Hello, I'm new to EliteTrader and also to Forex Thankfully I'm only playing around with toy money at the moment, otherwise yesterday my neighbours would have witnessed a computer and two monitors go flying out of my window (and maybe me with them). Basically, after seeing the market dropping for the past 20 minutes and only taking a small profit, greed kicked in and I put in a whopping SHORT at 15:04 GMT. As far as I could tell, all my indicators were telling me it would still keep dropping. It turns out that this was probably the worst possible time I could have done this. Foolishly I didn't have stops, and after the price started to go up and up, I sat there thinking: "Okay this is a blip, a glitch, it's going to go down again and everything will be okay.". Alright, I was wrong, and it cost me (again, toy money - phew!). Today I'm trying to work out what I did wrong. I'm mostly relying on MACD checking different timeframes from 1 min upwards. The only dubious one I could see was on 1M where there was some green histogram and the lines had crossed about 6 minutes earlier (I've attached a screenshot). However it wasn't changing a lot and I've seen that happen before on downtrend channels so I thought nothing of it. The other timeframes all seemed to show strong downtrends. Sooo.. could I have forseen this? Could other indicators have told me what was about to happen? Help would be very appreciated
Hi Huffles, and welcome to EliteTrader. Even when scalping, you should check the longer timeframes for possible Key Levels. please check the included screenshot. Here are a few things: 1 - your short occurred close to the bottom of the channel (blue lines) 2 - you shorted it way after the breakout of the support, which is where people usually cover after the stops had been taken out, and the thing usually reverses. 3 - please note the red support trendline 4 - there is a convergence of the support trendline and the bottom of the channel at the price you have shorted, a double whammy, so to speak. 5 - Daily Average Trading Range of GBP yesterday was around 130, the high was at 1.6160. Well, it looks to me that at 1.6030 GBP was already extended. 6 - you wrote "The other timeframes all seemed to show strong downtrends". What I see is a consolidation after we hit the 1.6280 resistance yet again. On Feb 14 GBP made a higher Low which hasn't been broken. So it looks to me like we are creating a Cup&Handle formation to retest the resistance, maybe possible breakout to the upside, retest of 1.6430 area, another retracement down, another retest of resistance, and so on. Then again, somebody will disagree, thats what makes trading beautiful. feel free to comment on this, so we all can learn. What software are you using?
Thanks Jaba, that's incredible. I'm amazed that you found all those warning signs that started a fortnight ago! Support and Resistance is a new concept to me (I did say I was a newbie, right?) but from what I've read and from what you've just pointed out it looks to be quite powerful. It's something I'll definitly be looking out for this coming week. I've since been reading about candlestick patterns, and the two candles either side of the trade also indicate that a reversal might happen (hammer on the left of it, and also a hammer or maybe spinning top to the right of it). The software is Dukascopy's JForex platform.
definition: huffle: to use the armpit for sexual gratification ? ? ? in defence of Huffles, there are other meanings of huffle, but does it now matter ? although I am curious, does one need a partner for a satisfying huffle ? http://www.urbandictionary.com/define.php?term=huffle the price movement imo requires all timeframes to be analyzed as Jaba122 has pointed out I and many others use MetaTrader 4 if not to trade from, to analyze with since it has very good charting tools you should learn to use the Fibonacco Retracement tool which I find invaluable and which can also be used to project future up/down prices my charts setup is to display the 5 min and 1 min charts side-by-side in MT which you'll see in the attached which illustrates the use of the Standard Deviation Channel and fibos on both charts
I can't believe you've soiled my name :-( It was all so innocent in my mind until you pointed that out, arghh Yes, I'm trying to keep a better eye on long-term support lines now, though I got a bit burnt last night when I went short overnight - I had a stop loss in place at least. Now that I look at it, I can see your fibonacci support line was warning me that might happen! Ah well, I'm losing quite a bit of money in this demo account. I'm tempted to keep my thinking the same way but DO THE EXACT OPPOSITE. I'd probably become quite rich doing that My more rational side of me is saying I need to make fewer trades in a day, and just be more certain before I enter a trade. I just find that it's much more exciting to be in a trade - I guess that's a gambling feeling that I need to stomp out quickly if I'm going to do well at this
Okay I didn't take my own advice to make fewer trades, however things are picking up. I've pulled back some of my losses now by making good use of the support lines and relying a bit less on MACD. I haven't got the fibonacci retracements to work for me yet, but I've still hope for them. Keep the good advice coming I'm happy to still using JForex at the moment - it lets me plot 6 fibonacci lines in 4 mouseclicks, and I'm still able to compare different charts side by side since you can undock the windows so I have one showing on another monitor. I wish I could pick my own colours for price lines and channel lines though. It just picks a random colour each time
Listen to me carefully please. Stop trading even a play money account (especially off 1 min fx charts) Your personality requires you to trade much larger timeframes with much smaller size. Listen to me or ignore me at your own peril.
Listen to me carefully, you need to improve your humour detection skills even if the humour isn't very funny I can happily inform you that should my account blow up (live or demo), I will NOT be throwing computers, monitors, or even myself out of the window :eek:
PokerFXTrader may have a point Huffles day-to-days/Buy&Hold trading only requires 5 minutes screen time a day, maybe 10 mins on the weekend - gives you 24 hours to make a trading decision you can get MT4 demos from Alpari UK, FXCM UK and others and everything can be user defined from chart background to custom indicators of which there are thousands including many and various Support&Resistance/Pivots indicators
You really shouldn't be placing a trade to sell at 15:00 GMT on a Friday after the GBPUSD has moved down 230 pips in two days. But, you're doing the right thing by trying to learn from your mistakes. At the end of every day replay the market. Look at all the trades you took and ask yourself "Why did I take this trade? Why was it profitable, why was it a loss? Look at all the moves the market made and ask yourself 'why did it go up/down?" Was it news/fundi driven etc. "Why did buyers enter the market, why did they leave? Same for sellers. Keep at it you'll get it.