As a trader I have evolved and I changed my strategy many a time before coming to a style of trading i feel comfortable with. I am not posting this thread to feel better or tell you that my way is better than yours.
What I am here to do is to, tell you what has and hasn't worked for me and why.
In the beginning i thought that there must be a way, to predict the prices, and to profit on this prediction. Surely it cannot be random and there must be a way to find out the exact entry and exit point.
i went about reading online and found many people and so called experts sharing their strategies either free or for profit.
MACD diversion, Slow stochastis settings, awesome oscillators, bollinger band bounce strategies, candle stick patterns and formations, trend lines, support and resistance and so forth. The way to attempt to PREDICT is limitless.
i came up with complicated calculations, and custom fitting the indicators, the more i tried the more complicated the puzzle became. i wanted to predict the low price of the day and wanted to find ways to attempt at the prediction of price. "to a complicated problem there must be a complicated solution" i thought.
yet........................it didn't work, or it worked until it stopped working
i came to think that the market was messing with me, if i went bull the prices dropped if i went bear the prices rose, prices would hit my stop loss right before reversing to my original hypothesis, then i moved my stop loss but it wasn't effective as it exceeded my threshold of pain.
I remember posting at the EUR/USD thread and i didnt know where price would go, so i being the person that 1 is very bright and 2 does not give up.
i needed to find a solution, and to find a solution i had to start from scratch.
thanks to FTI "technical analysis fallacy" Jacko "house of pain" james 16, and crucial point, to name a few, i began to re think my strategy. and especially jesse livermore. They all had one thing in common. which brings me to my point.
The moment i STOPPED predicting price, i became a better trader. No set of rules or mathematic algorithms can Predict price. The reason being that price movement is affected by market participants. Many participants have many different reasons for doing what their doing. Forex is fundamentally different than stocks but the market structure is similar. Understanding the market and who are the players helped me a lot.
Central Banks and the government of each country: are the biggest most important players in this market. I see a lot of posts about the "big boys" manipulating price, and I am not disputing that. However the fact that people think this is a supply and demand market sounds a little silly to me.
i believe supply and demand form a big role on the movement of price, but this is true about the central banks. FOREX CANNOT be solely influenced by traders, or speculators. The government would not allow that. Government intervention is key, and they make announcements and hint at it. Think of this : Do you really think the United States of America, the richest most powerful nation in the world, allow us speculators to ruin their economy and decimate their industries by letting the dollar float in a "lassez faire" manner?
if the FED wants to boost exports: they devalue the dollar
if inflation is a concern: Dont they appreciate the dollar? through various mechanisms?
then why do we think that this is a pure supply and demand market?
the moment i began to see this, and keep up with news, announcements, interest rates, yields, bank reserves, and how the Central banks minimize their exposure, the better off i became at trading.
it became obvious to me that the movement of the dollar dictates the market. The world doesn't run on money per say it is oil that gives the dollar is value, and worth. The reserve currency is also used to price commodities, and in international transactions. so it is important that we stay informed with the movement of these commodities, to gauge the value of the USD.
EVERY ONE wants to protect their earnings or achieve higher earnings, if you are aware of the economic cycles, fundamentals behind the movement of price and specially MARKET SENTIMENT, this will give you an edge on your trading.
why am i putting so much emphasis on fundamentals? because we all want to trade off of the chart and make assumptions on what the next tick or candle will bring and the fact is that without being aware of the fundamental factors driving price movement we always run the risk of "predicting the next move"
fundamentals gives us the direction/ trend of price
technical analysis should be used to give us timing of entrance
What I am here to do is to, tell you what has and hasn't worked for me and why.
In the beginning i thought that there must be a way, to predict the prices, and to profit on this prediction. Surely it cannot be random and there must be a way to find out the exact entry and exit point.
i went about reading online and found many people and so called experts sharing their strategies either free or for profit.
MACD diversion, Slow stochastis settings, awesome oscillators, bollinger band bounce strategies, candle stick patterns and formations, trend lines, support and resistance and so forth. The way to attempt to PREDICT is limitless.
i came up with complicated calculations, and custom fitting the indicators, the more i tried the more complicated the puzzle became. i wanted to predict the low price of the day and wanted to find ways to attempt at the prediction of price. "to a complicated problem there must be a complicated solution" i thought.
yet........................it didn't work, or it worked until it stopped working
i came to think that the market was messing with me, if i went bull the prices dropped if i went bear the prices rose, prices would hit my stop loss right before reversing to my original hypothesis, then i moved my stop loss but it wasn't effective as it exceeded my threshold of pain.
I remember posting at the EUR/USD thread and i didnt know where price would go, so i being the person that 1 is very bright and 2 does not give up.
i needed to find a solution, and to find a solution i had to start from scratch.
thanks to FTI "technical analysis fallacy" Jacko "house of pain" james 16, and crucial point, to name a few, i began to re think my strategy. and especially jesse livermore. They all had one thing in common. which brings me to my point.
The moment i STOPPED predicting price, i became a better trader. No set of rules or mathematic algorithms can Predict price. The reason being that price movement is affected by market participants. Many participants have many different reasons for doing what their doing. Forex is fundamentally different than stocks but the market structure is similar. Understanding the market and who are the players helped me a lot.
Central Banks and the government of each country: are the biggest most important players in this market. I see a lot of posts about the "big boys" manipulating price, and I am not disputing that. However the fact that people think this is a supply and demand market sounds a little silly to me.
i believe supply and demand form a big role on the movement of price, but this is true about the central banks. FOREX CANNOT be solely influenced by traders, or speculators. The government would not allow that. Government intervention is key, and they make announcements and hint at it. Think of this : Do you really think the United States of America, the richest most powerful nation in the world, allow us speculators to ruin their economy and decimate their industries by letting the dollar float in a "lassez faire" manner?
if the FED wants to boost exports: they devalue the dollar
if inflation is a concern: Dont they appreciate the dollar? through various mechanisms?
then why do we think that this is a pure supply and demand market?
the moment i began to see this, and keep up with news, announcements, interest rates, yields, bank reserves, and how the Central banks minimize their exposure, the better off i became at trading.
it became obvious to me that the movement of the dollar dictates the market. The world doesn't run on money per say it is oil that gives the dollar is value, and worth. The reserve currency is also used to price commodities, and in international transactions. so it is important that we stay informed with the movement of these commodities, to gauge the value of the USD.
EVERY ONE wants to protect their earnings or achieve higher earnings, if you are aware of the economic cycles, fundamentals behind the movement of price and specially MARKET SENTIMENT, this will give you an edge on your trading.
why am i putting so much emphasis on fundamentals? because we all want to trade off of the chart and make assumptions on what the next tick or candle will bring and the fact is that without being aware of the fundamental factors driving price movement we always run the risk of "predicting the next move"
fundamentals gives us the direction/ trend of price
technical analysis should be used to give us timing of entrance
AVT INVENIAM VIAM AVT FACIAM