hi, so I’ve been trading a real live account for about 2 months now. I have a strategy but I can’t seem to make it work. this is my strategy:
1.) don’t trade against trend
2.) only enter trades that are 2R or more
3.) only trade around support or resistance
4.) when price hits support/resistance wait for a buy/sell signal
The problem I have is that I can’t seem to spot good buy/sell signals. for example, let’s say the price is trending upwards and reaches a support level. How do I know whether to buy or not? if I see a bullish engulfing, inside bare or pin bar it’s relatively straightforward, but sometimes I see a dual candlestick pattern where it’s not a bullish engulfing but it’s not an inside bar either. for example it may have a normal bearish candlestick with an upper and lower wick which is then followed by a bullish candlestick which has a higher upper wick, smaller body and higher lower wick? do I place a trade?
also, currently I’m only trading technicals and am not even looking at fundamentals. should I be looking at fundamentals and is there an easy way to get into it?
finally, is there any advice for me if I want to start swing trading, or any useful information you think would be of benefit for a beginner like me.
Sounds like you’re relying on candlestick patterns as reversal signals. This is notoriously high skill and high risk.
Maybe you’re looking too closely. Trend is the simplest and most powerful pattern. Set you what you should see when you look at a chart with the absolute best possible trend of your trading strategy. List those features. Give each 1 point or give some more than 1pt. The look at your 6 real charts. Score them. Try to get in with the trend on the best, then the second best and then the third. Don’t go lower than this. Finding the right trend to get into will make your obsession with patterns evaporate.
Do you need confirmation to buy that thing you want at a 30% or 50% discount from the store?
You dont but the reason for that is because you know what that thing is worth or what it retails at and you have yet to determine with some level of accuracy what currency could be worth at any point in time.
Maybe, you need an additional confirmation for your strategy?
For example, you can look for support/resistance zones PLUS the reversal signal by one of the indicators like RSI. As for me, it is the best tool do define the possible reversal in connection with important levels mentioned above. You can read more on RSI. In the example they also use MAs. For instance, you can use a combination of candlestick reversal pattern occured near the important level + RSI extreme value (above 80 or below 20) + MA crossover.
I use daily to set my key support and resistance levels and then trade the daily and 4h chart. occasionally I’ll go to the hourly chart for better entries but not so much.
what about waiting for a buy/sell signal? do you just wait for price to hit the support or resistance and then place a buy or sell order regardless of what candlestick forms at that level?
seems to me like I’m relying to much on candlestick patterns based off what others are saying^^