This is the post that I've been wanting to write for a few weeks but haven't because I can't (and still can't) quite figure out the best way to phrase it. What I would like to ask is this:
Does forex trading really have to be complex?
Please note, I'm not saying does it have to be hard or challenging or anything else that implies having to think, but does it have to involve multiple timeframes and indicators based on some currencies but not others during certain days of the week or times of the day, etc, etc, etc?
Here's where I'm coming from: I've been trading US stocks and stock options for almost exactly 10 years. In that time, I looked at every system I could. There are some very very easy systems and some overly difficult complex systems. In my 10 years of trading I've learned that, for the most part, easy mechanical systems are the best. In stocks, we call them "screens" and they are amazing (I know a few 5 stock monthly screens that have been back-tested to '89 or longer that average 35% a year (ouch! I typed "month" in my original post! sorry!) with no losing years (my favorite of the bunch returned 144% from 2000-2002 when the S&P lost almost 37%). Anyone buying LEAPs on some of the better annual stock screens can even double those returns.
But I'm here at FF because I think I can get even better gains than with stocks and options. Or at least that's what all the late-night informercials tell me! But seriously, I'm excited about the world of forex but its so overwhelming because every system seems so complex. Is there some really really really simple system that can be used as a base? One that lets you make small gains (or causes small losses) while you learn about the more complex stuff that you can then use to build upon? After all, I started trading covered calls without knowing anything about the greeks. It was only after I started selling naked puts and setting up straddles that I (sorta) needed to know the advanced stuff about options.
Maybe there's some simple (maybe trend) system that traders don't use or talk about because they're simply not content averaging daily profits of half of 1% of their account equity? But I am, at least while I learn. And in case it matters, I love the idea of trend trading (aka momentum trading in the stock market - I have no use for the fundamentals).
If you have any thoughts on this at all, as I think there may be lots of other beginners with these questions, please post. I honestly appreciate it. Seriously.
TrunkMusic6
Does forex trading really have to be complex?
Please note, I'm not saying does it have to be hard or challenging or anything else that implies having to think, but does it have to involve multiple timeframes and indicators based on some currencies but not others during certain days of the week or times of the day, etc, etc, etc?
Here's where I'm coming from: I've been trading US stocks and stock options for almost exactly 10 years. In that time, I looked at every system I could. There are some very very easy systems and some overly difficult complex systems. In my 10 years of trading I've learned that, for the most part, easy mechanical systems are the best. In stocks, we call them "screens" and they are amazing (I know a few 5 stock monthly screens that have been back-tested to '89 or longer that average 35% a year (ouch! I typed "month" in my original post! sorry!) with no losing years (my favorite of the bunch returned 144% from 2000-2002 when the S&P lost almost 37%). Anyone buying LEAPs on some of the better annual stock screens can even double those returns.
But I'm here at FF because I think I can get even better gains than with stocks and options. Or at least that's what all the late-night informercials tell me! But seriously, I'm excited about the world of forex but its so overwhelming because every system seems so complex. Is there some really really really simple system that can be used as a base? One that lets you make small gains (or causes small losses) while you learn about the more complex stuff that you can then use to build upon? After all, I started trading covered calls without knowing anything about the greeks. It was only after I started selling naked puts and setting up straddles that I (sorta) needed to know the advanced stuff about options.
Maybe there's some simple (maybe trend) system that traders don't use or talk about because they're simply not content averaging daily profits of half of 1% of their account equity? But I am, at least while I learn. And in case it matters, I love the idea of trend trading (aka momentum trading in the stock market - I have no use for the fundamentals).
If you have any thoughts on this at all, as I think there may be lots of other beginners with these questions, please post. I honestly appreciate it. Seriously.
TrunkMusic6