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How to trade forex the right way ??

  • #21
  • Jun 4, 2007 1:32pm Jun 4, 2007 1:32pm
I always see people saying "follow the trend".. like it was so easy...

Maybe I'm not gifted or something, but I am never able to realize which is the trend in one chart.. When I think that the trend is one, I always lose.

Can someone give me some tips on how to identify the trend in a chart?
Why do we fall? "So we can learn to pick ourselves up."
  • #22
  • Jun 4, 2007 2:54pm Jun 4, 2007 2:54pm
Quoting ForexDude
I always see people saying "follow the trend".. like it was so easy...

Maybe I'm not gifted or something, but I am never able to realize which is the trend in one chart.. When I think that the trend is one, I always lose.

Can someone give me some tips on how to identify the trend in a chart?
You've got to pick a timeframe, first, as your main determinent (see above post).
There's an old (?) saying in trading..'if someone asks you what the trend is..you can't answer unless you know the timeframe involved'.
If you look at EURUSD on the Daily, the long-term trend is clearly up. Check it out on the hourly and you might consider it down.
Different stokes for different folks, but until I started trading strictly in line with the trend as shown on the Daily charts I consistently lost money.
Now I only trade with the trend, strictly with the trend, I have not had a losing month. I still get losing trades, it's part of the game, but often I've got stopped out on pairs I don't trade often and I've been cautious about stop positioning.
As a rule, if the long-term averages match on all TFs down to 1 hour I'm happy to place orders (buy/sell stops & sometimes limit orders) and wait for price to return to its normal direction.
  • #23
  • Edited 4:48pm Jun 4, 2007 4:35pm | Edited 4:48pm
Quoting WTB
Holy crap, do I disagree with that. My whole system is designed around 3 simple moving averages and price action around them...
ok, let me emphasize then. (to be politically correct) while some system uses MA's for swing entries (which is good) i totally hate MA crossover systems

at least, on lower timeframes. Maybe they work on higher TF. They just didn't work for me
100% of traders are losers. Just that some win more than they lose!
  • #24
  • Edited 4:53pm Jun 4, 2007 4:42pm | Edited 4:53pm
YES! Trading with the trend is enormously helpful, although you should always wait for corrections, which leave the currency better positioned to continue its trend.
I want to add something: If you're adding candlestick analysis to you're trend trading approach you get super tight stops with large potential returns (= good r:r).. I bought Nisons dvd's and with the right understanding you know so precise which patterns to ignore and which you should use.
I have found (it took about 1 year) that tradign trends with confirming candlepatterns on lower timeframe is a very good system. It requries still a lot of discretionary but, with the right understanding of candles it really helps you enormously. (Candlesticks give you a unique perspective of the uninterrupted struggle between buyers and sellers, i would say the best)
Greetings

btw: Another thing wich took me much time to get is, how important it is to be not greedy. It sounds so simple but is sooooo hard. Move stops accordingly and take partial profits, believe me, you'll be astonished (although on condition has to be fulfilled- at least for me-: I need to see a good r:r (preferable above 1:2), otherwise i won't take the trade, doesn't matter how good the setup is (because markets are just random and can turn the best setup into a loosing trade)
I'm getting there ... slowly
  • #25
  • Jun 4, 2007 4:47pm Jun 4, 2007 4:47pm
Quoting ForexDude
I always see people saying "follow the trend".. like it was so easy...

Maybe I'm not gifted or something, but I am never able to realize which is the trend in one chart.. When I think that the trend is one, I always lose.

Can someone give me some tips on how to identify the trend in a chart?
Zoom out
100% of traders are losers. Just that some win more than they lose!
  • #26
  • Jun 4, 2007 5:06pm Jun 4, 2007 5:06pm
Quoting billbss
I like your simple direct approach.

I'm working on something similar.

I like fibs, but I had about decided they were arbitrary and subjective.

Reason being there are always several swing lows/highs to base them from. You can always find one that will show an acceptable retrace.

Do you have any guidelines about choosing important highs or lows?

Thank you
for an uptrend, to find a low, u have to know when the trend start or restart, that high is the highest it ever was
100% of traders are losers. Just that some win more than they lose!
  • #27
  • Jun 5, 2007 2:18am Jun 5, 2007 2:18am
Quoting billflet
Andimozza,

You are fortunate to have such excellent replies to your post. If you keep things simple you'll save a load of time and $.

I began by learning trendlines and fib levels and was seein some success early on. Then I started learning indicators and never had good results. Then my pattern evolved something like Peter's. After two years I went back to my simple ways, except now armed with a better grasp of MM and what goes on beyond the trading platform--all of which can be learned here.

Now I'm seeing success again using simple methods. I hope simplicity will work for you as well. It's a lot less exhausting.

All the beest
Wow I never thought that my post will have an excellent replies
I'm just a totally newbie here

and i must say that i'm totally honour for this replies
Every moment in the market is unique
  • #28
  • Jun 5, 2007 3:02am Jun 5, 2007 3:02am
I agree w/ Mr Demark

i personally have loose interest on indic
cuz they all (like Mr Demark said) lag.......

i'm now in a stage of learning how to trade without using those fancy indic
i don't know wether this is a good turning point or not
well maybe some MA's will do good also (like peterFM use it) but definetely not a crossover combine w/ stoch and bla2x.......

but i think it will take me some more time to fully understand about the retracement, trend continuation base on price action, breakout (mouteki) etc. Maybe i lack the experience because many qualified trader here has trade more than a year while i only known and trade forex less then 6 months... I'm still a newbie compare to all of you

Price Action for me is something new, I've read James16 thread and now i'm trying really hard to understand P.A but i found it difficult for me to identify P.A (regarding the subjectivity i had)

any opinion on how to improve my understanding on these ??
or do i have to experience it by myself ?? learn from my mistake ?

while for fibo
I'll try to use it w/ Mr. Demark approach
seem simple for me....

o yeah one more thing
i really.. really... really (multiply it by 100 times) appreciate what u guys post in this thread

it really help me to gain confidence on how to trade without using those lagging indic
Every moment in the market is unique
  • #29
  • Jun 5, 2007 3:46am Jun 5, 2007 3:46am
Quoting andimozza
I agree w/ Mr Demark

i personally have loose interest on indic
cuz they all (like Mr Demark said) lag.......

i'm now in a stage of learning how to trade without using those fancy indic
i don't know wether this is a good turning point or not
well maybe some MA's will do good also (like peterFM use it) but definetely not a crossover combine w/ stoch and bla2x.......

but i think it will take me some more time to fully understand about the retracement, trend continuation base on price action, breakout (mouteki) etc. Maybe i lack the experience because many qualified trader here has trade more than a year while i only known and trade forex less then 6 months... I'm still a newbie compare to all of you

Price Action for me is something new, I've read James16 thread and now i'm trying really hard to understand P.A but i found it difficult for me to identify P.A (regarding the subjectivity i had)

any opinion on how to improve my understanding on these ??
or do i have to experience it by myself ?? learn from my mistake ?

while for fibo
I'll try to use it w/ Mr. Demark approach
seem simple for me....

o yeah one more thing
i really.. really... really (multiply it by 100 times) appreciate what u guys post in this thread

it really help me to gain confidence on how to trade without using those lagging indic
Life isn't simple Andi, but this is the sort of thing I look for. (See image)
An aggressive trader would consider placing buy limits at the 100EMA with a Stop just below the 200EMA. But my advice is to demo that approach while you are mastering PA.
The safer way is how I've detailed in the image. It's a relatively conservative trade, and will teach you to look for areas of Support and Resistance that may affect the amount of pips that a trade will give you.
If you have any questions, ask away. We are here to turn you into a winner if we can.
Please note this is not based on the 2 EMAs crossing, I use these purely for trend confirmation at points of retracement.
Attached Image
  • #30
  • Jun 5, 2007 4:27am Jun 5, 2007 4:27am
the right way? i don't know, i only use the same way....
1. i find pair that moves in the same dirrection with the positive swap.
2. find the moment that many timeframe gives the same signal.
3. wait the news that gives same movement as above.
  • #31
  • Jun 5, 2007 5:43am Jun 5, 2007 5:43am
Hi PeterFM

yupp i can see clearly that is not an MA crossover method

btw did u use PA as part of your trade ?

thx
Every moment in the market is unique
  • #32
  • Jun 5, 2007 6:35am Jun 5, 2007 6:35am
Quoting andimozza
Hi PeterFM

yupp i can see clearly that is not an MA crossover method

btw did u use PA as part of your trade ?

thx
I wasn't introduced to FX until early 2006, and lost a lot (well it seemed a lot for me at the time) of money until I found this place.
I put this image up, not as an actual trade, but an example of the sort of stuff I've been doing since the start of 2007.
The idea was to set you on a path that you could take that I know has a better than average chance of protecting your account while you're learning. It's NOT the only way, but it works for me. Mr demark uses Fibs, I don't at the moment simply because what I'm doing works for me and the less I have on screen the easier it is for me to make decisions.
Regarding PA, if you look at that chart there are several PA opportunities that stand out.

  1. 4 IBs after the 1st touch on the 100EMA
  2. The last touch of the 100EMA turned into a reasonable Pin Bar (others might not agree)
  3. As both EMAs are rising I would have played any of these long, probably TP around the Resistance area (shown by the Red Line)

All I'm asking you to do is take these ideas on-board, along with other stuff you feel suits you from guys like Mr. demark and try and find a way that sits comfortably with your own risk style, and personality.
It all comes down to screen time with a set of ideas and getting to a point where you say..'I think this works, looking back, now let's see if it works going forward'.
This sort of method can't be backtested, I don't think, simply because it's too subjective and has to become a part of you. Only by giving it time will you know what works, and what doesn't. Only with time will you be able to keep faith with a trade that you felt was good at the time of entry.
I stay with trades far longer than many here, and it may be that I will get punished sometime soon, but I'm now sure that I have the basis of a sound methodology, and all I need to do is refine it.
Two examples of what I mean:

  1. 5th May went Long NZDUSD @ 0.7373 - still running. It went as low as 0.7237 but now 0.7531
  2. 23rd May went Short EURAUD @ 1.6344 - chickened out at 1.6476 but now at 1.6117

If I'd kept faith on the 2nd trade I'd be smiling and there would have been one less loss to shown on last month's account.

All part of the learning curve!

  • #33
  • Jun 5, 2007 10:52am Jun 5, 2007 10:52am
Quoting PeterFM
I wasn't introduced to FX until early 2006, and lost a lot (well it seemed a lot for me at the time) of money until I found this place.
I put this image up, not as an actual trade, but an example of the sort of stuff I've been doing since the start of 2007.
The idea was to set you on a path that you could take that I know has a better than average chance of protecting your account while you're learning. It's NOT the only way, but it works for me. Mr demark uses Fibs, I don't at the moment simply because what I'm doing works for me and the less I have on screen the easier it is for me to make decisions.
Regarding PA, if you look at that chart there are several PA opportunities that stand out.

  1. 4 IBs after the 1st touch on the 100EMA
  2. The last touch of the 100EMA turned into a reasonable Pin Bar (others might not agree)
  3. As both EMAs are rising I would have played any of these long, probably TP around the Resistance area (shown by the Red Line)

All I'm asking you to do is take these ideas on-board, along with other stuff you feel suits you from guys like Mr. demark and try and find a way that sits comfortably with your own risk style, and personality.
It all comes down to screen time with a set of ideas and getting to a point where you say..'I think this works, looking back, now let's see if it works going forward'.
This sort of method can't be backtested, I don't think, simply because it's too subjective and has to become a part of you. Only by giving it time will you know what works, and what doesn't. Only with time will you be able to keep faith with a trade that you felt was good at the time of entry.
I stay with trades far longer than many here, and it may be that I will get punished sometime soon, but I'm now sure that I have the basis of a sound methodology, and all I need to do is refine it.
Two examples of what I mean:

  1. 5th May went Long NZDUSD @ 0.7373 - still running. It went as low as 0.7237 but now 0.7531
  2. 23rd May went Short EURAUD @ 1.6344 - chickened out at 1.6476 but now at 1.6117

If I'd kept faith on the 2nd trade I'd be smiling and there would have been one less loss to shown on last month's account.

All part of the learning curve!

You're right....
i agree with your point

well i dunno how to express it in words (since english is not my primarily language)
i think now i got some sort of ideas running on my head, eventhough i still can't figure it out where this will lead me further on

btw i found your word very inspiring
Every moment in the market is unique
  • #34
  • Jun 5, 2007 12:29pm Jun 5, 2007 12:29pm
For those of you who would like to improve on your trading style quickly,

i have shared this EA before and will share it again

what it does? It test any system you have.

how does it work? follow closely

1. press CTRL+R in metatrader to start setup the backtesting. Select the Date of the period to test and the pairs to test. Make sure visual mode is checked

2. Goto "Experts Properties" button and disable trailing stops

3. Start the tester by clicking start

4. press Pause (located below the dates), to select your template or indicators of choice

5. press the pause again to let it run once more.

6. whenever u see a trade opportunity, press pause, goto global variables (press f3) and for the entry variable, place 1 to go long or 2 to go short. Set the risk (%) and the SL in pips. Ignore the lots variable, the lots will be automatically calculated based on the SL and risk.
http://www.forexfactory.com/attachme...1&d=1181064512

7. press close

9. Unpause. Now u see a trade entered and u are doing a manual trading simulation.

10. You can also adjust SL and TP by moving the orange lines to levels of choice

11. to exit from a trade, goto global variables and enter 1 in the variable "Exit"

later folks, have a nice simulated trading practice
Attached Image (click to enlarge)
Click to Enlarge Name: 22.gif Size: 35 KB
Attached File(s)
File Type: mq4 LiveBacktest_1.1.mq4   10 KB | 379 downloads
100% of traders are losers. Just that some win more than they lose!
  • #35
  • Jun 6, 2007 2:11am Jun 6, 2007 2:11am
Take yourself into it soul. Understand what forex trading really is. You're on the right way when you've enjoyed being trader. Enjoy being a trader means: worry no more about lossing. How come? because you've already knew, nothing is perfect.

that's the philosophy, now the practical step:
1. learn everything related to forex, that interested you
2. Read and try some forex strategies. Try to find out how, when and why it can give you a winning trader either a lossing trade

3. Trade live, with small account first. It's to help you understanding your real trading psychology.

4. Try to understand your own trading style
5. form your own trading technique (which match your psychology and trading style)
  • #36
  • Jun 6, 2007 4:36am Jun 6, 2007 4:36am
Thanks for everyone and warm regards from me..

I find it's really hard when you have to read everything related to forex..
I have read everything in this forum, from james16, mouteki, vegas, fozzy, etc..

But it's making harder for me to understand the whole picture of forex, since everything's seem's blur and everyone has their own interpretation of forex..

I try to understand the price action, but there's no simple way to understand it.. And all i found is everyone arguing someone else's opinion.. So with the indicators, each of it have plus and minus.. And you have to put every one of them in your chart just to make you understand where the price is going..

Is there any simple way to understand this forex thing? The simple way to understand the whole thing's.. I used to read 'simple is better' but i can't find it in this forum.. What i'm searching is a universal language to understand forex..

Is there?
  • #37
  • Jun 6, 2007 4:37am Jun 6, 2007 4:37am
sorry for my english
  • #38
  • Jun 6, 2007 6:58am Jun 6, 2007 6:58am
Vishnu, go step by step, one task at a time.

I trade full time. My advice to you would be FIRST OF ALL try to understand and discover how to spot a healthy trend. You need to understand trends and how to profit from them before being able to move on. For the time being, forget trading systems, forget moututeki, fozzy, vegas and all the rest, and begin from the very most crucial point: "what is a trend, how can I identify it and how can I profit from it?".

Once you have that more-less figured out, choose your system. But before racing F-1 cars, you gotta get your basic driving license, and that means in the Forex world TRENDS!
  • #39
  • Jun 6, 2007 9:13am Jun 6, 2007 9:13am
Mr. Demark thx for the EA
it really help to backtest any kind of strategy manually
Every moment in the market is unique
  • #40
  • Jun 6, 2007 12:13pm Jun 6, 2007 12:13pm
No problem
100% of traders are losers. Just that some win more than they lose!
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