Is HSM's Forex group very low populated or what! I have been trading/studying forex through demo account and I think I may have finally found my cup of tea. I was never great at picking stocks and I am also not much of a fundamental guy. What I have found works fine for me was the use of TA. But in the equity market, price never behaves the way they set themselves up most of the time. On top of that, if I find myself right in my analysis, I'm wrong on the timing.
Enter the forex market. I have watched price move a lot and applying my own TA to them. I find that they behave exactly the way they set themselves up to be most of the time! (more often than the equity market anyway) Same goes for the futures market. I chose to test out forex just because of its 24hr market which allows me to still be in the market when I am out of work and school. Nevertheless, futures is something I plan on looking into in the future as well (again because I like the way price behaves on it) but for now I will be trading forex. I have learned a lot browsing around online and feel ready to finally compile all my thoughts and actions into one place.
Anyway, I opened a demo account on MetaTrader4 and plan on trading with the demo account for the next few months. If and when I profit consistently for at least four months, I will fund a real account and trade with it. Until then, demo! I set my account to $5,000 and 10:1 leverage (the amount I will fund my account with). Leverage is double-edge and 10:1 is the max I plan on funding. With that amount of leverage I can trade 10,000 lots at $1/pip maximum. I'll get into money management later.
My trading method will rely only on price actions coupled with support/resistance (MA's, trendline, fib). That's it. I am trying to keep it as simple as possible. In other words, I will be trading mainly off candlestick's formation:
- Hammer/Hanging Man/Shooting Star/Inverted Hammer (aka Pins)
- Bullish and Bearish Engulfing (Outside Bars)
- Double Low Higher Close/Double High Lower Close (DBLHC/DBHLC)
- Haramis (Inside Bars)
That's it! My plan is to look for them at possible swing highs and lows. That's step #1.
Step 2 is to look for support and resistance at the region where the price action has presented itself. It can be from trendlines, fibonaccis, moving averages, and previous S/A. The longer time frame, the better. In addition, if price action occurs where there are confluences from any of those S/R...even better! The objective is to look for price action at S/R area with confluences.
Easy two steps system. I like to keep things simple because I find that if I am ever presented with more information my mind goes crazy. There will not be any indicators used. Sometimes I like to bring it up to check for divergences at swing highs or lows to add to what I already have. I won't trade just solely based on divergences (got burnt enough times with it).
I will risk no more than 2% of my account on any of the trades. That means if I entered with a 10,000 lot my maximum loss can only be 100pips.
I will also try to keep most of my trade in the daily/weekly time frame and pick an entry in the intraday chart (H4/H1/M15). I will throw in some day trades from time to time if I spot a trade I like but I am going to stick to daily charts most of the time.
Let's get started then!
I will start this thread showing my first trade made in my MT4 demo account:
I picked my entry off the H4 chart in this one. The underlying reason to go long was bullish outer bars forming on the daily chart.
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