Which Trading System Or Strategy Is The Most Profitable?
I know some of us would have been around for a while; which strategy is the best and most profitable on Forex Factory from your experience?
Kindly share with us.
Only one, the strategy you develop yourself.
Me too have the same question: Which Trading System discussed under FF you use you follow the most?
I am glad to find FF and join the group. I am able to browse tons of Trading Systems over here. However how shall I choose which to follow? Where shall I start from?
Thanks for anyone which can guide me?
It will be the one that you develop yourself & can understand how it work. If your develop it yourself, surely you will understand how it works &
why it does not work at times. It is possible that someone will share their system or method & you can get your mind around it enough to make it
work for you, but think outside the box & develop your own method to the madness & you should feel that you have accomplished something on you own.
Just my view & nothing more.
There are 3 kinds of systems, technical, price actions, and discretionary. And i have gone through all three of them in that order.
In my opinion, pure technical systems are the most dummy proof,what we do is to follow the buy and sell signals, and you are going to have 2-3 indicators plus several moving averages on your charts. As my trading mature,I discover price action systems, in which we still gonna use charts as the primary trading tools, but just different in approach. we label out chart patterns, price channels, support/resistance instead of technical indicators. This approach requires a lot more discretion from the trader to make trading decisions.
Last but not least, the final approach is what a lot of career pros use. some called it fundamental+technical, some gave a name for it, calling it order flow trading. Not many resources on this forum for this kinds of trading systems. But there are several sites provide these educations, for example forexlive.com, orderflowtrading.com, and orderflowforex.com.
This is by far the most profitable to me, but still don't expect free lunch. Not saying you need to be an astro. physics to get it. Just need to time and patience to learn. PS, most of successful traders work a lot more than the regular 40 hours/week.
All in all, people pick up things and change strategies as they grow. system is only half of the game.
You have said it all
Thank you for all fast reply from acetrader, angrychinese (what actually make you angry? )
I understand my own system will be the ideal one, but before I "able" to develope system/strategy of my own, where do I need to start from?
When I browse to Trading System Subforum, there are many good system from what I see, Trading Made Simple, EASY, Jame16group etc.....but which one I shall start from? Consider me as newbie please....
Just price action and support/resistance and maybe pivot points.
Buy when you think price will go up and sell when you think price will go down.
If you are wrong, learn of it and try to find out why you where wrong.
Trade real accounts, no demo.
When i started trading, i also tried some systems i could find online but no long time success.
I removed all my indicators and now i trade only price action and support/resistance, with success!
It will take some time to learn, but when you get it, you truly understand the markets, and that is what we want, right?
And off course watch out for news releases, use stop loss and have a good solid money management!!
What Angry said. If you truely want to make it in the markets, you'll need to learn more about "Order Flow" trading (as it's called) and Global Macro. Basically, it all comes down to knowing "what moves the markets" and taking advantage of this information. Unfortunatley, technicals nor fundaments move the markets which is why tech/fundie traders are always late to game. Those of us who understand the market and who understand what moves the markets are always a step ahead of the heard. Global markets (i.e. currencies) are truely a "thinking man's game".
1. First understand the nature of the animal (market) you are dealing with. Fighting a fire-breathing dragon is not the same as hunting a fox. The forex market trades huge sums of money (in the trillions $) every day. It is dominated by relatively few large traders and us small guys are just cannon-fodder, our trades don't even make a blip on the trading screens.
2. Something like 95% (I believe it is even more) of small traders lose money so whatever trading system you will use must not do what 95% of other systems do. The overwhelming majority of systems are fixated on price behaviour and/or intraday trading. To be fair, they probably all work some of the time but not well enough to prevent a 95% bankruptcy rate over a reasonable period. Such systems neglect to consider what the major players are doing and their trades are driven by responding to subjective price patterns caused by the natural "noise" of the market or to short-term trends which often fail soon after they become evident. In other words, there is no real force behind these "noise"-based moves.
3. As explained above, the forex markets belong to the big boys. If you were a big boy e.g. a fund manager, how would you make money with your $2 billion fund? You need to buy thousands of contracts, would you try to buy them 5 or 6 at a time on 15 minute time intervals? Of course not! You would acquire your positions over weeks and months and then take the market for a ride for maybe 6 months or more. The point is that the big money (smart money) takes its time to make their huge profits. Even daily charts are just "noise" to these guys so I suggest that you consider using weekly charts. This means that you will take small positions with largish stop losses, say 200 pips or so, you can do your own research in this regard.
4. How to find out what the big players are doing? Study the weekly CFTC Commitments of Traders report which gives the futures positions of the big boys and how many contracts were added or closed out each week. This will help you trade with the price makers. Go Google.
5. There is very little of value in technical analysis. Moving averages are too late and indicators are misleading and dangerous. Chart patterns fail too often. Stop with the price behaviour fixation! Ignore it all except for one thing: Drawing straight trend lines and once you enter a trade make sure you use the steepest trend line you can draw as your exit i.e. when price crosses that trend line you exit the trade.
The combination of trading with the big boys and using simple trend lines on weekly data allows you to live a less stressful life, check the markets for only 30 minutes per week, and you will probably make more money than 95% of small traders . Our lifetime is finite why not spend it doing things you like instead of being stressed 8 hours a day trying to day trade? Your health can suffer leading to blood pressure and heart problems. If you are successful in your first few trades then instead of taking bigger and bigger positions in one instrument you should consider diversifying into other currencies and commodities.
6. Be patient. Let the market do the work for you.
Good luck to you
Weekly/Monthly timeframe, CFTC Weekly COT Reports, Daily CME Group Volatility and Open Interest Reports, Strong Trendlines, and daily Global Macro news and data releases.
But all of this is useless without a solid grasp of "what moves the market and who moves the markets". Couple in some ideas of liquidity and sentiment will always help you stay on side with the big boys. Trade with them, not against them, is what I've always believed and continue to practice.
Buy the rumor, sell the fact.
Your comment above set to open eye for me!! Guide me to see the real reasons why most traders failed!
As a newbie, I search indicator and system around and download many indicators for my mt4 chart.
I try each indicator and sometime make me confuse which one to follow?!
Can you further explain your points below? Please correct my understanding if I m wrong.
1. In your opinion, intraday trading is dangerous.
2. Can you explain this statement further? "Such systems neglect to consider what the major players are doing and their trades are driven by responding to subjective price patterns caused by the natural "noise" of the market or to short-term trends which often fail soon after they become evident."
3. From what I understand above, you trade only one in a month?
4..Please explain further your statement : "By weekly chart....This means that you will take small positions with largish stop losses, say 200 pips or so..."
5. I wish to understand what Big Guys are doing: I went to CFTC and I can only get CME under Current Legacy Reports? Am I go to the right place there?
6. " Ignore it all except for one thing: Drawing straight trend lines and once you enter a trade make sure you use the steepest trend line you can draw as your exit i.e. when price crosses that trend line you exit the trade."---can you show example ? what is your method in drawing trend-lines? I often having problem with exit...
7. "The combination of trading with the big boys and using simple trend lines on weekly data allows you to live a less stressful life, check the markets for only 30 minutes per week" -- can you please explain further what do you "check" the market during this 30 minutes?
8. I heard about Orderflow, sentiment, liquidity...can someone explain these terms?
I apologise if you perceive this post as annoying, but would you mind sharing some of your knowledge with a struggling trader such as myself?
If you can find the time to send me a simple message, I would appreciate it.
If we want to understand more on these moves, where shall we start from?
I am in dark!
2. Price patterns are subjective because we can each see different things on charts. Who is right? Anyone or nobody? Was a move that appears on a chart a significant move (i.e. were the big boys involved?) or was it just minor fluctuations on small volumes - unfortunately the chart doesn't tell us. No chart tells us what the intention of the big players is. Are you being suckered into a trade? The price can't tell us.
3. I do not trade once in a month. I can hold positions for several months and Sometimes I hold positions in different instruments. For example I have held a GBP position for a few weeks already and entered a AUD position last week. I check my charts once a week to ensure I am trading with the big boys and not against them. I do not claim that my method is perfect but it is far more profitable than what 95% of traders experience.
4. If you want to trade long-term charts you need large stop losses or risk being closed out.
5. Yes you went to right place. But also explore on internet as other people provide COT charts with price charts which makes things easy to follow.
6. I shall post a chart later
7. I leave others to answer this question
Here is the AUDUSD COT chart as it was last week
The blue line is the weekly trend line - I try to make it as steep as possible. Exit when a weekly candle closes below the trend line in an uptrend or above the weekly candle in a downtrend. Enter long when the CoT is rising and so is the weekly trend line or enter short when the weekly trend is down and so is the CoT. In this way one is aligning one's trades with the big boys. If the CoT and the weekly trend start to diverge then hold the weekly trend until the price closes across the trend line
CoT (large speculators) and trend going in same direction is the ideal.
Yes I am a battle-scarred veteran of the trading trenches. Started in 1990 by learning TA. Suckered in by the appearance of how simple it would be with just a moving average. Became an obsession. Been searching for an answer as to how to trade ever since. Been down the road of searching for the Holy Grail, trying to optimise indicators, thinking there was something wrong with me etc . It has taken many years to realise that both TA and FA are just plain crap and so is psychology (if this book/course doesn't improve your results then you must have psychological problems! My ass!). What a cop out, blame the student if your method doesn't work! 10 000hours to become successful? - more like 30 000 in my case to devise my own trading/investing methods.
If the common methods worked then how come "professional" fund managers fail to beat broad-based market indices? What do their methods offer that they perform so poorly? Why do 95% of forex traders fail, surely one would expect about 50% to be successful? I am tired of the BS. I believe that the answer to being successful is to understand that there has to be a "cause and effect relationship" i.e. prices change for a reason. In the forex markets I believe that the driving force is the big boys manipulating the market to set up and then cash in on their futures and options positions. I have found nothing else that correlates so well to forex price movements.
All imo, of course
Much like a gold mine which becomes known, then mined, then depleted. The long run and short run perfect competition economic curves come to mind. So unless a short term trader can adjust to the shifts fast enough (very difficult) then profits made become profits foregone. Targets once hit become stop outs. Its just a constant cycle that weeds out the old inefficiencies and in the process creates new ones.
Intraday trading is so attractive to anyone because of the potential speed in which profits could seemingly be made but like you say, that's what "everyone" does and so for that reason becomes the reason it's so hard to win long term. The FOREX market makes this short term trading dream a possibility with the leverage it offers. Anyway Im sure there are probably some successful intraday traders. I doubt they are rubbing two sticks together to make fire though.
"Which Trading System Or Strategy Is The Most Profitable?"
For the vast majority, closing their account.
Okay, not what is wanted. But it's true.
Appreaciate your reply!
However how do I get the CoT chart or the blue trendline??
Your chart is look different from mine at MT4?
PS: What is CoT stand for? Is it a line /indicator??
Updated weekly at http://cftc.gov/MarketReports/Commit...ders/index.htm under current legacy reports, futures only, chicago mercantile exchange, short format.
CoT charts: http://www.timingcharts.com/
I open timingcharts.com and attached image on EU (current)
What are the information can we gather from the chart?
What does the comm, large, specs stand for? Do them carry specific market information?
This is the Daily chart (attached image), do we need to access weekly, monthly as well?
THANKS FOR HELP!!!
Make sure you read all the info from the first link provided. In there you'll find detailed instructions on how to interpret/use CoT report.
Comm = comercials, Large= large speculators, Specs = small speculators (us included).
This info is released weekly, so I believe the weekly chart should be used. Please note that my opinion is worth what it's worth, as I don't really use this type of analysis in my trading anymore.
I was merely pointing you in the right direction to learn about CoT report. I'm sure there are plenty people here who can offer better guidance.
See this thread for instance: http://www.forexfactory.com/showthread.php?t=376395
vox dei has answered you questions very competently except for your query about the blue trend line I showed in my chart. I drew in that trend line and will extend it each week on my weekly chart. When the weekly price closes below that trend line that is my exit signal. Please note that this is MY way of trading this method, feel free to develop your own way or to ignore it all together.
I would just like to make one more comment - I can see that you did not spent time searching the internet if you don't even know what a CoT chart tells us (prior to vox dei replying to you) despite it being mentioned in previous posts. That is being lazy. Do your own research first (yes it takes time, why do you think it takes years to become a competent trader?), stop expecting to be spoon fed everything, and then if you have difficulties or require clarity you are most welcome to ask questions.
Truly thankful to all of you here, at least I know what I don't know! In earlier time I thought I know forex/trading if I understand about fundamental, TA, MM, trading pysco..
But you and others tell me different things...
Phiaw... I am still fresh fresh fresh newbie!!!! Got to work harder!!!!
The challenge, and what takes time, is to try this and try that and back test and live test (with real money) and read and carry on and repeat until you either find something that suits you or you lose and give up. Forex trading is hard and so is any futures market. Equities are easier to profit from because you cannot be forced to sell your position (you can still lose money though). Anyone can work hard but if it is the wrong direction then it is just a waste of time. I think you have had good guiding advice from contributors on this thread to help you on your way which should save you a lot of time. Good luck
hello, i am a beginner trader and i was fall last week and this makes me feel bad and i don't know what should i do no!!!!!!!!!!!!
Go to the following thread
this will help you
Most profitable is hard to determine, and there are various factors to consider, for example, a system may make excellent returns but expose you to a really big draw down one day ... so it was very profitable, until the music stopped and you are then dropping 50% or something.
Something to note though, is practically every tested and established strategy is profitable - but people still lose using these systems since they fail to follow it properly.
I think psychology is the real telling factor in trading.
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