So I could for example use that moving average crossover with RSI and Stochastic indicators to see if the market is trending on say the 1 hour or 4 hour chart, then drop into the 5 minute chart to enter/exit trades based on price action? Right now I am reading harmonic patterns in the Education section, specifically the ABCD pattern. Would looking for the ABCD pattern to complete at previous resistance be an example of using price action like you mention?
To me, when I hear price action, I think support and resistance levels combined with market trend or channel. Am I thinking the right thing, at least at an elementary level? Or do you mean something different when you say price action?
How do I progress from here to that understanding? Is it solely time and experience demo trading, with trial and error on what trade setups to use, or are there any good books / YouTube channels / etcā¦ that can reduce the learning curve?
I drew lines at support and resistance. Right now, I am thinking shorting (not with real money!) at around 1.14600 if the pattern completes, with target at 1.14314 and stop at around 1.14685. That would give me a good risk:reward ratio, and be assuming that previous support will be retested after pattern completion.
Perfect, thank you! I will look through the books in that list and probably order one this weekend. In the meantime, I am going to review the price action related section of the school and see if I can piece together a strategy based on price action with an indicator to help indicate the trend. I am thinking RSI most likely for that one.
This way I have something that I can start back testing with and at least get some more practice on the charts and using the various drawing tools while I refine my system.
@jseymour84, it sounds like your strategy is purely technical. Have you tried testing it on a shorter time frame to see if the results are of similar quality with a higher trade frequency? You mentioned you were trying to get free data on your NinjaTrader demo with us, and the shortest time frame you could get from NT was daily.
Do you actually use their platform to automate your strategy? If not, you could retrieve more historical data with shorter time frames using an MT4 demo.
@FOREX.com : Yes, the strategy is purely technical. I donāt really know enough about fundamentals to really trade on them, and I am currently studying up on Gartley patterns and price action strategies. I donāt do any automating. The only reason I started with NinjaTrader is that I saw a trader that does trading blogs on YouTube use it so I figured that was as good a place as any to start.
For a platform, the only things I am looking for is easy to use charting and the ability to place orders directly from charts, along with the ability to adjust stops by dragging them up and down - sort of like how TradingView does their simulated trading. Iāll try out the MT4 demo to see how I like that.
If you couldnāt tell by now, what I donāt know about trading could fill the Library of Congress 3 times over
Good question, there. Sometimes lower win rates are actually more profitable overall because of the increased numbers of trades that accompany them on a shorter TF.
The reason we asked if your strategy is purely technical is because then there should be no reason you canāt test it on shorter time frames provided you have the appropriate historical data. Shorter time frames should give you more trading signals, and since this is a demo account, thereās no harm in seeing if the strategy yields positive results with a higher frequency of trades.
Since you donāt automate your trades, youāre not married to a specific platform. And as it happens, FOREX.com offers all three platforms you mentioned (NinjaTrader, TradingView and MT4), and we offer free demo accounts for all three as well.
The reason you might want to consider MT4 specifically at least for you demo testing is because you said you wanted more free historical data. With MT4, you can download data for shorter time frames from the MetaQuotes history center as shown in the following video.
Best conversation I have read in a long time, thanks @jseymour84 for asking on the questions that r in the back of most beginner traders (or I should speak only for myself). @LaughingCharlie, ātelling it as it isā is very refreshing. We might be beginners but we not dumb, the ppl promising āfrom $2k to $75k in 2 monthsā actually drain my energy levels (I know BS when I see/smell it).
I feel rejuvenated & I admire how methodological @jseymour84 is approaching this, I am inspired to do the same.
Is 3% realistic, Yes, is it realistic for you and your system, that can only be answered through months of real life trading, and even if you do make 3% or more per month over the 12 months, that does not mean you will make same over the next 12 months. On my own thread I am on a 10 of 11 trade win streak but I know this is not a sustainable and I am not going to make financial plans based on a 90% trade win rate. Bottom line, you can not work from a fixed profit % or win%, and markets change, so what worked really well this month might lose money the next two months
Thanks for sharing. I understand that history doesnāt indicate future performance and that it will take me months to develop my own system for earning 3% per month average, and that some months can swing really, really low and some can swing really, really high. I just wanted to make sure that 3% was a realistic target to aim for in the long run.
My dream is to someday reach the point where I have generated enough profits to build a diverse investment portfolio (including stocks and bonds) that generates $60,000 a year passively through dividends, and make the other $40,000 - $60,000 from actively trading forex and possibly options.
If I can average a 3% return per month after ten years of active trading, then I have a good chance at making that dream a reality before I hit retirement age. Once I get that passive income rolling, then I can quit my job and live full time as a trader and enjoying the ability to travel and take control of my own time.
Also, is there a place on the forums where I can have sort of a running diary of my travel down this path, or would I be better suited setting up a free blogspot or wordpress.com blog?
EDIT: I went ahead and setup my own blog on wordpress.com. Doing so gives me somewhat more control over the platform, and I think it provides a better reading experience. If anyone wants the address, just let me know.
It depends on your trading system, even you can make more money if your trading strategy is well enough! By the way, may I know your experience? How many months you used your system on demo?
I am still working out my trading plan and system. I have 5 years of data downloaded for 5-6 different currency pairs and am working out a trend continuation trading system. Once I have that done and backtested, I plan to spend 3-6 months trading it on a demo account.
So youāre looking for a realistic answer - Iāll give you one.
Trading moving averages will only lead you to a lost account in the long term, lagging indicators arenāt made for you to make profits with, theyāre only a confluence to add onto other confluences, you should look at trading as a business of probabilities where thereās no 100%'s - you havenāt mentioned any loss in your question which gives me an understanding that you think this is a guarantee, unfortunately, it is not because moving averages donāt work like that.
In my opinion youāre better off finding an investor and investing your money on them with a good annual ROI, or giving in 2 months of dedicated learning and learn how to properly trade the Forex market using price, and economic indicators.
Well, luckily we are playing two diffrend games here. It certainly would be hard to beat those guys in their own game, but small time retail trader with few thousand dollars on his account and institutional trader, trading with hundreds of millions are two diffrend kinds of animals with diffrent strenghts and weaknesses. And no, not saying it is easy, but certainly possible for the best retail traders.
I have personally made it better, and noā¦ donāt have any proof of that, but think it this way, if 26% per year was the best you could ever hope for, why would there be any retail traders? One would need huge account to make living out of trading and if you had that big of on account, why not just let one of these hedge funds take care of it and spend your time doing something more productive? But this is an age old debate, some people wanting to become millionairs in a few months and others thinking no one ever gets rich by tradingā¦
