Got a bet-the-farm trade idea that you think the rest of the FX hood ought to know? Why don’t you put your pips where your mouth is? Join the latest competition that will rock the world of currency trading! Ladies and gentlemen, I proudly present to you Forex Ninja’s Trade of the Week Contest!
What the heck is it?
This is a popularity-based contest wherein participants submit their trade ideas that will be voted on by the BabyPips.com community. So yeah, winners will be determined by the number of votes that their trade ideas generate.
Oooh! Can I join?
Whether you’re fresh out of the School of Pipsology, a long-time veteran trader, or a monster, as long as you have a trade idea that you’re willing to share, you are eligible!
But of course, we all hate spammers, so here are a couple of things that you should take note of.
First, you have to have a BabyPips.com forum account. Duh-uh? Second, you have to have had at least five (5) posts. If you still haven’t met the quota, there’s still time to make small talk and meet new friends! Lastly, you have to be awesome. I’m sure none of y’all will have any problem with that.
How will I know if I win?
Winning trade ideas will be featured in my weekly blog for everyone to see and possibly follow! Now ain’t that sweet? Heck, if you’re lucky, you may even get an all-expense paid date with Huck… or Cyclopip. Ha!
WAIT, I’m not yet done! Here are some rules and guidelines that you MUST adhere to:
1. Trade Details
To fill in readers on your brilliant trade idea, you’ll need to have the following details in your post:
A. Chart of the pair you are trading: Indicate the currency pair and timeframe
B. Long or Short: Will you be buying or selling?
C. Entry Point: At what price will you enter the market?
D. Stop Loss: At what price will you cut losses?
E. Profit Target/s: At what price will you take profit?
F. Reward-to-risk Ratio: What is the potential return on risk?
G. Risk percentage: Yes, yes, we know you all want to earn the largest amount of money in the shortest time possible, but here in BabyPips.com risk management is the number one priority. This means that your trade ideas can only risk a maximum of 5% of the account. You can risk as little as 0.01% or as much as 4%, but never over 5%!
H. Indicators used: You must specify the indicators you used and their respective parameters. If you used a custom indicator for MT4, then you must also provide a short description of what it does, upload it, and give instructions on how to install it.
I. Trade Rationale: Explain WHY your trade idea is the bomb-diggity-bomb! Whether it’s based on fundamentals, technicals, statistics, the alignment of the stars, or the fact that your fortune-telling dog Spark farted twice this morning, we’d love to hear the rationale behind your brilliant trade idea!
J. Trade Adjustments: Detail how you plan to manage and exit your trade. This includes changes in the trade positions and closing early.
2. Chart Design
You’ll need to provide a clear screenshot of your trade idea. MT4 charts are preferred, but you can use any charting platform really. You may draw all the lines, circles, and arrows you need, just as long as it’s easy on the eyes. And please, no watermarks! Capiche?
3. Title of Trade Idea
The thread title should be in this format: [TW] MM-DD-YYYY – XXX/XXX (Position) by [username]
Here’s an example of a thread title: [TW] 4-26-2011 – EUR/USD (Long) by PipDiddy
4. Where to Submit
Submitting is as easy as pie!
Step one: Click on the Forums tab and go to Readers’ Choice: Trade of the Week under Currency Spot.
Step two: Post your correctly-labeled trade idea as a subthread.
Eg. [TW] 4-26-2011 – EUR/USD (Long) by PipDiddy
Step three: Cross your fingers that people will like your trade idea.
Basically, you submit your entries by creating a thread under the Trade of the Week forum. That way, people will be able to discuss your awesome trade ideas! Just remember to label them according to the format I specified above by filling out the details on the template I made.
At the end of every submission period, I will collect all the ideas and post them under one sticky so people can vote on them.
The first Trade of the Week submission period begins on Friday, at 3:00 am EST to 12:00 midnight EST.
5. Voting Period
We’ll put up the poll right after the market’s close every Friday so you can cast your votes over the weekend. Polls will be open from 12:00 midnight EST on Friday to 12:00 midnight EST on Sunday.
Since the contest will officially start next week, feel free to cast your votes anytime between 4:00 pm EST on Friday (May 13, 2011) and 4:00 pm EST on Sunday (May 15, 2011).
6. One Submission and One Vote Per Person Per Week.
To be fair to all, each person will only be allowed to submit one trade idea per week. Also, voting will be limited to one vote per person. Those caught violating the voting limit (Boo, cheaters!) will be banned… FOREVER! And we’re gonna tell their mamas that they cheated, too!
Here’s a sample trade to give you an idea how it should look like. Take note that this is NOT a real trade. This is purely for illustration purposes only.
Thread Title: [TW] 4-29-2011 – GBP/USD (Long) by Forex Ninja
Long or Short: LONG
Entry Point: 1.6600
Stop Loss: 1.6530
Profit Target/s: 1.6750
Reward-to-risk Ratio: A little over 2:1.
Risk percentage: I’m willing to risk 2% of my account since I’m going with the trend. I’ll open 2 positions at 1.6600 and risk 1% on each.
Indicators used: RSI (set to 9)
Fundamentally, it seems the markets weren’t too happy with the Fed’s decision to end QE2 on schedule in June. The fact that it plans to reinvest payments from principal securities means that the Fed still has lingering concerns about the economic recovery and that it doesn’t want to pull the life support plug just yet. With that said, I believe sentiment will remain bearish for the dollar, at least for the next few days.
On the technical side of things, I’m expecting the pair to retrace some of its gains back to the 50% Fibonacci level and find support at the previous resistance area. By then I’m anticipating the RSI to indicate that the pair is already oversold. That’s when I’ll pull the trigger, baby!
I’m looking to take profit on my first position at the pair’s most recent high at 1.6750. As for my second position, I’m gonna let it ride the trend like the wind. Yee-haw! But I’ll just close it manually if the pair starts to show signs of reversal (candlesticks, RSI). Also, I have no plans of holding this trade over the weekend so I will close it manually by Friday night.
Once again, the submission period won’t start until next Friday (May 13, 2011), so you’ve got a lot of time to look for ideas!
Questions? Suggestions? Leave ’em in the comment box below. Peace!