Trade analysis on a noob trade. wandering what went wrong

Beginner Questions
1

Hi guys,

I’m new to trading in total and been getting my PHD from the School of Pipsology right now :slight_smile:
In the spare time i trade on a demo account, testing and applying what i learn.
My question is based on a trade i just made that looked to me as a good long position but it turned as a short one because it took me out reaching my stoop loss. i was wondering if someone with a bit more experience can have a look and maybe give me a hint of why my analysis was wrong.
So i was looking on the EUR/AUD (15 min chart) where my RSI and Stoch looked oversold at 1.5398

I looked at the 5 min chart where i was thinking i’m seeing the moment to by but the problem is that it did the opposite going further down activating my stop loss at 1.53161.

Can anyone tell me what did i do wrong or at least if i did something wright on this trade?
Thank you !

2

RSI and stochastic and momentum indicators can go into their extreme high or low ranges and just bump along there for bar after bar after bar as price continues.

Over-sold doesn’t mean buying is going to start, it simply confirms people have been selling. But you already knew that as price had been falling, so what was the indicator for?

And who made money, the people who followed price or you who chased a reversal?

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3

I was hopping for a reversal after looking at the indicators, the overall trend was down and the reversal did happen for a short time but after my trade was closed… Are you saying to base my trades more on the overall trend instead of momentum indicators when is showing a strong trend in one direction?

4

Hi Tipss… Tom is spot on with what he has told you. Price can continue downward with the bottom of a trend only starting to show a change in direction (Momentum) when the Oscillator moves up.

You really should sit on you hands until the RSI, Stoch, CCI or what ever Oscillator you are using breaks back ABOVE (Oversold) the 30 RSI, Stoch 20 or CCI -100 before even thinking of opening a position.

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5

So bee more patient before opening a trade based on these indicators and weight in the overall trend properly…
Thanks guys! Much appreciated!

6

My suggestion is: study more on others trading indicators and
then make your strategy according to your comfortable trading tools; besides
you have to learn fundamental! Because, Forex is not only about indicator based
trading.

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7

Did you look at Higher Time Frames like weekly or Monthly to confirm your assumptions ?

8

yes
there is a saying

IF YOU ARE NOT WAITING FOR SOMETHING
YOU ARE TRADING INCORRECTLY

if you don’t know what to do
ask yourself “WHAT AM I WAITING FOR ?”

you only have 3 Answers

  1. Nothing, i’m putting a trade down now and after that i’m waiting for the stop loss to hit or the take profit to hit

  2. You’re waiting for a better entry position at [insert price here]

  3. ummm i don’t know (this one means… you don’t know what you’re doing)

the lesson is
get to a point when you ARE ALWAYS WAITING FOR SOMETHING

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9

In addition to the sensible comments you have had from other folk, I don’t know whether you’re into PA/candlestick analysis etc., but for me the bar you looked to enter on was very indecisive. If you’re going to get a reversal, I personally look for a rejection bar before I want to enter (in addition to various other reasons, I’m not saying just enter on one bar!!). So I’d never enter on such an indecisive bar. Sure, some will do a quick rejection and move back up (or down), and by waiting on a candlestick confirmation you can miss the boat, but if you’re right then you don’t need to be right very often to make money. I start by avoiding losing. Then the odd win kind of takes care of itself. So I would have considered that inconclusive PA and would have waited for some confirmation (which didn’t come, so I wouldn’t have taken the trade).

For my money, it’s better to be the trader sitting back and waiting for proof than to be the guy who got in early on what amounts to a(n educated) hunch.

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10

Thanks again guys!
Great to see that the community here is willing to help people like me getting better and understanding Forex.

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11

Yes I absolutely advise only enter in the direction of the prevailing trend within your trade’s time-frame. Off-chart indicators will not be needed to confirm the trend direction or strength but a couple of moving averages are helpful.

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12

Right entry ensures you to gain some pips of profit . charts analysis , right time frame and good indicators can help in this contest. Trend side is important against trend one can not make earning . I always tr y to enter market when trend is clear . Then monitoring is important to close positions at right time.

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13

We all try to enter at right trend , there is nothing strange if analysis is wrong. It happened many times with almost all traders. Manual trading faces many difficulties but it is safe than robot trading. not just trends we have to develop management qualities in us. If some one went wrong it is adjustable with this skill.

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14

You are looking at the wrong timeframe for trend reversals, 5min, 15min and 30min are for glimpse of the bigger picture of the overall currency market.

If I base my decision on a trend reversal, I’d be looking at 1h, 1d and 1w charts on that currency. Whilst considering past and future economic events, current market trend bearish or bullish, support and resistance, etc.

If you plan on trading lower timeframe, I’d suggest that you know the current trend to create yourself higher probability trades.

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