Hey guys, I am pretty new to trading forex and technical analysis in general. I went to college, for finance and accounting, so I am a bit familiar with stocks and fundamental analysis, but that is the extent of my background in trading. I have read a few book on technical analysis and just completed the pip school tutorial. My quizzes seem to reveal that I have a daytrader personality type. My problem is that I don’t know how to get signals. I have no ideas how to write or use EAs, so I can’t automatically backtest. Also I when I try to manual backtest by looking at candles, almost no good strategy I’ve come across gives me daily trade signals. I mainly have been looking at m30 charts, and they just don’t produce any entry signals. I tend trade only when the candle closes and then enter on the open of the next candle. Is this the best way to trade? Do any of you trade on an incomplete candle? I am just confused as to how daytraders find entry signals daily and how many hours they monitor the market and what are the best times. I usually would sit at my computer from 8a-5p est. Please help!
Greetings Speculator! Probably the first thing to do for the community to help is, what is your strategy? Entry rules, exit rules, chart tools used, trade management rules, etc. Do you keep a trading journal?
Thanks for the response Pipcrawler! I am so confused. Yes I just started to keep a trade journal. I don’t have a specific strategy yet because of this problem. As a result I have tried so many different strategies and time frames. Still can’t find a suitable one. The most recent strategy I am trying to use is the ichimoku kinkyo hyo kijun-sen crossover strategy. Again this is on m30. The strategy is basically enter long when price close crosses over kijun-sen from underneath and the reverse for sell. I normally only execute if it is also trading above the cloud on long enteries or below for short ones. I am demo trading $5000 and risk 2% of capital. Stop loss is placed right underneath both kumo lines (cloud). Risk is taken based on the amount of pips. Example, if the stop loss placement happens to be 30 pips from entry to under cloud, then $100/30 pips = $3.33 per pip which translates to 3.33*(10k/1) or lot of 33,333. No other chart tools are used. The problem is I don’t get enough entry signals. I would sit at the computer from 8a-5pm est sometimes with no entry at all. Do you know what I am doing wrong? I do I have the wrong approach?
I’m not a mechanical system trader, so I’m definitely not the best one to answer this question. I’m sure there are a other traders on this forum who are mech system traders that can help ya out, but you’ll have to search for’em.
But from my limited experience with mech systems, I know that the rules are in place to filter out a lot of the market noise, and given how market volatility is decreasing, it’s no surprise you may be getting less signals or none at all, especially as we approach the holidays. My best suggestion would be to reach out to the creator of the ichimoku kinkyo hyo kijun-sen crossover strategy to get his/her take on the philosophy behind the system and its effectiveness in the current environment. Remember that systems are a trading tool, and you have to use the right tool for the right environment. You wouldn’t use a hammer on a screw, right? I hope this helps…Good luck!
I see. I don’t think anyone in this forum actually created that strategy. I found it in a wiki, so I don’t know who to reach out to. So what type of trader are you? What is your approach to the market? I am still looking for a system, but not sure exactly which type is right for me. Any suggestions? I am open to other strategies, in fact i would prefer a non mechanical system approach, but that is all I usually find.
Hi speculator
Finding a suitable entry is the key I do believe. Well, have you tried price action? Candles…PIN bars…etc?
Thanks for the reply dollareuro. No I haven’t tried these approaches, well expect candles. I am familiar with candles from pip school. I am not familiar with pin bars or price action though. Could you help point me in the right direction with those approaches?
Hi Speculator,
PA (Price Action) trading is solely based on reading the charts like a story, sounds bizzare but it goes a long way.
PA traders look at the candlestick charts to see where price moved,how it moved and look for signals like a pinbar
or engulfing bar(you find tons of info about them here on bp or the net).
It’s a raw way to trade some also refer to it as naked trading since you don’t use any indicator,oscillator or alike.
Hope it helps.
http://forums.babypips.com/free-forex-trading-systems/57863-z-pattern.html
Cheers
Thanks Kasravi! Thanks a lot. That definitely helps! I am currently taking a look at your thread. Quick newb question. Sorry if it sounds stupid, but when trading patterns based off of H4 for example, do you literally need to check the chart every 4 hours (even when sleeping) to determine what change a new chart pattern brings and whether to trade on it?
Hey Speculator, I consider myself a student of discretionary trading. I like to combine fundamental, sentiment, and technical analysis into my trading framework. It probably takes a longer time to gain competency with this type of trading, especially for me, but I feel it’s the most adaptable to the changing markets if used with discipline.
My suggestion to you is to stick to a system that makes sense to you and make it your own. Also, remember that trading isn’t just about entries and exits, but also about trade management. Or simply, how you keep losses small and maximize your profits. So, when you find something that works for you, don’t only tweak the entries and exits, but also the rules for getting bigger and smaller as the trade goes your way or against you. Oh, and keep a journal religiously. It’s the one thing every new trader should do, but most won’t…that’ll be the biggest difference between whether you make progress or don’t. Good luck bud!
I see! Thanks a bunch Pipcrawler! I am experimenting with a very simple strategy now that’s starting to make sense. It is part mechanical, part discretionary. I am working on incorporating sentiment analysis and price action into it. 15 min charts between the hours 8-5p est. I will definitely keep you updated and let you know how it is coming! Thanks!
You’re welcome! This is just the first step in a long, long journey my friend…good luck and stay motivated! Looking forward to what you’ve got going on down the road
I follow Chris in this regard.He has a unique PA approach with some great articles. Here is the thread link Speculator:
http://forums.babypips.com/newbie-island/45414-understanding-price-action-chris-capre-263.html#post573367
Hope you will like the way we go there.
Cheers
Thanks Dollareuro! I have been hearing a lot about price action in threads. I’ll take a look at that and see if I can incorporate it into my training methods.
Definitely will! Thanks for the well wishes! Quick question for you by the way. With your discretionary trading style, when you decide to enter a trade, is it based on an indicator being positive alone and you decide to trade or not or must the indicator signal you permission to enter. And if so, would trade a signal late or pass it up entirely?
Hello Speculator welcome to the school of pipsology.I hope you can gather ideas from this forum.
Goodluck on your journey of earning knowledge,anyway the room is full of resources.