Into the Swing...... | Forex Factory

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Into the Swing......

  • #1
  • First Post: May 24, 2007 6:56pm May 24, 2007 6:56pm
Well after an inordinate number of hours playing with metatrader and reading countless internet articles/threads, I have raised my (demo) trading to the exalted heights of being able to loose slowly, instead of in a flurry of random imploring CLICKS!

Not one to tell the grandkids I know, but it would seem the loss (2.5% over the last three weeks) would have been a good profit had I stuck to the script I am trying to lay out for myself.
For example, identified the recent reversal on oil futures (not difficult I know) but was stopped out on a spike down 'cause my account could not tolerate the minimmum point value to allow a decent stop.
Result: 100 pip loss instead of 400 pip gain! I'm sure glad that wasn't real.

Heres the plan;

I want to go live in September (so plenty of time to improve) but am going to log my demo trading in an effort to make it "more real", in the hope I can then make an easier transition to real funds.
  • #2
  • May 24, 2007 7:02pm May 24, 2007 7:02pm
Best of luck Ted - you can do it & you'll find the journal really beneficial if you stick with it

Kind regards
Steve
  • #3
  • May 24, 2007 8:04pm May 24, 2007 8:04pm
At this point I would like to invite discussion about the development of discretionary swing trading stategies, (I have tried to manually backtest but can't because I know what happened to the pairs I want to trade over the last couple of years, I've even been thinking of joining curve fitters annonymous!) through live or demo forward testing. The aim here is to try and create something which can operate around a fulltime job, not unusual I'm sure.

I'd like to explain my methodology (I'm sure it will change) and if nobody gives a shit then maybe typing something out might help me anyway. So.....

I prefer to use Daily and hourly charts because it just makes sense, they are the time frames by which most human activities are governed, so I'll be looking for entries on the dailies and trailing stops using hourly sup/res.

Indicators (Squiggly lines)

1. 100 SMA. This represents a tide line for the market, to try and keep on the right side of the prevailing trend.

2. 55 EMA. Seems to provide dynamic sup/res and compliments the 100 SMA for identifying long term trends.

3.10 EMA. This seems a great for capturing swings as a close above/below can signal the end of mid lenght swing.

4. I have the EMAs of a 5 and 10 period RSI overlayed, looks like a mint tool for staying on the right side of the tracks, we'll see eh.

Account management

1. No more than two positions may be entered each day.Trying not to overdo it.

2. Cannot be exposed to highly correlated markets. Why bother?

3. Maximum leverage 50:1.Seems fair?

4. Spread must be 5 or less. Nobody likes comission!

5. Allow maximum 2% of current balance per trade. Or else!!

Exit Strategy

1.Place stoploss at ATR20. Normalizes volatility.

2.Trail stop using hourly sup/res, not within 1/2 ATR 20. Stops the pips escaping.

3. Use daily sup/res to identify targets with risk reward not less than 1:1.5.

Traded Markets

EUR/USD USD/JPY AUD/USD USD/CAD
GBP/USD USD/CHF NZD/USD CAD/JPY
Spot Gold Light sweet crude (just like me)


So there it is.
  • #4
  • May 24, 2007 8:25pm May 24, 2007 8:25pm
Quoting Ted1983
At this point I would like to invite discussion about the development of discretionary swing trading stategies, (I have tried to manually backtest but can't because I know what happened to the pairs I want to trade over the last couple of years, I've even been thinking of joining curve fitters annonymous!) through live or demo forward testing. The aim here is to try and create something which can operate around a fulltime job, not unusual I'm sure.

I'd like to explain my methodology (I'm sure it will change) and if nobody gives a shit then maybe typing something out might help me anyway. So.....

I prefer to use Daily and hourly charts because it just makes sense, they are the time frames by which most human activities are governed, so I'll be looking for entries on the dailies and trailing stops using hourly sup/res.

Indicators (Squiggly lines)

1. 100 SMA. This represents a tide line for the market, to try and keep on the right side of the prevailing trend.

2. 55 EMA. Seems to provide dynamic sup/res and compliments the 100 SMA for identifying long term trends.

3.10 EMA. This seems a great for capturing swings as a close above/below can signal the end of mid lenght swing.

4. I have the EMAs of a 5 and 10 period RSI overlayed, looks like a mint tool for staying on the right side of the tracks, we'll see eh.

Account management

1. No more than two positions may be entered each day.Trying not to overdo it.

2. Cannot be exposed to highly correlated markets. Why bother?

3. Maximum leverage 50:1.Seems fair?

4. Spread must be 5 or less. Nobody likes comission!

5. Allow maximum 2% of current balance per trade. Or else!!

Exit Strategy

1.Place stoploss at ATR20. Normalizes volatility.

2.Trail stop using hourly sup/res, not within 1/2 ATR 20. Stops the pips escaping.

3. Use daily sup/res to identify targets with risk reward not less than 1:1.5.

Traded Markets

EUR/USD USD/JPY AUD/USD USD/CAD
GBP/USD USD/CHF NZD/USD CAD/JPY
Spot Gold Light sweet crude (just like me)


So there it is.
let me guess...u use oanda??
  • #5
  • May 25, 2007 8:23am May 25, 2007 8:23am
Incorrect Hilmy . I've been testing my mettle using NorthFinance, but I intend to use Oanda when I finally take this live, as the specific lot size will allow perfectly for the ATR adjusted lot size.

(Also I believe Oanda has bases in Europe and USA, so as an Englishman I'll be able to trust my cash to all kinds of dodgy foreigners. HeHe!)

Was it the 50:1 leverage that indicated Oanda? My thinking behind this is if I use any higher leverage I'll be tempted to take riskier positions than necessary. For example the ATR on the EURO would require me to trade at something like $1.30/pip with a 5K account, this can easily be incorporated using 50:1!

For now I'll use North finance and truncate the risk to $1 per pip, as long as exposure does not exceed 2% I'll be, "within the law".


PS. BTW Hilmy as a fellow 23 year old male what made you decide Forex was the way forward?

PPS. Thank for the encouragement Steve.
  • #6
  • May 25, 2007 9:42am May 25, 2007 9:42am
1.Buy EUR/USD @ 1.3472
SL @ 1.3395

.Euro bounced of a rising trend line, after a double bottom on the previous 2 days price action, in conjunction with some Dollar negative news. Maybe should have entered last night around the 430 mark with a tight stop. but 400 looks like it might hold anyway. Looking for a close above 460 today to target 580 (a tag of the descending channel). If this doesnt' tank come monday, poor US GDP next week might see it go all the way, admitedly upside may be limited as we're near all time highs.
  • #7
  • May 29, 2007 6:29pm May 29, 2007 6:29pm
So todays spinning top on EUR "must" be due to conflict between the rising and the descending trendline. I'm leaving the previous trade open but moving SL to 3410, below todays low, still backing the longer term trend, as EUR and Cable appear to have strong support.

2.USD/CAD Sell limit @ 1.0770. (50% retrace of todays action.)

Down (again) on no change in interest rates, which says to me the rout may continue unabaited.
  • #8
  • May 30, 2007 6:34am May 30, 2007 6:34am
No overnight retracement on CAD, only ran up a few pips during the Asian session, so sell limit deleted. The pair predictably found support at 700 so I will try to enter on a break below that level.
  • #9
  • May 31, 2007 1:42pm May 31, 2007 1:42pm
A delightful cock up there on EUR (making me glad there are "experimental" funds), Shouldn't have moved stop above 400 yet, but as the lottage comprised 1.24% risk, will try to enter with a tight stop below 0400. Which will make up the full 2% when that gets gunned down!

Buy limit EUR/USD @ 1.3436
SL @ 1.3390.


CAD has penetrated then retraced to 0700 after yesterdays spike below, so...

Sell USD/CAD @ 1.0704
SL @ 1.0768.
  • #10
  • May 31, 2007 1:48pm May 31, 2007 1:48pm
good luck to you sir
  • #11
  • Last Post: May 31, 2007 1:57pm May 31, 2007 1:57pm
Quoting superdezign
good luck to you sir
Cheers! And feel free to comment on the progress/regresss, if you get bored.
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