Lets do this.
My first live trade ever was a fifty percent draw-down but that was a very long time ago now. I got into forex after reading an internet advertisement, sold on the get rich quick thing. I didnt know how hard is was going to be and even though my first trade was a devastating loss I was hooked. I remember I didn't even know what a chart was. I hadn't even conceived the though of its existence. Down the rabbit hole I went learning and learning and learning loaded with trial and error. I tried it all. You name it I tried it and every-time I had a loosing week I became more and more obsessed with this "game". I remember id be studying charts when I would wake up to feed my daughter when she was born. Just a borderline unhealthy obsession that led me to where i am now. I would spend so much time studying charts that I would have dreams about it. Learning how to trade and becoming a good at trading requires a complete lifestyle change. Find the time in your day to dedicate solely to charts and studies. I suggest at least a minimum of two hours a day at least.
Some people dont understand the immense amount of knowledge you need to absorb not to mention the level of intuition you must develop to achieve success. With an alleged failure rate of 95% this is a tough thing to do and takes a lot of perseverance and dedication. I can tell you that if you keep at it one day youll just get it. Like a punch in the face, itl hit you and you'll just understand everything. Youll start making pips and not look back.
Create a trading routine. Make a schedule and stick to it like you'll drop dead if you dont. Dont give up or curse the gods because you lost some pips. Everyone, no matter your skill will loose pips sometimes. Theres no fast and easy way to learn this but your only going to truly learn that from trial and error. Theres no holy grail per say. If there was a holy grail its called the "internet" and everything you need to know about technical analysis is right on the internet for free. I never paid for a thing. Everything I know about trading was found on the internet. Dont waste your money. Theres no system out there you can purchase that you can upload into your MT4 that will make you a millionaire in month or even a year or ever at all. Why? because you cant program intuition and experience into some code. This isnt to say that a trade cant be managed by a software. If there was a way to fully automate trades and make solid pips while you sleep your not going to find it for sale publicly on the internet and it would be extremely expensive. You couldn't put a price on something that would make you unlimited amounts of money.
So here we are fourteen years since I started with all these charts, technical s and fundamentals. Emotion vs logic and so on, I find myself back here wanting to share one last go and help people. People who really want to learn the universality of good technical analysis. Also how to separate emotion from logic and form discipline. With good time management, discipline, drive and following seemingly simple rules you will have success. If you don't have success, work harder. I have no agenda except to pass on some of the things I've learnt.
Im not going to call this a trading system because its more of a way of doing things even though it is somewhat systematic. Im just going to post my thoughts and show how I handle the market from moment to moment while detailing my thought process. Some basic knowledge is required to understand how I trade. Please make sure you understand support and resistance, drawing trend lines, moving averages and candlestick chart patterns. The core of what you will learn here can be used on any market producing enough volume to have the ability to trend on a short to medium term basis using a one hour chart frame. Below is all my experience put into simplicity. It works very well if you don't change anything. To me, this how its done. I'm going to show you what I call defensive trading. The first thing I always look at is where things can go wrong. By trading defensively and having a specific way of doing things you will have success in the long term. If your technical trading is solid its almost impossible to fail unless you get greedy. This is not some system that tells you to buy/sell blindly because the indicator turned green or red. When you make a trade you'll know why your making it and be aware of your trades positive and negative outcomes and have a reaction plan in the event that your trade starts working against you. However most trades are profitable and losses are not heartbreaking due to proper risk reward and confidence due to making logical decisions. My style of trading is especially useful in a ranging market which is normally due to the price actions inability to break a support or resistance line. I find having positive control in a ranging market creates a certain level of confidence.
Here's the rules I follow
-Never risk more than one percent
-Never mix emotion and logic. Emotion has no place in trading. Emotion is your enemy and in the trading world its duality is logic.
Logic is your friend. If your about to make a trade based a "good feeling", stand up and run away from your computer.
-Ratio of risk to reward is 1:3 minimum and also based on market performance and likelyhoods based on market experience. For example, if the trend is obviously reversing then close your trade because hope is not going to stop the market from eating you alive.
-I only trade the one hour chart because the way I trade is tailored to it and it suits the risk and reward ratios. I Also, I can watch up to ten charts at a time due to the one hour increments, thus insuring every chart gets the attention it needs. Previous I swore by the five min chart but as things eventually evolved further I found myself drawn closer and closer to the one hour chart due mainly to larger profits and lower risk. Using a time frame like one hour allows the time to watch several charts appropriately. By not rushing your making sound logical decisions with multiple setups on different charts allowing you to spread your risk or choose the best possible trade from your many charts.
-Always wait for the candle to close before you open your position.
-Don't assume things because the market will run you over. Decisions are based on logic only.
I spend as much time as possible watching charts and waiting for setups .Instead of chasing trades im already there waiting for them to happen Like a sniper in the darkness. When the markets are open I sleep at the most five to six hours a day and make most of my trades from the London open to the New York close. I almost always have an open trade. If you want it bad enough you'll put in the time and nothing will stand in your way. When you get good at trading any market becomes a sort of production line manufacturing pips in a consistent and constant fashion. How much money you can have is all dependent on your efforts. Start small and learn. As you get better you make more and more pips. When you get good at trading you'll know it. You can feel it. You know this is it. Then all of a sudden there's no limits and you want to spend all day and all night on the charts. Its like some intense love affair and you cant get enough as you realise to yourself that all you need to do is keep doing what your doing. It feels like the first time you got on your bike without training wheels and before you even began to rotate the peddles you just knew that this time you got this and that was it. After that moment, you were free.
Trading Specs
-trade station is MT4
-I trade in the NY time zone
-Anything on a one hour chart
On your chart
-24 WMA (yellow) hl/2
-24 SMA (red) hl/2
-Some trend lines
All trades are dependent on the price action and technicals data from the chart your looking at. I trade bounces of major trends lines and add to my position on completion of retracements indicated by the price action and stature of the two moving averages. Trade direction is determined by the side the yellow WMA is on in comparison to the position of the of the red SMA. So, if the WMA is below the SMA, I'm looking for bearish trend continuations (a completed retracement that has made a lower low) and if the WMA is above the SMA then I'm looking for bullish trend continuations (a completed retracement that has made a higher high. I don't trade breakouts. Instead I wait for a retracement then a continuation to confirm the trend and build on my position based on retracement then continuation ect only if the trend is strong enough. Almost every trade should move in your direction almost instantly or at least within the first fifteen minutes. Before I open a trade im looking at what would happen and where will the price rise or fall to if the trade doesn't work in my favour. I think to myself what I have to loose even though its only one percent. If a trade doesn't have the potential to return three times the risk without a breakout I will probably sit on the sidelines because its not worth it. I would rather watch from the sideline, wait for the break out and the take a position on the trend continuation.
The Setup
-Zoom all the way out on a fresh 1h chart with only the two MA's plotted on your chart
-Draw one support trend line connecting the two most obvious lowest points
-Draw one resistance trend line connecting the two most obvious highest points
-zoom in on your chart
This gives you the medium term support and resistance trend lines. Now your going to plot your short term trend lines to determine the short term trend. When this is done you now have your basic chart setup. You should constantly be adjusting these trend lines as support and resistance change for every chart your watching. For demonstration purposes I have prepared the 1h Eur/Usd chart for this coming week. Look below for the example. Once you have the basic setup your ready to start looking for trades by anticipating outcomes. Having all the possible outcomes figured in advance allows you to be prepared. Please feel free to post your charts if you'd like as long as they are in the format listed above so thats its easier to follow along.
And here is a quick review of last week and a range of possibility for the start of this coming week on the EUR/USD
So let us begin.
FJ
My first live trade ever was a fifty percent draw-down but that was a very long time ago now. I got into forex after reading an internet advertisement, sold on the get rich quick thing. I didnt know how hard is was going to be and even though my first trade was a devastating loss I was hooked. I remember I didn't even know what a chart was. I hadn't even conceived the though of its existence. Down the rabbit hole I went learning and learning and learning loaded with trial and error. I tried it all. You name it I tried it and every-time I had a loosing week I became more and more obsessed with this "game". I remember id be studying charts when I would wake up to feed my daughter when she was born. Just a borderline unhealthy obsession that led me to where i am now. I would spend so much time studying charts that I would have dreams about it. Learning how to trade and becoming a good at trading requires a complete lifestyle change. Find the time in your day to dedicate solely to charts and studies. I suggest at least a minimum of two hours a day at least.
Some people dont understand the immense amount of knowledge you need to absorb not to mention the level of intuition you must develop to achieve success. With an alleged failure rate of 95% this is a tough thing to do and takes a lot of perseverance and dedication. I can tell you that if you keep at it one day youll just get it. Like a punch in the face, itl hit you and you'll just understand everything. Youll start making pips and not look back.
Create a trading routine. Make a schedule and stick to it like you'll drop dead if you dont. Dont give up or curse the gods because you lost some pips. Everyone, no matter your skill will loose pips sometimes. Theres no fast and easy way to learn this but your only going to truly learn that from trial and error. Theres no holy grail per say. If there was a holy grail its called the "internet" and everything you need to know about technical analysis is right on the internet for free. I never paid for a thing. Everything I know about trading was found on the internet. Dont waste your money. Theres no system out there you can purchase that you can upload into your MT4 that will make you a millionaire in month or even a year or ever at all. Why? because you cant program intuition and experience into some code. This isnt to say that a trade cant be managed by a software. If there was a way to fully automate trades and make solid pips while you sleep your not going to find it for sale publicly on the internet and it would be extremely expensive. You couldn't put a price on something that would make you unlimited amounts of money.
So here we are fourteen years since I started with all these charts, technical s and fundamentals. Emotion vs logic and so on, I find myself back here wanting to share one last go and help people. People who really want to learn the universality of good technical analysis. Also how to separate emotion from logic and form discipline. With good time management, discipline, drive and following seemingly simple rules you will have success. If you don't have success, work harder. I have no agenda except to pass on some of the things I've learnt.
Im not going to call this a trading system because its more of a way of doing things even though it is somewhat systematic. Im just going to post my thoughts and show how I handle the market from moment to moment while detailing my thought process. Some basic knowledge is required to understand how I trade. Please make sure you understand support and resistance, drawing trend lines, moving averages and candlestick chart patterns. The core of what you will learn here can be used on any market producing enough volume to have the ability to trend on a short to medium term basis using a one hour chart frame. Below is all my experience put into simplicity. It works very well if you don't change anything. To me, this how its done. I'm going to show you what I call defensive trading. The first thing I always look at is where things can go wrong. By trading defensively and having a specific way of doing things you will have success in the long term. If your technical trading is solid its almost impossible to fail unless you get greedy. This is not some system that tells you to buy/sell blindly because the indicator turned green or red. When you make a trade you'll know why your making it and be aware of your trades positive and negative outcomes and have a reaction plan in the event that your trade starts working against you. However most trades are profitable and losses are not heartbreaking due to proper risk reward and confidence due to making logical decisions. My style of trading is especially useful in a ranging market which is normally due to the price actions inability to break a support or resistance line. I find having positive control in a ranging market creates a certain level of confidence.
Here's the rules I follow
-Never risk more than one percent
-Never mix emotion and logic. Emotion has no place in trading. Emotion is your enemy and in the trading world its duality is logic.
Logic is your friend. If your about to make a trade based a "good feeling", stand up and run away from your computer.
-Ratio of risk to reward is 1:3 minimum and also based on market performance and likelyhoods based on market experience. For example, if the trend is obviously reversing then close your trade because hope is not going to stop the market from eating you alive.
-I only trade the one hour chart because the way I trade is tailored to it and it suits the risk and reward ratios. I Also, I can watch up to ten charts at a time due to the one hour increments, thus insuring every chart gets the attention it needs. Previous I swore by the five min chart but as things eventually evolved further I found myself drawn closer and closer to the one hour chart due mainly to larger profits and lower risk. Using a time frame like one hour allows the time to watch several charts appropriately. By not rushing your making sound logical decisions with multiple setups on different charts allowing you to spread your risk or choose the best possible trade from your many charts.
-Always wait for the candle to close before you open your position.
-Don't assume things because the market will run you over. Decisions are based on logic only.
I spend as much time as possible watching charts and waiting for setups .Instead of chasing trades im already there waiting for them to happen Like a sniper in the darkness. When the markets are open I sleep at the most five to six hours a day and make most of my trades from the London open to the New York close. I almost always have an open trade. If you want it bad enough you'll put in the time and nothing will stand in your way. When you get good at trading any market becomes a sort of production line manufacturing pips in a consistent and constant fashion. How much money you can have is all dependent on your efforts. Start small and learn. As you get better you make more and more pips. When you get good at trading you'll know it. You can feel it. You know this is it. Then all of a sudden there's no limits and you want to spend all day and all night on the charts. Its like some intense love affair and you cant get enough as you realise to yourself that all you need to do is keep doing what your doing. It feels like the first time you got on your bike without training wheels and before you even began to rotate the peddles you just knew that this time you got this and that was it. After that moment, you were free.
Trading Specs
-trade station is MT4
-I trade in the NY time zone
-Anything on a one hour chart
On your chart
-24 WMA (yellow) hl/2
-24 SMA (red) hl/2
-Some trend lines
All trades are dependent on the price action and technicals data from the chart your looking at. I trade bounces of major trends lines and add to my position on completion of retracements indicated by the price action and stature of the two moving averages. Trade direction is determined by the side the yellow WMA is on in comparison to the position of the of the red SMA. So, if the WMA is below the SMA, I'm looking for bearish trend continuations (a completed retracement that has made a lower low) and if the WMA is above the SMA then I'm looking for bullish trend continuations (a completed retracement that has made a higher high. I don't trade breakouts. Instead I wait for a retracement then a continuation to confirm the trend and build on my position based on retracement then continuation ect only if the trend is strong enough. Almost every trade should move in your direction almost instantly or at least within the first fifteen minutes. Before I open a trade im looking at what would happen and where will the price rise or fall to if the trade doesn't work in my favour. I think to myself what I have to loose even though its only one percent. If a trade doesn't have the potential to return three times the risk without a breakout I will probably sit on the sidelines because its not worth it. I would rather watch from the sideline, wait for the break out and the take a position on the trend continuation.
The Setup
-Zoom all the way out on a fresh 1h chart with only the two MA's plotted on your chart
-Draw one support trend line connecting the two most obvious lowest points
-Draw one resistance trend line connecting the two most obvious highest points
-zoom in on your chart
This gives you the medium term support and resistance trend lines. Now your going to plot your short term trend lines to determine the short term trend. When this is done you now have your basic chart setup. You should constantly be adjusting these trend lines as support and resistance change for every chart your watching. For demonstration purposes I have prepared the 1h Eur/Usd chart for this coming week. Look below for the example. Once you have the basic setup your ready to start looking for trades by anticipating outcomes. Having all the possible outcomes figured in advance allows you to be prepared. Please feel free to post your charts if you'd like as long as they are in the format listed above so thats its easier to follow along.
And here is a quick review of last week and a range of possibility for the start of this coming week on the EUR/USD
So let us begin.
FJ
Stacking pips since 2002
