Hi guys, most of the trading strategies I've read on the internet are day trading strategies (eg the Cowabunga System and the 3 Ducks system from BabyPips). I don't want to wake up at 12am to trade the EUR/USD or GBP/USD. Do you day trade, swing trade, or position trade currencies? Also, what attracted you to your trading time frame? eg work schedule, no overnight risk, etc? Thanks
Interesting...since it seems to me that most of the traders who appear to know what they're doing are either swing traders or position traders. Personally, I'm an intraday trader because I don't have enough money to weather significant drawdowns or to eat the kind of losses one is going to suffer when there is a reversal in the trend, which is guaranteed to occur. However, if I were a swing trader, I would probably simply enter positions in the direction of the day-to-day trend, in which case, I might have been long GBPJPY since July 29th (for example); or if I were a position trader, I might have been long GBPJPY since July 3rd or perhaps even July 1st, using two or three carefully selected baseline moving averages to decide when to enter and when to exit given positions...
Personally I day-trade the Forex, and now the ZN (the very liquid 10-year notes) and the e-mini S&P 500. Here is the "secret" : if your trading system is profitable and robust, your OPTIMAL move is to trade it often, and day-trading accomplishes that goal! Why? To make even more money, simple as that. Give day-traders, swing traders and long term traders the same capital and the same trading system (assuming the strategy works on every time frame) and day-traders will ALWAYS make more (much more) money at the end of the year.
It is true, swing and long term traders must use wider stops since they are also using higher time frames than day traders.
I believe this is true not only because day traders will trade their system more often, but also because the Forex market is notorious for forming patterns consisting of surges and pullbacks. Consequently, a swing trader and especially a position trader is going to be repeatedly forced to stand by helplessly as s/he watches his or positions vacillate in and out of profit territory over and over again, whereas a nimble day trader can enter positions with each pullback and pocket gains with each surge, thereby accumulating compounded profits by executing overlapping trades. For instance, in the example below, a day trader could buy the asset each time the candlesticks begin to form a trough below the ascending yellow moving average and sell it each time they begin to form a crest above it, thereby milking the maximum amount of return from the Forex pair while still within the same general region. Moreover, the day trader will have made his or her returns a reality three to five times, whereas whatever gains the swing or position trader is currently enjoying are merely paper profits and could disappear if the market should decide to reverse direction.
What a bunch of nonsense. This is very misleading. You will get killed in trending markets using your strategy above.
Nothing but words...themselves little more than poppycock concerning that about which you know not. In a staunchly upward trending market, where the black adaptive moving average envelope has cleared the yellow baseline moving average, the candlesticks will never establish a trough beneath the baseline, thus keeping a trader in the position until the run is over... ...and in a strongly downward trending market, they will never form a crest above it. So, using the strategy above, contrary to getting killed, a trader would profit quite handsomely. (My previous post was not meant to exhaust every single situation a trader might encounter using the involved system.) Moreover, a trader could still accumulate compounded profits via the execution of overlapping trades by simply taking profit when candlesticks crest near the top of the envelope and reentering long positions when they establish a trough near or below its center.
I can assure you that trading Forex is no more complicated than trading stocks or futures. I use pure price action only, and zero indicator. For day-trades the 5 to 15-min charts are my preferred time frames.