Correct Trading Scheme

Hey guys,


since I am leaving ff for some time now, I wanted to share my experience of profitable trading and how it may be achieved by a 'correct trading scheme'.

You can make up your own opinion; but mine is:
Really good trade opportunities occur only, when there are rumors or news in the field (sector/stock/currency etc.).

This is quite easy explained: If you ever had a deep inside look into volume, you would have explored that big market movements occur only then, when many market participants are involved at the same time.

And what makes them getting involved at the same time?! News and rumors of course.

When there are a) news and rumors, and b) high volume, you have to look for c) - which is: Who actually drives the market?

Who is the big buyer / seller, often described as 'big boys'.

If you do your job correct, and analyze via volume analysis who they are, when they interact, how they sell or buy [not easy to learn, but very often more lucrative than any other analysis method], you can "swim" with them, and buy & sell when they do.

They will drive the market, not you. Only possibility for you is to go with them...


Correct Trading Scheme:

1) News / Events - are there any high impact news on an asset (fx, stock, metal, etc.)?
> Do the news caught the attention of many market participants?
> If yes, select that asset and have a closer look at it. Most of the assets have highest volume when they are being discussed / are in the focus.
> Rumors can be tradeable 'news' too.

2) Have a look at volume (real volume). Possible with stocks especially, also with metals (gold/silver) or commodities (oil).
Not so much with forex, as there is no centralized exchange for forex trades... which makes it actually impossible, to trade fx markets efficiently by this approach.
Still, it's possible to gather some info here: Have a look at quandl.com; they offer special insights into a huge variety of statistics.
Or some other forex volume analysis methods.... (mostly sentiment).

3) If the volume signals a movement, have a look who the big buyers are.
You must swim with the trend.
Chart Analysis on lower timeframes (1min - 1hour) only makes sense, once the first two aspects were fulfilled.
This is how advanced traders trade.
Plus, they have a monitoring system (screener) for movements of stocks etc.
The average market analysis (patterns, candlestick formations) is only an addition to it.
It is not the most important key decision aspect. - But if you solely trade on chart analysis, forget 1m - 1h and trade only higher timeframes.


Btw: For news you must subscribe to a very fast squawk box news provider, which, and that is not avoidable, costs money.
Also for a good stock screening platfrom you may have to pay a sub. fee for volume data etc.
If you like to trade forex, you may have to pay for market data also...

Fast money making and scalping in lower min. timeframes is only possible with the correct software, news, analysis and of course, experience.
It is totally recommended to have a tutor/teacher here, who has a verified success track record in the market he trades on. And that track record should be recent.

scalp-trading.de as example for german speaking traders (Heiko Behrendt)
or volume team
or Heldental
or Trading freaks
Otherwise check forexpeacearmy, myfxbook or trustpilot for good systems/teacher.
Bookmap is a good platform for trading, otherwise Sierra Chart, X-Trader ...



If you like to know more, I have written down some more trading experiences on my mql5 profile page:
https://www.mql5.com/en/users/andrewba

Btw:

There are also some great tutorials about bookmap for example on youtube.

Even if you won't use the software, the tutorials show you how the market actually works, and what you need to observe.

Very informative and recommendable.

I would suggest to get all information you need first, then make your experience via low balance (mt4/5),
and then maybe, when you think you are long enough now in the game, start with
a) good software (+ volume)
b) very fast information (news) and
c) a good stock screening software.


Don't forget to only risk max. 2% of your balance per trade;
I would suggest to only put 5% of your balance on one trading account.


As for news, also try this: https://www.elitetrader.com/et/threa...witter.337111/


Trade well.

And:

If you search for good semi-automated programs, that take a lot of work from you,
then look up these sites:

forexpeacearmy.com
trustpilot.com
myfxbook.com
darwinex.com
tradingview.com
psyquotation.com
(mql5.com; signals)

or other trading forums, that provide trusted feedback for trading services (or, even better, verified results).

This is the only way to find really good systems, that are worth to subscribe to or to buy.

I can recommend
perfecttrendsystem.com
or scalp-trading.de (german) for example.

Thus, I believe that there are for sure some other good services out there,
let it be semi-automated tools, trade signals, education, aso.

Only thing I do not believe in and can not recommend are EAs (fully automated systems).


There are developers on the mql5 market for example, that produce EAs with an optimal fitted profit curve; even with 100% quality data
(however, you have to ask yourself whether mt5 really gives 100% quality data, that is repeatable with different brokers).

That is some sort of problem: The future is different to the past, and overfitting (over-optimising) is not the best solution.

I only trust real life results; the longer, the better.
Whereas, trading conditions change, and what worked for some time, does not work later...

So, even good automated systems that brought a lot of verified profit, may lack wins in future.

If you ever find an EA with a verified track record of 4-5+ years, and a yearly profit of, lets say just 30% [50%], a max. drawdown of (not more than) 5% [10%], drop me a message or a comment here ; )