How to make money trading the FX market

This is a discussion on How to make money trading the FX market within the Forex forums, part of the Markets category; I normally trade US stocks intra-day but occasionally trade FX. I've just come back from a three week holiday and ...

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Old Sep 14, 2015, 8:23pm   #1
 
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How to make money trading the FX market

I normally trade US stocks intra-day but occasionally trade FX.
I've just come back from a three week holiday and very unusually for me position traded cable for a few days from a poolside - the classic and normally mythical dream !
It seemed to me that fundamentally cable was heading south for a while and my falling candles set up occurred so I took a modest short position so I didn't make a huge amount of profit but it was 257 pips.
I didn't take a larger position size as I felt I needed to give it a bit of room and I didn't want to be constantly checking the price and movement - it was a holiday !
The entry point was at the point indicated and the image taken at the time of exit.
I felt it was approaching that earlier support zone and had fallen quite a way over consecutive days so the probability of a reversal was rapidly increasing.
The first image is obviously of the trade, and I took the second one today to show what happened after my exit.
On the "How to make money trading the markets" thread I talk about one of the dozen trading set ups I use every day trading US stocks and this is a slight adaptation of that method. FX is different to stocks as trends tend to be fewer and persist for a much shorter time than with the stocks I like to trade. In other words I don't require a pre-existing strong trend, just a strong move at the time of entry. These moves aren't predictable in advance, I just look at the major pairs and see if anything is actually happening at the time.
I intend adding to this thread if I think something might be of interest or use to people.
There will be plenty of losing trades but they will be smaller than the winning ones as I will be using similar principles to my stock trading, set ups and price action over different time frames. They will also be far fewer in number as I prefer stocks which offer a huge range of trading instruments, not just a handful of FX pairs.
Many of my methods work on FX but not with as high a success rate as with stocks.
Hopefully some people will find the posts helpful.
If the methods are sound, then they can be adapted to some, not all, different trading instruments.
I don't expect there will be many wins of such a large size !
Attached Thumbnails
cable-holiday-trade.png   cable-holiday-trade-what-happened-after-exit.png  
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Last edited by Mr. Charts; Sep 14, 2015 at 8:29pm.
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Old Sep 15, 2015, 12:10am   #2
Joined Jul 2008
Hi Mr Charts. I only trade fx and have a method that uses something similar with volatility being the entry criteria. I should point out that these sorts of moves in smaller time frames are often followed by a reversal. It is okay if you manage the trade correctly for a BE or tiny profit on about half the failed ones. The signal is definitely less likely to fail on the 4 hour and higher. Just thought I'd share my 2 cents on this.
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Old Sep 15, 2015, 12:19am   #3
 
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Mr. Charts started this thread Thanks for the positive contribution. Volatility and range are key considerations, I agree.
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Old Sep 15, 2015, 7:27am   #4
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Good spot. This pair flashed a short signal to me too last week. I was also away on hols, but without comms so this is just one that got away.
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Old Sep 15, 2015, 8:29am   #5
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Thanks both for this discussion, it has sent my mind back to thinking about exits, which is where the real money is made in trading, literally.

GBP/USD is clearly not in an established downtrend so early exits for profit would be appropriate. But long and stable trends do occur in forex - e.g. AUD/CHF etc.. I am going back over my charts to select criteria for with-trend trades in "supertrends", where my usual risk-averse tendency to get out too early should be definitely resisted. Thanks again.
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Old Sep 28, 2015, 5:20pm   #6
 
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Mr. Charts started this thread And another multi day trade in cable +204 pips, just using the one method in my US stocks thread i.e. falling candles.
Exited because of support zone.
Attached Thumbnails
another-multi-day-cable-trade.png  
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Old Sep 28, 2015, 5:25pm   #7
 
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Mr. Charts started this thread Obviously losing trades happen, but position management ensures they are smaller than the winners.
There will also be trades over shorter time frames.
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Old Oct 15, 2015, 1:44pm   #8
 
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Mr. Charts started this thread As mentioned in the last post, here is a short term trade from this morning, a scalp really.
I happened to see a sudden surge in cable and jumped on board the one minute rising candles till it looked as if it was running out of steam and so then exited for +8 pips.
The difference in approach to the rising/falling candle in my other thread on stocks is that there is no pre-requisite for a strong trend.

There will be losing trades using this method (and the others I use) and I'll also post the losing ones, but so far I'm having a good run
Attached Thumbnails
cable-scalp-1-min-rising-candles.png  
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