Forex Figures

When choosing a Forex broker, many traders look for a brokerage that has not only good trading conditions, but a reputable staff of analysts who can provide regular support and explanation of market trends. Among those that have shot to fame are Kathy Lien, formerly of FXCM and now of GFT Forex, Bastian Rubben of SunbirdFX and Nour Eldeen Al-Hammoury from Amana Capital.

Although she is only 31, Kathy Lien has become an icon in the Forex world, making regular television appearances, authoring several Forex-related books and providing regular market analysis that is read by thousands of traders daily. For this reason, many traders were shocked when Lien announced that she is leaving GFT with her colleague Boris Schlossberg to open their own asset management firm.

Schlossberg and Lien have been working together for seven years, first at FXCM and then at GFT, and have been asked regularly to manage accounts, but could never do so because of various regulations and legal restrictions. On her website, Ms. Lien describes herself as a ‘trader first, analyst second’, so it is not entirely surprising that she would choose to pursue a venture that would allow her to spend more time trading, and (perhaps) less time analyzing on the front lines.

The good news for Forex traders is that there are many reliable Forex analysts that provide regular market updates, both via specific brokerages, or through content-based websites like DailyForex which provide quality analysis with no strings attached.

Which Forex analyst do you follow regularly?

Photo Courtesy of MoneyShow

I recently had the opportunity to interview Ed Ponsi, a professional Forex trader who seems to be entirely immersed in the markets.  In addition to publishing a book recently titled Selling America Short: The New World Order vs. The American Middle Class,  Mr. Ponsi is also responsible for FXEducator, a Forex training course for new traders who are looking to gain a better perspective on trading the currency markets.  Mr. Ponsi will be presenting at the Traders Expo Dallas in June 2012, along with Rob Booker and a host of exciting speakers.  It was truly interesting and exciting to learn more about Mr. Ponsi’s work and his views about the Forex world, and I hope you enjoy an interview of this fascinating and personable Forex Figure.

1 – How did you first get interested in the world of Forex?

I was a stock trader for a boutique firm on Wall Street, but I had a tendency to think in global terms. I was always tuned in to the international news, looking for an edge, and paid more attention to macro events as opposed to micro. Someone pointed out that my methods and demeanor seemed built for the currency markets, which is known to be news-oriented and for forming massive trends.  So, I decided to investigate the currency market, and when I learned of its advantages, in terms of liquidity and transparency, I was hooked.

2 – What did you do beforehand?

I worked a summer job at the Philadelphia Stock Exchange when I was in my teens, and that’s how I became interested in trading. Later I owned a small business but traded my own account on the side. I built up a pretty good track record, and used it to land an entry-level trading job on a Wall Street desk. It was rough at first, I had to adjust my techniques to comply with the company’s trading profile, but after a rocky start everything fell into place. Once I successfully incorporated their techniques and risk management into my trading, there was no looking back.

3 – What trading methods or strategies do you use?

I don’t use just one technique. I feel you have to be flexible in order to take what the markets are willing to give you. For example, I sometimes identify myself as a trend trader, but markets don’t always trend very well – in fact, right now, the markets aren’t trending well at all, so I’m focused on other techniques. I probably use seven or eight techniques in all, each designed to take advantage of a particular market tendency.

4 – What pair/s do you trade?

It varies. I don’t believe you should specialize in one or two pairs; instead I trade whichever chart looks the best to me. I used to trade USD/CAD quite a bit, but now that pair has become dull. Most of the trades I’ve taken recently involved the USDJPY, the AUDUSD, the EUR/AUD, and the EUR/CHF. Six months from now, depending on how the market is moving, the answer could be completely different.

5 – Do you implement the same trades for yourself and your clients?  If not, why not?

Yes, it makes sense. Trading with other people’s money should be no different than trading your own; you should always try to make the best trade possible. I love the feeling of hitting a new high-water mark in the client accounts. If I see a great opportunity, I want everyone to enjoy the benefits.

6 – How many hours each day do you spend trading Forex?

It’s funny, I guess it depends what you mean by trading. Some people think trading consists of pushing a lot of buttons, constantly buying and selling. I tend to hold positions for awhile, sometimes weeks, so I’m not constantly entering or exiting. I’d rather place one good trade than a dozen mediocre trades, because one good trade will make more money.

But if you want to consider preparation, which is 90% of the battle, as a part of trading, then I’m always trading. I constantly read, I study economics, fundamentals, technicals, news, speeches, everything. I don’t keep track of how much time I spend doing this every day, because it’s a constant process. As a trader, you really have to love what you do, so I wouldn’t classify any of this as ‘work’. You learn everything you can because of a desire to know and understand, and of course to make the best trading decisions.

7 – What do you see as the biggest benefit of trading Forex?  The biggest drawback?

The biggest benefit is the transparency. In the stock market, if you really want to understand what is happening in a company, you read the news, study the balance sheet, listen to the conference calls, and a dozen other things. These companies can play tricks with accounting, write off losses, shift profits from one quarter to another – and there are thousands of companies to worry about.

In the currency world, it’s much simpler; every country releases virtually the same information; employment, GDP, inflation, manufacturing data, etc. There are only a dozen or so major currencies to follow, instead of a universe of 10,000 stocks. Because it is a much smaller playing field, it’s easier to keep track of everything.

The biggest drawback for me was the lack of accurate volume information in Forex. With daily turnover at $4 trillion USD and rising, there is simply no way to keep an accurate count of all the trading activity in the forex market. Tracking volume in Forex is like counting grains of sand on a beach, so we have to base trading decisions on factors other than volume.

8 – How did you come to develop FXEducator?  When?

I created FXEducator in 2005, because there was such a lack of good trading information available. I know exactly what traders need because I was in their shoes at one time. Traders need good, actionable strategies that work. They need to possess an arsenal of actionable strategies, and they need to know the right time to use the right strategy. And, they need to get solid information from an experienced professional trader, not from an experienced professional salesman.

9 – What makes FXEducator different from other Forex education systems?

There are people who understand how to trade, but can’t articulate it well. There are also plenty of people who are willing to teach you how to trade, but many of them can’t actually do it themselves. But there are very few actual traders who teach, and who are good at teaching. I’m lucky because I know how to make money as a trader, and I can explain it to anyone. People tell me this is a rare combination, and that’s why FXEducator has been such a huge success. FXEducator has been around for seven years now, and in that time I’ve seen many competitors come and go. People appreciate quality in this business, a willingness to go the extra mile, and that’s why we’ve been successful.

10 – Do you offer personal coaching or advising to your FXEducator students?

I haven’t done that for many years, but we are always getting requests. Between my trading, writing, and television appearances, it’s difficult to find the time, but we get so many requests, and I hate to let people down. Sometime later this year I might take a few students under my wing, if I can find the time.

11 – How, if at all, do you think the Forex world has changed in light of the Eurozone debt crisis?  Where do you see the future headed? 

There has always been crisis and change in the markets. Fifteen years ago, there was no euro, and fifteen years from now it might be gone, or survive in a very different form. The best traders are the ones who adapt to change. The game is always changing, and every time it does, some traders fall away, but the good ones always adapt and survive.

I can’t predict the future but I can prepare for it by allowing myself to accept the possibilities now. Maybe Greece leaves the Eurozone and the euro currency rises; or perhaps Germany will leave and we will trade the Deutsche Mark again. Maybe someday the U.S. dollar will not be the reserve currency of the world. Maybe China will float the Yuan, what will that do to the Japanese Yen? It’s an endless game of possibilities, and I’m fortunate to be able to play that game for a living.

How did you first get into the Forex trading world?

I sold my offline business when I hit the big 40, semi retired & moved with my wife & young family to live in the sunny Canary Islands. I then discovered that you need more money when you have so much free time & and a beautiful climate. I needed to find a way to earn a substantial income & didn’t want the hassle of running a conventional business, so I turned to the internet.

How long have you been trading Forex?

It took me 3 years to learn how to trade successfully. After 5 years I started to teach & mentor others. I am now starting my 9^th year of Forex trading.

What platform do you use for your own trading?

I use MetaTrader4. I have used other platforms but the charts are nice and clear and it’s easy to teach others how to use it.

Do you trade based on technical analysis or fundamental analysis?  Or news?

I am a technical trader. I have always paid attention to scheduled news and avoided opening trades when it’s due but that was the limit of my fundamental analysis. However with all the Euro chaos in the last 18 months I have been paying a lot more attention to what’s going on in the financial world. I do not   trade the news per se and never trade on NFP Fridays.

What currency pairs do you focus on?

I concentrate on the GBP/USD, EUR/USD & EUR/GBP.  I am English but live in the Eurozone. I recommend to my students that they concentrate on their own currency if possible. They read the newspapers and hear the “word on the street” & therefore are already more knowledgeable than many experts.

What type of trading strategy do you use?

Everything I do is based around the core fundamentals of support & resistance, both fixed & moving (emas). I always aim to trade with the trend but have successful options if markets range. I never try pick tops and bottoms.

What was the catalyst that transformed you from a struggling trader to a consistently profitable one?

I struggled for 3 years. I have never been interested in gambling and yet after a couple of years I was showing many of the traits of someone with an addiction! I found the discipline & rule-following the hardest area to conquer. Eventually I took a break. I KNEW there was money to be made but I needed to take some time off and devise a clear strategy. For me patience, discipline & the ability to follow the rules are the keys to succeeding at Forex.

When did you launch your website?

I launched my free site in 2008 & then forexmentorpro.com in late 2009.

Why?

I was trading and making lots of money but I was bored whilst waiting for trades to set up. I taught a few local people how to trade and then started a blog where I shared tips and advice via twitter and the blog.  I had originally paid $3300 for a DVD course (what was I thinking?)! I knew I could do a far better job and for considerably less.

What made you change from Forex trader to Forex trainer?

I had been trading for 5 years. I trade from 4 hour charts so had long periods of inactivity, hence starting the blog. I found that I enjoyed helping people succeed and saving lots of people from all the scammers and junk products that we all know about.

What would you say is the most helpful part of your website?

Apart from the educational resources and analysis the biggest, most popular section is the members only section of the forum.

Why?

It’s run by full time professional trader Pierre who is on hand during the London & early New York session to share tips & advice. Members can share ideas and strategies. There is no negativity and experienced members are genuinely willing to help.

What makes Forex Mentor Pro different than other Forex courses?

Its high quality with great support but is ridiculously cheap. The Forex mentor program has over 40 educational mini videos to teach people how to trade but the biggest benefit for members is that we show the day before what we expect to happen in the markets, why and how we intend to trade it. I am known for being spookily accurate with my projections J.

What type of people register to your Forex forum?

It’s a spam free forum (every member is vetted). We have members who have graduated and become pro traders who are then happy and willing to give something back. There is no room for wingers and negativity – only a genuinely helpful ethos.

What makes the forum helpful for new traders? Experienced traders?

New traders can ask any questions without fear of being ridiculed. They can rub shoulders with lots of people who have been where they are now. For more experienced traders it’s a chance to connect with others (trading can be a lonely past time) and help others if they choose.

Any final thoughts or words of encouragement?

Forex can be a very profitable business, BUT people need to treat it as a business not a hobby if they wish to be very successful. Those coming into Forex expecting to get rich overnight will be disappointed. It takes time, effort and commitment, but the rewards can be brilliant if you can crack it.

Neil Norton is a full-time trader and co-founder of the TheForexRoom.com. The room educates traders on Neil’s own divergence strategy and calls live trades during the London session from 7am GMT that aims to capture dozens of pips daily. DailyForex.com caught up with Neil and we discussed his journey into trading, his trading room and how he views the markets.

Questions about Yourself

[DF]  What’s your professional background outside of trading Forex?

[Neil Norton]  I’m an Entrepreneur: I have built many businesses from scratch; the last one was an online retail business for consumer electronics.

[DF]  Where did you grow up?

[Neil Norton]  South London, UK

[DF]  How did your journey into Forex trading begin?

[Neil Norton]  I was looking for my next venture when I saw something on line. It was a live trade where they guy bought GBPUSD at £1,000 per pip & set a target of 20 pips. Looking back on it, it was a very basic pivot pop trade that I used myself for a while. Anyway he took profits at +19 pips (i.e. GBP £19,000 profit less spread) a few minutes later and that’s good money in anybody’s book with what seemed very little effort. If someone can do something then anybody can do it (as a basic principle of NLP). Little did I realise how hard the journey would be. I took the normal route of reading all the books on trading I could find, went to various seminars, some costing thousands of pounds but eventually realised that the only way to learn properly is to trade live. This was a very costly education but worth every penny.

[DF]  What interests do you have outside of trading? Do the skills or mental requirements overlap with what you need to be a good trader?

[Neil Norton]  I practice various martial arts including Muay Thai and kickboxing amongst others. I believe this helps with self discipline which is obviously crucial to any Forex trader. I also enjoy extreme sports such as skydiving; again I think this helps in trading as some people may have a tendency to hesitate when a trade sets up. I have seen this in some of the people I have mentored. I am doing a Psychology degree in my spare time; I believe this will help with the understanding of how the mind works and emotions during the trading process, as well as other things. 

[DF]  What drew you to trading in the first place? And why Forex, and not say futures?

[Neil Norton]  Realizing that the online retail market was becoming saturated with costs increasing and profits decreasing, I looked for a venture that would return me to me the high income that I was used to. I was also looking for something I could do all over the world and that was not dependant on my age. Trading ticked all the boxes.  I traded US & UK stocks when I started out but they moved too slowly and price action was too random. Also, the market makers are the main winners in that game what with gap-ups & gap-downs, earnings etc. Because I trade from the charts (price action) and I am primarily a technical analyst, I found Forex respected the rules amazingly, i.e. support resistance, breakouts, candlestick patterns etc. Once I was trading forex and making money consistently, I didn’t try to trade anything else. As the old saying goes, “If it ain’t broke then don’t try to fix it.” 

[DF]  Would you say you’re a full-time trader?

[Neil Norton]  Yes I trade full-time; I start at 6.30am and I normally trade through to around 4.30pm working Monday to Fridays most weeks. I have been full-time for the last 4 years. (5 years in all as I spent a year part-time trading/learning.)

[DF]  How long have you been trading the way you have now?

[Neil Norton]  I developed my core system about 3 or 4 years ago.

Trading Questions

[DF]  Which currency thepairs do you focus on?

[Neil Norton]  EURUSD, EURJPY, GBPUSD & AUDUSD (I will trade most major pairs if there is nothing on the 4 main pairs but a setup develops on something else).

[DF]  Do you trade markets outside of Forex?

[Neil Norton]  Not any more, I traded UK & US stocks for a while about 4 years ago.

[DF]  What platform do you use for charting?

[Neil Norton]  Various but mainly MT4.

[DF]  What timeframes do you use?

[Neil Norton]  4h, 1h, 30m, 15m, 5m & 1m, most trades are taken from the 30m & 5m charts.

[DF]  How long do you hold a typical trade?

[Neil Norton]  The 30m trades can last from under 30m to a few hours. When scalping I may be in and out of trades in a few seconds to a few minutes.

[DF]  Do you ever hold a position overnight?

[Neil Norton]  Rarely but if a position is developing well, I will leave with the appropriate stop.

[DF]  What kind of stop-loss size do you keep in pips?

[Neil Norton]  Normal stop is around 30 pips, it can go up to 70 pips but it all depends on the price action at the time of the trade & the targets will be relative to the stop.

[DF]  What’s your typical target in pips?

[Neil Norton] 1:1 or 2:1 so if stop is 30 pips, then first target 30 pips and second target 60 pips.

[DF]  What hours do you keep for the London Session?

[Neil Norton]  I’m in front of screens at 6.30am GMT and I look for the big money going in at the open. I’m very unlikely to take a position after 10.30am due to the low lunchtime liquidity.

[DF]  Do you use market orders to enter, or stop/limit orders?

[Neil Norton]  I use stop orders mainly for entries and I always set the stop & targets when placing the order.

[DF]  How does news & fundamentals affect your trading?

[Neil Norton]  I check the calendar every day before the open and mark on the charts (in case I forget, which can easily happen when I’m in a trade) events that are likely to cause volatility. If I am still in a position when the risk event is due I will adjust my stops accordingly. 9.30am GMT is normally a risky time for GBPUSD and 1.30pm GMT for EURUSD. I stay away from trading big news such as non-farm payroll as it’s too risky and in my opinion more of a gamble.

[DF]  Over the years, have the markets changed in terms of how you can apply your methods?

[Neil Norton]  I developed my core method a few years ago and have just been refining it since.  The method I use can be traded in trending or range-bound markets so there are normally a few viable trades throughout the day.

[DF]  What are the most common errors you see traders make?

[Neil Norton]  Taking profits too early and not cutting losers soon enough; also bad money management.  Although I set my stops when placing the trades, I do not get married to the trade and if a reversal forms while I’m in the trade I will take some profits out and manage the stop to either breakeven or the first target. I may also look to trade the reversal or correction if all criteria are met.

[DF]  What mistakes, if any, do you still make yourself as a Forex trader?

[Neil Norton]  When I started trading I kept a journal and that helped me turn the corner. I made the same mistakes as everybody else but once recognized, I corrected them. I wish I could say that I was a robot and never made a mistake; however, saying that, if I am not 100% on form, for example, if I’m tired or not 100% focused, I have been known to take profits a little early.

Performance Questions

[DF]  What’s your win percentage like?

[Neil Norton] 60-80% wins depending on the day.

[DF]  What drawdown do you tolerate?

[Neil Norton]  I will tolerate a maximum 2% drawdown per day (I risk about 1% of my equity per trade; if that is hit then I won’t trade for the rest of the day.

[DF]  Do you maintain a track record?

[Neil Norton]  I used to record every trade when I started but now only sporadically. The reason for this is that the set ups are the same and all the trades look very similar. I record some trades for my blog and YouTube but I prefer just to trade and walk away when I’m done these days.

[DF]  How many trades on average do you execute over the London session?

[Neil Norton]  Normally between 1-10, but more if I’m scalping.

[DF]  Do you aim for a weekly pip count as a goal?

[Neil Norton]  No, I find that with a pip goal there is too much pressure and it may force me to take trades that do not meet my criteria 100%. I just wait for the set ups and trade what’s there. Some weeks are obviously a lot higher in pip gain than others.

You may have already noticed that in addition to being full of fantastic resources, insightful analysis and a great propensity for profits, the Forex world is also full of morally questionable people or inexperienced traders who tend to mislead unsuspecting traders into unfortunate losses.  The best way to keep afloat when trading Forex is to find honest, reputable sites (shameless plug for DailyForex.com…) where you can get the information you need on a regular basis.  In addition to informational sites, however, you may also want to connect with other traders and to ask questions from your peers and mentors.  One way to do this is by using a Forex forum.  I’ve recently discovered the Forex FX Trader Forex forum, and I found it to be a refreshingly honest and accessible forum in the Forex world, so I’d like to tell you what I love about it.

Not Your Regular Forex Forum

For starters, the Forex FX Trader Forex forum has real people standing behind the company, which is more than I can say for many large, anonymous Forex forums.  Marc Walton is a genuine person with a real interest in helping Forex traders at all levels. He currently runs a high quality, low cost Forex mentor program which can help traders who need advice not only from their peers, but from a serious, long-term professional trader.  There is no purchase necessary to join the forum.  Even better – approved registrants to the forum are offered Mr. Walton’s ebook, “How to Trade Forex” absolutely free.  Though I haven’t read the book myself, it definitely sounds like it’s worth perusing.  The forum is moderated by Vasillis, who is always willing to help members (new and old) with any questions that they have.

It does take about 12 hours to get approved for membership at Forex-FXTrader’s forum, but that’s just a sign that unlike many of the Forex forums that seem so popular, this forum does moderate its registrants to ensure that inappropriate comments and misplaced marketing messages aren’t allowed on the forum.

The goal of Forex-FXTrader’s Forex forum is to help current traders become stronger Forex traders, by getting assistance from other traders and professionals.  The forum has several thousand members, most of whom are active, and posters should get a response to their query or post within a relatively short amount of time.

Finally, it goes without saying that this Forex forum is highly organized, allowing traders to find the proper place to post their questions or to comment on other topics without any trouble.  As someone who often seeks to escape the stress of the Forex world, I especially appreciated the financial jokes section, which was a nice balance to the more serious offerings such as general trading questions, Forex broker discussions and debates over which is the best Forex platform.

Forex-FXTrader’s forum is constantly evolving and offering new information and opportunities for traders, so if you’re looking for a place where your comments will get noticed, why not give it a try?

Since launching this blog, I’ve had the pleasure to interview several fascinating Forex traders and Forex trading coaches, but rarely do I get to interview the masterminds behind an entire Forex brokerage – the pioneers creative enough not just to build up an existing brokerage, but to create their own from the ground up.  David and Susan Cooney, the founders of the soon-to-be-launched MahiFX are just such creative forces.  After working in the various Forex related fields, the Cooneys decided to open their own brokerage, MahiFX.

Although many details about this new Forex brokerage are under-wraps until the MahiFX launch in February 2012, I sat down with Susan and David to hear firsthand about the plans they have for their new venture, and how MahiFX will differ from the other Forex brokerages.  Stay tuned for more information and hopefully a MahiFX review when the platform is live in a few months.

Why the name MahiFX?

David – It’s a Maori name meaning ‘our craft’ which we think sums up what we’re doing with market making. We also wanted a connection to my birth country (New Zealand).

Why did you prefer to be a market maker, as opposed to a no dealing desk brokerage?

David – It’s what my background has been since 1993.  I was really lucky to learn from Susquehana in the UK. They had a defined philosophy and I began learning the craft. It became part of my DNA, what I do.  The focus has always been on accommodating other people’s wishes, rather than being a proprietary trader.

Susan – A lot of the negativity in the market surrounding market makers in general is related to the fact that people think market makers are trading against you, which is a bit of a misconception. Brokers often perpetuate the idea that market makers are the root of all evil, but obviously there’s no truth to that.  If a broker operates a complete agency model then they are immediately passing each trade on, so the risk ends up with the market maker, one the client has no relationship with and with additional brokerage on top.  Clearly it’s more cost effective for a client to deal direct with the market maker.

David –A market maker has no advance notice that a trader is about to click on a price and execute a trade.  In the absence of this information there can be no suggestion of a market maker trading against a client.  However if a client leaves an FX order to be executed at a later stage, it could be argued that a market maker has advance information about a trader’s wishes and will act upon them. This is an issue that is common to market makers and brokers alike. We take this issue seriously and have built our pricing engine completely separate to the order book so it knows nothing about client orders. Given its fully automated the machine cannot trade against clients.

What type of spreads will you have?

David – Spreads need to be a function of market conditions. There are bouts of volatility, and it’s consistent with market maker mentality that you’ll go wider during certain conditions. We publish our base spreads for complete transparency. It’s the absolute exception rather than the rule that we would be wider than the published base spreads. It’s a challenge to publish the highest quality rate, and we’re committed to doing that.

Susan – It’s also important for the client to be aware of what’s happening with our spreads.  When there’s a news event (NFP), traders are often left with wide spreads and don’t know when or if the spreads are going to tighten, so our goal is to help clients predict this change. We want clients to be feel they can rely on our pricing even during volatile periods.

David – you can only do this if you control the formation of the rate yourself.

Will you be using proprietary platforms, or traditional platforms (MT4)?

David – It’s a proprietary platform – we’ve built the platform ourselves.  Includes all of the key features we’ve come to appreciate over the years.  The really important part is that we own it, so we can control the entire client experience, and incorporate client feedback, and these improvements are important.  One of the vulnerabilities of MT4/5 is that if you request changes, all changes are global, including for your competition.

Susan – In the early days [when I worked at] e-FX in the institutional space, many banks simply white labeled the same system.  Dresdner [where Susan also worked] built its own platform, which made it completely unique.  We feel that by building our own platform we can continually evolve it with new technology.  Incorporating feedback and listening to our clients is a critical part of our offering.

What would you say is the most valuable lesson that you’ve learned during the setup of this brokerage?

Susan – How incredibly hard it is.  When you’re in the investment banking world, everyone talks about running their business within the bank, but everyone has a lot of support there and many things are taken care of.  We’re building it on our own, and have to make decisions even at the most basic level, which is certainly a challenge.

David – One of the things we’ve learned is that you have to build a really good team of people because one person can’t do it alone.  (MahiFX currently has 11 people on the team).

MahiFX is fully automated so we don’t have a dealing desk. We think the technology and quantitative analysts are just as important as traders in today’s market making business, since we’re building technology that does the trading.  The people with trading experience are important to monitor the operation of the machines.  It’s akin to a pilot who puts the plane on auto-pilot but sticks around just in case.

Do you plan to trade on the platform?

David – I was a currency options trader since 1993, but we want to stay away from any suggestion that there’s a human dimension to the way our platform works, or that we’re actually trading against our clients, so we won’t be trading on the platform.

What are each of your specific roles within the company?

David – We are basically co-CEOs, but my focus is around the technology and risk management, hers is around the client experience and marketing.

How does working together in your own company differ from the work you’ve done together in the past?

Susan – We’re pretty driven people, and we were very passionate about what we did in the past so nothing has changed there.  The biggest difference here is that we did have an office, which separated work from home, but this was unfortunately destroyed during this year’s earthquake.  Luckily none of our staff was hurt, and in the immediate aftermath the entire team shifted out to our home office and now they don’t want to leave!

How is John Paulson related to the company?

David – It was just a tongue-in-cheek marketing campaign to show that some people who trade can make a very large amount of money. Of course there are no guarantees that people trading on MahiFX will make 4.9 billion dollars!

Any final thoughts?

David – The retail trader can get a better experience dealing direct with someone that has our experience in price formation. We can significantly improve the spreads and the quality and consistency of the trading experience.  That’s our mission.

A few months ago we decided to spice up this blog so that instead of focusing solely on market analysis and Forex industry news we’ll also shine the spotlight on some notable Forex traders whose unique approaches have helped them become full-time traders.  Few of these traders, however, have a story as interesting as Andrew Mitchem, a dairy farmer-turned full-time Forex trader who has proven that you can be a successful Forex trader no matter what your background is.

Below are the questions that I asked Andrew (aka “The Forex Trading Coach“) during our interview.  I found his story fascinating and his approach to Forex enlightening.  I hope you’ll find the same!

How did you come to join the world of Forex trading?

9 years ago I had to get out of dairy farming, and I heard a radio ad for a free trading seminar, and I had no other specific plans, but I needed a job where I could watch my 2 year old son.  I went to the course, which, in retrospect wasn’t that great, but I got hooked.  I tried all types of trading in the first 3 years, but I didn’t really profit.  I realized that I really needed to profit or get out of the Forex market.  Since I sold my farm I was ok (financially)…but I was ready to make money.  So I unsubscribed to all the salesy Forex newsletters, and focused really on a Forex strategy that I could trade by myself.

What strategies did you find specifically helpful?

I realized that price action and Japanese candlesticks was something I could use to see where big banks and institutions were trying to move the market.  The real-time info in the candles was very helpful, and so I started with a blank chart, just with candles, and I deleted all other indicators – candlesticks were as real-time as possible.  Candlesticks alone won’t tell you how to trade, you need to analyze them in more depth.  So I started incorporating a few other indicators to understand the candlesticks.

When I started understanding money management, my trading changed from average to very good.  I realized pips aren’t important; it’s more about the risk-reward ratio that’s important – not the pips.  I put a low % of my account on every trade, which allowed me to place a trade on any pair/time frame that I saw fit, knowing full well that if it went wrong, I’d be ok, since there was equal risk on every trade.  This strategy also controls the emotional part of trading.  I trade 0.25-0.5% of my account on each trade, which is very low risk.  I look for a reward that’s 2-3 times my risk.  So I trade on various pairs and time frames, depending upon where I see a good technical setup, knowing that my risk per trade is low.

How many hours do you trade a day?

About 2 (hours/day), during the Asian or European session.  I share my trades from the Daily charts with all of my clients so that they can see how I use my unique Forex trading strategy for real live trades.

Anyone who copied my Daily Trade recommendations in 2010 would have made 97% on their account (with no compounding and ½% risk per trade).  In 2011 the total so far (as of November 2011) is 57%, slightly lower than last year  but still a great result considering the crazy market this year.  My Daily chart trades take 5-10 minutes a day to place, all are set as pending orders, so it’s a great system for people who have full-time jobs, kids or other responsibilities.  Because it’s a day chart, it’s possible to do it at your convenience.  Trades are open 2-3 hours to 2-3 days.

How many trades do you place on an average week?

20-30 trades.

You currently offer a Forex trading course and one-on-one guidance for interested students.  What is it about your course that makes it unique?

I’m a full-time trader myself, which means I’m a real trader, and I earn my money through my trading.  Also, the course has a lot of logic in it, it makes sense.  I put it together myself, I’m the only one who teaches it so every participant is dealing directly with me.  My course is a great value for anyone willing to invest in their education, I’ll do anything to help them succeed, and because of that, I have a high success rate with my clients.

The course is an 80-page PDF, 4.5 hours of videos in short clips, which are in the same sequence as the PDF.  Every two weeks there’s a live trading room (which runs about 2 hours), that includes trading in real time and Q&A, and review of past trades.  All sessions are recorded so they can come back and watch if they want to.

I also developed software that works on MT4 that alerts clients to potential trade setups.  Even clients who don’t trade on MT4 can use an MT4 demo to use the software and then place the trades elsewhere.

The course also has a help desk and clients have access to my daily trades along with my explanation for why I’m taking each trade. The goal of this isn’t just to make them money (though that’s great), but also to teach my students how to select the trades for themselves.  On the webinars, we focus more on the shorter time-frame charts.  About 100-120 attend the webinars live, most others watch it at another time.

How many students have you taught over the years?

I started with one student who I taught one-on-one in Australia, and then I did a 3 week trip in Malaysia, Sri Lanka, Spain, France, England, and taught 5 clients one-on-one in 3 weeks.  From there, I started doing some private coaching for a broker, and since I developed my full Forex course.  I now have about 300 clients in 35 countries.

Any closing thoughts you’d like to share?

I’ve always been self-employed, by choice.  I was a dairy farmer before getting into trading. What this means is that anyone can succeed in trading, no matter what their background.  There doesn’t need to be any correlation between a person’s background and their trading abilities.  All you need is patience and an understanding of a system that works.

Doug Rosen, a full-time trader, has recently set up the Forex Trade Plans. He provides traders with intraday calls according to his Fibonacci levels starting with just the EURUSD. DailyForex.com sat down with Doug and discussed his journey into trading, his live room and how he views the markets.

Q.  Doug, thank you for taking the time to speak with DailyForex. What was your professional background prior to trading?

[Doug Rosen] I was in electronics – satellite communications, satellite internet, home & business networks, video surveillance, home theatre systems – all that type of stuff. I built equipment and carried out modifications; as my business expanded I became more of a retailer & dealer and I sent other technicians out on jobs.

Q.  How did your journey into trading begin?

[Doug Rosen] Back in 2005 I went to a client’s house for a satellite TV related service call; it was a client I knew really well and I knew he wasn’t very tech savvy or into computers. However, on this visit he had an array of monitors so I asked him what he was doing. He told me he was trading “forex” – a term I had never heard before. I was already considering learning about the stock market, so trading was something at the back of my mind. I then started seeing infomercials advertising trading seminars. I initially went to the free ones before I started doing my own research. That’s how it all began. A year after that client visit in 2005, I had my first live account with FXCM.

Q.  The heart of your trading is Fibonacci. How do you trade Fibonacci principles differently from other traders?

[Doug Rosen] A lot of traders don’t trade Fibs, but the ones that do usually use what I call a “swing Fib” [a regular retracement or extension between highs and lows]. I’ll trade a standard Fib line in the direction of the trend, but I’ll also draw something I call a “Range-Fib”; this alerts me when there might be contention in a trade. I calculate Fibs of multiple timeframes and multiple candles. I like to trade Fib levels that are derived from the ranges of previous candles from higher timeframes and I’ll overlap them with Pivot Points to find my trades.

Q.  What is a subscriber getting with Forex Trade Plans

[Doug Rosen] No hype bare-bones trading. I want the room to be one that just gets people into winning trades.  I’m not trying to educate them so much as I am trying to get them into profitable trades with minimal drawdown. I’ve found that becoming a proficient trader can be 2-3 years. People need a lot knowledge and chart-time. A lot of people who get into trading don’t have a couple of years to give before making money and they want to make money immediately. I want to provide a systematic no-brainer approach telling them when to pull the trigger. They will see my analysis live as I carry out the trades and they will learn along the way, but the education aspect is secondary. Most forex services lose their clients’ money through either losing trade calls or education that doesn’t work. I want to put my clients into positive territory from the beginning.

Q.  How does news & fundamentals affect your trading?

[Doug Rosen] I can’t make any trades based on news announcements; but I use it to know when not to get into a trade if a key announcement is round the corner or when to exit early, for example. Outside of that, I’m purely technical.

Q.  What trading hours do you keep? How many trades do you capture every week on average?

[Doug Rosen] I try to capture at least 3-4 moves a night in the London open session – typically from 1:30 AM ET to 5 AM ET, sometimes 6 AM.  If I can get back into the market at 10am ET the following morning, I may trade for a couple more hours.

Q.  What timeframes do you most often trade?

[Doug Rosen] I based my analysis from the daily charts down to the 15-minute charts, but I pull the trigger based on the 1-minute chart.

Q.  Do you aim for a weekly pip count as a goal?

[Doug Rosen] On one pair, EURUSD, about 250 to 300 pips a week. Right now, I am calling trades on just one pair as the room is new and I am developing my service. Eventually 3-4 pairs will become available. The EURUSD pair presents adequate opportunities in the London session to find at least 40 pips if not more.

Q.  What mistakes do you still make today as a trader?

[Doug Rosen] Not taking profit when I should. I love my bigger 100 pips moves and often I should be taking some profits earlier in the move. The majority of my trades find themselves at least 20 pips in the money and just booking partial profits regularly on those is healthy.

Q.  Any final thoughts?

[Doug Rosen] Always be patient; wait for the move to develop and don’t anticipate the trade; there’s not always a trade just because the market is moving. So you have to always trade off a solid surface. Don’t chase price or chase candles: wait for it to reach a logical area to make a move.

John Correnti is a full-time trader and part-owner of Currensys (www.currensys.com). Currensys provides traders with an objective trading system and a daily live trading room. DailyForex.com recently caught up with John and we discussed his journey into trading, Currensys and how he views the markets.

Q.  John, thank you for taking the time to speak with DailyForex. What was your professional background prior to trading?

[John Correnti] I used to buy and sell homes in the renovation business. I found I was always relying on the other contractors to get my jobs done and that meant I was at the mercy of others for my livelihood. That was what got me searching for a better living and more independence.

Q.  How did your journey into trading begin?

[John Correnti] Initially I bought a lot of courses looking for the Holy Grail like everyone else. I stumbled across Phil McGrew [founder of Currensys] and I became one of Phil’s first clients and struck up a good friendship with him. That said, I still continued buying Expert Advisors [automated forex trading programmes]. Eventually, I realised that these programmes weren’t the answer; the answer was that I had to follow the rules [of Phil’s system] and keep my emotions out – that’s when my trading turned around.

Q.  One of the backbones of your trading is the MACD indicator. In simple terms, what is a MACD measuring?

[John Correnti] We use MACD as the principal base indicator; it measures buying and selling pressure in the market. All indicators lag to an extent; we feel MACD is the least lagging, or in other words, it’s the most reactive, period. We’ve modified the MACD [from the standard versions found in software programmes] and that’s our secret sauce so to speak. We have the ability to filter out different market conditions: trending, choppy, breakouts and reversals. Phil developed it as a trader himself to keep him in the market only at the right time. We only employ one other indicator: 3/14 EMA cross only for our breakout system.

[Note: 3/14 EMA cross is the crossover between the 3 and 14 Exponential Moving Averages.]

Q.  You personally take into account correlation between currency pairs. How do you apply correlation?

[John Correnti] All USD based pairs are correlated. For the most part, they’re going to travel in the same direction. 70% of the volume is in the Forex market USD based. So if you’re trading one of those pairs, don’t trade multiples of USD pairs. Correlation also helps give me added confirmation with my trades: when I’m getting three out of four USD pairs giving signals, it gives me added confirmation. The USD/CAD however does whatever it feels like it wants to do – it trades much more independently.

Q.  You’ve avoided MetaTrader in favour of supporting NinjaTrader, eSignal, FXCM, MCFX and TradeStation. Why is that?

[John Correnti] That decision was made purely based on the quality of the platform and the datafeed. Any professional trader will tell you that you need good a platform and excellent datafeed. MetaTrader is an easily manipulated platform from the broker’s perspective: stop hunting, bad fills, those kinds of things. We didn’t want to be associated with that and also with a lot of the cheaper programmes built for MetaTrader. We’re more focussed on quality, mentoring and customer service. I’m sorry, but you just cannot expect to become a full-time trader using MetaTrader.

Q.  What is the Currensys solution – what is a client getting?

[John Correnti] A customer gets two things: firstly, a system that gives a trader quality edge in all types of markets and rule-base to follow, and based on its historical record, a good income. Secondly, the trader gets mentoring. We get clients through a learning curve that other systems don’t do or charge extra for. All systems fail on occasions. Even when times are rough, we are there providing support. I feel that’s unique in the industry.

Q.  Over the years, have the markets changed in terms of how you can apply your methods?

[John Correnti] The markets have become more volatile because of more volume and political unrest. That’s a good thing: we need volatility. We want movement. Even the unfortunate events in Japan created tremendous opportunities for traders. You need a system to capitalise on those events and capture those moves. The underlying algorithm of the system hasn’t changed over the years: it’s based on sound logic.

Q.  How does news & fundamentals affect your trading?

[John Correnti] The only news event we avoid trading around is the monthly Non-Farm Payroll. Otherwise, we always trade. There are multiple news events every day, and if you’re focussed on that you won’t be focussed on the system. So outside of NFP, I ignore the news. I couldn’t tell you what news events there were today.

Q.  Given that the Currensys system can be traded without assistance from others, what benefit is the live trading room?

[John Correnti] I knew from my own experience as a Currensys client before I became a part owner of the company, most people wouldn’t read the manual, understand the manual immediately or follow the rules. So they would start off with a low chance of success. Every mistake a trader could make, I did it. And people are generally the same. So the live-room was to help clients understand the rules and how to manage the signals, and guard them away from the mistakes I made at the beginning. It is there to accelerate their learning-curve and their confidence levels and then that’s the turning point to becoming profitable.

Q.  What trading hours do you keep? How many trades do you capture every week on average?

[John Correnti] I usually get up for the London open and trade through to noon EST, those 8 hours. Typically I take three trades most days.

Q.  What timeframes do you most often trade?

[John Correnti] Because of my schedule, I primarily deal with the 15-minute charts but I do like the higher timeframes a lot, 1-hour and 4-hour charts. I want to migrate to those timeframes as they’re easier to manage particularly as my schedule has become more complex.

Q.  Do you aim for a weekly pip count as a goal?

[John Correnti] No. I got out of that because that makes you chase numbers, do stupid things, and not keep within the rule-set. If people follow the rules, know their trading plan, their pip goals will come about. I tell people: we’re all here to trade to make money. But it can’t be about money: as soon as money enters into the equation, stress enters and it’s a killer. If you keep it about the rules and the system, emotions become in-check and you will become profitable at that time. My goal is to be 100% rule-based and execute according to that. Based on that, I make hundreds of pips in a week.

Q.  What’s the mix of your Currensys members between full-time traders and part-timers?

[John Correnti] From what I can gather, everybody who gets involved has aspirations to become full-time. About 60% of our clients are full-time. We also have some CTAs building books of business around our system. [CTAs are professionals registered with the CFTC and National Futures Association.]

Q.  What are the most common errors you see traders make?

[John Correnti] Very simple: not following the rules. When you don’t, you take losses. Then you become apprehensive about following the rules because you think the system doesn’t work. It’s very important to back-test, so you have expectations, then you walk forward in demo, so when you go live, you follow the rules as it’s ingrained in you by that stage. We have a 240 page manual; there’s a lot of information. This is what you must do in order to become successful: read it and follow those rules.

Q.  What mistakes do you still make today as a trader?

[John Correnti] Not following the rules. This happens when I am just preoccupied and not focussed on what I’m doing. I’m human like everyone else, and put on bad trades. When I’m focussed and centered, I’m a winner. When I’m not, I lose. It’s kind of simple in that way.

Q.  Any final thoughts?

[John Correnti] We’re here to help people become successful using the program. We know not every single person will become successful: maybe they can’t handle the risk because of their own psychological reasons, or don’t have the time. But for those who truly want to be successful, we have unlimited support. We’ll do whatever we can as long as they’re dedicated, we’ll be there every step of the way. Phil is of the same mindset: that’s why our partnership works. We’re not here to churn through clients. We want to keep people in the game and help them become profitable.

There are a lot of traders and educators that I could consider for this title, and to be honest, picking it wasn’t easy. There are many excellent traders that I speak to on an almost daily basis, and as such – they certainly could have been considered. Going to the education sector, there are several that I really like a lot.

For the Forex trader, there are literally thousands of people out there that you can follow for education and advice, as well as allow to trade an account for you. The Internet has caused an explosion of the possible candidates for this title over the last few years, and I had to think long and hard about this.

The person that kept coming to mind had to be someone who understood the markets, as well as traded them. Most Forex traders aren’t well known, and as such – I felt like I was being pulled in the direction of an educator. But with an educator, you need someone who can not only explain the markets, but also make the education engaging so that the student remembers what they are being taught. After all, what good is education if it isn’t something that sticks with you? Once I started to think in this way, a clear winner stepped forward. On top of that, he has started to trade managed accounts.

Colorful teaching and sense of humor - Rob Booker

Without a doubt, the “hero” of mine is Rob Booker. Rob has been teaching traders for years now, and has always been known for his colorful teaching style and sense of humor. He also knows the markets, and knows them well. While Rob would be the first to admit to you that understanding technical analysis is something that a lot of people can claim, he has the ability to make Forex fun, and that helps with retention.

Mr. Booker has been sought out by various conferences and does monthly webinars for instruction that you can attend for free. He is not only a professional, but well-known to be generous as well. Every time I have ever emailed him, I got a prompt response, even when he was on the road.

Rob’s book “Adventures Of A Currency Trader” is without a doubt one of the best books I have ever read on the topic of FX trading, as it has many lessons in it that aren’t laid out in a textbook-like manner. It approaches the currency markets form a psychological manner and in a story form. Without a doubt an easy read and I have always recommended it to my trading friends. If I had to sum it up in one sentence, I would sum it up like this: It is to the Forex world what “Reminiscences of a Stock Operator” is to the stock world, an absolute classic. I myself have read the book 8 or 9 times.

If you are just starting out, or have been trading for a while, Rob is someone you want to know. In fact, he has a great website with a plethora of information on his website.

When you stop by, make sure to drop him a note – he’s always ready to talk to a fellow trader.