Jan 23, 2010

Talent is Overrated - Geoff Colvin's interview with Charlie Rose

Hey Guys,

I love to learn stuff. So it's not surprising that I regularly subscribe myself to whatever good information I can find over the net and ask a lot of questions so I can try my best to understand how things work.

The interview below is one of the videos I came across recently that I really want to share with you all. The interviewer is Charlie Rose, a famous talk show host that has interviewed many a great people (http://www.charlierose.com/). His guest is Geoff Colvin, the author of a book named "Talent is Overrated".

Here's the video:

Question. How many times have you heard someone say, "Oh that guy is just pure talent!", "He was born for that!", "She's such a natural!" yada yada yada. Sure, we all know that Tiger Woods is such a good swinger (in golf!), Michael Jordan was next to unstoppable on the basketball court, Jacky Chan makes dangerous stunts look like a trip to the playground, Luciano Pavarotti sings the opera like there's music box stored in his stomach and countless various stories of how somebody could do something like they were born to do it. However, what we often never hear about is the countless number of hours they put into practicing, the failures they had to endure and the criticism they had to bear in their relentless efforts to become good in the field they are at.

Let's forget about those people for awhile and look at our own lives. You could be picking up a new hobby, a different job or searching for that Eureka moment in your life. Someone's mother once said, "Life is like a box of chocolates. You never know what you're gonna get." Here are some tips to help you discover what talent you have and how to harness it:

1. Don't be Afraid to Try New Things
- One very good forex trader I know was formerly working on large fishing boats before he captained his own boat. If you watch Discovery Channel's "Deadliest Catch", you'll probably have a rough idea of how adventurous his life was. As hard as it is to link forex trading AND large deep sea fishing boats together, IF he was afraid to try new things, he would never have become the successful forex trader that he is today.

2. It's Never Too Late
- A good buddy of mine picked up Bike Trials at the age of 44! If you've never heard of this sport and do not know how physically challenging it can be, I do suggest you visit his site and have a look (Bike Trials and a Fistful of Blisters). Colonel Sanders, who came up with the recipe for the now world famous Kentucky Fried Chicken only found success at the age of 65!

3. Find a Mentor/Partner/Coach
- A mentor/partner/coach is someone who guides you along in your journey through their knowledge and experience as well as hold you accountable for your actions. Professional sportspeople have coaches, singers have their vocal trainers etc. I myself have made it my mission to get someone to mentor me so I can become a much much better forex trader.

4. Hard Work
- I don't think I need to explain this, do I?

Here's to making the most of your talents,

Jan 18, 2010

Forex Education: Learn to Pay or Pay to Learn?

Hey All!

Through my experience of blogging, I have met some good friend and traders along the way. One of them is Casey Stubbs, who runs Winners Edge Trading. He has kindly asked me to do a guest post for his blog and here it is.

Forex Education: Learn to Pay or Pay to Learn?

As usual, feel free to post your comments if any!

Happy Trading,

Jan 14, 2010

Thoughts on Marc Faber's "The Gloom, Boom and Doom Report"

Disclaimer: The material written on this site are entirely opinions of my own and is not meant to be taken as investment advice of any sort. Please read my full disclaimer at the bottom of the page before proceeding.

I was watching a video by Dr. Marc Faber who publishes a monthly newsletter titled "The Gloom, Boom and Doom Report". Here's the video:

My opinion?

I believe that the US government has not handled this crisis in the best possible manner with TARP and the bailouts simply because repaying debt with new debts will not work as the new debts carry with it costs of financing as well.

Theoretically, at the end of the day when push comes to shove, the only way to "repay" such debts will be through defaulting.  Which brings us to the other side of the fence, the people that say that US is "too big to fail" (sounds familiar?). The amount of corporations and countries dependent on the US dollar is huge simply due to the fact that USD is the choice currency for trade due to its "stability". This means that if the US fails, many other countries will also be in trouble as they hold US reserves. Therefore, in a way it is in their best interests to not let the US  fail. Question is, will there be one day where these countries no longer want to bear the burden of holding US debt? China has already instructed their banks last year to stop lending money to US banks.

Another alternative for the US that is the least desired would be finding a country to go to war with. During war time, the US will be flooded with massive contracts ranging from the purchase of weapons, ammunition, the rebuilding of buildings and infrastructures, security, fire fighting, food, supplies etc. Besides the billions of dollars of contracts during wartime, it also serves as a distraction for the people's economic woes.

Will US President Barack Obama carry the country through this tough period? Honestly I don't know but for the sake of many people, I do hope so. Til then, I recommend that you and I arm ourselves with some knowledge of what to do just in case something unexpected happens.


Jan 13, 2010

Starting Forex: Falling in Love and Getting Your Heart Broken

Hey guys,

As a forex trader, I always enjoy chatting with other people about currency trading. These people could range from professional traders who can make thousands of dollar a day to young and excited 'fresh meat' who have just entered the vast world of forex trading.

The Old Traders
One common factor is very prevalent when I speak to forex traders who make good money day in and day out i.e. They all have either lost money OR had blown an account when they first started their journey in forex trading (someone I know told me he lost USD 250,000!).

The Bold Traders
On the other hand, some of my conversations with forex beginners, I deduced another fact i.e. If they had luckily (or unluckily?) made some money while trading a demo account or even a live account, this small form of 'victory' makes them feel on top of the world and that they were born to trade forex. After a period of time, these people would then somehow proceed to the category of "have lost money" and/or "have blown an account".

What can I deduce from the above?

The possibility of making very good money coupled with a lot of amazing marketing out there draws people into the forex markets day by day. Forex beginners are very prone to believe that forex trading is easy only to discover the water is deep once they are in the pool. Once they realize that forex trading is NOT as easy as it seems, some lucky ones will pull out of the market while the unlucky ones will continue to gamble away their money (I know someone who has kept trying for 10 years!). Those that do not give up and continue on learning will find that forex trading is just like any other business. You need to dedicate your time, money and effort to be able to reap the excellent rewards that your relationship with the market provides.

You will get your heart broken when you blow up that account. Grief if you must, then get up, get over it and continue on your journey to be a successful forex trader.

Happy Trading,

Jan 7, 2010

The Costly Badminton Game: An Excellent Forex Trade that Turned Average

Hi Guys,

Just wanna share with you my forex trade experience yesterday on the GBP/USD.

If you look at the chart, you will see for little triangles pointing down. Those indicate short entries that I made along the way. You can see that I was confidently building up positions shorting the GBP/USD for a total of four times. My average entry for the four trades were at 1.6040.

If you look further to the right you will see a little red dot which was where I was unfortunately stopped out of the trade at +20 pips

So why am I complaining about a winning trade? Well, what happened was I expected this move to go to at least 1.5940 OR lower. You see, I had a badminton game to attend and what I thought was I will move my Stop Loss to cover at least +20 pips since there will be a news release during my badminton game and I wouldn't be able to watch the markets. This was when my trades were nicely hovering at 1.5970 area which was roughly about +70 pips. I refused to take a portion of my positions out as I really believed that prices would head to 1.5940 OR lower (at time of writing this now prices did touch 1.5900).

And as you can see, after the news release, prices went up all the way, hitting my stop loss at +20 pips and then slowly reversed to the 1.5900s which would have given me a profit of roughly +140 pips! Seven times what I ended up with!

So you can see how costly this badminton game was. In hindsight, I could have done a few things:

1. Not play badminton (which was not my top choice)
2. Taken out some profits first since I would not be there during news (ok choice but the momentum for the trade was really building up)
3. Adjust my Stop Loss to where price levels formed a Strong Resistance instead of my price level of +20 pips (which would have kept me in the trade).

Oh well, at least I had a good time exercising. As they all say, the market will always be there as long as we live to trade another day.

Happy Trading,

Jan 6, 2010

Forex: Trade Management

Hey All,

One of the best part about forex trading is that the vast market liquidity allows for very accurate trade management strategies to be employed.

Forex traders would have probably heard of the saying "Keep your losers small and let you winners run". Here are some examples of what it means.

Example 1:

You entered a trade at 1 standard lot ($10 per pip) with a stop loss (I'm a firm believer that you should ALWAYS employ stop losses) of 100 pips (equivalent to $1,000). The trade moves in your favor 50 pips and now you have options to either:

1. Move your stop loss to breakeven, which means that you are totally risk free for this trade. At worst, if price reverses to your entry price, you would have made no profits and no losses.

2. Take partial profits i.e. Close out half (or any amount) of the position at 50 pips profit and let the others run.

The above are only two examples of how you can manage an active trade, there are probably as many variations out there as you can think of.

Example 2:

Here's how one of my trade buddies, @piptee does his trade management which he calls the "I Don't Care Entry". Click HERE for the article.

Mastering the art of trade management will greatly improve your trading. As Alan Farley puts it, "Experienced traders control risk, inexperienced traders chase gains".

I hope this will help you come out with some ideas of your own. And when you do, why not share them here as well?

Happy Trading,

Jan 1, 2010

Happy New Year 2010!!!

Hey guys!

Just want to take this opportunity to wish everyone an AMAZING 2010 with loads of joy and success!!!

How is everyone's New Year? Any resolution for the year ahead? Share it with me so I can cheer you on! Those of you who have been dropping by to this blog might have noticed that there are some changes to the blog layout. The change is basically to cater to a more efficient and organised blog. An even bigger change is that I now have my own domain name at www.forexandlife.com! The reason this domain name was chosen is because it accurately reflects the original intention of the blog, which was to share with you guys my journey on trading forex as well as some of my random thoughts about life.

While the previous URL www.theforexguy.blogspot.com still works, please change your bookmarks and links to www.forexandlife.com to accurately mark the new change.

Lastly, I have included a couple of ways where you can contact or keep in touch with me either through Facebook, Twitter, RSS or e-mail. So if you have questions, interested in guest blogging, or just to say hi, do feel free to drop me a note.

Thank you very much for being part of my journey so far. Here's to an abundant 2010 to all and may we make lots of pips together!



Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. ForexAndLife.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.