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What to do next?

  • #1
  • First Post: Nov 7, 2006 6:43am Nov 7, 2006 6:43am
Hello all traders,<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

<o></o>

After 2 and a half years of studying forex I still cant find a system that I feel comfortable with.<o></o>

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I started out 2 and a half years ago trading on the 5 min charts, I then moved up to the 15 min charts. I have taken just about every course there is online and bought all the e-books you can think of. I manually back tested systems over years of data but not found anything I felt comfortable trading, I have tried breakouts and god knows what else. I have read most of the large threads on FF like Sidus James16 and Bagovino oh yes and Vegas.

<o></o>

About 8 months back I have switched to the daily charts and 4H charts and I feel far more at home here, I have been trying to trade Trend Line bounces as I thought the risk reward would be great but my account is still going down!. (I’m only trading micro lots at the moment)<o></o>

I also love Fibs and I think they could be great if I only knew where to look for trades when using them.<o></o>

<o></o>

Anyway I am getting very frustrated every day trying to find a method that fits me. I know I will never give up my dream of doing this for a living but I really need some advice from the great people of this forum, especially the ones who are trading profitably.<o></o>

<o></o>

I am only interested in trading the daily, 4H charts and maybe the 1H for entry.<o></o>

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Any help at all would be greatly appreciated.<o></o>

<o></o>

Many thanks
  • #2
  • Nov 7, 2006 6:50am Nov 7, 2006 6:50am
You say no system seems to fit you. What do you mean by this? Or better yet,


What are the characteristics of your dream system that you're looking for? Describe it, maybe someone here knows of a system like it.
  • #3
  • Nov 7, 2006 7:02am Nov 7, 2006 7:02am
Quoting aicccia
You say no system seems to fit you. What do you mean by this? Or better yet,


What are the characteristics of your dream system that you're looking for? Describe it, maybe someone here knows of a system like it.
Hi,

Yes I sould have mentioned what system would suit me.

I dont like trading anything below the 1H charts and I prefer the daily and 4H. I have already done all that sitting in front of my charts all day long and Its not for me.
I like planning trades over several days and making say 5-6 good trades a month in stead of trading 100's of times on the 5 min charts.

I have the planning part down but they just done seem to work out

I have thought about planning a trade and doing the opposite, that should make me profitable lol

thanks for your reply

DD
  • #4
  • Nov 7, 2006 7:06am Nov 7, 2006 7:06am
I trade the Fibo retracement on days when a pair is ranging (oscillating within a 21-50 pip range) rather than trending (rallying in one direction for >50 pips). You'll get a feel for which days are going to be which, the more you trade.

On ranging days I will use the 3 and 5 minute charts. With a 3 pip spread, the minimum size of a move for me to play is 21 pips. With 4-5 pips spread it's 30. I'll enter once the pair has crossed the 23.6% retracement and set my limit at 61.8%. Sometimes the pair will bounce over the 23.6% a couple of times. If it hits 23.6% a third time and doesn't rally in the trade direction, I get out. I rarely walk away from these because on ranging days I have to stay focused, the market turns on a dime. I want to be ready to get out if the pair stalls at 50% retracement, but usually if it goes past 50 it will go on to 61.8%.

Hope this helps.

Cheers
AFF
FOREX = 21st century alchemy.
  • #5
  • Nov 7, 2006 7:11am Nov 7, 2006 7:11am
Quoting afemi94ce
I trade the Fibo retracement on days when a pair is ranging (oscillating within a 21-50 pip range) rather than trending (rallying in one direction for >50 pips). You'll get a feel for which days are going to be which, the more you trade.

On ranging days I will use the 3 and 5 minute charts. With a 3 pip spread, the minimum size of a move for me to play is 21 pips. With 4-5 pips spread it's 30. I'll enter once the pair has crossed the 23.6% retracement and set my limit at 61.8%. Sometimes the pair will bounce over the 23.6% a couple of times. If it hits 23.6% a third time and doesn't rally in the trade direction, I get out. I rarely walk away from these because on ranging days I have to stay focused, the market turns on a dime. I want to be ready to get out if the pair stalls at 50% retracement, but usually if it goes past 50 it will go on to 61.8%.

Hope this helps.

Cheers
AFF
Thnks for your reply AFF

Any advice is great

DD
  • #6
  • Nov 7, 2006 7:17am Nov 7, 2006 7:17am
Because the market is a fractal model, you can use the same retracement strategy at any timeframe. I'm looking at hourly GBP/USD right now and we are at a 61.8% retracement of Friday's high before the NFP.

If you had entered at the 23.6% cross at 5:00 last night at 1.8986 there were close to 70 pips to be had. You wouldn't have to watch the hourly chart like a hawk, you just have to be patient on the setups is all.

AFF
FOREX = 21st century alchemy.
  • #7
  • Nov 7, 2006 7:23am Nov 7, 2006 7:23am
Have you made and actually use a trading plan? Amazing how many traders don't! Sytstems alone can't guarantee any predictible on-going success unless you act on them thru the discipline of a good trading plan. Continuity of profit cannot be achieved without continuity of execution, so if you dont have a trading plan and are living and dying by it, you're not executing consistently and only doing as what Mark Douglas (Trading In the Zone) describes as engaging in "random winning and random losing." Believe me, that's a dead end street in any market. I think most traders are so blindsided by their eternal quest for the "holy grail" of a system that they completely overlook creating and/or executing from a disciplined plan. It isn't a "system" alone by itself which will make you money, its the system executed within the discipline of a good plan...the plan determines how you act with the system. A system handles the market factor, a good trading plan handles the you factor. To be continuously successful, you have to handle both. This is an important fact that seems to really gets glossed over. People are always telling you "Plan the trade and trade the plan," but nobody really goes into detail about how to do that or shows you how to make a plan. Without a plan, its impossible to eliminate enough trading variables/ impulses to determine, by qualitative comparison, what works and doesn't work so you can modify ilater. A good trade cant be defined strictly by being profitable. There are just bad trades; but if I define a successful trade as one in which I followed my plan exactly, then every trade has the potential to be successful. My plan is what makes the difference and most importantly, puts me in control.

Would you try to bake a cake without a recipe? If you did, even every once an a while you would still get lucky and make a good cake...but that would only be because you got lucky.

Why would you trade without a plan? Even if you win...without a plan, you just got lucky.

If you dont have a clue as to how about going to make a plan for yourself, pm if you'd like me to send you a copy of my plan...you're welcome to use it as a starting point towards building your own.

Hope this helps...
  • #8
  • Nov 7, 2006 7:31am Nov 7, 2006 7:31am
Quoting fourexcellence
Have you made and actually use a trading plan? Amazing how many traders don't! Sytstems alone can't guarantee any predictible on-going success unless you act on them thru the discipline of a good trading plan. Continuity of profit cannot be achieved without continuity of execution, so if you dont have a trading plan and are living and dying by it, you're not executing consistently and only doing as what Mark Douglas (Trading In the Zone) describes as engaging in "random winning and random losing." Believe me, that's a dead end street in any market. I think most traders are so blindsided by their eternal quest for the "holy grail" of a system that they completely overlook creating and/or executing from a disciplined plan. It isn't a "system" alone by itself which will make you money, its the system executed within the discipline of a good plan...the plan determines how you act with the system. A system handles the market factor, a good trading plan handles the you factor. To be continuously successful, you have to handle both. This is an important fact that seems to really gets glossed over. People are always telling you "Plan the trade and trade the plan," but nobody really goes into detail about how to do that or shows you how to make a plan. Without a plan, its impossible to eliminate enough trading variables/ impulses to determine, by qualitative comparison, what works and doesn't work so you can modify ilater. A good trade cant be defined strictly by being profitable. There are just bad trades; but if I define a successful trade as one in which I followed my plan exactly, then every trade has the potential to be successful. My plan is what makes the difference and most importantly, puts me in control.

Would you try to bake a cake without a recipe? If you did, even every once an a while you would still get lucky and make a good cake...but that would only be because you got lucky.

Why would you trade without a plan? Even if you win...without a plan, you just got lucky.

If you dont have a clue as to how about going to make a plan for yourself, pm if you'd like me to send you a copy of my plan...you're welcome to use it as a starting point towards building your own.

Hope this helps...

Hi fourexcellence,

interesting, but I dont understand what you mean by 'plan'.
Can you make us an example please ?

Otherwise you are also not telling us what is that you mean.

Thanks
  • #9
  • Nov 7, 2006 7:52am Nov 7, 2006 7:52am
2.5 years in FX still doing microlots and not comfortable with any system? at least you got some stamina! I certainly wouldn't last that long, I have given myself 6 months to establish a promising system and trading routine and a further 6 months for the dosh to start rolling in. If I cannot do that than it's game over for me.
Anyway, you like D1 and H4 timeframes, so do I now and I have forward tested both james16 and Mouteki with very promising success over the past 4 weeks (440 and 575 pips per week across 10 pairs respectively!!!). I plan to go back live this week starting with minilots and gradually growing to full lots as soon as my balance grows and allows it.
So what don't you like about those 2 systems? Especially the daily pinbars present such strong trades when at S/R/Pivot points. And if you manage to get a TL break on H4 shortly after, Bob's your uncle.
Let me know which element of those two make you uncomfortable and maybe I can help you overcome those reservations.
Consistency and patience is everything
  • #10
  • Nov 7, 2006 8:15am Nov 7, 2006 8:15am
A plan in its most simplest terms, is a written (it doesn't work if you do it out of your head; the whole idea is to get it out of your head!) set of rules which detail under which exact circumstances one may enter, stay in and exit the market. Although a plan should include trading rules (my trading do's and donts), it's much more than that; it also guarantees I have a predetermined, pre-thought out course of action to any and every situation the market might throw at me. I have often found that when I encounter some market development for which I had previously not prepared for, thats when I have to think on my feet. If I ever find myself having to think about what I need to do next in a trade, I'm dead meat. The time for thinking is before I go into the trade. By the time I pull the trigger...all thinking is over and done, at that point, its just a matter of executing my plan.

Once a trade sets up according to my plan, its a no-brainer to get in, and once I get in, because my stop loss and exit/profit-taking specifications are already pre-determined in my plan, there is no emotion in the trade (I like that!). If I am following my plan, the trade will either stop out or make me money...those are the only two options; and all the worrying, fretting or sweating over every little pip movement doesn't change that! With a plan, trading becomes more precise and much less emotional.

For example, my plan details, in writing, the terms for entry/ exit, stop amounts, adding lots to positions, how I trade counter trend moves, money management, even which markets and what times, etc. The more detail I can spell out in my plan, the less thinking and emoting I have to do later while I'm in the trade.

Most importantly, I have discovered a good plan eliminates 99% of the numerous variables in the market. Part of the problem is that the market is always presenting us with too many choices. Thats where the trouble always starts, I get confused and worse, impulsive. The plan is my road map of what I know works for me to help find my way through the myriad of choices the market offers.
Does this help at all?...should I post my plan as an attachment on the board somewhere where you can take a look at what I talking about?
  • #11
  • Nov 7, 2006 8:17am Nov 7, 2006 8:17am
Just an observation, but if you're trading off the daily charts without a proven system and trading without a concrete plan (plan being a fixed set of entry, exit, and money management techniques) you're only going to get a few signals a month. Of course it's gonna take two years. If you flop between a few daily systems, and you're not spending time using your time efficiently (backtesting), you're going to waste a lot of trading months.

This is why there have been other members of this forum that suggest new traders trade off of intermediate time frames (15 and 30 minute for example). Yes, they are not as accurate, yes it creates psychological barriers, but the fact remains if you're not going to take advantage of previous data (which is dumb) you need to trade off of lower time frame charts to get more "opportunities". And I don't mean the 1 minute or tick charts.

So, from my reasoning, you have two "main" options. The first is to get a system that works off higher time frames (dailys) and backtest the shi*t out of it. Use all that previous data to your aadvantage. If you don't use it to your advantage, other traders will, and they will beat you. Second option is to learn to be a discretionary trader by starting out on intraday charts and understanding you are going to lose a lot to begin with.

If you're already over two years into the game, I suggest the first scenario I mentioned. Backtesting is priceless.
  • #12
  • Nov 7, 2006 8:25am Nov 7, 2006 8:25am
Quoting Geldmeister
2.5 years in FX still doing microlots and not comfortable with any system? at least you got some stamina! I certainly wouldn't last that long, I have given myself 6 months to establish a promising system and trading routine and a further 6 months for the dosh to start rolling in. If I cannot do that than it's game over for me.
Anyway, you like D1 and H4 timeframes, so do I now and I have forward tested both james16 and Mouteki with very promising success over the past 4 weeks (440 and 575 pips per week across 10 pairs respectively!!!). I plan to go back live this week starting with minilots and gradually growing to full lots as soon as my balance grows and allows it.
So what don't you like about those 2 systems? Especially the daily pinbars present such strong trades when at S/R/Pivot points. And if you manage to get a TL break on H4 shortly after, Bob's your uncle.
Let me know which element of those two make you uncomfortable and maybe I can help you overcome those reservations.
Hi Geldmeister,

Thnkyou for your responce, yes i have checked out the both of the treads you talk about but i have only tryed to trade the Mouteki method, I liked the idea of this method but for some reason I got false breakouts all the time resulting a big losses? Maybe I missed something?

If you could give any advice on what I may have been doing wrong then I would be very greatfull.

As for the daily pin bars, I will look into that closer right now, what 10 pairs are you trading?

thanks DD
  • #13
  • Nov 7, 2006 8:33am Nov 7, 2006 8:33am
My advice would be to choose one currency pair, one timeframe and one system. Write the rules of your system down and paste them on your monitor. Stick to them without fail for the next couple of months at least.

Quit trading your micro account for now - you don't have a profitable system, so why trade something that isn't working? Instead, spend hours manually going through old tick replays (you can now do that on mt4) and follow your system exactly. Keep good statistics of what is happening. So you can determine how profitable a trade is, how far against you a profitable trade tends to go on average before turning profitable (good for knowing where to place stops), characteristics of the market that work best for your system, what your indicators were saying at the time of entry and exit, etc.

The reason I think this might help is that you'll focus on one system and market for a couple of months and through a lot of manual back testing over real data you'll start to get a feel for that one market and system until it becomes intuitive. Then your statistics will help you get info on when you should take a trade, where to place your stops, etc. which will help you fine tune the system to better profitability.

All I can say is that this approach works for me. YMMV.

Squid
  • #14
  • Nov 7, 2006 8:46am Nov 7, 2006 8:46am
ok, first mistake appears to be stops too wide, there should be no large losses if you have sensible SLs in place. I found during my testing that many trades only required stops of 10-20 pips to stay in. Also, if price moves back trough the TL the wrong way you know it's no winner.

I chose all those pairs where my broker offers a reasonable spread (i.e. 3-5 pips). Not surprisingly GBP/USD and USD/CHF are the most profitable and EUR/GBP is hardly worth the effort. I attach my recent trade log for you so you can see the pairs, results and stops needed.

{Image Removed, please repost 600x600}
Consistency and patience is everything
  • #15
  • Nov 7, 2006 8:47am Nov 7, 2006 8:47am
Fourexcellence... I have just started trading to a plan (Beginning of October) and writing a journal everyday with all of my thoughts etc. I find the first part is really helping my trading and the second part is really helping me to understand myself.


The advice you have given is excellent.... Could you post your plan just so we can see your example please?
  • #16
  • Nov 7, 2006 8:52am Nov 7, 2006 8:52am
Micardo,

Yes, I've found that it has made THE DIFFERENCE in my trading!

I'd be happy to post my plan as a .doc attachment, but being a noobie here, I'm not quite certain how to do that...can anyone help me with that?
  • #17
  • Nov 7, 2006 8:53am Nov 7, 2006 8:53am
Quoting Squid
My advice would be to choose one currency pair, one timeframe and one system. Write the rules of your system down and paste them on your monitor. Stick to them without fail for the next couple of months at least.

Quit trading your micro account for now - you don't have a profitable system, so why trade something that isn't working? Instead, spend hours manually going through old tick replays (you can now do that on mt4) and follow your system exactly. Keep good statistics of what is happening. So you can determine how profitable a trade is, how far against you a profitable trade tends to go on average before turning profitable (good for knowing where to place stops), characteristics of the market that work best for your system, what your indicators were saying at the time of entry and exit, etc.

The reason I think this might help is that you'll focus on one system and market for a couple of months and through a lot of manual back testing over real data you'll start to get a feel for that one market and system until it becomes intuitive. Then your statistics will help you get info on when you should take a trade, where to place your stops, etc. which will help you fine tune the system to better profitability.

All I can say is that this approach works for me. YMMV.

Squid
This is all excellent advice. I would read this twice.
  • #18
  • Nov 7, 2006 8:54am Nov 7, 2006 8:54am
At the bottom of the edit screen just use the Attach file to post button.

If your file is much larger than about 1m, just zip it first... thanks scott


Quoting fourexcellence
Micardo,

Yes, I've found that it has made THE DIFFERENCE in my trading!

I'd be happy to post my plan as a .doc attachment, but being a noobie here, I'm not quite certain how to do that...can anyone help me with that?
  • #19
  • Nov 7, 2006 8:55am Nov 7, 2006 8:55am
Quoting Geldmeister
ok, first mistake appears to be stops too wide, there should be no large losses if you have sensible SLs in place. I found during my testing that many trades only required stops of 10-20 pips to stay in. Also, if price moves back trough the TL the wrong way you know it's no winner.

I chose all those pairs where my broker offers a reasonable spread (i.e. 3-5 pips). Not surprisingly GBP/USD and USD/CHF are the most profitable and EUR/GBP is hardly worth the effort. I attach my recent trade log for you so you can see the pairs, results and stops needed.

{Image Removed, please repost 600x600}
Thanks for showing me your results Geldmeister, could you tell me how you choose the size of your s/l? I noticed that it was bigger in some than others.

DD
  • #20
  • Nov 7, 2006 9:00am Nov 7, 2006 9:00am
oh, I found how to post with attchments...DUH!

Attached is a copy of my plan...it is intended as an example only.

Also, please note it contains specific references to the system I am using, so don't be confused about that. The plan should be modified to be personal for you.

Consider it a good starting point from which to build your own plan, because any plan needs to reflect your trading style and limits of risk/reward.

Also, I'm constantly tweeking it to improve results. My plan is a living, growing thing...always improving...

Hope this helps...
Attached File(s)
File Type: doc Trading Plan v.8.doc   43 KB | 510 downloads
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