Trading strategy? Just use your head!

so…you’ve gone through the school of pipsology, you’ve read a couple ebooks on fibonacci and candlesticks, you’ve opened yourself a demo account with your prefered broker…

now all thats left to do is find or develop what a majority like to call your “trading strategy”

plan your trade and trade your plan they say…

be disciplined they say…

follow your trading strategy step by step they say…

so you’ve spent a month or so perfecting and tweaking your trading strategy and now your on your way to forex riches right?

dear trading community…

if that was the case do you really think there would even be a need for traders?

dont you think these highly mathematical and systematic EA’s would dominate the market and make everyone rich?

the key to being a successful trader is to be as dynamic as the market itself!

the forex market doesnt adhere to your guidelines, your rules, your step by step trading strategy!

you have to be one step ahead!

you have to do more than just read and analyse the market!

you have to UNDERSTAND it!


before i continue with this thread i would like to ask you’s all a question…

WHAT makes the market MOVE???

PEOPLE :slight_smile:

Darn, message too short

Greed and fear.

OSKAR can you elaborate a little more on that answer?

Supply and Demand.
Adam Smith knew it all the time.

EAs aren’t used in place of traders because they can’t cope well with news or sudden unexpected movements in the market. Such things can wipe out an account in no time.

Trading yourself by following some basic principles but also being aware of news and how the market might fluctuate such as market flow change levels and previous support and resistance gives you a “feel” for the market.

You trade your plan [B]when it feels right[/B].

I guess it is the 1,000,000$ question you just posted here! :slight_smile:

Oskar just put it plain and clear, and if it is to be an answer on one of these trivia shows, choose it! :slight_smile:
As stated by dialectical materialism philosophy, when man takes a well defined purpose action, he doesn’t take in conclusion all outcomes, and [B]unrestrained social or economic process may occur[/B].

Well, to simplefy it, [U]3 major factors can be stated:[/U]
Economic factors, Political conditions and market psychology

[U]Economic factors[/U]
Everything from [U]economic policy [/U] which can be [B]fiscal[/B]-budget or spending practices or [B]monetary[/B]-government’s central bank influence on supply and “cost” of money, to [U]conditions[/U] - government budget deficits/surpluses, trade levels and trends, Inflation levels, economic growth and health and the economy’s productivity.

[U]Political conditions[/U]
Internal, regional, and international political fluctuation and instability.
For example, the Israeli-Palestine conflict.

[U]Market psychology[/U]
Market psychology and trader perceptions influence the foreign exchange market in a variety of ways, regarding: trader’s personality (mostly rational/irrational ratio of emotion), various trading trends - long/short term, use of technical trading as opposed to intuitive technique and so on.

What might be the conclusion of all of this? Perhaps that just the thought about it may put in doubt the fact that we are succeeding in doing so :slight_smile:

  • Written with help from Wikipedia, I and your interesting questions :slight_smile:

I quite agree… the imbalance of supply and demand generates the move.

My point of view is always very simple, in the end, all Starts and Ends with PEOPLE.
No People, No Forex, No Stock market, No Government, No Police, No… The Planet will be here for a while longer but will be gone too one of this billion days. :slight_smile:
Nobody gets “Screwed Over” by any of this above mentioned entities, in there is a person with a bad mood that screws you over or a person with a good mood that gives you brake.
Murphie Brown (Candice Bergen) made fun of Dan Quale about the unwed mother and said Murphie Brown is fiction and everybody was laughing at Quale (not that I think he was smart to say that), yet the same applies to all this small and big “company” or “official” names as we people call it. In there are only PEOPLE and People are the cause of all good or bad for the rest of living things on the planet.
Does the planet cares one way or an other? I don’t think so, it’s just a rock traveling trough space.
Back to Forex: Millions of people are looking at charts and make a decision, buy or sell and there is one definite winner, the broker, anybody else may sometimes win and sometimes loose. We all try to have more winning trades then loosing trades. Some people are better at it then others but remember, if you win, somebody lost and this was a person. If you loose :eek:, somebody has a smile on his face because he made money :D.
Hmmmmmmmmmmmmmm, Too much Philosophy :slight_smile:
Happy Trading

mmm…some excellent answers here :slight_smile:

so i take it we are all in agreement that PEOPLE make the market move, whether it is small independant retail traders or the executives behind these huge corporate banks and other financial institutions, they are all controled by PEOPLE!

if we all agree that PEOPLE make the market move and not when the 5 EMA crosses the 10 EMA confirmed by rsi being above 70 and MACD…blah blah blah

then why the hell are we surrounded with thousands of “haily grail” trading strategies that a majority of the trading community swear by?

just a few more questions…

what percentage of traders do you think follow a “trading strategy” ?

what percentage of traders do you think use common sense, their eyes and their knowledge of the forex market to base their trading decisions on?

what is the percentage of unsuccessful traders?

what is the percentage of successful traders?

anyone see a pattern?

Go to this threat in Babypips

Try to DL it or watch it, this guys have a million buck on there hand to play with and are struggling.
If you watch only 1 episode then watch the last one.
It is indeed very interesting.
Happy Trading

Hard to determine who is successful and who is not as people do not always share their business

1= Not many, read in babypips and you realize we try to follow but bend the rules.
2= 5% since 95% are dropping out. Tymen has that chart posted in here :slight_smile:
3= 95% see 2
4= 5% see 2

What everybody tries with EA is very simple, we try to get a EA that shows the hope, fear and greed of everybody that may or may not place, an order in the market.
The disagreement is what EA can do that. :slight_smile:
So far, EA are hindsight indicators. Each will show you right up to the last FINISHED candle and that’s hindsight.
The Candle at the moment in progress can show long or short big time and you order, just to see it turns against you.
It’s probability we try to predict, others calling it educated guess (maybe :))
Happy Trading

great reply Oskar

anyone else want to share some insight?

anyone had a eureka moment yet?

Partially correct, Manually trading has the disadvantage you see your money “dwindle” away and you may make the wrong decision. To protect, you close, just to see it to turn around again.
(million dollar trader) movie showed that beautifully.
But agree you can make more money with managed trades that are going your way.
Set & Forget is easier on your nerves.
The real question is what method is better in the long run for your nerves, your well being, your portfolio and ultimately your possibility to keep your lifestyle.

What do you mean by ‘set & forget’ ?
Are you referring EA’s in general ? or a unique software/platform?

I believe that [B]‘One will never get it right all the times’[/B] is why we are all here, having insightful conversations as this.
Regarding other commitments and emotions, we all have them in one way or another (even full time traders), so automated trading can be an answer to both the experienced and the inexperienced, the full-time trader and the one having or wanting the trading experience to be in 2nd or so in his list of priorities.

Maybe the 5:95 ratio of successful/unsuccessful traders, which as said here is due to 95% are dropping out, is in fact [B]because[/B] of one’s extensive [B]thinking of reading[/B] the market whilst the change made after reading is [B]again[/B] not suited for the playing field.

Because it works for [B]THEM[/B].
That does not mean it will work for you, me or any other person.

That’s why “wannabe” traders have to learn the basics and pay their dues in blood, sweat and tears. :slight_smile:

Now that’s a good point: success is a subjective experience. The development path will vary for every aspiring trader and what inevitably works for individual A will differ from individual B. But ultimately, success is measured in preservation of capital through management of risk and growth of capital; however that is achieved.

One insight among others I’ve had over the years that really caused me to turn the corner from thinking I needed to balance various types of analysis to becoming a technical purist is the notion that naked price on a chart is the clearest realization of market psychology outside of standing in a trading pit. Those candles/bars on your screen are the direct representation of real-time oscillation in supply and demand, money flows driving in and out of whatever you’re trading. So, [I]price just is the encapsulation of how the varied sentiment of all members of the market crowd registers at a given moment in time. [/I] There is a story, however brief, and a (mis?) apprehension of where the market is headed with every tick up and down. Price does not move by chance; it moves by will, even if we can’t grasp that will because of its enormity, complexity and unpredictability.

Whatever methodology or system one uses, success is likely to come about where price is acknowledged and respected. That applies to your chart (the old “less is more” adage, indicators v. no indicators, etc.), but also applies to your head. The market crowd is a maelstrom of noise, opinion, ego and yes, greed: no matter how above the fray one may think they are, they’re never entirely immune to suggestion in all of its overt and subtle forms. Guard your most valued asset (your apprehension of the market context and whatever edge that gives you) and find ways to develop and guide it. This is something many traders do not do and one of many reasons that contribute to their failure.


great insights…!!

Very well said…!!
I have come to the same realisation and that’s why I’m using two charts for every instrument I’m trading.
One chart with all the indicators, S&R, trendlines, Pivot Points ect. ect. and one chart [B]without[/B] lines and indicators…just naked price action. It keeps me in the [B]“real world”[/B] of price action.

The market crowd is a maelstrom of noise, opinion, ego and yes, greed: no matter how above the fray one may think they are, they’re never entirely immune to suggestion in all of its overt and subtle forms.

And fear I might add.
Fear to loose capital and fear to loose accumulated profits in open positions.

It really boils down to these two emotions…greed and fear. And that what drives naked price action in it’s pure sense.