***** UPDATE 20th Jan 2012 *****
I've noticed there are a few new readers coming in since the thread started up again. The first 9 pages give some good information but the latest reincarnation of this system starts with this post.
http://www.forexfactory.com/showthre...92#post5288392
****************************
I posted a thread a little while ago to try to help newer traders who were maybe struggling a little bit. Unfortunately it got moved to the commercial section due to my excessive enthusiasm for a thread by a commercial member. (I understand the forums moderators reasons for doing this and have no complaints at all).
***UPDATE: I have removed the content of the original thread that got it put into the commercial section. Although the system described there is slightly different than the one I present here there is a lot of good information and lots of charts that you may find interesting and I don't want to have to go over again here so here is the link and you may like to take a look. http://www.forexfactory.com/showthread.php?t=304375 ***
At the start of the thread I gave a little of my history and a small breakdown of what it took for me to start to make money from trading. In this thread I am not going to repeat all of that information but rather I am just going to present a system. I'm sure if you wanted to read that thread you could probably work out how to find it and you may find some of the information useful.
The system I offer here is slightly different from my system on the other thread. I have included a few indicators in this system because although I can trade perfectly well without them I believe that from a beginning traders point of view it may be useful to have these indicators present to aid in spotting good trades and to aid in entry and exit rules for good trades.
The system uses trendlines drawn on the monthly, weekly and daily charts, a 100 ema of the close, heiken ashi candles and stochastics.
Drawing trendlines is sometimes a sticky issue but to simplify things we will just say that to draw a trendline you merely connect the lows in an uptrend and the highs in a downtrend. Lots and lots of chart examples will follow.
A note on trendlines while we are here. I draw trendlines on monthly charts first. These monthly trendlines are the most reliable s/r levels on a chart. They do tend to cause a reaction in price if not a complete trend reversal. Also, as stated in my other thread, I do draw 2 touch trendlines by which I mean the first touch is the start of the trendline and the 2nd touch is the first connecting point. A lot of people will tell you that a trendline isn't a trendline until the 3rd touch to which I say true but a 4 or 5 touch trendline starts out life as a 2 touch trendline.
I use trendlines because they are a good, reliable (on the higher time frames) place to look for reversals in the direction of a trend.
I use a 100 ema of the close to help define the longer term trend. Generally I only take trades in the same direction that the ema is sloping unless there is a strong pattern forming such as a flag or triangle.
I use Heiken Ashi candles which are average price candles because they filter out a lot of the noise of regular price action. A change in colour at a trendline backed up by stochs in the direction of the main trend gives a good signal. Also they can help you stay in the trade longer as you are less prone to worrying about the day to day noise.
I use stochastics (8,3,3,low/high,simple) to confirm the price reversal. Of all the oscillators I find stochastics the most useful to represent what is happening in the momentum of price. I posted a couple of posts on my other thread with an explanation of why I don't like the terms overbought and oversold. Nothing has changed, I still don't like them but I do find that stochs can be useful when looking for good reversals providing you are trading with the trend. Also I believe it is easier to define a good entry point for a newer trader if you use these visual aids.
I will post more with chart examples and give detailed entry and exit rules soon. Incidentally this is a system for trading daily charts so if you like to take lots of trades then this is not for you. If you like to make money and don't want to pay your broker a fortune in spreads then you may want to read more.
I've noticed there are a few new readers coming in since the thread started up again. The first 9 pages give some good information but the latest reincarnation of this system starts with this post.
http://www.forexfactory.com/showthre...92#post5288392
****************************
I posted a thread a little while ago to try to help newer traders who were maybe struggling a little bit. Unfortunately it got moved to the commercial section due to my excessive enthusiasm for a thread by a commercial member. (I understand the forums moderators reasons for doing this and have no complaints at all).
***UPDATE: I have removed the content of the original thread that got it put into the commercial section. Although the system described there is slightly different than the one I present here there is a lot of good information and lots of charts that you may find interesting and I don't want to have to go over again here so here is the link and you may like to take a look. http://www.forexfactory.com/showthread.php?t=304375 ***
At the start of the thread I gave a little of my history and a small breakdown of what it took for me to start to make money from trading. In this thread I am not going to repeat all of that information but rather I am just going to present a system. I'm sure if you wanted to read that thread you could probably work out how to find it and you may find some of the information useful.
The system I offer here is slightly different from my system on the other thread. I have included a few indicators in this system because although I can trade perfectly well without them I believe that from a beginning traders point of view it may be useful to have these indicators present to aid in spotting good trades and to aid in entry and exit rules for good trades.
The system uses trendlines drawn on the monthly, weekly and daily charts, a 100 ema of the close, heiken ashi candles and stochastics.
Drawing trendlines is sometimes a sticky issue but to simplify things we will just say that to draw a trendline you merely connect the lows in an uptrend and the highs in a downtrend. Lots and lots of chart examples will follow.
A note on trendlines while we are here. I draw trendlines on monthly charts first. These monthly trendlines are the most reliable s/r levels on a chart. They do tend to cause a reaction in price if not a complete trend reversal. Also, as stated in my other thread, I do draw 2 touch trendlines by which I mean the first touch is the start of the trendline and the 2nd touch is the first connecting point. A lot of people will tell you that a trendline isn't a trendline until the 3rd touch to which I say true but a 4 or 5 touch trendline starts out life as a 2 touch trendline.
I use trendlines because they are a good, reliable (on the higher time frames) place to look for reversals in the direction of a trend.
I use a 100 ema of the close to help define the longer term trend. Generally I only take trades in the same direction that the ema is sloping unless there is a strong pattern forming such as a flag or triangle.
I use Heiken Ashi candles which are average price candles because they filter out a lot of the noise of regular price action. A change in colour at a trendline backed up by stochs in the direction of the main trend gives a good signal. Also they can help you stay in the trade longer as you are less prone to worrying about the day to day noise.
I use stochastics (8,3,3,low/high,simple) to confirm the price reversal. Of all the oscillators I find stochastics the most useful to represent what is happening in the momentum of price. I posted a couple of posts on my other thread with an explanation of why I don't like the terms overbought and oversold. Nothing has changed, I still don't like them but I do find that stochs can be useful when looking for good reversals providing you are trading with the trend. Also I believe it is easier to define a good entry point for a newer trader if you use these visual aids.
I will post more with chart examples and give detailed entry and exit rules soon. Incidentally this is a system for trading daily charts so if you like to take lots of trades then this is not for you. If you like to make money and don't want to pay your broker a fortune in spreads then you may want to read more.