Trading forex for a living- my strategy

doktor3

Junior member
27 2
Hello fellow traders,

welcome to my trading journal and the attempt to beat the forex market. Should be fun!


LITTLE BIT ABOUT MYSELF

Let me tell you more about myself first. I got into trading about 5 years ago and have been making my living out of it since then. I trade full time and thats my only income.

I traded mostly options and stocks and i still do but my goal is now to master price action trading and make money on forex. Its a tough challenge but thats why it makes is so interesting. So about 1 year ago i decided to master it. I dedicated about 8 or more hours each day to read and study forex. I read most of the topics here and tried alot of the strategies. I made about 50 different templates myself and tried forex simulators to speed up the process. Overall it was a fun journey but i soon realized all of that makes very little sense. I dont want to sound too negative but i honestly havent seen any profitable system that is based on indicators derived from past data.

So then on my journey i stumbled upon trading price action and looking at how price behaves around support and resistance areas. Or supply and demand zones. Whatever you want to call it. Its indeed always a zone and never s straight line. I studied how price behaves in an uptrend and how it does in a downtrend. It all made sense. I learned about it for few months and tested few strategies until i settled with my most promising one.

MY TRADING PHILOSOPHY

My logic is this: Forex is not random and it can be exploited. No matter what people tell you it is not random. It is a market based on people who are making trading decisions. Yes their decisions are mostly random except at those points where they are forced to make trading decisions. Thats where fear and greed come into game and thats where forex becomes predictable.

Offcourse an individual trader doesnt know what is going on in each other trader mind and as an individual you dont have insight into all the orders that are placed in the market so therefore you are doomed to fail if you dont find the edge.

Money managment alone wont give you an edge and taking random entries/or indicators based entries would produce 50/50 outcome in the long run but becouse you pay the spread you would eventually loose all the money.

So how to overcome this problem and find an edge to exploit? Easy, very easy....all you have to do is find areas on the chart where people will be forced to make trading decisions based on fear or greed...those are the support and resistance areas. Once you find them and know how to exploit them by observing price action you got yourself and edge. Thats all. Simple!


THE STRATEGY

So what is my strategy?

1) in an uptrend - buy on the pullback

2) in a downtrend - sell on the rallies

3) in range market - i look for price when it reaches S/R and observe behaviour. I fade the weakness if price has stalled and starts to turn. Bearish/bullish engulfing bars or pinbars are good entry points.
In case of breakout i wait for retest and go with the order flow. If price is approachig S/R with alot of power sometimes i trade the breakout outright.

Basically just FADING THE WEAKNESS and FOLLOWING ORDER FLOW.
 

doktor3

Junior member
27 2
TRADE EXAMPLES

1 - Buy on a pullback in uptrend

uptrend-example.png



2 - Sell on a rally in downtrend

downtrend-example.png



3 -Fade the weakness in range market

range-example.png
 

doktor3

Junior member
27 2
GOAL

Im trading only euro/usd and only M5 chart. Why EU? It has been behaving most predicatble due to the largest number of people trading it. If some other currency with low spreads start behaving the same way ill trade it as well.

My goal is the double the account by trading 10 lot positions per trade on 100k usd demo account.
So when i reach 200 k that will equal 1000 pip of profit which is a quite good confirmation that my strategy is working.

Im a day trader trading on M5 and taking about 15 pip per trade so 1000 pip of profit would equal about 65 profitable trades. That is in my opinion a sample size which is big enough to give me confidence for live account trading.

Once the goal is reached i will go trading live with same amount but less risk offcourse. My goal is to be able to make from 2% - to 4% on live account each month. That in my opinion is realistic as having larger risk would result in unnecessary big occasional drawdowns which are bound to happen statistically.


RESULTS

WEEK 1

week-1.png
 

Pat494

Legendary member
14,622 1,577
Looking good as per results. I like the low DD. I expect you could code it up ?

:clap:
 

NVP

Legendary member
37,711 2,066
TRADE EXAMPLES


2 - Sell on a rally in downtrend

downtrend-example.png




hey there....

I heartily endorse the strategy ...we are all hunting these one way or another

why didnt you sell in the area I show below ?.....

a little cherry picking going on ? ;)

N
 

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doktor3

Junior member
27 2
Looking good as per results. I like the low DD. I expect you could code it up ?

:clap:

If you are talking about making an EA for this...hmmm very hard. Trading price action depends much on the overall context and is quite discretionary. It would be very hard to make an reliable EA for this.
 
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doktor3

Junior member
27 2
TRADE EXAMPLES



hey there....

I heartily endorse the strategy ...we are all hunting these one way or another

why didnt you sell in the area I show below ?.....

a little cherry picking going on ? ;)

N

I dont see a reason to sell there. The price was just above the support line and you can see clear battle between buyers and sellers. Thats my reasoning.
 

cha-ching

Active member
148 9
doktor3,

Thanks for the interesting thread. May I ask whether you trade Al Brooks' setups? What's your opinion on his methods applied to forex?

Best regards,
 

doktor3

Junior member
27 2
doktor3,

Thanks for the interesting thread. May I ask whether you trade Al Brooks' setups? What's your opinion on his methods applied to forex?

Best regards,

Hi,

no i havent heard of him but ill look up which setups he is using if he is pure price action trader. There is always room for more knowledge :)
 

WallStreetHero

Well-known member
391 18
Can you elaborate on your method abit,

Your example of a buy does not look like a pull back.

...and how do you identify s/r areas
 

doktor3

Junior member
27 2
Can you elaborate on your method abit,

Your example of a buy does not look like a pull back.

...and how do you identify s/r areas

S/R areas are determined usually on bigger TF as highs and lows of previous swings.

Why it doesnt look like pullback? Maybe not the best exmple but it sure looks like that to me.
 
 
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