Manual Trading Diskusia

At the moment, I'm basically using this account to learn about manual trading and to really get an idea for how the market moves. I'm looking to move to a real, but very small account soon as putting real money into the market makes you obviously think a lot different to if your demo trading.

Not very happy with my results so far, and I think this is mostly due not finding a system that really works for me. I'm using mostly weekly and daily pivot point lines on a MTF analysis and trying to spot opportunities using these.

I don't believe too strongly in the plethora of indicators which are available as these are all lagging indicators and only mathematically show you what has happened up until now. Really, the value of a 50 ema vs 25 ema in my opinion doesn't tell you much more than you can actually surmise looking at the chart over the last 50 periods with your own eyes. Which direction is the trend? Is it speeding up or slowing down? That's it really. Typically the 25 ema diverges furthest from the 50 as it races towards a level or S or R, then sits at this level waiting for the 50 to 'catch up'. I'm also guessing that those who have tried automating any sort of system based on MA lines will undoubtedly have found this out quite severely as I have.

So really, the plan for me is to focus on the basics.
1) Continue to find the timeframe which best suits me. I much rather have trades run for max of an hour. I like to see results straight away and I believe that the longer a trade runs for, the more variables and chaos is added to the system, meaning that your original reason for entering a trade are minimised as time progresses. In saying this, shorter timeframe trades are 'more expensive' as the movement compared to spread is lower, meaning that beating the broker becomes a larger part of the trade. I'm still to find a happy medium.

2) Continue investigating ways of judging isolated currencies. The reason the EURJPY pair is moving up is because the EUR economy has a higher demand for their currency, or the future looks rosier than the JPY economy. At the same time though, both economies may be much weaker than every other FX traded economy, meaning that the probability of trading any other currency against the JPY would be a better option as there should be a larger divergence in the two currencies.

3) Continue to utilize Multi-time-frame analysis. While everything in FX is a fractal, MTFA sure helps to paint a 3D picture of how a pair is behaving much better than in one time-frame.

4) Find a much better Entry and Exit strategy. At the moment, I've tried only a few manual strategies, but am mixing them up and not performing them in any proper manner. My idea is that starting next week, I trial a different method each week, practising only the one method and judging each accordingly. (obviously with the view of improving and modifying each slowly as I go.)

5) Find the right time to trade. At the moment, I am focusing on the start of the London session due to the increased volatility, and therefore better value entries compared to spread. This works out well for me as it is around the 5-6pm mark here in Australia. It means that after work I can spend a few hours working at the best time of the FX day. The issue is, I'm assuming that this is a good thing. Perhaps the volatility also makes the markets more erratic, maybe between the London and NY opening the markets perform in a more volatile but 'better behaved' manner. Something to think about.

6) Learn to actively deal with the emotions of this beast! It appears that my 3 trades I've entered today are all going to come back winners (at the current time) and that fills me with hope that I'm actually getting somewhere in this Forex game. In an hours time, I may have lost two of these and be feeling terrible about losing another 1% on my 'imaginary' account. I really need to think more of Metatrader as a 'game' or poker machine and stop letting it affect my emotions.

7) Continue to focus solely on each trade as 1% risk to my account. I still don't understand this fascination with pips! Unless you are entering into every trade with a fixed lot size, which goes against EVERY money management guideline (and logic for that matter) then pips are totally irrelevant. Really, it's possible (though an extreme example) to earn 50,000 pips in a month, but still blow your account. I have developed a set of scripts which allow me to place indicator lines on a chart, one for each of TP, Pending Entry and SL, which, depending on their position to the market automatically place a BUY/SELL LIMIT/STOP based on the lines. Don't want a TP, you delete the line and it doesn't add one for the order. Want to make an instant order, delete the Entry line. I can supply these to anyone if their interested as the one major headache I have found is lot size calculations when trying to place an order. By the time you've made the calculation, the opportunity is gone.

Well, back to the strategies...