I thought I would actually put up some good news for a change since I typically bellyache about my Fx trading woes. Anyway, I’ve have some positive progress so far. After losing more money, I vowed to stop trading with real money until I was profitable on demo.
I found 2 great strategies on BabyPips which I have been using successfully. I wanted to point them out to you guys so if anyone is still struggling you could use them. They are the iphone trading strategy found here Iphone Trading Strategy , and The Most Profitable Trading Pattern, found here Most Profitable Trading Pattern.
Both are on this forum.
The Most Profitable Pattern strategy involves getting in on the pullback of a trending market. We use the 20 and 50 EMA cross then get in on the pullbacks (PB). We get in on the PB when the Stochastic goes into oversold territory. I found this to be very reliable as long as the market is trending.
The iphone trading strategy involves determining market direction by starting on the hourly TF. You place a longer term SMA on the chart and start with the hourly TF. I typically use the 60 SMA. The MA doesn’t really matter, as long as price action (PA) has some room to breathe. You start from the hourly and identify where PA is, you then drop down to the 15 min TF and make sure is it going the same way. You then drop down to the 1 min and make sure PA is changing directions from the opposite way and crossing back to your bias. So for example hourly TF says buy, 15 min says buy, then drop to 1 min and when it is crossing your MA from a sell to a buy. You then jump into the trade at this point. I have found that this also works. It works well with phone trading.
I have had success with both of these strategies. I also go through several other steps which I will discuss here at length. Any constructive criticism is welcomed.
Firstly, I have a Currency Strength Indicator to give me an overall bias on the buy or sell. I use this one here Forex Power Indicator. I then physically check the charts on the 4 hr TF to make sure it is actually true. After this I can apply either of the strategies previously discussed.
I will also add other confirmations on the 4 hr TF. I typically try to stay in the hourly to 4 hr TF. Some additions can include Heiken Ashi candles, market structure, trend line breaks, or the use of the MACD.
For me, the most important part is determining direction. Once we have a clear direction, things get much easier. I then use my other strategies to look for entries or exits.
One of the major things I would struggle with was watch trades go against me. I would sit there and watch the PA retrace and I would see the money going out of my account, and I would bail on the trade. While trading in demo, I found that many times the price would go against me a bit then simply jump back in my direction. This really helped me to understand how PA moves in Forex. I was right many times if I just let the trade play out instead of freaking out and jumping out of the trade. I also found myself constantly seeking new trades, which was not good.
I initially started with a demo acct of $1,000. I lost about half that in a matter of 2 weeks. I then began to be more selective with my trades. I worked with it for about 2 weeks on demo applying what I had learned. I ended up taking my acct to about $1,500 over a 2 week period playing mini lots. Most of it was on the GBP as it took a nose dive these last few weeks.
This has been very good news at this point. I have done nothing but lose ever since I started. But I think I have a good bit of structure now. I’m winning more than I am losing at this point. I will keep at it.