Maddie is here :)

Hmmm, maybe not an answer in the form of an explanation as such, but maybe a suggestion why such a situation may happen…

I want to build a box and I gather the wood and nails and use my hammer to assemble it and the result is just fine! :smile:

I want to build a box and I gather the wood and screws and use my hammer to assemble it and the result is - well, a mess, to be honest! :thinking:

Methods are just the tools we use to trade. The question is are forex and commodities/indices like nails and screws such that they do not respond to the same toolset - like a hammer!

If so, then it is not that forex is impossible to profit from per se - it maybe just requires a different set of tools to work it?

Look at Dennis’ thread! It has been going using the same basic technique for, I think, close to 10 years now (on other threads/forums even before this one)? Would he still be posting on it daily if he was not profiting from it?

https://forums.babypips.com/t/trading-the-trend-with-strong-weak-analysis/77959

Admittedly, the SW method is not an actual trading system as such, it only highlights what pairs are trading best at any one time on a longer TF and which therefore offer the best probability of a positive result. It is still ultimately down to the trader’s actual personal method whether they gain or not - but clearly there is a positive expectancy from this approach, even if it is applied to forex! :slight_smile:

Personally, I had always traded mainly EU/GU for years and with no reason to have even thought of changing. It was only at the start of the Brexit process that I got bored and unsettled about how these currencies were going to perform and decide to shift to Crude Oil.

I do admit that it was a refreshing insight to see how this commodity traded with far greater “reliability” and respect of the more generally observed TA levels. But OIl has also drifted into a set of limitations for movements, but which are not relevant to the discussion here. Suffice to say, that was the point, as you know, where I switched to indices, and in particular the SP500 - and I do find that to be a great “commodity” to trade. But I still dip into currencies whenever it seems worthwhile and I have not got burned there yet - and, strangely, I am using the same set of tools for both forex and commmodities/indices.

Well that was just one answer for you,anyway! :smiley:

@Madalyn,
All I would add to Dale’s comments (apart from the above) is not to solely focus on how to identify entries. There are many, many ways of finding good entry points. But the real issue is what does the market do after you have entered. It may shoot off sharply in one direction or other, it may slowly grind its way ahead, it might range between wide or narrow levels, or it might just wiggle around going nowhere.

The point is no one knows how a new move is going to develop and because all mechanical methods are built around formulas they will obviously perform differently in different types of market price movements.

For this reason, your exit strategy is even more important than your entry criteria. And built into that exit strategy will be perhaps the most important parameters of your entire trading set up - your position sizing, risk analysis and equity management.

Trading is a probability business and it obviously has losses and gains - this is as normal a part of your business as overheads are in any other business. The issue is optimising the extent of your profits over the level of your overheads (losses). Your net profit will very strongly reflect how you manage your risk/reward analysis, your loss control and your profit-taking.

I.e. there is a total concept behind trading that is far more than just looking for good entries.

Just some thoughts from the side of the road…

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