[Simple Trading System] Trendline Break (The Only System You Need)

[desifxtrader]

Re: Learn to Trade Forex

Need space for later posting #8

 

[desifxtrader]

Re: Swing Calls by desifxtrader

Recalling ...

2nd attempt to break 87.45 level this week failed. And it seems there's lack of Bulls:

Weekly:

In the Daily charts, we can see the increasing strength of Bears:

A nice Double top formation thou ;P .... the close below 86.40 is also notable.

 

[desifxtrader]

Re: Swing Calls by desifxtrader

Euro:

Found support @ 2100/40. R = 2700, 2660. Formation of double bottom is noticeable. As of yet, no new development.

2420, 2560-2660 are good short zones.

Swissy:

Displaying weakness. 1700 & 1650 acting as R levels. 1440, 1240 as S levels [watch out for a breakdown].

More updates later on, ... closing this week with an open position for this weekend:

 

[desifxtrader]

Forex Trading: An Introduction for Newbies and

:: Forex Trading ::​

An Introduction for Newbies and Reference for rest of us.​

For the sole purpose of readers in this lovely forum [Traderji,com], I'm jotting down a document that I've found very helpful. When you come across and "I" in the below document, understand that it is the original writer & composer who has created this beautiful information. All credits and cheers goes to the main author.

Courtesy & Credits: PeterFM​

 

[desifxtrader]

The route for starting up Forex trading:

Appropriate route for starting up Forex trading:

Account size and leverage
Demo versus Live
Time frames
Psychology
Money Management
Systems
Indicators

I will explain, in more depth, my reasoning for each heading as I go along, but for now this is the thinking behind the modified list.

 

[desifxtrader]

1. Account size and leverage:

Account size and leverage:

It takes time to learn a consistent way of producing steady growth in your account. To ensure you have that time it's important to consider how much effort and money you are prepared to invest in that learning and, more importantly how slowly you are prepared to lose your money. Because, as a rule, you will be more likely to lose than win as you start trading. The smaller the account, the more risk is involved, therefore the less time you can afford making wrong decisions.

Whether you go for a live, or demo, account (covered next) you should start with a broker offering 400:1 account leverage. This lets you master Money Management (MM), by trading micro lots (0.01). You also need to understand the difference between Broker Leverage and Actual Leverage, and I'll point you towards links that will help you with this terminology.

 

[desifxtrader]

2. Demo versus Live:

Demo versus Live

'Should I demo or go live?' I started live, and regretted it. However, I started the wrong way. I began with too small a fund relative to what I was trying to achieve. I didn't understand any of the stuff in my list, all I could see was the house on the beach.

Not understanding MM, I tried Spread Betting. The same problem of account leverage came up. I didn't have enough in my account to enable me to set sensible stops, I couldn't face the drawdowns whilst waiting to see if my trade was going to turn into a winner. The value in demo trading is two-fold.

Firstly, you get to understand all the terminology (Sell Stops - Buy Limits etc) and, secondly, you get to develop a feel for how your chosen method works. Every method, or system, has weaknesses. You need to find those out as soon as you can, and how MM can keep you in the game longer. When you decide to go live, stick with Broker Leverage of 400:1 and continue to trade micro lots. As you gain experience, and your account grows, your MM will enable you to increase your lot size and grow it faster.

The value of a demo account can be summed up as having these main benefits:

It allows time for you to learn how irrational the FX market can be
It allows you to learn how a brokers platform works, enabling you to understand the terminology used when placing, and managing, a trade
It allows you to master some of the finer points of Money Management
It allows you to test, and refine, new theories, systems or methodologies, without risking real money

The disadvantages of a demo account are these:

The data feed, compared to a live account, may, occasionally, vary just enough to confound your plans; this will be less of a factor in the long-term charts.

If your demo account size bears no relationship to the size of your actual trading account (when you go live) your expectations will be raised to an unreasonable level. If youve quickly turned $30K into $75K, or more, you may be tempted, on a smaller account, to try and emulate the same performance by the incorrect use of True Leverage. Unless you are very lucky you wont, and, if you were, remember luck plays no part in successful FX trading. Always open a demo account with the smallest amount the broker offers.

Demo trading will never give you the same feelings that will hit you when there is real money on the table. Treat your demo trades as stepping-stones in mastering both the Money Management and Psychological aspects of trading. If you start saying to yourself, Ill stick a trade on here, because I think this is going to turn around, and if it goes wrong it doesnt matter anyway youll start developing habits that will be hard to break when youre trading live.

Watching a demo account grow, assuming youre doing things right, is hard. All the time youll be thinking, That could have been my money on that trade, I could have made $100 today. You must clear your mind; at this stage youre learning to trade correctly, not learning to make money. Learn to trade correctly and the money will come later.

As I mentioned earlier, I didnt start on demo due to the way I was introduced to FX. I had a two/three week trial of the software and then I was live. The cost to me was more than just the money, which I could ill afford to lose; it has created a defensive barrier, mentally, that Im finding hard to break. After little more than a year Im sure in what Im doing, although there are plenty of areas that still need developing, but the damage that early experience caused me is making me reluctant to invest more into my trading fund. I know this may sound contradictory, on one hand confident in my approach to trading, on the other scared to up the stakes, but this is why I wished Id understood the value of demo trading.

Therefore, my main advice is that you demo for at least 3 months before going live. If you cant make consistent profits on demo, you wont make them when youre live. If you feel you cant wait, and you want to get into live trading as soon as possible then try and follow these guidelines:

Use as small a starting account as you can. Divide your funds into 3 or 4 smaller pots (i.e. if you were thinking of putting aside $1000 for trading, then start off with $250), put one of these pots into a broker offering a penny account, and trade with that.

Learn the basics of Money Management, and be happy trading with small lots while youre getting your head around how to manage risk.

If you are successful after a few months, increase your lot size gradually as that first $250 pot grows. Resist the temptation to add in another $250 at this point; you may have had a good run, but things change fast in FX and a losing streak may just be round the corner.

If youve blown that first $250, dont stick another pot in yet. Go back to your demo account, analyze what went wrong and start afresh. Dont go live until youre sure you understand any errors you made, and how you need to correct them. Then, and only then, consider starting up your live account again with the second pot.

 

[desifxtrader]

3. Time Frames (TF):

Time frames:-

Time frames are down to personal choice; all I can do here is tell you what worked for me. As I said, I started on 5/15-minute charts, and always struggled. I now focus on the Daily charts, but use the shorter time frames to look for better entries in order to reduce risk. I realize that many people, starting out, have difficulty with this. I now feel that the reason is simply that we fall into the trap of 'having to trade'. By that I mean if we're not trading, we feel we're not working. The urge to always have a position on is hard to resist, but it's the biggest problem I had to overcome.

 

[desifxtrader]

4. Psychology

Psychology:

Even when I felt I'd started to turn the corner in trading, I didn't really make the major leap forward until I read a book entitled 'Trading in the Zone' by Mark Douglas. I recommend that you read this before you go much further in your trading. It will help you come to terms with losing trades, and develop the vital neutral mindset so crucial to your success.

 

[desifxtrader]

5. Money Management:

Money Management

I've mentioned Money Management (MM) already, and you may wonder why it's this far down the list, but until the first four items are resolved it's hard to fully understand how important this is to you. Choose your account size and leverage, demo to learn the how things work, and what it all means, pick your time frame and get to grips with your mental state. Now you can devote time to mastering MM.