My Forex Penny Dropped

Posted by admin 01/10/2013 Comments are off 880 views

forex penny

5 years I’d spent learning forex, and although I’d made progress I really wasn’t profitable, the best I seemed to be able to do was break even, it had become rather frustrating.¬† By this time I had tried just about everything from Elliot Wave to coin tossing, but I have never let anything beat me and this was no different, forex was not going to be the winner, I was.

All The Forex Tools.

I studied all the indicators at the start of my forex journey, I tried them all, and with probably all the settings you can think of, I tried many combinations, but nothing seemed to work, there would always be a run of losses somewhere along the line. I did live tests, demo tests, back tests, but there would always be exceptions that I could not fathom how to filter out and keep in profit. I tried indicator free correlation trading, I put up 4 pairs that had a good correlating factor, I used the USDCHF, GBPUSD, EURUSD and USCHF and use the relationship between them to trade any of the pairs, it never worked, I tried using the 4 just to trade the GBPUSD, but good profit runs would always fall apart and I’d end up losing more than I’d earned. I did a weird and wonderful combination of how the market reacted to news events and how these points would match up with points on Elliot Waves, this was probably the most sophisticated and complex approach that I ever used to attempt to make my forex profits. With all the advocates for price action trading on the internet forums, I decided that this was the way to go, less complexity, simple charts and easy decision making, surely 3 years later I’d learned enough about forex to learn and implement price action trading effectively. I spent hours a day searching the internet, discussing on forums, reading extensively about candlestick trading and setups, I would leave no stone unturned. I learnt every Fibonacci trick in the book, I employed some proper money management for the first time, I would take profit off trades in stages. I still never sustained my profits though, it would always end in tears, literally at times, but I never gave up, I wouldn’t, it was not going to beat me.

Taking A Forex Break.

Living a rather frugal existence, consisting of stopping putting milk in my coffee because I couldn’t afford it! Yes, that’s how determined I was to gain the upper hand on this beast of a forex market, I would scrimp and save just to buy me more time to learn, nothing would stop me from finding this pot of gold, but by this time the rainbow wasn’t looking so bright any more. I decided that I was too under capitalised, I concluded that I would never make the profits of 100% a month that I kind of always though was achievable. This though was the beginning of my realisation of how to trade forex effectively, I’d been under too much pressure, although I didn’t have a need as such to make money urgently from forex, the pressure was always there to improve my lot. But with less pressure due to having some income, now I started taking a more pragmatic approach to trading, it was something I’d do in the background. I could try a few things that I always wondered about like 50/50 trading, I’d place trades on where you could either win about 30 PIPS or lose them. It’s quite amazing when you try this how long a series of losses can be, I think I counted 13 consecutive losses at one point. This kind of proved to me that there was a big psychological factor to forex trading, more than I ever considered there would be, while my run of wins doing this would never be more than 6, it was so easy to lose 10 or more trades in a row. There just had to be some major psychological factor in the equation, and so I persisted with this strategy, 2 things were fixed, the profit and the loss on the trades, if I could get more winners rather than losers then¬† I would simply make a profit. And so I did, my account kept edging into profit, and with this the penny dropped, forex was kind of simple in many ways, and the way to sustain profits was to make it easy, and the way to do that is with the daily timeframes. The daily timeframes are a lot smoother and easier to interpret, I now use the daily chart to see what the market is dong and find entries off the 1 hr chart, and my profits have become consistent and sustainable.

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