Trade Set-up Research

Beginner Questions
1

Hi everyone,

I’m currently demo trading, seeing what strategies work for me etc, and I am trying to find a way to systemise how I approach each trade.

I think the best way to do this is to physically write down your ideas and money management numbers, so I’ve drafted out a form that could be used, which is attached to this post.

Eventually I would get the form printed as a notepad, so that old trades could be hole-punched and archived as a journal, also helping me measure my progress, but in the meantime I’d be interested to hear any ideas on how it could be improved, and I say that realising that everyone looks at trades differently, but for now I’m trying to keep it as universal as possible until my own trading preferences materialise.

Thanks in advance for any pointers.

TradeSet-upResearch.pdf (50 KB)

2

Hi!

That looks as a good approach to me. The form seems to cover all fronts, so that is in order. A pointer may be that it is perhaps better to record it in an excel sheet. That allows you to do some calculations. MS Onenote kan also be usefull.

Do you also do backtesting? That is a very helpfull tool to develop your strategy.

3

Use a searchable database, I use php with mysql, but it’s a bit techie, try MS Access or a spreadsheet, drop the fields that don’t help or correlate.

4

Hi Toekan,

I’ve not yet backtested anything, only trying out ideas using price action and stochastic.

I guess backtesting is scrolling back though the charts and replaying setups by incrementally stepping along the candlesticks?

Thanks for the excel tip, i’ll definitely look at that.

5

One thing at a time Purplepatchforex! :wink:

6

This just looks like a trade record sheet. To me research is quantitative. So you would basically backtest agianst historical data, either done by hand or via programming. Its great you have a worksheet to journal in but, its still going to take you 100 trades + to have any significant finding, this is why having back data will give you a better idea faster. Now your going to say well back testing doesnt work in the future. Well guess what, once you take those trades and journal them down and determine you have an edge. That is now in the past, so in the future the same distortion between performace and research apply.

7

I use a similar trade journal. I am only a beginner as well. It can be quite handy to include a general trend bias based off the h4 or daily in your entries. To be realistic we all go against the daily trend as a lot of us are not going to hold onto trades for months or years. It has helped me eliminate a few pairs where probability tended to be lower for my style of trading.

8

Thanks for the replies guys,

Backtesting certainly seems like a necessary duty, I’d be greatful to hear more about how it’s done, can anyone point me to another thread that covers it so a noob can grasp it? I think a “by hand” method would suit me better for now, unless there is a more efficient easy way via programming that could be recommended, although I don’t want to get distracted by learning to program when I’m really trying to learn to trade…

Thanks again

9

I have used Forex Tester 2, it simulates a mt4 like environment, and allows multiple time frame analysis. Although it is a commercial product (i am not compensated or related to that company at all). I have used and I think its the best way to do it discretionary. It gives you a statistical report and you can fast forward time. There are free EAs for MT4 but they are not as accurate or allow limit orders or multiple time frames.