Forex Trading - - Is it Viable for Everyone??

Something that most people often wonder about is whether or not everyone can (or should) trade forex. In answering that question, let me tell you a recent experience my mother had. She traveled to the UK recently to spend some time with family members. Upon arrival, she was thoroughly surprised to discover that everyone in the house including husband, wife, siblings, and mother-in-law (who happens to be older than my mum) were all trading forex… and making profits too! Now she’s insisting that I must teach all members of our family in Lagos!

I have often said that forex trading is something that can be taken up by anyone whether as a hobby, a part-time job, or a profession. The question is “are you interested?” because if you are, the rest is not that difficult. Get a computer, internet connection, a basic forex education, and start practicing. That’s it! Of course, you have to go much deeper if you want to become a professional trader but you can make up your mind about that after getting a hold of the basics. What many people don’t realize is that forex trading can be a really exciting hobby; don’t let the complex-sounding terms scare you away.

Last week, the Eur/Usd experienced a decline (though not too steep) after failing to breach the 1.3664 Resistance level. Currently (Monday evening), the market has found some Support at the 1.3419 line and we’ll be looking to see what happens next. A breach of this level will obviously trigger a Sell while we look to Buy only if there’s a reversal of trend even if in the short-term. In the meantime, let’s see how trading went on our virtual portfolio last week.

On Monday 12th April, the Eur/Usd opened with a large upward gap (Sunday night) which was obviously the effect of a bullish outlook over the weekend. By the early hours of the morning, we had some negative divergence and price started heading south. The first casualty was the 1.3658 Support line which was breached shortly after but we didn’t go Short since the close was too far away. The next opportunity for a Short trade came around 12noon when the 1.3597 Support line was breached. Entry was at 1.3593 and the first position was closed at 1.3578 around 12:45pm for a profit of 15pips. The second position was stopped out at entry 2hours later.

On Tuesday, the market started out trading around the 1.3579 level. It then started rising till it got to the 1.3617 Resistance line where it was rejected. It then returned to the 1.3579 Support line and breached it around 10:45am but the close was too far away for our entry. This was a good thing because the market reversed shortly after and rose to the 1.3617 Resistance line where it was rejected again.

Wednesday’s trading started with the market hovering just above the 1.3646 Support line. It breached this level around 7:45am but we didn’t take the trade because the set-up was against the trend and there was no reversal pattern at the time. Also, the entry price was very far away from the Support. We had another potential entry for a Short trade around 11:45am when the 1.3620 Support line was breached but we didn’t take it also because the entry was too far away.

Thursday’s trading started with the market heading downwards. This decline was coming off some negative divergence which occurred in the middle of the US session on Wednesday. The downward move continued till it reached the 1.3642 level where it found some Support. This level was first breached in the early hours of the morning but price hovered just beneath the Support till another valid entry was triggered at 7:00am. Entry price was 1.3638 and the first position was closed at 1.3623 for a profit of 15pips. The second position was eventually closed at 1.3558 around 2:00pm for a profit of 80pips.

On Friday, trading started out around the 1.3546 level. Price drifted horizontally till just around the beginning of the London session. It then headed downwards but reversed before it even got to the next Support level which was at 1.3506. After bouncing around for most part of the London session, it eventually resumed the downward trend and broke the 1.3506 Support around 2:15pm thereby signaling a Short trade. Entry was at 1.3501 and the first position was closed at 1.3473 around 5:00pm for a profit of 28pips. The second position was stopped-out at entry around 6:00pm.

As at the end of last week, our portfolio stood at $119,510.00. In our next article, we’ll have an overview of how this week’s trading played out.

Disclaimer: The information contained in this article is for educational purposes only. Nothing contained or implied here shall be deemed a solicitation or an offer to Buy/Sell traded instruments. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Trading involves substantial risk and there is always the potential for loss. Because the risk factor is high in the foreign exchange market trading, only genuine “risk” funds should be used. If you do not have the extra capital that you can afford to lose, you should not trade in the foreign exchange market..