Gbp/usd

[jon1971]

Hello Boys & Girls,

My first post here, so please be gentle.

For those who give a toss, I have been trading FTSE 100 stocks for about 6 months and have a strong technical bias, so I know a little about chart analysis.

This week I decided to get my feet wet with forex trading, as I'm new to it, I'm primarily dealing spot minis.

After a strong start (I made $700 off of a 2 contract trade) I have consistently lost money. So I have gone back to basics and am taking a systematic approach.

The behavior of currencies is very different to stocks IMO, much quicker moves and less predictable. I tend to sell short against the trend (trying to find the tops of intra-day rallys). This I believe is where I'm going wrong, I get a head and shoulders or a triple or more top (on a 1 or 2 minute chart) I go short, the price drops a bit but then just pushes on up and steam rollers my stop.

Guys I know the trend is your friend and blah, blah, blah, but seriously where am I going wrong??

Any advice would be appreciated. Also I notice price has pushed to the yearly high, but my chart and dealing screen is saying market closed (I thought it was open 24hrs) it's 6am here in the UK, when does the market re-open?

Cheers, Jon

 

[£10kLoser]

All markets close for the weekend and Forex opens up late Sunday night.

You can't draw conclusions from chart patterns from the 1 or 2 minute charts - that's just random noise and gambling. Use the 15 minute or 30 minute charts for something more meaningful. Trying to find tops and bottoms is a route to failure. You need to join the moves, not anticipate new ones.

 

[jon1971]

All markets close for the weekend and Forex opens up late Sunday night.

You can't draw conclusions from chart patterns from the 1 or 2 minute charts - that's just random noise and gambling. Use the 15 minute or 30 minute charts for something more meaningful. Trying to find tops and bottoms is a route to failure. You need to join the moves, not anticipate new ones.

Great advice, cheers.

 

[GammaJammer]

If you really need a high octane fix and insist on trading on those ultra low timeframe charts (which really is just noise) then can I suggest you zoom out to a 1h, 4h and daily chart and determine trend direction first? Then try and trade with the trend.

I would say just don't trade on those timeframes at all (1min etc) but I always say that and I always get ignored so I'm trying a new tack.

Good luck

GJ

oh, and one more thing - GBP/USD (cable) is not necessarily the pair I'd choose to learn on. Can be a bit of a wild beast at times.

 

[lpt007]

another pair

Hi GammaJammer,
i'am a newbie to forex, which other pair would you suggest on Forex to start with?
many thanks in advance.
Regards
leo

 

[Rhody Trader]

oh, and one more thing - GBP/USD (cable) is not necessarily the pair I'd choose to learn on. Can be a bit of a wild beast at times.

I concur with GJ on this one. Cable can be extremely violent. EUR/USD or USD/JPY are probably better choices to start.

 

[jon1971]

If you really need a high octane fix and insist on trading on those ultra low timeframe charts (which really is just noise) then can I suggest you zoom out to a 1h, 4h and daily chart and determine trend direction first? Then try and trade with the trend.

I would say just don't trade on those timeframes at all (1min etc) but I always say that and I always get ignored so I'm trying a new tack.

Good luck

GJ

oh, and one more thing - GBP/USD (cable) is not necessarily the pair I'd choose to learn on. Can be a bit of a wild beast at times.

I've actually done really well on cable over the past 24hrs, scooped about 200 pips in total going both ways.

I used daily bars to identify entry points (well I actually used the bounce off of the long term trend line), then gauged trend strength and likely reversals using the 5min, 30min, & 1hr bars. Two contract trade, closed the first to cover the risk on the second and then just let it ride. Pretty much the same coming down, waited for the last spike, let it go down 50 pips and then shorted. I used a wider stop (which I think is where I was going wrong previously).

But yes it is a very wild pair. I think I will take GJ's & RT's advice and choose a pair that moves at a more sedate pace!!

Now if I can just maneuver out of these UK bank & retail stocks!!
There's a steep learning curve in this profession!

 

[disi]

Hello Boys & Girls,

My first post here, so please be gentle.

The behavior of currencies is very different to stocks IMO, much quicker moves and less predictable. I tend to sell short against the trend (trying to find the tops of intra-day rallys). This I believe is where I'm going wrong, I get a head and shoulders or a triple or more top (on a 1 or 2 minute chart) I go short, the price drops a bit but then just pushes on up and steam rollers my stop.

Cheers, Jon

You are right. FX is much more dynamic and variable. It does not mean you can not earn money here - it means that you have to find other way to do it.

Don't ever go against the trade - not until you have 5-8 years of experience in trading. GBP pairs are especially volatile, so don't do it.