Since I work, I can't sit at my computer all day monitoring my trade. So I focus on finding One Good Trade (tm). I log in about 45 minutes before the New York open and try to find a single, high probability trade that I can "set it and forget it" until I get home from work and can review.
I'm trading the major dollar pairs, although I'm limiting myself to the Euro, Canadian, Pound, Swiss, and Yen in that order. I'm using a 60 day SMA, and I check to see if the pair is trending in the 4-hour, 1-hour, and 5-minute time frames. If the pair is trending in the same direction on all three time frames, then I will look for an entry.
100% Three Ducks.
What I'm looking for is a trend that formed during the London session that I can hop on to and ride for the first few hours of the New York session. Provided it continues.
Several days I saw that none of my pairs were trending in the same direction on all three time frames. And that's fine. Sometimes you get no trade signal. "When there is nothing to do, the correct thing to do is nothing." Tomorrow is another day.
Where I think my problem lies is in timing my entry, and setting my Take Profit & Stop Loss.
One clear mistake I noticed myself making was not having a good Reward:Risk ratio. For example, if my buy price was .xx50, I was setting my Stop Loss at .xx35 and my Take Profit at .xx65. 15 pips each way. That's a Reward:Risk of 1:1, and that's just DUMB. I know I need to be at 2:1, hell even 1.5:1. 1:1 is just ignorant. But I did it. More than once.
My goal was to try to make 20 pips a day. But I was also trying to use Support & Resistance to set my Take Profit & Stop Loss. But I noticed that many times on the 5-minute chart, and even the 15-minute chart, Support & Resistance were only 10, 8, sometimes only 5, pips away from the price. This is suppose to be a swing trading strategy, but 5 pips is a scalp not a swing. But I know I really should be using Support & Resistance to set my levels. But reviewing my trades shows me that clearly I am not, so this is another area where I am a mess.
I don't really want to scalp, but one of the things I'm currently evaluating during my self imposed suspension is if I should consider scalping set-ups. OK, it's not that I don't want to scalp. The truth is I really DO want to scalp.
"Wooo wooo wooo wooo! Lookit me! I'm Injun Joe!"
Ah hem... Anyway, in my studies to date several independent sources have commented that scalping FOREX is a high risk strategy, with perhaps inconsistent ROI. Again, I'm researching.
One moment I do remember is I looked at my charts, saw a trade signal and placed a trade. Then I got up and made breakfast. I checked Metatrader after breakfast and saw that i was already stopped out. "It's still early" I thought to myself. "I'll place another trade."
I reached for the mouse, and then I stopped myself. My plan was to place One Good Trade (tm) a day. "Set it and forget it." I told myself that I wasn't going to trade emotionally, and I wasn't going to overtrade. FOREX will still be here tomorrow. I felt good about myself as I closed Metatrader that morning.
I feel like if I have any edge at all, it is that I have good, strict money management, and firm emotional self-possession.
One of the milestones I have set for myself is "Six consecutive months of profitable demo trading before going live."