trading the momentum cycle

why [most] systems fail?

it is because the market keeps on giving buy and signals one after the other.
Which signal to take?
The one which is most likely?As Brooks and many others say CONSIDER THE CONTEXT?

This is what confused me for a decade and confusion appears, to the the prime by product of markets and also the prime reason reason why 95% of traders, including myself, lose.

Where do these conflicting signals come from? i suspect from a different time frame.

This is why many traders watch more than one time frame and only when they line up, do they take a trade or signal.This however results in long periods of waiting,and also makes you miss trade signal in the time frame that is being watched.
In the same chart, i have drawn one trend line showing an series of higher lows [a up move] and on the same chart[and same place] i have drawn another trend line,showing a series of lower high [a down move] and it is possible, one trader will say up move, another will say downmove, one will say the other is wrong, but both will make money, if they manage it.It is quite possible a third will say range and he MAY TRADE IT AS SUCH and he too will make money.
A fourth trader may say triangle and a fifth say "NO NO NO IT IS N0ISE"
So in this situation-markets do not stay in one situation-you have 3 [or more] bias and, if the trader is convinced that the bias he sees is correct and if he trades it, according to that conviction and with confidence, he will make money.
In fact all 3 traders will make money. So it is not true if one trader makes money the other will lose:this is the wonder of the markets.
In fact it may be one of the few activities that always rewards excellence.
This could also be the reason behind Brooks comment that it does not matter in which direction you trade,if you manage ,you will make money




excellence

 

Those trend lines mean nothing. You are just looking at noise which is unreadable without knowing the context of the higher time frames.

You claim to want to read the market instead of using systems but you are purposely putting blinders on and refusing to see what is really going on by only looking at 5 minute bars.

 

Not to mention that daytrading currencies is pretty nuts. I’d be stopped out all day long. Campaign trade currencies, fine.

 

the two boxes marked in the chart-yellow and red-show two 'types' of market conditions:how to trade either or both?

 

so you belong to the 5 th type of trader.....Brooks would think differently
OF COURSE IF YOU ARE TRADING 4H ,5 min would be noise, but i am trading 5 min and many traders do trade 5 min

 

yes i agree
but i find holding overnight positions very stressful:i used to hold large stock future positions for 3 months or more;that time i was sure about the trend.You have to be sure about the trend and then you have to wait for long periods without a position.I used to wait sometimes for 3-4 months.
yes day trading has different challenges but it was because of the above reasons that i was tempted to try out day trading and now i am doing it only for the education[mainly this] but also to pass the time.

 

I wasn't slamming day trading. I was slamming day trading currencies. Personally, I'd estimate day trading FX is an order of magnitude harder than other instruments.

 

I look at all the time frames together. From Weekly to daily to intraday and try to understand where the market has been, where its at now, and whats possible. Where bulls or bears have made their stand and what happens when we approach those areas.

I tried trading only from a 5 minute ES chart before and lost because I had no clue what was actually happening with the market over all. This is what all the vendors sell to you and all the trading education people talk about... No wonder everyone losses. You basically become a liquidity provider for the longer timeframe players. Im not knocking day trading either but you must know where we are and where we have been in the bigger context or you will get killed.

Thanks for the opportunity to articule my ideas.

 

that is true...but what you say makes sense to you.

 

yes but i have outlined the reasons....but after all these years, i would not shift any where else and i dare say trading longer term forex is even more tough because of all the political interference but i must add i never could even afford to try trade longer term