I am a newbie please read the whole entry below and provide me some feedback
I have been studying the forex markets from some time now. (about 4 months to be precise).
I have followed this valuable website and learned many things.
I am tending to believe that with a proper technical and fundamental system in place forex can be profitable.
I have done some testing on the demo and I find that it is possible to make 20-30 pips a day on an average. However, a serious doubt has emerged.
As I tested I went back and back in the charts. I used the 1 Hour time frames and trends. I noticed that the current conditions (prevalent from last 5-8 months) are great for a forex trader. There is a lots of trends and it can be tapped for profits. But I was disappointed when I looked at the charts of the period June-July 2007 for a pair like EUR/USD. There was hardly any volatility or trends–My honest questions here is that those of you who make profit trading forex, do you feel the same. Were you able to make the same results a year ago, or two years ago? Do not you feel the current economic times are the best to trade.
I will highly appreciate your inputs and opinion–may be that will be a deciding factor in my going live with trading sooner that later or vice versa.
I’ve also wondered this.
Wondered, does this volatility make it harder to be profitable or easier?
Seems easier because of the volatility, but at the same time, harder because it’s not really predictable.
predictable or not, volatility is chartable. There are indicators available that show a zero line and a histogram defining the weight of volatility and volume and the direction, (either long or short according to being above or below a zero line). I might, if I were you, consider doing some research on your demo account charting tools and seeing what else is available other than what your are using current as possible add ons to your information.
Any tool is only a tool when it is being used and being used properly.
After that… go to demo and watch how other tools work. Learn what to look for and use that information to determine if that tool tells you something you didn’t know before you started using it. i.e. does this tool work for you. If so, great! If not, try another tool.
Good hunting, good learning, and, for future reference, good luck and good pippin.
I would recommend watching the 7 a.m EST u.s. session on open of market this coming week. There may be something worth watching all of the day on monday, from market open this week, to see what the rest of the world seems to think is going on in finance. Could be interesting as news reports locally say that a foreign country drew its line in the sand and sided with a major currency market this Friday local. Could this affect the e/u??? I think this is a very interesting time to be charting the market.
VOLITILITY makes fast money for fast traders who KNOW how to trade, but a RANGING market can also be easily played for profit once you have some “stick time” behind you !
during a time of “ranging”, one simply plays the support and resistance points of the “range” or goes looking for another currency that ISNT ranging — not much to discuss there !
but now getting BACK to the VOLITILITY issue — where it appears you might make MORE, you must understand, as newbs, that you will probably get STOPPED OUT because of that self same volitility and its wide range candles, so THAT conversation becomes pretty much useless also !
a nice simple trending market is what we all want ---- its like sitting on a rocking horse or being in the middle of a CB truck convoy — You wish for an auto pilot so you can put your feet up, read your selected magazine or book and collect money each time you pass a toll booth !
thats why you LEARN to trade — so you can profit from ANY market because ANY market is what youre gonna see when you trade !
But, from a turtle of a trader, allow that if i cant find what i want one place, i hope into the Duesenberg and look somewhere else for that smooth, sleek blonde (brunette, redhead ??) that i want to play with at the moment !
MP thanks a lot. I read and like your posts very much! You are a good man!
One reason I had my doubts was that all I have practiced has been within last few months, which has seen the volatile markets. I do place wide stops (Sometimes I place stops as wide as 100-120) and occasionally they do get hit. I trade on the hourly and daily charts (15 mins, 5 mins are too finicky). I also get a 1:1 risk-reward ratio. My profitable trade/losing ones is > 1. So I do make some money. The account size is mini, that means 1 pip = $1 BUt that is not a concern right now–
I have a dream to be my own boss, and be a good trader–I have given myself a time of about two years. When I started trading, I was a total novice-this website and a few others have helped a lot.
Thanks again and to all members who take time to answers basic questions like this.
while in NO WAY offering this up as a “system” of trading and fully aware of how rudimentary it is, if you had simply followed the moving average crosses on this chart, you would be in very decent profit as long as you used proper money management and i would venture the idea (and i am NOT suggesting this !), that you would have made that profit WITHOUT any sl’s that would kick you out of the market.
Its a simple trend system, and combined with support and resistance and the LRC’s, is almost fool proof as long as you stick with whats happening.
once again, its nothing but a baby system, as you enter late and exit late, but you DO make money in the middle, and making money is the name of the game in this town pahdna !
the white lines are the MAJOR trend, which we can see is UP while the yellow channels are the minor trends that take place within the major trend — you can play the downside moves while HOLDING your upside move (which will then go thru drawdowns) or you can exit and replay the downside moves as seperate moves, always keeping in mind your MAJOR UPSIDE TREND !
there are far better methods, and MOST methods using PROPER money management to handle drawdowns DO WORK and some better than others, but this is for you to SEE how the market moves and how relatively speaking, simple it really is !
If the channel lines you are using are not available to the software I am using, how do I go about identifying them on my own? I have been wanting to ask you this question for a couple of weeks now and…
IF youre using MT4, there is a downloadable custom indicator called “SHI_Channel_True” which is excellent for setting major trends, and then there is an LRC tool in that is contained within the MT4 toolbar but not visible unless you choose it.
u get it by RIGHT clicking on the toolbar that shows “trendline” and then selecting it for use — once thats done, the LRC tool will ALWAYS be on the toolbar !
proper money management + a simple system = Some decent $$$
Well I cant comment on what a simple and complex system is, but with the screen shot you provided, it is common sense that the market is trending up on the long term. If the short term trend can confirm that too, I will go long on it.
However yeah that is my question too, how do I draw those channel lines? Do I do it manually, because my provider does not have that line thing built in!!
I am using fxcmmicro for a charting package… I am not advertising for them, but they were kind to me on a complaint I had, and they said it would be taken care of in a timely fashion, though I haven’t checked to see if the account adjustment has been made… wait for tomorrow 9.am ish. Is the charting software they offer MT4?
As I am sipping my coffee and assimilating your last post, I come up with a small strategy. Nothing spectacular, nothing that gets me 200 pips a day, but something that fulfills my goal of an average 20-30 pips a day.
I am think why will not my gig not work if I go in the direction of the trend on the daily charts, I place my stop loss at 120, I just take my profit at 15-20 pips.
I guess the probably of hitting the tp is much higher than hitting the sl. What do you think about my newbie system, late in the trade, early in exit, but get my 20 pips a day system???
I have started a demo account with a broker new to me and have some work to do setting up… but I do see an EMA with a 14, so great Yoda, I should be seeking more info soon…
"you load 16 tons of #9 coal and the straw boss says now ““well bless ma soul””
it should work,but it will depend on WHAT TIME OF DAY you open your LONG trade — if you open it during the time the price is trending DOWN, you will suffer huge drawdowns and a strong possibility of being stopped out.
the market moves UP one part of the day and DOWN the other, giving traders a chance to exercise both the BUY and SELL buttons on their panels, obviously to avoid rust and calcification forming !
TRADE UP in an up trend and you will be fine, but first check how many pips normal retraces on that currency have !
one little additional trick, and make out the $1000 check to me please, is to take an H1 trade AFTER MIDNITE, EST — once you determine trend, you can rest assured that it WILL make the trip and leave you proud in the morning !
i believe the charting software for the micro accounts is MT4, while you can get either theirs or MT4 for the deeper pockets version.
btw, the moving average indicator in MT4 allows you to set any numerical or base for the EMA — it also allows you to set the EMA to a SMA or a number of other MA’s ---- dont bother me no more punk !
I do trade midnight setup. As a matter of fact I only trade at 3 time, 11 PM CST, 6 AM CTS, and 5 PM CST. Dont ask why I chose these, but work for me
Ahh I am so badly in need of being good- so many of the issues I face are resolved. Anyways, are there any good books, websites (addition to this one) that offer valuable strategies into forex. Btw, if my money management is good, do I need to have a good technical side too? I like using only the EMA,SMA. Is it because my knowledge is so limited, or can I succeed using the just the minimum of technical systems?
these are my personal feelings and im sure there are many others also.
as you are learning, AVOID the other websites — while many are excellent for those with decent experience, the sheer AMOUNT of “systems” put forth will take your mind and turn it every which way but loose ! I would suggest that for most of the “method trading” books out there but think anything that teaches you the “psychology” of trading to be interesting !
if you are going to be a decent trader, what OTHERS do is of no interest, although there are always “parts” of any good system that one can adopt to their own uses !
do what you do now — allow for the account to increase — as you trade more and more the patterns will start showing themselves and you will start to use your OWN methods !
try using the LRC to gain graphic insight into currency direction, so that “guesses” become “educated decisions” and you become “braver” as time proves you correct !
Im a turtle — “slow and steady wins the race !”, so you have no “bad” need of being “good” — it all comes with time, and very soon you will be amazed at the things you didnt know as the future unfolds @
MAKE YOUR HASTE SLOWLY, and it becomes a wonderful journey — make haste hastefully, and you could easily lie in the gutter, broken and bleeding and with no wallet !
it is only because youre starting, and its the same for every NEW endevour one undertakes in life — to some it comes faster, but it usually comes to all who look for it !
RELAX, breathe deeply and keep doing what youre doing till its SO boring you can hardly take it — then look for step 2 !
There is a lot to read between lines in your posts-- Posted below one I found at another thread, did not find the regression channel on my broker platform (fxcm demo) but did find an indicator called “Regression”. Looks promising, I am dissecting it currently
Thanks a lot, your inputs are well appreciated!!
ITS BLOODY WELL DIFICULT !
absorbing and learning and speaking a foreign language and watching the danged price move up and down and sideways and all over the place and you dont got no idea of what the blue hades is going on and no one will tell you and you just want to make some money and have a pizza and a sam adams and the world wont let you do it and sooner or later you swear youre gonna learn what this dumb forex is all about before it takes every cent youve got !
HAVE I GOT A DEAL FOR YOU !
although trading for a decent amount of time (that translates into “I dont lose nearly as much as i used to !”) I get confused as to where in the blue hell everything is heading at times, especially recently, and often the old trick of watching the trend on the H1 doesnt always work as THATS getting whipped around also.
SO I ALWAYS FALL BACK TO A COUPLE OF LINES I MADE MORE KNOWN TO THE WORLD A FEW YEARS BACK !
THE LINEAR REGRESSION CHANNEL !
fancy name but really simply means a couple of trend lines that the computer magically draws for you and that will show you the trend and direction your prices are presently (and in the future) taking !
now in this pix, Ive used the LRC tool available in MT4 and drawn the upchannel (yellow) from where the lower left hand side 3 white arrows live (from the LOWEST and FURTHEST AWAY point on the chart)
The second channel is drawn from the top three white arrows and is the NEAREST and HIGHEST point near your price candle.
now this sets up the main trend (the long yellow channel) and the PRESENT DIRECTION of the minor trend which is the small yellow channel.
what this shows is the major trend is UP and your price is moving to the bottom of the channel, or what some would call SUPPORT — notice where the two channels are meeting ? NOTICE that the GREEN channel meets there also ! Wanna bet thats where the price reverses (OR breaks down, which we need indicators to tell us more about, but this is an LRC lesson and not an indicator lesson)
oh yeah, the GREEN channel is from a custom indicator called “SHI_channel_real” and can be easily googled for — put it on your charts and youll IMMEDIATELY be able to tell where your price IS and where its HEADING !
now this doesnt replace LEARNING about forex from this site, but should make it SIMPLER to see where things are heading !
after a while of doing nothing but watching the LRC channels, youll start getting the idea of how the price moves from one line to another, or from support to resistance and then back again, which is a DIRTY LITTLE SECRET OF FOREX, and one the banks NEVER wanted you to know about.
so now that Ive got my security forces in place, I have freely given you what should never have been revealed and youre now one up on the banks.
