Daytrader Wants To Know

Greetings from South Africa!
This is a great forum and i like to read it every day .I am still new and learning more day by day.By day.I am a forex day trader newbie, i have been trading on a demo for a month and will continue to do so for at least a couple more months until i can get the hang of it.Initially my thoughts were that it is simple and a quick way to make cash but of course as you all know this is not the case.I am fortunate enough to have a mentor who has a trading strategy plan that works perfectly for him though would like to gain more knowledge in this field and would like it if perhaps a senior member or established day trader could review my strategy and comment.Thus far i have only been using the macd and rsi indicators for signals and would like to learn more.
Thank you for taking the time to read this and i hope to hear from you.
yours in forex
redheart :cheesy:

redheart said:

.... and would like it if perhaps a senior member or established day trader could review my strategy and comment.Thus far i have only been using the macd and rsi indicators for signals and would like to learn more.......

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Welcome redheart. If you will post the details of your strategy (perhaps with some chart examples), I am sure that someone will comment.

JO

Thanks for the advice , i am actually just a beginner with an overall strategy or call it a trade plan.Well its actually just a way for me to trade.I just want to know if i can add anything.well here is my plan please look at it and tell me if i am right.
first i do daily and hourly channeling.
2 establish the daily trend bullish/bearish
3 study previous day resis/supp levels
4 do daily pivot report
5 identify entry/exit points
6 wait for confirmation
7 place market orders
8 if market is neutral or semi bear/bull short at two resistance levels 15 apart
and long at two supp levels 15 apart
9 place stop losses in case of volatile market
10 watch movements during day
11 after 30 pip target reached close trade for the day
12 close all orders & positions not executed by 20h00
what do you think? anything more helpfull i can do?
thanking you
redheart

where are your stops set?

30 pt targets sound a bit close, but since it looks as though you aim to go counter-trend, then they may be ok.. if you were trend following, you should have wider targets, if at all.

how do you define point 8) ?

also, for point 12) you may be better off cancelling all orders at about 6pm GMT/BST as the forex market tends to die in the evenings..

hope this helps.

FC

Thank you for the reply FETTEREDCHINOS ,for a moment there i thought i was being ignored.
Yes stops are a tricky one i normally place them 15pts away from entry price and then move them into the trade to "lock" profits.yes i do trade against and with the trade but i will use wider targets for the following trend trades.
your advice on closing is also quite spot-on and i appreciate it.
thanks for your help buddy
yours in forex.

With regards to point eight....i use the "daily pivot formulae" to calc the rsi 1/2 supp 1/2 levels ,obviously only helpfull in less volatile markets-i dont even know if this system is applied to forex??!!!can you tell me?Based on that res/supp i will place market orders , two to sell(at resistance levels 15pts apart-in case one order fails)and the the same applies to support levels?I am bad at explaining things , tell me if i am unclear...Is there anything else i can do?more advice will be appreciated...

hmm i see where you are coming from.. but in my experience, traditional pivot points rarely work better than average on futures, id be surprised if they were any good.

it is all about the exit.. entry is secondary to trading..

fc

Hi redheart,

my advice, in case you haven't considered this already, would be to consider what your money management objectives were too.

E.g. what will be my account size?
what size trades will i place?
if i have a run of 'x' number of losing trades, will i lose my account balance?

i found a tremendous improvement in my own results when i analysed my system and found what my average stop-loss size was, average no. of wins/losses, etc. it's a gruelling job but has been more than worth the effort.

when you say things like:

redheart said:

9 place stop losses in case of volatile market

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in case??? if there was a spike in volatility and the markets moved against you, it'd be too late.

just my two cents.

good luck.

Thank you once again for the input , i appreciate it. FC i saw that again today that pivot systems, are'nt really working i suppose in another market perhaps.
Longandwrong you are also right i actually had that case today, in the eur/usd there was a nice spike against me.Thank goodness i am using a demo....I am still not very bright and hope to be one day.I am considering a mini acc. for starters in a couple months or so and then slowly build myself up.so it will be a very tight trading style and i realise that without a stop(like today) fxcm would have closed my account and asked me never to try trading again...
Can you explain in more detail how to work out my stop loss level?
and also how do i identify the day's trend...I mean this morning it seemed as if the eur/usd would rise and now it's not?!?
thanking all you guys.
redheart