Currently I am new to trading and I’ve been trading for about 8-9 months. I am not doing it full time but I would like or even really appreciate any advice as to my trading plan itself.
So currently I am trading a simple moving average crossover
Currently I do float between the 15min and 1hr timeframes
But my main trading plan is
Enter long when EMA(15) cross over EMA(30)…RSI(28) to be over (50). Vice Versa
I’ve only recently started trading with the 50 SMA so only look for short positions when price is under the MA. (Vice versa).
Is this too simplistic of a plan, I understand that it does depend on the trader but I’m trying to start the journey of becoming consistent.
Any advice to help a newbie out? Thanks in advance!
that’s very good, it shows you’re not stupid, as most are.
at least you are starting on a positive note… THAT’S VERY GOOD.
There’s no such thing
Ever see that movie, "Pool Hall Junkies"
There’s a scene where (i think an Art Critic) says to Johnny.
something like…
so… You’re an Entrepreneur
What’s your Secret
and i think he says’ it’s a secret
then the critic says
What’s your Technique
and Johnny says… WELL… I KINDA TAKE MONEY OUT OF OTHER PEOPLE’S POCKETS AND … PUT IT INTO MY POCKET
solid strategy hehe
simple and it works
so… is your strategy too simplistic… there’s no such thing, i don’t even think you should pay attention to anyone that says it is
WHY IS IT’S SIMPLICITY OF COMPLEXITY… RELEVANT ?
ALL THAT MATTERS IS THIS…
DOES IT WORK FOR YOU ?
YES or NO
and
CAN YOU MAINTAIN CONSISTANTLY ?
YES or NO
Your system will tell you if it’s a good system , Assuming you pay attention with an impartial opinion
what we say doesn’t matter
i could tell you this…
RE this
and i could say to you, No No… change the EMA to 25… TRUST ME hehe
you’d be stupid to change it
You only change it , if it’s not working
so… if it didn’t work on 15 then YOU WOULD EXPERIMENT WITH 25 AND SEE HOW IT WENT
if there was NO CHANGE, You would change it back to the way it was because there is no benefit to listening to my advice
but, if it instantly changed… you leave it like that and hence get better results
let your system tell you if it’s working, don’t rely on our opinion.
Its basic. Basic and simple is not a problem. Basic and incomplete is an issue. Basic and wrong is a serious problem.
An entry signal off lagging indicators is going to lag so far I’d need convincing there’s still going to be adequate movement in the price action for you to make a decent profit.
A lagging signal is OK when you want to find a good place to enter an established trend and to ride it long-term but if you’re day-trading surely the session is too short?
Where’s your stop? Do you exit at profit target? Do you intend to pyramid? What % of account do you intend to risk?
Please find attached a link to the Original turtles system. You could find no better example for a template for developing your own system. Chapter 1 provides the template. Chapters 2-7 breaks down each component. Simply replace them with your own rules. Chapter 8 describes what you’ll have to do to improve your system. Time to go to work.
Currently with I do find day trading very short and most times my stops are what makes me exit the trade. In turn the emotions begin to set it in and I just mess up. I’m more than happy to admit… it’s just 80% of the time just after
MY stops are hit I the price ends up moving back in the direction I favoured.
I normally place my stops 1 candlestick previous to my entry point. And I tend to risk between 1% and 3%, once a week I apply a bigger risk to my trade 8-10%.
I don’t fully understand the pyramid method you were speaking of… exiting I also struggle with as well as most times my stop are hit first.
The classic place to set a stop on a long trade would be below the previous swing low. If an upward move started from a low and an uptrend consists of higher highs and higher lows, in each case, if price moves below the respective low, that would indicate the upward move or uptrend is over. Or at least so weak that the probability of a further move up is less than the probability of a further move down. Allow for a little volatility in placing the stop, sometimes price will “test the water” below the low but re-bound almost immediately.
1-3% risk per trade is about what most traders could stand.10% is going to be rarely seen, so you’re out on a limb there I feel.
Most trades are set up so that if you;re risking -1%, your profit should be at least +1%. The issue of pyramiding arises when you successfully get to +1%. Many at this point would close the trade, k,money in the bank. some would close half of it and move the stop-loss to entry. But if price is moving in an uptrend which is just as strong, maybe stronger than when you originally entered, a small number of traders myself included would pyramid the trade by adding another position of the same size: move the original trade’s stop to its entry price and set the stop on the pyramid trade to the same level. If price rises the same distance from the second entry as from the first, you’re now looking at a profit of +3%, still with a capital risk of -1% only. This is good but in fact you can keep adding new trades and dragging the stop-loss up as you go.
The relative positions of moving averages and possibly even their crossovers do have some legitimate uses in trading.
But timing the actual entering of trades isn’t one of them.
This doesn’t matter, though.
What matters is for you to learn how to backtest so that you can see for yourself that these methods have no edge, rather than relying on asking people in a forum most of whom know no better than you do and will therefore only misinform you, for all their good intentions.
You don’t say if your successful with it? If you are then it is neither too simplistic or too complex. I never try and tell folks what they can or can not do. People can do well where I have not at times. Having said that, a true fact is that SMA cross overs work beautifully in trending markets and give false signals in consolidating or side ways channels. If markets trended most of the time you could get fabulously rich, Since markets only trend 30% of the time this turns into a drawn out way of going broke. The smaller the time frames the more this is true. I have the best results comparing 240 minute charts (4 hour) with daily and weekly. If you like SMA’s forget about crossovers and use the huge ones like 2000, 1000, 500, and 200. Test this out and you will find they make really great support and resistance points. Want something really simple to determine direction? Put up a line chart on the daily and weekly. Daily and weekly only. By that I’m referring to a line on close, put simple trend lines on the line chart an then turn it back into a candle stick chart. When you get the break out of a close above or below this trend line you now have your direction. Do you get false breakouts? Yes, but not if the market has held at a true S/R top or bottom prior to the breakout. I stay away from all the other indicators and comparisons. It all becomes too subjective. I have RSI divergence saying to buy and Stochastics are giving me a sell while Bollinger Bands are looking neutral and I am at 62 % on the Fibonacci ratios. I keep it simple.