Having trouble coming up with decent strategy

Beginner Questions
1

Ok. I am an aspiring forex trader. I have a full time job, so I will only be doing swing trading, holding positions for multiple days.

I have read a lot about the strategies which I can use and Bollinger bands and candlestick price action is what I am interested in. ( Also fibonacci). I dont think I like too many indicators.

I have firmed up some rules on how I want to enter the market. But when I look at charts, I dont see the conditions being met. So I cannot make an entry.

Since I cannot watch the market on a continuous basis, I usually miss my entries. :frowning:

How to get around that? Should I set alerts, so that when price is above or below, enter the trade. I am getting frustated as I cannot pinpoint the right time to enter , based on my criteria.

So I have a startegy in place, but because the conditions are not right, I just cannot enter the trade. And then I might have missed an entry.

What to do?

2

If your entry rule is indicator based, you can write an EA under MT4 or MT5 to send you an email when conditions are met, or even enter the trade for you. I did that in the past, I was receiving an email and a notification on my phone when some indicators where aligned, with a pre-calculated volume in the email.

If you can predict somehow your desired entry price before the trading session, from a channel or whatever, most platforms will have an option to send you an email, or even a text message on your phone sometimes, when a given price is touched. Or you can use pending orders (buy limit, buy stop, sell limit, sell stop, OCO orders)

Otherwise you may choose an even greater time frame, or accept imperfect entries.

3

As others have suggested, you can automate the process and even use VPS hosting, but unless you are coding your own ea, you may want to think twice before using one, good luck

4

That’s the purpose of a set of rules. Your entry, stop loss and profit targets are entered and triggered based on your rules. You don’t need anything complicated or be a slave to your computer screen. Let the market come to you, don’t chase. You mentioned Fibonacci, BB and Price action. Entry, stop loss and profit targets can all be addressed by pending orders and alerts.

It sounds like you’re trend trading, so in the case of BB, you use 2 entries one trigger the long pending, one to click the short order. Place your stop loss opposite the entry, for both orders, and do the same for your profit targets. Fibonacci put a pending order at the 50% level stop loss 60% level above and your first take profit at the 0% level . For the times you get stopped out or market only retraces to a level under the 50%, when it does hit, your profit makes it worth while for those times you missed. Same with major support and resistance areas.

One more thing; currency markets are running Sunday to Friday, all three time zones have overlaps and price trends and goes sideways as well. London/New York have the most volume, but there are opportunities in all three overlaps. Hope that helps
Gp

5

As gp said the purpose of rules and conditions in a strategy are there for a reason. You have obviously put them there and you should not feel pressured into taking a trade. Patience is very important, you may miss a few good ones but often you will miss many more bad ones.

6

Swing Trading is definitely a good choice given your job.

The Daily and 4 Hour Charts are great choices for Swing Trading with Candlestick Patterns, since you know when to check for a signal.

I dont use Indicators. I find that they are lagging because of their use of past price data and can create confusion especially when looking for convergence in their signals.

Take two recent trades that have been made as part of my Swing Trading Methodology.

GBP CAD

DAILY CHART


(FXCM Charts used for Daily & 4 Hour Chart Signals)

DAILY CHART


(Dukascopy Platform used for entry)

Entry took place based on the Daily Candle signal given at 5 00 EST with the trade hitting the target a few days later. There was no need to watch the chart once entry takes place, which allows you to go back to work etc. All of this is done based on Price Action and absolutely no indicators are used.

CHF JPY

4 HOUR CHART


DAILY CHART


In this trade, the entry was based on the 4 Hour Chart after the Daily Chart provided its signals. At times, based on certain criteria set out in my strategy, entry takes place either on the Daily Chart or the 4H Chart. In either scenario, you know beforehand when to look for trade signals.

Naturally I cant publicly share where you can get this strategy without violating the forum rules…
However the main aspects are…

[ul]
[li]Candlestick Signals for Market Direction;
[/li][li]Daily and 4 Hour Charts for Signals and Entry;
[/li][li]Targeting 100-200 Pips per trade;
[/li][li]Trading the Weekly Range of each pair;
[/li][li]Never looking at trade while open (cardinal rule followed by me and my traders);
[/li][/ul]

Check out my thread http://forums.babypips.com/show-me-money-swing-trading/66923-price-action-daily-4h-charts-no-more-indicators-news-smaller-time-frames.html for more examples.

Use the strategy on a Demo, see the results, and then use on a Live Account when you are convinced.

Duane aka DRFXTRADING

7

You could try the 3 ducks trading system, theres a thread on it here. Very simple

8

May you please elaborate more on this?

9

It is indeed a very difficult choice to make when you have countless strategies and trading method available online. But with your problem, you can set some kind of alerts if you have a solid system by which you are only missing your entry points.

10

Hey man, no problem

After entering a trade and being sure it complies with your rules, only check on it to make sure it is still open or when it is closed.

If for example, I expect a trade to reach its target in 4 days, I only check to make sure it is still open at the end of each day up until that 4th day. I configure my trade platform so that when I check it, I only see this…


This way I am not tempted to look at the graph and change my mind unnecessarily.

11

“Change your mind unnecessarily” ??

What if market conditions change? What if they change in your favor? What if they change against you? Essentially, you’re saying you spot a setup, enter the market, and do nothing to manage it other than avoid it at all costs? …?

12

I’d advocate trading off the higher timeframes, Daily or upwards, and just doing a market scan in the evening, then place trade orders then, which either trigger or you cancel them. You can do a broader scan at the weekend, set your opinions and watch list for the week, then use the nightly scan to update yourself and look for setups that fit your criteria. Simply S&R allied to PA gives higher TF setups. You won’t be taking too many setups, it’s a nice, low stress way of trading and fits around a full time job. I always think it is dangerous territory to get into a ‘I keep missing setups’ mindset. That always sounds to me as though two competing full time jobs are colliding. Trading successfully is a full time job in itself in terms of the stakes, the commitment required and how seriously one has to take it. For my money, it is imperative to pick a trading style that fits with a trader’s lifestyle and trading preferences. Anyone who does not will simply lose money over the long term, in my view.

And to take your final sentence: don’t take a trade when the conditions are not right, keep your powder dry and take a trade only when the conditions are right. Anything else will simply lose you money, imho.

ST

13

Trading is the world of ambiguities. It is even impossible to track your mistakes and learn from them, because strangely enough their falseness is relative and they are mistakes only under certain market conditions. There is no universal system for profitable trading, every time you need to conduct series of corrections to meet real market conditions. This uncertainty gives birth to all of our losses…

14

Well I know where you’re coming from, but I wouldn’t go so far as to say that it is impossible to learn from one’s mistakes! A decent trading log that records as much context as possible - including state of mind at the time - and a hyperlink to a screen capture of the chart on which basis the trade was taken can be a great help.

15

Cant say I agree with all of that.
The vast majority of msitakes/losses are our own doing - stop losses too tight, overtrading, insufficient funds, overleveraging, not having a trading plan, over emotional…I could go on, so it is far from impossible to track and learn from mistakes

16

You beat me to it - was going to ask the same, lol

17

If the market changes in my favour?..then I would be profitable…

Watching your trade alone is a big factor behind the emotions and indecision faced by traders…if something is going to work most times for you, why do you constantly need to be checking it?

If it moves against you…well then accept the loss and move on…assuming you have a good system, you will be profiable with winners that outnumber losses…isnt that what a good system is?

Micromanaging of trades is unnecessary once you are confident about your system. If not, then, in my opinion…it needs to be adjusted.

18

It is a normal situation and any person who enters forex market faces this problem. Another issue is selecting the right time frame, first you should decide about time frame that suits you best and then decide about any strategy on that time frame.

19

This is were demo accounts come in.
Practice different strategies, time frames, indicators, etc until you find a combination that suits you. Then you can consider going live

20

Trading strategy must determine:

  1. direction of trade
  2. position size
  3. when/where to get in
  4. when/where to get out with loss
  5. when/where to get out with profit

The strategy must also take into account changes in volatility. It must also take advantage of market biases that give the trader a statistical edge without which he cannot profit.