I didn't really take to it the first two years i traded. I liked catching flagpoles, and then I liked trend following. Really i am just now learning to enjoy scalping. Once the rhythm is found, and you develop a good instinct for when to pull the trigger, a series of modest wins can be very satisfying. And it's a great way to capitalize on a sideways market. But if your timing is off, those serial losses can add up and make for a dismal day.
You can immediately understand that the simpler the strategies are, the easier it will be to start trading.
Successful trading in the Forex market is possible only if you have the right strategy and strictly follow it.
If there is money in the account, the main difficulties for a trader may arise with the choice of the moment to open transactions. Using the strategy avoids doubts, since the market is entered when a clear signal appears.
I'm entering into live trading for the first time, is there a profitable and simple strategy that I can use to make consistent profits?
Unfortunately, no, not really. We call that strategy the Holy Grail and it is unobtainable. The best you can hope for is to be able at the end of the year see that your account has grown instead of shrank. You will get losses. Lots of them. You have to keep the amounts of your losses low enough and the amounts of your wins high enough that even if you lose more times than you win, you still eke out a profit overall. Beginners nearly always lose, overall. That's what brings more money to the table for the stronger traders to win. Trading, particularly day trading, is not growth oriented. It is a zero sum game, for the most part. The money has to come from somewhere. That somewhere is the new guys. You are food. Your stops will be very important and you will blow off placing a stop order at your own peril. Yeah you will get stopped out for lots of small losses when your stop is high and tight. That's often better than having a few catastrophic losses, so you just deal with it. Here's a tip to keep in mind. Think where you want your stop, first. How far down (assuming a long position, i.e. you are trying to buy low and sell high) do you think your stock or other instrument can logically go? Not how far it REALLY can go, but how far down your apparent line of support is, on the chart. The point where if it goes past that point, it is going much, much further down. That's where you want your stop, where you want to get out no matter what, because the trade has gone bad. NEXT pick your entry. At what point do you think it is logical to expect your stock (for convenience I will call all instruments "stocks" here.) to go up? That's where you want your entry to be. If your stock has already gone above that level, it is too late. Stay out. You want to get in cheap to maximize profit. Next, before you buy, where is the logical line of resistance? At what point is it logical for the stock to stop and maybe even reverse and go back down? You want to take your profit or at least some of it right below that level. Now the distance you will allow it to go DOWN before you stop out needs to be a fraction of the distance you expect it to go up. In other words, the amount you SHOULD win must be a multiple, at least twice but preferably 3x, what you COULD lose. If it is too late to put a setup like that together, don't buy in. You don't have to trade every day or every hour or even every week. One good day a week where you grow your account 2% is a recipe for success. In 35 weeks you will double your account! Or would, if you could do that. But if you gain 2% and the next day lose a percent and the next day another percent and the next day too, and gain 3% the next day and so on, you will be broke in a year or less. When you lose, your account is smaller and the same percentage of win is LESS MONEY than before, and so you always lose a little more than you win back. Call it the house advantage. The way to beat the house is to bet when the odds are on your side, only. KInd of like blackjack. When the shoe favors the player, bet, and bet meaningfully. When the shoe favors the house, leave the table, and go have a drink or a meal. LIke poker, you still have ante. You pay for data, maybe for your charting software, internet and backup internet service, computer wear and tear and upgrades, yadda yadda. So you do have to trade, sometime. Shit or get off the pot. But don't do it when it doesn't look really really good. What you COULD lose in a trade is your risk. You aren't risking the entire amount of your buy order. You risk the amount you could lose if you stop out. Your reward is how much you expect to win. Managing your money and your risk are the heart and soul of all gambling, and trading is gambling. You want to live to trade another day, and not take a bad beat that knocks you out of the game for weeks or months while you get another stake together. As a younger person you can afford to take bigger chances because you have plenty of years left to make more money. With a small account you can take bigger chances because you can re fund your account in just a couple of weeks or whatever. With a large account that you can't easily put back together, or at an advanced age where it is more important to keep the basket half full than to fill it the rest of the way up, when the filling up comes with risk. You will read a lot of suggestions for the total limit of your risk or the minimum risk/reward or the total percentage of your money in play, but really you need to set those limits yourself... but STICK TO THEM NO MATTER WHAT. Rules based trading will always work better than freestyling it. Make your rules and follow them with no exceptions. I will give you two specific strategies. That's one more than what you need or what you should try to use. One strategy faithfully followed gives you a better chance than multiple strats. The first is simple trend following between the Bollinger Bands. Bollinger Bands is a popular indicator and because it is popular, lots of traders follow it and so you can predict with much better certainty what lots of other traders will do. For this reason, following, or more accurately, LEADING the way, will be possible, lften enough and to sufficient extent, that you can grind out a profit overall if you stick to your rules and the are good ones So, back to the Bollinger Bands. This is a popular indicator because it often works and it often works because it is popular and is followed. Your BB is three lines. One is a moving average, or the basis. Another is a line of points a certain distance down, usually expressed in standard deviations. The other is the same number of std devs up above the basis. On your chart, select this indicator for display. Look at your chart. Notice how not always, but very often, the price will seem to bounce up and down between upper and lower, or between uppor or lower and basis. Does that give you any ideas? Maybe you make a rule that whenever a candle dips down below the lower, you buy, and whenever it touches the upper, you sell. Or maybe you buy or sell PART of your trade and save a little of the trade for the next candle, after you have verified the predicted price action. Another way to trade the BB is to buy when the price is above the basis, and hold it until it dips below the basis. One or the other will work for you. when it does. This is a simple strat and it is easy to write your rules and to follow them, and set your targets and your stops. And like I said, it works, when it does. There are no guarantees. Your second freebie is called by various names but I call it the bull flag strategy. For this you need a good scanner. Your parameters you will have to read up or or figure out for yourself, but use your scanner to first pick a few low priced stocks that today had very high relative volume and price under $20/share, mid or lower cap, that had low volatility for the previous few weeks or so. Most of them you will see rocketed up in price shortly after the opening bell or maybe in the premarket. Then just as suddenly, they stopped going up. But instead of reversing and plummeting back down, they sort of leveled off and maybe sagged a little, then after a few candles, shot up again. Maybe repeated for a total of 4 or even 5 times. The sudden upward thrusts are the flagpoles. The saggy sideways action are the flags. Also called consolidation. Trying to get in on that first flagpole is very difficult. Too bad, cause if you knew it was coming it could give you a tremendous win. But you CAN predict the next one, sort of. Why? Because other traders are predicting it, too! And because it is natural for traders to sell and take profit after a big green candle or two. As they sell, the price is stalled or even slightly depressed. But other traders or even the same ones are alert for the first upward twitch in price and/or volume afterwards. That is when you jump in with both feet. Set your stop just below the lowest candle in the flag. Set your target for half your action at half the height of the first flagpole, or maybe 2/3. Then set the remainder of your target sell order at the same height as the first candle. In other words you are betting with some of your money that the price will increase half or 2/3 as much as it increased before, and with the rest of your money you are betting that it won't increase very much more than it increased in the initial flagpole. Your stop is a bet that the price will not go below where it has just been. THose are your bracket orders to be placed with your buy order. So set them all and then execute. If the price goes down you stop out. If it goes up, move your stop up into the green to lock in some profit. As the price moves up, move the stop up to keep half of the price increase locked in as your profit. IF it never reaches your target you got some profit. If it does, you got very good profit. If it goes south on your, your losses are small or else you have a small profit if it went up enough to lock in some profit. There is also a bear flag strategy. Don't go there. The flagpole strat works best on mid cap or small cap stocks between $5 and $20 or so, mostly pharma, health, or tech startups. They can explode for a few hours when they get a good clinical trial, or a good government contract, or win a court case etc and then they go back to sleep for a while. These stocks are harder to short than large cap higher price stocks. There's two strats in the nutshell version. I suggest you buy a handful of good books and study them like your life depends on a passing grade. Give the paid courses a miss. It is said that those who can, do, and those who can't, teach. A successful trader really doesn't have time to teach noobs full time and it isn't as profitable as being a winning trader, and you CAN learn what NOT to do from a losing trader, but maybe not learn so much about what TO do from a losing trader. JUst sayin. But lots of successful traders write a book or two. Write it in a week, bam, done, get a buck or two every time another noob buys it on Amazon. And he wrote it in his spare time. So get the book, skip the course, is my suggestion. But do your homework. This post is probably about as involved as anyone will take the time to get, in teaching you. How badly do you think I want to teach you how not to lose your money to me? Think about that for a minute. I want money. So I want new guys to bring it to the table because taking it from the ruthless and experienced traders is just too damn hard. I want new guys to come and donate to the cause. And that is probably more honesty than you will get from anyone else here. Read. Study. Back-test. Paper trade. Work it out yourself. Thank you very much for all the money that you lose. Watch your profit/loss management. I want to milk the cow, not kill it outright.
It seems to me that the most important thing is that a person must decide on his own and choose the strategy that Lesya will be for him, and this can be done with the help of a demo account.