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BELIEFS
I have read a lot of information about pretty much everything here at FF and have tried to distill from it a few truths about forex (if there are any)
This is what i am left with.
The only thing that price seems to respect are significant levels, whether you call this support, resistance, PPZ's, previous highds/lows.
Price reacts to these but its pretty difficult to predict how, will it bounce or
break?
The above is true, as far as price respecting certain areas. The reason for this, in my humble opinion, could be places where larger institutions are interested in selling or buying. It is not my order, or yours. It will be Citibank, the ECB, or some other such large buyer/seller. I am correct in my theory? It's doesn't matter.....it is what it is.
One thing that got me into profit was to stop worrying about the WHY, but the WHAT. Meaning.....if pinbars in general work.....that's all that matters. Who cares why?
Also, why predict what will happen? Why not REACT to it? Much safer and smarter. (A lot less like gambling.)
Smaller time frames expose themselves more to the noise of forex and also the costs (spread) become more significant. On the other hand if this can be managed then scalping can have a number of benefits, mainly that of growing your account quicker.
True, and it will also increase your chances of getting burnt out. Or a stroke. We are trying to gain a better lifestyle through this. Or better yet - freedom. Freedom is NOT sitting at a computer screen 18 hours a day scalping the 15 minute chart. At that point - it becomes a quality of life issue.
Trends are great but they can and usually do end as soon as you join them.
Peope say let your winners run and cut losers short, how do you know a
winner?, you cant predict the future.
Get over that issue. No, we cannot predict the future. That is fear talking. However, we CAN predict the next move with the odds in our favor. It's called risk for a reason.
The weakest point of any method is human intervention or emotions, wether it be flexing your money management rules or 'knowing' were the price is going.
I think another word for 'discretion' is 'guessing'. If you can not quantify any part of your sytem it is basically guesswork.
Don't get me wrong, some traders are very good and cosistent guessers - im not.
That's fine. However, discretion is NOT guessing. In fact, discretion 99% of the time for me means NOT taking a trade. There is no chance of losing money when I am not in the market.
For example, I use discretion when I decide not to take a pinbar in EUR/USD at 8 a.m. EST, on a Non-Farm Payroll Friday. Most of the time, I find discretion keeps me OUT of trouble, not gets me into it. Do I miss a great trade every once in a while? You bet I do. That's life. And my life has more to it than trading.....so it happens.
The only way to win over time is to find an edge, stick to the rules which give you that edge, have belief in that system and then exploit it.
I believe that an edge is born through probability. If you can prove that
something happens more often than not, over an acceptably long period of
time, with accuracy then maybe, just maybe you may have found one.
I agree - however you put way too much thought into this. Price does one of two things.....goes up or down. It can go sideways, but only for so long.....trading should be easy. Thank God it is.
It us who make it hard.
System Theory.
O.k. so now you know where my mindset is i'm going to tell you how i'm trying to trade.
I say trying because this system needs considerable refinement.
What i want is your comments to see if its worth me pursuing this idea or not
I suppose this system is really an offspring from the James16 thread so much credit is due there.
It basically uses price action in the form of pinbars to trigger trades.
A pinbar shows price being rejected form a support resistance line.
James16 embraces this price action along with outside bars and double bar
high/lows with a lower/higher close, tries to weave in some other reasons to take the trade such as fib levels, moving averages etc. and then uses
discretion to make the trade.
I believe that this method works but am not convinced about certain aspects of it. Mainly the moving averages and the frequency of trades.
There are some of us, myself included, that NEVER use moving averages. In fact, I don't think it really helps one way or another. James and I disagree on that part of the system. But truth be told, my chart have nothing more than S/R lines. That's all I need.
However, make them the obvious, important ones. Weekly ones, daily ones. S/R lines on a 15 minute chart rarely mean anything.
I mean you can use any m.a. value you want from 1 to 1000, at some point
its going to look relevent to something. And man, i must be really impatient or something but trades are so infrequent on the daily timeframe that i cant
stand it, and it would take even longer to prove it.
You impatience will cost you money, and a lot of it if you are not careful.
Maybe this is a big weakness for me, maybe this method will gravitate to the longer tf's, but if there's any way possible of navigating the volatile waters of the H1 then id like to try. As i said earlier, scalping has its benefits
You seriously should start with weekly and daily. Trust me, after a couple of months of solid returns, you won't need the excitement of fast trades. However, if you can't do it on a daily chart, there's no way you will be able to do it on a 1 hour chart.
I think that the main thing that i don't like is the discretion side of it. i really
feel much more comfortable with quantifiable decisions, would i be any more
successfull trying to hand pick trades than i would trading everything that met my quantifiable parameters? This is what im trying to find out.
Beyond that discretion I mentioned earlier with massive news announcements coming out, discretion really isn't that big of a problem in my opinion. Remember, you never HAVE to be in the market.
As a general rule, I take every pinbar that is on S/R lines. Do they all work? No. But a majority of them do. That majority of them gives more than the others ones (losers) take. That's all you are trying to do....earn more than you lose.
Even if you only are up 10% for the year - you are doing better than 90% of the traders out there. You cannot put pressure on yourself to make 2% everyday, for example. Sometimes there just isn't anything worth getting involved in. Or other times, there is too much going on in our lives to care....
Remember: TRADE TO LIVE....NOT LIVE TO TRADE.
Ignored
DislikedAny way thanks for reading this and please comment, i would really love to hear your opinions and thoughtsIgnored
DislikedCould somebody please explain some abbreviations for me.
I've plotted Price_Action1.1 and I only know IB(Inside Bar) Pin Up and Down.
What is BuOVB, BeOVB , TBH, TBL MSL and MSH or DBHLC, DBLHC?
A little glossary with a short explanation would be nice.Ignored
DislikedSince you are talking daily Pin Bars have a read through this thread. Might give you some ideas on how to tell the good from the bad without an indicator.
http://www.forexfactory.com/showthre...ghlight=ademac
Enjoy
AdemacIgnored