I need some serious advice and help on day trading FOREX

Discussion in 'Forex' started by Melchi, Dec 1, 2022.

  1. If you give me a CSV of the PL from the first 100 that did well plus those that followed, I'll tell you if it was just 'statistical luck' or not. I'm not going to clean the data for you, but if you give it to me clean, I'll analyze it for free. I'm a registered statistician. PM me if interested and I'll tell you the columns of data I need and ask a few more questions so I can approach the data properly.

    That said, paper trading is NOT the same as live trading, so this is just to give you some basic information about yourself and your approach, but it won't go much further than that.

    IMO, if health and significant personal problems are involved, it's time to put the majority of your time somewhere else. That doesn't mean walking away from trading forever, but (1) it's not worth potentially causing even more health or personal problems for yourself and (2) if you have these problems at the same time you're trying to make it work, that's likely to impact your ability to be successful with trading.

    It's better to move on to something else with, say, 80% of your time and if you're seriously interested in trading spend just 20% of your time pursuing it as a hobby. Give yourself a break from trying to make it your 'everything' and take the time to figure out where it fits into your life. I always had a day job until I was statistically consistently profitable and even then I still work sometimes for fun and money (statistical consulting / fixed duration contracts mostly) and I find it contributes to my overall health and life balance (for me, personally, it's good to get out of the house into the 'real world' sometimes).

    Good luck and take care of yourself.
     
    Last edited: Dec 1, 2022
    #11     Dec 1, 2022
  2. chappy

    chappy

    If you can see and understand why I've drawn these trend lines this way ,you can become profitable ... I've been doing this for almost 20 yrs. Thanks Screenshot_20221201-123448.png
     
    #12     Dec 1, 2022
    ParryManta and beginner66 like this.
  3. SunTrader

    SunTrader

    Start the new biz, while you still (?) have working capital.
     
    #13     Dec 1, 2022
  4. hi there — I’m a profitable trader with a background in g10 macro (rates & fx) at a bulge bracket. Much of the information online about trading, especially in the fx market, is gibberish sold by brokers or the clueless.

    I recommend you first unlearn what you have learned and then start to focus on building up your core competency. For fx trading your core competencies are:
    - macroeconomics & basic econometrics
    - r or python, though you could get by with just excel
    - understanding of asset pricing models and should be able to walk through how to price a forward
    - very familiar with how cash trading works in fx markets
    - knowledgeable of futures, options, and swaps
    - decent knowledge of vrp and the drivers of volatility
    - knowledgeable of central banks, how they function / operate, the role of bis, imf, and how bop are measured and analyzed
    - knowledgeable of theories about fx such as the international fishers effect, carry factor, p-p-p, and more recent models

    A great primer for much of this is in Adam iqbal’s excellent book:

    Foreign Exchange: Practical Asset Pricing and Macroeconomic Theory https://a.co/d/fTdT5pz

    Adam was the head of g10 fx at Goldman Sachs and is a rare breed of great practitioner/great explainer.

    once you’ve gone through the book, and do make sure you attempt the questions, the next step is to learn about the fx pairs you want to cover. My suggestion is that you read up on the economic history of the countries first, then their central bank (chart all of their rate hikes/cuts through history), their trade balance (bop), economic industry makeup (esp what they import and export), and political stability. This qualitative analysis will help you build context around decisions made by fiscal or monetary authorities.

    finally, read bank research especially rates and fx topics. Ignore the technical reports (not helpful at all), and focus on understanding what’s driving positioning or speculation. Try to find 20 observable trading events and work through how you would approach them (start with spot, can then look at futures/options).

    Doing this will help you build the proper pattern recognition (aH yes when the economy is running slow, the central bank tends to ease UNLESS there’s dollar strength which makes sense because this country imports a ton of energy all priced in usd…historically this has happened twice and resulted in significant tradeable events).

    with a solid foundation established you can then venture into trading, taking risk you feel comfortable with, while limiting your books delta exposure by diversifying your pairs and thesis with at least 3-5 other ideas.
     
    #14     Dec 1, 2022
    trismes, Atikon, Yomi and 2 others like this.
  5. MKTrader

    MKTrader

    Things like counter-trend trading in the quieter Asian session. It worked great for a while and many bots started trading it. Typically you have skewed risk:reward (maybe 10 point take profit with a 30-pip stop which backtested best). But suddenly there started to be runaway moves in those sessions and it was no longer profitable. Basically bigger players saw what retailers were doing and did stop hunting. In those days you could also do certain strategies (typically scalping) that worked on certain brokers with faster feeds and smaller spreads. But soon the brokers would change their spread or it would suddenly stop working. At other times trend-following/breakouts worked well, but by the time people figured that out and it appeared to be consistent, the market would go back to chop mode.
     
    #15     Dec 1, 2022
    murray t turtle likes this.
  6. %%
    Exactly\ but study more metals than that.
    Acres of DIAmonds is good read, but that'$ a book about metals and real estate.
    IF one likes cash metals + i do, consider giving the female metal's cashier a big bag of turnip greens.
    One millionaire called Dave Ramsey, millionaire hour + unlike most millionaires who did it with stock funds+ RE;
    that GA grocer did $7 million in groceries , no ETFs or RE:caution::caution:.
     
    #16     Dec 1, 2022
  7. Lol in a trillion-dollar-a-day market no one cares about hunting your stop :D
     
    #17     Dec 1, 2022
    murray t turtle likes this.
  8. %%
    TRUE;
    but in 4x or any liquid market, most would prefer to take out the stops/ resting orders:D:D
    I would also try to find a better market than 4x where the fine print @ bott0m line of ad notes\ ''you cant lose more than your original investment''
    This is not really investment advice\LOL, but mr Melchi was wanting trade advice.
    Good to get out of the house+ into the real world. Wisdom is profitable to direct:caution::caution:
     
    #18     Dec 1, 2022
  9. expiated

    expiated

    Before writing my response, let me just say there are plenty of trolls on this website who are undoubtedly going to pooh-pooh everything I say, so bear that in mind. (I won't see anything they write because I have them all on ignore.) Second, though I believe there is a relatively "simple" (not to be confused with relatively "easy") way to trade without over analyzing charts, I would not encourage you to continue trading unless I were willing to reveal exactly how I believe this can be done, which I'm unwilling to do. In other words, I'm not suggesting that you should, or shouldn't, keep on keepin' on. I'm just expressing my opinions as regards your post.

    Ultimately, I enjoy responding to questions like yours for two reasons. First, I genuinely like trying to help people in, as much as possible, the way they asked for it (and will therefore do my best to share information that you might actually find useful); and second, I find it helps me to zero in on the aspects of my trading that are at the heart of its effectiveness.

    So then, about that simple system...

    I developed it myself, and I think this is a key point. When you develop your own system, you know exactly how it works, exactly why it works, and as a result, you have 100% faith in it; not to mention that you will be the world's foremost expert in executing it. Take the best of this and the best of that, and configure it (your Frankenstein's monster) so that it works best for you!

    I looked into RSI, CCI, MACD, stochastics, harmonic patterns, pivot points, Fibonacci ratios, Elliot waves, etc... and threw it all out!

    The only thing I kept was simple moving averages and simple moving average envelopes (also proprietary moving averages and proprietary adaptive price range envelopes that I coded myself.)

    However, I do NOT use 10, 20, 50, 100 and 200 period moving averages. Doing so makes no intuitive sense to me, personally. Also, I have read that the moving average one chooses is not as important as getting familiar with the way in which price interacts with it (or something to that effect). Yet, I strongly disagree with this!

    Norm Fosback, the former head of the Institute for Econometric Research, once stated that "there are no magic numbers in trend following... It should be a basic requirement of any moving average trend following system that practically all moving average lengths predict successfully to a greater or less degree."

    And yet, the way I see it, even Fosback's own statement suggests the possibility that there are magic numbers in trend following; for if "practically all moving average lengths predict successfully to a greater or less degree," then it follows logically that those which predict successfully to the absolute greatest degree are the ones that are the best! One simply needs to wade through all that data to arrive at these superior moving averages—which I now call "baselines" after hearing Patrick Victor use this term.

    upload_2022-12-1_13-9-56.png

    The above graphic shows my primary baselines for a particular time frame. (I conducted an exhaustive, painstaking investigation which I equate with running thousands and thousands of computer models to arrive at the moving averages which best reflect the primary trends in a given context.) However, they are NOT based on periods, but rather, on TIME. They are temporal in nature. And unlike the standard fare, where plotting a 20-period moving average on a five-minute chart is the same as plotting a 20-period moving average on a daily chart; a 60-minute baseline dropped on a five-minute chart is NOT going to be the same as a 60-minute baseline dropped in a one-minute chart.

    As you can see from the arrows I plotted on the above image, I VERY MUCH believe in using pullbacks as the entry levels for the trades I execute. I also analyze charts from multiple time frames because it gives me different perspectives, providing me with a clearer and fuller picture, with higher time frame charts delivering an overall view, and lower time frame charts providing more details and greater precision. (By the way, for all the skeptics who say that moving averages are lagging, for me, the solution is quite simple: Just move to a lower [faster] time frame/chart.)

    The above figure also illustrates how the right moving averages can make it very easy to see when there has been a trend reversal. The other tool I use for this purpose consists of typical price ranges (in multiple time frames, of course).

    The adaptive price range envelope in this next chart serves as an example of how such channels can help me recognize when the odds of price reversing direction are higher than normal/average, not to mention when an expected reversal has NOT occurred and, if in a position, to REMAIN in the trade and let profits run.

    upload_2022-12-1_12-33-8.png

    It's just basic stuff... baselines and typical price ranges.

    But to be honest, a fuller description of what I do (I will cut and past from stuff I've written previously) is to try to evaluate the synergy between such factors as typical price ranges, reoccurring chart patterns, horizontal support and resistance levels, trend lines, and market structure, all in multiple time frames—with the result being a graphical depiction of current conditions that I can then use to help me make precise, well-timed trades.

    Accordingly, my final decisions on when to buy and when to sell are always made based on the consensus of various input data, sampled in multiple time frames—data which includes baselines, market structure, temporal support/resistance (I didn't even talk about this), horizontal support/resistance, price ranges, and reoccurring chart patterns, as stated above.

    It is the consensus opinion of all these various factors that determines what I will decide to do in the final analysis. The moves I make depend on what each of these determinants means in light of all the others and how they all will affect and impact on one another. It is the interpretation of each moving part individually—and of all these assorted components as a whole—that constitutes my approach.

    It is all about interpreting what's happening in the moment based on market generated information, which is to say, technical analysis. (I choose not to put my trust in non-market generated information—meaning fundamental analysis.)

    It comes down to "ruling reason," which for me, is just another way of saying the numbers, or "the math" if you will—the summation of all those correlating data points that are a part of the market generated information.
     
    Last edited: Dec 1, 2022
    #19     Dec 1, 2022
  10. lindq

    lindq

    "Norm Fosback, the former head of the Institute for Econometric Research, once stated that "there are no magic numbers in trend following... It should be a basic requirement of any moving average trend following system that practically all moving average lengths predict successfully to a greater or less degree."

    I would expect this comment from an economist, as it makes absolutely no sense at all.
     
    #20     Dec 1, 2022
    murray t turtle and expiated like this.