start to read books on the psychology of trading and identify with the characters portrayed in those books and finally comes the eureka moment.

The eureka moment causes a new connection to be made in your brain. You suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds, never mind the next 20 mins.


Because of this revelation you stop taking any notice of what anyone thinks - what this news item will do, and what that event will do to the markets. You become an individual with your own method of trading


You start to work just one system that you mould to your own way of trading, you're starting to get happy and you define your risk threshold.

You start to take every trade that your 'edge' shows has a good probability of winning with. When the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as you realise that the trade is bad you close it . The next trade or the one after it or the one after that will have higher odds of success because you know your system works.


You stop looking at trading results from a trade-to-trade perspective and start to look at weekly figures knowing that one bad trade does not a poor system make.


You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter what as you know the probabilities stack in your favour.

You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who advised the same thing a year ago with a smile. You weren't ready then, but you are now. The eureka moment came the moment that you truly accepted that you cannot predict the market.

Step 4 - Conscious Competence

You are making trades whenever your system tells you to. You take losses just as easily as you take wins You now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it looses and when you're on a loser you close it swiftly with little pain to your account

You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose 100 pips - generally you are breaking even and not losing money. You are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day away. You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

You'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back again. You will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.

This lasts about 6 months

Step Five - Unconscious Competence

Now we’re cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level. You are running on autopilot. You start to pick the really big trades and getting 200 pips in a day doesnt make you any more excited that getting 1 pips.


You see the newbies in the forum shouting 'go dollar go' as if they are urging on a horse to win in the grand national and you see yourself - but many years ago now.

This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.

You're a star in the trading chat room and people listen to what you say. You recognise yourself in their questions from about two years ago. You pass on your advice but you know most of it is futile because they're teenagers - some of them will get to where you are - some will do it fast and others will be slower - literally dozens and dozens will never get past stage two, but a few will.

Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring - you're doing your job and that's that.


Finally you grow out of the chat rooms and find a few choice people who you converse with about the markets without being influenced at all.


All the time you are honing your methods to extract the maximum profit from the market without increasing risk. Your method of trading doesnt change - it just gets better - you now have what women call 'intuition'

You can now say with your head held high "I'm a currency trader" but to be honest you dont even bother telling anyone - it's a job like any other.


I hope youve enjoyed reading this journey into a traders mind and that hopefully youve identified with some points in here.


Remember that only 5% will actually make it - but the reason for that isnt ability, its staying power and the ability to change your perceptions and paradigms as new information comes available.


The losers are those who wanted to 'get rich quick' but approached the market and within 6 months put on a pair of blinkers so they couldnt see the obvious - a kind of "this is the way i see it and thats that" scenario - refusing to assimilate new information that changes that perception.


Im happy to tell you that the reason i started trading was because of the 'get rich quick' mindset. Just that now i see it as 'get rich slow'

If youre thinking about giving up i have one piece of advice for you ....

Ask yourself the question "how many years would you go to college if you knew for a fact that there was a million dollars a year job at the end of it?

Take care and good trading to you all.
Ps: I don't know the trader who write this, but all credit to him/her

1 June 2011 EUR/USD last update

As I have said before, I expect trend change from bullish to bearish and now it happen, lead by Dow Jones which falls more than 200 point. I think 1.3880 is possible.

and now it open the possibility, today yield me 152 pips, and that feels really good,
If you take my words, I'm shorting this behemoth down no matter what happen before NFP or next week ECB meeting.

All I know is technically EUR/USD is doomed with dark cloud cover appear in monthly chart.
now take my other words for your safety, "Sell on rally" for EUR/USD till you see a rally that is going to heaven hehehe.

Have good sleep,
and may the green pips with you

1 June 2011 EUR/USD continuing review

Whoopsie it falls to give around 35 pips, but I mess up with Swiss army EA hehehe
I forget to adjust the trail into 30 break even and 50 pip trailing,
Got my position BE+1 after first attack to 1.4397 and price bounce back up, later second attack trust down more than 1.4400 and close below it, I'm sure it still can go down more,

But need to take caution as Trichet will speak 2 hours later,
What will happen to Greece? I think a delayed default for now,
but what will happen next time? delayed default again? the government have very big reserve then,
I don't think so, the next wave of default and no one have enough protection to default.

Anyway I'm taking short again after that BE taken down yielding me total of +37 pips, up 3.64% not bad,
Already out, waiting for next setup so I can reach +62 pip target. 25 pips more and time to close the platform, or maybe hunting for small chance hehehe.

Impossible mean I'm possible.

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1 June throwing my first bullet


Here come my first trade, just a resistance trade, not my short term system, a long term system, seems scary to short here as I see W pattern developing, well just a small risk trade to open the my week. If fail then must go on with next trade. My short level is 1.4420 TP if possible trend reversal 1.3850 with first safe level to take profit at 1.4360.

waiting for the result, there is CHF retail sales news at 2.15 GMT+7, might move the market and move EUR/USD as USD/CHF counterpart.

Have a nice day and may the green pips with you

31 May 2011 Tuesday

Not an interesting day to trade today, I see there is no opportunity for my system as in the morning it already take off to the moon, haw haw haw.

Well nothing to lose, I teach full time today from 13.00 GMT+7 till 21.00 and still need to drive to buy some food. Urf, really impatient for tomorrow, right now I see buying opportunity for EUR/USD but I'll pass as this is low volume time or I'd say it is something that I cannot watch and somehow I have the feeling it might correct down more before deciding what to do next. 1.4400 is strong barrier followed by 1.4500, I'll do some long term trade for short if price ever reach that level. (Considering the power and persistence of EUR/USD movement, I think 1.4500 is in the card.

okay, have a nice day, have green pips.

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Focus

Whatever you do, whatever you think, if you are not focused at all, you'll just walking in the same spot.
It is my concern that most of us do lot of things while they hardly can give same focus to each of things they are focusing into. In war when you lost focus, you might probably:
1. Shot your friend by mistake and later shot by the laughing enemy because you slaughter the team for them.
2. Shot by your enemy easily and dead
3. Shot by your friend purposely because you are in the way of their survival
4. Saved by strong ally, man of war which is extremely unlikely
So the conclusion is when you are not focus, the chance you are dead multiplied geometrically compare to when you are focus.

Maybe you already got the point, focus is really important in real life or in trading,
Now I want to bring this topic into trading,
Suppose you are trading using combination of system like listed below:
crossover - stochastic, moving average, MACD, CCI, Osma,
OB (Overbought) OS (Oversold) - RSI, bull bear, alligator, williamK%, ROC, ATR, MFI,
other system - bollinger band, Fibonacci ratio, support-resistance, candlestick, pivot point, pitch fork, ichimoku, heiken ashi, parabolic SAR, etc
or using expert advisor like - boomerang, fapturbo, swissarmy, MACD crossover, indrafx, etc.
(I'm sure, at least you already heard one of the "thing" that I mentioned above)

You know how to use all of them (In my case, I know 80% of the "Thing" that is mentioned above), but result not coming to you, instead of winning, you are drowned in complication of the system, and ask "When I need to buy?", "When I need to cut loss?", "When I need to take profit?", "When I need to trail my profit?"
In the end when it is time to do all of them, you only freeze and still wondering, what to do right now?
It feels like your body want to move to the right but your body instinctively want to move left, in the end you just not moving.

I know that is the frustration that is experienced by every trader, we are always looking for the best inside the system, but we are stuck into swarm of information and we are stuck focusing in finding the best system while forgetting what the real deal is investing in ourselves so we can be the master of the "Thing" we use.
yup, that means focusing more in one "thing" and forget about others.

If you still can't get it, I tell you bluntly, choose from one of the "thing" or whatever you think the best and live with it forever, period.

If you still don't get it, maybe this quote from master of martial art will open your mind.
" I fear not the man who has practiced 10000 kicks once, buy I fear the man who has practiced one kick 10000 times" Bruce Lee

I have realized this three years ago and try to change my way of focusing, I improved really much, but in reality, sometime I still fall to the same pit where I let myself tempted hehehe...this is until big accident happen and I come to realization what is important for me. Lesson learned.

After falling about 100 times (I think it is more, but still below Edison who fall 1000 times or maybe 10000 times?), I come to realization stick with what is working and forget the others, that is good realization, buy the negative thing is..... it is such a boring thing, cause morning.... it's "THAT", afternoon, it's "THAT", night.... it's "THAT", tomorrow....it's "THAT", next week "THAT", next month "THAT", next year "THAT".

you may say that is insanity, but I'd say that is loyalty, that is commitment, strong one that keep our focus only to the "Thing". Ask parents you know who celebrate diamond wedding and maybe you'll learn what is it hehehe.

Last question is, "How bad do you want the profit? it's not a matter of boring, it's a matter of profit." you decide.

Good luck, may this article entertain you to some extend or if you think this is careful, come back to my blog, I'll release my simple system that you can use to decide with what system you want to dedicate your system.

Have a nice day