Trading using Murray Maths and Price Action
what i have personally learnt is that price action is King. I have tried hundreds of indicators, standard ones in MT4, ones posted on FTSD, ones on russian forums, u name it, i have used it.....thru all this, i have found that price action is the best...indicators seem to work but they work only for specific periods and for specific types of markets, they dont always work....so one week, they work very well, u make a lot of money and u start trusting it....so next week, cos of ur trust, u start to overleverage when u take trades and what happens ? the indicators dont work and u lose whatever u earnt and more....
Studying price action is not easy...it takes time, it takes experience to understand how the price moves, when and why...forex is not a get-rich quick scheme.....but when we are ready to spend so many years in our respective work areas (manufacturing, automobile, software etc.) to get some money, its amazing how people tend to get impatient when they enter into forex and they tend to over leverage.
Lesson no. 1 is 'dont ever over-leverage'....u should not risk more than 3% of ur account in any trade...ever....if u do, u are bound to lose in the long run...u could win in a week or mnth but u will lose in the long run....thats for sure....
reason why people over leverage is cos of greed....lesson no. 2 is to control greed....but its a contradictory thing....lets face it...most of us trade cos we are greedy...we are not happy with the money that we are earning and we want more...thats why we move to trading...but, the trade experts say that we should not be greedy....how can u avoid something which was the very reason that u entered into forex in the first place?? its tough....its really really tough....it took me about 3-4 yrs to control greed....
but just remember this, do u realise that by earning just 50 pips a day using a $1000 account using 3% leverage, u could be making $1000 a mnth after just 5 mnths? and $2000 a mnth after just 7 mnths?? $2000 a mnth is more than enough for a lot of us...and i could go on and on on how we could keep building this amount....
what i have said is not impossible...anyone could afford $1000....3% leverage is a standard leverage...and 50 pips a day is very much possible if u know what u r doing....so, all that i have said above is possible for all of us....but it keeps a lot of self control...
u could make 50 pips a day just by trading for 2 hrs a day during the euro or the US session.....but being patient and waiting for the right trade is the key...thats where everyone loses....
use price action and support & resistance....i hope everyone understands what support and resistance is and what they do...if not, let me know and i can explain...attached is a chart of GJ in 1H timeframe....see how the price reacts to the S & R.....i use just this...thats all....rest of it is purely down to understanding the market, what it does, when and just getting a feel of how price will move....
edit - a very important thing to understand abt S & R.....S & R are not price points where price will reverse...in other words, S & R gives u a small range of prices where price could reverse....say, if support is 100, it is not that price could reverse from exactly 100 and so if price reaches 99.5, it is not assumed that the support is broken....if we say that the support is 100, price could reverse from anywhere between 99 to 101.....so, u need to watch price action and ensure that the price stays below support or above resistance for atleast 15 mins before u could safely assume that it is broken...a lot of traders see a price spike beyond S & R and immediately enter into a trade assuming that the S or R is broken only to see the price going back within a couple of minutes...
Hi, Karthik. Thanks for starting this thread. Maybe you should rename the thread to PRICE ACTION IS KING to capture the attention of possible readers.
You have so aptly put it - Price Action is KING. I have also discovered that though indicators are helpful but bcos they are based on historical data, they are somewhat slow to reflect IMMEDIATELY any changes in the trading sentiment, whereas the Price Action that is going on NOW reflects current situation.
To be able to read the price direction correctly is not easy (otherwise all of us traders will become millionaires), it takes time and effort and mistakes to acquire the skill over time (prob a few years).
It will be interesting to see how you the price direction that causes you to place an order - whether to buy/sell, and what technical aids you use to come to that conclusion.
Thanks for sharing with us your experience and the hard lessons you have learned - they are indeed helpful to all traders.
Hi, Karthik. Thanks for starting this thread. Maybe you should rename the thread to PRICE ACTION IS KING to capture the attention of possible readers.
You have so aptly put it - Price Action is KING. I have also discovered that though indicators are helpful but bcos they are based on historical data, they are somewhat slow to reflect IMMEDIATELY any changes in the trading sentiment, whereas the Price Action that is going on NOW reflects current situation.
To be able to read the price direction correctly is not easy (otherwise all of us traders will become millionaires), it takes time and effort and mistakes to acquire the skill over time (prob a few years).
It will be interesting to see how you the price direction that causes you to place an order - whether to buy/sell, and what technical aids you use to come to that conclusion.
Thanks for sharing with us your experience and the hard lessons you have learned - they are indeed helpful to all traders.thanks Kenneth....as u rightly pointed out, price action is a very tough thing to master...but it is the only stuff that always works, in all pairs and in all TFs.....
What are supports and resistances
Supports and resistances are points in the price of an entity (it can be a share or a currency pair or a commodity or any other entity) where the prices stall. They have got more to do with history and user sentiment. Lets say that the price of the entity is 5 to begin with. It begins to rise and it keeps rising and seeing this price, more and more people would want to jump in and they keep buying and the price rises even more. This means that the demand is more than the supply and as long as this happens, the price will rise.
The price will continue to rise until a stage is reached where people start to feel that the price has become high enough or those who bought it early feel that they have earned enough profit. Lets say that at this point, the price of the entity is 10. So, people start feeling that the price has risen too much (this is also called overbought conditions) and slowly start selling. The demand becomes less than or equal to the supply and the price slowly drops from 10. As the price continues to drop, the people who plan to make money on shorts also jump in and the buyers (even though they might have very less profits or are in loss) start getting panicky and they start selling and the price starts falling more and also at a faster rate.
So the price continues to drop from 10 and thus 10 becomes resistance as the price has not breached 10. Next time the price comes close to 10, the buyers and the sellers will look at past history and find that 10 was the place where selling started the previous time and so the buyers would want to get out at that point just to be on the safer side and so 10 becomes a even bigger resistance.
The price drop from 10 continues and at one place, the opposite to the one explained above happens ie. the users feel that the price has dropped too much (say at 2) and they start buying again and the price starts to rise again. Thus 2 becomes the support.
Remember, the greater the amount of time that a support or resistance has not been broken, the stronger it is. Even yesterdays high and low are resistance and support respectively but they are not very strong as they are quite recent prices.
So, always watch out for supports and resistances. The big banks and traders dont sit with their ema or whatever indicators and buy and sell based on that. They look out for stops and resistances and buy / sell based on that. So be careful, watch out for opportunities and get a feel of the market before jumping in.
here is the indicator...
thanks for sharing man...could be usefull
Money Management
The concept of stop loss and money management cannot be stressed enough. It is very easy to makemoney in the forex market. How much you make and in what time depends on how good you are. Let meexplain how easy it can be. Any sane person can find the long term trend in a currency. Just open the daily chart and find in which way the chart is moving. If it moves up from left to right, then the trend is up. If it moves down from left to right, the trend is down. Simple. You dont need to know rocket science to find this.
Next, you need to have enough money and you need to buy lots in the direction of the trend. Assume that you have $5000 in your mini-account and you buy 1 lot which would cost you, say $50. This means that you still have $4950 for handling the situation when the buy goes against you. Assuming that you buy EURUSD, the price has to move 4950 pips for you to burn up your account and be out of the trade. And what is the chance that the price would move 4950 pips against you if you had bought it in the direction of the trend? One in a million maybe. The price may go 300-400 pips against you but it will always come back if you had bought the pair in the direction of the trend. So making money in forex is as simple as picking the direction of the trend and having enough money to sustain your losses.
As said before, how much money you make and how soon the price, after it moves against you, comes back depends on what juncture you picked up your lot. It may come back in a few hours or days or months but it will surely come back. If you had picked it up at the right point and in the right direction, it will come back sooner. If you did not pick the right moment, it will still come back but it will be later. This is why you need to know the supports and resistances and the direction of the trend. If the trend is up and you go long at a support, even if the price breaks through the support and drops, it will surely come back. You need to wait patiently.
So always have enough money in your acccount and choose the time you get in, carefully. Lots of time is still left and the market is always going to be there. So dont hurry and dont blow up your account. There have been instances when many users open a $250 mini account and buy 1 lot in the wrong direction and blow up the account in a few days time. They keep doing this 4-5 times before they start realising this. Whereas, if they had spent time to accumulate that money (4 times $250 is $1000), they could have invested $1000 in the account and chosen the right moment to get in and thus made money. $1000 gives you a much better chance of survival than having $250 in your account.
So keep it simple. Choose the direction, choose the time and go for it and make money!!
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Hi All,
I am Karthik from India. I have been trading forex for the past 4-5 years (never realised that i was trading for so long until i checked my records today !!). Anyway, as the title suggests, i trade mainly using Murray Maths and Price Action. Before i go any further, a little history about my forex career.
As stated, i started out about 4-5 yrs back. I have lost a lot of money and i have also gained a lot of money. But most importantly for me, i have learnt a lot during the journey. As my experience grew, i also started managing accounts. I blew up some of these accounts (along with mine) initially, due to various reasons, which included the fact that i was new to managing accounts at that point of time and also due to the investors themselves who wanted me to over leverage inspite of me repeatedly warning them about the risks involved.
Anyway, as stated, i grew up and learnt a lot and now i am a fund manager with a company in Slovenia (i dont want to reveal any names as it is against the rules). I read a lot and have been a regular visitor at FTSD for the past 3-4 years though a silent one, so far.
I have started my own share of threads in FTSD (esp. a couple of years back) and also ran a very successful forex blog (which had 150-200 regular visitors per day) but i had to give them up as i did not have time. So, i guess some of you in here might remember me.
I am not a full time fund manager or forex trader (yet) and i have other businesses to take care. I can see that most guys in FTSD are part time traders only....So i guess, i can understand your problems with forex better.
Anyway, i wish to use this thread to share some of the lessons i have learnt so that i can fast track some of you guys and also help some of you avoid the pitfalls that i faced. I will not only try and share what i learnt, i will also post charts, reveal how i trade and also take some trades in this thread along with you guys. Let us see how this journey goes.
As i said, i am not one who sits on the screen 16 hrs a day watching the market and so i would be a bit off and on. Excuse me for that.
So lets get started. I welcome all of you to post whatever u feel like and also can ask me any questions that u want. I will answer as many as i can.