Learn&Earn

Hello everyone! Reading a forum for a long time already and finally decided to create my own thread, maybe it will helps someone who is still looking for his way on Forex. I am full-time trader for almost 7 years now and has come a long way to become successful. For now I have my own trading school in my city and we are doing fine with just following the simple rules. I won’t tell you about all indicators and systems that I used and tried, because it will takes a very long time and a huge amount of pages J 99% of them are useless. I just want to give the idea of trading here and hope that it will be useful for some traders, especially newbies and those who are ready to give up on trading. I am not going to tell you about “special” indies or systems that gives you 100500% per day. No, no, no. We are not looking for the Holy Graal here, we are just learning to hold our emotions, stick to our trading plan, use the right Money Management and not to be afraid of our trades (especially losses). Yes, yes, I know – you have heard all that for hundred times already. But have you done all that? Or emotions are still taking over you? Believe me, there are only few simple steps and rules that you need to follow to become successful. But you should do it every day, every time when you start to trade! Ready for that? So let’s go, we are going to Learn&Earn on Forex!

First of all I want to show you some of my trades. There is no special system in there, no special Green or Red signals, no secret indicators that make decisions. Only YOU should make a decision, depends on market situation! And indicators can only help you with that. So all the indies that you will see on my charts are helpers. I trade very simple, using only visual support and demand levels and divergences, taking trades on breakouts. Also timing is very important! You should know your pair, you should learn it well to know when it moves the best. I use the start of London session mostly. So here is the example of my standard chart and one of my trades:





“So what?” – you will say. Noting special, right? So this exactly is the secret! Do not overcomplicate things! Your system with all your indies is only the small part of trading. I think it’s only 20% of general success. The rest are Money Management (MM), Discipline, Patience and Trading Plan. All this leads you to the right Psychology. Your entry is only a chance, it’s a probability, that depends on statistics. You know the situation, you have seen it before, and you know that more often it goes up in this case (for example). So you click a “Buy” button. That’s simple. But that’s the only beginning! There are a lot of fakes and no system will gives you great results just because of indicator signal. If you have the other needed qualities, then you can save your trade even after the worst entry. You should have the understanding of what you do, you should have the confidence of what you do. Ok, later in the process we will talk about this much-much more.

System/Entries
Your entry may depend on MAs or Oscillators – anything you like, just keep it simple. I use breakouts to enter the trade and found them less fake than other indies or patterns. MAs are great support/demand helpers, but I never use their crosses. Also I use Divergences – they are second great helpers for me. Also I take a view on candles form, trying to avoid candles with tails on both sides. On this thread we will use a lot of different pairs, it can be GBP pairs, EUR/CAD/AUD pairs or Gold, also I like DAX because of its high volatility. I use intraday trading on M15-H1 timeframes, on DAX I use M5/M15. So that’s all you need to know about technical side of my trading. It’s simple and brief. I will explain every chart that I post here. I use a lot of different tools, but in the second post I will show you very simple small system, which is a great helper to you tech analysis trading.

For Support/Demand I suggest you to put two MAs on your chart – fast and long one. For example, 89 (simple, close) and 21 (exponential, close). Also it’s great to use MA 200 (exponential, close) to see the long term trend. They work on any timeframes.

For Divergences I use standard MACD (12,26,9). Works the best on H1 and higher. There are some other great tools for Divs (especially for lower timeframes), but I will tell you about them later. Step by step. Also you can share here what works the best for you to see the Divs.



Money Management (MM)
It’s the MOST important thing in trading. It’s the only thing that can help you to earn more than you lose. MM can make any system to become profitable, and without right MM any profitable system will lead you to a big loss. Believe me, you can earn good money even making a few pips per day, if you have right MM and a good Trading Plan. Always set your SL, think about it BEFORE entering the trade, never risk more than you want to get, skip trades with huge SL. The best Risk:Reward ratio is 1:>1.5. Sometimes it can be 1:1, but never less! Sure, it depends on your ambitions and on your deposit size, but I suggest you never risk more than 2% per trade, but the best thing is to risk about 1% per trade. So your target is about 1.5% per trade. And we would have at least few trades every day. That’s a good math, believe me.

Exits/Managing trades
As I said before, all your trades should be considered BEFORE taking the trade. No rush, no panic during the trade. If you feel panic, then you do something wrong. Remember, your trading doesn’t depend on one single trade! One trade will never make you rich or poor. So always have a plan. Your trade can go well and reach the TP. But what if it goes wrong? Sure, you have to get some experience in your system and your pair. You have to feel it. But also you have to get your own rules. I never use a trailing stop, it makes my trading more complicated and I am not sure that TS makes my results better. If I see my open trade goes wrong – I have few ways to follow. If it goes quick, it can hit my SL – no problem. If price is slow and there is no volatility – I can wait until it decides where to go. If I see, that situation on market has changed and my signal is not valid anymore – I exit the trade! No doubts with that. It’s better to give few pips to market back, than to lose much more, while waiting and gambling. Also I can exit manually with green pips, if I see reasons for that – double tops/bottoms, divergence etc. I move my SL to breakeven when the price reaches about 50% of my TP. But this point can be discussed – it depends on pair and volatility. I always do my statistics about moving SL to breakeven to see what is the best moment for this. Market is always changing, what worked yesterday can fail tomorrow. You have to be ready. I suggest everyone to do his own trading book, where you can write all your trades, reasons to enter/exit, your thoughts and all your stats. It really helps to improve, to see your past mistakes and never do them again.

Ok, so let’s just start to Learn&Earn! Use simple rules of tech analysis, but pay much attention to our discipline and psychology. Post your charts here with description of your trades, everyone is welcome! Let’s get successful together.

P.S. Sorry for my English, it’s not my native language J

Here I will show you small system. It should be used in addition to another tech analysis as a helper. We will use 2 types of CCI here. There are a lot of different ways to use oscillators, but we will use it very simple. We will use zones of CCI: cross of -100 line and cross of +100 line. When the price moves between -100 and +100 - it moves in a usuall way, we see it like the price is deciding where to go. When the price crosses -100 or +100 – it shows us that strong trend presents on the market. So we have to use it. It’s additional confirmation for us. It’s not just the green or red signal! We use CCI together with our tech analysis – most of the times we use it with BreakOuts.

We use CCI (100, close) – it shows us the longterm trend. Looking on that CCI we can easly determine at what stage the price is now in longterm picture. That’s really useful for understanding the mood of the market and helps to exclude the fake moves.
Another CCI is quick one (14, close). It shows us the mood of the market for this exact moment. Together with the long CCI it gives us a goodworking system which helps us in our decisions.

We use the levels -100 and +100. We are looking for the crosses of both CCI when the price is coming to oversold or overbought zone. If one indicator crosses the line and the other crosses it much more later – it’s better to skip the signal. The strongest signals are when the crosses happen together at one time. Also we can use crosses of 0 line, but that signals are weaker. Someone use crosses when price is moving back from overbought/oversold area (for example, cross the -100 line from bottom to top) – that signals are very aggressive and you can see a lot of fakes in such crosses. That happens because such moves mean the end of the trend, but they don’t mean that another trend has started. As I said before, when price is between -100 and +100 – it’s in undecided mood. Note that and use that.

Here is the example. You can see 3 lines. The first signal happened too late – the cross of CCI(100) happened when the price moved a lot already. First line shows us only cross of CCI(100) zero line, but I don’t advice you to take such signals at once. It’s better to test such signals before taking them. The last signal was perfect – the cross of both CCI at once confirmed the BreakOut. Note that we accept CCI signals only if there is a BO on the market or another tech signal!




Template is attached. Also there are two indies from tmpl, very easy ones. One shows simple supp/dem and makes it visual easier, another one shows Round Numbers, which are also support/demand levels, price often reacts on that levels.

Let’s talk little bit more about BreakOuts. We will call them shortly here – BO. As you can see from pictures above – all my trades happen because of BOs. We are looking for Double Tops/Bottoms, looking for range breakouts after consolidation, sometimes even looking for candle breakouts. Continuation breakouts are much better and profitable than reversal ones. I suggest you to take trades only with the trend direction, it will minimaze your losses.

What I don’t trade: I don’t trade Trendline breakouts, I don’t trade old support/demand levels on high timeframes or historical levels. I only look left on M15 and trade breakouts what I see with my eye.

We can find some interesting things on our chart, which gives us another confirmation. For example, if indicator shows us the same behaviour as the price. Especially if indi retraces before BO. We know how the price is moving, right? Often it retests the certain level before making breakout. So if we use that simple 1/2/3 (Test-Retrace-BreakOut) formation with our breakouts – that will helps us much! Also price is often ranging near the level before breakout. That’s a good signal also, it gets power to make a strong move. Or if we see the divergence on the chart. All that we will see and learn on our thread!

Today EUR/USD. We see two BO with confirmation of CCI. There could be two ways of etnry - before breaking yesterday's high, at once as CCI gave a signal, or we could wait the confirmation until 9:15. I would take it at once as CCI crossed +100 and break the blue line.


USD/CAD. Classic range BO. Night time, not good for most of the traders, but the signal was perfect. Also i want to notice, that i use to set tight stop losses. It's quick system, intraday one, so put SL above previous 2-3 candles.

I like the above and I plan to look at it and see how I can integrate it into the system I am working on.

Thanks for stating a new thread

We have an interesting situation on EUR/USD right now. Let's take a look. We see the Double Bottom appeared. We see the breakout with CCI crosses. But! What else can we see? Remember: BO, Divs and support/demand - that's what we are looking for. Always. Would you enter this trade if you notice these divergences against you?

Recent situation on EUR/USD H1. Simple MACD divergences. But they work really great. Take a better look at them and you would find a powerful tool for your trading system.
Blue lines are approximate entry points. In both trades you could had a profit as minimum twice bigger than SL. Red line is a big support level - we can see the price bouncing of it on may, june and august.

I told about different types of signals on CCI. We can see them right now on DAX. Let's take a look.

First signal - pink line. There is a BO, but CCI(100) only crossed the 0 line. That can be taken, but you should understand that this is a risky trade. It's better to wait the next candle to get sure, that price is not going to reverse.
Next signal - red line. When the candle is closed and CCI(100) did a cross - it's late to enter. Never enter after a big candle! Often price retraces after big moves. The best opportunity to enter was the point when the price breaks the low of the small candle with wicks on the both sides (yellow line). But only on breaking it's low! That was a consolidation candle, with small retracement to the broken level. It's important type of candles, we will see a lot of them later. If you enter there - your SL is very small, so the risk is minimal. Then you manage your trade and watch how the price and CCI behaves.

Green line. Another type of possibility to enter with CCI. Price is breaking the range zone. It's very agressive entry when long CCI just coming back from the previous move. It's counter trend entry. I don't andvice to take such entries, especially if you are new to the system or trading pair. Such signals can be taking on DAX, because of it's high volatility, but i don't like such agressive entries on currency pairs.

Seems like a simple and very powerful price action strategy. I will try. Thanks for sharing.

Hi Whatever.
You said that you trade for a living. What time do you usually trade?
nice tecnique.

Hi Whatever, very interesting concepts . Subscribed

Subs. Thanks and
Regards

Dear Whatever.,

Thank you kindly for sharing this. I too have actually started noticing this but only starting last week, using a similar 96 period cci (still long term) and the 14

From my observations, divergences play a key part in this and the use of MACD give some guide to where they might occur. I will be running some forward test and backtest stats to work out a rough success rate. Would it be ok to suggest other things I am looking at to add something that potentially can help with this system?

Kind Regards,
Tzamo

Hi voketexpert! Thanks for your question.
Yes, i trade for living and i think timing is the big part of success. I trade the London session from the very beggining and the first half of American session. I try to avoid signals right before the London Open and i don't trade during Asian session (because i sleep lol). Few years ago we could see the best moves right at London Open (LO) - we could make a lot of money just for the first hour of this session. For now this rule works not so good as before, unfortunately. Also i want to notice that trader should be very careful before the start of a new session. If you see a signal 15-30 minutes before London or New York Open - be very careful with that. The start of the new session can broke it very quick.

Hello tzamo! Sure it will be great if you can share with us your thoughts and your ideas. Everyone is welcome, let's work together and getting better in our trading! Will be interesting to discuss new ideas

its is the right time for in?

About today's EUR/USD situation. Just wanted to write about this potential trade after of our today's timing discussions.
Let's see the situaion. I want to remind, that we don't take just alone CCI signals! CCI is a helper in our tech analysis. We are looking for breakouts, divergences and support/resistance levels. And do it at the right time!

1. Timing. Only 15 mins for London to start. Avoid trades at this time.

2. Candle form. If you get the signal after huge candle - avoid such trades. Price will often retrace after big quick move. Don't sell the bottom and don't buy the top.

3. What BreakOut do you want to trade here? If you want to trade the BO of red line - you should enter little bit earlier than CCI confirms its signal (you should be confident that CCI is moving your way and ready to cross -100 zone). But if you take this trade you should notice:

1. it's not good time to take a trade (London is coming, situation can be changed quickly);
2. there is a strong support lever lower the price (blue line). Your target should be near that. Or at least you should move you SL to BreakEven when the price reaches that level.
3. What is you SL and TP in this potential trade? Is it a good R:R ratio? If your target was the blue line, than you could reach your TP.

If you want to trade the signal after CCI confirms, than there is no breakout of blue line, there is no sence to enter after such big candle. No entry.

On the last picture there is a box, which shows us London and New York sessions. Maybe someone will find it useful, so i attach session indicators and template with CCI and set boxes of London and NY sessions.

Hey buddy, glad to see you here! Good luck with your thread, you are doing great.

Good advice, keep it up my friend.