Really simple trading

Here is my take on trading - and a recent turn around in my success makes me feel qualified to make some comments. Having tried every new new thing under the sun, and spent my hard earned money on various courses and software products, I can tell you that you don´t have to spend a penny to learn how to trade - the simple stuff works.
Here are the mistakes I made, and I guess many others make them too:

1. Stops too close.
2. No objective assessment of a target.
3. Overcomplication.
4. Watching indicators instead of price.
5. No recovery strategy for when a trade starts to go wrong.
6. Listening to people and reading books where the author really doesn´t know what they are talking about.
7. Accepting trading folk law - risk-reward ratios and all that stuff.
8. Expecting the forex markets to be display pattern precision.

My stops are so wide that my risk/reward is often greater than one. Heresy - but it works. The stops are so wide because they give me a chance to recover a losing trade. But you´ll have to figure the rest out for yourself.
You need some way of determining a target. The old ideas are the best. Head and shoulders - and there are thousands of them in forex - give you a measurement of target - the distance between the top of the head and the neckline. Use it as a provisional target and monitor the trade.
I know some people seem to do well with indicators - but they just didn´t work for me. Patterns work for me - but I´ve learned not to be too demanding in terms of breakouts and pattern construction. Resist the need to complicate - the simple patterns work if you give them some room.
Look at the overall situation - changes of trend take time to mature (sometimes they don´t - but that’s the exception).
For all those with a math/engineering/science background - which I have too - your background will work against you - at least it did for me. There is nothing precise about trading despite the claims of some Fib people. Dance with the market - don´t stand so close to your partner that you are treading on their toes all the time - give them some room to move. And if you both want to dance a different dance find a way to exit gracefully.
This is my take - if another paradigm works for you lets hear about it.
I´ll post some trades when I´ve learned how to get a jpeg attached to my posts. I hope this is useful.

[FONT='Arial','sans-serif']Thank you for that insight, I am also new to Forex and I am looking to get started, so I am reading all I can get my hands on. This helps a lot, but ill have to save it for when I start using MT4.[/font]

Ok well expert here is my first question on my first trade how far apart should I set my TP and SL, is there a rule for that or is it just how I feel?

On head and shoulders my stop is about 20% head to neckline distance above the head. I also have a limit trade near the head. Take profit is head to neckline distance - but monitor the trade. The stop and limit give me a chance to recover the trade to break even if it goes wrong - it very often works.

Well said bigblue, thanks for sharing !

MT.

Hey since my last question I choose an indicator to begin to use them and now I am looking for information on the Volumes indicator, or at least how to read and understand its use, so can you help me out?

Interesting assessment. But to be fair, I'm going to take advice from a poster with 16 posts with a grain of salt

Do you do backtesting?

LTBF, no disrespect, but it's number of trades that determines experience, not number of posts. I've made over 1,000 posts here, but it doesn't mean that I'm an expert trader, or even very knowledgeable. In fact, quite the opposite.

No doubt there are plenty of pro traders who are too busy making money to even bother with a forum like this. Some have their own websites. And why should they want to share their winning formula with us?

David

I agree with you, but it’s difficult to believe in someone most of all because this market is really imprecise. Thanks we have MT4 with demo account! Every advice needs to be proved there. Then you will know, but the behavior and the mood when you trade depends on you I think.

Interesting information, it is needed to think above it )

Rite david

Beautiful setup on USDCAD - 1HR chart. Still in it.

Out of USDCAD - text book setup. This one is less ideal - an inverted H&S n USDJPY 15 min chart. We´ll see how it goes.

For H&S trading here is what to look for:

1. Must be at the end of a trend - must have been a decent rise or fall before pattern.
2. Shoulders and neckine should run on parallels - more or less.
3. Upsloping H&S nechlines seem to be more reliable than flat or descending.

So wheres the head and shoulders?

Help a newbie out.

Here´s an annotated chart - you can see how its developed since this morning. Came at the end of a very long and aggressive rise.

it's really visible...only I have to try found it on my pictures..

Fundamental analysis is important these days but as you said bigblue old ideas are the best. I’m interested in H&S technique to trade so let me ask you. The basic idea is, when you recognize the H&S, trade in the opposite way the same high of the head but to get save only 20%. Did I understand it? And also monitoring the trade to avoid any mistake.

I forgot about the timeframes. Is it useful in anyone? I think maximum in 30M or 1H because you need to monitor it.

Juz an info for all, more chart pattern available here

http://chart-patterns.netfirms.com/bearflag.htm

NOt sure whether this is a valid one or not.