Yes that is a system. Everything with a systematic approach is a system. So, you know why you entered, you know why you exited and you know why you used this or that lot size. Plus, very important, you don’t widen your stops. I can’t tell anything about some other things you use, but trendlines are for sure something what works. Then it’s only a matter of time until you will see how that works out. I wish you the best and I guess you have a fair chance with that! Plus you are already mostly over the hill of blowing your account soon, what I can see. As I said, then only time will tell how that goes.
I find sometimes that watching a pair like the EUR/USD go lower and lower actually prevents you from entering a trade because you tend to think to yourself, " Surely it can’t go any lower," But then it does, and you ask yourself, “Why didn’t I get in?” But by that time price has got even lower and you think, “Surely it can’t go any lower…”
Scalped +10 pips on EU climb back up from opening drop to 1-3551. Entered 1-3580, stop 1-3570, target 1-3590. As I have said before I am not too keen to scalp, ( makes me wonder why I do it really ). Maybe it’s just a lack of experience that shows in the lack of confidence. Did believe however that price WAS going to hit 1-36 again ( which it has ) but Nikkei, DJIA and S&P futures are all pointing lower so there will be no more scalps or trades from me this evening.
I’ve opened an account with photobucket so I can upload the odd chart screen shot, but as I look at the 1 Hour chart just now, it does make me think price could possibly go back up to around the 1-3640/50 area.
But the fundamentals just now are screaming lower so maybe this will prove to be no more than a bounce before the next shift lower which I’m thinking will be around the 1-35 area.
Incidentally, for those of you who care, after today’s round of golf I am seriously considering selling another pair, A driver and a putter !! And here was me thinking it was only women that make grown men cry !:17:
That is very true. I read in a book that the author says trading with a demo account is almost useless as you don’t test your emotional capabilities in holding a trade when it’s 60% down. He teaches to use strategies, and never let emotions get the better of you! Maintain a rock solid emotionless trade as you watch your trade shoot up and shoot down (; Never get out of a trade unless proven statistically wrong (;
I did kind the reverse. I turned 500 into 1,500 in a month but gave most of it back. Seems like the more that I learn, the less I really know. I was laid off as an accountant at an investment bank a couple of months back, and am day trading while I search (I know it’s gonna take some more months) for another job. I’m convinced that it is possible to make money trading fx, but I’m starting to think the real best way to do it is to have an information cartel where ideas and knowledge can be shared.
As much as I would love to think that someday the guys up on the hill would share the info with us mere mortals, I’ve kinda accepted that ain’t ever gonna really happen.
I personally am of the belief now, after all that I have gone through in my short time trading ,is that the ONE MAIN THING, that will kill your account everytime ISN’T bad trades decisions and it ISN’T even getting your analysis wrong.
I believe the one main thing that will blow your account is pure and simply impatience.
I know we all want to get to the fast cars and mansions, and we’d all rather get there sooner rather than later. But like it or not, we all have to accept that this really IS a marathon.
That’s not just some metaphor to sound wise and knowledgeable. It really is the truth.
If you start a marathon you need to pace yourself, have your targets if you must, but make them realistic targets. Keep an even pace, it’s tempting to go a little faster but must must discipline yourself, after all, there’s a long way to go. Keep it nice and easy and as event free as possible. This way, you know you WILL get to the fnish line.
But if you set of like a bat out of hell, thumping up the street as fast as your little legs can carry you straight from the starting gun, then at some point not TOO far from now, you’re going to wake up on a stretcher with a crowd around you with some guy saying, “Stand back please, let him breathe !!”
I may be wrong, I’m only a newbie myself, but it seems to me that your worse enemy in this business is yourself. Impatience will father bad decisions every time. I don’t think this is rocket science. Difficult yes, but difficult mainly because we make it difficult for ourselves.
Instead of aiming for 6 million pips every trade, maybe 20 would be a better target. Patience and realistic targets, that’s the two things I would tell any complete beginner to learn.
Anyway, those are just the ramblings of a tired cabbie, goodnight folks, be lucky.
I’m sitting watching a 1 min chart of the EU just now. Don’t worry, I’m not taking any trades from the 1 min chart, just watching it for a reason.
I’ve drew a rising trend line on it which covers almost exactly an hour now. It’s amazing how price has bounced almost exactly oof of this line and then continued to rise regardless of all the current talk of Euro zone crisis.
Don’t get me wrong, overall I think the EU will drop below 1-35, within days, maybe a week or two.
But it does make me think of the elusive art of TIMING. I placed two short trades yesterday, which both lost and took my balance back down to $102. But, ( as if you’ve never heard this story before !! ) shortly after they closed, guess what ??
Yep, reversed and went below my original TP target. So the big secret is ALL about TIMING. You can guess the direction correctly, but if you get your timing wrong, you’ll lose.
So going back to the trend line, is the answer to trade entry timing as simple as LINES? ( support, resistance and trend ). Are they the simplest, yet most effective ‘indicators’ ?
I’ve read recently about all kinds of different indicators. Gartley, butterflies, the solution to the rubiks cube divided by your granny’s age. But in the end, does all come down to lines? Sure, at some point any line will fail. But more often than not, are they right???
So here’s an answer to my own question from above. The 1 hour chart has moved in a short term range since Monday morning @ around 9:00 am GMT. Price range has gone from around 1-3555 up to around 1-3696.
Price as I write this has just broke up through 1-3650 and is threfore, in theory, heading up towards this short term resistance, @ or around the 1-3696/ 1-37 area. I haven’t used a fib or any other method of judging PA. Just this simple resistance line. And if it gets to within 10/15 pips of this area and then fails, I’m taking that as confirmation that this little test has succeeded.
Little trend line on the 1 min chart was broken and funnily enough has now become a little resistance on the 5 min chart. Next bounce down from that line is 1-3687. Next candle level would be around 1-3690/93 and eventually short term resistance of around the 1-3696 / 1-37 area.
Price already hit 1-3680 and dropped but I didn’t call it as a failure and turn around as it didn’t make a new candle low on the 15 min chart. But as I write it’s around 1-3684.
Looking forward to eeing how this little experiment pans out. Timing may coincide with New York open where just now index futures are pointing lower, however they did yesterday as well and there was no great drop.
just broke through 1-37 on 1 hour. if it can close above 1-37, i’m looking at next resistance at around 1-3730, then up to 1-3780.
again I still believe this to be a bounce with pair eventually falling below 1-35, but just trying to find the best short entry level.
Sorry for giving you all the running commentary on something I know you can all see for yourselves, but it may just give some other compete newbies a general idea of what someone else is looking at or thinking.
Failing to close above the 1-37 level, and therefore remaining in the small short term range, would maybe be worth risking 20 pips to see if PA fell back into the range
Don’t know if this is helpful to any complete beginner or maybe pointing you in the wrong direction, but I’ve been looking over the charts to find the longest timeframe that showed the quick drop in recent Euro Dollar.
I reckon the 15 min chart showed the best sign that would have allowed you to get in the quickest. 5 min and 1 min just not worth taking a trade on at all in my humble opion.
Interestingly the 15 min current candle is showing a bounce up from short range ( 1-3555 - 1-37 ish ) mid point 1-3525.
Again, from a total newbies learning point of view, it’s worth watching to see if it does rise according to candle shape and still adheres to short range. Or indeed falls but remains within this small range.
Still think we are in a bounce up though, looking for a good entry level to short
Made 21 pips between 2 different trades this afternoon just playing with small support/resistance /trend lines from a 1 minute chart. And above them, the times that price has bounced from some of the lines I’ve drawn has been remarkable.I know it’s not what you may call proper analysis, or for that matter, responsible trading, but it’s amazing how these lines do indeed work.
As I mentioned earlier, there was a small support around the 1-3730 area. Sure enough price spikes to c. 1-3724 and fails.
Lesson here then for all complete newbies rading this would just be to scale it up onto higher timeframes with bigger TP and stops. I only used 1 min chart and 10 pips profit/loss on either side and it worked out.
Obviously as lines are not exact levels there may have been an element of luck involved in using such tight TP and Stops. But it does just show that newbies could do a whole lot worse than to spark up the demo account and just start drawing lines. Support, Resistance, Trend.
Support, Resistance and Trend line education can be found on this site through the ‘SCHOOL’ tab on the home page. Muck around with them on different timeframes.
You may end up asking yourself “Can Forex really be this simple?” Well I don’t know the answer to that, but it’s as good a place to start as any other, and if it DOES work, why change it ??
One quick thought regarding education. I signed up with one of the major brokers (GFT) as a newbie a couple of months ago. After I signed up, I became very nervous, as I would read reviews criticizing my broker for having a trading desk (therefore conflict of interest with my trades) etc. Naturally, my broker makes money when I trade, so the more I trade, the more it benefits them. I’ve taken numerous webinars, most of them several times, and the amount I’ve learned has been amazing. I’ve purchased a couple of books about patterns and the application of Fibonacci written by Larry Pesavento (also recommended by my broker) that I’ve also found to be really useful. I really do recommend my broker completely. They are very proactive in terms if teaching: risk management, money management, Fibonacci, trading methods, market analysis, etc.
I guess my point is that there are resources out there, but the tricky thing is that we as newer traders have to find them (and realize they’re resources) on our own. There is no Forex trading A to Z (one of the closest is Babypips) in one place. However, having a good broker that provides quality education and good software seems to really help as well. I’m starting to get interested in S/R support and resistance (supply and demand) pivot points and mastering Gartley and the various patterns (a couple at a time.)
Am very open to any thought or critique… Criticism makes us stronger.
To be honest I think you are both talking about the same thing, Education. Yunny1 brings up a great point that most newbies don’t even know there is a point to be made about ( if you get that ). Most newbies want to know how to get into trading without realising that they need to learn also how to get out of a trade, It ISN’t just a case of, “That’ll do me nicely, where’s the close button?” ( sometimes it is )
Hogarste talks about the different parts of education and the different indicator tools out there. But thinking back to when you (the reader in general, not Hogarste in particular ) were a complete and utter clueless novice, when you first started looking into FX, didn’t you just find the mere mention of Fibonacci, MACD, Gartley, RSI and all that stuff just vastly overwhelming ?
What I, and probably most other newbies, would love to have found when I was just right at the start, was a web site, or blog, that had been started by someone else who was a clueless newbie. This site would mostly take the form of video content and the very first one would have the author doing a video that says, “Hi, My name is HoG and I don’t have a clue about Forex. But what I am going to do, through a video diary, is show you , step by step, how I learn, what I learn and leading all the way up, eventually, to the point where I am making live trades.”
The important part of this idea is that it IS started by a newbie. The problem with educated and experienced traders doing these things is that invariably within the first 5 minutes they will say something, that to them is very basic, but it just flies right over the heads of newbies. And right there and then you’ve lost that person.
I realise that this would be very time consuming, I know this, because when I first started writing this thread, I started a kind of diary blog. But I didn’t have the knowledge of how to do the videos to show a screen with examples of what I was talking about. I did around 25 posts in that blog before I gave it up, but in that short time, and short amount of posts, I had people from 16 different countries reading it.
The question comes down to this, what do you really need, and how much do you NEED to learn, to trade Forex successfully, consistently and where do you learn it ? Are lines enough? Do you need lines, candlesticks, pivot points, RSI, moving averages, a little house on the prairie and a boy named Sue ? If you CAN trade Forex successfully with just candlesticks, S&R lines and maybe the odd moving average, is it REALLY necessary to learn about Gartley and Bollinger and Ichimoku ??
The one thing you CAN be sure of is the fact that if you asked 100 traders what the best indicators to use in FX are, you’ll probably get 100 different answers. You’ll also get your fair share of liars too. The ones who tell you that their system Guarantees at least 150 pips per day.
Sure, the school of pipsology on Babypips is probably the best learning resource that I found. But, ( and I hope I don’t get into trouble from the babypips people for this ) I’ve already stated in this thread that I struggle to read things. I don’t mean I can’t read, I mean I have a dreadful attention span when it comes to reading. But had I found a web site that showed me videos of simple basic beginners stuff, videos made by a person who was just learning like me, I would probably have used that site, especially if I found that the author WAS learning and WAS moving forward, with the added bonus that I don’t have to read too much.
I suppose my whole point is that there IS an awful lot out there to learn about FX. IF that is, you really want to learn it all. But before a newbie goes wading in trying to learn about patterns that would have Professor Steven Hawkins asking, " What the F+*> does that mean?", wouldn’t it be better just trying to learn what you needed?
So I suppose you ask, “Well how do you know how much you need to Learn ?” Well, if you’re trading, demo or live, and you’re trading profitably and consistantly, haven’t you then learned enough ? Like when you flick a switch at home and the light comes on. Do you really need to know thehow electricity gets from the grid to your house, then have schematics of the loop wiring system of your home and understand that the switch cmpletes a circuit which enables the element in the lightbulb to heat up and then produce light ? Or is it just enough to know that when you flick the switch, the light comes on ?
OK, philosophy classed dismissed, but I’d love to know. How much do you NEED to know ?
Yoga class coming next !!
HoG
And before any of you ask, No I’ve not been drinking, I just got a bit deep and carried away. I love the button underneath this box, it says “Post Quick Reply”. They obviously didn’t have me in mind when they made that button. LOL
That raises an interesting question. What do different people think is needed in order to get up and trading with some degree of success. I read a thread (I wish I could remember which) where one of the more experienced forexers recommended that a newbie focus on supply / demand (support and resistance), money and risk management, the affect of news releases (fundamental), etc. I’m not sure if there are studies linking Fibonacci analysis with boys named Sue. I’m sure it’s out there already, but I am interested to here what others think is most useful for the newbie fx traders beyond the most basic. I would say that Kathy Lien’s books and articles, Lary Pesavento’s books are a really good way to start. Also GFT does a really great job with free webinars (hope I can say that.)
Ah !! Therein lies a point, without trying to sound too cheeky. It doesn’t matter what OTHER people think, or say, you need to learn. It’s what YOU think you need to learn that will ultimately be the deciding factor in the success or failure of your FX trading.
I have rebuilt my account balance from a low of $43 to the current level of $104. I was at $109 but lost on 2 trades earlier in the week. Anyway. During the rebuilding process, all I have used is my limited knowledge of candlesticks, and support / resistance and trend lines. Sometimes I had the Slow Stochastics or RSI running at the bottom of the chart, sometimes I overlayed a Fib, but I promise you thaT IS ALL.
I have had moving averages running on my charts but I removed them all because in all honesty I don’t know how to use them properly and the way I WAS trying to use them was causing me to question wether they were actually doing me more harm than good. Now if this is right or wrong I don’t know, but I tend to believe that moving averages are used as nothing more than support resistance areas. But if you’ve already drawn support / resistance lines, and you use a Fib ( basically another support / resistance system ) How many areas of support / resistance do you really need on the one chart ???
So going back to my account, if I have more than doubled up from my low point, using nothing more than quite basic analysis, what says this isn’t all you [I][/I][B]NEED[/B] to trade consistently and profitably. You’ll notice I emphasised the word ‘need’ just then. That’s because I’m trying to draw a difference between what is actually required and what else you may WANT to learn
Obviously, learning more and more on ANY subjest you are interested in can’t be a bad thing. But I’ve always been of the mind that sometimes, in certain areas, you can know TOO MUCH. But that I mean you have to be careful you don’t end up having 20 different complicated indicators running on your charts at the same time and OVER complicate what could turn out to be a rather straight forward excercise.
I suppose the real answer to this lies with each and every individual and what they personally prefer to use. One trader may swear by Ichimoku, another bt Bollinger, another by Gartley and another through simple PA and S&R Lines. I don’t think you’ll ever get ALL traders to agree that one system is the best. [B]BUT[/B]…
If I personally continue to find that I am trading consistantly, profitably and intelligently, using no more than PA and support and resistance, whay would I want to OVER OMPLICATE that ?? Sure, I WILL read and learn about other tools and indicators, but if I already have a system that works, and works well, why change it ?
So my advice to any complete beginner would be to start in a demo account using no more than knowledge of candlesticks
( I’m currently reading and watching everything I can find on candlesticks ) and support and resistance lines. As you go on, trading demo and increasing your knowledge of other tools, try using them on your demo. If they work well alongside what you already use, continue to use theem. If they don’t, stop using them.
But if you find that keeping it simple works, then it works, so don’t muck around with it. There is an old saying that says, “There’s more than one way to skin a cat.” and that is true. But as long as the cat ends up naked, who cares how complicated your skinning techique is ?
So keep it simple, if you find you need something more, add something. But if you don’t, then don’t.
There then comes the question of learning about the psychology of trading. Personally I believe the best introduction to teaching the psychology of trading would be to start 2 separate threads. One would have the title, “Learn The Basics Of Forex Trading.” and the other thread would have the title, “Make $125,000 In Just 3 Days !” It would be interstingto see, if clicking on either thread could be counted and took you to the same destination, which title would receive the most clicks. I bet I could guess which would win !!
Interestingly enough, just as a little add-on to the above article on what to learn and support and resistance, the EUR/USD is, as I write this, having another look at the 23.6% Fib retrace from the ( 1 hour chart ) 29/08/2011 high of 1-45462 to the 12/09/2011 low of around 1-3495. 23.6% resistance comes in at approx.1-3746. So as a little test, it will be interesting to see if that level holds or breaks up to the 38.2% at 1-38992 ( or an even 1-39 )
and that takes some time…