Heikin Ashi Candles Colour Change

[.Pride.]

Re: ForeX TechnicaL AnalysiS StrategieS

what you have posted is a simple trend following system...a simple ema crossover will do the same job as the alligator...

this will work well while the market is trending...but you will get severely whipsawed in ranging markets...

unfortunately, you cannot know beforehand when the markets are trending or ranging...you can know that only when you look at the left hand side of the chart...and by then, it is too late...
by the time you will realize that the market is trending, half the trend would have ended...and by the time you will realize that the markets are ranging, you would have already been whipsawed...

what you need here is a filter...something that will help you stay out of the ranging markets rather than solely relying on your visual interpretation of the candles...
something like damiani volatmeter, perhaps?

also, i think you should trade only when the UK and US market timings overlap as thats when trend following systems perform best...
and as long as you are using a trend following system, exit all positions before major news...use a separate news trading strategy in conjunction with your main strategy to take advantage of the major moves following big announcements...

the forex market is full of technical traders...so keep a note of all major support and resistance zones as thats usually where trends reverse...

personally, I have tried all the charts and have finally settled on scalping the m1 while riding h4 trends...

 

[Rkji]

Re: ForeX TechnicaL AnalysiS StrategieS

thank you for the beautiful post pride, your presence is of much delight


i use adx in stocks & thinking of applying it to forex as well. whenever adx is rising above 20 & keeps on rising surpassing 25...30....price does trend. if you could notice my recent image of mt4, you will find that there was a very strong signal when adx was 37 and there was a crossover of the three averages, you can see what happened.

when adx stays below 20 or falling sharply from 80, there is no question of taking a trade through this system as adx below 20 or falling tells you price is ranging. notice mixed reaction of buyers & sellers di+ di- when price intends to range. if there is a crossover of buyer seller..di+ di -and adx is rising above 25 or in prev case 37, you do have a trend building up.

well, i will surely look into damiani volatmeter to see if it can replace adx for telling a good trend or a range.

pride, notice adx in stocks. whenever adx is below 20 & stays there for good 30 candles on a 1 -15 min tf, or for atleast 30-45 mins, when it rises above 20 & goes on to surpass 25, if candles are above 20 sma, you will see price shooting in that direction....reason being during this time accumulation is going on & when accumulation is finished & adx rises above 20, strong trends are found.

i learnt this from a very experienced guy who could be a mkt maker.

for stocks, i use 5 by 9 wma as suggested by savant sir & i am satisfied with that. in forex, this idea of using three ma' s by the original author was...that whenever fast moving wilders ma 4 ( smoothed by hl/2) will cross 9 wilders smoothed ma (adx above 20-my idea) from below, a buy call is generated & on the top when 4 wilders ma will cross 6 ma, one can exit & avoid loosing on certain profit as 6 ma will most likely cross 9 ma but there will be a delay due to which you could loose certain pips..ofcourse you can can hang on till 4 crosses 9 from above becoz sometimes 4 would cross 6 but fails to cross 9 which gives additional profit as you can see from my first post where two warnings are posted.

pls oblige me with your continued divine presence as i loved your intraday strategy.

regards
rishi

what you have posted is a simple trend following system...a simple ema crossover will do the same job as the alligator...

this will work well while the market is trending...but you will get severely whipsawed in ranging markets...

unfortunately, you cannot know beforehand when the markets are trending or ranging...you can know that only when you look at the left hand side of the chart...and by then, it is too late...
by the time you will realize that the market is trending, half the trend would have ended...and by the time you will realize that the markets are ranging, you would have already been whipsawed...

what you need here is a filter...something that will help you stay out of the ranging markets rather than solely relying on your visual interpretation of the candles...
something like damiani volatmeter, perhaps?

also, i think you should trade only when the UK and US market timings overlap as thats when trend following systems perform best...
and as long as you are using a trend following system, exit all positions before major news...use a separate news trading strategy in conjunction with your main strategy to take advantage of the major moves following big announcements...

the forex market is full of technical traders...so keep a note of all major support and resistance zones as thats usually where trends reverse...

personally, I have tried all the charts and have finally settled on scalping the m1 while riding h4 trends...

 

[.Pride.]

Re: ForeX TechnicaL AnalysiS StrategieS

Rishi, I have one very important advice that I would like you to understand and follow. Trust me, this is the only way that you can really make your account size grow.

You need to take advantage of the leverage that forex offers and add to it the power of compounding.

First, decide how much of your equity you would like to risk for each trade. It could be 1%, 2%, 5%, etc...depending on your risk profile.

Next, define a daily target (in pips). It doesn't have to be big. A 10 pip target is respectable. Stop trading when you achieve this target and call it a day. Sometimes it might take just one trade of 5 mins to achieve it, other times it might take a couple of hours. Just stop when you achieve it.

The next day, your previous days profit will be included while calculating your risk amount (compounding).

Thats it. You don't need to stay glued to the screen throughout the day and you don't always have to be in the markets. The only important thing is, you need to be able to make those 10 pips consistently (which, I think is not that difficult for such a small number of pips).
------------------------------------------------------------------------------------
Example:

You have $1000 in your account. You decide that you can risk 3% of your equity on each trade. Your profit target is 15 pips. Stoploss is 10 pips.

That means you can lose a maximum of $30 for a loss of 10 pips. So, you buy 0.3 lots. On a profit of 15 pips, you will get $45.

The next day, you will again risk 3%, but this time, it will be more than $30, so you can buy more lots.

So, all you need to do, is figure out how to make 10-15 pips consistently on a daily basis.
This example results in a profit of more than 400% in two months.
-------------------------------------------------------------------------------------

Now forget about catching large trends, and just focus on how to make 10 pips a day.

A great trader I know told me that every newbie should start with scalping, as thats the best way to grow your account. Once it reaches a respectable size, go for longer term trades for capital protection and peace of mind.

I myself have a daily profit target of 20 pips and I risk 2.5% of my equity on each trade. I just do 2 trades of 10 pips each everyday and then close shop. My scalping strategy allows me to take atleast 20-30 trades a day, with a strike rate of more than 70%, but still, I stop trading when I make 20 pips. I have been trading live for the past two months and I am up over 550%.
I know many scalpers who make over 20,000% annually. The only problem is that all of them have to shift to longer term trading due to eventual liquidity issues, which results in a slowing of the growth rate.
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My statement may be controversial, but it is the truth.

 

[ag_fx]

Re: ForeX TechnicaL AnalysiS StrategieS

I would like to Add some points here to what Pride posted. If you decide to go ahead with scalping techniques, and the kind of Money Management that he suggests, consider the following points:

1. Look for a Forex Broker with narrow spreads. While scalping, you need as narrow spreads as possible so that you can get in and come out at your target levels. Also, narrower the spread, the lesser out of money you are as soon as you enter the trade.


2. Choose a couple of(max 2-3) highly liquid pairs with smallest spreads. Most of the times, scalpers have to limit the number of pairs so as to focus on set ups that might appear. Scalpers use smaller time frame charts of 1-15 mins and thus it becomes practically impossible to track more than a couple of pairs with smaller time frames.


3. if you want, choose any specific opening. Staying in India, you can very well trade during UK openings, US openings and both the sessions. These are most liquid sessions and thus should provide you with ample opportunities to scalp for your daily bread and butter.


4. Whenever you are able to make some decent profits, take them out. Try and taking out your entire initial investment out of the markets first. That way, you can then trade on House's Money. Please note, this is a suggestion only keeping in mind the kind of MM and targets that Pride suggested above. With a higher leverage, you also run a risk of blowing your account equally fast.

5. Do trade demo before putting live money.

6. When you demo, make sure you keep a note of Maximum "Consecutive Loosers" that your strategy generates. This data should then be used to define your risk per trade. You should never start with any arbit risk per trade according to your wish. No trader has his own RISK APPETITE. Risk Appetite is always of a strategy. You possibly cant take a risk of 2% per trade if you expect 200 winners and 50 consecutive loosers.You never know if the loosers would come before winners.


My suggestion is only this:

Dont let the greed factor come into you in your formative years. Do not expect 100% months or try and achieve them. You will definitely be able to pull it off at a smaller level, but when you grow, it will be more of a pain in @$$ rather than anything else. If you never plan to grow your equity to "Oh My God" levels, then its still ok....But in longer term, a poor MM is much more a reason that traders fail than anything else.

Our brain is a programmable entity. Do not program it in a way which you may want to remove later on. Trust me, it is more than just difficult to do it.

Best Regards

AnK!T

 

[.Pride.]

Re: ForeX TechnicaL AnalysiS StrategieS

Hi Ankit, good to see you here...and congratulations for you know what!

All your points are absolutely valid...

and just to reiterate what I said earlier, it pays off to try scalping during the initial days to increase your capital fast...then you can gradually move to a more balanced strategy...

I say this because if you intend to trade and risk only 0.5% of your equity on each bet, then you better begin with a $50,000 account, otherwise the profits and losses will be so small that you will begin to get impatient and might break your MM rules...

For most of us, to begin with even a $1000 account is considered extravagant. So it will be a frustratingly slow journey to grow that to a respectable level. This is where scalping with a bit higher risk comes into the picture.

on a side note, when you're scalping with a large no. of trades, your % risk becomes irrelevant. Your risk management then has everything to do with your ability to read price action in real time. If your ability to read price is basic or your holding period is a lot longer, then % risk becomes critical.

add to this the fact that 90% of the time, I do not wait for my 10pip stoploss to get triggered. Instead, when you are trading on such a small time frame, you can easily exit as soon as you feel that the trade is not going in your direction. Unlike long term trading, you don't have to hold on to the trade and wait for it to go in your favour. While scalping, you enter a trade, and if price does not immediately start moving in your favour, you exit without waiting for it to hit your stoploss.

anyway, enough of scalping talk...

rishi, have you tried renko charts? i think they are pretty good if you want to focus on the trends and filter the noise...

 

[Rkji]

Re: ForeX TechnicaL AnalysiS StrategieS

pride, thank you from the bottom of my heart for taking so much pain in writing at this length on your holiday

10 pips / day sounds good

i am glad to know that you are doing good for yourself in forex as well

all the best

regards
rishi

Rishi, I have one very important advice that I would like you to understand and follow. Trust me, this is the only way that you can really make your account size grow.......

My statement may be controversial, but it is the truth.

 

[Rkji]

Re: ForeX TechnicaL AnalysiS StrategieS

many thanks ankit, i appreciate your valuable presence & you made my job very easy in pride' s thread as i used to glide through pride & your posts only & was able to finish reading the entire thread quickly...hihi

i would definately remember the important points you made

thanks for being kind on a sunday

regards
rishi

I would like to Add some points here.....

Our brain is a programmable entity. Do not program it in a way which you may want to remove later on. Trust me, it is more than just difficult to do it.

Best Regards

AnK!T

 

[Rkji]

Re: ForeX TechnicaL AnalysiS StrategieS

nah, i haven' t tried renko charts, as a matter of fact just learnt heikin ashi charts & started using them.

well, will surely look into renko charts


regards
rishi

rishi, have you tried renko charts? i think they are pretty good if you want to focus on the trends and filter the noise...

 

[ag_fx]

Re: ForeX TechnicaL AnalysiS StrategieS

Hi Ankit, good to see you here...and congratulations for you know what!

All your points are absolutely valid...

and just to reiterate what I said earlier, it pays off to try scalping during the initial days to increase your capital fast...then you can gradually move to a more balanced strategy...

Thanks a lot man for your wishes...

I personally have never scalped with real capital...I was always inclined towards higher TF trading for various reasons that would go beyond the scope of this thread....

I do know several Money Managers managing several 1000s of USD by implementing only scalping. So, it surely works...No two ways about it...


It appears you are trading live with scalping....so, if you dont mind, why dont you discuss some of the details about your scalping method.....perhaps a new thread with your scalping stuff? Like a journal....May be it will help me learn some techniques to steal 10-15 extra pips off the market a day...Would help me a lot for sure and Im sure it would help a lot of others around...

Best

AnK!T

 

[.Pride.]

Re: ForeX TechnicaL AnalysiS StrategieS

yeah...why not...maybe next weekend I'll post some details about scalping...it's nothing complicated though...so simple, in fact, that most people would hesitate to try it