About me and my Forex “birth”
My introduction to Forex trading was triggered by a life event rather than the wish to earn an extra income. When relocating from the United States to Canada, my wife and I had to make the important decision whether to exchange the amount of our substantial US Dollar savings into Canadian currency before crossing the border or after arriving in Canada. Not being familiar with how exactly currency exchange worked, we decided to bring our savings into Canada as they were, in US Dollars, and revisit the issue after we settle.
A few weeks later, I started to check online for the USD/CAD exchange rate. I was only using the kind of simple input forms where you enter the USD amount, then choose the target currency for a quick estimated conversion. It was then that I started to notice that some websites were displaying miniature charts next to the result of my conversion from USD to CAD. These charts were showing the exchange rate for various time intervals, such as 5 minutes, 1 hour, or even one month. The fluctuations for smaller periods of time were sometimes negligible, but when looking at the changes from one month to another, it was obvious that the Canadian Dollar was losing value versus its American counterpart.
On the same charts, smaller time frames only revealed seemingly random ups and downs where prices whipsawed without making much sense. On larger time frames however, such as weekly and monthly charts, price movements looked smoother and their trend became visible. At that time, the trend was undeniably pointing up.
It seemed to me that every week that we were postponing the exchange of our US Dollars into Canadian Dollars was in our favor. Again, my extraordinary patience paid out. To put this into perspective, our move to Canada happened in November of 2007, when the US Dollar was at its lowest and only bought 0.905 Canadian Dollars. We finally converted our savings to CAD in December of 2008, when one USD bought 1.28 Canadian Dollars. Call it beginner’s luck if you may, but I saw that the USD/CAD pair has hit 1.28 three months in a row and just had a feeling that it wouldn’t go much higher than that.
USD/CAD actually ended up going only 2.5 cents higher in the course of the next three months, before dropping to a ridiculous low of 0.94 over the next three years. We didn’t care how far it went up after that, of how far it had dropped. What was relevant to us was that on every US Dollar we had brought with us to Canada, we gained a true (and unleveraged, I may add) 37.5 cents when compared to the rate we would have received if our savings would have been converted to CAD upon our arrival in November of 2007. All this was achieved by waiting, looking at the charts on a nearly daily basis and resisting the urge to declare that each occurring chart high was the ultimate and absolute top of tops.
This extraordinarily lucky “trade” was also the coincidental discovery of a new potential way to generate some extra cash. Since the notion of “leverage” was unknown to me at that time, I was under the impression that, given the sometimes small sub-cent fluctuations of prices over long periods of time, very large sums of money were required to make just a few dollars in profit. I also didn’t know that in Forex you can trade both ways, either selling or buying. Initially, I thought that you can only buy a currency, as much as you can only buy a stock, same as with any other thing in life, then sell it at a higher price that what you’ve bought it for. I had a hard time understanding the meaning of a “short” trade and was trying to find real-life analogies to exemplify that. But how can you possibly sell something that you do not have, such as selling the house that you do not own yet, and on top of that make money only when the price decreases?!?
Weird, huh? Please keep browsing through my blog, as I will explain everything in the simplest possible terms. Apart from explaining how Forex works, I will introduce you to the most common indicators used in day trading, as well as discuss various proven Forex trading strategies. If you already have a killer trading strategy, I would gladly use my MQL4 programming skills and assist you in converting your awesome idea into a custom MetaTrader 4 Expert Advisor program that will trade for you day and night, 24/5.
While I enjoy trading currency, my professional background is not related to the financial world. I have been active in the information technology field for more than twenty-five years and have a true passion for geometry and technical analysis. I am also an avid MQL4 programmer on a perpetual quest to develop the perfect EA (Expert Advisor) for automated trading on the MT4 (MetaTrader 4) platform.