I, like many others, thought this might be a quick way to make an easy buck and it couldn’t be further from the truth. I thought I could find a system which is plug and play and watch the money roll in. Obviously, this will never happen. I recently got in contact with someone on another forum (unrelated to trading) who is helping to point me in the right direction. Most indicators, by definition, are lagging, as they rely on price for calculations.
I am trying to develop my own comprehensive system which can be applied to multiple trading pairs and multiple timeframes. I will post screenshots of my entries, SL and TP, and track my wins and losses.
Setup: Simple Candlestick Chart
[B][I][U]Steps 1-4 are done the night before
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[B]Step 1 -[/B] The night before the trading day, open the daily charts for the pairs you plan to target. I will be using the EUR/USD and USD/JPY and maybe add some AUD charts. I will mainly use these as they fit my schedule and they have lower spreads.
[B]Step 2 -[/B] Mark support and resistance levels and draw trend lines. Next, go down to the 4 hour and 1 hour chart and do the same.
[B]Step 3 -[/B] For day trading, I plan on using the 15m chart, so I will also do the same for this chart.
[B]Step 4 -[/B] Now, we can analyze the S/R and trendlines and start looking and what happened near these levels and start to make a hypothesis on what will happen tomorrow.
[B]Step 5 - [/B] Look for traditional candlestick patterns and adjust entry and SL/TP based on the S/R and trendlines.
Step 5 is obviously the difficult part and takes a good understanding of candlestick patterns and price action. I don’t have this knowledge yet, but hopefully, I will be able to learn along with people who participate in this thread. I am very much a beginner, so no one should follow anything I post in this thread as advice.
I will start with a demo account of $1000 and trade on various time frames. I will adjust my lot size based on my account balance for each trade, as Oanda allows this.
You can see some of the support and resistance lines I have drawn on various timeframes.
As you can see on the right, the doji and hammer show that it has tested the resistance, but I believe it doesn’t have the power to break it at moment. I would wait for a confirmation bullish candle and set my stoploss a few pips above the high of the doji. I would look for it to come back down to the 1.53201 level, which used to be a resistance, but I believe will be come a support.
Right now, the spread is way too high (weekend) to entertain this trade, just using this as a live example.
The red vertical line represents the last candle of the last pic I posted.
The yellow circle shows a shooting star pattern. To me, this shows that there was a false breakout of the resistance area, which should start to drive the prices down. This only confirms my theory that the price will fall.
When I see the bullish candle right next to it, I would have entered at the blue line. The teal color represents my SL and the resistance level of 1.53201 or thereabouts would be my target. I would set my target to be at least 2x my risk and adjust the sl to lock in profit.
Looks like I was right. It went for 50+ pips and is still going. It hit my resistance level a few times before finally taking the plunge. I identified the reversal before any indicators would have.
Another fake breakout via the shooting star/pinbar. I feel prices will come down. I got in at the white arrow, 80.893. I accidentally placed it under the wrong demo account, so I won’t count this one.
Short Entry developing. Don’t get in just because you see the strong bearish pinbar. Wait for a confirmation candle. If you guys have questions, let me know.
Don’t over think the sl or tp. It should be kept simple as well. Win more than you lose. Watch the market and look for strength and weakness. Stay in when strong, get out quicker when there are signs of weakness. Its better to be more cautious than adventurous. Check your “hope” level. If it’s too strong, get out.
Definitely! I managed to turn a profit yesterday, but could have done much better. My two biggest problems were overtrading and tweaking the trades once they had been made. From now on, I will be more selective and set it and forget it.
I had to work from 8am to 11pm, so I didn’t have a lot of time to trade. I was able to get in a few good spots and took my SL in one spot.
Balance is now $1126. I plan on posting some more entries, but I have been too busy. Is there an easy way to track the pips made through Oanda or some other website?
The bottom really fell out of USDJPY last night. It dropped 28 pips below this level. My TP was a little over 20 pips. I am really feeling USDJPY. My support lines I have drawn have been really accurate.
Tweezer top was forming on the 15m chart. I used the 5m chart to enter at the brown arrow and set my TP at around the green arrow, as there was some support there. I made a couple of bad trades the other day and haven’t traded as much in the last few days.
