Pips in wheelbarrow - Trading FX profitably

[Galts Gulch]

As I have taken this 7 years of journey learning to trade the Forex market, I have spent hundreds of thousands of hours of back testing, live testing, reading trading methods, taking webinars, studying charts, learning price action, learning candle patterns, trying indicators and fibs, trying naked charts, testing M5, M15, H1, H4, D and even Weekly charts....reading, studying, learning from many different traders...Money Duck, Dean Malone, Lawgirl, Islander, Ty Young, Craig Harris, Big E, dcgnic, X-Man, Vantage, Jason Stapleton, Rob Booker, Emmanuel, Snarly Jack, dee50....and the list could go on.

I have had to learn money management, entries and exits, where to place stop losses and take profits, how the TDI works with price action, candle patterns and candle movements, when to trade with news and when to stay away, where to place stop losses and take profits, how to use the ADR to determine profits, etc.....all things that each of you are also working to learn and apply into your trading.

Now that I have had some success with trading, I get lots of questions about "how did you know where to enter?", "how did you know that cross of the TDI would go 50 or 100 pips?', "what made you believe this or that would happen?", why did you trade against the 200EMA or a certain resistance area?", how do "you decide, when you move your focus from the original target of 50 pips to a reduced target - to rescue the pips before they were melted away"?, etc.

The answer to those questions is.....I DID NOT KNOW !!!! I don't have a crystal ball to predict anything about the market and anyone who says they do is not telling the truth.

I can only say, I developed a trading plan with a number scenarios based on the premise of IF...THEN. IF this happens, THEN I will do that. Example: IF this certain candle pattern occurs and candle #1 changes to blue and the TDI moved up or crosses red or yellow or the 50 line, THEN I will enter when price breaks above the high of the previous candle. Sometimes that works and sometimes it does not work but I have refined it to the point that it works most of the time. When I make an entry, I do NOT know if it is going to move 20 pips, or 50 pips or 100 pips..... I just know that based on what I have learned over the years, I have developed a scenario in my trading plan that addresses that situation and I am willing to risk some money on an entry there. I also use the trading plan for exits....IF this happens, THEN I will do that.

In answer to the question about getting out, sometimes it is based on how many pips I will let it pull back before keeping some of them .. Sometimes it is based on a CLOSED candle of a different color and sometimes I am willing to let price run back to BE or a SL moved up above BE, on the chance the pullback is temporary and will continue to TP. If the TDI is hanging around the 50 line, it tells me that price is consolidating and I will only enter small scalp trades.

As far as learning the Higher TF’s, I have developed my trading plan for H1 on EU and GU pairs to the point that I now want to expand into Higher TF’s for stress free pips. Shorter TF’s has too many whipsaws and reversals so I seldom trade that time frame. Many Pro Traders have had success with Higher TF’s, so I want to see how that time frame works for me. I tried it once before but it was too slow for me. Since then, I have learned to be more patient and maybe the H4and D TF’s are something I can use. I would like to develop a plan that allows me to enter on the H1 and stay in the trade longer on the H4 and follow the same trade/s on D TF as well.

You need to learn to trust the TDI when it matches with price action. It doesn't get much better than that....entry on 2nd red candle at LO with a cross of green over red and the MBL.....moving out of the overbought area. When all those things fall into place, most of the time price will move at least 50 pips on Euro pairs, even if it is a retracement. Put in the time.... learn from back testing and forward testing....you will see that for yourself.

As far as exits are concerned, I have found that if you wait for a candle to close in the opposite color or a long pullback bar forms, that is the time to exit, if your TP has not already been hit. Getting out at every little pullback will drive you crazy

Always remember ... Any / Every strategy is Constant and we as individual trader/s have to evolve with it ... Customize it to suit our Psyche and make it our Own .... :thumb::clap::clapping:

 

[Aman1]

So true. That shows one should not ape trading methods blindly. One should develop a method for himself/herself that suits individual's personality.

 

[amitrandive]

Always remember ... Any / Every strategy is Constant and we as individual trader/s have to evolve with it ... Customize it to suit our Psyche and make it our Own .... :thumb::clap::clapping:

:clap::clap::clap:

 

[Galts Gulch]

Trading cross pairs ...

 

[Galts Gulch]

Few SIMPLE rules to Increase profit and decrease Loss in FX ...

1. Trade 9 hours of London Market. This will include 3 hours of New York market as well.

2. If the market moves too much during Tokyo session, London market will be choppy and side ways ... STAY AWAY ... On the other hand, if market is choppy, market gets in to Over Drive mode during London market ... When not not trade is also as important as when to trade.

3. London market sets the High and Low for the day, Predominantly.

4. Stick to one pair, till the time you have control over how the pair reacts to different market ... Nothing compensates for Experience.

5. Stay away from the market, during Red NEWS releases.

6. Stick to Market trades. As different pairs affect different pairs, pending orders can be executed, while you are sleeping ... It is not worth the Risk.

7. Observe the wicks / shadows of the candles. They tell lots of stories about PA.

 

[Galts Gulch]

Tendencies –

Typical behaviors or the way something is likely to react. We can use tendencies in the market to enhance our edge and take advantage of repeatable occurrences. The more time you spend in front of your charts, the more you will notice tendencies in the Forex market. These are several I have observed and picked up over the last 9 years. Remember, nothing in trading is absolute, but additional knowledge can increase our profitability and consistency.
Here are just a few:

1. The EUR/USD tends to reverse or create structure around the 20’s and 80’s. For example 1.3320 and 1.3380.
2. The GBP/USD tends to reverse or create structure at the 50’s and even handles. For example 1.5550 and 1.5600.
3. The USD and JPY tends to move in the same direction approximately 80% of the time.
4. If during the London and New York overlap there is a large sell off or rally (100+ pips), the afternoon of New York and often into the Asian session, the market tends retrace from the overlapping volatility and price action. I call this “drift” as the low volume and low volatility during these off-peak periods may take several candles. The move tends to be typically very slow but very deliberate. These can be low stress and high profit trades.
5. The market tends to be the most bearish or bullish before a trend reversal. A large impulse or “last gasp” often occurs just before a trend reversal. This is what creates a “hammer” or inverted hammer candle pattern.
6. A Fib retracement to .382 level of the AB leg tends to terminate at the 1.618 expansion of the AB leg.
7. A Fib retracement to the .618 or .786 level of the AB leg tends to terminate at the 1.272 Fib expansion of the AB leg.
8. A Fib retracement to the .50 level of the AB leg tends to terminate at the 1.414 Fib expansion of the AB leg.
9. The market tends to sell off faster than it rallies.
10. Structure leaves clues. The market tends retest previous levels of strong support and resistance.
11. Trading is 10% psychology and 90% strategy until you trade live with real money. It then tends to become 10% strategy and 90% psychology.
12. You can not develop a viable trading strategy based on fundamentals. Fundamentals tend to not be consistent, repeatable or reliable and therefore have no quantifiable or measurable metrics that can be incorporated into a profitable trading system.
13. The market tends to trend only 30% of the time. And 90% of the times, this is the time, a pro trader goes for the kill to rest, study, analyze in remaining 70%
The more you incorporate these tendencies into your trading sessions, you’ll be less anxious and more in control.

These are the nuances professional traders use to sharpen their skills and a focus on the best opportunities.

Please comment on other tendencies you have observed or use in your trading.

 

[amsin21]

Tendencies –


6. A Fib retracement to .382 level of the AB leg tends to terminate at the 1.618 expansion of the AB leg.
7. A Fib retracement to the .618 or .786 level of the AB leg tends to terminate at the 1.272 Fib expansion of the AB leg.
8. A Fib retracement to the .50 level of the AB leg tends to terminate at the 1.414 Fib expansion of the AB leg.

Please comment on other tendencies you have observed or use in your trading.

GG,

Add 88.6%/0.886 to your arsenal, which is the best retracement level, derived from square rooting Fib golden ratio 61.8%/0.618 which gives 78.6%/0.786 and again square rooting it. Normally this level acts as strong support/resistance level.

I always take position blindly in line with the main trend, once 88.6% is hit and confirmed by a second candle, SL below 100%. Most times the bounce back @88.6% fly past the 0% level giving an extra descent profit.

Just my few cents.

 

[Galts Gulch]

GG,

Add 88.6%/0.886 to your arsenal, which is the best retracement level, derived from square rooting Fib golden ratio 61.8%/0.618 which gives 78.6%/0.786 and again square rooting it. Normally this level acts as strong support/resistance level.

I always take position blindly in line with the main trend, once 88.6% is hit and confirmed by a second candle, SL below 100%. Most times the bounce back @88.6% fly past the 0% level giving an extra descent profit.

Just my few cents.

Forgot to add it ...
Thanks buddy ....
Is this not how to share and care ? :clap::thumb::clapping:

 

[DSM]

Amsin, What TF/Chart do you trade? Usually, see double tops or double bottoms (the second bottom going just one candle below the previous low) and then bouncing back above the high of the day.

GG,

I always take position blindly in line with the main trend, once 88.6% is hit and confirmed by a second candle, SL below 100%. Most times the bounce back @88.6% fly past the 0% level giving an extra descent profit.

Just my few cents.

 

[amsin21]

Amsin, What TF/Chart do you trade?

DSM,

30m as execution TF and 2H as short term TF, long term as in daily and weekly.

Usually, see double tops or double bottoms (the second bottom going just one candle below the previous low) and then bouncing back above the high of the day.

I didn't get you bro.