what a reversal ! Eurusd was playing with 1.59  some moments before the ECB rate decision and headed south very quickly after Trichet didn’t use the ‘code’ words of vigilance etc in his speech. He also attracted the attention on a possible growth slowing in the Eurozone.  Because I am euro bullish, I have been reluctant to hop in the train downwards.

I only made 4 miserable pips , when I tought the day would be the royal path to 1.60 bringing at least 50 pips  ; how disapointing . Well, perhaps some other time.

Easy one this morning: +/- 34 pips: bought eurusd @ 1.5400 and let it go upwards.

I don’t know really why the euro went up, especially after the Irish vote refusing the Lisbon Treaty. I would have expected a decent fall  but it’s the opposite that happened. So this leaves us with the usual suspects to explain the move :

• oil climbing steadily
• Israel planning to strike against Iran nuclear factories
• Trichet announcing a rate hike soon if inflation goes up
• signs of inflation creeping up in many sectors
• workers going on strikes and asking pay raises which fuel inflation expectations.

A few days at Bregenz in Austria, located on the eastern shores of Lake Constance, one of the biggest lakes in Europe. It is 63 km long, and at its widest point, nearly 14 km. Very pleasant city with friendly inhabitants, lots of outdoor sports and spectacular views from the mountains around the city. Picture: I have no clue who this guy might be ; was standing in the garden .

The following keywords typed in Google landed you here

Several keywords are in french since this blog is bilingual. I have yet to translate some parts of the site. I wonder how Google deals with multilingual sites from an indexing point of vue.

Usual money management rule says : “decrease trading size after losses.”
I am not sure this is optimal: you will need many more winning trades to recover the losses.
After the 80 pips loss and though my capital was not hurt, I traded lower and earned back 40 pips in one day without taking much risk, on the contrary.
Only problem is that the capital has not increased much.
That’s why choosing your trade size is important: even after losses, you have to continue with the same value. Unless of course your trading method is definetely wrong, in that case you would go down even faster.

First two days were rather difficult : some 80 pips lost due to several errors:

• trading stubbornly a range on the ‘wrong foot’
• chasing the market
• I tried to keep positions longer than what is required by quick scalps to yield more profits; in fact I forced myself to leave open losing positions ( which is absurd for a scalper) . I closed several positions at 10 pips loss.
• So far I paid an add-on to trade with my principal broker. ( a third party program). I was fed-up to pay and decided to trade directly the broker’s platform. They have developed a trading application for fx traders and I have to admit they did a good job. So, good bye the add-on and the monthly fee. But in the process of getting used to the new platform, I made errors which have cost me some money. I am OK now with the new system.

The last three days of the week , I have been busy with the usual scalping activity yielding 5 to 10 pips a day.

I must say I had a pretty good day , everything went beyond expectations: 49 pips for 10 trades. If there is one thing I look very closely, it is the average win and loss percentage.I had a 5.4 pips / trade winning average which is higher than the usual 1 or 2 pips/trade.

It’s quite simple : you must strive to have the winning average close or higher than the average loss, or your win/loss ratio will have to be above 50 %. When scalping, my win/loss ratio is around 65/70 % which allows my winning average to be slightly below my loss average, though it is not an optimum situation.

In any case, I will do everything to avoid having any loss higher than 7 pips, otherwise it takes too long to get back the loss ( remember: if your average win is 1 or 2 pips, you need 4 to 7 winning trades just to recover this loss: allowing a greater loss is not good and put strains on your trading).

Cutting early losses makes sense because if you have a good knowledge of your trading statistics, a 7 pips loss will not affect your confidence since you have no doubt you will recover this without taking any additional risk. You just let the statistics work for you. The first lesson I learnt is that a trader that can’t cut a loss will not make it at trading forex. You just can’t think twice or hope , or wish that the trade will recover: at minus 7, I cut the trade. You wait two more seconds and the score is minus 10 then minus 15 . Wrong bet.

Well, contrary to what I said in my previous post, I’ll post the daily results as I have nothing else particular to write today . This is the usual scalping activity, though I try hard to escape from the scalping routine . I am convinced there is more money to make in long-term movements but I can’t grab a trend for the moment.

If you look closely to the table , you will see that several trades have a very short duration: sometimes less than 6 seconds. I hope my broker will not kick me out . I read in a forum that brokers sometimes ” flag” scalpers and give them quotes with some slippage to discourage this activity.So far, I haven’t noticed anything similar . Anyway, I couldn’t care less : a breakout is a breakout and that’s what I trade . I am not using dirty tricks or cheating the platform: just trading short-term movements.

I post these tables for those who would be interested in seeing characteristics of fx scalping trades. It shows that scalping is one way of doing trades ,though it’s probably not the most comfortable one : it is a stressing and time consuming activity. A positive aspect is that your risk is minimal as the rule is to cut immediately a trade going south.

I am presently more attracted to longer term trades with more potential and I spend a considerable time developping trading strategies. That’s why I will not post daily scalping results anymore. My point was just to show that fx scalping is possible, but I don’t think this activity would help you build a fortune