Example of FTM's Momentum Method on 9 Oct 2009

If you have been a professional forex trader, you will realize that despite the super weakness in USD, GBP was in a more jia lak (Hokkien - meaning worse) position over the last two weeks.

Given the weakness in USD on Wed and Thurs session, typically one can expect a relief rally in USD on Friday session. Don't get me wrong. I am not expecting a USD relief rally because I trade on what I see and not what I think.

Well, USD indeed had a rebound on Friday session How did I see this? The first sign is a rebound of USD/JPY, telling me that USD was no longer weak on Friday's Asian session. This is the first sign. The session sign was the range bound action in the high beta currencies against USD. It was telling me that USD was not that weak on Friday compared to Wed's and Thurs' session. Of course, since AUD/USD has made such a strong move over the weak, Friday is typically expected to be a profit taking day, and I can understand that this might be the case (Smile!).

When GBP remains weak, and JPY is weak, there is no way to trade GBP/JPY on Friday. Instead, it makes perfect sense to trade GBP/USD to look for a short position. So, this is my rationale of going to look for short position on GBP/USD.

Using Bill's Foreign Time Machine Momentum Method, there were two trading opportunities on Friday's session.

Trade 1

Setup bar was formed at 12:30pm candle (based on SG Time), and one would immediately go short at 1:00pm. Using FTM's Momentum Method, one should have exited the position around European session for an approximately 50 pips profit. This is no brainer in my view.

Trade 2

Setup bar was formed at 11:00pm candle (based on SG time), and one would immediately go short at 11:30pm at 1.5915. Guess what? If you don't want to hold the trade over the weekend, you could have exited the trade at the close of Friday's US session for approximately 70 pips profits. Again, this is no brainer to me.

Some of you may ask how I picked these trades? First, I am a fundamental trader and trade based on the relative strength and weakness in individual currency. So, I am not a specialist of any currency pair. In fact, I can trade anything under the sun. Like in this particular case, do I force myself to trade EUR and not GBP when GBP is more jia lak than EUR? And do I force myself to trade GBP/JPY and not GBP/USD when USD is stronger than JPY on Friday's session. So, as professional traders, we have to be inflexible to be flexible. Be more alert to what happened in the global economy and we will see tons of opportunities everywhere in the currency market.

In terms of money management, I don't really the FTM's recommended exit method. Instead, I have said before. I adopted Ross Beck's multiple lots exit method, which is a method I am more comfortable with than Bill's FTM method. It's ok. As professional traders, we have to understand our trading personalities and trade on what we feel comfortable. There is no right or wrong way in trading. In fact, like my options trading, I typically mix and match various people's ideas to become greeksman's trading method.

Hope you enjoy this sharing so far on my FTM journey.