Questions

Here are some questions which are posted to me in the comment section recently.

Q: Do you watch other pairs to see what they're doing (meaning if they are near support/resistance or have broken out of them already)?

A: Yes, I always monitor other currency pairs to obtain an overall picture of the underlying market strength. For my case, it is the strength of the US dollar since the currency pairs which I normally trade are USD/CAD, USD/JPY, USD/CHF and GBP/USD. I pay more attention to price action (i.e. breakout of candle sticks) rather than support/resistance level.

Q: I noticed that you did not include EUR/USD in your list of traded pairs. Is there a reason for this?

A: Yes. Basically, EUR/USD is a slower moving currency pair with a narrower daily pip range when compared to other major dollar pairs. Its movement is mostly influenced by the imminent economic releases and the latest fundamental development. It seldom takes lead when come to technical breakout. You can trade USD/CHF pair instead as it tends to be negatively correlated to EUR/USD. Personally, I have more success trading the USD/CHF pair and therefore from my past experience, I don't recommend EUR/USD as the beginner's trading currency pair.

Q: I like to know your thought process on position entries.

A: I have tried to scalp using the minute charts but found it way too difficult and time-consuming. With the lack of strict discipline, the tendency of misreading the market directions and then messing things up is great.

Now, I only enter my positions using the hourly chart. I try to spot a small breakout in price at hourly interval but will not rush into a position if the price has already rallied too much. I would rather wait for a good entry level in other charts that I monitor.

Send in your questions and I will try my best to answer them.