Hi all,
I have a thought about a trading plan. It's not a "system" per say, it's just a way of reacting to the market. I'm a beginner in trading, I have only been trading for about 3 months on demo accounts, and I'm really not very keen on getting flamed, so if you don't have a constructive reply on your mind then please save yourself the effort of typing one.
When I started trading I relied heavily on technical indicators, and of course, as most of the new traders do, I was looking for that 'perfect' indicator or the best combination..etc.
Also I had a daily goal of 10-20 pips, so according to what I knew back then I had to trade on daily basis and maybe multiple times a day.
Just recently I've changed my thinking a bit. My current method depends on just "reading the charts". I keep watching my charts till I find a really good setup. What I mean by this is that I start plotting support and resistance lines and trend lines, then I wait for a pattern to form. In addition to this I have a 12ema and 20-sma bollinger bands on my charts
but I only return to them for confirmation (position of 12 ema relative to that of the 20 sma of the bollinger bands, and postion of candles with respect to the band lines).
When I find that good setup, I put my order, almost all my orders are pending/limit orders, so that I could react to the different possibilities, and of course I trail my stops (I start with a 50-70 pips target, 20-30 stop loss and 15 pips trailing stop).
one last thing is the amount of money I risk. My positions are leveraged such that 1 pip = 0.5% of what I have, I know a lot will say this is a crazy risk, but considering the risk-reward ratio, every 3 - 4 consecutive losses could be compensated by just 1 good trade. One could even remove the take profit and depend on the trailing stop alone which could sometimes make bigger profits.
2 days ago I started trying this method on a demo that I got down to 145$ from 5000$ 2 months ago, just to see what I can do with it. and I'm now up to 220$. I know this isn't a result to rely on, and I'm not asking for feedback on that result. I just want to discuss this plan with you, what pitfalls do you see there and what improvements could be done to it.
EDIT : Forgot to mention a word about my goals. I realized how crazy it's to look for 10-20 pips everyday, so I have changed this to "averaging" 10-20 pips/day which means that I need to be up 70 pips/week (on average) or about 280-300 pips/month. It may not appear as an ambitious goal, but considering the price of 1 pip I believe that's fairly enough for me.
Sorry for the long post.
MT.
I have a thought about a trading plan. It's not a "system" per say, it's just a way of reacting to the market. I'm a beginner in trading, I have only been trading for about 3 months on demo accounts, and I'm really not very keen on getting flamed, so if you don't have a constructive reply on your mind then please save yourself the effort of typing one.
When I started trading I relied heavily on technical indicators, and of course, as most of the new traders do, I was looking for that 'perfect' indicator or the best combination..etc.
Also I had a daily goal of 10-20 pips, so according to what I knew back then I had to trade on daily basis and maybe multiple times a day.
Just recently I've changed my thinking a bit. My current method depends on just "reading the charts". I keep watching my charts till I find a really good setup. What I mean by this is that I start plotting support and resistance lines and trend lines, then I wait for a pattern to form. In addition to this I have a 12ema and 20-sma bollinger bands on my charts
but I only return to them for confirmation (position of 12 ema relative to that of the 20 sma of the bollinger bands, and postion of candles with respect to the band lines).
When I find that good setup, I put my order, almost all my orders are pending/limit orders, so that I could react to the different possibilities, and of course I trail my stops (I start with a 50-70 pips target, 20-30 stop loss and 15 pips trailing stop).
one last thing is the amount of money I risk. My positions are leveraged such that 1 pip = 0.5% of what I have, I know a lot will say this is a crazy risk, but considering the risk-reward ratio, every 3 - 4 consecutive losses could be compensated by just 1 good trade. One could even remove the take profit and depend on the trailing stop alone which could sometimes make bigger profits.
2 days ago I started trying this method on a demo that I got down to 145$ from 5000$ 2 months ago, just to see what I can do with it. and I'm now up to 220$. I know this isn't a result to rely on, and I'm not asking for feedback on that result. I just want to discuss this plan with you, what pitfalls do you see there and what improvements could be done to it.
EDIT : Forgot to mention a word about my goals. I realized how crazy it's to look for 10-20 pips everyday, so I have changed this to "averaging" 10-20 pips/day which means that I need to be up 70 pips/week (on average) or about 280-300 pips/month. It may not appear as an ambitious goal, but considering the price of 1 pip I believe that's fairly enough for me.
Sorry for the long post.
MT.