How do i start trading in foreign currency and how do i make money of it - page 2
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Then why isn´t more of the 100´s of experts (if any) coded by myself, others on the forum, and probably by yourself profitable? No emotions in automatic trading strategies...
There are over 1000's or strategies just like there are EA's. Selecting 1 of the 1000's strategies in Forex and thinking you're going to generate stable and significant income is what breaks most traders Psychologically. At any given time or time-frame, 1 strategy can be the holy-grail or the piece of trash. I agree 100% with johanmalan because that's where I''m at right now. It's difficult to program an EA with all the Nuances of a human mind which tries to filter out 1000+ strategies. Sometimes you need to know the answer to why my Indicator hit Over-bought but the market keep trending up_ward. If you're trading an EA which sells at Over-bought, it's gonna do that every-time and not learn form the market lesson that Greece is in financial trouble....Well unless you can program that in as well :) All in my Humble Opinions.
There are over 1000's or strategies just like there are EA's. Selecting 1 of the 1000's strategies in Forex and thinking you're going to generate stable and significant income is what breaks most traders Psychologically. At any given time or time-frame, 1 strategy can be the holy-grail or the piece of trash. I agree 100% with johanmalan because that's where I''m at right now. It's difficult to program an EA with all the Nuances of a human mind which tries to filter out 1000+ strategies. Sometimes you need to know the answer to why my Indicator hit Over-bought but the market keep trending up_ward. If you're trading an EA which sells at Over-bought, it's gonna do that every-time and not learn form the market lesson that Greece is in financial trouble....Well unless you can program that in as well :) All in my Humble Opinions.
As usual, absolutely true.
Perhaps semi-automatic trading/filtering is the way to go...
Hi Im new to foreign trading how do i get started and how do I make money
My route, and you are not going to like it...
3 years fondation degree: Economics and finance / 2 years Statistical math graduate / 1 year Chartered Market Technician CMT (MTA) / 3 years Chartered financial Analyst (CFA, although this is not required for self trading). 6 years professional experience as a hedge fund manager with a leading "firm", Canary Wharf London.
Also on going study of other related subjects such as why I am here, Coding MTL4. The list is quite frankly endless.
Now the good bit...
Day trading is very simple. You can cut this down to the first paper of the CMT more or less. Day trading can be viewed as unrelated to the actual directional market in its minor trend for a number of reasons.
1. Minor trend: anything thats not more then a few days can be manipulated. Lets say by central banks for example
2. News events and the reaction around news events may produce signals controvining the perceived outcome forecast. Large orders or prime price finding often wharp minor trend markets. The myth 90% of participants are wrong is only a half truth used by popular retail brokers, the full truth is the larger trader on news reaction often waits for prime price or market movers target price levels for liquidity purposes, its not always everyone getting it wrong.
3. Decisional positions of large traders are not normally based on Minute 15 charts or even 4 hourly charts. The most popular TA chart is still the Daily chart and often up.
This makes day trading fairly simple if applied with sound capital management, the simple way
1. Find a minor trend and play it until it changes direction, its that simple. Deploy an SL and a Limit and Bob is your uncle. Regressional analysis is a good option, locate an average and its diviations using a regressional channel tool, stick a MA on and note its relationship to the regressional average (50EMA is good for small timeframes), always think averages, the price will come back to the average thats why its the average!
2. Try not to concern yourself with news events other then their timing's, content to a day trader is not a concern, the price action is the concern, they will controdict each other all to often (see above).
3. apply the simple tennants of Dow thoery, a the higher highs and higher lows is good for long trader lower lows and low highs are good for short trades, anything else means change is likely, the market changes direction in only two ways: Failure swing and Non-Failure swing, learn these two, anything else under any fancy name is merely a combination of these two. Coulpe to the two averages above, simple, they separate regressional lower supports are tested time to conclued the near term day trade long.
A bit of a wall of text, simple fact is that indicators lag and should confirm a trading decision as it develops. They are not a source of entry, price action or market action if adding volume and open interest into the mix is.
In this post I'm attempting to cut away the endless bullshit I see every day on the Internet and give you a simple core building blocks learning path. I responded to the fact that you are asking this question on a MTL4 forum, which alarmed me as this is automated and indicator based trading, this should be at the end of your list, how can you build a useful EA, IND or Script without building block understanding?
This way my friend it is extremely simple to make money as you asked. Dow/Trend/Averages ta-dar
Final note I'm adding, traders are only emotional for two reasons: Fear and Greed
1. Fear is simple to understand, they have put to much risk on the board, bad capital management. Keep open risk to comfortable minimums, see notes above a move that you missed will very likely be there in even in a few hours. Asia, Uk and US are in competition, The USA will not like the London market getting all the pies. It wil come back at some point.
2. Greed, over extention of a trade is all to common, see above, trade the bugger twice or even three times, day retail traders should take profits at conclusion of the primary move or hedge it off/cover and re-enter the same trade again and again. Markets move in zig-zags see Dow theory. Someone famous dude said something like "be fearful when all are greedy and greedy when all are fearful" extremely sound advice.
My route, and you are not going to like it...
[...]Nice post. Welcome.
V
Thank you. Obviously my training has not included spelling :)
Didn´t notice,
Thanks for great value post!
As usual, absolutely true.
Perhaps semi-automatic trading/filtering is the way to go...
Absolute, I feel most EA loses outside of being damn right poorly constructed are due to the operator not understanding when to turn the bloody thing off or on. Having an EA designed to trend follow is going to get extremely confused and unprofitable in a ranging line market, obviously. Like almost everything in our world to make gains one needs to actually work at it.
I have never seen, even on the top floor of the tower, any Robot/EA/automatic magic machine you turn on and forget. If JP Morgan, Goldman-Sachs or Barclays still employ Traders, I'm guessing there is a very good reason for it, would you agree?
If JP Morgan, Goldman-Sachs or Barclays still employ Traders, I'm guessing there is a very good reason for it, would you agree?
I would most definately agree =)
I (and most definately others) have tried to make various filters to detect market conditions in an attempt to avoid inappropriate market conditions for different ea´s trading-style.
Unfortunately also this type of market condition filtering has its huge limitations, much of it probably because of what were recently mentioned in another thread, lagging indicators.
Once price has started to trend again (or entering ranging conditions from vice versa) it is often too late to get in.
Instead it more often than not seems (even though it is probably just an illusion, or simply murphy's law) as if everyone detects this new market condition at the same time resulting in a price reversal or spike just enough to reach the obvious stoploss-levels before continuing the new market state.
You as an highly qualified market participant, would you say that these intraday price movements could be based upon such behaviour to a great extent?
I mean could there be a negative effect created by technical indicators exploited by bigger players on a regular basis?
Of course I already know and have heard about Stoploss-hunting, but do you think it has a major role in intraday trading?
/ McKeen
This topic finally got interesting.....
Rob, I am intersted in the linear regression analysis you mentioned...could you further explain that? I am not to known to linear regression slopes because in MetaTrader it is just not the most comfortable tool to use...
Would be nice if you expanded on that a little.
Thanks
EP