Reflections, 5 years in the making

Trading Discussion
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I’m afraid I’ve come to the end of my rope regarding Fx trading. After 5 years I can confidently say that I have never made money and have spent thousands of $$$ trying different programs with no good outcomes.

I’m sure there are folks on here that do actually make money. I know its possible. But I fear that for me it may be impossible. In some ways it has been more of an addiction I think. But over time I’ve noticed that it makes no different what I do, the result is the same.

I feel that in order to be successful in Fx you need a few things. You need a good strategy, that is simple and profitable. You have to document your trades and remember that you will have losing trades and losing periods (aka law of large numbers). You have to understand the system but know how to deal with trading discretion. Discretion for me is impossible. I look at that chart most times and have no idea what to do. And most importantly you need a good mentor which is impossible to get.

What is really sad is how you jump over to YouTube and see 100’s of videos on how easy Fx is and how you can make tons of money. It kind of makes me sick. I wish it weren’t true but I think it is. Sorry for the tone but just being honest. For me personally, trading has been impossible.

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Yes, the realities of FX trading life. I’m with you in that it could be a never ending path to success, whatever which way you choose. It seems the more you learn the less you know, up to a point when you have no idea what to do, except to toss a coin. But there is a solution that took me ages to appreciate:-

-: while I get your YouTube critique, first take a look at Trader Nick live podcasts in which he shows you and explains his latest trades. He is the genuine article - and while he now runs a business, his approach is a great learning exercise - and all at no cost.

Just a couple of spoilers; he only trades trends using S&R - S&D price zones for entry/exit. Cuts losing positions early, lets winning trades run, using a trailing stop. Natural and simple to follow.

Persevere, I honestly consider you’re on the right track. Just let me know when you need a booster.

Cheers.

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I appreciate the kind words. Believe I had a membership with his site once. The majority of trading revolves around support and resistance. These concepts are subjective. Which requires discretion. Here we are talking about discretion again. I am in the dark in regards to most of the support and resistance Concepts. I find most trading instructors will not discuss these Concepts thoroughly enough. Especially for an idiot like me. I require a lot of hand-holding when it comes to Trading. This I will never find.

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Okay, let’s have a crack at surfing the waves. I put a PSAR 0.09 - 0.50 on my charts, which reduces the lagging. The balls are easy to see, and a change of direction signal is easy to follow.

So, starting from the day chart, I click on the MT4/5 Zoom Out button a few times. This reduces the chart to a clear cut evidence of long term price action trend. Keep that in mind. Zoom back in again to see if the current Daily chart is trending in the same direction as the long-term trend. If not, then the price action is in a retracement. It could be traded, but needs a close watch.

Just bear that in mind, because every chart will have waves, and it’s best to pick a same trend price action wave. So now on the Daily chart draw two horizontal lines at the top of the highest and bottom of the lowest candles within a few days or weeks, aiming to horizontally match the PSAR balls at the same price level across the dates. Then look at the current price, and expect that it would at some point reach either the high or low again.

Once you have those levels, which can be expanded a little into zones, when moving down to the 4 hr chart to see what’s happening there. The horizontal lines are still there, but the trend must be moving in line with the daily trend to consider a trade opportunity. Enter trade from this chart.
…
If you put on MACD 3-10-16, the histogram bars will generally correspond to the PSAR balls and at zero the trend is as weak as it gets. A RSI 10 period, at above or below 50 level confirms the strength of the trend direction.

Finally, put on EMA 8,22,44 which should all line up with the trend direction. The 8 above the 22 in a bullish trend below the candles, as is the 44. A 22 /44 crossover could also signal a directional change that must be confirmed by PSAR balls.

Read this carefully. I have honed these signals to have a favourable probability of identifying a winning trade. IMO, you’ll find one of the 28 FX pairs with this set up 2 to 3 times a week. Set a wide S/L at 20 PIPS which is plenty to cut early if the trade is a loser. Do NOT nurse it, until the market proves you’re wrong, there’s always another better trade waiting. follow a winning trade with a trailing stop into your new found price zones.

But, as you are aware, nothing is guaranteed, least of all divergance from the strategy.

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Not sure if this is the right way to do this but here is an example on AUDUSD this morning

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How do you know when to enter the trade?

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i totally agree with you, ending should be a good choice to cut losses and think about different activities. Brokers and course teachers definitely make good money from any winning or loosing traders. It is like chess game, where two opponents meet with own strategies. Wins the one, who reacts to opponents moves applying better strategy or finding opponents mistakes. In my experience best teacher is testing new ideas or strategies going to long term trading, better with amount of money not pity to loose.

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Don’t quit. Seriously.

I don’t mean to be rude, but I’m gonna be direct.

Do you want this or not? If the answer is yes, then don’t quit.

Take a step back, do whatever you gotta do, and come back stronger.

You’ve been losing for 5 years? That sucks, and I’m sorry to hear you haf a hard time. But you wanna know what’s great about that?

You kept going for 5 years! You had no consistent profits, but you still kept going. To me, that’s amazing!

That means you have staying power.

If you endured all that suffering, you may as well get a reward for your pain.

What story would you rather tell? The one where you were losing for five years and eventually became profitable? Or the one where you gave up and moved on to something else?

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Have you been journaling?

It’s incredibly helpful.

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Truth be told I never settled on one strategy this whole time. I made too many rookie mistakes and kept jumping from strategy to strategy. I needed to find just 1 strategy that was simple and profitable with little to know discretion. Would be nice to have a mentor, but generally that has gone poorly for me in the past.

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Well done. The AUD/USD is a consistent trend following pair which is profitable. As you can see at a glance, it’s in a downward trend, every indicator is confirming this.

I also decided to take a trade from the 4hr chart, but it was suffering a wave retracement of green bullish candles as you can see. How I managed that was to set a SELL STOP pending trade around the lower red candles with a S/L wide enough to accommodate a second unlikely bullish retracement.

The rationale worked perfectly because the bullish trend fizzled out and the bears took control to continue the downward trend, which triggered my SELL STOP and brought in a small profit this morning when I closed it, as the trend was being attacked at the opening of the Asian markets.

As an aside, once you’re used to horizontal lines and zones depicting the same prices at different wave times, it’s fairly simple to see where an entry could take place - and thus use a pending order geared to where you want it to happen.

The benefit is you’re in control and won’t lose money while you’re waiting for the Pending order to trigger. And if it doesn’t trigger in your time zone, close it out. There’s always another trade.

Discipline and patience will get you there.

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Still not very firm on the entry criteria. You’re saying I should only buy or sell near support resistance areas? Or perhaps look for specific candle formations?

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When I look at the Daily chart, it’s either trending, consolidating or ranging. Ideally, I would only trade a trend, as it has the most potential to make large profits, and small losses.

Let’s focus on that first of all. I move down to the 4hr, and if necessary the 1hr chart to see if there is a consensus or not. If all three ducks line up - including the indicators, I’ll have my 4hr entry right away. No faffing about. Low risk, high returns.

That’s the ideal, however real life is not so amenable,. There will be many times when the 4hr & 1hr time frames don’t play ball. I would reject any thought of entering a trade if the EMA indicators are not following the trend.

There are exceptions when a line up is trending in the same direction, but the last two or more candles are out of synch. In which case it could be reaching a support/resistance and or supply/demand level, or even a minor retracement caused by e.g. a media flash.

These exceptions are easy to trade. Just enter a pending order at the trend continuation point you would want it to be triggered to give yourself a high probability the price action would again follow the trend.

You could also enter an opposite pending order trading the retracement movement, which would be a scalping trade that needs close watch.

Now for the ranging and consolidation charts. Forget consolidation as a ‘right now’ trade, but put a follow-up each day to see if a breakout is happening. If it follows the long-term trend that’s your entry signal. If it doesn’t, don’t bother.

Ranging markets are for experienced scalpers only, who would mostly trade the 5m charts. You’ll be at the mercy of the market, so don’t bother. There are always better trades awaiting.

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The thing with Youtube…there are many scammers, so be careful. However the truth remains that it is close to impossible for retailers to make money, unless you know how to follow the foot steps of the central banks ( market makers ).

We, small retailers, are not their target. However you do get taken out in the middle of their process. If a simple support/resistance, gartley pattern, trendline, etc. would do the job, then babypips would have been full with multimillionaires.

My advice is to dive into market maker trading. This is what made me profitable and will make you profitable as well.

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Was that because you thought the mentor was not worthy of mentoring or because you didn’t follow what the mentor was advising to do to become a successful Forex trader?

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There are number of answers to that question. I would group them into categories. I had mentors that knew exactly what they were doing, but had no clue how to communicate to newbies. Some mentors had no idea what they were doing, or some would give vague answers. Some mentors would regurgitate text book trading knowledge and nothing else. In general, I just found them to be poor in most cases. But to be really honest, some I just did not give them a chance because I was so frustrated with my progress.

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Oh yeah, and 1 mentor told me to not even trade Fx and trade the stock market instead. Nevermind how I did’nt have the money to overcome the PTD rule.

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Make sense, thank you so much.

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Don’t give up! When it gets too hard to learn this is when you have to push more, and things will start making more and more sense.

Besides Trader Nick, I recommend you to check Matt to Million Youtube channel. Very genuine guy. I’ve learned a lot about trading US30 just by watching his break-down videos.

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That is your problem. You never ever practiced the different components necessary to analyze a trade. Contrary to what you said, support and resistance are not subjective. They have objective criteria to spot them. Go back to the school of Pipsology and look at their definition of support and resistance and practice it on different charts. You said that you spend thousands of dollars on learning forex, you should’ve spend thousands of hours on the different components needed to analyze a chart. That would’ve made you profitable.

Just give it another shot. No money involved. Start with support and resistance only; they are the fundamentals of technical analysis. First on one chart, then on multiple time frames.

For example, take the Eur/Usd Chart.

  • Find support and resistance on it. Leave the lines on the chart.

Give the lines of every timeframe a different color. I use red for the daily, Pink for the 4h, Green for the 1h, yellow for the 5 minute, and aqua for the 1 minute. You can choose your own colors, but make sure that the lines of every timeframe have distinct colors.

  • When you’re done with drawing the lines, look at the chart and pay attention to how price moved when it reached a particular support or resistance line.
    Write down how much further than the line price spiked, and what the ATR was one or two bars before structure was reached. You need that for stop/ loss placement.
  • And then look at what happens when multiple lines are reached.
  • Look at which scenario you like best, and decide how you would trade it.
  • Now try demo trading it with just one lot.
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