To the pros in the audience: Please rate my n00b strategy.

[Michael "Grimweird" Tan]

Thanks for taking the trouble to read this. I appreciate your kind attention

I'm a Forex newbie and I'd like to get some feedback as to my current trading strategy/method, I have no knowledge of the technical jargon commonly used in the industry, so I have to resort to lay terms, sorry.

In the simplest terms, I trade according to "Time" and "News".

Basically:

I keep an eye on when New Zealand, Japan, Australia, Hong Kong, The Middle East, Germany, the UK and the US opens for the trading day. From what I have observed, 1.5-2 hours before each region opens the charts show movement and these moves may change direction based on prevailing trends, current events and expected announcements in relation to the pair of the currency I'm trading. As an example EURO/USD in anticipation of and in response to the recent FOMC announcements.

I try to avoid trading and close positions approx 30mins before and 15-30 mins after the actual announcement or event or regional market opening as I often can only guess which direction the spike is going to "stab". Oftentimes it may be the opposite direction many trading "experts" predict. So instead of taking the risk and the resultant massive profits/losses I think it may be better for the n00b to wait and see. Frequently I find I can still make modest profits but at a much reduced risk.

I also make sure I have my "Trading Twitter Account" on and following Reuters World News, WSJ, The Economist and CNN in case of any market shaking "Breaking News". Using this, I have managed to both minimize losses and make at least small profits whenever these events occur.

I also make sure I get updates from knowledgeable folks like our resident Sive, Andy and Jarrat and thoroughly read through their daily write-ups and predictions as well as those of others every day before deciding on which one or at most two currency pair(s) to pay special attention to.

I have very little understanding on the various tools available for "technical analysis" and I know next to nothing about many of the trading "bots" out there, so until I can get a better understanding of these, I'll stick to my own (probably over simplistic) way of reading the charts this would namely be:

1. Look at the chart from the daily, hourly and half hourly perspective.

2. Identify the "highest" and "lowest" peak prices and the "middle" price lines running through the chart.

3. Wait for the price to get either very high or very low in relation to the middle and place my money to go the other direction.

4. This of course is done in conjunction with all the other stuff I mentioned earlier on in the post.

5. I tend to take modest profits ONLY. Once the trade has made about 50-60% profit, I bug out and close. Same if the chart suddenly goes berserk for no reason I can understand.

This approach seems to work for me somehow, although I spend a LOT of time waiting and scrutinizing the charts for all these conditions to be met before opening a position, the effort and time is more often than not justified. I feel that this method is more about minimizing risk than about maximizing profit, but as far as I'm concerned at this point in my life, not losing money is already making a profit in Forex trading

Please provide me with as much feedback as you can spare, it's fine if you want to ridicule and laugh at the n00b But I really need to learn and I need to learn as quickly and as well as I can. So please leave me comments, critiques and suggestions as to how I can improve.

Many thanks in advance guys. A thousand pips to you
Mike.

 

[LoRio]

If you are patient enough to wait for those extreme price points , then you should definetely learn TA.
Fundamentals first , then Technical analysis , and if the technicals are in place , you enter.
Per example , Dollar Yen Uptrend , Fundamental : Up , technical somewhere in the middle of an ascending channel.Wait for the channel bottom to pick up a long.

Dont be discouraged by the small amounts of profits.Look into the percentage return.
if that was a million for instance , how much would you gain with that percentage.

 

[Michael "Grimweird" Tan]

If you are patient enough to wait for those extreme price points , then you should definetely learn TA.
Fundamentals first , then Technical analysis , and if the technicals are in place , you enter.
Per example , Dollar Yen Uptrend , Fundamental : Up , technical somewhere in the middle of an ascending channel.Wait for the channel bottom to pick up a long.

Dont be discouraged by the small amounts of profits.Look into the percentage return.
if that was a million for instance , how much would you gain with that percentage.

Got it. So in your opinion the theory is more or less sound. It's just that it might take a very long time and much patience to make a profit correct? I have tested this in demo and my 2 month stint on Binary Options many times and been profitable approx 60-70% of the time despite a poor grasp of TA and total ignorance of the ancillary tools, calculators and bots many people swear by. It just takes an awful long time, sometimes I only make 1-2 serious trades for the whole day.

My main reason for failure was greed. I could double and sometimes triple my capital ($500 when I started out) over a week and then start making massive $100-300 trades (that's 20-60% of my funds LOL!!!) in the hopes of huge profits and wind up with crippling losses instead. Sometimes the entire account would be blown in a single night. Lesson learned though. As I said, I'm gonna bug out as soon as a pre-planned modest profit is made. No more holding on hoping for 100+% profits.

Tell you what Lorentzo. Could you do me a huge favour and try my method on your live account (I assume you have one)? Please understand that I'm not asking you to be my guinea pig or anything, just try it with the most minimum trade your broker allows and tell me whether it works for you. If it does, tell me and of course if you like it, then you have another option for your trading strategy. If it doesn't well, sorry man. At least you know it won't work for you.

As you know, I'm in a really bad place financially right now and I'd really like to cover all the bases committing any money whatsoever.

Thanks again man. You've been a really big help.
Mike.

 

[LoRio]

Got it. So in your opinion the theory is more or less sound. It's just that it might take a very long time and much patience to make a profit correct? I have tested this in demo and my 2 month stint on Binary Options many times and been profitable approx 60-70% of the time despite a poor grasp of TA and total ignorance of the ancillary tools, calculators and bots many people swear by. It just takes an awful long time, sometimes I only make 1-2 serious trades for the whole day.

My main reason for failure was greed. I could double and sometimes triple my capital ($500 when I started out) over a week and then start making massive $100-300 trades (that's 20-60% of my funds LOL!!!) in the hopes of huge profits and wind up with crippling losses instead. Sometimes the entire account would be blown in a single night. Lesson learned though. As I said, I'm gonna bug out as soon as a pre-planned modest profit is made. No more holding on hoping for 100+% profits.

Tell you what Lorentzo. Could you do me a huge favour and try my method on your live account (I assume you have one)? Please understand that I'm not asking you to be my guinea pig or anything, just try it with the most minimum trade your broker allows and tell me whether it works for you. If it does, tell me and of course if you like it, then you have another option for your trading strategy. If it doesn't well, sorry man. At least you know it won't work for you.

As you know, I'm in a really bad place financially right now and I'd really like to cover all the bases committing any money whatsoever.

Thanks again man. You've been a really big help.
Mike.

No.
First of all , its more of an approach , say we get a trading system , if i trade it , it could work , if you did , it could go to waste.And vice versa offcourse.
You wont be able to gauge anything out of it.
You can sign up for a no deposit bonus live account and test it there .
I suggest OctaFx , you will get the NDB instantly and the spread is tiny.

 

[Michael "Grimweird" Tan]

No.
First of all , its more of an approach , say we get a trading system , if i trade it , it could work , if you did , it could go to waste.And vice versa offcourse.
You wont be able to gauge anything out of it.
You can sign up for a no deposit bonus live account and test it there .
I suggest OctaFx , you will get the NDB instantly and the spread is tiny.

Well, I guess I can understand that. Thanks anyway though.

Err... How is it that brokers actually allow you to trade with real money which ISN'T yours? There's gotta be an angle man

Are you sure this is legit? Don't wanna cause myself grief later on.

 

[forexdiscounts]

You are really spending very much time in trying to develop a system.

What efforts are you doing in learing from pros?

There is so much FREE stuff on the net for you.
Did you go through the FPA's Forex Military School?
Forex Military School | Complete Forex Education by a Pro Banker - Forex Peace Army Forum

 

[Rambo35]

Well, I guess I can understand that. Thanks anyway though.

Err... How is it that brokers actually allow you to trade with real money which ISN'T yours? There's gotta be an angle man

Are you sure this is legit? Don't wanna cause myself grief later on.

Just know that nothing is free and while there are those no deposit bonuses where a broker gives you a few bucks, that is only to check out the platform which in most cases is MT4. I recommend trading your own money, forget any bonuses (and if you want them make sure you read the terms and conditions, most scream scam when they can't withdraw their earnings but often it is because they took a bonus and did not understand the rules).

 

[Michael "Grimweird" Tan]

You are really spending very much time in trying to develop a system.

What efforts are you doing in learing from pros?

There is so much FREE stuff on the net for you.
Did you go through the FPA's Forex Military School?
Forex Military School | Complete Forex Education by a Pro Banker - Forex Peace Army Forum

Yup. That's the first thing I did (and am still doing) There's an AWFUL lot of material though I understand the gist of what Sive's saying and a lot of it seems to be similar to what I was proposing in my "system" as I like to call it. I find the technical analysis stuff most difficult to understand though. Sorry man, but I'm gonna need more time to go through all 40 chapters of it.

 

[Michael "Grimweird" Tan]

Just know that nothing is free and while there are those no deposit bonuses where a broker gives you a few bucks, that is only to check out the platform which in most cases is MT4. I recommend trading your own money, forget any bonuses (and if you want them make sure you read the terms and conditions, most scream scam when they can't withdraw their earnings but often it is because they took a bonus and did not understand the rules).

Yeah man. I know. I've read a lot of wrong scam claims where it was actually the complainants own lack of understanding of the TOS and agreements. If I understand correctly, many if these bonuses can only be withdrawn after a trader hits a certain number of trade volume (usually many,many times the value of the bonus) or the "bonus" is actually only used as "collateral" when trades go bad right?

I think LoRio's OctaFX thing looks more or less legit though, I'm kinda waiting for him to confirm this if he knows anything more about it... Thanks man

 

[LoRio]

Yeah man. I know. I've read a lot of wrong scam claims where it was actually the complainants own lack of understanding of the TOS and agreements. If I understand correctly, many if these bonuses can only be withdrawn after a trader hits a certain number of trade volume (usually many,many times the value of the bonus) or the "bonus" is actually only used as "collateral" when trades go bad right?

I think LoRio's OctaFX thing looks more or less legit though, I'm kinda waiting for him to confirm this if he knows anything more about it... Thanks man

You wont approach the bonus as withdrawable .You will test your strategy.
The bonus terms are these : you make 2 lots worth of trades , and you verify your account.
This account should release you from the "waste my capital" fear and allow you to test your approach
in an absolute manner.