Introducing Variety A New Blogging Project ~ forex trading laptop

3:17 PM in a, approach, blogging, Forex, in, introducing, managing, money, new, practical, project, trading, variety

Today we are going to go a little bit away from the usual articles about currency trading so I apologize to my regular audience if you were expecting the usual - hopefully well written - article dealing with forex automated trading or other revelant aspects of the forex market. However today and tomorrow I am going to be talking to you about some interesting developments that have happened within the last month (dont worry, tomorrow it will be about automated trading), which have prompted me to make some new projects to improve the way in which things are evolving.

This post will be dealing with a new project I came up with which has absolutely nothing to do with automated trading or forex for that matter. This new project started as a need for variety as I felt my life and projects were being limited by my work as a currency trader. Certainly being a day trader is fun and automated forex trading is an amazingly complex and wonderful field but in addition to developing systems, investments, asirikuy and this blog I needed to do something else which stimulated other areas of my - now heavily left hemisphere oriented - brain.
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What did I come up with ? Well, since I love helping people and I do feel I have substantial knowledge in other fields which I developed within my quest for profitability in trading and my studies as a scientist, I decided to start a new blog about just whatever I could think off that I could write to help people improve their lives. This new blog called "Entirely For You" (you can always access it directly at http://www.entirely4you.com) is my attempt to show people another side of me which will have- hopefully - a lot of practical and theoretical knowledge to help people in their everyday lives. (for those of you who have read my blog for a while- yes- I did have a name in Quechua :o) but it was already taken !)

My objectives with this blog are clearly not financial but only recreational in the sense that I love writting and writting about other things besides automated trading is a way to "ease my workload" and prevent a burn out which would have certainly happened in a few months or years ifI had continued this excessive focus on automated trading systems. Sure, I will continue to post daily here and do all the weekly work as usual but my new blog will provide me with some relief when I feel like writting about something else and hopefully it will also give people a good deal of information derived from the little but applied wisdom that I have acquired through my life.

Of course this blog also means that you will get to know me better as a person, something which I think is vital when you need to develop trust in someone else, you will learn about my opinions relevant to other subjects and definitely some other aspects of my personality. This not only means that you will know that I am definitely a flesh and bone human being but that I have absolutely nothing to hide from you and that everything I do in my life is approached from the most ethical, honest and proffesional way I can :o). So I hope you enjoy this new website and you visit it often ! (update frequency will vary but probably I will post once or twice a week) Please leave any comments or opinions you may have ! :o)

On a side note, there is also another surprise for you related with automated trading which will be released tomorrow (hint : notice that new orange box at the bottom of the page ?)

If you would also like to learn more about my work in automated trading please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Managing Money in Forex Trading A Practical Approach ~ forex trading learning

12:44 PM in a, advisors, an, approach, expert, forex, in, lightning, managing, money, practical, review, trading, unbiased

Yesterday I wrote a post about how successful forex traders develop their ability to make money and how anyone interested in making a living from trading should absolutely consider the managing of other peoples funds as the easiest way to achieve their financial freedom. The reason for this is that simply most people wont have the necessary amount of money to make a living (about 250-350K USD) with the risk levels necessary to preserve capital through the draw down periods which are characteristic of all long term profitable trading strategies. Today I want to write a post about the practical aspects of money management and the technical and legal aspects of this journey.

First of all, I consider that if you want to be a money manager you need to have a track record that shows net profitability through a statistically relevant amount of time. This means that you should have a real live account that can show a verified track record of at least 5 years. This will show that you are able to tackle a wide variety of market conditions and that your systems and abilities are able to both make and preserve capital. The initial balance of this account is actually not that relevant and even a 5 year, 1K account with net profitability will be enough.

What next ? Well, the most popular model for account management is done through a limited power of attorney in which you receive permission from a client to manage their funds but you dont have the ability to withdraw any money. Effectively either the broker or your client have to make the payments for you when they are due. Payments are usually made on new equity highs as a percentage of profit from equity high to equity high. For example, if an account was at 110 and then reached 120 the client made 10 and if you charge a 20% commission then you keep 2.

One of the most important aspects you need to consider here is that the limited power of attorney approach - even if it does not give you power to withdraw your clients funds - is a type of money management practice and it is therefore subject to the pertinent regulations. In the US - for example - you can manage up to 140K USD or 15 clients without becoming a CTA (Commodity Trading Advisor) but anything above that requires registration by law, bear in mind that the waive of registration also requires you NOT to advertise yourself as a money manager so you will be limited to a small crowd of investors (probably friends). This however only applies to US customers and to manage money from investors from other parts of the world you will need to deal with their own countrys regulations as you will be subject to the regulations of the customers home country.

Now, managing 140K from US customers is a very good start (even more if you have customers from other countries) but if you are truly serious about your business then you need to become a Commodity Trading Advisor. Registering requires you to pass a Series 3 exam and to pay almost 1000 USD in annual fees and this is therefore a step you may want to take only after managing your first small customer base for 2-3 years. Once you reach this point you will be able to start a business and manage a limitless pool of investors which effectively makes your income potentially VERY large. Even if you only manage an average yearly return of 10% (a return many new forex traders would laugh at), managing 20 million dollars this will already mean a 400K income for you at a 20% commission.

In conclusion, if you really want to live from trading and if you really want to make a lot of money from it then probably you will have to work hard for the next 8-10 years to perfect your ability to make money and to begin your journey as a successful money manager. This indeed sounds MUCH more realistic that what expert advisor and forex system sellers told you, doesnt it ?

If you would like to learn more about the use of automated trading systems to achieve success in trading and how you too can learn to code, evaluate and use your own systems based on sound trading tactics please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !

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Its all about risk ~ forex trading online training

12:00 PM in about, all, Forex, in, its, joaquin, losers, managing, nadex, risk, the, trading, way

I watch other traders and observe their behavior. I look to see how consistent they are, whether they are winning or losing, how happy they are about their trading, and about a hundred other factors. I like to observe.

A question I often get asked is this...

"How many trades do you take per day?" or "Will you send me at least 10 signals per day?" or "Why dont you trade in and out of the market all day, instead of taking one position?"

Here is my answer.

I only trade a few positions while others may take tens or hundreds because I am focusing on trades that I have a reasonably accurate assumption that either they will be profitable or that they will be low risk.

Commissions play a part. Each trade on Nadex has a fee attached to it. $0.90 in. $0.90 out. If the trade expires OTM (out of the money) then there is no fee. If I take 10 trades a week (2 per day), then my commissions are $18.00 roughly for the week. If I take 5 trades per day, then my commissions, for the week are $45.

On the other side, If I were to scalp in and out of the market all day, $15 here $15 there and taking on massive risk with each trade, our costs go up. $1.80 each time. 20 trades per day equals a commission cost at the end of the week of $180. This is a whopping $9,360 in commissions each year.

Here is another reason I do not take as many trades. With each new trade brings risk. Every trade is a brand new ballgame. Why would I risk losing money 100 times when I could do it 20 times instead.

Here is another reason. If I feel that I need to make a certain amount of money, instead of trading more, I will just increase my contract size instead.

For instance, If I am looking to make or lose $1000, Instead of trading $10 for 100 trades, I might trade $50 for 20 trades.

Everyone is different. There is no right or wrong way to do it. It is all on our perceptions of the market. This is just how I see it.

In my opinion, traders should be focused on making money, not trading just for the sake of trading. I am in this business to make a profit, whether it is from 1000 trades or one trade. That doesnt matter. If I can do reach the same goal with 1 trade, I will.

One could say, "Yeah but instead of taking on more risk for less trades, why not spread the risk over many trades?" Like I said, it is all on your own perception of the market. Spreading the risk is a good thing but over trading is a horrible thing that will come back to bite you if you are not careful.


















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