Forex Technical Analysis

[bob1408]

I have opened a demo account with Oanda and Interbank FX and started trading.

First 4 days, I have traded on purely price action and short term trends with basic understanding of candlestick charts. During this 4 days I made 16 trade with 14 winning and 2 loosing trade. My standard demo accounts was showing $4,260 profit in total. It was great.

So, I thought if I use some Indicators and oscillators I could improve it further. To my surprise from here on my trading gone downwards, mostly losses. Conclusion I came to is that obviously I was using Indicators etc wrong. I used the default values of indicators supplied with the trading platform (in IFX case MT4) for all time frames. I have difficulty of believing using same values on an indicator for all time frames, ie. M1, M15, H1 and D1. I need to build a fullest possible understanding of technical tools relevant to Forex so that I can use them correctly.

Could you please suggest useful resources (books, websites etc) for learning Forex related technical analysis tools properly to the point without history and bla, bla's. What I mean by this that I already know "Trend is your friend etc" but what I would want to learn how to draw a trend line correctly on a chart and so on.

 

[Rhody Trader]

Here's the question I can't help but ask. If you made money on 14 of 16 trades, how exactly did you think you needed to improve?

 

[bob1408]

It felt like looking into a crystal ball. Maybe it was beginners luck. I couldn't build a sound system with just price action and candlestick charts. All trades were done in short time frame. Some were simply scalping.

I don't believe in magic or such stuff. I need to build a system based on something measurable. I cannot just say I have system based on my reading of price action and all that candlesticks. Can I?

 

[Rhody Trader]

Why not? A fair number of experienced traders (my self included) will tell you they started off testing all kinds of systems and playing with all the indicators they came across only to end up just trading based on the charts and price action.

 

[bob1408]

Thanks a lot John. That's encouraging to know.

Today I have been playing with with SMA and EMA to produce sensible crossovers and looks quite promising. When trading in M1 and even sometimes with 5 seconds charts it's nice to have a sense of direction with M15 and H1 charts that's where SMA & EMA become handy for me at present.

If I can master to read and anticipate "dam money traps I'll be much more confident to start live trading with multiple lots. Perhaps one day...

However, I think, I still have to learn basic tools such as drawing pivot points correctly and so on. I didn't know how to draw trend lines correctly until couple of days ago.