A New Beginning

This week, we look at low volatility trading, the continuing weakness in the British Pound, and how rumors can affect the Forex market. All of this and more in this week's newsletter, titled A NEW BEGINNING

Ed Ponsi on CNN

CNN's Charles Hodson asks Currency Trader Ed Ponsi what the future has for the U.S. dollar. CLICK HERE TO VIEW

Deja Vu

Hello from London! Lots of good stuff this week, including problems for the Pound, why the Dollar rally won't last, the real reasoning behind the Fed's recent actions, and more. Click here to read this week's article.

Here's a shot from CNN...Cheers!

Cherrio!

I'm on my way to London. Please keep an eye out for the following TV appearances while I'm in the UK. Here are my appearances for Friday, Dec 14....

CNBC Europe 4:10 PM (London and GMT time)
CNN International between 7-8 PM (London and GMT time)

It's Rate Cutting Time

Was the Fed right or wrong on the Dec 11 interest rate decision? Where are the Canadian Dollar and the British Pound headed next? How can you join the 'Millionaire's Club'? With the rise of Sovereign Wealth Funds, what will our future look like? For these answers and more, CLICK HERE TO READ THIS WEEKS NEWSLETTER

2008 Trade of the Year

Goldman Sachs just released it's list of best trades for 2008 - which currencies do they like, and why? Speaking of Goldman, why is Ben Stein upset with the investment banker? Hugo Chavez lost, oil and gold are falling, and the USD is rallying - is this the start of something big? How do you short real estate? For the answers to these and other questions, CLICK HERE TO READ THIS WEEK'S NEWSLETTER

Forex and Existentialism

This week - Will Airbus go under because of the weak USD? Does Jean Claude Trichet have a trick up his sleeve? The British Pound softens up; are rate cuts coming from the BoE? USDJPY breaks support, and more, in this week's article, "Forex and Existentialism"

The Legion of Doom

In this week's letter - a buffoon and a tyrant slam the USD, The USDJPY hanging by a thread, meditations on the media, and of course - because you asked for it - more Chuck Norris. Click here to read

Live with Maria Bartaromo

Here is the link to my interview with Maria Bartaromo from Monday.

Chuck Norris, Karaoke, and More

In this week's newsletter - bubble notes from China, questions about Fibonacci and Arbitrage, Bernanke grilled before Congress, and marking Chuck Norris to market. Enjoy!

Gisele Bundchen is Paying Attention

I was disturbed to hear a US TV pundit call Brazilian supermodel Gisele Bundchen a 'pinhead' because she prefers to be paid in currencies other than US Dollars. Hey, she's just paying attention to the world around her! She prefers Brazilian Real, one of the champions of the currency world right now.


Check out this article on Gisele's currency prowess.

How To Spot A Bubble

Whenever traders speak about bubbles, they usually cite some anecdotal evidence that demonstrates just how irrational investors have become. By the late stages of the Nasdaq bubble, it was impossible to go anywhere in the U.S. – to a party, to the grocery store, to your dentist – without hearing about the booming U.S. stock market. Well, here is the latest symptom of investors gone wild - a hit song in China contains the following lyrics:

Use intuition to buy stocks and make money
I won’t be excited unless my investment goes up multiple times
I won’t be excited unless my investment hits irrational highs
As stock investors, we must persist


From: “I Won’t Sell Even if I Die” by Kaijie Gong

As bad as the Nasdaq bubble was in the year 2000, I can’t ever recall hearing Shania Twain or Metallica singing about the markets back then.

Here's the link to the article:

http://www.yomiuri.co.jp/dy/world/20071111TDY04302.htm

Everything Is Still Connected

Wondering how to make money on the subprime fiasco? Why does Merrill's spokesperson deserve a permanent slot on "Dancing With the Stars"? Why does Singapore want to lure traders? For this and more, please read this week's column, titled "Everything Is Still Connected"

Greetings From Singapore!

In this week's issue, The Definition of "Mixed Feelings", Danger – Falling Shoes, "SuperBubble", Watch Out for the Yen, "The Euro – To Infinity and Beyond!" and your questions. Enjoy!

The Amero, The Bubble, and More

Will the US, Canada, and Mexico share a common currency in the future? What is India doing to ease upward pressure on its currency and deflate a potential stock bubble? Where is the US Dollar headed next? For the answers to these questions and more, please read this week's column, titled THE AMERO, THE BUBBLE, AND MORE

Here is my home away from home, my temporary residence in Singapore....

Unintentional Comedy

In this week's issue: So That's Where My Money Went, Singapore Slings, Lip Service, and Why You're Smarter Than William Poole, all if this week's newsletter, titled Unintentional Comedy. I hope you enjoy it!

Heading to Asia

I'm packing for a three-week trip to Asia, so stay tuned for all of the details. Meanwhile, Goldman Sachs and Morgan Stanley have just increased their targets for a variety of Asian currencies. The gist is that these countries will intervene less and allow their respective currencies to appreciate more, in an effort to fight inflation.

READ THE FULL STORY HERE

Here's a lovely shot of Hong Kong...

Get Ready for the Las Vegas Expo!

On November 17 and 18, I'll be appearing at the Mandalay Bay Hotel and Casino in Las Vegas for the big Las Vegas Traders Expo.

I'll be signing copies of my new book, "Forex Patterns and Probabilities" at the Traders Press booth, and I'll be speaking on Saturday and Sunday at the Interbank FX Booth. My main presentation will be on Saturday evening, from 5:30 PM - 6:30 PM

My Schedule:

Saturday: Interbank FX booth: 2:30 pm
Saturday: "Forex Patterns and Probabilities" 5:30 pm
Sunday: Interbank FX booth: 11:00 am

Here's a link to one of my appearances at the Forex Trading Expo last month

See you in Las Vegas!

Axl Calls for Rate Hike

No, not THAT Axl!!!

Yesterday's smoking hot Euro could be credited to Axel Weber, governing council member of the European Central Bank.

"There is a danger that, against the backdrop of the expected rise in euro-zone inflation rates in the coming months, there will be a need for additional action..."

READ THE FULL STORY HERE

Here's a recent photo of that other Axl; looks like he's doing ok

Morgan Stanley Traders Lost $390 Million in One Day

REQUIRED READING...You have got to read this!

Morgan Stanley, the world's second- biggest securities firm, said its quantitative strategy traders lost $390 million during a single day in August as their computer models failed to account for ``widespread'' investor selling.

Presentation from the Vegas Expo

This is video shot live at the Forex Trading Expo in Las Vegas, Sept. 2007. It's nearly 45 minutes long, and generated quite a reaction (Traders Press sold out of my book, "Forex Patterns and Probabilities", within an hour of this presentation). Please note that it is almost completely improvised and off-the-cuff, which may be the reason why the reaction was so strong.

CLICK HERE TO VIEW THE PRESENTATION

See you again in Vegas at the November Traders Expo!

Throw The Ball Away!

A lesson in football...or is it a lesson in trading? We hope you enjoy this week's article, titled "THROW THE BALL AWAY!"

Special Forex Q&A with Ed Ponsi

Ok, we all know the USD is weak, and if you read the previous three articles, you know why and what it means. Now comes the good part; your questions about what we can do about it! And yes, we can do something about it....Please enjoy "Special Forex Q&A with Ed Ponsi"

Part lll: The US Dollar and the Thief In the Night

What can be done about the weak U.S. Dollar? How will it affect the future of all U.S. citizens? What can we do right now to save the beleaguered buck? Read the answers in the conclusion to our series, titled Part lll: The US Dollar and the Thief In the Night

Ed Ponsi on ForexTV

PLEASE CLICK HERE to catch my interview with Remi Hoki on Forex TV. Remi asks some great questions as we discuss EUR/USD, EUR/JPY, the GBP and the BoE, the Japanese Yen, the Canadian Dollar, and other current currency topics.

Houston Book Signing on Saturday - Free Event!

FTA Presents Ed Ponsi
Saturday, September 22, 2007 2:00 pm - 5:00 pm
Location:
University of St. Thomas, Anderson Hall
3910 Yoakum
Houston, 77006

In addition to this free, three-hour presentation, I'll be signing discounted copies of my new book, "Forex Patterns and Probabilities"and giving away prizes

CLICK HERE FOR DETAILS

Part ll: The US Dollar and the Thief In the Night

Will we learn from the lessons of the past, or are we doomed to repeat them? Due to your response (I received quite a few emails, thanks to all of you) to last week's article, we continue our series with PART ll: THE US DOLLAR AND THE THIEF IN THE NIGHT

Forex Radio - Ed Ponsi on the Vince Rowe Show

Hey everyone, I'll be on the VINCE ROWE RADIO SHOW today just after noon eastern time, or just after 16:00 GMT today. You can also catch me on Thursday on CNBC World, between 8:00 am and 9:00 am Eastern time.

Hangin' With CVJ in Vegas

Just back from the Las Vegas traders expo, where I finally got to meet the one and only CVJ from FX Street. Also got to spend a little time with other great instructors like Rob Booker and Raghee Horner, two of the few in this business who are the "real deal". Here's a shot of me with CVJ....

Las Vegas Schedule

Hey Everyone,

Here is my speaking schedule for Las Vegas Trader's Expo:

Saturday Sept 15: 1:00 PM at the INTERBANK FX stage

Saturday Sept 15: 3:00 PM Trade Forex Like a Pro with Ed Ponsi

Sunday Sept 16: 12:00 NOON at the INTERBANK FX stage

Autographed copies of my new book "Forex Patterns and Probabilities" will be available at the Traders Press display.

All of the presentations will be unique and different, so try to catch all three. See you in Vegas!

The U.S. Dollar and the Thief in the Night

We all know that the U.S. Dollar is weak; in fact, just this week the U.S. Dollar Index reached a new 15-year low. But how does a weak currency affect the people who live there? What will be the future of the United States if the dollar continues to weaken? Read all about it in this week's newsletter, THE US DOLLAR AND THE THIEF IN THE NIGHT

A Star Trader Is Born

A Star Trader Is Born

As a trading instructor, nothing brings more joy to me than to see one of my students become a star trader, and I want to share that joy with all of you. This gentleman deserves all the credit for putting in the time and work needed to succeed in this business. Please read:

Ed,

I just thought I would update you before the Toronto signing. I have had
great gains since I took the course with you and am averaging 31.6% a
month. I have put into a private swing fund that will be starting the
first of January with about 25 investors that I have come to get to know
in the past 2 years in my business. I will be unable to attend
the book signing but maybe I can hook up with you in the future.

I saw your big interview and just had one question " Whats with the TIE?"

Take care and thanks so much for the finishing touches that I needed to
put me in the drivers seat.

Now that's what I'm talking about! He can't make it to today's
book signing, but I hope you will:

Date: Friday, September 7
Time: 5:00 PM
Place: Online Trading Academy Canada

North American Centre

5650 Yonge St. Suite 1700 (Yonge and Finch)
Toronto, Ontario M2M 4G3
Phone: 1.866.691.8398
And, if you want to see my latest misadventure with neckties, please watch BNN (Canadian market news television) at 3:20 pm today.

Bank of England, ECB on Hold

The Bank of England not only held interest rates firm at 5.75%, but issued a special statement today in conjunction with the decision. This leads traders to believe that the BoE will be on hold for the foreseeable future, and could mean some short-term softness for the GBP. The European Central Bank left rates on hold at 4%, with traders waiting for Trichet's speech at 12:30 GMT for clues about the future direction of the Euro.

Ear To The Ground

How should Forex traders approach the current volatile environment? What is the best way to use the ADX indicator? What is the real deal with the Bush Bailout? For the answers to these questions and more, I hope you'll enjoy THIS WEEK'S NEWSLETTER, "EAR TO THE GROUND"

Central Bank Madness

Yesterday, the Reserve Bank of Australia held rates steady at 6.5%. Today, we'll hear from the Bank of Canada, and tomorrow, the Bank of England and the European Central Bank. I don't expect any changes in rates, as these decision-making bodies may want to take a wait-and-see attitude toward the credit crunch. Look for comments, both hawkish and dovish, to determine the next directional moves.

CNBC Video: How to Trade Forex Volatility

Here is an appearance from Tuesday, August 28 on CNBC World. In this video, I explain how to use equity markets as a leading indicator to trade Forex. We also discuss how to trade when the current market environment ends. With Bob O'Brien of CNBC and and Nick Hastings of Dow Jones Newswires.

"Forex Patterns and Probabilities" Ranked #242 In Canada!!!

Hard to believe, isn't it? Remember, this is the ranking among all books, including novels by John Grisham and Steven King. Yet if you look at the image below, you'll see "Forex Patterns and Probabilities" ranked at 242 on Amazon.ca. I guess Canada really likes the book! Looking forward to next week's book signing in Toronto (please see the post below for details on the Toronto book signing). Look out Harry Potter!

Toronto Book Signing Info

Date: Friday, September 7
Time: 5:00 PM
Place:
Online Trading Academy Canada
North American Centre
5650 Yonge St. Suite 1700 (Yonge and Finch)
Toronto, Ontario M2M 4G3
Phone: 1.866.691.8398

Please call ahead to reserve a space!

CLICK THIS LINK FOR MORE INFO

Canada Rocks!

Sales for my new book, "Forex Patterns and Probabilities" have been particularly impressive in Canada! A big Thank You to all of my friends and supporters in Canada, who drove the book up into the top 500 on Amazon.ca last week. Even now, the book is hovering just outside the top 1000 in Canada - amazing when you consider that we are competing with writers like John Grisham and Steven King. Look out Harry Potter!

I'll see you on Friday, Sept. 7 in Toronto for the next book signing. More details to come!

Bouncing Right Along

The pendulum is swinging back and forth, creating big moves in the Forex market. Why did we see such a gigantic move last week? What is the best way to trade these moves? For the answers to these questions and more, please have a look at this week's newsletter, titled BOUNCING RIGHT ALONG

Shelter From the Storm

How can traders protect themselves in this environment? How can you determine what type of trader you are? Where is support for EUR/JPY, GBP/JPY, and other carry trade pairs? What is the difference between the Fed funds rate and the discount rate? For all of this and much more, please read this week's newsletter, fittingly titled SHELTER FROM THE STORM

Ed Ponsi on CNBC Europe!

HERE IS THE LINK to today's CNBC Europe appearance...

Hello From London

I 'd like to thank everyone who turned out today...the London book signing was a huge success! FX Street regulars Ray, AT and Guido were there, along with many friends from OTA and elsewhere. I had the honor of autographing dozens of books and in general, a good time was had by all. Thank you one and all! The next scheduled book signing will be in Toronto on Sept. 7.

I also made my first appearance on CNBC Europe this morning, I'll post a link shortly...

Location of Book Signing in London

On Friday, August 17 starting at 10:30 am, I'll be signing my new book"Forex Patterns and Probabilities" at the following location:
OTA London
Ver House
Park Industrial Estate
St Albans
AL2 2WH
United Kingdom
Phone: 0845-094-6476


See you there!

EUR/JPY, DJIA: Everything Is Connected

We are seeing strong correlations between US stocks and the Yen "carry trade" currency pairs, such as EUR/JPY. Why is there such a strong connection? Is this a temporary correlation? How can we use this to make money? Read this and more in THIS WEEK'S NEWSLETTER

TheStreet.com Interview with Ed Ponsi

The excitement surrounding my new book, "Forex Patterns and Probabilities" has led to several televised appearances, thanks to all of you who purchased the book. CLICK HERE and type the word "Ponsi" into the 'Search Videos' field for this week's televised appearance on THE STREET.COM The title of the clip is, Yen and Dollar Not Done Declining

More Forex Q&A with Ed Ponsi

What should a trader do when time frames disagree? What is the proper risk management strategy for traders who seeks ten pips per trade? What are the new Philly World Currency Options? For the answers to these and other questions, please read this week's newsletter, More Forex Q&A with Ed Ponsi

Subprime Detectives Search In Dark for Next Victim

With the latest news showing an acceleration of trouble in the credit markets, traders watch and wonder when the next shoe will drop. More trouble for Bear Stearns, and more names joining the now growing list. Traders are trying to determine who is holding the hot potato, so to speak, so they can short the living daylights out of the stock. IN THIS ARTICLE FROM THE WALL STREET JOURNAL we go inside the hunt for the truth - who's holding what, and how much of it.

Forex Radio Show Link

Here is a link to my appearance on Tuesday's Vince Rowe radio show. Simply click the link and scroll down to JULY 31, PARTS 2, 3, AND 4. I answer questions live on the radio and give my opinions about where the Forex markets are going. I hope you enjoy it!

Ed Ponsi Book Signings and Personal Appearances

Thank you everyone for your tremendous response to my new book, FOREX PATTERNS AND PROBABILITIES
I'll be making a number of personal appearances and book signings to celebrate the release of the book. We'll also give away valuable prizes at each of these appearances:

August 17 Online Trading Academy, London (St. Albans)

August 25-26 ACTIF Symposium, Montreal

September 7 Online Trading Academy, Toronto

September 15-16 Forex Trading Expo, Las Vegas

More dates are being added, so I hope to see you as we make our way around the world.

From: Robert, Peterborough Ontario
Rating:
Date of Post: 2007-07-14
Review: I took a course that Ed put on in Toronto and I would have to say that Ed is the best. I had 3 years experience prior to the course and considered myself a good trader. After the first few days the market looked completly different to me. Ed completely changed the way I looked at and approached the market. Ed shows you what to do and why you are doing it. I can now trade stress free. I trade about one tenth as often and I make 5 times as much. I also want to note that I have purchased several courses (from other sources)in the past and after a quick glance at the material I knew it was a waste of time and my money.

I have never given a testimonial or commented on anything in the past, but I just have to tell everyone out there that ED Ponsi is the BEST. I like to say that it was the best (ED)ucation I ever recieved. Way to go Ed. And good luck with your new book!!

Chaos, Confusion, and Opportunity

Right now, the markets are experiencing a major upheaval due to the subprime mess. What is going to happen next? How can we use the current volatility in the US stock market to trade Forex? Why is the US Dollar suddenly gaining ground? How can we tell when the trend has changed? CLICK HERE TO READ MY WEEKLY NEWSLETTER

Positive Carry

Definition of Positive Carry: A strategy of holding two offsetting positions, one of which creates an incoming cashflow that is greater than the obligations of the other. It is also the name of a hedge fund manager's yacht that is now for sale - due to damage from the subprime debacle. READ ABOUT IT HERE

Should He Stay or Should He Go

Go, apparently. Japan's Prime Minister Shinzo Abe suffered a humiliating defeat this weekend, and now it looks like he might be on his way out. Will it affect the Japanese Yen? READ ABOUT IT HERE

EUR/JPY Falling With DJIA, S&P 500

It's no coincidence that the reversal in US stocks - which opened nicely higher and traded well through most of the day - has also led to a reversal in EUR/JPY. I consider the US stock market to be the current barometer of risk, and when risk aversion rears its head, investments that had performed well tend to suffer. Few trades have performed as well as the Carry Trades over the past five months. Here on the 15 minute chart, we see EUR/JPY reversing in sync with US stocks.

AUD/USD Channel

Check out this channel formation on the daily chart of AUD/USD. Aussie has pulled back to major support, but the fundamentals still favor the Land Down Under. China is still growing like mad, and the demand for base metals will continue to increase, which favors Aussie. The interest rate differential means that long traders will collect interest in addition to the potential appreciation from here.

Forex Radio Show

Hey Everybody, I'll be on the VINCE ROWE RADIO SHOW today at 16:05 GMT (five minutes past noon New York time). See you there!

Fresh Newsletter

Who is making money on the weak US dollar? Will the buck continue to slide? What about the British Pound, will it continue to reach new heights? For the answers to these and other questions, please read STOCKS RALLY ON WEAK US DOLLAR

Wow! USD/CAD new 30-year lows

Its 5:30 am here in LA. Looks like the Loonie is breaking the last support level, falling hard below 1.04. Here is the scoop from Dow Jones Newswire:

12:30 GMT Canada Retail Sales Ex Autos +2.3% In May From Apr
12:30 GMT Canada Retail Sales +2.8% In May From Apr

estimates were for Retail Sales at just 0.5% with the core at 0.6%.

Forgive me for celebrating, but the entire LA seminar class is short USDCAD from 1.0478 using the MTF technique from the FXEducator DVDs. I love it when the class makes $$$!!! Sweet!

EUR/JPY Ascending Triangle

The EUR/JPY pair appears to be consolidating after another ferocious leg higher, and that consolidation is taking the form of an ascending triangle. I'm impressed by the fact that the triangle harmonizes with the overall trend, as the pair has been trending higher for over two years now. Bears have been defending the area just under 169.00, for a week or so, and I've got to believe there are stops above the figure. A break above that level could unleash a torrent of short covering.

"Forex Patterns and Probabilities" Available NOW!

The official release date was July 27, so you can imagine my surprise when I saw this on Amazon.com

"Want it by July 20? Order it in the next 21 hours, 25 minutes and choose One Day Shipping at checkout."

This means if you order before 1 PM on July 19, New York time (17:00 GMT), you'll get the book on July 20th

I hope you enjoy it!

This Is Awesome, Too!

Another recent email from a student who placed a spectacular trade...it appears that he made about 650 pips on this trade in the GBP/JPY currency pair...check it out:

Dear Ed,

Once again, I couldn't help but to let you know of my success with this
pair....and as your humble student, 90% of the credit goes to your teaching and
mentoring...as always!

I opened the position with three Lots on the slight curvature of the 20EMA on
June 13th @ 240.27. Stop was placed at 238.47, which was under the previous 2-3
day consolidation as well as under the medium-term 50EMA.
I arrived at Exit I on the 19th @ 245.20...which turned out to be a Daily Doji
close...so I was concerned...but not overtly concerned. My Stop was moved
accordingly, of course, and on we went...

Exit II arrived @ 246.54...just above the round numbers and a strong dynamic
support there at 246.50...on the 22nd....and Stop was moved again.

At this point, I had a choice to make, as technicals were telling me a pullback
was certainly due.....as we were hovering around the 23.6% Fib of the current
upleg, which was 246.27 on my charts. I was certainly pleased that I "tweaked"
this second exit a bit...even if it was an "upside" tweak....I wanted to get
just a touch through the 246.50 level.....

My final exit arrived with some nervousness at 247.42 on the 25th...as the
previous day's close was a beautiful Doji.......

This is when I truly realized....so what! With proper management of the trade, I
could have been stopped out on the 19th with 497 pips risk free, as my stop was
properly moved.

When this little revelation hits...this is when I truly realize my level in
climbing the learning curve these past 20 months with you...and it's quite a
feeling....and this feeling is the best part! It tells me I have properly
planned the position, monitored appropriately, maintained my risk, and been
patient.

I know the Carries cannot go on forever and the markets will constantly
change...but having these plans and structures you have taught me, gives me all
of the solid foundations for anything that may arise in any trading situation!

Feel free to use this one as a shameless plug for your teaching experience, the
book, the DVDs, having someone by you a drink...anything!...hee hee... :-)

Sincerely,

5 Questions with Rob Booker

Since famed trading instructor Rob Booker was nice enough to ask a few questions of me about my techniques and experiences, I've decided to ask Rob a few questions as well. What followed was a fascinating interview where Rob relates his personal experiences, and how they inspired his book. Please read on...

*How did you get started in trading?*

A friend of mine had invested $750,000 (or even a bit more) with a currency
trader in Los Angeles. The terms of the deal: it was actually a loan, which
would pay at least 5% interest per month would be paid on the investment. When
I heard that this currency trader was paying 5% per month, I realized that
he must be making some serious cash. I decided I needed to know more about
that. However, I have to also say that during law school, I had a lot of
exposure to the financial industry in San Francisco, and it was during that
time that I "caught the bug," and I knew that somehow I would be involved in
the financial world.

*What inspired the "Harry Banes" character in your book?*

Some of my own experiences. Some of those trades in the book are my actual
trades. Working at a law firm inspired the depression that Harry feels at
having to work for someone else. Also, I believe that there is a little bit
of all of us in Harry Banes. He sort of goes through the real heartache,
terror, euphoria, and other emotions connected with trying to make a living
as a trader.

*What's a favorite trading war story (present or past)?*

This one is hard for people to believe but I am going to tell the story
anyway. I was teaching a seminar in Las Vegas two or three years ago, and
the 2nd day of the seminar was the Non Farm Payroll report. The night
before I had dreamed that after the report, the USD/CHF moved 121 pips
upward. I actually remember dreaming that I saw the candles move in a
particular order and speed and I could remember what I had seen on the chart
in my dream very clearly when I woke up. When I got to the seminar that
day, I announced it to the group. Also that morning I told Maxwell Fox, my
trading partner and good friend, that I was so confident that the USD/CHF
would move 121 pips upward that day, that I would insure any losses he
incurred by trading the report – that I would actually pay out of my own
pocket for any losses he took. I basically told him to light it up and
trade like a bandit.



Sure enough, the USD/CHF moved in exactly the same way that I had dreamed. It
was a surreal experience. I tell people now that if they are willing to
look at the same thing every day, in the same way, with the same indicators,
over and over and over again, that they will start to have an intuitive
sense for the market. By becoming an expert in one thing, they can actually
start to sense for when a move is going to happen.



And what did Max do that day? Typically, Max traded responsibly and
conservatively. He made money but didn't use a wild prediction of mine to
trade irresponsibly. That's one of the reasons Max is still the trader I
admire the most.

*In Chapter 12, Banes visits a hedge fund and is surprised at what he finds.
Was this inspired by a real life experience?*

Yes. My wife worked at a hedge fund in San Francisco during the time that I
was in law school. I was often shocked to see how that fund, and other
funds, were either terribly spendthrift, or cheap, or undisciplined, or
disciplined, in their trading. The fund she worked for lost something like
$70,000,000 – probably more than 25% of the total funds under management --
in one day on a bunch of OEX options. She had to reconcile those trades. The
story can be found in Jack Schwager's New Market Wizards under the chapter
for Dana Galante. My wife reconciled those trades; she came home absolutely
shocked. One of the first things she did the next week was walk back into
work and ask for a raise. She knew that she was needed more than ever.



There are lots more stories like that, as I visited with hedge fund traders
during the roaring 1990's.*
*
*What advice would you give to new Forex traders?*

You get better at trading by doing three simple things:



1. You focus on just one method of trading on just a few currency
pairs;
2. Make just a little bit of money at first – get disciplined with a
small amount of money, and then you will earn the right to trade with more
money;
3. 99% of traders can probably do 1-3% per month returns consistently,
but they fail because they're trying to get 10% per month.

Thanks Rob!

Forex Q&A with Ed Ponsi

Please CLICK HERE TO READ MY LATEST ARTICLE where I answer questions from readers about Forex trading.

Also, please note - I'll be signing my new book and giving away prizes at the following OTA locations:

OTA London: Friday, August 17


OTA Toronto: Friday, September 8



More dates to come...

This Is Awesome!

I just had to share this with you - an email from one of my students. Apparently, he entered the same USD/CAD trade that was recorded in real time on this blog - only he did it completely on his own. Check it out....

Ed,

(Name deleted by EP) here, I just found your blog last night and noticed that I was in the same trade as you had recommended earlier in the day. I had also covered a portion in the same area as you had recommended. I just wanted to let you know what a good feeling I got when I had already done what you were saying to do. Just goes to show you how great a teacher you are. It has been around 2 months since the Toronto class and my account has shown nothing but steady gains since.Thank you for the great (ED) ucation.

Rob Booker Interview

Please join me in welcoming Rob Booker to the FXEducator Blog!

Rob was kind enough to ask a few questions of me; how I got started, ect. Pretty cool stuff!

Please click here to see my INTERVIEW WITH ROB BOOKER

Fibonacci vs. Pivot Points

Ed,
I have a question for you on trading with the trends. I have been experimenting with Fib retracements and pivot points to help me better pick my pullback targets. I generally use a 4 hour chart for my smaller moves and use a weekly/daily chart to establish my overall trend directions and bigger retracement areas. I don't know much about Elliott Wave, I just draw my fib retracements off obvious up and down moves in the directions of the overall bigger trends. It seems to work pretty well but I still can't seem to spot when a pair is done retracing and at what level it should retrace to. I use weekly and monthly pivot points with fib retracement numbers to try and find areas at which a pair may turn around at also. I guess my question is how do you know which fib retracments or pivot point areas are most likely going to be your pullback targets? Thanks so much.

Hi i9markos,

Thank you for your question. I'm a big believer in Fibonacci when trading Forex, because it is such a huge part of the Forex trading "culture". This makes it much more likely to be effective in creating a self-fulfilling prophecy. Pivot points are an ingrained part of the futures trading culture. I think there are some inherent problems with Pivots regarding Forex. Fib retracements are price-based, they have no time reference, whereas Pivots depend on time (opening price, closing price are determined by the time used to begin and end the trading day). Because time is part of the equation, and because there is no standard time of day that every currency trader uses to begin and end the Forex trading day, it's highly likely that different traders are using different reference points for the opening and closing time of daily candles. If the time varies, the price is likely to vary also, meaning that the pivots themselves could vary. This reduces the chances of a self fulfilling prophecy.

To determine which Fib levels are more likely to work, I don't assume that any will work, instead try to observe price action when a level is reached. If it shows support or resistance, then I might use it - not before. Nobody knows for certain which levels will hold, but if I see some evidence, I know there is a chance. It's my belief that effective trading is nothing more than the art of stacking probabilities in your favor. Hope this helps!

Ed Ponsi
President
FXEducator.com
edponsi.com

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Total Profit = 237 pips - Trade Closed

We have finally closed our live trade with a total profit of 237 pips. Final exit was 1.0465, duration was approximately 30 hours. I sure wish that it were always this easy! ;)

We entered yesterday at 1.0585 (see previous posts) We now have:

1/3 = profit of 40 pips
1/3 = profit of 77 pips
1/3 = profit of 120 pips

Total Profit = 237 pips

Feel free to hit me up with comments and questions. info@fxeducator.com is my email address

Thanks,

Ed Ponsi

Total profit = 117 pips (So Far)

Continuing coverage of our live trade. A big move in USD/CAD on the heels of the Trade Balance figures for the U.S. and for Canada. We are going to take additional profits here at 1.0508, and move the stop down to 1.0545.

We entered yesterday at 1.0585 (see previous posts) We now have:

1/3 = profit of 40 pips
1/3 = profit of 77 pips
Total profit = 117 pips (So Far)
1/3 = still open

Our target for the final 1/3 of the trade is 1.0465. So, well either gain 40 pips if the stop is hit at 1.0545, or 120 pips if the exit is reached at 1.0465.

Comments? Questions? Is anybody out there? ;)

USD/JPY Question

Quote:
Originally Posted by MR NO
How much the USD/JPY can went down,do you think that he will brake the 120.98?

Hi Mr No,

Thanks for your question. EUR/JPY and GBP/JPY are such good trading vehicles right now, so I don't really care for USD/JPY right now. AUD/JPY and to a lesser extent NZD/JPY have been pretty good too. When I think of USD/JPY, I think of two weak currencies - and I'd rather match a strong currency vs. a weak currency. But if the subprime mess boils over, and the risk aversion causes the Yen to strengthen, then USD/JPY should go well below 120.98. A strong JPY would give us just what I'd like to see - a strong currency vs. a weak currency.

USD/CAD - Managing The Trade

Hey Everybody,

I hope you're all having a great day and enjoying our live trade on USD/CAD. Now that we have a nice little profit of about 40 pips, it's time to move the stop. I'm going to lower the protective stop to 1.0585, which was also the entry point. At the same time I'm going to close 1/3 of my position. This means that we'll have a nice little gain on 1/3 of the trade, and at worst a break-even scenario on the other 2/3 of the trade. Hopefully this puppy will keep on running, and we can take additional profits and lower the stop further.

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USD/CAD Resistance - Fibonacci, Moving Average

An addendum to the previous post, a glance at the daily chart reveals that the rally hit resistance at the 20-day moving average (about 1.0615) before slipping back below the 1.0600 figure. We also have a 50% Fibonacci resistance point near 1.0600, so the stop has a good degree of protection. This doesn't guarantee success, but it doesn't hurt, either.

USD/CAD Short @1.0585

USD/CAD is in a long term downtrend, and it has found some resistance on the hourly chart on the 1.0600 figure. Also showing overbought on the hourly RSI. Shorting here with a stop above the recent highs.