After 1.5 years, at a crossroads, need advice from veterans

Hi everyone, I'm not sure where to begin but let me start by saying how I trade.

I trade price action. I have the stochastic, and a 20, 50, and 200 SMA on my charts. But the only time any of those indicators will affect a decision I make is if one of the MAs is acting as dynamic support/resistance. I trade any pair, but just currencies, not XAUUSD or anything else. I trade trend continuation, entering on pullbacks.

>I look first at the 1D chart. I plot out key levels of support and resistance. I draw the S/R areas as rectangles, not lines, because well, they are areas in most cases. Although I often use lines to mark out key psychological levels like round numbers and previous highs/lows. I don't use trend lines.

>Next I look at the 4H chart. I want to see a clear trend in one or the other direction. I make a note of clearly trending pairs. I see if what the 1D and 4H charts are telling me is in agreement. For example, I don't go against a higher time frame trend but say if the 4H candles have broken and retested a resistance zone on the 1D chart, I pay close attention.

>I wait for the London or New York session, which one depends on my work schedule. I also look at the 1H chart, and make sure all three time frames are in agreement. If price is in a clear trend on the 1H chart, and is at an area of value such as an S/R zone or dynamic S/R like an MA, I wait for my entry signal. That will be a doji or large wick, or an engulfing candle. And it will be the first FULL 1H candle printed on the NY or London session. But I sometimes trade the 2nd or 3 candle if for example like what often happens when the is some news a couple hours after open.

>Also, I don't trade a pair if there is major news coming within 24h of my entry. I keep track of the fundamentals of each currency and take those into account. I also keep track of COT data and use that as confluence. I risk 0.50% per trade and I only have one trade open for any given currency at any given time. I generally go for 2:1 RRR. But if the setup is solid, I accept as little as 1.6:1 if for example I think price will only go that far. I put my stop loss at the point where my trade thesis would be invalidated, plus a few more pips just in case there is stop hunting. In practice this usually means below the low/high of the previous pullback.

I started learning how to trade a year and a half ago. I've already passed two funding challenges. But the first account I lost due to max drawdown. It was death by a thousand cuts, and also at that time last year I was confused about how to be trading. My problem now is that my current funded account is in drawdown.

I was doing well until precisely April 14th when US retail sales came out. What I've noticed since then is that the DXY has been in a range. So I avoided the USD pairs and traded cross pairs. Both are profitable for me in my good months. Now, since April 14th, the same thing has happened again and again. I look at a cross pair, go through the whole process I outlined and enter a trade. And I'm getting stopped out again and again and again. And the trend always seems to reverse exactly when I enter the trade. It's like I'm cursed.

What I'm thinking I should do is wait until the DXY decisively breaks out of its range, I think that at the latest by the week after next, after FED, ECB and NFP this will be the case. What I'm noticing is that I can't even trust the movements on cross pairs when the USD is making choppy price action. I went over this on the charts today. For example, looking at CADCHF and USDCHF side to side. When I see some weird sudden choppy move that makes no sense on a cross pair, often when I go to the corresponding USD pairs for one of those two currencies, I see that same move.

So yeah basically I either have months where my win rate is 45%-55% with a 2:1 RRR (which I'm super happy about), or I have a horrible time when my win rate is literally like 25%. That's how I would lose my funded account.

So do more experienced traders agree with my thesis that I should only trade when DXY is clearly trending?

More long term, if I do this I will have sometimes long stretches where I don't trade. Regarding that I have two options:

1. Learn to trade mean reversion and switch to that strategy when the DXY is rangebound like it has been since April 14th.

2. Or I learn to trade other assets like USOIL or indices. I can trade those when they are trending. I'm leaning towards this solution now because I've started to trade USOIL and the S&P500 on a demo account. But I'm open minded.


I'd really hate to lose this funded account. Seeing how I have already passed two prop firm challenges and mostly profitable months on demo, I have a certain level of confidence. I think if I pass this hurdle the future looks bright. Any advice or thoughts from more experienced traders would be greatly appreciated. God bless you all.

Edit: The title should read "need advice from veterans". I'm a little tired today haha!

if you accept an advice, look for a new strategy, because the current one does not work in all market conditions. and the danger of burning the account will always be there.

I will approach this as if this is a genuine asking. For me, I think it best to be straight with you if you genuinely seek input .....

First - the DXY is an indication of an indication OF yet another indication of information. So it's very watered down and is not real. Here is my definition of real = Society uses it everyday, needs it everyday and insists on it being accessible every day. So using the DXY is really no different to using a stochastic readout of another stochastic indication.

Next, if I read it correctly, you want a trending market away from intraday news and use COT reports to gain insight. OK. You won't or cannot trade range movements. Do not understand why some look the same and other times they are different. You're trying to use "price action" as some kind of stated position for intention and entry. I see no mention of using timed views (10/15min chart or 5mins chart). You're using R:R just as people are told. You've been experiencing bouncy months of profitability. And you started trying your hand in other instruments.

Friend, you're all over the place. You have no focus. TF alignment put aside. Trading should never be about "making money" it needs to be about understanding what you're dealing with at all times. KEEPING what you receive is paramount.

* Daily and 4h - For intraweek and bi-weekly (1-2 weeks) movement not short bursts unless "scalping".
* COT Reports - Are never for minor TF's below 4hr chart view. For larger GENERAL projections and for someone who appreciates the Futures and Options markets positions.
* You need to learn what it means to watch a market. EG - Place a simple Donchian channel setting 22 on your chart and go back 10-20yrs on Weekly, Daily and 4HR and pay attention to what happens.
* You need to take notes on everything you do. EVERYTHING.
* Price action and R:R are great in theory but in practice, have no bearing on real life. I don't refer to FF "life" I am referring to REAL real life. You need to sit with your market and look at it in as many situations as possible. And make notes.
* "Bouncy" months come from inconsistency and inconsistency comes from poor tracking skills. Put aside the speculation BS everyone around here is addicted to and start playing with ideas of how to track your market and make notes on what you observe.
*You have no sign of a real plan. = A trend trader/follower on Mid and Higher TF's requires two things = Big picture and follow through. Always. And a plan for IF - the trend only offers 1 weakened pullback. And a plan for if it does two. And one for if it does three and so on. Understand?
* Use a tool like a rectangle or circle to highlight a H1 wick/spike then drop down into that area's lower TF eg. 5min view and see how it looks. Don't be afraid to get that close. It helps to see the underbelly of what a wick etc is really doing.
* You will make things worse jumping around from one instrument to another. Pick one and learn.

To me, all of this is sound input if the person wants to keep their money. Any other legitimate long standing trader will probably tell you the same things.

PS = Stop listening to other people and all the fancy things one can do ..... most of the time they're wrong. Identify your true basics, hone your tracking skills and remember why you started doing it. Ignore the funded account crap, it's a distraction and you'll make poor decisions out of fear and insecurity.

Good luck.

Peter

go to Admin above your thread to amend the title.
you still can change it within 24 hours.

generally speaking i would say that you are already doing good with the following. keep up with it.

following d1 trend with d1 snr, and waiting for h4 to align with d1 direction.
lower time frame pullback and entry.
what more can one ask for when during london or new york session, price is in the vicinity of snr with d1 directional bias.

basically 2 main things.
trading around the right chosen key level with higher time frame directional bias.

if using dxy, i think it works better with exchange regulated ones.
friday was a mess for usdjpy during new york session when dxy dropped.
long in snp and gu were alright as gbp was the strongest currency.
while uj hardly moved as jpy was the weakest one.

Market is a rectangle in a rectangle in a rectangle in a rectangle and so on...
Learn to accept the fractal nature first and earn second.
As sidenote the borders of the rectangles most of the time are not clear viable to the point and here must every trader build massive screentime.

I'm just going to list my comments

SIMPLIFY!!!

- First thing. Don't quit. You'll never learn how to trade if you quit.
- Focus on buying low and selling high. How can you improve your entry price?
- You don't seem to be confident in your trading strategy. You have no business dealing with prop firms until you have supreme confidence in your strategy. Putting the cart before the horse. Be patient, don't expect to be an expert so quickly.
- Everything you described about your strategy sounds like what the guys on youtube sell as their own personal "winning strategy". This is a fine starting point but you will need to experiment with some of your variables. Experimentation takes time.
- You didn't describe high tight your stops are. I imagine you're trying to call tops and bottoms and snipe the market. You're not ready for that yet.
- You're trying to predict direction. It's impossible to to predict direction. Your mindset should start with "I have no idea which direction price will go. But this is still a high probability trade." Make sure you can clearly define and articulate what a high probability trade is.
- Your strategy seems way too complicated with too many variables. Simplify what you're doing so that you have more control over the strategy. This will allow you to experiment and isolate the parts of your strategy that aren't working. Maybe you need to try a 1:1 risk reward. Maybe a negative risk reward of 2:1 to get your confidence up.

You need more market observation. Put 2 small trades on with no stop loss and no take profit. One long one short, same security. Just let it run for a couple weeks Study the movement of the market. Really pay attention to what's happening. Watch the trades flow back and forth between positive and negative. Experience how much space and time a trade actually needs to have an opportunity to be profitable. Take note of how you feel as one trade goes negative and the other goes positive.

Good luck