Trading systems for total beginners

Beginner Questions Candlesticks, Chart Patterns, and Price Action
1

Hello Everybody,

After reading some sites and also forums here, I want to ask you about your, checked, trading systems using moving avarages, RSI and Stochastic. Those indicators “speak” to me the best, so do you know any easy system that uses them? I am a total beginner, newbie or however you may want to call me, so be patient with me, please… but/and answer my question! :57:

2

I would recommend keeping your charts as simple as possible.
I use a system I found on here called the 3 ducks trading system. Very simple, just 1 indicator and 3 time frames.

1 Like
3

Learn to trade Naked without indicators, EA’s Robot, MA’s Oscillators etc. Let Price Action be your methodology. ALL indicators lag and and will either get you into a trade late or out of a trade late period.

4

Hello again,
Just to keep you posted ( like anybody cared, ritgh? hahahahaha) I figured out 15M and 1H are the best time frames for me. Mostly I don’t lose money when trading those frames.
Just saying and waving Aloha to all who read these words.

5

Very good. What indicators did you settle on? The ones you mentioned?

6

Hi. yes, besides I am testing 10EMA, 25EMA and 50EMA. When they cross I make the move, very often it goes in a good direction. Somehow those numbers spoke to me.

7

To move towards trading profitably, Brygida, you’ll have [U]much[/U] better chances if you give up indicators, and learn “price action” techniques, in my opinion.

I come from a “trading family background” and have now been trading for a decade (including an initial 4-year period of studying, watching, learning and using demo accounts only), and for the last two years of that, after an enormous amount of trading education, research and practice, I’ve fairly steadily earned from it what most people would consider a very good living (that’s how much work I put into it, albeit part-time, to achieve it - even with my background); like many people in similar positions, my trading became consistently profitable only when I eventually [U]abandoned[/U] the pursuit of indicator-based systems. I urge you to do the same, and the sooner the better.

I’m happy to recommend books to you, now or later, if that helps.

Ok, subject to the comments above, I’ll answer it. :wink:

Here’s the safest, most sensible forex system I’ve seen with entry parameters based on moving averages, stochastics and an RSI.

[U]Chart set-up[/U]:
[U]M10 forex bar charts[/U] during their main trading hours (e.g. EUR/USD and/or GBP/USD when either Europe or New York is in its normal business hours, but avoiding the opening of sessions by half an hour and their closing by an hour; choose only pairs with low spreads, such as GBP/USD and EUR/USD during their appropriate sessions)
[U]Simple moving averages[/U]: 6 and 18 periods
[U]RSI[/U]: 10 periods with a horizontal line drawn at 50 (if your charting software requires two levels to be specified, just put “50” for both of them)
[U]Full stochastic[/U]: settings 5-2-2 with horizontal lines drawn at 62 and 38

[U]Entries[/U]:
Enter long at the start of the next M10 bar after an M10 bar has [I]closed[/I] with the fast moving average having crossed up above the slow moving average while both moving averages are rising (i.e. “no dead crosses”), and the RSI is above 50 and rising, and both lines of the stochastic are above 62.
Enter short at the start of the next M10 bar after an M10 bar has [I]closed[/I] with the fast moving average having crossed down below the slow moving average while both moving averages are declining (i.e. “no dead crosses”), and the RSI is below 50 and falling, and both lines of the stochastic are below 38.

[U]Management[/U]:
Stop-loss fixed at 9 pips
Take profit fixed at 15 pips

[U]Position-sizing[/U]:
Expose to risk no more than 1% of your trading capital per trade (value per pip is such that a 9-pip loss will lose only 1% of your funds)

[U]Notes[/U]:

  • The indicators are used only to open trades, not to close them. Once a trade is opened, ignore them (or take them off the chart).
  • Don’t trade around news announcements that might be relevant to either/both of the currencies you’re trading.
  • Don’t decide to increase the position-size after a good run of trades (and not after a bad run, either!).
  • It’s ok to trade it on slower charts than M10, too (probably not on faster ones), and it might be ok to increase the TP and SL (on a [I]pro rata[/I] basis, according to current volatility), if you do.
  • If you trade it on slower charts, you’ll get fewer trades but their overall win-rate should be higher.
  • You need [B]all 4[/B] of the entry parameters to be fulfilled (MA crossover; MA’s both rising/falling; RSI above/below 50 and rising/falling; both stochastic lines above 62/below 38) - if one of them isn’t wait until the [I]close[/I] of a bar has confirmed that all 4 conditions are fulfilled before entering: that’s important, because all these indicators “repaint”.
  • You need to win only 37.5% of your trades, with this system, to break even: any win-rate higher than that will be profitable.
  • Edited to add: there are other pairs you can trade with it, too, as long as they’re active when you try: USD/CHF, USD/CAD, AUD/USD (beware high spreads), EUR/JPY, USD/JPY, but not GBP/JPY.
  • Don’t open multiple trades at the same time: once a trade’s open, wait for it to close itself (one way or the other) before opening another.
  • Don’t draw any conclusions about this system, or these indicators, until you’ve faithfully recorded the outcomes of 200 consecutive trades using the system (to do [I][U]any[/U][/I] kind of trading profitably, in the long term, you’ll need the patience and discipline of being able to do at least that).

I don’t say that you’ll necessarily make big profits from this, but it’s about as safe as you’ll get for a simple, multi-indicator system [I][U]using the indicators you requested[/U][/I], and if nothing else, practising it will be [U]really[/U] beneficial towards teaching you the patience and discipline necessary to trade systematically, because every time you try to “bend the rules” it will probably backfire on you. And for that alone, it’s valuable. And good luck!

8

lexys

Thank you very much for your time and answering my questions. Very thoughtful and kind of you. I will try your system, with time, but I must say I have been trading for a very short time, I have noticed that I start to understand price action or at least I can notice its tendencies. With time I hope to be better, but I know I need much more practice. I stay positive and do not lose my cool head, that’s also important, I believe.
Anyway, again, thank you for your answer.
LadyB ( Brygida)

10

Hi there, FXAITareeq
I just want to say that, despite all other great answers to my question, I have started to use your - naked price action and it has been great for me. I mean, I take things slow and really baby steps, but, thanks to you, I am imroving. So, just want to say thanks.

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That is so AWESOME LadyB. I am so thrilled to hear that, and more importantly that it is working for you. Keep up the excellent work and please, please keep me informed as to your progress.

I look forward to being your #1 Fan!

Have a magnificent day on PURPOSE!
AR

12

Oh thank you very much for your kind words, sorry for a late answer, life keeps me busy. Learnig Forex is rather good for me, so also thanks to you, I enjoy it. Hope your days and transactions are fabulous too.
Hope to stay in touch,
BB

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We had a GREAT day yesterday. Hit T1 on EURUSD for 141 pips. Let’s keep in touch more often.

EURUSDH4BEND3.jpg700×509 32.7 KB

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Absolutely we should write more often, but first I have had to ‘clean’ my computers, man! they went bananas. Hey, congrats on those awesome pips you made. I am taking my learning slowly, but every day I make some 50-ish pips. I try to learn before investing larger amounts of money though.

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You are moving in the right direction. There is absolutely no need to rush. The Forex Market isn’t going to disappear anytime soon. It is doing quite well taking 95% of the Retail Forex Trades money on a daily basis. The fact that you’re gaining 50 pips a day is awesome. When you get a chance read my blog post on “You only need 20 Pips a Day” If you utilize proper risk management you can gradually have a nice Forex account.

Have a magnificent day on PURPOSE
FXALTareeq

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Wow! FXAITareeq ! What a great post and soon I will read some more of it. I like it. I think I will sign up to your newsletter service, I think it may help a lot. As I said before I make small steps, so say today I’ve earnd 70 pips, but I invest very low money, 0.01 lot to start with. After losing some $ before on a higher transactions, I decided to take it slow. With time I want to increase to 0.02, 0.03, etc. What you mention in the blog makes a total sense to me, I wil remember your words!
Have a fabulous day!

B

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Your absolutely welcome @LadyB. I’m starting to blog more often. I’m in this festive mood to give more and help more Forex Traders gain success in terms of improving their trading skills. Many new traders should try to emulate those who are successful and have been in this wonderful industry long-term. This “One Trading Strategy” will improve any Trader’s success. It worked for George Soros, Bill Lipschutz and Stanley Druckenmillerand, it can work for you if you try it!

Have a magnificent day on PURPOSE!
FXALTareeq

20

Hello,
I’ve subscribed to you blog so I’ve got the mail, very interesting.

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BTW we just closed EURAUD Daily Busted Kangaroo Tail Trade for 633 Pips. The details is in the video.