Quotations by James Chen

The European Central Bank has a specific mandate to protect against inflation—-economic growth is secondary. The American Federal Reserve’s role is to promote economic growth and jobs, as well as to watch against inflation. [2009] - James Chen

In the fast-moving, impatient world of foreign exchange trading, longer-term could mean anywhere from as short as a week or a month to as long as a year, or possibly more. Position trading can be one of the most profitable styles of trading due to the fact that many currencies tend to trend exceptionally well on a longer-term basis. Position trading usually relies substantially on fundamental analysis, along with longer-term technical analysis. [2009] - James Chen

Swing traders generally ignore fundamental information and concentrate almost exclusively on the technicals. Some would say that the ideal swing trade should be held for two to five days, while others may say it should be one to four days. [2009] - James Chen

The best way to manage established trend positions is through the use of trailing stop losses. A manual trailing stop loss is often a more preferred method of managing a trend trade. A logical location for each move of the stop loss would be right below the last swing low (or dip). [2009] - James Chen

Scaling into position entails entering initially with a small, fractional trade size, and then adding onto the position as the trend develops further. Scaling out is just the opposite. Once a full position has matured, and there are indications of a possible waning of trend momentum, parts of the position may be closed in succession.  [2009] - James Chen

A trade exit may also be made when a profit target is hit. The profit target should ideally be set to several times the magnitude of the initial stop loss. [2009] - James Chen

There are three primary guidelines of a trend pattern in Elliott Wave, according to its founder. Within the context of the 5-wave trend cycle, Wave 2 never moves beyond the beginning of Wave 1, Wave 3 is never the shortest of the five waves, and Wave 4 never enters the price span of Wave 1. [2009] - James Chen

Well-defined price-oscillator divergences, especially on longer-term charts, can be surprisingly accurate in many instances. [2009] - James Chen

Trading exclusively in the direction of positive interest yield is one of the most prudent and sensible ways to trade long-term positions in forex. [2009] - James Chen

Always to have in the account, at the very least, ten times the amount of margin required for a typical trade. [2009] - James Chen

Many forex traders like to target a reward-to-risk ratio of 3:1 as the ideal. Shooting for 2:1 can often be more practical in many real-life trading situations. [2009] - James Chen

Instead of creating the rigid rule that exactly 2% of total equity will be risked on each trade, a more adaptable rule might be to require that no single trade can have a stop loss that exceeds, for example, 4% of total equity. [2009] - James Chen

Trailing stops can automate the twin concepts of cutting losses and letting profi ts run. [2009] - James Chen

Hedging within the forex market, though it may be a component of certain specialized trading strategies, is not one of the more viable methods for controlling risk in general forex trading. [2009] - James Chen

What exactly is positive expectancy? It simply means that the trading strategy should consistently produce a net gain in equity. This could mean either a higher average number of winning trades than losses, or a greater average profi t per winning trade than loss per losing trade (reward-to-risk), or any combination of the two. [2009] - James Chen

Greed and fear are the two most dangerous emotions to a trader. [2009] - James Chen