A change of tactic

I lost 20% of my account doing what i thought was scalping turns out it was guerilla trading or even super-fast guerilla trading. Learnt a few things about finance in my 4 months of live trading but in the end iv lost money. Iv now closed my account and gone back to demo. Iv gone from one extreme to the other from trades that last seconds on the 1min chart to now looking at long-term trades on the weekly chart. just wondering if anyone trades longer-term? any tips? people say to check weekly then check daily chart how does that work? Thanks in advance . Heres a tip to newbies scalping if the RSI is -3 or -4 buy big and then immediately close and take profit, it works everytime.

Do you not open multiple time frames other than the one you are trading in, to get an overall view of the market before trading.?

No not really, Normally i would check the longer timeframes if the trade was going against me. I was trading the 1min chart and got the direction correct most of the time. When it went against me i would normally hold it and wait for it to come back if the price was at an ok level. or cut it. knowing when to cut your loss is the hardest part for me especially when trading from my phone.

I don’t trade longer term but I look at the weekly, daily and sometimes , to get a longer term bias, which I used to compare with the shorter time frames that I trade.

You could set up the same thing with month, weekly, daily and 4 hour charts. I use a linear regression line, to establish trend, but you don’t have to a moving average and or any combo will give you same thing.; direction of trend.

You didn’t say how you decide what pair you’re going to trade and what you use to plot entry, stoop loss and profit targets. If you included that, the guys who trade the longer terms could give you better advice. Anyway hope that helps

Im trying cci correction strategy on a weekly chart on my demo account. funny if i just kept my positions open i wouldnt have lost 20% of my account, i was worried about my short usd/cad mainly and run out of patience with my guerilla strategy where i like instant results and not have to wait days to get a result. I also closed my usd/jpy long even tho i knew it would be alright in a day or two. guess i had a forex meltdown. now im looking for a more relaxed style like the weekly chart, having a trade open for 3/4 days wuth less leverage. i trade 6 majors plus eur/gbp. im experimenting once cci goes -101 sell and above 101 for long. if cci gives me a false signal l will close, only tried it for one day so far. with 4 wins and 2 losses. just wondering if on weekly cci goes 101 but the daily is 70 or something shall i ignore daily and just trade the weekly? Has anyone tried this cci correction strategy does the daily and weekly have to match with the indicator both saying -101 etc? thanks.

Here’s a tool I use on every trade I’m considering. So lets say I want to risk 5$ of my account balance it will tell me how much 5% in $$, shows me the stop loss and lot size for each, by adding leverage tells me margin. From their I do my technical analysis then see how my stop loss, entry and potential profit fit in my analysis. If it makes sense I execute the trade if not I don’t. Try it out.
Forex Money Management

I’m not familiar with cci 101, or how to apply it. I’m a short term technical trader. I trade the London/New York overlap mostly. Anyhow try the money management tool. As we;ll you can have the best traing method and money management plan, but if you don’t exercise Patience and Discipline you won’t last. Your trading business can’t depend on one trade or one session, built over time using patience and discipline.

I would second the same…most traders use one or the other variant, and it does help to have a good MM otherwise you are screwed and not in the good way either. I use hourly, daily and weekly ones, but it all comes down to the strategy. And nope, I do not scalp…

cci is commodity channel index indicator created by donald lambert. It is a momentum oscillator. Basically a signal that a trend is there or something is overbought/oversold. the cci correction strategy is as simple as if cci goes over +100 you buy if it goes -100 you sell. The only problem is sometimes it will go over 100 then back down to 98 or whatever which is giving you a false signal. This is what impractising in demo at the moment. I agree totally with your you need patience and discipline comment, the other day i totally lacked that and lost it. Think the pressure of my technique finally got to me. predicting which way price would move about 20 times a day for four months and that was me done. I now want a much more relaxed style of trading. Thanks for the advice guys.

Sorry I’m somewhat familiar with it. The person that explained to me, put a 50% line and if it was above go long, below go short. I tired it a couple of times, but I have no use for it in my trading strategy. No matter what indicator or indicators you using, I found they work a lot better when verified by another indicator. For example apply the CCI then verify it with Stochastic s or some other momentum indicator.

As far as predicting price 20 times a day in my opinion that’s a tough way to go. Instead of trying pick tops and bottoms 20 times a day. Try to pick profit areas once or twice a day; much easier, capital is not tied up and losses are limited. Based on the balance of probabilities you will have more success long term planning for a potential 10-20 pip trade in one trade, rather than 2 pip profit target with ten trades.

If you check the trend on the 1 hour, and it’s down, again on the 30 minute and it’s down, then the same thing on 15 and 5 minute all at the same time, you will be pretty safe going short until the 5 minute reverses and goes the opposite way or goes sideways. Now add to that an indicator or price pattern that indicates the 5 minute has changed and again most of the time you can assume price will change and that’s time to get out. If you want to use longer time frames it’s the same principle, just use multiple time frames at the same time so you can see what’s happened above and below your entry. Again only my opinion and remember nothing works all the time, that’s why the trading gods gave us stop losses.

Just my worth nothing opinion, ideas may differ. I just liked your question because I think we have debated hugely the merits of scalping on lower time frames against long for some time in here but GP advice is sound.

I swing trade a lot so I do find myself looking for reversal zones and it is most effective on longer time frames and I look at the 4h into the daily, weekly is really for that one bar perspective. The restriction in trading higher time frames is always seen as one of capital. I don’t think so… however as long as you are willing to have a 100 ticks at least on a stop you should be fine, weekly is fine as well but capital will start to matter stops will need to be at least 200-300 ticks wide and and you should be willing to hold a trade for 3-7 weeks.

To answer your question. You are on the right side of the track long term trading. Short term trading does have its merits but be prepared to have trading costs and lots of drawdown meaning a lot more work so more of an occupation because the moment you hit 5-10% drawdown be prepared to work to cover that drawdown or you are likely going to blow out or simply just give up as more losses are likely to follow.

If you are a part timer stick to 4h and daily, if you have a significant sum and the wife is peaking over your shoulder, then stick to weekly. Good luck with your new strategy wish you every success.

I think it is very common to check the longer time frames to get an overall trend. I agree with what gp said especially with the last paragraph. Emerald also made a good pint about the merits + costs of short/term trading and how long/term trading differs. In the end you will need to weight the pros and cons of both and see which makes more sense to you.

Thanks everyone. I would say quick trades on the 1 min chart is very possible and a good way to make money, after 2 months my account was up 20% the hardest part about that strategy is if price moves against you, knowing whether to cut it or wait and let it come back round. it is also a very stressful way to trade tho at the same time. So now im experimenting with the longer time-frames. I am also starting to think fundamentals are more important than technical patterns. Technical patterns are important because it enables traders to earn their bread and butter everyday but central bank policy and politics trumps technicals slightly. Good luck.