It came to my attention that in Japan, the 3^rd Forex country in the world in terms of trading volume, retail investors were very active. Not any kind of retail traders, as suggested by this post’s title.

Japanese housewives are very influent traders indeed. They are around 30 Million, which gives us a good idea about the impact they can make, especially as carry traders.

They usually use the Ichimoku cloud strategy and they are fond of the Aussie because they can borrow in Yen at very low rates, close to 0%, and then buy the Aussie dollar in order to make profit with the interest rate differential, as long as the AUD goes above their entry position level.

Some of them are superstars and are being followed by many traders, as you can see in the following video:

For example, It shows the cost per citizen and to which countries the US owe its debt.

Then, on an unserious manner, it also informs you about haw many trips to the moon you can buy with that much money :)

(source)

Oh, and if you want to know where is the debt now, check the real time US debt clock.

Denis, 61, France, Executive

Did you notice a change in your mind during your first real trade?

Yes absolutely, we lose our intelligence and our thinking abilities. We don’t see the obvious anymore. Experience fixes that and you get your clarity back.

Do you sometimes feel smarter than the market?

No, the Forex market is not a conscious entity, it has no intelligence, it just randomly evolves according to orders.

What’s your money management like?

I use a global stop, I trade just a few orders but I trade with my entire capital. If I start losing, I immediately cut my position and take time to think about what didn’t work. This reflection can last two months. Eventually, the Forex market offers just little breathing space. So I avoid small trades otherwise the spread would eat too much of the profit.

What are the strongest emotions you have to deal with when trading? Greed, hope, fear…etc.?

Greed and fear went away long ago. But when you start hoping, it poisons your mind, you lose clarity instead of paying attention to signals.

How do you deal with leverage?

I use a leverage of 10, I wait to improve myself before increasing my leverage.

What are the main differences between your contest account strategy and your free margin account one?

I simply use the contest account to refill my free margin account through Miles collection with the 0.5% daily goal. My real account is my learning tool. I stopped using indicators, I just try to feel the trend and to take volatility into account.

Knowing that your free margin account can grant you real cash, how do you overcome a bad trading result?

Profit is not my goal, my goal is to achieve a constant progression. When I reach this target, then everything can happen, we’ll see.

Do you use stops and targets or do you watch over your trades yourself?

I directly monitor my position as long as it doesn’t take off, as long as my idea didn’t happen. If the market goes the other way, I cut immediately. Therefore I don’t often use stops and take profits.

Do you think about what you’ll do with your profits?

No, I just want consistency in order to use a higher leverage. I keep a cool head. After 10 years on the financial markets, I never lost a cent.

Adi, 23, Romania, Student

Can you introduce yourself (hobbies, interests…etc.)?

Not much to say about me. I like to read books, play games, enjoy music and other similar things.

Editor’s note: Which games? Don’t tell me Call of Duty, Battlefield is much better ;)

For how long have you been on the Forex Championship? For you, trading in Forex is a hobby or an occupation?

I have been in the contest since September last year. For me it’s more like a hobby for now. I like to research all kind of methods of trading and to test them.

How did you hear about the Forex Championship and RTFX?

I found it on some forum about trading contests.

Is there another trader (in the Championship or somewhere else) who inspires you?

No.

What was your best trade and your worst trade?

Can’t say I had a clearly distinguishable best trade and worse. Had many bad ones followed by a similar number of good trades.  I am currently trying to stop myself from looking to be big winner as it’s usually pretty rare. Best idea seems to be achieving consistency instead of big variations in equity, as it brings a more balanced view that helps going through the bad periods and keeping yourself grounded when things are going very well.

What are your trading styles (scalping, trading the trend, trading the news, hedging…etc.) and schedules?

For now my trading style for the contest is trading the trend. I place trades in the general trend direction and that’s it. In live trading I usually do scalps as well.  I usually avoid trading during the news or at least I avoid trading with the usual scale size lot. News can bring unexpected extreme movements.

How would you describe your trading strategy (daily, weekly and monthly objectives, take profit, stop loss…etc.)?

For the Forex demo contest it’s definitely a daily strategy, sticking to following my friend, the trend.

What would be your advice to traders?

Develop good self-discipline and money management. Technicals are the key as well but without a sound disciplined risk management plan, it’s pretty easy to drift into losses. Try to aim for consistency instead of going for the big jackpot. In the long run it will surely be worthwhile.

Do you check our market news and analysis (RTFX Morning Briefing, Trader Tip)? If yes, do you find them useful or can they be improved?

Yes sometimes I use them to see if they conform to my plans and to get an alternative point of view.  I found them pretty useful.

Do you have other sources of information? If yes, which ones?

I check the forexfactory site for the economic calendar and to see what other traders are saying there about the live market. I watch mt4i.com to feel what the retail traders are doing globally. These are my usual tools. When I have time I consult Bloomberg, Reuters and other financial publications as well.

Editor’s note: not bad, our economic calendar is comprehensive as well.

Anything else you would like to add?

No.

Following the article about the yen’s value compared to other major currencies, and after reading this post let’s have a sneak peek at another Japanese trading feature, the famous Ichimoku cloud.

It’s a trading system published in 1969 by Goichi Hosoda. Its goal is to analyse the market in the blink of an eye (“Ichimoku”) without using any other indicators.

This system, very popular in Asia, works with any kind of market and relies on Japanese candlesticks only.

It’s based on 5 key elements:

1. Tenkan-Sen: average between the highest and the lowest on the last 9 periods.
2. Kijun-Sen: average between the highest and the lowest on the last 26 periods.
3. Chikou-Span: Last closing price on the last 26 periods.
4. Senkou Span A: average between the Tenkan-Sen and the Kijun-Sen plotted 26 periods ahead.
5. Senkou Span B: average between the highest and the lowest calculated over the past 52 time periods and plotted 26 periods ahead.

The goal is to identify 3 signals:

1. The trend: displayed by the Kijun-Sen. It’s pretty flat in the above chart.
2. Entry and exit points: when the Tenkan-Sen crosses the Kijun-Sen up and over the base line, it’s a buy signal. When the crossing happens down and under the base line it’s a sell signal. These signals are reinforced by the Chikou-Span. When it’s above the price curve, it strengthens the buy signal, and when it’s below the price curve it gives a green light for a sell trade. No specific signals in our chart.
3. Support and resistance: the cloud is the area between the Senkou Span A and the Senkou Span B. It’s plotted 26 periods ahead as well. If prices are above the cloud, it can be considered as a support indicator, as displayed in our chart. If it’s below then the cloud can be viewed as a resistance area.

You can use the Ichimoku system in the Forex demo contest platform. Open a charting window and then click on the top right button of the window:

Then select Ichimoku:

we’ve just released this webmaster tool, feel free to use it on your blog, website…etc.

Spain auctioned 3 and 5-year bonds but the higher observed rates (4.037% against 2.617% last time in March) reflect its recent financial downgrade by S&P. That won’t help the Euro. The ECB kept its benchmark interest rate at 1% because of the big growth gap amongst Eurozone countries. Somehow, the EUR-USD gained around 50 pips during Mario Draghi’s press conference (ECB’s chairman).

US unemployment rate will be published tomorrow, let’s see how the dollar will react. All of this gives you a lead on the main trend for this month’s trades. By the way, you can check April’s ranking.

Trade well

Plus, it spots History’s major events. This is what I call perspective :)

(Click on the image to enlarge)

See how the two World Wars engineered growth and how the 1929 Krach mainly hurt occidental economies? Or how a big growth trend started in the late seventies for China, right when they introduced their economic reform?

I love the part when the industrial revolution triggers a growth soaring for many countries.

Asia, powered by India and China, will concentrate a bigger share of power in the years to come. Sooner or later, the Yuan and the Rupee should become major currencies as well and we will have to add them on the Forex Demo Contest. I look forward to trade my first EUR-CNY or USD-INR :)

In the meantime, enjoy your last week-end before the beginning of next trading month.

Trade well.

On the other side of the planet, the Royal Bank of New Zealand didn’t change its policy rates, just like they usually do, and kept them at 2.5%.

UK GDP recent release disappointed investors and affected the GBP.

On a larger scale, the Euro Zone sentiment slips lower, it was just confirmed by the recent announcement of German CPI.

The single currency will continue to react to European news, like the Dutch government collapse after failing to reach an agreement about the public deficit or the incoming French elections results.

It may create a few opportunities on the Forex Demo Competition, especially when the markets will reopen on Monday 7^th of May, one day after the announcement of elections results.