How can you consistently win in the FX using Technical Analysis?

Couldn’t agree more to the statement above.

Technical analysis is a part afterall. You can be a technical hero and still lose due to poor money management, or emotions.

A good trading system in my view is that one which will bring to you more winners than losers. That is what named “Profitable”. But will the trader follow every signal from his system? and I mean every signal. Will he follow the stoploss, profit projection? An example would be. If you start trading a system, and you get some losses in streak. That does not mean it’s over, with proper stoploss and profit level in place, a good signal can let you recover what you lost in bad signals and more.

I wanted to say it in one word. Discipline. Some people are not very talented in Technical Analysis but with discipline, they make more money.

Almost all traders will use the same tools, but strategic plans play the big role in winning and losing.

is it true ?

Money management is what will make a difference between a profitable an unprofitable trader. There is no technical analysis or fundamental analysis strategy out there that will let anyone profit consistently. You need to control emotions and have money management skills. Technical and fundamental analysis is just a small step to being successful. Learn to control emotions and money management, then you stand a chance.

To be consistently profitable, regardless of the approach you use, you need to have a system/method/technique that is a net winner over time. If you do not, the best money management approach and the most rigid discipline will do nothing more than slow the process of shrinking your account. You cannot turn a losing system in to a winning one through money management and a good trading pyschology - though you can turn a winner in to a loser if you don’t trade control your risk and keep your head on straight.

yes of course having a decent system makes a difference too but I was mainly trying to make a point that without money management, it’ll be hard to be successful. Let’s say 2 people were given a same strategy that includes the same entries. One person with good money management will make money but if the other person allows his losses to run and cuts his profits short, he’ll lose money, even with the same exact system. Both system and money management go hand in hand but money management in my opinion carries a lot more importance than any system alone. There are many systems out there that people would classify as a losing system, such as a 20-30% winning ratio strategy but with proper money management, it can indeed be profitable if done right. What one person considers a losing system can be different to another so it really depends on a lot of things. Just like they always say, one man’s garbage is another man’s treasure :slight_smile:

Hi guys,
so far very good general suggestions from everybody…ie Disciplene , money management , system etc…

Could any body please provide specifics …? ie. what are you doing for money management and the results ? what % or your account total do you trade ?
What kind of leverage ? What kind of stoploss…is it in % or by pips ?

Would be helpful to know what others are doing …thanx

btw, i’ve started a USD500 ac wth FXCM wth a 200:1 leverage,a mentor suggested I trade no more than 30% of my account value and do a stop loss at 35pips of th opposite direction of my trade.

What do you guy/gals think…?

tqs again…

kem

Sorry, this just made me laugh, i know you meant ceramic tiles… just can’t get the image of a ceramic tail out my head lol.

james

Money management is about one thing, and one thing only - your position size. That, in turn, comes from your risk profile.

Letting losses run and cutting gainers short is not money management. It’s system execution, or maybe more in the area of trader psychology.

A trading system should have rules for both entering and exiting trades. If it doesn’t, it’s not a complete system. Granted, in some approaches the entries and exits cannot be cleanly articulated, but that doesn’t mean the basic rules don’t exist. The trader who lets his losers run instead of getting out when the system says to get out has a breakdown in execution, not in money management.

Now if he traded too big (or too small, for that matter) then you have a breakdown in money management.

Losses that are too large in pip size - larger than would be accounted for by the system rules - are the fault of failed system execution. Losses that are too large in terms of % of account balance (assuming they aren’t the result of losses too large in pip size) are the result of faulty money management.

You make a valid point rhodytrader. Cutting losses and letting profits run is more to be considered as risk management but the term money management can be very general in nature. Some people will consider money management differently than others but in the end, it all boils down to controlling emotions, managing money, managing risk, and having a system that works for you to be profitable. Hopefully what you and I discuss here will help some new traders understand some of the important factors in becoming successful.

Actually, I use money management and risk management interchangeably when talking in trading terms since most folks don’t differentiate between the two (unless they’re an insurance professional maybe :stuck_out_tongue: ).

To me, cutting losses short and letting profits run (and anything else in that respect) is a function of the trading system the trading system being the rules which indicate when you enter and exit positions.

Risk/Money Management, the way I define it, is the process of sizing one’s positions based on a predefined risk parameter set. This is not just about ensuring the avoidance of excessive losses. It’s also about maximizing return given the risk you want to take.

Poor money/risk management, to my mind, is the failure to have and abide by a well thoughtout risk strategy, which means a failure to properly size each position. I do not put failing to close out a position when a stop level is reached in the category of poor risk management. That is simply the inability to follow your trading system. Of course failure in either means a breakdown in trader psychology (so to speak).

Even if I was to tell you my style of trading doesn’t mean you will succeed with it. because trading is like boxing, you have to develop your own style to be successful. The questions you asked are good ones. But you have to ultimately make those questions into answers which produce results.

Other peoples methods can give you a guide. Read as much material you can get of forex trading methods. Learn the market your in. Because different strategies apply to different currencies. Risk no more than 5% - 1% of your over all account. Meaning your stop should make you lose no more than $25 per trade until adjusted +/- $500. If you risk $25 to make $25-$45 you are not making good trade ratios. A ratio of 1:2 is the lowest you will go. So if you risk $25 to make $50 or better, you are doing good.

It seems your new to forex. Do yourself a favor and save that $500 till you become a decent trader. Practice practice practice on a demo accout for 6 months with the design trading method that you adopted. You should beable to look at your records a see the results of all your studying and analysis.

You can use that six month learning to curve to learn with real money or play money. Its up to you. :cool:

a picture is worth a thousand words (or more :slight_smile: ) so here’s how I do it. This was today, basically for 5 min charts I set stop loss 1/2 of the channel for longer time periods I set it to 1/4 or even 1/8. For this trade I didnt actually set a stop loss but still :slight_smile:
9/06/2007 20:15 Sell GBP CHF -10,000.00 2.4287
9/06/2007 20:43 Buy GBP CHF 10,000.00 2.4268
9/06/2007 20:43 Total: 15.81

hope this helps

Well, that is a basic thing that you have to understand about technical analysis, otherwise you will miss the whole point of it. The reason why moving averages or any other common indicators works, is because traders believe it works, so they use those indicators. For example, the 200 MA known as a powerful resisting/supporting indicator, and many traders set their orders near the level of the 200 MA because they learned that it has technical impact. Therefore the 200 MA becomes a powerful resisting or supporting indicator. On the same weight, the 145 MA could have the meaning, but everybody uses the 200 MA since that is what they learned. In other words, if everybody did not use the same indicators, or look at the same potential break up/down levels, the entire technical analysis system wouldn’t work.

I couldn’t agree with you more.

This thread hasn’t been responded to in almost 4 years, up until today.

Why the thread dredge?

It seem to be a pandemic these days.

Where is the problem? I don’t see one. Yes, I was also irritated by those ole threads popping up at first. But frankly, isn’t it a chance to read some stuff what is in here what would be off forever just sitting in the database and never read again?

I for myself knew after a while that he did it and just an eye on the nick and I knew what I had to deal with and not clicking on it or maybe clicking on it if it sounded a little intersting.

The solution for the issue if it would be taken as such would be to delete threads which weren’t visited for a year or whatever time would be okay for most. Somebody to ban, just because he answers to threads even older ones is a little overregulation, no? You wanna go the path of the cftc now here in the forum as well? Then maybe after a while we would all have to go to offshore forums, lol …

It’s a coin which has two sides. I mean my 2 cent coin here, lol. :stuck_out_tongue:

It’s just bad forum protocol to address things that are years old.

Not just this forum, but ANY forum board I’ve joined it’s pretty much frowned upon.

Most of them are just rehashed questions we’ve seen a million times anyway.

I don’t know about you, but I do read stuff on here all the time that is dated years ago. But there’s just no point in reviving a thread, or replying to a member who is most likely no longer active.

Well, I can understand your point. I guess. It’s just, to ban somebody just because he is acting different what somebody would expect to is in my eyes a little overregulation. Why not ask him for the reasons and is it really that annoying? That there are threads with almost the same or similar questions is not an issue of age. Every day somebody pops up here with the new holy grail of making a fortune in some days. Or somebody asks how much trillions one could make. While there are threads enough with answers. I guess that’s just part of a forum. If you want to answer, you can. If you don’t, you are free to ignore it. I click often at “new posts” and then there is also the info when the thread was created.

As I wrote, just my 2 cents. :slight_smile:

Reviving old threads is usually just a way to get post counts up.

Getting post counts up at BP allows one to start posting links.

Posting links = spamming in most cases.

So the banning isn’t about being unfair, it’s about preempting someone boosting their post count enough to post their “Forex Riches: $200.00 to $200,000,000.00 In 7 Weeks” sales crap.

It’s not about penalizing random noobs.

Nice point, Chris.
It is important that if you use indicators to make sure each indicator is not alike and they do things with varying capacities. In other words, the Williams Oscillator, MACD, stochastics are all oscillators. If those are the 3 you use, then you are dead in the water, because they will form a confluence just by their similarity.OTOH, you want a confluence.
The pair I posted is the CHF/JPY. I have been saying for a few weeks this pair is getting ready for a plunge. This is the monthly chart, so it needs to be viewed in its context. The monthly has hit the top or an extreme of an SD channel. By looking to the left, we see the peak of the cloud as it is in the future. That can be constructed as R. Looking to the right, the cloud has leveled, which means in the future, at least a correction is due. The cloud is a state of equilibrium. The tenken and kijun have leveled around the area of the cloud, while the kijun is actually under the cloud. The stochastics is OB. A look at the weekly and daily charts are showing momentum still favoring a move north, which is the only thing holding thing holding the move south back.
Regardless, once it begins, and considering all the indications on the monthly it is still expected for the move south to take the pair to a minimum of 90.04, which is the top of the cloud, and represents the median of price action, or its state of equilibrium.

But, yes. A methodology is something that is highly personal. The indicators of choice are highly personal. In using indicators, the main thing to look for is a confluence of events or your very best indicators will lie to you.