Common Sense Trading

First off, let me say, the following post is my opinion from speaking to people on this forum and a couple of close friends that I have taught how to trade. I wanted to start a new thread to discuss the use of common sense in trading which I believe, is greatly underused. In my opinion, a lot of people want systems where they can be "mindless" and just push buttons because some indicator or combination of indicators told them to do so. People want a concrete way to look at this market so no thinking is required. Now, I understand that a trader should have some type of rules or rules that they need to stick to keep emotion out out of trading but I think that sometimes traders get too caught up in their "rules" and do not use their brain. Again, I am not talking about be too subjective in trading, just a little thought.

I have an example. I use candlesticks in my trading. When I first started trading I had no idea there were many books trying to explain the different patterns and what they meant. I would see an uptrend and then a candle with a long wick to the upside and a small body. I thought, ok, this is losing some momentum. I didn't need a book to tell me that. This is just one example, I have many. I am really curious as to how many people realize that they use a little common sense in their trading or that maybe they need to incorporate more. Also, if anyone can give some examples. My main thought after visiting this forum is that too many people over complicate trading and I feel sorry for them. If a trader just put all the forex jibber jabber to the side and used a little more common sense, how much more successful as a trader they could be.

I would love to learn you way of trading, it has sparked my interest, more so on the daily chart, get back back to me when you have the chance, thanks for you time!

sorry about my last comment, my typing and wording look's out of place, as I was saying, your trading on the daily charts is something that I have been looking for! I look forward to learning your system, I am willing to learning as much as I can from you, if you have the time that is! I just realized that as a junior member I can not send PM's, I look foreword to hearing from you

I too would like to see you crank up a thread describing your trading methods. I followed you over to this thread from a couple of other threads and am really intrigued.

You said that you sit down once a day around 6 pm to come up with the trading plan. Do you immediately put in your trades or are you watching them. How much time do you spend trading.

My day job is lucrative enough to keep the family fed and the kids in their respective schools and my trading ability isn't adequate to fully supplement this income yet so I am trapped between knowing if I was at a keyboard trading during the day I would be profitable and knowing that I don't have the cashflow currently to make that transition. Plus as I am still growing it will probably take at least a year or two of consistent income to mentally allow me to make a jump to full time trader. I do have a high risk aversion tendency to my personal life style being affected.

Learning a system that is reliable for a good evenings work would be tremendous and I think it is fully possible without 5000 indicators on a screen to purely confuse the living fool out of me.

Add me to you list of interested followers on this thread. I hope that all who join will endevor to "keep it simple" as you have, and leave all the trading baggage at the door.

The best to you,

C.

Wow, I thought this thread was dead. I got your messages C. Thank you. I have gotten several other messages so I think I will start a journal. I have decided I will not let the negativity bother me if that creeps in. I don't care as I like to help out. I will probably start it over the weekend after NFP. I have been gone all day and just sat down to my computer and read everything. I will let everyone else know who has contacted me with a PM as well.

negativity and errant posters are easily addressed. Stevehopwood and nanningbob utilize two seperate systems for different threads.

Steve goes with you must have 1 voucher or to be a buddy.

Nanningbob went with the 1 voucher minimum rule.

A suggestion on my side would be to be upfront with everyone on the thread about posting rules and negative energy. Then you should be able to excommunicate them or at least put some stoppers in place to keep everything in control. Just because people or jealous or unbelieving doesn't mean that the rest of us are not learning.

Forex is a journey and if you are able to trade and just logged on today. That simply speaks volumes about the tactics and methods that you are utilizing.

Peace and positive vibes to the thread.

Thanks for the kind words, I will consider you suggestions. I am off to bed.

Hi Brenzaj42,

Do you ever take "pull backs" with the trend as an entry on the daily charts? That would assume you missed or didn't take the ema cross (not likely in your case). But if some some reason one would be trying to get into a trend trade well after an ema cross, do you have any suggestions? Some pull backs fail to get back to the emas and price will move on swiftly. This question is posed with the assumption that only the daily charts will be traded and not the 4 hr.

Thanks for your reply.
C.

I'm sure he'll cover all the details in his upcoming thread.

I am starting my own thread and will cover this but what you are describing as pullbacks is what I do. I trade pullbacks on the weekly chart which is why I enter on the daily. I will only enter in the opposite direction of the weekly if parallel and inverse analysis confirms it. More about that later.

You should backtest these ideas before implementing them. Some people would say it's common since that if the EUR/USD has moved down 4 consecutive 30-minute bars in a row, it's has a very high probability to have an up bar. Backtesting this, you can see that this is untrue of most days, especially Thursday, where the number of consecutive lower bars has no effect on which direction the next bar will go.
This same concept has been tested with multiple candlestick patterns to prove/disprove their relevance in various markets and time intervals.

I totally agree with the common sense factor, but I think it's important to backtest common sense theories to analyze win/loss ratio's to determine the risk level and stops/limits based off of previous peaks.

Hi Brenzaj42

Will you post a note on this thread as to how to locate your new thread? Why not just continue this one? I'm not thread savy, so I don't know the protocol. I'm looking forward to the information you will be providing. Hope it will start soon.

Best regards.
C.

I have started a journal called long term pips.