I’ve been trading FOREX for about three months now - seriously for only about two months. I’ve been trading in a Demo Account and a live account (very small positions only) and I’m reading books, watching YouTube Videos, following Twitter feeds, and reviewing analyst reports. I’m just trying to soak as much information up as possible. All along, I’ve figured that, eventually, it will “click” and I will figure out a system or approach that works for me. But, my win-loss ratio is atrocious and I’m starting to get discouraged. I could literally flip a coin to decide “up or down” and do better than I’m doing now.
Soooooo, I need help. What nuggets of wisdom can you share? How did you go from random win to consistently profitable? Would you be willing to share a simple system that works for you?
“I’m trying to become a professional race car driver. I’ve only been driving for two months and am becoming discouraged because I’m not yet able to qualify for the pro circuit.”
It’s a harsh reality, but, odds are stacked against you and this entire industry is built on people with your mindset that donate a portion of their paycheck for 1-3 months to some broker and then disappear for a year. Come back with a renewed sense of purpose, rinse repeat rinse repeat.
It takes years to become stable. Some never achieve it.
Your win loss ratio shouldn’t be a defining factor in your success. What is your average R:R?
Some of the most profitable traders may only win 30% of the time and some may be up in the 70-80%'s. Focus on designing a simple system then backtest and forward test to know whether it has a slight edge in the market and go from there. It will take time and patience.
I’m no pro, or even intermediate, but I’d ask you what your trading strategy is? Are you sticking to it, or making emotional decisions while you trade? What’s your risk management strategy? Are you trading somebody’s signals? Have you figured out what’s wrong? Why are you losing trades? Are they hitting your SL? Are you using a SL?
Maybe share some more details about what you’re doing right now.
Thanks for the questions. I’ve tried a lot of things. Maybe that’s part of my problem; I’m jumping around a bit. But, that’s because I haven’t really found anything that seems to work consistently. I’ve traded stocks quite a bit and I like to use Bollinger Bands and Stochastics. I’ve been looking at the 4H chart to find trends, then place the trades in the direction of the trend using the 30 min chart. I’ve been placing my SL at about 15 pips below my entry, but that may change based on levels of support/resistance I’ve identified. I usually try for a 2:1 RR, but that also may change based on support/resistance levels. Yes, I generally lose trades because the price hits my SL. Sometimes, I’ll close the trade manually if it moves significantly in the wrong direction and it looks like it would hit the SL anyway. I’m not sure why I’m losing trades but would welcome your insight. Again, thanks for your questions, B
Think like the big banks. They trade based on liquidity/volume. Do some research about how market makers trade. This is a big + in your trading. You can of course combine it with supports/resistances. elliot waves, etc.
If your platform is MT4/5 click the zoom out button two to three times to see the long term trend clearly. What could be happening now, is that the 4 hr chart just shows an interval wave retracement - not the trend. That’s why institutional traders use a 200MA on the daily/weekly chart.
Also, in today’s Covid 19 environment the FX markets are very difficult to trade owing to an overload of uncertainty. Aim to rely on price action and recent supply and demand zones, primarily, instead of S&R levels.
hope that helps.
You could also try trading indices, because they are less likely to violently react to media economic reports. For example, the DAX & DOW are in tandem and normally in line with each other - one shorts, so should the other.
It takes a long time to process all that needs to be processed.
While there is wisdom from some of the other posters, fact is after three months you are probably still trying to digest price patterns, highs lows, and basic technicals.
Adding all this money management stuff, and discipline stuff is probably asking a little bit much of you right now.
I advice is to just to get used to price patterns, place a few orders, move a few stops and enjoy the fact you have no money at risk.
You will never master emotions, or money management if you have not first learned to read charts, or more importantly have trust in those charts.
Stop asking for simple systems, or the keys to the kingdom, just familiarise yourself with what is in front of you.
Hey, thanks for the detailed advice. I’ll start using the 200MA. Question: How do I know where the supply and demand zones are? S&R is pretty easy to identify, but I’m not familiar with supply and demand zones. B
Okay, good. S&D revolves around price action highs and lows zones within the last couple of wave actions. For example if you look at the price highs and lows on a 1hr chart at beginning and end of Asian session, you’ll see eight candles - this is the complete zone which, for trading purposes, lines can be drawn at the last wave price high/low action within that short period.
It’s a London session breakout strategy that you’ll need to learn properly before attempting it. Because there are nuances that are not obvious. BTW a naked chart shows a clearer picture, albeit you could have a 6O EMA (or 72MA) and other trend indicators - I use MACD histogram for strength of trend and PSAR for possible trend change. Bear in mind these are lagging indicators that need more sensitive settings to the standard settings - which could lead to false signals. That’s why I need two for confirmation signals.
I’ve never seen a strategy that uses a 15 pip stop loss that is profitable. You will most likely get whipped around a bit (normal ebb n flow) and get knocked out before the trend even begins. My suggestion is you trade on a high time frame and use bigger stops on less lots.
This is one of the problems. I agree with @rolandlc33 that you need to look at the bigger picture, higher time-frames and give your trades more room to breath. It is a slower process, but as Warren Buffet once said:
“A short focus is not conductive to long profits”.