Okay maybe this is a dumb idea, maybe not. Maybe its been attempted before, and maybe it hasn’t.
Have a read of this 1st post in full
OPTION A if it does not connect with you, then leave. No need to tell us so, just hit the back button and move on.
OPTION B If it does then you are welcome to join us in this quest
Here goes.
The purpose of this thread is to be the solution to those on the edge of giving up on forex. What I mean is this can be the solution to those new to forex and struggling to find their way, or their plan, or it may the solution to those that have been through all the educating they can find, all the backtesting and forward testing they care to spend their time and money on and still have an idea that forex can work for them.
The purpose of this thread is to facilitate discussion to finding a simple trading plan that most traders can follow. A holy grail? No such thing? I believe holy grails are found and used every day. Thing about it. It’s like your favourite shirt. Will it work for everyone? No. Does it work for you? Bloody oath it does.
I know successful traders. I have met them and I continue to meet with them. Some of them are friends of mine. Do you know what 1 thing they all have in common? NONE OF THEM SPEND ANY TIME ON TRADING FORUMS! Think about that. If you put together a good trading plan that was working wonders for you, would YOU spend time on these forums? If you would that is great but I suggest not many would, and certainly not in any capacity to teach and lift up others to success as well.
I do not have all the answers. I am not a successful trader. I am not to push my friends into “teaching” me their plan. I am above that. What I am here for is to guide a discussion and outpouring and testing of ideas as a group (much stronger than a bunch of individuals) in order to find a plan that most of us can follow and indeed others that come along can take on board.
I would rather see 1000 people making $10,000 a month than 100 people making $100,000 a month.
To be a part of this move, there are a couple of conditions:
1. Constructive not destructive. ALL ideas are welcome but not all ideas are EQUAL. What I mean is that if you get on and bad mouth or cry foul on someone elses idea without any suggested alternative, then your post will be reported and deleted. This is to be a constructive discussion. IF you disagree with something, fine, say you disagree, explain why in a courteous manner, and then post a suggested alternative.
2. Contribute at least 10% of your profits using this plan or anything derived from it towards local charity in your area. With so much money moving around the world these days for projects way over the horizon, I think a lot of communities have forgotten what is right outside their door. My personal goal is to get to 50% profit to charity and would love to be able to pay a families rent for 6 months after their house burns down, or buy that kidney machine for the local hospital, or purchase 1000kg of rice for the local soup kitchen. Whatever it is, help others. Obviously there is no police here to check on this one so honour bound we all are.
So I guess I will start.
I have been trading demo for 14 months every spare minute of every spare day including weekends when the markets are closed. Sometimes I am trading, sometimes backtesting on charts and spreadsheets, sometime forward testing, sometime hidden in one of many books or ebooks I have purchased. And sometimes meeting and sharing a drink with successful trader friends I know. I have no other plan. I am at the top of what I do professionally and while that makes a good income, it is not enough to be self sufficient. I will always be working for the man. Forex is the only thing I can see that I can leverage to go to the next level income and lifestyle wise.
And I am not one to keep things close to my chest.
What have I learned along the way?
1. price action is really the best indication of the market
A lot of indicators show what already happened and rarely can tell you what will happen next. Some may be read to show an idea of what MAY HAPPEN but in reality the market will go where the market will go. Over my time I have seen many a support and resistance line ignored, many a round number line ignored, many a Fibonacci level ignored, many a MACD signal ignored and many a Stochastic turn ignored.
2. you need to accept losses as a step to the wins
No system wins 100% of the time so if you can get more wins or greater wins than losses, then you are winning overall and you can follow that system to retirement. If you take a six sided die and when you roll a 6 you get $1000 but if you roll anything else, you lose $100, why would you not play that till your end of days?
3. keep your losers to a minimum (use good stops) and ride your winners (add positions, use trailing stops, whatever)
Always use Stops and calculate them according to your plan and keep them in place unless your plan calls for the stops to move up as your trade moves in your favour. Always take the opportunity to lock in profits with a stop. Always look to ride your trade until a serious exit signal occurs or your target is reached. Trust the rules of your system you follow not how you FEEL about the profit or loss.
4. those who fail teach
Okay this may not be 100% correct for ALL forex teachers out there but I was told a few times that if a system or plan is so good that it can be sold for $100s or $1000s then why are they not simple using it themselves? There are some genuine teachers out there that are teaching what they use successfully as well but I am yet to find or hear of any. So beware!
So what have I been testing?
Over time I have tested all sorts of ideas and indicators and systems and “holy grails” from forums and friends and books and ebooks. I have not found anything to work for me but I have found small things here and there that are true.
Currently I am testing these 2 ideas:
1. the 6/10MA price action cross
Here I have a daily chart and a 6MA. When a full candle (ie one that does not touch or touches only 5% of its size) CLOSES above or below the 6MA, I take that as a signal the MARKET is wanting to a change in direction. Will this occur? I don’t know. So I need some confirmation. If the price crossed above the MA then I am looking for LONG answers and if price crossed below, I am looking for SHORT confirmations. What is the angle of the MA on the previous 3 candles? In others words, look at the angle of the signal candle and the 2 previous to that candle. If the MA line moved in the same direction as the price cross award +1 point, if it moved against, award -1 point. Sometimes you need to see the actual value of that MA to see if it went up or down. There is no flat. The same value is a +1. If I get 2 or 3 points then I enter the trade immediately.
There are a lot of variations I can add to this idea. A more cautious entry of waiting for a retrace candle and then entering. Maybe looking for confirmation in the close of signal candle being above close of previous 1 or 2 candles? Maybe looking at a MACD or Stochastic or trend strength indicator. I have tried lots of different ideas and nothing seems to get this signal more than 57% accurate on GBPUSD for the past 2 years. I fact a lot of the times it seems more accurate to go AGAINST some of these signals. Believed me I almost took that as my plan!
2. Inside candle close
With this idea I have adopted a popular belief that an inside candle (ie a candle fully formed and closed within the size of the previous candle) can be like a spring coiling and waiting to explode. But in which direction? I added a 21EMA and if the pattern formed above the EMA I expect it to explode LONG and if formed below then explode SHORT.
I have tried entry orders at the top and bottom of both ends of the candle. I have tried looking at MACD and/or Stochastic for indication of which way it may explode. I have even tried hedging ideas of adding 2 positions in opposite directions with targets exceeding stops so a move either way will end in profit overall. Again nothing seems to get me more than 50% accurate or profitable.
So we really need to start from scratch. What do we need in this plan?
1. We need to define a SETUP. That is something that occurs to tell us to take notice and look for confirmations and entry points.
2. Then we need CONFIRMATION. We need something to confirm a direction for us?
3. And we need ENTRIES. We need to identify when and where to enter into our trade?
4. Then we need a STOP and a STOP PLAN. Where do we place the stop and how do we manage it after the trade has opened?
5. And possibly a TARGET and TARGET PLAN. What is our target and is that managed as the trade progresses?
Have a read of this 1st post in full
OPTION A if it does not connect with you, then leave. No need to tell us so, just hit the back button and move on.
OPTION B If it does then you are welcome to join us in this quest
Here goes.
The purpose of this thread is to be the solution to those on the edge of giving up on forex. What I mean is this can be the solution to those new to forex and struggling to find their way, or their plan, or it may the solution to those that have been through all the educating they can find, all the backtesting and forward testing they care to spend their time and money on and still have an idea that forex can work for them.
The purpose of this thread is to facilitate discussion to finding a simple trading plan that most traders can follow. A holy grail? No such thing? I believe holy grails are found and used every day. Thing about it. It’s like your favourite shirt. Will it work for everyone? No. Does it work for you? Bloody oath it does.
I know successful traders. I have met them and I continue to meet with them. Some of them are friends of mine. Do you know what 1 thing they all have in common? NONE OF THEM SPEND ANY TIME ON TRADING FORUMS! Think about that. If you put together a good trading plan that was working wonders for you, would YOU spend time on these forums? If you would that is great but I suggest not many would, and certainly not in any capacity to teach and lift up others to success as well.
I do not have all the answers. I am not a successful trader. I am not to push my friends into “teaching” me their plan. I am above that. What I am here for is to guide a discussion and outpouring and testing of ideas as a group (much stronger than a bunch of individuals) in order to find a plan that most of us can follow and indeed others that come along can take on board.
I would rather see 1000 people making $10,000 a month than 100 people making $100,000 a month.
To be a part of this move, there are a couple of conditions:
1. Constructive not destructive. ALL ideas are welcome but not all ideas are EQUAL. What I mean is that if you get on and bad mouth or cry foul on someone elses idea without any suggested alternative, then your post will be reported and deleted. This is to be a constructive discussion. IF you disagree with something, fine, say you disagree, explain why in a courteous manner, and then post a suggested alternative.
2. Contribute at least 10% of your profits using this plan or anything derived from it towards local charity in your area. With so much money moving around the world these days for projects way over the horizon, I think a lot of communities have forgotten what is right outside their door. My personal goal is to get to 50% profit to charity and would love to be able to pay a families rent for 6 months after their house burns down, or buy that kidney machine for the local hospital, or purchase 1000kg of rice for the local soup kitchen. Whatever it is, help others. Obviously there is no police here to check on this one so honour bound we all are.
So I guess I will start.
I have been trading demo for 14 months every spare minute of every spare day including weekends when the markets are closed. Sometimes I am trading, sometimes backtesting on charts and spreadsheets, sometime forward testing, sometime hidden in one of many books or ebooks I have purchased. And sometimes meeting and sharing a drink with successful trader friends I know. I have no other plan. I am at the top of what I do professionally and while that makes a good income, it is not enough to be self sufficient. I will always be working for the man. Forex is the only thing I can see that I can leverage to go to the next level income and lifestyle wise.
And I am not one to keep things close to my chest.
What have I learned along the way?
1. price action is really the best indication of the market
A lot of indicators show what already happened and rarely can tell you what will happen next. Some may be read to show an idea of what MAY HAPPEN but in reality the market will go where the market will go. Over my time I have seen many a support and resistance line ignored, many a round number line ignored, many a Fibonacci level ignored, many a MACD signal ignored and many a Stochastic turn ignored.
2. you need to accept losses as a step to the wins
No system wins 100% of the time so if you can get more wins or greater wins than losses, then you are winning overall and you can follow that system to retirement. If you take a six sided die and when you roll a 6 you get $1000 but if you roll anything else, you lose $100, why would you not play that till your end of days?
3. keep your losers to a minimum (use good stops) and ride your winners (add positions, use trailing stops, whatever)
Always use Stops and calculate them according to your plan and keep them in place unless your plan calls for the stops to move up as your trade moves in your favour. Always take the opportunity to lock in profits with a stop. Always look to ride your trade until a serious exit signal occurs or your target is reached. Trust the rules of your system you follow not how you FEEL about the profit or loss.
4. those who fail teach
Okay this may not be 100% correct for ALL forex teachers out there but I was told a few times that if a system or plan is so good that it can be sold for $100s or $1000s then why are they not simple using it themselves? There are some genuine teachers out there that are teaching what they use successfully as well but I am yet to find or hear of any. So beware!
So what have I been testing?
Over time I have tested all sorts of ideas and indicators and systems and “holy grails” from forums and friends and books and ebooks. I have not found anything to work for me but I have found small things here and there that are true.
Currently I am testing these 2 ideas:
1. the 6/10MA price action cross
Here I have a daily chart and a 6MA. When a full candle (ie one that does not touch or touches only 5% of its size) CLOSES above or below the 6MA, I take that as a signal the MARKET is wanting to a change in direction. Will this occur? I don’t know. So I need some confirmation. If the price crossed above the MA then I am looking for LONG answers and if price crossed below, I am looking for SHORT confirmations. What is the angle of the MA on the previous 3 candles? In others words, look at the angle of the signal candle and the 2 previous to that candle. If the MA line moved in the same direction as the price cross award +1 point, if it moved against, award -1 point. Sometimes you need to see the actual value of that MA to see if it went up or down. There is no flat. The same value is a +1. If I get 2 or 3 points then I enter the trade immediately.
There are a lot of variations I can add to this idea. A more cautious entry of waiting for a retrace candle and then entering. Maybe looking for confirmation in the close of signal candle being above close of previous 1 or 2 candles? Maybe looking at a MACD or Stochastic or trend strength indicator. I have tried lots of different ideas and nothing seems to get this signal more than 57% accurate on GBPUSD for the past 2 years. I fact a lot of the times it seems more accurate to go AGAINST some of these signals. Believed me I almost took that as my plan!
2. Inside candle close
With this idea I have adopted a popular belief that an inside candle (ie a candle fully formed and closed within the size of the previous candle) can be like a spring coiling and waiting to explode. But in which direction? I added a 21EMA and if the pattern formed above the EMA I expect it to explode LONG and if formed below then explode SHORT.
I have tried entry orders at the top and bottom of both ends of the candle. I have tried looking at MACD and/or Stochastic for indication of which way it may explode. I have even tried hedging ideas of adding 2 positions in opposite directions with targets exceeding stops so a move either way will end in profit overall. Again nothing seems to get me more than 50% accurate or profitable.
So we really need to start from scratch. What do we need in this plan?
1. We need to define a SETUP. That is something that occurs to tell us to take notice and look for confirmations and entry points.
2. Then we need CONFIRMATION. We need something to confirm a direction for us?
3. And we need ENTRIES. We need to identify when and where to enter into our trade?
4. Then we need a STOP and a STOP PLAN. Where do we place the stop and how do we manage it after the trade has opened?
5. And possibly a TARGET and TARGET PLAN. What is our target and is that managed as the trade progresses?
Winners add to winning trades!