Right! - Now I'm ready to trade for Real

[meseany]

I’ve been on Zulu since Jan and to be honest, it’s a night mare… so I’m going to have a go myself and let you know how Im getting on… hopefully you’ll be able to help me.

I want to do this my own way, and develop my own style… I’ve had some advice and got some ideas - so I’ll be trying to consolidate it as I go…

I know this much - there are 2 aspects 1. finding the elusive entry point and 2. managing the trade whilst in play.

I’ve got some home work to do before actually placing trades - my starting point will be looking at major fx news events (interest rate settings, non farm payrolls etc) and seeing how price behaves after such announcements.

News - price action so far (though no real work done to look at correlation just yet):

Today: 10th July 3pm GBP NIESR Gross Domestic Product Estimate (JUN) - previous 0.1% actual -0.2% - so Id expect GBP/USD to drop - and sure enough using 15m chart (which is my reference for correlation homework) price at 3pm 1.55269 now at 4.18pm (GMT) 1.54806 and falling.

Also - look at 5th July 12pm GBP BOE Asset purchase Jul - prev 325B actual 375B - so Id expect GBP/USD - price at 12pm 1.56038 then at 1.45pm 1.55110

And - EUR Base rate decision 5th July 12.45pm - prev 1% actual 0.75% so Id expect EUR/USD to fall - price at 12.45pm 1.25118 then at 3pm 1.23600

And - USD Change in non farm payroll Jun - 6th July 1.30pm - prev 77K actual 80k so Id expect EUR/USD to fall on back of a strengthening USD - price at 1.30pm 1.23777 then at 7.30pm 1.22585

So - there is clearly a correlation.

I’m going to be looking at major events only - as above - and using the announcements to dictate my entry point either buy or sell - I’ll know which ones to focus on once I’ve looked at past 3 mths and seen which correlate the strongest.

So - that’s my entry but where’s my exit? The notes above are all very well, looking back at a chart and choosing the best point to exit - so I would like some advice on how best to chose my exit - Im thinking previous points of resistance/support?

I’ll keep you posted on my progress.

Sean

[steverichards25]

I recomend you go for very short term trades, the shorter the less risk in my opinion. aiming for 10 pips profit per trade is reasonable. you dont want to be trading in some choppy zig-zag market, hoping for 50 pips profit. maybe the professionals can get away with that lol, but not me. I would advise you to stay away from the market during important news, you could test out your strategy on a demo account and try trading NFP and other news, dont risk your money on news now. and don’t forget stop-losses or you will die quickly.

[SimonTemplar]

I think that that is really good news, Sean, I wish you good luck with it.

Personally I would say that you are thinking on the right lines with your idea to target S&R levels to plan trade exits. I just monitor S&R, check that there is ‘room’ for my trade to play out how I want it to, and set TP etc within obvious levels. I don’t trade fundamentals, personally - I am strictly Technical Analysis - but regardless of your trigger for Entry, S&R levels are a key thing to look out for, imho.

Add to that sensible money management and you can’t go too far wrong, over time, once you have your eye in.

For instance, if you initially risk just 1% of your account balance per trade, you have to be very wrong a lot of times before you reduce your account balance to the point where it is impossible to trade. Keeping your risk percentage constant also makes tracking your progress far easier.

Sorry to ramble, just some thoughts, good luck with it!

ST

[PipBandit]

While there’s correlations you have to be careful as a lot of the correlation can be priced in already before the decision. Sometimes things can go in directions you might not expect from the news results. NFP is pretty notorious with it’s head fakes. For example there might be poor numbers so you would expect E/U to fall but maybe if there’s really poor numbers then E/U might rise due to heightened QE3 expectations. Or it might not. It’s kind of a lottery that one.

The recent E/U rate cut was already pretty much priced in as everybody expected a 0.25% cut. But the drop we got after the decision was more due to the lowering of the deposit rate to 0% and language used by the ECB which made traders believe that things must be bad if the ECB are finally making some more moves.

I think you’d be better off taking those big ticket news results into your overall calculations but making your entries based more on the price action vibrating off key levels. Same goes for exits.

[SimonTemplar]

While there’s correlations you have to be careful as a lot of the correlation can be priced in already before the decision. Sometimes things can go in directions you might not expect from the news results. NFP is pretty notorious with it’s head fakes. For example there might be poor numbers so you would expect E/U to fall but maybe if there’s really poor numbers then E/U might rise due to heightened QE3 expectations. Or it might not. It’s kind of a lottery that one.

The recent E/U rate cut was already pretty much priced in as everybody expected a 0.25% cut. But the drop we got after the decision was more due to the lowering of the deposit rate to 0% and language used by the ECB which made traders believe that things must be bad if the ECB are finally making some more moves.

I think you’d be better off taking those big ticket news results into your overall calculations but making your entries based more on the price action vibrating off key levels. Same goes for exits.

Quite - it can be pretty tricky, unpredicable territory. I basically ignore news altogether for my end of day trading (I find it just doesn’t make a difference!), and for intraday I keep my trades away from the announcements as much as possible. If things get choppy I ditch the intraday altogether and hide in my Daily chart bunker until the nasty intraday spikes go away!

[joshipramod]

Meseany, Good Luck with your beginning with trade at your own. I am a newbie and currently trying Demo. It would very much interesting for me to see your progress. Its always good idea to share experience. However, based on my limited 2 months experience, I would like to reiterate to keep your risk limited to 1% would be a better idea. Its my thinking / opinion that it would be always nice to stick to Tech. Analysis as beginner instead of going to ocean fundamentals. Further, it will be more than enough to double your capital - if you can manage to secure 40-50 pips a week in 2-3 trades (yes 2-3 trade only - not to over trade). Once the trader has grip the per week targets can be always increased gradually. Again - wish you luck.

[meseany]

I recomend you go for very short term trades, the shorter the less risk in my opinion. aiming for 10 pips profit per trade is reasonable. you dont want to be trading in some choppy zig-zag market, hoping for 50 pips profit. maybe the professionals can get away with that lol, but not me. I would advise you to stay away from the market during important news, you could test out your strategy on a demo account and try trading NFP and other news, dont risk your money on news now. and don’t forget stop-losses or you will die quickly.

Thanks Steve,

Before I trade I’m going back 3 mths to see the news/price correlation. 10 pips seems too low though I firmly agree re SL. I need to develop an exit strategy.

I’ll let you know how the correlation work goes - from this I hope to discern which news causes biggest price reactions. I’m looking at major news items only.

Sean

[meseany]

I think that that is really good news, Sean, I wish you good luck with it.

Personally I would say that you are thinking on the right lines with your idea to target S&R levels to plan trade exits. I just monitor S&R, check that there is ‘room’ for my trade to play out how I want it to, and set TP etc within obvious levels. I don’t trade fundamentals, personally - I am strictly Technical Analysis - but regardless of your trigger for Entry, S&R levels are a key thing to look out for, imho.

Add to that sensible money management and you can’t go too far wrong, over time, once you have your eye in.

For instance, if you initially risk just 1% of your account balance per trade, you have to be very wrong a lot of times before you reduce your account balance to the point where it is impossible to trade. Keeping your risk percentage constant also makes tracking your progress far easier.

Sorry to ramble, just some thoughts, good luck with it!

ST

Hi ST,

I presume looking at support and resistance is simply a visual tool - ie no need for any tools.

Thanks a lot for your support.
Sean

[meseany]

While there’s correlations you have to be careful as a lot of the correlation can be priced in already before the decision. Sometimes things can go in directions you might not expect from the news results. NFP is pretty notorious with it’s head fakes. For example there might be poor numbers so you would expect E/U to fall but maybe if there’s really poor numbers then E/U might rise due to heightened QE3 expectations. Or it might not. It’s kind of a lottery that one.

The recent E/U rate cut was already pretty much priced in as everybody expected a 0.25% cut. But the drop we got after the decision was more due to the lowering of the deposit rate to 0% and language used by the ECB which made traders believe that things must be bad if the ECB are finally making some more moves.

I think you’d be better off taking those big ticket news results into your overall calculations but making your entries based more on the price action vibrating off key levels. Same goes for exits.

PB, clearly the head line news such as ECR setting the rate to 0.25% is there for everyone but where do you find the deposit rate being set to 0% and the bigger picture? Can you recommend a source of news where the further reaching inplacations are to be found?

As for vibrating off key levels - this is what I need to get to grips with - my technicals aren’t there. That’s why I was thinking of a style to suit me - ie news and support/resistance - I want a simple technique.

What simple technicals could I couple with the news?

Thanks,
Sean

[meseany]

Meseany, Good Luck with your beginning with trade at your own. I am a newbie and currently trying Demo. It would very much interesting for me to see your progress. Its always good idea to share experience. However, based on my limited 2 months experience, I would like to reiterate to keep your risk limited to 1% would be a better idea. Its my thinking / opinion that it would be always nice to stick to Tech. Analysis as beginner instead of going to ocean fundamentals. Further, it will be more than enough to double your capital - if you can manage to secure 40-50 pips a week in 2-3 trades (yes 2-3 trade only - not to over trade). Once the trader has grip the per week targets can be always increased gradually. Again - wish you luck.

Hi Josh,

Thanks a lot for your support - I’m sure my strategy will evolve and keep evolving.

I’m just starting with news - this isn’t my end game.

I’m looking forward to keeping everyone up to date.

I’ll be a week or 2 doing my correlation work.

Sean

[meseany]

Quite - it can be pretty tricky, unpredicable territory. I basically ignore news altogether for my end of day trading (I find it just doesn’t make a difference!), and for intraday I keep my trades away from the announcements as much as possible. If things get choppy I ditch the intraday altogether and hide in my Daily chart bunker until the nasty intraday spikes go away!

Simon,

Same technique for end of day trading and intraday?

I presume by end of day you mean to post your order whilst the market sleeps only to be possibly picked up if your entry point is reached?

Sean

[Peter_Brandley]

Mesany- Take this advice- Risk and money management is really useful to protect the act from over trade.
Always take 5 minutes to review what we do yesterday ,you will know your strength and weakness points and try to improve trading style & habit in order to maximize your profits potential.
Another best way to maximise your profit in forex is by doing more and more analysis before openeing and closing your trades

QUOTE=meseany;371166]I’ve been on Zulu since Jan and to be honest, it’s a night mare… so I’m going to have a go myself and let you know how Im getting on… hopefully you’ll be able to help me.

I want to do this my own way, and develop my own style… I’ve had some advice and got some ideas - so I’ll be trying to consolidate it as I go…

I know this much - there are 2 aspects 1. finding the elusive entry point and 2. managing the trade whilst in play.

I’ve got some home work to do before actually placing trades - my starting point will be looking at major fx news events (interest rate settings, non farm payrolls etc) and seeing how price behaves after such announcements.

News - price action so far (though no real work done to look at correlation just yet):

Today: 10th July 3pm GBP NIESR Gross Domestic Product Estimate (JUN) - previous 0.1% actual -0.2% - so Id expect GBP/USD to drop - and sure enough using 15m chart (which is my reference for correlation homework) price at 3pm 1.55269 now at 4.18pm (GMT) 1.54806 and falling.

Also - look at 5th July 12pm GBP BOE Asset purchase Jul - prev 325B actual 375B - so Id expect GBP/USD - price at 12pm 1.56038 then at 1.45pm 1.55110

And - EUR Base rate decision 5th July 12.45pm - prev 1% actual 0.75% so Id expect EUR/USD to fall - price at 12.45pm 1.25118 then at 3pm 1.23600

And - USD Change in non farm payroll Jun - 6th July 1.30pm - prev 77K actual 80k so Id expect EUR/USD to fall on back of a strengthening USD - price at 1.30pm 1.23777 then at 7.30pm 1.22585

So - there is clearly a correlation.

I’m going to be looking at major events only - as above - and using the announcements to dictate my entry point either buy or sell - I’ll know which ones to focus on once I’ve looked at past 3 mths and seen which correlate the strongest.

So - that’s my entry but where’s my exit? The notes above are all very well, looking back at a chart and choosing the best point to exit - so I would like some advice on how best to chose my exit - Im thinking previous points of resistance/support?

I’ll keep you posted on my progress.

Sean[/QUOTE]

[meseany]

Mesany- Take this advice- Risk and money management is really useful to protect the act from over trade.
Always take 5 minutes to review what we do yesterday ,you will know your strength and weakness points and try to improve trading style & habit in order to maximize your profits potential.
Another best way to maximise your profit in forex is by doing more and more analysis before openeing and closing your trades

Peter,

I used to play a lot of poker on line and do exactly what you’re suggesting - it’s excellent advice and I will roll it into my game plan.

Thank you,
Sean

[SimonTemplar]

Hi ST,

I presume looking at support and resistance is simply a visual tool - ie no need for any tools.

Thanks a lot for your support.
Sean

Good morning Sean. Yes, I just look at the chart, scrunch it up (that’s the technical term) to see more elapsed time and draw lines on where I see areas of S&R. I’m not aware of any tool that would do that automatically, and in any case it is great discipline to do it manually anyway. In my opinion, the best way to build an understanding of the charts and how Price moves is to spend hours - and I mean a lot of hours, certainly hundreds if not thousands… - simply drawing S&R lines on charts, then monitoring how Price reacts to those levels going forwards. It will always be a zone rather than a specific line (for instance, if I am targeting 200 pips then I might have a 10 pip or more range on the S&R level), but it is amazing how Price remembers. This can also inform which timeframe you prefer for your Entries. In my case, I was particularly struck by how clean the reactions are on the Daily rather than, say, the five minute chart, so I tend to prefer higher timeframes, although I do trade Hourly and 240 in less choppy times.

I think that a lot of hours spent just drawing lines then monitoring how they interact going forwards, then refining the drawing of the levels would improve the returns of the vast majority of technical traders.

Simon,

Same technique for end of day trading and intraday?

I presume by end of day you mean to post your order whilst the market sleeps only to be possibly picked up if your entry point is reached?

Sean

Yes, the same underlying approach (PA out of S&R levels), although on the higher timeframe stuff I look for more factors to come together, as I take fewer, higher quality setups. So when entering off the Daily, I will have looked at the Monthly and the Weekly, I might have some Fib levels on there, I might look for divergence, I might look for a reversal pattern on a lower timeframe, I will want PA to look right on the Daily, I’ll want[I] at least [/I]three or four reasons to be in the trade.

On the lower timeframes, certainly the Hourly and below, I won’t get as many factors together as I am targeting much shorter runs - if I’m planning to be in and out of the market much more quickly, then I don’t tend to get into Fib etc. But I am basically looking for PA out of S&R levels regardless of timeframe.

Apologies, by the way, if you found me critical on your other, ZT thread - I am critical of ZT itself (I think that the model attracts too many providers who are not themselves quality traders), but I always thought that you took a very measured, considered approach to it. I am sorry if I did not make that sufficiently clear in a couple of my posts (no need to repond to this, I don’t want to dilute or sidetrack this thread).

Simon

[TheLastBear]

Hi Sean,

you said you have been with Zulu and it was horrible. May I ask why? I do not trade with Zulu and use PaxForex as my prime broker, but I am curious to hear about other trader’s experiences with different brokers.

[PipBandit]

PB, clearly the head line news such as ECR setting the rate to 0.25% is there for everyone but where do you find the deposit rate being set to 0% and the bigger picture? Can you recommend a source of news where the further reaching inplacations are to be found?

As for vibrating off key levels - this is what I need to get to grips with - my technicals aren’t there. That’s why I was thinking of a style to suit me - ie news and support/resistance - I want a simple technique.

What simple technicals could I couple with the news?

I just use four websites for keeping up to date with what’s going on. There’s usually 3-4 hot button items which are affecting the market and they’re what I keep my eye on rather than trying to get too deep into the fundamental data.

Forexlive (probably the most useful in my opinion)
Bloomberg
Zerohedge (some good financial articles but heavily biased towards the negative)
Reuters

If you want to have a look at S&R, trade entry, management and exits then, in my opinion, there’s nothing better on this site than this thread:

http://forums.babypips.com/free-forex-trading-systems/29902-technical-templates-continued.html

[EDDY_MO]

Sean,

trading forex is not poker wish that markets were that easy as statistical probability of betting on one number.
i think the combination lies smwhere among fundamentals and technical analysis…if you use the majors you can have some good returns

[bobmaninc]

Sean,

trading forex is not poker wish that markets were that easy as statistical probability of betting on one number.
i think the combination lies smwhere among fundamentals and technical analysis…if you use the majors you can have some good returns

If we bet on one number in poker then I have been getting screwed all my life. It was always my understanding I was betting on the probability of my hand beating out the rest. If I knew we were only betting on one number things may have been different.

[meseany]

I’ve been looking into SMA crossover strategies - and using 4 types to define short/long entry/exit - thing is this can happen at 4am in the morning - is there any way to program this into a platform - is it what I’ve heard call an EA?

Thank you,
Sean

[FringFX]

I’ve been looking into SMA crossover strategies - and using 4 types to define short/long entry/exit - thing is this can happen at 4am in the morning - is there any way to program this into a platform - is it what I’ve heard call an EA?

Can be an EA, or simply an indicator.
You go the EA route if you want it to make automatic buy and sell for you.
You can either learn how to code it or let a programmer do it for you.