Hello Kathy and Boris,

How are you? Thanks for answering the question I posted last week.

Can you please tell me -

a. Under a trading system maximum of how many indicators should be used? What kind of indicators should be? For e.g. According to me using EMA as primary indicator and SMA as confirming indicator will not make sense.

b. What are the most popular indicators in the market used today?

c. I cannot watch chart and follow through the trade when I open one due to my office schedule. In this case, should I keep trailing stop loss? I generally trade on 1 hr chart. What should my stop loss be in range of?

Thanks.
Rahul

My question is regarding a possible increase in risk aversion and a consequent "fly-to-quality" movement. Who will be the winners and loser in such an environment ?

Many thanks

Here are my questions...

Why are demo accounts typically limited to 30 days? It takes substantially longer for most people to learn how to trade well.

Will autotrading ever be available to FXCM account holders (Metatrader, Intellicharts integration, etc)?

What is your favorite high probability trade that unfolds over a 1-4 week timeframe and what news event or other activity influences this trade?

I'm sure brokers have seen plenty of traders wash out. What are some of the things genuinely successful traders are doing that beginners are missing?

Also, thanks for the book Kathy, it's a great primer on Forex.

Here's are the responses to this week's questions! Keep on posting and we will respond next Friday.

Kathy and Bors' Q&A 05-18-07 Responses

Hi Kathy and Boris,

I loved Boris' book on technical analysis and kathy is simply amazing. Now back to my purpose to my writing to you..i trade on energies, commodities and FX for my firm here in india.. i would like to know the following..

1) When i feel to trade with risky pairs like Euro/Gbp , i find it difficult to understand how these pairs move in relation to euro dollar or gbpdollar..if the euro and pound both move up against the dollar then is it Interest rate differentials with the dollar takes an upper hand in determining euro gbp movements?

2) Which firm could give me the most competitive spreads and most competitive margins?

3) Using Boris' BB strategy as depicted in the book, I find it effective almost all the time excepting when the underlying fundamentals change for the respective currency..then is when i begin to get impatient..where do i get out then since i believe EITHER im right or i m out Kinda policy..

Note: Do visit India..its wonderful..
Thanks
Regards
Abhishek
India..

Hello Kathy
I read your article about Cot report at investopedia it is so cool and simple
and i have a Q about it . the Q about ((Open interest)) And how we can use it ? and i see in your example that the open interest is total so how can we
know if this interest is bull or bear !!!!!

2nd Q :are the rules of COT report applicable with all markets ; i mean Eurusd pair can treated like Gold like USDJPY ...etc

last Q : i need more resources about COT report and how we can read it right ( in forex markets ); BY the way i bought Trade Stocks and Commodities with the Insiders by LARRY WILLIAMS but it increase my confusion about this report because it deals a lot with Comm. traders and give them a huge weight in determination of the direction of markets
Thnx in advance

regards

AHMED

Attached Files

Using COT Report To Forecast FX Movements kathy lein.doc (77.5 KB, 493 views)

Just completed the FX Course and have opened a mini account. During the practice account I stated a journal and have been trying to establish a game plan. Last week you discussed briefly about making a plan and sticking with it. Would any seasoned successful traders like to share a few plans that work with us rookies! The best way to learn is from someone else’s mistakes --- sure would be beneficial for us beginners.

hi there . im new in the forex buissness , and i have built up my strategy as a day-trader that wants no more than 20 pips per trade done. now on the demo i have been acheiving the profits i aim 2 , but i have been facing difficulty in placing stop loss orders . im afraid that stop losses will take away my profit since im aiming fow low profits. i have been in places were the price goes 50-60 pips against me and then goes back with me to giv me profits.
my close-on-loss strategy is based on closing the postion in loss if the signal vanishes on RSI , SAR , Bollinger Bands , and stochalistics .
i would be thankful for help in placing stop losses for my strategy .
thanks a lot
M. A. { EsCaD }

Was just wondering if the hype you hear and read on candlestick reading is real? Currently a new candlestick reading DVD is about to be released “Profiting in Forex”. Can this actually help that much? Doesn’t a data release from the Economic calendar cancel any candlestick pattern dependant on good news bad news released?

We will be conducting our Weekly Q&A session on Thursday instead of Friday this week, so please get your questions in by 9am EST Thursday

Hi Boris and Kathy , Could you please explain Bollinger Bands , in a way that identifies buy signals and sell signals ?

Do you think that GBP/USD Has formed a significant top ? Are we going to retrace and see the pair go below 1990 figure ? if yes When ? THANK YOU VERY MUCH =)

I Would like to tell u both that I really appreciate your effors to help traders , Your every comment has influenced my tradings in a very positive way . THANKS AGAIN.

Greetings Guys,

Do you think there is any merit in a system that trades the news using chart patterns? Do u think entering direction using chart patterns before a news events can be a high probability trade?

Dear Kathy and Boris,

It was awesome meeting you two at the expo! =)

My first question is about the article published May 23rd "EUR/USD - Hedging Strategy For 100 pips in Potential Profit" The parameters are as follows:

-Currency Pair: EUR/USD
-Entry Zone: Go both long and short at the market if the price is at any level within the 1.3450-1.3550 range
-Protective Stop: Long stop below 1.3390 and short stop above 1.3610
-Profit Target: Long Target at 1.3550 and Short Target at 1.3450
-Profit Potential: 100 pips (excluding transaction costs and slippage)

The entry zone is suppose to be anywhere between the support and resistance line. Right now EUR/USD is at 1.3453, it is in the entry zone, but I would think that since it is 3 pips away from the target, I have missed my entry point, ideally it would be good to enter at 1.3500, and not just "any level". Is this right?

Kathy, I think you had said when hedging, you guys like to place 2 lots. And take profit on the first lot at R1/S1 and let the second lot run and see if it hits R2/S2. Does that mean you open 2 buy positoins and 2 sell positions of 1 lot each? or you open 1 sell and 1 buy position, but with 2 lots each (2 x 100,000 units)? How then can you only exit one of the lots? Or am I interpreting this wrong?

Boris, lets use tomorrow's news for example, durable goods and new home sales. I know you talked about the 5 minute wait rule to make sure the market has no surprises, and you would not want to enter a position right before a news release just incase the market surprises. Since the first is at 8:30am and the second is at 10am, if the 8:30 position doesn't reach your limit, would you exit it before the 10 oclock news release? or would you disregard the 8:30 and focus on the 10am news?

How long would you keep a fundamental-based position after the fact if it doesnt reach your limit.?

Thank you!!

Have a great weekend everyone! =)

When you plot the Risk Reversal, for example

USDJPY 1M R/R, you hve 1.0/1.4 JC. Which number you use? 1.0 or 1.4?\

Thanks.

hi kathy and boris,

could you please tell us:

(1) what is the difference b/w an ECN (offering STP-straight-through-processing) and a retail MM (market maker) like FXCM?

(2) what are the pros and cons of ECNs vs. MMs?

(3) does the new no-dealing-desk platform released last winter mean that FXCM is now an ECN?

(4) can retail customers using the no-dealing-desk platform expect the same speed of execution as when using an ECN?

(5) what is the difference b/w the no-dealing-desk platform and the PropFX platform (www.propfx.com) offered by FXCM?

(6) is PropFX an ECN platform?

cheers,
triantus.