The fact that you stated it as a goal means that number is in your head somewhere and the fact that you're asking our opinion of its viability tells us you probably haven't done the groundwork necessary to be consistently profitable. If a minimum profit goal is in your head in any form, this number will influence your trading, even if on a purely subconscious level. This can be detrimental. I once had a minimum daily goal floating in my head, but it was before I had a true plan. Once you have a viable plan and can follow it, the most important thing to focus on is flawless execution of your plan, because by flawlessly executing your plan, you will naturally achieve the minimum profit goals your plan indicates. Read my post from yesterday regarding this topic; the brief article I quoted in reply to MADASINHATTER is priceless for traders: http://www.elitetrader.com/vb/showthread.php?s=&threadid=230029&perpage=10&pagenumber=7 I'm a firm believer in this. It's part of solid plan, having a max loss and minimum profit level per trade that provides the risk:reward ratio which, when combined with your average win rate, allows you to extract your minimum profit requirement from the market assuming you trade every valid setup that presents itself. This doesn't mean you quit when that profit level is reached. You keep trading every setup until the day is done. The reason I asked if you only traded news events is because you only took one trade. I trade many times a day, but if you're using a longer time frame then just one trade makes sense. When trading a solid trend or into a potential breakout level where price is more likely to run beyond your minimum profit per trade, trailing stops or scaling out are good ways to let winners run well beyond that minimum profit level. If you trade exclusively with candles, then you're trading price action, which is very random at times and very orderly at other times. The key is to observe and master price patterns that produce forceful price moves more often than not in your trading time frame. "...as if the usdollar wanted to continue its downward trend." A price action traders asks, "What would price have to do to tell me it's likely to continue its downward trend?" and then trades to the short side only when price acts in that fashion, not before. I assumed you were day trading, in which case the only use for a daily chart is to note the major support and resistance levels that may come into play, and to prepare for a possible breakout on the daily chart which will likely result in a strong trend day on an intraday basis. If you're day trading, focus on the price action in your chosen time frame. In ANY time frame, two up candles followed by two down candles (assuming a similar range each way) tells me that neither side has control during that particular brief time window. What does that pattern look like in the context of the bars preceding it? Is the larger trend up or down or are we in a range? Where do bulls/bears likely have their lines drawn in the sand? I trade a 5-min time frame and I wait for clarity following a news release. On a 5-min chart, the euro futures (6E) broke out of a range during the jobs news, then retraced the entire breakout and tested the bottom of the range in the very next 5-min bar. Neither side has control yet. Next 5-min bar price moves back up and closes around a flat (indecision) 20-bar moving average. Still no signal to take a side in the 5-min time frame. The next bar closes red just below the 20 MA. For me this pattern is creating a setup. Because the moving average is flat, I want a little more clarity. The following bar price tries once more to move up and hits the same resistance price as the two previous bars. This resistance level is at a significantly lower high than both the breakout high and the previous range high. When that 3rd post-news bar closes red just below the 20 MA after two failures to move higher, that price action tells me the bulls are losing the near term battle, the bears will likely start getting aggressive, and if price breaks the earlier range low, the bulls will start throwing in the towel and the bears will become aggressive. A break of the low of that 3rd post-news bar will be my trigger to short and I'll place a sell stop there as soon as that bar closes. For me to achieve my minimum profit required on a trade, price will have to break the previous support level. When price breaks that level, it does so with conviction (the bulls bail, the bears get aggressive) and I can begin trailing a stop which will produce at a minimum $360/contract more than my minimum target. (Letting the winner run.) If price broke that 20 MA resistance level to the upside, closed above it, and set up a long entry, I'd go long no matter what I thought of the news or the price action of the larger time frames.
@NoDoji Yes very good posts. NoDoji is a very good trader IMO. Read the posts of NoDoji and learn something new. @jnbadger Before you are not a perfect Master Trader, you cant make any constant money on a long term view, doesnt matter how much money u use for trading. Trading is always the same process. doesnt matter if you trade with 1.000,- $ or with 1.000.000,- $ !!! There is no difference in the trading of making a trade with a expected profit of 150,- $ or with 150k $. Its just a leverage thing. Bigger leverage comes with account growing thats a natural trading law. More selfconfidence is a side effect. ------ But its of course better to learn and master your skills with as few money how possible. I suggest, you only have 1k on your trading account, and your goal is to make 150,- a day. Learn and work hard until you can make it at least 3 of 5 days for 12 months. Withdraw all profits every week, so far you are over 200,- !!! ------ Next step is the next level. Use then trading capital of 3k and try to make every day 10% = 300,- and so on. ---- once you are on the level, with trading with 10k and making on at least 3 of 5 days --- 500,- a day = 1.500,- at least a week = 6000,- a month, you can make a good living of it. Do not overtrade, the begin is always hard, but if you do it slowly step by step, you will have all odds on your side. Safe your profits to your bank account, and never touch them for trading !!! Thats the Master Rule in Trading for a living. Always try to get better until you have your self satisfaction, that nothing can surprise you anymore and than you know for yourself, what ever will happen, you can make a fortune from every amount of money, because you are a hardcore skilled master trader. It means you must think of yourself that you are the best trader in the world. Trading is no competition to other traders. Its absolute meaningless what other traders do, or how much money they make. The Game, The Business is only about you and your self discipline and ambition !!! Nothing else !!! Once again, you can do it !!! Wish you the best. Never give up. Best Regards, HateTheRisk
Great analysis. Thanks. Actually, it was the candles within the greater context of the overall direction of the USdollar that caught my attention. Two up days within an overall downward trend, follwed by two down days which suggested to be that downward trend wanted to continue. I didn't say that I rely only on price action using only the candles. I just find the moving averages and bollinger bands and, and, and ... to be a real distraction on the chart. I feel more comfortable simply looking at the candles and observing their trend in several time frames. This isn't pure price action analysis. And, quite frankly, you too aren't relying purely on price action. However, I say again, a very interesting analysis. Thanks again.
HateTheRisk, I am actively trading in a $300 micro account. I just started shifting $3000 over to a mini account. Next task is to convince FXCM to put the two accounts together under one login so I can transfer money between the two. Many trades are better done in the micro account. I have had a micro account since June. I have managed to keep it alive the entire time. I haven't lost any money. Of course, I may lose money. Of course, I must plan how to manage these losses. Sorry, guys, I am NOT trying to get rich quick. I will take my little bits and pieces out of my profits on a daily basis, set them aside, and re-fund my account when needed while I learn the process of trading profitably consistently. Why? 100% per month MIGHT be possible, but 100% COMPOUNDED per month is close to impossible! 150$ is 5% of $3000. 5% COMPOUNDED daily is almost impossible. See the difference? One is linear relationship, the other is an exponential relationship.
One more thing, bhardy, and I promise to shut up for at least little while... The greatest benefit of true price action trading is that it has withstood the test of time, demonstrating viable profitable edges that have worked for decades. There are hugely profitable alternative trading strategies to basic price action. Reversion-to-mean (counter-trend/fading) strategies are massively profitable in the hands of well-capitalized and highly experienced traders. These strategies involve trading against the prevailing price action and making assumptions about overbought/oversold levels or about fundamentals. Even in well-capitalized, highly experienced hands, the risk of ruin with these strategies is significant. Just look at how many hedge funds blow up badly using such strategies. In the hands of a novice, no matter how "intelligent" or well-capitalized s/he is, RTM strategies are deadly. Price action strategies offer equal opportunity for novices and experienced traders alike. There's a lot of work involved in doing the research, study, testing, and plan development, but the risk of ruin once you do that and you learn to trust and follow your plan is extremely low. I thought I was pretty smart after some great day trading success as a total beginner, and decided to do some to do some RTM swing trading so I could capture bigger pieces of the pie. It was disastrous as you can see from some of the results of my Fall of 2008 (pun intended): http://www.elitetrader.com/vb/showthread.php?s=&threadid=132626&perpage=10&pagenumber=3 http://www.elitetrader.com/vb/showthread.php?s=&postid=2095969&#post2095969 http://www.elitetrader.com/vb/showthread.php?s=&postid=2069593&#post2069593 These were trades made against the prevailing trend of the daily chart time frame, and based on opinion (the notion that "price always does X"). It was the result of trying to translate what I'd been doing quite well (day trading simple price action setups off a 3-min chart) into a higher time frame and swing trading without doing any of the necessary groundwork to shift gears appropriately (for example, you trade much smaller size when swing trading, and you use a daily chart to find setups, not a 3-min chart).
You're welcome. A lot of people refer to a 20-bar moving average as an indicator and in a way I imagine it is an indicator because it gives you a very quick indication of whether price is trending (rising/falling MA) or ranging (flat MA) in a given time frame. I use it as a mobile support/resistance level and it's admittedly the weakest of all S/R levels (trend/channel lines in a trend and previous S/R in a range being the strongest levels). That's my only "indicator". It's been quite a while since I've had stochastics or Keltner channels on my charts, and I've never used Bollingers or MACD.
Thanks. I have been debating this same issue in my own mind, and frankly agree with you. I am simply struggling to learn how to correctly read prices only. Wish me luck on Gold today. Market opens in 2 hours. Went long at 1750 on Friday.