Making Money and the Most Basic of All Basic Strategies
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Thread: Making Money and the Most Basic of All Basic Strategies

  1. #1
    I have been getting a lot of pm#8217;so about some thread I started last week called No Brainer Trades. Here's the connection: https://www.forexforum.co.za/trading...-scalping.html

    All of the trades posted in the thread from either myself or other members have proved everywhere from 20 to hundreds of pips with the exception of one, so the success rate has been quite high so far. We expect to continue it as we go along, and edue. During my diligence here and I have been becoming I thought I would write another, outlining the major methods I use.


    During my years of trading, I have been blessed to have had some fantastic experience and have picked up two major matters:

    1. Trading as a means of steady income is not a painful procedure if you understand what you're doing
    2. Trading can be an extremely painful procedure if you hear the incorrect advice

    New traders suffer a serious disadvantage because they do not understand what moves the market and how to react to certain results. When attempting to learn, the overflow of information out there may be equally beneficial and disastrous. The following article is meant to supply one winning egy that offers a high winning percentage rate, utilizes no indiors, and is easy to learn and follow along. It is also meant to provide information regarding market movers and how they generally operate concerning this egy, since it's probabilistically the most frequently used and followed.

    I#8217;will outline my own abbreviated trading plan, which makes it easier to understand explanations and presenting examples concerning how I exchange on a long and long-term intraday basis.

    Before you continue reading, I encourage you to take a look at a general overview of the interbank market and how it works. It baffles me that such a large portion of retail traders out there have no clue of this structure, and it#8217;s no wonder. Deficiency of knowledge in any endeavor is usually likely to result in failure. Know what it is that you are investing before you trade it, and then move on. You may find one here: http://www.investopedia.com/articles.../interbank.asp

    Banks control the cash. Retail traders like I or you, in addition to major funds play an integral part in the motion of this market, but the banks are the ones placing on multi-million dollar positions that drive the markets. We # 8217; re not, although we would love to think we're a portion of it.

    Working for a major fund and a bank for many years, I understood what a joke a lot of trading actually was and how easy it really can be for any novice investor having a willingness to learn. In my shop, we'd one dedied analyst per pair and he or she basically called the shots to traders around the desk. The trader is responsible for transferring the cash whilst securing profit whenever possible. With almost no spread, most of the positions would persist from several seconds. A number of them would take tiny profits trading countertrend all day , along with payoff traders, causing climbs and shing bars since you see on a regular basis.

    When an order gets placed that seems larger than life, and processors begin to stack onothers usually follow like a herd like sheep. The biggest orders are placed in regions of extreme support and resistance, and most of the market makers are aware of this actuality. Analytics performed by the banks generally outline these regions first and foremost it#8217;s the most frequently used and followed technique at identifying reversal points. Other analytics are utilized too, including diagonal trend lines, pivots, price channels, macd, moving averages, etc., but problems over ambiguity arise with them all. The method I#8217;ll describe below uses nothing more than support and resistance, with methods allowing for on the way. It#8217;s what the players do; therefore, it makes sense to be doing it.

    No egy is going to be ideal, because on top of regular speculative trading there are other influences on the foreign exchange market, and it might be hard to differentiate when one price amount will be more influential than another. As a retail trader following this technique, however, it's totally possible to profit 80 to hundreds of pips in a five hour session, each daily. Less is more, in this circumstance.

    I create about 5 to 10 trades per session, each 1 fitting into the framework of a high probability. I#8217;ve used this technique within the past 3 years because it has proven to be the most dependable and easy to trade. Others will argue, although they argue and are seeking to GBP, I#8217;m already closing my trade with 20 pips of profit. They go short, and price bounces back up, and that I hope to explain why here.

    Areas of support and resistance hold because unlike other procedures, anyone trading in any timeframe is able to look at a chart and see where price has reacted several times in the past, or what will be a #8220;no brainer#8221; in the immediate future. Any amount is subject to some breakout on a response of news, or various influences. It is important at all times to assess the current market conditions and in great judgment decide whether the degree bust or needs to hold. By way of instance, on days of hysteria in which the dollar is getting smashed, you#8217;re a lot less inclined to create a lot of pips on such amounts if they are countertrend. The exact same can be true for Fridays (stop searching day), sometimes of option expiration or at the very end of this month. Regardless, even on these days, it's possible to utilize this technique to enter trades in the direction of this trend on a retracement to the specific pip, letting you make the most of their volatility's madness.

    The Trading Itself

    There are 2 different types of support and resistance that generally maintain: long-term and near-term.

    Long-term support and resistance levels can be distinguished on a 1-hour or increased timeframe. I typically begin with a 4-hour chart and scroll down or up depending on the situation. Long-term support and resistance levels, below laxed market conditions, may be good to get 100 pips at one time, unless under the conditions previously described. Here is a good example of a current USD/JPY trade that bounced off of predetermined amounts. As I write it's currently 40 pips in profit, as well as the original posting before the transaction can be seen here: https://www.forexforum.co.za/general...-question.html

    As you can see in the chart below, this entire area was utilized as both support and resistance several times in the past. Due to the significant influence it has had from the market during past times, a probability exists the price will bounce off of it.
    The range of the degree might be hard to discern, since it can be quite broad. Taking a look at the latest reactionary amounts, one can determine that the most important range of price action is 102.74 to 102.60. Within this 15 pip range price was expected to bounce, as it did, directly from 102.73.

    Another instance on AUD/USD you may find below. You may see that, on many occasions in the past, price used the .9290 degree as service. This time was no different. Price hit it right on the nose and started its long journey into new highs. The original posting for this transaction can be found here: https://www.forexforum.co.za/trading...00-2008-a.html

    This AUD transaction is a great instance of ranges, and how to tell which amount price will bounce from if multiple regions of support/resistance is found in the exact same loion. You can see here that in addition to .9290 support, there is also applicable support lower at 0.9273. One egy is to scale in the position, placing on a portion of it at .9290 and, if price dropped any lower, place the rest on at 0.9273. Your stop loss should be placed directly under these amounts, like price continued to proceed it would indie a follow through, and clean break of this level.

    Near-term support and resistance happens when a former degree is breached, and that support (or resistance) degree acts as a resistance (or service ) degree. The best timeframe to see on those is 1-hour or not. Starting with a 1-hour chart, work your way down to smaller timeframes, paying close attention to the points of support and resistance on the tide moving countertrend into the current one. 1-hour charts occasionally cover up these regions, requiring a 30-min or 15-min chart to see them properly.

    An instance of this may be found with a transaction I took today on USD/CAD. On news, price bogged down through the prior 0.9872 degree of service, all the way down to 0.9817. Two hours afterwards, price lurked its way back up to 0.9872, and started to sell off to roughly 35 pips of profit. These happen over and over again on a daily basis, and can be easy to place.

    Another instance under AUD. Again on news, price made new highs, breaking through 0.9558 resistance. Several hours after, price moved back down to this amount, tapped itwas great for roughly 92 pips profit at max. You might also see that opportunities were present to short AUD/USD previous to this news spike, as well.

    Taking Profits

    Profit ought to be taken in regard to the setup and current market conditions. No two trades are alike; market conditions change all the time. Typically speaking, near-term support and resistance provides for moves that are bigger. For many, they can lead to trend continuation; for many others, they Can lead to consolidation. With the exception of market conditions, here are the principles I generally follow:

    For long-term support and resistance, I will typically take partial profits at around 40 pips or so, and make the rest and determine if I get a runner. I will look for opposing regions of support and resistance and use them to scale out of a position.

    For near-term support and resistance, I will typically take partial profits at around 20 pips or so, and leave the remainder on for continuation. Again, I will look for conflicting areas of service and resistance to climb outside.

    Understanding current market conditions is essential to getting profits. Whether it's a service or resistance trade, current market conditions could leave you empty handed for the day if you are not currently working with them properly. In a crazy market, it is best to secure some profit as soon as you can (20 pips or so).

    After any commerce is 20 pips at the cash, I will usually put my stop loss to breakeven. In case the market turns on you, it is probably doing this for a fantastic reason.

    When the trade is a continuation of a current trend, you may get a better chance at more pips, even though it is not always necessarily the case. Long-term support and resistance can act as major obstacles, priming the market for a trend reversal.

    Things to avoid:

    1. Placing on a counter-trend trade in a news spike
    2. Not placing a stop loss to breakeven if profit is 20 pips at the money
    3. Holding too much conviction on a long-term move
    4. Generalizing beliefs on where price will head
    5. Not waiting for the setup
    6. Chasing a commerce late after a setup has already occurred
    7. Sloppy trading (#8220;sureit#8217;s moving up#8221;-RRB-
    8. Letting a profitable commerce turn red

    I've some other approaches I use, and will try to post them later. However, I hope this helps for now. Thanks,





  2. #2
    Quote Originally Posted by ;
    Of course it does matter. I would like to see at least 2 rebound points either separated by days or a couple of hours on stage.
    Okay good..thought so

    Thank

  3. #3
    I drew support/resistace lines in my chart on GBPUSD chart from back in 2002. Coming back into current day, seems price has bounced off those older things too....prlly even worked better than the more recent ones

  4. #4
    Quote Originally Posted by ;
    Of course it will matter. I'd like to see at least two rebound points either separated by days or a couple of hours on larger stage.
    Can you started the post utilizing market order or limit order...

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