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My Own Forex Journey

Discussion in 'Forex Trading Systems and Strategies' started by Forexwatchman, Nov 13, 2009.

  1. Forexwatchman

    Forexwatchman Sergeant

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    After the worst week I've ever had since my trading days began, I have come to a low point, a point at which I either turn things completely around or I give up defeated. Not a very good spot to be in. It's terrible when you know you can do better but you just aren't doing it. When you have to keep reminding yourself that it was just a lack of strategy and discipline and not some bigger force behind it all that really means you're not cut out for this and it's never gonna materialize into something long-term. There's the nagging uncertainty of whether the forex market is even a viable way to produce income in the long run or if it's just a random force of nature like gambling, sometimes you have a string of wins and other times a string of losses- the wins being the motivation to do it again, and the losses you must force out of your mind before the fear and anxiety stop you forever- but eventually the house gets all its money back regardless of how well you try to manage your losses.

    So what are the facts- just the straight up facts. 1) I know that I am committed to seeing this thing through to the end. 2) I know that I have just as much reasoning, skill, and discipline as anyone else who ever made it in the forex market. The one and only thing I am lacking is a strategy, written in stone, tested and proven to myself. The key part of that last sentence was the proving it to myself part. I've always been the type to question something down to it's purest form, getting at the very root, the most senior fundamental datum of something is only captured through personal observation and experience, the rest is only second hand.

    So there you have it, the sole reason behind me writing this, to develop a strategy, to test it out in real time, and to keep a running history of that process so that I can say without question that at the end of this process I am either gonna trade successfully enough to make this a living, or I should use my skills and abilities elsewhere. And as depressing as the thought of all this hard work and stress leading to a DEAD END may seem, I will say this right now in advance: I would be a much lesser person if I chose to simply give in and give up than I am to embark on this process of exploration of the forex market, answering my questions objectively and studiously in order to arrive at a conclusion of my own once and for all.

    So what are the building blocks of forming a good strategy.
    1)Know the kind of trader you are.
    2)Know what indicators work best most of the time and when and how to use them.
    3) Based off #2, determine entry and exit points.
    4)Continue to research and adapt the overall strategy.
    5) MOST IMPORTANT: Keep it simple.

    Now I will go about this process in that order. And any suggestions are more than welcome. I would love to have others in the same boat as me follow along and use this as just a small part in their overall compass through the forex ocean, for whatever its worth.
     
  2. Ricex

    Ricex Sergeant

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    A very honest post Forexwatchman, I hope it attracts contributions and debate. I admire your courage and I guarantee you that you are not alone in thinking this way, I certainly have had periods exactly like you are describing.

    I think you have the basis of a good plan there. I would just like to amplify the importance of discipline in trading, especially at the start, as we really need to change our normal thought processes and move the thinking from gambler to trader.

    This is one of the hardest aspects of becoming a successful trader and is why so many people who otherwise have the talent and technical skill to make it in this game fail. Speaking from my own experience on this subject I know it took me a long time to get to grips with it, and the problem did'nt end there. It is a daily fight against your ego and all your prior thinking on how to behave under certain conditions, a complete uncoupling from emotions and 'normal' behaviour patterns which are necessary outside of trading.

    It is so powerful that even the most experienced traders will at some point do something completely ridiculous and regret it, but they will recognise the fail for what it is and get themselves back on track.

    You seem very level headed and mature and I wish you the best of luck in your endeavour, just remember this is not a race and guard your capital at all costs.
     
  3. Music Man

    Music Man Corporal

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    What strategy have you been using? There are many to choose from.

    One manual strategy that I have seen people praise is the AshFX strategy from http://forexmoments.com. Basically, you use PSAR, AO, AC and Stochastics:

    1) When the PSAR dot initially changes direction AND
    2) Accelerator agrees AND
    3) Awesome Oscillator agrees AND
    4) Stochastic Oscillator agrees, but is not over 80 for a buy, or under 20 for a sell
    5) The "trigger candle" is complete and bearish for a sell, bullish for a buy and not too long (indicating too much volatility or a whipsaw)

    Ash calls for a 30/30 pip split on TP/SL, above and below your entry. He apparently uses market orders, although I don't like to use those. He also recommends higher time frames... daily chart, I believe.

    For the full (free) system and much discussion, reference the URL I gave.

    My own personal EA separates order and money management from trading signals, so that virtually any trading signals can be plugged in via preset file. Thus, I am also always looking for new technical indicator-based strategies. Lately, I've been working on one that triggers off CCI and OsMA, but I'm not ready to claim it as worth using yet.

    :)

    MM
     
  4. Ricex

    Ricex Sergeant

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    It will be 3 months tomorrow that you wrote this post Forexwatchman, it didn't get as much feedback as I thought unfortunately, but I was wondering how things are going and if your making progress?
     
  5. ernest8fingers

    ernest8fingers Master Sergeant

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    Sorry I just noticed this post

    If you do not give up-you will not fail. Your doubts only confirm to me that you are genuine and decent. I have stood exactly where you stand now. In 2005 when I 1st "discovered" Forex I lost a few grand (3500.-6000.) in less than 90 days. If it is true that some make money trading-why couldnt I? I have some education (HS/2 yr College degree/ 2 yrs Votech) and consider myself at least "average". What was wrong with me and my trading? I stopped trading "live" for the next 8 months and just watched(every day/hour) price Charts and began to notice movement patterns during different times of day especially around zones of S/R. I digested EVERYTHING Forex-everywhere. Retail Forex trading by individuals is highly dependent on that individuals Personality/Account Balance/Broker choice as well as ability to "read" those price Charts. I personally HATE drawdown anxiety(entering a trade that goes against me - a lot!). I tend to only Day trade(I dont want to risk Swap charges). I only place trades at the opening(or very near) of 2 sessions(NY/London). That means for me-waking up at 5:00 AM PST to catch the open of the NY session(by following the herd and the DOW) in order to time my entry and its direction. I do the same for the open of the London session(around 11:30 pm PST). If I miss an entry, I DONT TRADE THAT SESSION. I miss plenty too. A missed trade wont kill my account-there will always be another one in a matter of hours. I am basically a Swing Trader at heart. This offers me(usually) 2 trading opportunities per 24 hour day. Thats how I like it and this style fits my personality/account size. How amazing to me that Forex trading only really comes down to just 2 actions-Buying/Selling. Yet there seems to be so many variables that need attention prior to "pulling the trigger" it makes the head spin. Remember-if you give up now-you will be counted among the 95% of losers. Never give up.:) BTW- I did figure out my own trading rules. They seem to work(mostly). If interested PM me(or email: ernest8fingers@gmail.com ) and I will tell u what I do and when I do it. This may or may not help but at least will give you an idea of what another Retail Forex wannabe G.Soros trader goes through.Good luck.
     
    #5 ernest8fingers, Feb 12, 2010
    Last edited: Feb 12, 2010
  6. Forexwatchman

    Forexwatchman Sergeant

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    Three months ago I found myself at this crossroads. What a difference three months makes. My motivation for this post was that I wanted to make my struggle a public one in order to seek out any advice that forum visitors might have, but I also knew that if I admitted that I wasn’t succeeding at trading because I wasn’t as disciplined as I should have been, then I would feel more compelled to reform myself before it was too late.
    As a result of this post, I did make fundamental changes to my trading strategy that has resulted in the transformation that I was seeking to find, and I would like to share what those changes were.

    One huge change was my use of proper money management. I no longer arbitrarily basing my lot sizes on what my instincts tell me about the likelihood of taking some position, but instead having it fixed at either 2% or 5% of whatever my account balance is, depending on the amount of technical and fundamental factors that agree with the position.

    The next change that took place was a total reevaluation of what I considered trusted indicators. I had honestly been applying far too many indicators, and thus was always wavering between taking a trade or not due to the lack of cohesive signals from my indicators. I guess you could call it indicator paralysis, but it totally goes against the “keep it simple” part of a successful trading strategy.

    But I guess that the biggest change was my determination to see this thing through, which led me to register and develop my own website which caters to my specific trading method and analysis. By doing this, I felt even more compelled to be disciplined and honest, since I knew that anyone with internet access and an interest in forex could see what I was doing and judge me accordingly. There is something behind being public with your struggles that causes you to become more self-aware and accountable, and that’s what I sought to achieve all along through this post.

    Thanks for checking back in with me, and I hope all those who read this can also benefit from knowing that it’s not how hard you are struggling right now that determines your chances of success, but how hard your resolve to see this thing through that makes the difference in success or failure.
     
  7. insidetradellc

    insidetradellc Recruit

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    Thanks for the insight about forex, it really gave me a lot to think about the next time I consider opening a forex account to trade... :)
     
  8. gmartinez

    gmartinez Recruit

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    Learning with demo accounts first, until you feel comfortable with your strategy and you have a clear plan on money management.

    Fundamentals are important but the market will not always follow them. The time is important but you do not know how long it will take to the market to react to those fundamentals.
     
  9. RahmanSL

    RahmanSL Major

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    Like earnest8fingers, I too just notice this post and have to say what you posted 3 months ago reflect almost exactly what I am experiencing right now.

    From adrenalin rush from winning positions down to utter frustration when the market moves against me, I am not even sure whether I want to trade live at all anymore.
    I feel like what I see on the screen as not real money, and have a strong tendency to risk all for one huge gain. I find it difficult to follow sound logical advices generously given by seasoned traders here & elsewhere, and instead would open up a trade position based on “instinct”. Yes, I am afraid my gambler’s instinct is very much in charge.

    I will have to travel the same road so many seasoned traders did before me and have to discover for myself if forex is indeed for me.

    But it has been an interesting and enlightening journey into another world which is so much more removed from mine.
     
  10. Ricex

    Ricex Sergeant

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    Your not alone RahmanSL, the vast majority of new traders out there have difficulty with discipline and changing their thought patterns from gambler to trader.

    Discipline in trading is helped by having a strategy with strict rules that you follow no matter what your "instinct" is saying to you. In fact instinct is just your ego in disguise.

    I think it will do this, or I think it will do that, is just guessing and will ultimately fail.

    Take off all your indicators and try to look at your charts structure, and learn how the price moves in certain ways. Identifying what the market is doing is rule N°1, trending or consolidating? only then can you start to look at the probability of something happening..... trading is all about probability, trade only with high probability and your on your way to making this work.
     

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