Hi everyone!
I’ve been trading live for about 3 months now. Prior I went life I demod for about 2 months but my learning curve didn’t go beyond getting to know the platform and the basics like identifying major support and resistance on a chart.
I then quickly got bored and decided to move onto a live account thought it was the time /boy I was wrong still don’t have any regrets/.
So this past 3 months have been the most challenging months in my life not just within but outside the context of forex world. I’ve gotten to know what my strenghts and weaknesses are as an individual. And forex has pushed me to the edge many times but somehow I’ve managed to get through and still alive and well and looking forward to the journey ahead!
Enough the rant let’s ge to the point shall we?
So after trying whole bunch of indicators from RSI , SMA EMAs to fibs and momentum /and the list goes on/ I’ve realized /finally yeah even I’ve been reading since long ago/ that indicators lag big time. It wasn’t a news to me but I had to go through these things myself.
Then I turned to my good old trustee support and resistance and incorporated fibs and moving averages for the same purpose but to use it in different market conditions. Anyhow after a lot of trial and error from technical aspect of trading I’ve concluded that I’ll stick with my good old support and resistance, fibs and MA’s will be thrown in occassionally.
But I’ve had difficulty timing in my entries and exits. A lot of the times I either enter too late in the mid way through the trend or too early in the middle or at the beginning of a pullback /had to suffer a lot of losses due to this/. I was entering and exiting from daily TFs.
But then another problem arised. I’ve realized that there was bigger force much bigger force than just bunch of economic news releases here and there that is the fundamental driving force behind the market movement. if only I could somehow get on the same flow with the big guys I thought to myself. So I’ve discovered a very informative thread started by Forexchange and started learning about trading with market sentiment.
Then i still didn’t quite realize fully that there’s several levels of facets to market sentiment. I was painting all this black and white /one of my weaknesses/. In short I was trying to simplify something that is so complicated and demands greater understanding.
I’ve evolved quite a bit since I started 3 months ago and I’m in the stage of refining my system. And here’s the final draw /hopefully/. Obviously there’s alot of improvements to be made along the process. But the foundation will remain the same. I think I’ve finally built the foundation after much trial and error and wanted to share foundation of my system here. Any constructive critism is welcome !! thats the reason why i’m posting it here to share.
- So I’ll base my decision which pairs to trade and to which direction on COT non commercials data that I will analyse on a weekly basis.
When I analyse COT non commercials data I look for
- net position changes
- open interest
- long and short positions held by non commercials in %
with this data i’ll be able to determine who comes up at 1 /strongest/ and who slacks at the last /weakest/
-
Once I have the list compiled from the strongest to the weakest. I’ll look for confluence factor to support this claim by pulling in my charts and look at pairs. For instance lets say AUD came up at 1 as the strongest according to my COT non commercials data so I’ll look at pairs that starts with AUD and vice versa with the weakest currencies to see if AUD is trending up against other currencies. If yes which AUD pair appears to be in an obvious uptrend /this all will be done on dailies I might add MA for further confirmation/
-
Here’s the last step in my analysis. In this step I’ll look at fundamentals ; general economic condition, interest rate and also political condition as a confluence to support my COT non commercials strongest to weakest data as well.
General rule of the thumb will be to go with the flow aka the trend.
As for my entries this is how I will be going very simple;
- I’ll draw major S&R on a daily chart
- Then I’ll zoom into 4H charts and draw interim S&R as well /I’ve noticed a lot of the times prices do respect interim S&R lines on 4H chart so when I used to place my entries on dailies I’ve had alot of problems/
- I’ll look for early entries from 1H or 4H TFs
- And go along with the bigger picture that is drawn from my analysis or the flow in short
- If the trend is already midway through on 4H I’ll wait for a nice pullback and get on the pullback instead of jumping in midway.
- Enter as soon as the second candle is in line with the overal trend on 4H chart with tight SL placed just below or above major or interim support or resistance
- Take profit when opposing candle forms /look at price action/ in lower TF’s 1H.