I have been trading since the start of 2017 and am still on the demo accounts. I am happy with Binary, I have consistently profited off that with my stratergy. Its forex what is my problem.
I can do the technical analysis side really well but what I am struggling to do is create profit, sometimes I will enter a trade and it will go the opposite way, Like I did a fib retracement on AUDCHF, it bounced off one of the levels,so I entered before bed, woke up this morning and it had gone back up. I did a H&S on GBPCAD, I sold it at the neckline, it went down and then came back up.
I am not sure whether it is my entry and exit points or my SL and TP that are the problem. I am hoping someone can help me with this problem? I Don’t know whether my SL and TP are too far away and I am expecting to bigger profit or what.
It could be your targets… I am using ATR-based targets and sometimes they work beautifully but most times I get stopped out. Timing is everything but also it is very good to keep losses small… If you went through many losses in a row but had one big win that made up for those losses then OVERALL your strategy will be okay.
Also, are your targets from the daily chart? Sometimes those head-and-shoulder patterns work and sometimes the fail, just like S/R levels… I wish there were a way to automate it that did not involve paying a programmer, so that if you failed a level break trade you had another entry order entered at the same level by your platform after you got stopped out, so that the next move up (or down) through that level would not be wasted. However, if you just set your orders once a day, you can still catch good moves… Yiur analysis is not wrong, it is just that large moves are harder to catch in currencies, especially intraday.
I use 1HR chart to analyse, sometimes 4hr chart and then enter and exit after a candle is complete wherever I feel it needs to be.
Do you think I should be aiming for smaller moves then and going for 15/20 pip moves? You know instead of aim for the say swing low point on the fib, just go for 15/20 pips ?
This is where both you and I are at a disadvantage for not using coding, because (and this is something I looked into last November) with platforms like Quantopian you can basically do thousands of backtests in a matter of minutes, to test your theory on any given asset… Sadly Quantopian does not serve forex instruments, but if you did stocks then it would be the way to go.
If you backtested manually (and had the time for it, but it is a lot of time) you could learn a lot, checking what would have happened had you entered at the close of, say, the previous 4hr candle going long/short each day for x number of days… I am saying this because I know that this could save months of just trudging forward with a strategy that may barely break even… There are no certainties in trading, so it is all about building as much probability/statistical advantage as possible… And when you trade small moves that advantage is definitely not on the trader’s side - manual scalping, for example, is a known recipe for disaster when it comes to forex traders like you and me and a lot of us out here… not that 15-20 pips is necessarily scalping, but it is a small move nonetheless…
I now know at least three traders from Babypips (who do not work in trading but still do it beside a day-job) who have become good at making profits: two of them have moved away entirely from spot forex (though one of them is doing currency futures trading for some part), and another one still has some spot forex exposure. The ones leaving spot forex behind tell me that other asset classes are much more directional, given preparation and patience, and that the volatility typically had in stocks and commodities gives you much more of a fighting chance to make some profits (given appropriate risk controls and preparation) than currencies.
I am currently trialling a trading strategy of my own in USDTRY (there is a thread in Forextown, it will be on page 2 now, i think… sorry, “Trading Discussion” as it is now called, no longer Forextown): I chose this pair because it is capable of genuine 600-800-pip moves per day, by which I mean not massive prices spikes of that magnitude caused by spread widening but actual daily moves… There have been several postings on BabyPips about generating average ranges for different currency pairs but while Googling it now I did not find a central resource for that, just bits here and there (none of which up to date). The question for you is: would trading 15-20 pip targets mean a zero-sum game for your given currency pairs? Would you have to implement a negative R/R ratio? If you could not backtest, how long would you give yourself in forward testing before you declared the system worthwhile or not?
I know that you have asked yourself these or probably similar questions, so forgive me if I sounded condescending in any way. Oftentimes I found that systems plucked out of the air from my own analysis have had no success because the analysis of chart levels etc. was right but I had not enough statistical (i.e. backtested) data to give me confidence going forward…
I almost always ONLY enter on S/R zones, this allows for very good Risk reward ratios (2:1 or higher)
Wait for a retest (Im still backtesting this one a lot, as there are some types of trades that just goes off even without retest)
Ideal SL for me
a. H1- 20pips
b. H4- 40pips
Now for the TP there are many ways to go about this
a. Next structure
b. Next S/R
c. Fib Retracements or Extensions
personally for me good TP’s have key areas lined up with Fib Levels.
If you have the capability to monitor your trades full time, its best to analyze it Candle by candle. Here are 3 situations where i Exit immediately
a. Strong Reversal patterns appearing
b. Trend line break- Candle closes outside
c. Huge Counter candle+ Strong followup
