What Every New & Or Aspiring Forex Trader... Still Wants To Know

Beginner Questions
1619

Hi. To be honest I hope that I have not misled you: I intended my post to offer some generic encouragement that it is possible to negotiate the markets even in heavy news periods, and secondly to reinforce what I see as a key point that avoiding trading through big news announcements is important to sustained success, year on year.

I don’t trade the ICT strategy, although my approach does echo elements of it, from what I have read. I find this thread very helpful, and I like the positivity among the regular contributors, and ICT’s whole mindset appeals to me, so I find that the thread helps my trading. However, I must confess that I have not, yet, gone through the whole thread in detail (I came to it very late in the day) so do not know all the detail of the strategy, which is why I do not post specific setups on here, as I do not want to detract from ICT’s excellent thread or risk confusing people who think that I follow the strat. I do use Fib levels and S&R on most of my trades.

To answer your questions, I always risk 1% of my account on each trade, although one some of the trade I will scale in - in other words, if I place off the Daily, I will sometimes trail my Stop to B/E if I see another opportunity to enter on, say, the Hourly chart, which I will do with a further 1% risk, so my overall risk on the move is never more than 1%. For instance, I went Short on NZD/USD on 28/04 (think that was the date, anyway!), then earlier this week saw a further setup on the Hourly chart for the same pair. I trailed my Stop to B/E and entered a further 1% risk on the same pair, with the same TP as the original trade.

And yes, sorry, I am in the UK, so yes 0530-0830 GMT - tends to be a comparitively news-free zone as most people who drive the news are not talking to the Press at that time.

Sorry if my post implied that I follow the specifics of the ICT strategy, I intended it more to make the two wider points that I believed are relevant to Forex trading per se, rather than to any specific strategy. I will be clearer in future.

1620

Lol, I do not know about that, I take losing trades just like anyone else, and I don’t have any particular inside track, just a good strategy, regular coaching (keeps me honest!) and a mechanical approach.

I had a good few days (maybe a ten day holiday without access to a computer helped?!) so hoped to use that to inspire others a little when there were a few losses around this week. 1.66% is really not a bad loss at all, you were one trade away from making a profit this week, so that is really very encouraging. You have a good strategy, you are avoiding things like NFP, you are not losing much when you lose, you will, I am sure, analyze the trades you took so will not repeat any mistakes - sounds to me, from this and other posts, as though you are very close.

1621

Thanks for the encouragement, it helps keep me on the right track. I was some real dumb money as little as 3 months ago, so having this consistency feels unnatural, I don’t quite trust it yet. But right now I’ve got 10 weeks of results with an average of 1.13% per week, and that’s right about where I want to be. Which really boosts my confidence because that’s my FIRST 10 weeks, and I assume the results should get better as my experience increases and I weed out my common mistakes…

I’m having some problems maintaining the sleep schedule to be up to trade london open and go to work, but I think I’m getting better in that department too. I’m kind of like ICT, I cannot follow a sleep schedule to save my life, so sometimes I just have to sleep through my trading times and suck a lemon if I missed a good trade because of it. It would be easier if I didn’t have to work but I figure missing a few trading days isn’t the end of the world.

and that’s enough latenight rambling for me!

1622

I agree that it can be an addiction of sorts, and that is why one of the first videos that ICT put up was about trade psychology. Now I am sure many people watched that and thought, ‘yeah yeah, my ego is in check, I don’t need to prove anything…c’mon let’s get down to the technical stuff that makes the money’, and maybe haven’t actually revisited it. Yes, I am sure that there are people who can stay in control when trading multiple times a day, but there are probably more who are in denial about the type of personality that they have. Only you can determine which one you fall into, and it may take a lot of heartache for the latter type to actually realize they have a problem.

(As an analogy, I just remembered a couple that I met while travelling in Asia. Every year they would hop on a plane from Sweden where they lived, and vacation for two weeks in the tropical climes of Thailand. For those two weeks, and those two weeks only, they would indulge in hard drugs. Once back in their home country they were professional people who held down jobs of responsibility and would never go near anything of the kind. How many people can actually do that? Not too many I guess. Why even risk trying to find out? It is a dangerous route to go down.)

I felt the compulsion to avenge my losing trade this week, and I didn’t like the feeling one bit. I think that is more an ego problem than an addiction to the ‘buzz’ of needing a winner. But I too have that lingering pain from wiping out on derivatives, and this, as you say, is what will keep me on the straight and narrow.

Thanks again.

EDIT: I think that analogy turned out to be the opposite of what I was aiming for! Haha! I guess we are all at risk of becoming addicted, but we are all going down that dangerous road in order to experience a new perspective on life…a life away from the 9-5 grind. What we need to do is control the experience, and always be wary that we could fall prey to emotions that create an addiction to ‘being in the trade’. In that respect, we need to be like the Swedes…fully in control but knowing of the risks. So in answer to my question ‘How many people can actually do that?’ the answer is still ‘not too many’, and that is why most people fail.

1623

I think that different personalities respond differently to trading… i think some have more of a tendency to get “pipdrunk” then others. I personally don’t have trouble with this at all. I am more inclined to be fear driven and not risk enough or take good setups when i should… so thats kinda the opposite end of the spectrum and its something i now realize i need to work on. My personality is motivated more by fear then greed (or addiction to the action).
Interesting to see how different people respond to trading and their own personal psychology.

1624

Hi to all and for those struggling with the Smart money tool,I’ve just had the eureka moment and got it !!!
In as much as I can pick out when are the divergances and see the rules working there magic.

I’ve noted it as this When Cable trades higher(highs or lows) and fibre fails too,Sell cable.

When Cable trades lower(highs or lows)and fibre does not,Buy cable.

Sometimes these divergances can be quite subtle but the results are consistant you just have to practise reading it a bit(just spent 2+ hours on it and finally got it consistent!).

I’m starting trading this coming week(Demo first)as I have ICT’s concepts down now after watching London open and learning from you all in the chat room(Thank you all!!!)for the best part of two months,still got a few quiries if anyone can advise:ITC’s ADR indicator(MT4)shows the daily average H/L for that day?and its displayed top right of screen?As he’s done a video with a Excel type box to fill in and calculate,is this the same but for MT4 or different?
Everyone quotes ADR as a validator for trades etc so if anyone can clarify it Much appreciated.
The other quiry is with placing orders etc has anyone a quick lesson or explanacion for those of us on the slower learning curve!!ie knocking on in years a bit.

Many thanks in anticipation

Jeff

1625

I’m going to be adding a tool to my trading this week, and I’m pretty excited because I actually have experience trading with it from 2010!

simply…WEEKLY Pivots. These are best viewed on a 1h or 4h chart. I will be drawing the levels manually, simply because I don’t have the weekly version of “dailypivotmacro” by ICT. Wish I did…

anyways, I had 2 consecutive positive months trading weekly pivots coinciding with weekly highs/lows and its what gave me the confidence to go full-time trading (refer to earlier post if you wanna know how that went). I started chasing other methods almost right out of the gate and money management was slack at best. The patient mindset was incredibly difficult to maintain, but I’d say that was mostly due to being underfunded in terms of account size and living expenses.

back to pivot’eering, I’ll just add a quick pic of some weekly pivots calling the shots on this week’s Fiber action!

edit:
look familiar?

1626

Yes, I was looking at the higher time frames for a while, but decided to get my London Close perfected before moving on to this. I think this kind of trade would fit in with my schedule and would compliment the scalps that I take at LC.

What I would like to do with this is use the SMT on the 2 hour time frame as that shows very clear divergences for me. I am aware that not many people can access a 2 hour time frame on their platforms, but if you can, then I think you will find that (and I don’t know why) it is very easy to use the SMT. Please see picture below for the same trade that akeakamai is highlighting…

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I also like the idea of combining this with ‘Short term high/low’, ‘Intermediate term high/low’ and ‘Long term high/low’ analysis on the 4H time frame. This is all detailed in one of ICT’s teaching videos. An example of this is shown below. Note this is NOT the same example that akeakamai is highlighting.

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Well, definitely something to work on in the coming weeks. I look forward to sharing more information Ake.

Regards

1627

This is showing on page 1, but no link yet:

[B]5) The ICT London Close Tactic - View Video

5.1) ICT Trade Worksheet - Download File[/B]

I can’t take the suspense any longer!!

1628

[QUOTE=akeakamai;256899]I’m going to be adding a tool to my trading this week, and I’m pretty excited because I actually have experience trading with it from 2010!

simply…WEEKLY Pivots. These are best viewed on a 1h or 4h chart. I will be drawing the levels manually, simply because I don’t have the weekly version of “dailypivotmacro” by ICT. Wish I did…

thats really funny because i just wrote down to check these weekly pivots too on my checklist for a trade :wink:

1629

Some food for thought.

Here is a 1 year chart of the Euro showing the net positions of the traders included in the COT report. Observe the long term movement and direction of the Euro. For the most part, when the large non-commercial traders are net long or, net long positions are being accumulated (green line slanting up), The Euro is being pushed higher because of demand (an increase in buyers). The opposite holds true for the reverse, IE. net short positions pushing the Euro lower (an increase in sellers).

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Now, look what happens when an extreme amount of traders are either net long or short, the first example being in May/June 2010 when the Euro bottomed. All the large traders were selling short until there was no one left to sell short to, and the market turned, sending the Euro on a 3 month 1200 pip run.

Look familiar to last weeks data? IE, all the traders willing to go long are long already, and there are no more buyers left to push prices higher. Add to that the negative news events for the Euro and it gets slammed down, as there is no more long demand left, and a whole bunch of supply.

I am by no means an expert on any of this, however, I do believe the chart speaks for its self.

1630

Hey guys, this is kind of off topic but I have been thinking about Open Interest lately, and it’s something that’s been on the back of my mind for a while but never really bothered to find out about it. So here goes…

In the video where ICT covered Open Interest, he had stated that when one sees a reduction, it means that Commercials are reducing their net short positions and price may be in store for a bullish trend. And if Open Interest increases, Commercials are increasing net shorts positions and price is in store for a drop.

But I have read that Open Interest is more or less a indication of the strength of the current trend; much like volume.

With that understanding, would that not mean if price is already in an uptrend, and Open Interest increases, it is confirming the current trend and is actually a bullish indication?

If someone could help confirm what to follow it’d be great. I know ICT says that a drop always indicates a bullish bias, but I am having troubles understanding why it works that way?

Edit: Here’s is just one of the websites where it states OI is an indication of trend strength, rather bullish or bearish.

Understanding Volume & Open Interest in Commodities

Regards,
Clark.

1631

Yes, I also struggled with that. The stuff that you are talking about regarding price being in an uptrend and an OI increase confirming the trend is exactly what I read in Steve Nison’s book. If OI declines in an uptrend then it is a signal that the trend may be coming to an end. But this is a very simplistic explanation that doesn’t take into account the role of Large specs. vs Commercials. I think that this is only applicable to trending markets, with OI rising or declining at a steady pace.

With regard to the ICT information, he did state that there needs to be a ‘precipitous’ decrease/increase of more than 20% while price is in consolidation for it to work in the way he suggests. I too can’t get my head around the reality of why this works.

I think the key is to compare the type of PRICE ACTION you are seeing, and then apply the OI. But like I say, this is a case of the blind leading the blind so don’t take my word for it!

1632

Haha, the blind leading the blind… I like that one. :stuck_out_tongue:

Hopefully ICT can answer this for us himself.

I believe that a large change while price is consolidating is key. But for the past couple of months, while Cable was rising (prior to the recent drops), Open Interest rose steadily. So that’s when I started wondering exactly how Open Interest is used… I’m still a bit confused by it and hopefully it gets cleared up soon, since that’s about the only thing that’s been puzzling me.

Regards,
Clark.

1633

Well I think you have to change your thinking a bit ie when someone takes a short position they are actually buyers from that point on because they have to buy a contract to close out their position so it makes alot of sense that when OI (contracts that are still open) starts to fall the price starts going up.

Well it makes sense to me anyway. :31:

Wally

1634

Believe it or not but there is a book dedicated to COT called Trade Stocks & Commodities With The Insiders by Larry Williams which can be found googling or amazon.

1635

I’m new with forex and MT4 trading platform and is currently having trouble with determining which are the time frames to trade.

I plan to trade on EUR/USD and GBP/USD.

I live in Singapore (GMT+8), and know that New York is 12 hours behind Singapore time.

The problem is, i do not know how to change the time in MT4, it is always lagging 28 hours from the current time zone I’m in.

Kind souls please help me! >_<

Thanks a dozen in advance!

1636

You cannot change time in MT4. It depends on your broker server time. So first check your broker time, then you can adjust your indis (e.g. pivot indi).

e.g. if your broker time is GMT+8 and you want to use Pivot DailyMacro with EST pivots, then set Shift Hrs = -12

Good tool is P4L Clock indicator.

Hope it helps.

1637

How are you guys scaling out of your trades?

I know what i want to take out and when, just not how to remove 30% etc.

Is it simply a case of opening three seperate orders per trade? I cant find any useful information about this on my brokers (Oanda) website.

Hasnt been an issue up till now because ive been moving SL to BE and taking full profit at 100% extension but its time to take it to the next level!

1638

You can either enter couple trades say one with 70 units other 30 units with same sl but different tp, or you can enter a trade of 100 units and after 30pips enter a new trade of 30 units in opposite direction simple as that.