I am a new trader and have learnt all of the basic etc and now looking at trades via a demo account.
I have tried a few strategies already etc and learnt quite a bit in a short time, mainly silly mistakes!
I’ve decided now to use main key areas and look at price action around them for my trades.
I think I’ll use the daily timeframe to start with as it gives me more time to think about my decisions and less movement or news that can effect my decisions
I will be looking at support/resistance/trendlines/ and moving averages 50/100/200 mainly if price approaches these areas to see how it reacts if it slows down etc and shows any signs of reversing.
I will mainly be following trends so will use the 200 EMA to decide this is below the 200ema I will only look for sells.
Once it’s approaching a key area I will look for candle patterns and I will also be using the stochastic oscillator and Bollinger bands just for extra confirmation.
For example if hitting a resistance area and then I see a bearish engulfing candle plus it’s overbought on a stochastic and near the top of a Bollinger band then it’s a good time to buy.
Does anyone do anything similar?? If so would love to talk about it? Or if so can speak and identify possible trades or patterns we have seen creating more eyes on this kind of strategy.
Hi Shaungliddon, that is a lot to take in for a beginner. I was mentored in 2011 by a young man who had an 80% trade success rate over one year. As we developed our two way mentoring (me to him for project management an he to me for Forex trading education) we agreed after analyzing his success that he had not taken his personal time into consideration. Though his 80% success rate was commendable, his average profit per trade was about £50 and each trade had taken between 10 to 20 hours of strategy, waiting for set up and entry decision. In short, about £2.50 per hour to £5.00 per hour. Meantime, I was paying him around £20 per hour to restructure our property portfolio which he did well. Shortly after our mutual mentoring sessions he got his first contract job and is now a Google executive. My second time around is a hobby, with a need to demonstrate a measurable edge before committing significant funds. Best of luck. And by the way the best way to learn is with a small amount of skin in the game (real money not demo account) Losing £10K in demo is no big deal, and it may make your real life real money experience suffer.
There is no overbought or oversold in my humble opinion in forex, Tho u could use the stochastics for divergence, convergence to get confirmation and also could keep u from selling at support or buying at tops.
Thanks for your message, I do agree with this as technically price can stay on overbought/sold for a very long time but I don’t purely just use this.
I look for key areas of support and resistance and if when it gets to these areas it also matches with overbought/sold it’s just another little helpful tool that it could change?
You not agree? I appreciate any thoughts and advice
It sounds like alot but that really doesn’t take me that long at all and most evenings is only maybe an hour plus max and will get even quicker the more experienced I get.
I completely get where people say to use real money as your mind will react different, but I still don’t think I am ready or experienced enough as I still make silly decisions now, I would just feel like I’m throwing it away.
The ideal would be to have a mentor but that’s pretty much impossible to find!
I agree oversold/overbought indicators are a waste of effort and instil false absolute confidence.
But one of my better profit-taking rules is to exit when prices have made 5 consecutive daily bars each with a higher daily high and higher daily low - “blue” bars. I have seen that most forex charts will not show a 6th consecutive blue daily bar and when the next day prints with a lower high, that’s a new buying opportunity for me. So I suppose that’s a kind of overbought measure wouldn’t you agree?
When you talk about strategies that work for a long time, all good strategies work forever. Its just that if the market has stopped behaving a certain way for a time, the strategy stops giving signals during that period. That doesn’t mean the strategy has failed, it is doing exactly what it should - keeping you out of the market when conditions are unfavourable.
I can’t think of a strategy that would work in 2019, but had never worked before and will never work again.
Yeah I completely understand why you say that but if I lose these alongside other things it’s just another tick for me to enter a trade.
I like your process and that’s a good way of doing it, unless ofcourse you’re waiting for a fifth but it changes before that and you was waiting thinking that 5th candle will come.
I wouldn’t say what I’m doing is a strategy as such it’s just watching price movement and then at key areas seeing how it reacts that’s it really.
stochasticks, rsi and the likes are all momentum indicators, (they could measure overbought or oversold but in stocks, comodities, not spot forex), as for ur rule that s more in the area of daily range and or exauhstion of price,it all depends on the bids and offers as price is always searching for liquidity(and by liquidity i don t mean retail stops cos we can t move the market with that). it s just my opinion on the matter on what i ve seen thro my own experience last 3 years, whilst trying to see what works and what doesn t.
learn to be able to make money in all market conditions( uptrend, downtrend, sideways) cos that all this market or an market for that matter can do. and no matter the mood of the market(1 of those stated above) u can make money. just as important, know what type of person u are, meaning are u a patient 1, u don t mind waiting days for a setup or u just like to have more action trading rather then just sit and wait, cos that was a major factor for me atleast as i started with swing trading but realised i can t just sit and watch for so long untill a setup occurs and i d often place trades just out of boredom.
p://prntscr.com/p93huq that s an example of what i m expecting gbpusd to do next week, it s a simple swing trading strategy using rsi to identify divergences. i haven t showed u that to give u a system cos i don t trade that, as it s not my style to wait that much for a setup, but because u are keen to use stochasticks which for me didn t worked in the way u want to apply it. another small thing but very important in my opinion is to learn to read price action, and when i say that i don t mean learn triangles and pennants and all that BS, try to figure out why is price moving and why is it behavin or how at major levels and after u understood that u can put as many indicators on ur charts as u want. again, this is just my opinion(doesn t mean i can t be wrong). cheers
Mentor. I thought about this too, second time around. Whilst I may ask my mentee of 7 years ago to return the favour by mentoring my son in project management, I had a senior moment on the weekend and decided to look up if there were any local Forex trader clubs. I found many within 20 miles and one with 960 members 12 miles away. So I invited my son and myself to their next meeting 16Oct19. So try looking for any local clubs with members who do Forex. You may be pleasantly surprised. Go to face to face meeting, ask for a mentor and say what you can offer in return (work, time, testing their strategies on dummy accounts…