My strategy, your opinion ? :)

Beginner Questions
1

Hello to you all Pips-gourous,
I’ve been studying the forex market for a bit more than a month now.
My 2 main sources are babypips and “currency trading for the dummies second edition”.

My strategy starts to shape up and I’d like your opinion please.

This is based on a fundamental analysis to help me feeling the market and engaging maximum 2 pairs, but only one by one. If one pair seems not to be interesting, I’ll switch to the other one to hunt another opportunity.

Basicaly, I’ll look to enter a confirmed bullish trend, based on a 4 hours chart analysis.
My entry point is when RSI is below 30.
If this never happens, then I’ll look at the RSI support level, and enter the trade when this level is reached.
However, I will not enter any trade with RSI > 55%.
If I enter a trade between RSI 30 and 55, it will have to be as well below or “near” the SMA which I’ve setup to 89 periods, regardless of the chart scale.

So:
Trend goes up on 4 hours chart, RSI < 30 on 1 min chart => I buy and sell when RSI >70
Trend goes up on 4 hours chart, 30<RSI<50 + pair value < SMA => I buy and sell when RSI >70

I will focus on EUR/USD and USD/JPY:
If Euro looks to strenghen: I focus on EUR/USD
If USD looks to strenghen: I focus on USD/JPY etc.

I will of course back test my strategy, I’ve done all the setup this week end, but I’d like to know your point of view please.

Also, it looks like I have more interest in short term trading (1 position being open and closed quickly, not more than a day, ideally 1 hour maxi).

I had lots of problems identifying the best broker for this strategy, as it looks like I need a reliable non dealing desk broker with tight spreads, which it looks to be rare… I’ve spent lot of time on the tool from babypips comparing brokers, but I found bad reviews for each one of those I’ve chosen…

Could you please help a newbi/rookie/beginner babytrader ?
Thanks a lot everyone, I’ve spent as well lot of time on the forums, but I couldn’t find an asnwer to all my questions… :slight_smile:

2

Looking good so far, be sure to track your results well and even use the thread to keep updated with the trades you see.

In regards to your system, what do you use to determine the bullish trend on the 4H chart? Are you looking for bullish news in correlation with price action moving in the same direction as you need? Keep in mind, news and the forex market is like a highway with no lanes. S*%t gets crazy :stuck_out_tongue:

About your broker; keep in mind one thing. Are you more likely to complain about a bad experience but feel equally compelled to say good things about a broker? Probably not, and that’s one of the problems I’ve found with online reviews of brokers. That being said, still ready them. If 10 people say they didn’t get their money, stay away. The best thing to do is open demos with the brokers you’re want to try and test your system. You’ll see exactly whether they work or not, whether their spreads are too high and all that.

And just a final thought and something to think about, when using fundamental analysis in your trading, it’ll be quite hard to identify sentiment based on news. Every day there’s about 80 things that could affect the psyche of trading. It can be extremely hard to keep up. I’d recommend someone new NOT base a system around fundamentals yet. It’s a lot to take in. I’ve been trading for 2 years now and have not fully understood fundamentals as well as I’d wish to ‘harness their power’ :stuck_out_tongue:

3

Thanks a lot for your feedback Soul786.

The fundamental analysis would be based on what the economic calendar says, usually, the importance is well indicated on various websites. I won’t base too much time on this anyway, as on a short term trading system, this may not be relevant that much. For me this is much more to have a general feeling rather than my main info to pull the trigger.

I have setup an excel file on which one I will record my results, on 100 trades. I will trade a pair regardless of fear, as soon as conditions are here, I buy or sell in a systematic way.

If like that I have a 70% ratio, then I have a good one, I will then have to work on the second part: stop loss.
i.e: I target to win 10, but I know 30% of the time I’ll loose 5 :slight_smile:
Well, if I can do that, works for me !

For the broker, I tried forex.com for over a month now, but whatever I do, I always start -50 or -60£… However, no requote whatsoever.

I tried alpari uk, but I’ve had some horrible re quotes :s
Saxo trader looks brilliant, but horribly complex !!! (I will probably give it another go).
-> I really like their education webinars, a dimension I didn’t see that well explained anywhere else: You and your brain !!! :slight_smile:

I tried Zulutrade and etoro, but I don’t know, web platforms, I have a problem with that :slight_smile:
I think I still have to try Oanda now…As they seem to be reliable (based on some comments and company size).

Thanks for the feedback again ! I’ll post my results and we’ll see.

4

Basicaly, I’ll look to enter a confirmed bullish trend, based on a 4 hours chart analysis.

This is a good start…

My entry point is when RSI is below 30.
If this never happens, then I’ll look at the RSI support level, and enter the trade when this level is reached.
However, I will not enter any trade with RSI > 55%.
If I enter a trade between RSI 30 and 55, it will have to be as well below or “near” the SMA which I’ve setup to 89 periods, regardless of the chart scale.

So:
Trend goes up on 4 hours chart, RSI < 30 on 1 min chart => I buy and sell when RSI >70
Trend goes up on 4 hours chart, 30<RSI<50 + pair value < SMA => I buy and sell when RSI >70

This is nonsense. Why are you mixing 4h chart with 1min chart??? If you want to trade lower charts, my advice is to look on the 4h chart to establish the trend, and then trade the 1h or 30min chart according to the 4h trend

I will focus on EUR/USD and USD/JPY:
If Euro looks to strenghen: I focus on EUR/USD
If USD looks to strenghen: I focus on USD/JPY etc.

Focus on all the pairs you can. For me the best pairs are: EURUSD, EJPYUSD, GBPUSD, GBPJPY, AUSUSD, EURAUS, USDCAD, NZDUSD, USDUJPY. Yen pairs like GBPJPY and EURJPY are more volatile.

I will of course back test my strategy, I’ve done all the setup this week end, but I’d like to know your point of view please.

Also, it looks like I have more interest in short term trading (1 position being open and closed quickly, not more than a day, ideally 1 hour maxi).

Personally I trade bigger timeframes, but If you want to trade the shorter timframes, the forget about the 4h chart. Seriously, 4h chart is not for quick trades. If you trade the 1h chart, based on the 4h trend, then your trades will last usually one day. If you want your trades to last 1 hour, then you need to go lower: your big chart should be the 1h chart wehere you establish the big trend, and then go down to 15m or 5 m chart to trade.

I had lots of problems identifying the best broker for this strategy, as it looks like I need a reliable non dealing desk broker with tight spreads, which it looks to be rare… I’ve spent lot of time on the tool from babypips comparing brokers, but I found bad reviews for each one of those I’ve chosen…

Could you please help a newbi/rookie/beginner babytrader ?
Thanks a lot everyone, I’ve spent as well lot of time on the forums, but I couldn’t find an asnwer to all my questions…

I hope I helped you, so dont forget

daily chart—> big trend
4h chart----> trade

4h chart—> big trend
1h or 30m chart: trade

1h chart —> big trend
15m or 5m —> trade

Dont mix 4h charts with 1m charts

5

Gasanvill, I only use the 4h chart to have an idea of the overall trend during the day, I don’t spend lot of time on this one.
My main indicator being the 1 hour chart as you’ve suggested.

I’m a bit unsure about trading on couple of different pairs, but I guess trying would answer my questions, so…I’ll try !

Thank you !

6

Yes, if you only stay woth 2 pairs, they dont give signals every time of the day, so eventually you will be tempted to enter bad tardes. With 8 or 9 pairs you can choose the best setup

7

Yes, that makes sense…

8

I’ve opened a position yesterday EUR/USD, and now earning roughly £500.
The question is what to do next. I have placed a stop loss a £300, so I’m cool with this trade, as RSI really low (around 30) So I think there is room for more profit on this trade.

I was thinking of 2 options:
Option 1: As EUR/USD looks to be cheap with RSI<30 I could buy another lot of EUR/USD
Option 2: GBP/USD has a RSI<30 as well, so same question, is it a good deal ?

I’ve been monitoring both EUR/USD and GBP/USD and the last 2 hours, they’ve been moving together.
I’ve decided to buy 1 lot of GBP/USD to just avoid the situation of a good trade (EUR/USD I bought yesterday), to eventually go bad.
I was thinking as I’m currently both of my trades against USD, and at the moment one is giving me +500£ and the other one just starting around 20£, that I could limit the risk to -100£ on the GBPUSD trade, but adding to my operations another potential good trade.

Makes sense? :slight_smile:
Basicaly, I have a good trade EURUSD with stop loss at £300 and I was thinking maybe I can risk to loose 100£ on another potential good trade, if I loose on both my trades I still earn 200£ but I just gave myself a good oppportunity for better profit.
Is this good risk management for you pipsgourous ?

Thanks

9

Hummm just bought usd/jpy (8:02 AM GMT) as the pair looked really weak.
The problem is that OandA took around 30 secondes to process the request, and when I clicked cancel, the order went through…

I think we should agree that at some point your broker will not perform well all the time, everyone needs to make money.

So I was wondering, do you guys see latency in processing orders around 8:00 AM GMT (so the opening of the London trading fiesta) ?

So far, OandA on the couple of trades I’ve done through the demo MT4 platform was reliable, and always gave me a better price than the one I’ve used with forex.com. But the advantage of forex.co is that I had no latency whatsoever after 1 month testing. But was more expensive…Ha well, I think you have to know what you want haven’t you? :slight_smile:

Any feedback on this latency on the MT4 platform with OandA welcomed !
Thank you all Pipsdudes !

10

So far, how did that strategy worked out for you? I tried this with a demo account, I got huge loss.

All things are difficult before they are easy.