Help - Please

[russellsaunders]

Hi Everyone

I am new to the forum and just a baby at trading forex - 3 months....

I've been learning about MACD, Stochastic, RSI and Bollinger indicators, rather than just place a trade and keep my fingers crossed.

All was seemingly going OK and I was making some gains until the last couple of days. Just wondering if someone would be kind enough to give me some advice.

If I see some movement on a 5 minutes chart I look for confirmation of a trend starting by looking at the 30 minute chart for MACD, Stochastic, RSI to see if they agree. I also look at the hour chart to confirm stochastic and MACD.

I make sure there is a good volume of trade and if I am comfortable ( a relative term) I place the trade.

Yesterday and today as soon as I placed the trade (within the minute) the trend reversed (today after 30 minutes of going up prior to me placing the trade).

I don't think the market is against me personally, but I am guessing that I am misreading signals.

Could someone let me know how they interpret the signals given off by all these indicators.

I just can't see what I am doing wrong.

Thanks very much

Sorry for the long post

Russell

 

[wackypete2]

The past 2 weeks price has been driven almost entirely by Greece news or some bumbling political guy babbling about the dollar or the euro doing this or that thing, etc...

Use indicators with caution. They are exactly what the name implies, "indicators", not buy or sell signals. Don't blindly follow them without being aware of world events going on. You should be aware of fundamentals. You don't necessarily have to understand it all (who does??) but DO understand that it affects price very quicky and sometimes very strangely.

Peter

 

[tomorton]

Conscientious and methodical work russell, but as wacky opete says, the last few weeks have been very atypical.

Also, assuming each indicator / price set-up might only work 70% of the time, using 4 or more indicators is logarithmically piling up the complexities of your model: how will you work out which is the best of your set of indicators with so many and so many interactions between them?

 

[russellsaunders]

Thanks Wackypete and tomorton.

So, which would you say are the best ones to use if I had to use only say 2 or 3?

Also, if I might ask. I think I tend to stay in a trend believing the indicators are right and therefore the market will turn back in the direction I have traded. Most of the money I am down has been 'lost' in this way.

I think my Exit Strategy sucks.... any suggestions how to recognise when the market has turned rather that it being just the normal ups and downs ?

Thanks

Russell

 

[russellsaunders]

Conscientious and methodical work russell, but as wacky opete says, the last few weeks have been very atypical.

Also, assuming each indicator / price set-up might only work 70% of the time, using 4 or more indicators is logarithmically piling up the complexities of your model: how will you work out which is the best of your set of indicators with so many and so many interactions between them?

You know that is so obvious when someone points it out (not meaning at all to sound rude). I am trying too hard to get it right.

 

[tomorton]

Market turns are only really visible after the turn - when direction has not only changed but the new direction been confirmed, perhaps by something like a re-test of previous price high or low or trend line or channel boundary etc. So that means you will always be taking a profit a little less than the possible max, and occasionally, even the confirmation will be false and the previous direction will resume - possibility of a re-entry of course.

The other approach is through study and chart reading, to learn how far a price normally moves following a certain set-up, and set your exit just short of that limit. You will always then leave a small margin on the table, and occasionally a lot more, but at least you willl be banking profits more often than seeing them eroded as price boomerangs back to your entry.

 

[russellsaunders]

Market turns are only really visible after the turn - when direction has not only changed but the new direction been confirmed, perhaps by something like a re-test of previous price high or low or trend line or channel boundary etc. So that means you will always be taking a profit a little less than the possible max, and occasionally, even the confirmation will be false and the previous direction will resume - possibility of a re-entry of course.

The other approach is through study and chart reading, to learn how far a price normally moves following a certain set-up, and set your exit just short of that limit. You will always then leave a small margin on the table, and occasionally a lot more, but at least you willl be banking profits more often than seeing them eroded as price boomerangs back to your entry.

Before I tried to get clever, I used to use a simple 30 minute chart and the MA10 / MA20 crossover to tell me when to trade and the 5 minute 5/10 as a 'get ready' indicator. I was doing better then than I am now that I'm 'smarter'.

Russell

 

[Black Swan]

Before I tried to get clever, I used to use a simple 30 minute chart and the MA10 / MA20 crossover to tell me when to trade and the 5 minute 5/10 as a 'get ready' indicator. I was doing better then than I am now that I'm 'smarter'.

Russell

plenty of folk have made consistent money from a couple of MAs supporting basic PA...

 

[neil]

plenty of folk have made consistent money from a couple of MAs supporting basic PA...

Less is often better

http://www.forexfactory.com/showthread.php?t=255112

http://www.forexfactory.com/showthread.php?t=2331

Enjoy:smart: