hi jonnyy, how goes it?......only been in couple times & it's only been operational this week I think, so a little early to judge I guess....have to wait see how it pans out!
Well, I dont like chatrooms, but I like this one. You will meet some very good traders like Buk and FX Cowboy. The problem is that you are using time you maybe could spend better making research? But let us give the forex chatroom a chance.
TRADERguy, I think many traders can't understand how you can trade with 1-10 pips stops? How do you do?
I read the first part of your journal but after 120 pages I jumped to the end. Did you make any changes?
The main trick to short term trading is watching the order flow. You don't really need to watch the order book (although it certainly helps), just watch the way the price moves within each five minute bar and the relationship of the last few five minute bars. Ask yourself questions like how many tics long is each bar? When it gets to the top or the bottom of each bar, what happens? During an up move does the price reach the top of the bar, pause and then retrace at least half way back down the bar? How many tics is the bottom of each bar above the bottom of the last bar? After analyzing the flow of the price then you can know how to trade it. Except during the most powerful moves, to enter you should be buying just after the price has moved down and/or selling just after the price has moved up. When you see a profit forming as the price moves your way and you feel happy that it moved your way, this is usually when to get out or sometimes when to reverse. Enter trades when you think you see a bargain and you think the price will move your way in the next second. Use limit orders most of the time so that you won't have to pay the spread. Put at least 2 exits in the queue. Pull the nearest one if the price movement appears more forceful than you were thinking. Be quick to pull your second exit order if its approaching your first target and you have decided to get out there. Whenever you have a position on, if you don't have a target yet, put an order in the queue so that if a large order sweeps the prices (in the futures only/ it will come back quicker that you can react) you will have banked a good profit. Don't be afraid to scratch your trade if you don't like how things are looking. If you have several losers in a row ask yourself if you are doing something wrong. If you can't ID the problem, take a break-get your hand off the mouse, get up, and stop watching the screen. If you trade 100 times in a day with an average five tic loser, 8 tic winners, and you scratch 20 of the trades; you have made 120 tics if you lose as often as you win.
Also I should have added that obviously no one should try full blown scalping without having the fastest technology and depth of market. However, my first trade of the day is often in the right direction and only a few tics from the best possible price to enter at. If you have a directional bias for the day (or next few hours), especially if you are starting at the beginning of the EU or NY session, you can use short term analysis to get in at a very good price where you take little or no heat.
your method does not work so good if you do not have rock bottom commissions i.e. if your commission is < $3 RT much better than > $5 RT
Are there any EUR traders trading from the US? How do you guys handle the night hours? I'm in the Pacific time zone. I follow EUR 10 pm-4 am EST and then 9am-3pm EST. My body and mind is about to break down. I think I'll just start trading EUR from the NY open 8am EST from now on. However, by the time NY opens some of the big moves are already over. I have a big dilemma! Thanks, Chinook
It works best if your transaction costs are < $1. However the ability and wisdom of entering when the price moves against you in the very short term can make everyone a few extra pips per trade regardless of what timeframe they trade.
Most of your body's internal clock is regulated by light. Have the lights on at night while you are trading, don't sit there in the dark and trade by the light of your monitors and TV. Keep the blinds drawn while you are trading so your body doesn't think that it is the start of the day during the middle of your day. Make sure that your bedroom is dark when you go to sleep. Don't go outside in the sunlight 60 to 90 minutes prior to going to bed. Also they make some sort of light helmet or box that people use to fight jet lag and to avoid depression during the winter/especially north of the Arctic circle; maybe try using one of these when you get up. Last, make sure that you are getting enough sleep, if your body needs 8 hours quit a little earlier.