Quotations by Ed Ponsi

The Japanese yen pairs have their own “personalities” and are more likely to find support/resistance at round numbers. If you enjoy trading the USD/JPY currency pair, try EUR/JPY. This pair is similar to USD/JPY, but the moves tend to be quicker, with greater volatility. [2007] - Ed Ponsi

USD/CAD has been one of my favorites because of its persistent long-term trend. The relationship between this currency pair and the price of oil is strong, as the Canadian dollar often gains ground as energy prices rise, and falls when energy prices weaken. Canada and Japan are at opposite ends of the spectrum regarding the production and consumption of oil, and this is reflected in the CAD/JPY exchange rate. [2007] - Ed Ponsi

The Australian dollar often rises and falls along with the price of gold. [2007] - Ed Ponsi

There are three basic types of trading conditions: 1. Trending 2. Range-bound 3. Consolidating. [2007] - Ed Ponsi

The ADX indicator’s giving a reading above 35 and rising would be an indication of a strongly trending market. [2007] - Ed Ponsi

If we have determined that we are in an uptrend on the daily chart, we can go long if the price falls to a level of support on the hourly chart. Or we can go long if an oscillator, such as RSI(calculated using 14 periods), indicates that the pair is oversold on the hourly chart (I recommend waiting for the oscillator to drop from the over- bought level and into neutral territory). Enter long with your stop below the area of support. An active day trader can use a four-hour chart as the longer-term chart and a 15-minute chart as the shorter-term chart. [2007] - Ed Ponsi

Breakouts that run in the opposite direction of the trend have a greater likelihood of failure. [2007] - Ed Ponsi

If the reason for entering the trade is no longer valid, then the trade itself is no longer valid. If the price is rushing headlong toward your support or resistance level, get out of the way. [2007] - Ed Ponsi

Since we know that the London session has the highest volume, we’ll consider breakouts that occur during this session to be legitimate. We would especially consider these breakouts to be significant if they occur early in the session, as this is the time of day that normally generates the highest volume and the greatest liquidity. [2007] - Ed Ponsi

The forex market’s tendency to break out after a period of consolidation, holds true in both long and short time frames. [2007] - Ed Ponsi

Round numbers come into play quite often in the USD/CAD and Great Britain pound/U.S. dollar (GBP/USD) pairs. I’ve also seen round number support/resistance occur frequently in some of the Yen pairs, particularly euro/Japanese yen (EUR/JPY) and USD/JPY. On those pairs, the midway point between round numbers (for example 114.50, or 137.50) can also act as support or resistance. [2007] - Ed Ponsi

Achieving a goal of just 1 percent per month would put you well ahead of most traders, since the majority of traders lose money. While a goal of 2 percent per month may not sound awe inspiring, if we can achieve it consistently, the annual gain will be just shy of 27 percent—and you’ll have outperformed most mutual funds and hedge funds. If you have successfully achieved your modest goal for three months in a row, raise the goal to the next plateau—from a 1 percent monthly goal to 2 percent, or from 2 percent to 3 percent, and so on. By the time you work your way up to consistent monthly returns of 3 percent and then 4 percent, you’ll be putting up respectable numbers, and you’ll have gained the benefit of months of experience. If you can achieve consistent monthly gains of 5 percent or 6 percent, you will have truly joined the elite. [2007] - Ed Ponsi

If you are consistently failing to meet your goals, they may be too aggressive. Try for an easier target. If things get really tough, cease live trading and switch to a demo account until you regain your footing. [2007] - Ed Ponsi

We make the playing field larger by using wider exits and stops, by using longer time frames, and by trying for larger gains. [2007] - Ed Ponsi