I have been racking my brain to come up with systems to trade the forex markets. I have many but they all fall very short of being even decent. I have systems that I trade in futures, but surprisingly (at least to me), they fall apart in the forex. Even after I make changes. I am not looking for a free pass, but any "clue" or suggestions any of you may have as to a new avenue to explore would be greatly appreciated. A new perspective, if you will. P.M. me if you prefer and I GREATLY appreciate any and all help! Thanks
TA works well in forex, using DAILY candlesticks, don't even attempt daytrading forex, much less with high leverage. Follow trends, by the way your system should have a 'neutral zone' when there's no trend. When there's no clear trend i prefer to stay in cash.
Daytrading is fine but like anything you need to know what you're doing. crgarcia you're posting a lot of misinformation about trading forex, you might be better off learning first before advising others.
What do you use for trading futures? It might be best to stick with what you know and adjust it rather than try to get familiar with a new strategy in an unfamiliar market. What sort of time frame do you trade?
In futures I use a volatility based system on daily charts. In Forex I am looking to use weekly timeframes. I tried tweaking my other systems and even using them on many different timeframes in Forex and no luck. So began this "obsession" with coming up with a reasonable system to trade Forex.
There are some excellent trends to exploit in forex so I would say anything that identifies a trend and/or a potential reversal. I use Fibonacci intraday but it works equally well on longer time frames, forex is technically 'correct' with significant levels respected to a degree, and easy to identify when broken. I like to keep things simple so Fibs and a trendline is all I use, it's no better or worse than a lot of unneccesarily complicated analysis and indicators in my opinion. Looking at a weekly Eur/Usd chart it's hard to see how anyone could miss the obvious trades really. Too obvious? Perhaps, but it's hard to argue how profitable it would have been to follow the trend. Perhaps my approach is too simple for some tastes, but it works for me and might be worth at least a look if nothing else.
I agree 100% about the trend following and the apparent "ease" of profits, for lack of a better term. At first glance the Forex markets seem to behave quite well (correct me if I'm wrong) and have other built in benefits where slippage and liquidity are concerned. However when I run tests with MAs, simple breakouts, etc. I get less then stellar results. And certainly nothing that I feel comfortable putting money behind. I am determined to keep these systems simple for the most part.
Junk all preconceptions and just look at price action and try to come up with a system from scratch using what you see. Don't try to bring your experience from trading other instruments to the analysis unless you see something obvious. Forex trades differently. Even different pairs have different behavior so focus on one pair to start with.
Weekly? Why? The only way to trade weekly, or in some cases daily, is with a very large account and/or extremely low leverage due to the size of the stop losses you'll need. Price action is the only way to go. Start putting in your screen time on one pair/cross and on 4HR charts and go from there. JMHO.
Weekly to capture large sustained moves and the fact that there is an actual open and close on weekly bars as opposed to the daily "pause." Forgive me but elaborate more on price action as you guys see it. Wouldn't there be "patterns" on any time frame that should be exploitable and represented in the charts of the past which show a record of "price action" albeit the "past." Or am I way off on what you are describing. Thanks