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New member looking for a little advice and handholding

  • #1
  • First Post: Jan 13, 2010 5:52am Jan 13, 2010 5:52am
Hi everyone!

I've been a reader of FF for quite a while now. Recently, I've gone over some of the most popular forum topics here and although there is a lot of great advice given here, there is just so much information here that I feel inundated by it. I decided to register and ask for some help from the members here because I feel that reading through all the information here is too much to handle. There are so many threads here and needless to say, quite a few of them start out nice but over a short period of time, they fill up with side discussion about the philosophy of trading or the usage of trailing stops or whatever.

I started this topic because I have a specific question, but before that, let me give you my background (for those that don't care, skip below to the question in bold).

Background

I have been trading forex for about two years now. I started off trading demo, then switched to live. I lost my first account about a month after having started. I started demo-trading again, being somewhat successful, I started trading live, with a smaller account this time. I've been able to make some money, but overall my losses are still bigger and come more often than my wins. Over time, I've had some success - my losses have been getting smaller and my wins have been getting bigger. But it is still not good enough as I am still losing money. Surely you must all know how this feels like.

Strategies and Systems

I've been developing many strategies over the years, but especially during the last half year. I realized that I needed a strategy that works, trading off one's gut feeling is just foolish. I knew it before and I had a system but for some reason I thought I was more clever and could override my systems. Oh, the mistakes. I have made all the mistakes in the book - not following my system, lack of discipline, lack of money management, unrealistic expectations, you name it!

It has been a tough road. Emotionally and psychologically, that is. I don't much care about the money that I've lost. I haven't been speculating with money I can't afford to lose, so the money that has gone down the drain is not such a big deal. The biggest barrier that I've had to overcome is admitting to myself that I am doing something wrong. The fact that I am writing here is a sign of defeat, sort of. But I'm not giving up.

OK, enough of that. Let me tell you where I'm at right now. I've put together a system that works for me, it's fairly simple and it does have at least one indicator in it. It's not an EA, it's manual. The returns on that are enough to be satisfied with but one element is missing from it. Which brings me to...

The question

The only thing that makes my system work is a clear trend. I have almost solved the problem on the daily charts - meaning that I have a way to determine the trend on the daily chart, but I would like to be able to determine a trend on H4 and H1 too. Could you please help me find a way to determine trends on H1, H4 and D1 charts?

The reason that I am posting this question here is, as I said above, that there are so many threads here and I feel quite lost. I tried going through the material myself but after a week of dense reading I feel that I've gotten nothing out of it.

You don't have to post the answer in a few sentences, I'm okay with going through the material myself. If there is a thread here that deals with this issue in a clear and useful way, I'd be happy to receive the link. But please don't go Da Vinci on me (some people like to hide knowledge behind word games and such, I'm not good at figuring them out).

I'll try and answer all of your questions if you have any.
If you don't risk, you don't ever have to lose.
  • #2
  • Jan 13, 2010 8:28am Jan 13, 2010 8:28am
Quoting bug
The question

The only thing that makes my system work is a clear trend. I have almost solved the problem on the daily charts - meaning that I have a way to determine the trend on the daily chart, but I would like to be able to determine a trend on H4 and H1 too. Could you please help me find a way to determine trends on H1, H4 and D1 charts?

.
Hi and welcome to the Forex Factory The best way to determine a trend on any time scale is to zoom out (in MT4) and look see if it's going up or down. If you are not sure, then it is likely to be ranging. If you have a system based on trends then that is when you wait on the sidelines.

With regard to the rest of your post, I know the feeling. You can't rush these things and if, after say 3 years of hard work, you are still not confident, get another job.

Forex trading can be very frustrating. Just when you think you've got it the market comes along and whips you. See this recent thread:

http://www.forexfactory.com/showthread.php?t=214637

where, though I say it myself, I posted one of my best offerings.

If you have a system and it's based on trending it's probably like most indicator based systems - frequently goes into drawdown. This is due to pullbacks and bounces off support and resistance levels. Add to these whipsaws and news spikes and you get a mess - resulting in a panic reaction. Avoid this a little bit by learning more about price action and support and resistance levels. Next time you see a pull back you may see it as an opportunity to enter a trade rather than a slightly sickly feeling of wishing you weren't in one. Read the James 16 thread. This is, in my opinion, the best coverage of these subjects in FF.

Seek out the traders who seem to know what they are talking about. Click on their profiles and track their posts. You may find some who have the same trading style as you. Ask questions. Work hard. Good luck.
Gone to a better place
  • #3
  • Jan 13, 2010 9:37am Jan 13, 2010 9:37am
Quoting smikester
The best way to determine a trend on any time scale is to zoom out (in MT4) and look see if it's going up or down. If you are not sure, then it is likely to be ranging. If you have a system based on trends then that is when you wait on the sidelines.
I read the same thing from JohnW's thread but when I tried implementing it, it didn't work too good. Eyeballing trades as simple as this doesn't quite cut it for me. I admire those who are able to determine trends as easy as that. But it just doesn't seem to work for me. Why? I guess it's because the left-to-right method is the bigger picture, but I'm missing some crucial pieces of the puzzle. I don't know if you understand me... let me make a vague comparison. Suggest we have two kinds of terrain - forests and fields. After just a short glimpse, a person with normal eyesight will be able to determine whether the terrain was covered with trees or grass (ie. the trend). Experts, however, are able to tell you what kind of forest or field it was - a pine forest or a mixed forest, a field covered with weed or sprouting trees (that will turn into a forest soon enough). Seasoned traders see the trees AND the forest, they see the patterns and lines all over the chart. Maybe it's just age and experience.

Quote
If you have a system and it's based on trending it's probably like most indicator based systems - frequently goes into drawdown.
The system has one indicator to trigger signals, one indicator to confirm the trend and one moving average to trigger secondary signals and that's it. It works both ways - long AND short. The triggers are different, though. The types of trades that I make in an uptrend are somewhat different from the types of trades I make in a downtrend. In any case, the problem remains. It would be easy to solve it using volumes, but we all know that's nigh impossible.

Quote
Read the James 16 thread.
Already on it, mate. In fact, James's thread was my first visit to this site.

Quoting smikester
Seek out the traders who seem to know what they are talking about. Click on their profiles and track their posts.
Seems like you almost read my mind. I've been doing just that all day long today. It's exam session at my university so I've been taking some time off in between exams. I've been able to collect a few blog links as well and I am investigating all of them to see if they fit my style.

Thank you for your time and advice.
If you don't risk, you don't ever have to lose.
  • #4
  • Edited 1:51pm Jan 13, 2010 1:49pm | Edited 1:51pm
Quoting bug
Hi everyone!

I've been a reader of FF for quite a while now. Recently, I've gone over some of the most popular forum topics here and although there is a lot of great advice given here, there is just so much information here that I feel inundated by it.[/quote}
Generally a sign of a trader that will make it is an unwillingness to fail.. and desire to do what others cannot... and the emotional drive and psychology to read non stop for 14 hours straight then figure out ways to get that stuff into your trading just to get your motherloving A double...
well u need to start from one end of Forex factory and move to the other.. because jammed in those seemingly mindless discussions they have theyre is usually one gleaming post that makes the retarded read worth it and there is to many to link for you. and thats the honest truth
Quote
I started this topic because I have a specific question, but before that, let me give you my background (for those that don't care, skip below to the question in bold).

Background

I have been trading forex for about two years now. I started off trading demo, then switched to live. I lost my first account about a month after having started. I started demo-trading again, being somewhat successful, I started trading live, with a smaller account this time. I've been able to make some money, but overall my losses are still bigger and come...

since youve shared with us well share well share with you...
My background is in finance I graduated from Penn State with a double major in finance and philosophy... I figured adam smith was the man and he was a financial philosopher...so there had to be something to it lol...
My family up north has a brokerage firm.. and I run a currency strategy company -which will not be named for FF rules- ive been trading FX for close to 6 years now.. last couple of years trading more than 5 million of my 6 years trading FX Ive been trading stocks much longer..
[/quote]
Quote
Strategies and Systems

I've been developing many strategies over the years, but especially during the last half year. I realized that I needed a strategy that works, trading off one's gut feeling is just foolish. I knew it before and I had a system but for some reason I thought I was more clever and could override my systems. Oh, the mistakes. I have made all the mistakes in the book - not following my system, lack of discipline, lack of money management, unrealistic expectations, you name it!
unfortunately it seems that the only book you could have read on any of those would have been a trading system book or ta book and they dont go over any psych.. or MM.. or even fundamentals... or right sided thinking. So your not doing to bad in 2 years you may actually be where your suppose to..

- you know when your just about to make it in FX when you think it cant be done your hitting and emotional bottom and you feel like punching things letting it out that your a failure... do it push it out ... and go at it again and generally the last piece clicks and you make it.. -> least thats how it worked with me

Quote
It has been a tough road. Emotionally and psychologically, that is. I don't much care about the money that I've lost. I haven't been speculating with money I can't afford to lose, so the money that has gone down the drain is not such a big deal. The biggest barrier that I've had to overcome is admitting to myself that I am doing something wrong. The fact that I am writing here is a sign of defeat, sort of. But I'm not giving up.
I did it with money i could afford to lose unfortunately lol just wanted to throw that in there.
Quote
OK, enough of that. Let me tell you where I'm at right now. I've put together a system that works for me, it's fairly simple and it does have at least one indicator in it. It's not an EA, it's manual. The returns on that are enough to be satisfied with but one element is missing from it. Which brings me to...
and the build up!
Quote
The question

The only thing that makes my system work is a clear trend. I have almost solved the problem on the daily charts - meaning that I have a way to determine the trend on the daily chart, but I would like to be able to determine a trend on H4 and H1 too. Could you please help me find a way to determine trends on H1, H4 and D1 charts?

2 years and you cant tell a trend? well ill help you out a bit hopefully... dont zoom out try it this way... take them D%MN candlesticks of your chart. and switch it over to an average price line chart.

Look at the Wave structure... now im not an elliot wave guy at all .. so dont think that... but I do understand well the idea of market psychology..

They market is in trend when... in an uptrend Higher swing highs and Higher swing lows are being make... its is the end of the trend or at least a pause when..... in an uptrend a Lower swing Low is made....

in a downtrend Lower swing Highs and Lower swing lows are made.. it is the end of a downtrend when... a higher swing high is made...

end of story. if it is retracing deep and doesnt break out with distance it is in CHOP... dont trade... why is it like this.?

Market Psychology... most participants assume the market is moving up.. the interbanks are trading up everyone is up... you can see the psychological action in the market from overbought to oversold... these are just replacement words for Market euphoria and market fear and relief and greed.. when in an uptrend greed and excitement enter the market at a discount of the last swing high... this will create a higher swing low. and should drive if there is enough higher swing highs... your protecting yourself when the market psychology is brought ito question AKA... a low is broken in an uptrend.. or a high is broken in a downtrend...

This is Price action definition of trend.

Quote
The reason that I am posting this question here is, as I said above, that there are so many threads here and I feel quite lost. I tried going through the material myself but after a week of dense reading I feel that I've gotten nothing out of it.

if you read something revatively interesting print the post out and put it in a scrap book or a binder with plastic pages.. every week read and add.. and reread your binder and try to excersize it. it wont seem useful if you dont use it.. whats the use of having a home gym if your only gonna look at it and read the manual and not use it.

Quote

You don't have to post the answer in a few sentences, I'm okay with going through the material myself. If there is a thread here that deals with this issue in a clear and useful way, I'd be happy to receive the link. But please don't go Da Vinci on me (some people like to hide knowledge behind word games and such, I'm not good at figuring them out).

I'll try and answer all of your questions if you have any.

those people are called gurus. if it cant be qualified .. journalized.. and repeated .. and have numbers and results applied to it... ITS ABSOLUTE HORSE ... ok see ya
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  • #5
  • Jan 13, 2010 5:46pm Jan 13, 2010 5:46pm
Trend Magic seems to do a nice job identifing trends. Combine it with an entry signal and you could have a nice system on the go. Here it is shown with an ema crossover arrow indi on 1hr and 4hr TF.
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Attached File(s)
File Type: zip Trend Magic and EMA XO.zip   4 KB | 330 downloads
  • #6
  • Jan 13, 2010 7:15pm Jan 13, 2010 7:15pm
One common approach to identifying a trend is the use of the 20, 50, and 200 simple moving averages. In order, 20 above the 50, and 50 above the 200, would signify an uptrend. In reverse order, 200 on top of the 50, and 50 on top of the 20 would signify a downtrend. A cross of the 50 by the 20, but the 50 still above the 200 would signify a weakening uptrend and vice versa. An actual trend change would be the 50 crossing the 200 to either the up or downside depending on the current trend.
Hopefully im making sense here. If not let me know and ill post a chart.
  • #7
  • Edited 1:02am Jan 14, 2010 12:04am | Edited 1:02am
Quote
2 years and you cant tell a trend? well ill help you out a bit hopefully... dont zoom out try it this way... take them D%MN candlesticks of your chart. and switch it over to an average price line chart.

Look at the Wave structure... now im not an elliot wave guy at all .. so dont think that... but I do understand well the idea of market psychology..

They market is in trend when... in an uptrend Higher swing highs and Higher swing lows are being make... its is the end of the trend or at least a pause when..... in an uptrend a Lower...
Well it's not that bad for me.... during the two years I have managed to train my eye to determine trends (I also use MAs and a tweaked MACD), but sometimes it is just not good enough. Let me give you an example. In December '09, the dollar index made a higher high and a higher low. Before that, the trend was down (obviously!). What is missing from my system is something that would tell me if a new uptrend has begun. Right now things are looking like we could resume a downtrend, albeit with a less steeper curve down. But it might turn out the other way - we could start an uptrend. My experience tells me that this was just a relief rally and the dollar is going to resume its downtrend, but I need confirmation. I guess I didn't make it clear enough in my first post, so I'm sorry if I am confusing you. I am doing fine with determining trends in the usual sense (at least on the daily chart). What troubles me most is setups like the one I described above. I know that one solution would be to take the time off and wait for a new trend to form but I am still hoping to find something that would help me determine the strength of a dying trend (as with the dollar right now).

I don't know how it feels to read this but I have a feeling that I've utterly confused you lot...hope I'm not being too vague or anything.

EDIT.
What troubles me most is determining trends on H1 and H4. I have no trouble with D1 - I use MAs and MACD for that and they give me signals that are clear enough. My systems works okay on the daily chart, but I'm looking for more action and that's why I want to use the one and four hour charts. So my question would be - can you recommend any specific EMAs or SMAs for H1 and H4? I use 19 and 39 EMAs on the daily chart, and 20-50-200 SMAs as well (not on the same charts, though).



Quote
if you read something revatively interesting print the post out and put it in a scrap book or a binder with plastic pages.. every week read and add.. and reread your binder and try to excersize it. it wont seem useful if you dont use it.. whats the use of having a home gym if your only gonna look at it and read the manual and not use it.
Very useful advice! Again, it seems like you guys have somehow hacked my brain because I've been doing that for a few months now.
Thanks for the help!
If you don't risk, you don't ever have to lose.
  • #8
  • Jan 14, 2010 12:06am Jan 14, 2010 12:06am
Quoting andante9
Trend Magic seems to do a nice job identifing trends.
How does it work? Do you have a link to a page that explains the details?
If you don't risk, you don't ever have to lose.
  • #9
  • Jan 14, 2010 9:15am Jan 14, 2010 9:15am
Quoting bug
How does it work? Do you have a link to a page that explains the details?
Hi Bug

They are free custom indicators. I've combined them and like what I see. The ema arrows may be set to what ever you want and has an alert if you want it. I think it is set to use ema's 5 and 8. I find ema's 4 and 5 work nicely too. The trend magic cannot be modified but works very nicely especially on 1hr and up TF.

I go one step further and I only take trades that are positve swap (or at least not negative swap).

Download the zip at the bottom of my previous post and put the two files into the folder /experts/indicators located on the drive where you installed mt4 (likely your c drive). If your platform is running you will need restart it after you put the indi's in the folder. Then just drag them from the custom indicators folder in navigator.

If you are interested and but are still having trouble getting set up, just let me know and I'll help you out.

Dan
  • #10
  • Jan 14, 2010 10:17am Jan 14, 2010 10:17am
Dan, that's what I did. What I'd like to know is what this indicator is based on. I've downloaded indicators before and I've found that if I don't understand how it works, I can't use it as effectively as I'd like to. Is it based on moving averages?

BTW, update for all of the readers here.
As I've gone through all the posts all over FF, one particular suggestion kept coming up: remove all the indicators and focus on the price. Well, that's exactly what I've done, at least on the intraday charts. I still use indicators on the daily chart because I've fine tuned them to fit my system and they work relatively well. So far today I've been pretty successful, which is no indication of further success of course... but I'll see where it takes me. I'll try and combine trend magic in there as well and see how it works.
If you don't risk, you don't ever have to lose.
  • #11
  • Edited 10:45am Jan 14, 2010 10:21am | Edited 10:45am
Quoting bug
Dan, that's what I did. What I'd like to know is what this indicator is based on. I've downloaded indicators before and I've found that if I don't understand how it works, I can't use it as effectively as I'd like to. Is it based on moving averages?

BTW, update for all of the readers here.
As I've gone through all the posts all over FF, one particular suggestion kept coming up: remove all the indicators and focus on the price. Well, that's exactly what I've done, at least on the intraday charts. I still use indicators on the daily chart...
Sorry I didn't know what stage you were at! Glad you got it installed ok.
Just search trend magic in the FF search box above and you can find info on how it works. It has something to do with cci and atr if I remember right.

Dan
  • #12
  • Edited 12:51pm Jan 14, 2010 10:29am | Edited 12:51pm
I would highly encourage you to stop reading until you have picked a strategy which you like and is suited to your personality. By asking this message board which strategy is best for you, you are inviting hundreds of replies with hundreds of differing answers which will even further confuse you.


I would recommend that you read one book and only one book on technical analysis and then start from there. When choosing a book to delve in to, I would highly recommend one which is widely acclaimed as the best of the best. I would suggest a book by John Murphy or the only technical analysis book I have ever purchased and read:

http://www.amazon.com/Technical-Analysis-Complete-Financial-Technicians/dp/0131531131/ref=sr_1_1?ie=UTF8&s=books&qid=1263484863&sr=8-1


I am very empathetic for you; I have been in your shoes before. I spent perhaps a year on message boards searching for the “Grail” and the answer to the markets. The answer unfortunately must be hidden within words: it lies in you. You have to make the leap to profitability.


Now, that we’re finished being cryptic, let me give you very practical advice. If support and resistance lines as well as trend lines are not sufficient for you, then I invite you to use my method:

-Draw immediate support and resistance.
-Use 2 moving averages of relatively short length (10 and 20 is perfect)
-When price clears immediate resistance with the 10 above the 20, it is in an uptrend. The reverse would be a downtrend.
-Practice, practice, practice, practice until you can see it consistently and remember that the larger trend is more than likely the direction where price will be travelling. For example, if you are trading with a 5 minute chart, look at the 1 hour chart to put everything in place

Now how do we know the trend has ended? The trend ends as soon as the moving averages cross back over each other. We then proceed to draw new support and resistance and monitor the price until it begins to trend again.


It genuinely is this easy. However, you must put in a few hours of work to spot it. I suggest you turn off the message board and open a chart for the next 4 hours. Do not stop looking at it until you are able to spot trends. The key to success is in you, no one else.
Attached Image
  • #13
  • Jan 14, 2010 2:26pm Jan 14, 2010 2:26pm
Hi bug,

Can I ask how you determine the trend on your daily chart (sorry if I missed this... if I did please point me to it)?

In my view, if you can define the daily trend then you should really be able to use the same criteria to define the trend in any timeframe.

Regards,

Dan
  • #14
  • Edited 9:12am Jan 15, 2010 1:59am | Edited 9:12am
Dan and Moody,
I'm at uni right now and I'm about to have an exam. I will reply to your posts as soon as I get home, which should be in about 5 hours or so.
If you don't risk, you don't ever have to lose.
  • #15
  • Jan 15, 2010 9:11am Jan 15, 2010 9:11am
Getting home took a lil' longer than I expected, but here are the charts. Since I try to trade only one pair, my interests lie mainly in determining the trend for the US dollar. I've uploaded them to imageshack to conserve FF space (as far as I know, they should stay up there forever)
http://img10.imageshack.us/img10/6996/example3.th.gif
http://img251.imageshack.us/img251/9002/example2.th.gif
http://img10.imageshack.us/img10/6945/example1o.th.gif

The MAs on the USDX chart are 20, 50 and 200 SMAs. The MAs on the EURUSD chart are 19 and 39 period EMAs (the MACD is also set up to follow the 19 and 39 day MAs, I know that for some this might look like duplication but sometimes the histogram is useful). The vertical lines on the EURUSD chart are places where I see a clear trend.

So. The trends. Up until very recently, the trends were all down dollar-wise. Right now, I can't tell - it could go either way. My understanding is that in times like these, macro news is what decides whether a new trend starts or not. If the news is good for the Eurozone and bad for the US, the downtrend will resume, albeit at a less steep curve. HOWEVER, my gut instinct tells me that the trend is over. That gut instinct is a strange mixture of news and experience. But I will make a clear decision once the R&S lines give me a signal (I'd also like confirmation from EMAs and MACD).

If you'd like me to explain a little more (just so you know how experienced I am) then ask me questions about the charts - go real deep if you want to. Sometimes I leave something out just because I think it's obvious but if you feel like I you want me to explain a little more, then go ahead, press hard! (don't ask anything stupid, though)
If you don't risk, you don't ever have to lose.
  • #16
  • Jan 15, 2010 9:21am Jan 15, 2010 9:21am
Quoting Moody
I would recommend that you read one book and only one book on technical analysis and then start from there. When choosing a book to delve in to, I would highly recommend one which is widely acclaimed as the best of the best. I would suggest a book by John Murphy or the only technical analysis book I have ever purchased and read:
I have Marcel Link's High Probability Trading and I've read it twice from cover to cover (actually I'm lying, I didn't read the programming part as I'm not into that, never have been, really). I found it highly practical and every once in a while I pick it up to check upon some details. I'll give it another look. I also have John Murphy's e-book, but I haven't had the time to read it just yet. By the way, these are the only two trading books that I have.

Quote
I am very empathetic for you; I have been in your shoes before. I spent perhaps a year on message boards searching for the “Grail” and the answer to the markets. The answer unfortunately must be hidden within words: it lies in you. You have to make the leap to profitability.
Thank you for the kind words. Fortunately for me, I've already realized that. I'm not chasing perfection - I don't want to ride a trend from bottom to top, I'm okay with the middle part. But no harm done in repeating the true words of wisdom, mate.

Quote
Now, that we’re finished being cryptic, let me give you very practical advice. If support and resistance lines as well as trend lines are not sufficient for you, then I invite you to use my method.
I will give it a try, but it will take some time. I don't like to rush things. In addition, I still have a few exams to study for. I'll try and post the results here as I progress (if I forget to do so then remind me).
If you don't risk, you don't ever have to lose.
  • #17
  • Jan 15, 2010 9:28am Jan 15, 2010 9:28am
Quoting bug
Getting home took a lil' longer than I expected, but here are the charts. Since I try to trade only one pair, my interests lie mainly in determining the trend for the US dollar. I've uploaded them to imageshack to conserve FF space (as far as I know, they should stay up there forever)
http://img10.imageshack.us/img10/6996/example3.th.gif

http://img10.imageshack.us/img10/6945/example1o.th.gif...
Hi Bug,
I use a similar approach as to what you are using, I use the the 30, 50, and 100 SMA to determine if a trend is tradable by low risk standards. All lline must parallel to each other pointing the same direction and in order fastest being closest to the PA.

Then I use S/R lines, Fibs, trendlines...etc to determine where to look for a bounce, but the ticket is to make sure you have a confluence of support and resistance in the area your looking to enter. The more S/R levels you get in one spot the greater are the odds your entry is correct. But I also switch to a lower TF to make my entry, and look for the entry signal on that TF.

I use anywhere from a 4 to 6 times smaller TF to place the entry and SL I can see the reversal signals better on the smaller TF, the larger TF is the setup and smaller is the trigger.

--NM
  • #18
  • Jan 15, 2010 9:40am Jan 15, 2010 9:40am
Nightmoves,
daily charts don't pose a problem to me. The system that I have developed (which is a fairly simple one at that, I might say) works just fine on the daily charts. But the thing is that I'm looking for more action* - I want to use it one the H4 and H1 charts and that's where I get into trouble. Determining a clear trend on the H1 and H4 isn't that easy for me and that's why I'm asking for help.

*Maybe I shouldn't be looking for more action? I haven't been in this business for long and I'm still taking my lessons from the School of Hard Knocks, so my question to you guys is - if my system works on the daily chart, should I focus on developing patience rather than finding ways to use my system on the H1 and H4? For me the answer isn't that obvious because I still think I can make it work. What about you? Does experience suggest otherwise?
If you don't risk, you don't ever have to lose.
  • #19
  • Jan 15, 2010 9:43am Jan 15, 2010 9:43am
Quoting NightMoves
Hi Bug,
I use a similar approach as to what you are using, I use the the 30, 50, and 100 SMA to determine if a trend is tradable by low risk standards. All lline must parallel to each other pointing the same direction and in order fastest being closest to the PA.

Then I use S/R lines, Fibs, trendlines...etc to determine where to look for a bounce, but the ticket is to make sure you have a confluence of support and resistance in the area your looking to enter. The more S/R levels you get in one spot the greater are the odds your entry is correct....
You can use the SMA lines to determine the strength and health of the trend as well, sometimes the trend may have too much momentum and that can be risky, you can gauge the depth of the retracements by the SMA lines as well.

You may see nice harmonic bounces of the 30 then soon it starts slapping the 50, and then soon it is slapping the 100 so you can kind of determine if maybe it is running out of horse power to go on much further if that makes sense.

--NM
  • #20
  • Jan 15, 2010 9:53am Jan 15, 2010 9:53am
Quoting bug
Nightmoves,
daily charts don't pose a problem to me. The system that I have developed (which is a fairly simple one at that, I might say) works just fine on the daily charts. But the thing is that I'm looking for more action* - I want to use it one the H4 and H1 charts and that's where I get into trouble. Determining a clear trend on the H1 and H4 isn't that easy for me and that's why I'm asking for help.

*Maybe I shouldn't be looking for more action? I haven't been in this business for long and I'm still taking my lessons from the...
Most of the trades I take are on the 4 hour or the 1 hour charts based on using those SMA lines. I am ususally not always but usually in a nd out of a trade the same day.
For example look at the chart I posted, this is a 4 hour time frame of the EURCHF pair this is a nice trend, price is swinging nice and harmonically between the 30 and 50 SMA and the trend looks good. So this is a tradable trend price is no where near the 100 so the only thing you need to look for is longer term S/R levels that might be in the way of the trade.

--NM
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