The Root of Forex Swing Trading

in all my years studying this stuff, i can not avoid a single simple truth.

EITHER YOU ARE FOR A TREND, OR AGAINST IT.

that's it.... nothing more, nothing less.

if a breakout occurs, i either bet against it (and am betting on a sideways market) or i am betting that it will continue into a medium or long term trend.

so in sideways years, my trend following systems will lose pips.... and likewise my countertrend systems will do well...

i looked at several ways of profiting in both types of markets throughout the year, but at the end of the day, fate relied on 2 things:

1. i bet the market would trend

2. the market trended

that's all there is to it. it's very simple. you can't see trends or sideways markets in advance, so you roll the dice, and hopefully you will have bet the correct strategies in hindsight.

Keep in mind that sideways years have great trending periods on a lower time frame. At the moment most pairs are moving sideways on the daily w/ the USD uncertainty, but if you go down to smaller TFs you'll notice there's several good trending days per week.

I've done quite well trading intra-day range breakouts for 100 pips here and there. As ranges get smaller and smaller, the TF needed to trade them gets smaller and smaller too... up until the point you can't cover your costs anymore and it becomes pointless to trade.

With that said there are some pairs that tend to trend, and some pairs that tend to range. And some time frames that tend to do one over another. Pairs that have a currency with a strong interest rate policy (strong increases or decreases) will tend to cause a trend, along with traditional strength/weakness pairings. Up until recently the USD was a great example of this, then followed by the JPY... what comes next, we'll see. Still, over long periods of time it is highly unlikely that pairs like the EURUSD and GBPUSD will range intra-day more than they trend, while pairs like the GBPJPY seem to love their ranges... so you can tailor the strategy to fit the pair and get better than random results.

Well you can't see them in advance, but you can see when they're happening right in front of you. For instance when a pair is making a new high, say a 40 day high, it's pretty obvious that it's trending. There might be a quick reversal at key highs, but the fade always rallies back if the trend is worth it's salt. Obviously you wouldn't enter then until the rally returns.

Nothing's 100% of course, but being quick to cut losses and not letting a wins turn into a loss lets you cut out quickly when things don't go as planned.

I'm in the business of giving you the business end of my business, and business is good.

My business is 30 pips here, 15 pips there. Nothing crazy, but I'm in this to build an account, not a "pip master's legendary codex". Hooray for me! I found the holy grail!

P.S. I have nothing truly serious to give to this topic. I just like giving Tdion a hard time.

yeah at least we aren't at war anymore jedi

so i changed the thread's name to just "swing" trades because scalpers are in a different league. of course it depends on the timeframe and TP/SL you do, but the premise remains. it's always continuation or reversal, and always a coin flip until all trades are closed.

P.S. I have nothing truly serious to give to this topic. I just like giving Tdion a hard time.

The above is from your ex war buddy !

Your post is very interesting in that you confirm the luck or guess factor.

Try trading this way if you would like better results...

It is called by WWW.INO.COM the "FTP" Method !!!

Fundamentals + Technicals + Perception

Fundamentals also stands for Supply and Demand of the currency pair that you trade.

I will find the great video of FTP and post it here on edit for you. I love PEACE !!!


If you have not viewed the video posted on this thread called "FTP" please do so after reading this post. FUNDAMENTALS get you into your position ahead of most others. Then you use TECHNICALS to get the BEST entry into that currency and also know where everyone sees, Support, Resistance and Pivot Points.

Then we get to PERCEPTION !

Just like in the FTP video of a little less than 7 minutes shows, when the PERCEPTION becomes commonplace, that is when it will be ready to reverse as it just might do shortly over the next few days since the market thinks the banking and brokerage and housing bottom has been reached because Citi Bank only declared losses of 2.5 Billion in the last quarter.

I will do another post on how to take advantage of this knowledge to make money using my method of trading FX which works on my Home Thread, Knowledge Is Power. Enjoy !!!

Here is the Link to the FTP video.

http://broadcast.ino.com/education/t...eboard_6/?blog

PLEASE WATCH IT !!! Thank You !!!



Bruce

Hmm.

A good carry trade will let you profit in a sideways market or an uptrend... two out of three ain't bad!

can't be planned (in my estimation) and i never saw a carry basket that didn't break within a few months.

Well, I have to say that I wish I had bought some XYZJPY near the bottom of the last big unwind!

It depends what you mean by break. There are some unwindings but with good MM it's not so much an issue. The last 1.5 year there have been several unwindings (some quite strong) but still my carry trading is doing quite well.

few more nuggets here....

1) drawdowns are to be expected.... nasty, ugly ones too.... a part of life as much as babys have soft skin and water being wet..... accept, plan accordingly, and live with them.

2) the most important question to constantly ask yourself is, AM I MAKING NEW PIP COUNT HIGHS??? New highs is my motto.... because no matter how crafty and clever you are with your money management, a huge drawdown can put you out of commission (or cripple you from recovery)

Again, question "where are my green pips coming from?" not because of voodoo charting systems, but because of some sound logical reasoning....

hi

another installment

i do some lurking around here.... get a bit amused by all the excel spreadsheets that show risk per trade, etc....

i get amused by people trading gartley crabs and butterflies.... their calculations expecting exact targets to be met (fib traders fall into this boat too)....

i get amused by people trying to compute the exact ROI they want to achieve in 12 months....

i get amused by people trying to calculate kelly formulas with their systems, and people asking "what system makes pips?" the same system will do great one year, and horrible the next.... the market is always in control of your equity... not the stupid system.


i look back at my early posts and old threads and see myself a naive noob.... asking the same type of questions i am making fun of here. the truth of the matter is that CHAOS RULES (in 99% of trading scenarios).... stop looking at trading as a set of glove tight rules and expectations, and start looking at it as a mitten with room for chaos.

when all the information is boiled down, there are a few simple truths to base trading on. you can explore trailing stops, averaging down, pyramiding, money management, etc.... i hope you research all the possibilities and find not only what works for you, but simply what works.

Hey tdion.
Although I am a COMPLETE Noob who has just been reading reading and reading.. not even demo'ed an account yet. I am very interested in you understanding.

I must say, 95% of technical analysis is absolute rubbish. Just reading some of the guides on TA gives me this.

I am highly interested in reading more from you and understanding how YOU understand forex.

Thanks for this thread.

hi dk.

i am not a financial advisor.... must say that off the bat.

well my experience is just like being in school.... i read lots and ultimately let my own thinking filter out the crap from the good stuff.

sometimes common sense must dictate, though. i mean, i have bashed fibs over and over because i think they are coincidence. that doesn't mean people aren't making money with them.... you have to believe in something.

i think james16 and virus are two good places to start. most of my own thinking lines up with their "patterns" if you will.... the reason being is that i can imagine "real world" reasons why the pattern works.... not because "the chart told me to."

okay so i would recommend getting savy with metatrader 4 and start learning to code your own trading robots. this skill is very useful in testing your own ideas. you can visit my "MA Optimization (very cool)" thread and see the power of using EAs to find the best parameters.

now i must say that many people at FF don't like me. i am very opinionated and brash in my responses, but at the end of the day, i think its what is best for the community.

if you choose to make a commitment to learning forex, you can't help but learn what doesn't work over time, and should probably find a small handful of things that MIGHT work longterm. check out my other threads if you want to get inside my head.

-td

Hey Tom!

I think that a lot of people at FF do like you for the very same reasons

It's good to see you back posting.

Kind Regards
Steve