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My simple way of trading

  • #1
  • First Post: Jun 30, 2006 2:34pm Jun 30, 2006 2:34pm
Hi, I'm 18 years old, and am getting into Forex for the first time. I've been reading about forex and have had a practice account for the last month and this is what i've been doing. let me know what you think.

I do nothing but look at charts, and using common sense, try to buy low sell high, I set my stop/loss at +/- 10 pips. using my practice account, it has worked. with my stop/loss at the same number of pips, anything over a 50% success rate would be making me money. It seems to make sense that by my judgement, i can win over 50% of my trades. My goal is around a 60% success rate. If i make 5 trades a week, i want to win 3. What does everybody else think about this?
PipMasterFlex
  • #2
  • Jun 30, 2006 2:40pm Jun 30, 2006 2:40pm
Greetings and Welcome.

I am curious as to what factors make up your 'common sense' so that you know when you buy that it will be a low.. so that later you can sell high?

Lou
  • #3
  • Jun 30, 2006 2:43pm Jun 30, 2006 2:43pm
If you can get 30 pips on your winning trades, you only need to be right about a third of the time.
  • #4
  • Jun 30, 2006 2:52pm Jun 30, 2006 2:52pm
my common sense would be looking at charts of different time intervals, looking at the long term trends and trends over the past few hours and trying to predict when a price increase will happen. i don't have hours to pour over different indicators and systems, i just want to successfuly predict over 50% of the time.
PipMasterFlex
  • #5
  • Jun 30, 2006 3:18pm Jun 30, 2006 3:18pm
Quoting isufreak24
my common sense would be looking at charts of different time intervals, looking at the long term trends and trends over the past few hours and trying to predict when a price increase will happen. i don't have hours to pour over different indicators and systems, i just want to successfuly predict over 50% of the time.
In my opinion you will never hit a 50% win ratio with just common sense. If thats all it took then a lot more people would be doing this. You dont need hours to trade. Forex is set up to work with anyones schedule. It takes dedication, especially in the beginning. Also remember even though you might be successful in your demo account it a whole different world going live!
  • #6
  • Edited 6:17pm Jun 30, 2006 3:28pm | Edited 6:17pm
Well, I think your approach has merit. I think you could easily be right 50% and more if you were to use the price action ques that are listed in the public James16 thread. It still uses no indicators and requires nearly no time to follow. It will enhance your common sense and give it depth and accuracy. It should not take more than a short time to get the basics down.

Of course none of this is worth anything at all if you do not use sound Money Management. check out the Money management sticky in the Beginner Forum.

It is great stuff. I like your idea and think it would work. good luck and good trading, Scott
  • #7
  • Jul 1, 2006 1:33pm Jul 1, 2006 1:33pm
Common sense doesn't always make sense in the market....Of course you do have a point, but looking at charts of different time frames is not the only thing to watch....

Plus, you don't need to be right 50% of the time to be profitable over the long haul...It depends on your trading style...Are you a trend trader or a momentum trader???

If you are a trend trader, you only need to be right in 30% of the time....If you are a momentum trader, you will need to be right more than 50% of the time, preferably 70% of the time, because the start of every trend will hurt you and create you some losses...

In my opinion, you are just 1 step ahead...Just develope a strategy for yourself, and you won't need to worry again...


Thanks,

Nader
  • #8
  • Jul 1, 2006 2:09pm Jul 1, 2006 2:09pm
Quoting isufreak24
Hi, I'm 18 years old, and am getting into Forex for the first time. I've been reading about forex and have had a practice account for the last month and this is what i've been doing. let me know what you think.

I do nothing but look at charts, and using common sense, try to buy low sell high, I set my stop/loss at +/- 10 pips. using my practice account, it has worked. with my stop/loss at the same number of pips, anything over a 50% success rate would be making me money. It seems to make sense that by my judgement, i can win over 50% of my trades. My goal is around a 60% success rate. If i make 5 trades a week, i want to win 3. What does everybody else think about this?
buy low and sell high you will be jumping against a train more than 50% of the time if you use 'common sense' only. You got to use experience that you don't have. I suggest aswell you read price action predictions (like the ones in james16 public forum and maybe a book on candlestick patterns) and then develop your common sense in 6 more month of practice. Not only the win/loose ratio, but also money management and check out your average risk reward.

you can also buy high and sell higher..

anyway, In my humble opinion you are up for a disaster. forex is not easy.
  • #9
  • Jul 1, 2006 2:15pm Jul 1, 2006 2:15pm
Keep trying your method. You never know who might just develope a "feel" for the market. And be able to identify trends and trend patterns in there subconscience and not even realise it. Thinking its common sence but actually be doing some serious calculations with out knowing it.
There are many times that I have done this. Just all of a sudden it will scream at me and I'll just know what its doing when 2 sec ago I didn't. You can try the "let God guide my hand" method. Although 99% would say thats insane.

But I would recomend studying e-wave principle to familiarise your self with the way the market forms waves, and subwaves. Your method is what e-wave practioners do. Once you have an understanding of the way waves form, and reverse, correct, and consillidate, then you can just look at the time frames, and read the waves. the 10 lesson turtorial is free. I don't recomend purchasing anything from them accept the e-wave book. Took me a year to get it but now I am glad I did. I can re-read it any time any where not just when online.

happy trades

Dave
Elliott Wave International - Expert Financial Market Forecasting

actually you can get 2 free weeks of intraday forcasts I think. And see how its applied in real intraday markets. I did this last year. Again I wouldn't pay for there service though because they came up with relitivily the same forcasts as I was. And If they were different mine was the winner. Not that I am that good but I think they have too many opinions in there office.
  • #10
  • Jul 2, 2006 2:35pm Jul 2, 2006 2:35pm
Thanks everybody for your input. i will defienitely read up alot more and do alot more studying and practice before i jump right in. Thank you for your advice!
PipMasterFlex
  • #11
  • Jul 2, 2006 4:13pm Jul 2, 2006 4:13pm
keep trying your system, you are tackling the hardest part of trading. You can use all the indicators you like to help you get a bit better entry but in truth, the "edge" all the books talk about, is feeling how the market works. Most people start out machanical then move to discretionary (its easier to learn that way). Your discretion, experience and knowledge are the best tools (and your worse ). There are many people out there making a living on the market but there aren't many programs out there making on the market.

If you are going to trade naked make sure you document everything you do, this will help you in the future, its like building your very own custom indicator that works for you. Write down why you took a trade, why you won a trade and why lost a trade and how you could have been better at winning/loosing ect.

Also read the http://www.forexfactory.com/forexfor...ead.php?t=5880 thread it has some wonderful insights. You will notice all the studies and research the best approach is to follow the trend. You dont really need indicators for that
  • #12
  • Jul 2, 2006 10:52pm Jul 2, 2006 10:52pm
You sound like a great kid, so I'm going to help you out with the math a little here.

Assuming you flip a coin, 50/50 chance. Same thing in forex, buy or sell.

Assuming you are correct 60% of the time. Hell, you are a smart kid, I'm going to give you 70% success rate.

When you win + 10 pips
When you lose - 10 pips

Winners = 70%

So we do a little math:

70% * +10 pips = +7 pips
30% * -10 pips = -3 pips

Assuming you are trading GBP/USD with a 4 pip spread.

100% * -4 pips = -4 pips

Total = +7 pips + -3pips + -4pips = ZERO

So, assuming you are maxing out your common sense at 70%, and trading the most active of them all, the Cable, you have a ZERO expectancy at maximum yield... That means, a can of beer will put you into negative expectancy territory.

I'm here to tell you, the math is against you so far.. But keep at it.
google:
  • #13
  • Jul 2, 2006 11:03pm Jul 2, 2006 11:03pm
Hey isufreak24, and good luck with everything. Your post is an enticing one, and you are going to, and have already got, many replies telling you that your approach is wrong and you are niave in your thinking. I dispute this from experience, your method to me sounds essentially sound, your main problem, as mentioned by others is your risk/reward with a 10 pip stop vs 10 pip take profit, you are asking for a death by a thousand cuts.

My only advice to you would be stick with what is comfortable with you, after all we are all looking for an edge, and following the masses isn't going to give you that. Have a look at letting your winnings run and you will be under much less pressure, moving your stop to +1 and letting the trade go can be a nice way to do this at times.

I wish you all the luck, I wish I had of gotten into the trading game at 18, it would have saved me working some very ordinary jobs.

Oh and if I hear that coin toss analogy again I am going to scream! ... the markets aren't like a coin toss, the odds can be much better than 50/50 with the proper analysis and, as isufreak24 says, commone sense, and the markets move in 3 directions not 2 by the way ... sorry it just bugs me.
You can quit and they won't care, but you will always know.
  • #14
  • Jul 3, 2006 1:04am Jul 3, 2006 1:04am
Akuma, I gave him a 70% chance!! That's a 10 sided coin with 7 heads on it!

The one thing you GOTTA get out of your head, or rather, into your head is;

Forex and all trading is a NEGATIVE SUM game, because of the bid/ask. If bid/ask is 4, and you are doing +-10 pips, your spread is 40% of your take!!

So you gotta retweak your math or like Akuma says, you'll die a death by a thousand cuts..
google:
  • #15
  • Jul 3, 2006 5:29am Jul 3, 2006 5:29am
Quoting isufreak24
Hi, I'm 18 years old, and am getting into Forex for the first time. I've been reading about forex and have had a practice account for the last month and this is what i've been doing. let me know what you think.

I do nothing but look at charts, and using common sense, try to buy low sell high, I set my stop/loss at +/- 10 pips. using my practice account, it has worked. with my stop/loss at the same number of pips, anything over a 50% success rate would be making me money. It seems to make sense that by my judgement, i can win over 50% of my trades. My goal is around a 60% success rate. If i make 5 trades a week, i want to win 3. What does everybody else think about this?
Isufreak

After 1 year of demo trading and having my chart very much like a christmas tree with all kind of waves bands and everything in between, one day I decided to get rid of everything and look at exactly what you're looking at ...price action. Then I practice for another 4 months just with price. I decided to incorporate pivot points and made my trading easier.

Here I am 5 years later - a full-time trader, always coming ahead on winning trades every month since.

My suggestion is to adjust S/L to give price a room to breathe, and practice with one currency for now until you get the "feel" of that particular instrument.

I respect all traders who uses indiators. Not my intention to diminish anyone on that matter. After all you trade with whatever works for you, the idea is to come ahead.

Isufreak, I do exactly as you. I check price on daily, 4 hour and 30 minute time frames to check for bias. Then I check for trades acording to my trading rules

If you need any help, just let me know.

Forexfactory also have plenty of good traders willing to help as you see.

Good luck
Peace
  • #16
  • Jul 3, 2006 11:02am Jul 3, 2006 11:02am
I never expected this kind of response. thanks again. I'm still trying to digest all of this, i think ive learned more in these posts than i have anywhere else on the internet. Right now I am trying out different indicators on my demo account, currently RSI, Stochastic Oscillator, and MACD, to try and give some reason to my "common sense". I'm going to try and create a simple system with some real reasoning behind it. Thanks you all of you I've learned so much in just a few days. Hopefully your help with help me succeed. I sincerely thank you for your input.
PipMasterFlex
  • #17
  • Jul 3, 2006 1:54pm Jul 3, 2006 1:54pm
Hi,

You've has plenty of advice and (mainly) constructive criticism. The 2 most important points are to realise that live trading is nothing like demo trading and to give yourself a bit more leeway by increasing your 10 pip stoploss.

I wish you all the best of luck and look forward to hearing you r successes.
  • #18
  • Edited 7:30pm Jul 3, 2006 2:47pm | Edited 7:30pm
isufreak24,

Unless you come from a family of traders I don't think many start much younger than yourself. Forex is a great market and you can defiantly make a career out of it. But just like anything in life it’s not going to come easy. I think what draws a lot of people is thinking they can come home after work pull up the charts and trading platform do it for a few hours a day and supplest their income. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>

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Just like sport or any trade. You have to find what works for you and as long as you stick to it. I think you will be all right.<o></o>

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People that come into Forex and subscribe to every trade alert service, open and account set the trade come back 12/24 hrs expecting to be up 30+ pips. Common sense will tell you they were doomed from the beginning. As well I don’t think demo accounts do much good just due to the fact so much of trading psychological. Use it to get started so that you can become familiar with the platform and your trading plan. Then open a small account doesn’t matter is it $300 and 1 mini lot.<o></o>

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Have plan, stick to your plan, keep a journal almost all successful traders do. Then you can look back say oh yes that why I did that or that what I should have done. Then in time you’ll find what works for you.<o></o>

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Good Luck! <o></o>

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Turbo<o></o>
  • #19
  • Jul 3, 2006 7:06pm Jul 3, 2006 7:06pm
Quoting turbokaos
i

As well I don’t think demo accounts do much good just due to the fact so much of trading psychological. Use it to get started so that you can become familiar with the platform and your trading plan. Then open a small account doesn’t matter is it $300 and 1 mini lot.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>
I really agree with you, get the $0.10 a pip account, it will teach you 10x as fast as a demo. I would suggest getting a demo account for a month or two at first to learn how to use the platform (that goes double for gft, their platform is backwards) until you dont make mistakes executing orders.
  • #20
  • Jul 4, 2006 3:32am Jul 4, 2006 3:32am
The psychology of it is tough, but I want to really stress.. If the math doesn't work, then it will NEVER work. Even if you have the will of a presidential intern; all the psychology in the world won't help if you can't get the math of it down.

But you've got some great advice here on the forum! I stopped trading real money about 2 months ago. Starting from scratch. You are way ahead of us when we were your age. Don't give up!
google:
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