In a small effort towards developing a trading strategy for “Buffing the reversals,” so to speak, in a practice of trading with realtime market data (ECN) at the 1M time scale, I’ve developed a short series of documentary charts and have put together a description with Evernote. I’d like to share these notes with the forum - having added a distinct disclaimer of liability to the article, and some grains of salt with regards to “Bad Trades”. Ostensibly, there are enough “Good trades” to make up for those though, right?
[B]Trade Scenarios - A Study - MetaTrader 4 with Heikin Ashi, Volume, and Momentum Indicators [/B]
In the charts in that article, I’m applying a Heikin Ashi (HA) indicator as a kind of an overlay for a line-graph view of the market rate. In separate areas of the chart space, there’s an On-Balance Volume Indicator (OBV), a Stochastic Oscillator (STO) and a Fisher indicator. I’ve installed both of the Fisher indicator and the HA indicator from “Third party” sources. I’ve linked the URLs for those indicators, in the article. The OBV and Stochastic indicators seem to both be available as installed with the MetaTrader 4 platform.
My favorite indicator of all of those, candidly, is the Stochastic indicator. I think it’s a remarkably useful indicator for illustrating a momentum of of market trends - such that could be juxtaposed to a momentum of the market rate itself. I’d like to describe what I think is useful about the indicator, but I’m afraid I’m not an expert of Forex, MetaTrader, or statistical mathematics. Mostly, I’d wanted to point out a sense of usefulness about the Stochastic indicator, but I thought it might be appropriate to provide some further documentation too.
In my own primary trading strategy - such that I’ve made a small effort to describe, in the article - I’m trading at the 1 minute time scale, on an ECN (Interbank) service. Although candidly I think that the realtime data can be a little overwhelming, but I think I’ve finally found a nice set of simple indicators, such that I think may serve to make it easier to trade at real time.
I thought it might be appropriate to try to address the broader topic: Trading Strategy, beside presenting the article in my own simple contribution to the web documentation base about Forex.
Personally, I believe I’ve found a comfortable trading strategy, such that may be suitable for working with limited equity. However, I believe it can be a little difficult to apply - when the market rate is ambiguous, for instance, or when one opens a position in an estimate that winds up to be contrary to the market’s later performance. So far as the technical nature of the trading strategy itself - such that I’ve tried to describe in that article - I believe it pivots largely on the availability of the realtime data from the Forex ECN network.
When trading with a small limited equity, I believe it may be difficult to open any long-going positions on a market - considering that the open position may not stay open across the fluctuations in the market rate, especially when there are some periodic, dramatic [I]market rate spikes[/I], as I’ve been seeing primarily in paper trading - a certain one recurring, this week, early in the morning of the trading day. Those spikes, I know, can more than zero-out the available equity, even in a paper trading account - for instance yesterday, in paper trading, there was a market rate spike that went so abruptly, the broker could not stop out the account soon enough. It ended with -6 USD in the Demo account.
Thus, personally I’ve been focusing on trading at short durations onto the realtime market data, placing the stop-loss setting carefully on any open positions for limiting the immediate risk, and - broadly - trying to develop a sense of something like intuition, as to the performance of the market over time.
I hope that my own small contribution, which I’ve linked to above, may not be too excessively wordy. I’ve tried to go to something of a small depth, in the introduction - with a short note about risk mitigation in Forex. I believe I’ve made the documentation about the strategy mostly in the set of charts included in the article, but - in regards to the strategy itself - I’ve tried to write out a few summary explanations in the text before the charts, too.
The charts are included as to proceed sequentially across the duration of a short trading session. I suppose it could seem, in a sense, like a kind of flip-book. I hope that it may be in any ways usefully descriptive, in its present draft edition. Personally, I would like to focus more about MQL programming, but of course I would like to have a working strategy to program in MQL - perhaps there may be something to it, in the Stochastic indicator?
If anyone else may be interested in discussing trading strategies, broadly or to detail, maybe some “Shop talk” as such could be apropos?