Euro Under Attacked!

If you trade Forex, you will notice that Euro is under attacked now! I would like to say it is a second round. Read and listen to the recent news on EU, everything is bad and negative. The 'sentiment' index in my trading dictionary indicate it is far below negative level. Bloomberg, CNBC, Reuters, CNN etc play important role to create the fear in the market. Dr. Doom, Soros and other big boys start giving negative comments on Euro zone! It is a bit funny and ironic why they only make the comment now and not during the Euro at the highest level few months ago. Think Again!
The first round of profit taking has just completed recently. I was thinking it will rebound back to at least half of the level on the position I hedged. Sadly, my prediction is wrong. They (Big Boys) whacked the pair again, Greece decent bad debt become big topic, then Dr. Doom start to talk about Spain monetary system and the negative stories continue. Overall, financial media become their source to channel the 'fear' to all the novice investors. If you are a rational player, look at US problem, it is far severe then the Euro Zone. However, the market is always act irrational which is controlled by the Big Boys.
The Forex market is a vicious arena, the big boys will make you to believe their views. They have the 'bullets' to control the games. If you are not big enough to fight them, you will surrender in the middle of the games or even knock-down completely.
As I am still at the early stages of the games, I prefer stand aside and watch the game carefully. Once the opportunities come, I will make my move.

What is moving the market? Answer: Psychology of the Participants

When you observe stock market, Forex, commodity and other market charts, you see the trend up,down or flat. Plenty of money could be made if you know what is moving the market. The simple answer of the phenomena; Psychology of the participants/players. Oxford dictionary define the term psychology as:
1.the scientific study of the human mind and its functions, especially those affecting behaviour in a given context.
2. the mental characteristics or attitude of a person.
3. the mental factors governing a situation or activity.

I prefer the definition of No.3 in the context of Forex Market. In Forex market, there are many types of participants. It ranges from Big Boys to small ants(novice retail investors). When Big Boys move, you need to pay attention. It can be fake or real move, if you mental cannot catch the real one, you are in trouble.

Most people easily get distracted when they read news, listen to rumors or even just by simply look at the real time chart. The greed and fear always play in this games, emotions start to control mental. Next, mental will send the flaw signal to the nerve thus you will start to make mistakes. In the end of the day, you lost control of your emotion. The rest is history, you burn your account!

The rules of thumbs say 90-95% players lose money in Forex Market. Do you know that 90-95% money actually transfer from the losing side to winning side. Many people ask me how to make money in Forex.
I always tell them in 3 simple steps. 1. Learn how to lose money first. 2. Learn how to NOT losing money.
3. Learn how to become winner. If you don't know the basic rules of the games, read back my previuos articles. If you think this is not your games, then stay away. I don't want you fall into the 90-95% group.

I gone through a lot of 'experiments' and end up basically emotionless when I listen to the news, look at the charts or even execute the trade in the most volatile environment. I almost take control of the market psychology. I say 'almost' since every trader has imperfection. Sometimes, "trading is not how many mistakes you make, but the matter is how much you can make!"-Hope you get it.

The FX Market is "the conspiracy of the rich"

Recently I read  Robert Kiyosaki (RK) latest book. The title sounds catchy(this guy always  use catchy title and turn his books to multi millions dollars business). When I finished chapter 1, I contend his views and related it to Forex Market.
Well, do you know greenback (USD) is backed by thin air. Yes, after 1972, USD is no more backed by Gold and it is backed by nothing. The so-called US economy is backing USD. The term "money" change to "currency" and every country use its currency to compare each others. This magnificent fusion of this process created the largest capital market in the world. Speculators take these opportunities make millions and billions of dollars. How? Simple, they use the "economy value" of each currency to define the rate of transaction each day.
Forex market is controlled by the rich. The rich have the power to influence government, media to move the so-called economy value. US government is the BIG BOSS to determine the movement of currency market since most of the world currency pair with it. It is easy for Uncle Ben to make money in FX market but he is just a US government servant who is obliged by law. I believe there is a group of unseen hands behind  Federal Reserve to direct their policy. Who are they? They are the 'ultra rich' in the world. I am very sure most of you heard of Rothschild and the Gangs.
Back to RK book, we only need to equip ourselves to take advantage of  the BIG BOYS move. The EUR/USD had a volatile move in the last 2 months has demonstrated my views. Before Christmas and Holiday season come, they take back huge profit what they have created since early of the year 2009. I warned this in my last articles of 2009. Look at EUR/USD now, I always remind myself that trading FX is like searching gold in the jungle full of wild animals. I always look for the strong rangers and follow them to the gold mine. Sometimes it is hard to catch the rangers footsteps, so I need to be extra careful before following the right path. Occasionally, we like to stop by river and fishing. (No a bad start for me, 300 pips profit in 1 week.)
I end this article with a famous quote;
"Let me issue and control a nation's currency and I care not who make its laws"-Amschel Rothschild, 1791.

Forex Trader New Year Resoultion

Is a bit funny when I look at the seasonal FX traders resolution, my resolution is pretty simple; set up a hedge fund company which focus on Forex, Options, Futures and Stocks market. It may seems a bit risky market if you don't have trading experiences. Basically, all investments are high risk if you don't know what you are doing.
Back to other investment instruments, I like to hedge whether in Forex, Options, Futures or stocks. In fact one instrument related to other. Using Options and Futures to hedge spot Forex; in my opinions is not feasible since the premiums is too high and Forex indirectly provide you the high leveraging and hedging tools. As for stocks market and options, I prefer covered calls which I can collect premiums even the rate of return is lower if compare to buy call(high risk). 3-4% per month is not a bad return and you still can keep the shares you own.
Anyway, 2010 will be a good year for hedge fund industry, in fact every year is good year since hedge fund control both site of the market. Mr. Soros earn USD3 billions personally in the worst year in financial crisis! So do many famous hedge fund managers.