What is the best style for my life situation?

First off let me say hello to everyone - this is by far the best Forex info site on the internet. I’ve been studying up on Forex for the past couple weeks and looking to ramp up my knowledge over the next few months, get going on a demo account till I consistently show a profit, and then start grinding away for real:)

I have an IT/finance background, but it’s always been my dream since I was a kid to trade for a living. About 4 years ago I got disillusioned by the corporate life and got a job at the CBOT. I was making $375 a week with no benefits, but I moved up quickly and eventually started screen trading for a guy. The money didn’t matter at the time because I loved the work.

6 weeks after I started trading mini-S&P futures on the screen - I had 1 winning session! - my boss pulled the plug. I was trading off a $5K account and was allowed to scalp 1 lots. I had no direction or guidance, was terribly undercapitalized, and scalping 1 lots all day was killing me with the commissions. Even a scratch cost me serious money.

That experience really f* up my confidence and dream, and I went back into the corporate life and struggled to get ahead again.

Flash forward 4 more years to 2008. I’m now making good money in my corporate job and have the capital to trade. During the past 4 years I thought alot about why I failed the first time. I came to realize I was a lot closer than I thought I was, and the strategy and bankroll I was handed didn’t suit my style.

I’m tied up with work M-F from 8-7 Pacific time. Based on that, what is my best bet to trade around this schedule until I can trade full-time for a living?

Should I wake up really early and trade, closing all positions by end of day? Or should I take a longer time frame of up to week and hold stuff overnight?

Your schedule actually works really well as you’ll be able to trade the London/Tokyo overlap from 11:00 PM - 1:00 AM PST and also the Europe/New York overlap from 5:00 AM - 9:00 AM PST (obviously you won’t be able to trade that whole time since you’ll be going to work, but a decent chunk of it). Those have been my favorite times to trade and provide for the most volatility I’ve noticed.

As for the style of trading, that has everything to do with what you enjoy and what works for you. As a scalper, I don’t think I would ever be capable of position trading or even holding a position overnight for that matter. It just wouldn’t be me and my bank account would suffer accordingly.

I would have to agree with lavaman on a couple of things:

trade the overlaps-- my fav is the London/NY which central time for me is 7-11. Volatility really heats up an hour after the start of the overlap. If you can commit to just a couple of trades at that time, you might just have enough profit to call it a day :smiley:

I would also suggest to continue scalping, afterall you should have decent experience with it correct? Scalping allows you to make bank by targeting 5-10 pips (my preference on EUR/USD) on solid opportunities with hefty exposure (currently my exposure is 40% of my account balance with 50:1 leverage).

My scalping allows me to make 5-8 or so trades per day and increase my account by 4-8% per day.

Nonetheless, it would also be wise to look into longer term strategies that may take a day or two to develop. That way you can set up your trades in the evening and allow them to rollover into the next day or two to fully maximize profits. This may also take a lot stress off of trading by not having your eyes glued to charts during your trading period.

Good luck!

Thanks for the response lavaman. When you scalp those 2 windows, do you use a 5 and 10 minute chart to look for your setups?

I’m a little hesitant to scalp again, but that’s mainly due to my first experience with it. In a normal trading session for the mini-S&P’s I would have found around 10 decent setups from 7AM-2PM CST each day. I had tight stops and frequently got taken out and missed the move I had waited around for.

My boss wanted me to do 200+ trades a day for .5-1.0 point per trade on a 1 lot. I couldn’t do that with the capital I had behind me. Even if I scratched 100% of my trades for a week, the commissions would eat up almost all of my account.

But based on my schedule right now maybe I should revisit scalping. Take fewer trades like I did in the past, but only those with at least a 2:1 reward/risk ratio.

Hey MNS, I actually use the one minute charts for precise entries and exits, and I scalp with the bias of the current hour. However, I am aware that more scalpers favor the M5 charts. I personally use pretty tight stops. Typically, I have it set to 7 pips, with the idea that I also gain a pip or two just by the momentum in place when my order is triggered (not always the case, but often enough). My win percentage sometimes is no more than 50%, but the gains come in the way that I scale out of trades, always letting a third of my position ‘ride’. I often take about 10 trades per session.

Your boss sounds INSANE.

Hi Lavaman,

Quick question, I hear people always talking about scaling out of a position, as you said you let a third of your position run. I totally understand this, as I often scale in as well. But does this mean that you always initially open at least 3 lots, then scale out of 2 and let the third lot run? If not, then what do you do? Thanks in advance.

lets just say that youve got a bit of a problem here and youre gonna have to face up to it pretty quickly !

the problems to look forward to are, should you decide to trade prior to work, a trade that stays open while you sweat it and the clock keeps relentlessly moving toward the time you should be saying “gm” to your REAL job boss !

while you may “think” youve got the scalping issue locked up, you have to PROVE it to yourself and the best way for that is to demo the method BUT while youre doing that, you will find that some of the really outstanding trades on the 30 minute and H1 charts happen overnight (which is the London opening)

what most people, no matter how much i scream it from the rooftops DONT understand is forex is a trending little beastie, and if its gone up for the day, some other market will play it short, since they cant (are not allowed is a better choice of words) take it higher ! NOW, who are those OTHER markets ?

after midnight (EST) you will see the trend in the H1 develop clearly, and you simply play that trend and wake up in profit ---- on those nights where the market is waiting for news, the situation is EXACTLY the same, because the trend already has the direction of the move figured in and while you may not wake up with the currency having moved one iota from the time you went to sleep, once the news is released you can be assured it will do exactly what was planned !

your ONLY problem in this situation is knowing when to take profit, and a simple set of “barry’s support and resistance” chart overlays will head you to the right place !

ONCE you build your account, you can think about taking a very MINIMUM amount of scalps in the morning (once you have proved how really great you are on the demo (ps — ONLY open a demo for the amount you will be actually trading — if you open a 50K account and will only be trading with a few thou, youre right back into where you were in your past life).

ONCE everything comes into focus, you can tell your boss to “take this job and shove it” and head down the yellow brick road, paying NO attention to the man behind the curtain !

enjoy and trade well

mp

[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !

As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !![/I][/B]

Hey Piplady, I trade using Oanda right now and I can set my lot size to anything I want with them. I always trade a lost size that is divisible by 3. I sell a third of the lot at +5 pips, another third at +10 pips, and then the last third I let go, while continuously moving my stop-loss to the open of two candles prior.

My preferred method of trading is alot like the NickB method. Using 4 hour candles I can let my trades work while I sleep or am at work. I guess I’ll have to figure out how to do alarms for trade entry while Im gone…but I think it’s doable.

Since Fridays are a day to avoid in Forex I’ll not do any trading that day, only Sunday night through Thursday night.

while friday may not be the best day to institute a trade based on the H4, its a great day to FINISH one !

and if you scalp or short term trade, fridays action is usually a delight as long as you stick to the shorter timeframes so that your trade can finish by the EOD !

MP

[QUOTE=Money Never Sleeps;83868

Since Fridays are a day to avoid in Forex I’ll not do any trading that day, only Sunday night through Thursday night.[/QUOTE]

Well I’m excited to start on the demo account once I’m done reading Steve Nison’s Candlestick book and document my rules for trading.

Does anyone else here trade off 4H charts? How many setups a week do you find on average?

Friday is not that bad a day to trade if you know what you are doing- I usually try H1 30 M on Fridays and put my t/p very low., like 10 or even 5 :slight_smile: I only trade for an hour on Fridays-it is a waste to be trading after 11-12 PM EST.

HMMMMMMMMMM !

REALLY think so !!!

mp

I use Oanda also, how do you set this up?
Also, you say you trade off the 1H, if you set your stop at 2 candles prior couldn’t you SL be fairly larger?