Hello everyone, my name is yose. Recently I quit from my job to pursue my dreams as a forex trader while I’m still young. Right now I’m confused with all the things that i have learnt.
I started forex journey a while ago in 2019, moving from stock to forex, only to stuck in a box, with larger loss. I lost quite a lot of money for myself after quitting my job. I do google some advice from Forex “gurus”, what to do, what not to do, blah blah blah. Only to lose even more.
I guess I’m on my breaking point between I will keep improving or I will keep losing. I learnt price action since 2016, applying it in the stock market (Daily timeframe), looking great, but when I do it in the forex market, I just can’t do it right. At some point I realized that daily timeframe in Forex is not for me, so I choose 1H timeframe. Going through some months with it, and realized it’s still not for me, I want a fast price movement, which is intraday trading. And when I apply price action in it, my analysis doesn’t make sense at some point, but we know that market is always right, so I came down to a new strategy which is moving averages strategy (not crossover).
I really need some opinion from the experienced trader here, whether that strategy is proven working or not. Thank you for the time!
Here’s a link to a pro trader, who trades live on Telegram for no cost. He explains the reasons for entering and exiting trades - mostly scalping DAX, DOW & FTSE Indices, with a few FX currency swing trades.
Moving average cross-overs work over a very long series of trades but not very well in terms of profit or win rate and the draw-downs can be extreme.
The only reason they have a positive outcome is because they get traders into trend-following positions. But because the point in time at which the crossover occurs has no strong correlation with recent price action, entries are inaccurate and failures are common.
Follow trends by all means but don’t bet your shirt on MA cross-overs as entry signals.
Apparently it’s not moving average crossovers method. So to put it, here’s the strategy,
Identify price position is it above or below EMA 200
If it’s above EMA 200, then look for a pullback between EMA 20 and EMA 50.
If the candle closed in your favor, you enter the trade with stop loss of 2 ATR of the entry timeframe
Exit when candle closed beyond EMA 50
So, what do you think about it? It’s using EMA 20 and EMA 50 for area of value, I’m still backtesting it, and I wonder if this strategy could be used with price action
You’re right, it seems like i micromanaged my trades a lot of time and doesn’t let it run, because I’m afraid of my winner turns to loser.
Thank you so much for your reply!
Sure. right now I am only using one forex trading strategy.
For going long -
price above 50 and 100EMAs on daily chart
20EMA above 50EMA
look for a day with a lower range
set a buy order just above the lower day’s high
set a trailing stop-loss just below the lower day’s low
adjust TSL to not less than 1 x ATR14 below the entry/order level
adjust order size so that capital risk is 1% of account capital
close the position after 3 consecutive higher closes and monitor for a re-entry on another lower range day
If another lower range day follows setting the buy order, the order will not be triggered, but can be adjusted downwards and based on the second day’s range.
In any case, keep checking the TA to ensure the trend criteria are still showing and also that price has not fallen to test or close below the prior swing low, or that some bearish candles have not printed (such as a shooting star etc.).
Is there a reason you quit your job before you were already making money from trading? Were you able to support yourself without any reliance on trading?
well, my previous job was 45 minutes away, and i have to commute using motorcycle, and i was able to make a good return on scalping, but i didn’t consider the present market situation which support my strategy back then, and when the market condition changes, everything i did was like a huge slap to my face.
i was able to support myself and my parents without any reliance on trading, so i thought “this is it”. anyway, everything went jumpy, and currently i’m looking for a new job.
Hi,
There is nothing wrong with the strategy you have decided to follow. But what I read in summary is that you have gone from D1 to H1 to scalping, and that is a psychological form of desperation that you need positive results and look for shorter and shorter timeframes in which to satisfy your needs as time moves on and capital becomes more scarce. The wolves are at the door.
So your change of strategy by looking for a new job is exactly the right approach. Wait until you have stabilized your basic income from a job, get back on track so that your income can cover all your expenses, and then get back to where you left off with your Forex plan. Since you are back testing the results, I am sure the back tests (at least on daily) will show a positive edge provided you have a distinct baseline for entry, an equation relating to ATR(x) to size the trade, and one or two indicators for confirmation of correct entry with respect to baseline. Adjusting indicator settings would almost guarantee you will get what you are looking for, but at the expense of over-fitting the settings to past results.
So I need to declare that I am not a continuously successful trader, in that I have no consistent positive edge that I can demonstrate by real historical data, but I do believe that if your plans are not realistic, they will be doomed to failure. What I mean by that is that anyone who thinks they can double or triple their money in a year is probably going to be disappointed.
One great piece of advice on this forum is “learn how NOT to lose money” @steve369 ?
If you concentrate on the PLAN and not the financial outcome of the plan, you will have a far greater chance of success than thinking that every trade has to be a winner.
Best of luck, I think you are well along the way to being a good trader.