Br88dy

I wasn't planning on buying a strategy, I was going to develop one on my own. Well I want to be an intraday day trader, so is fading a breakout not a good strategy if I want to stick to the 15min timeframe?

Yes, for a little over a month I've spent several hours a day watching the major trading pairs on Trading View's excellent online software. This isn't a lot of time, but I'm not burnt out yet, so the signs are good that I'm willing to learn. I'm definitely coachable, which is one reason I think I can eventually be good at this. And I'm certain most people make an effort to build this "master plan" that will give them 90-100% certainty on every trade. But the difference between the 5% and the 95% is the ability to stick to the plan, without letting greed or any other emotional roadblock get in the way. That's what I need to learn how to do. I plan on using recent highs and lows, candlestick lengths, maybe a Bollinger Band to see current volatility, maybe Fib levels. I'm an extremely intuitive person and have a good understanding of human nature, and I've noticed this skill comes in handy when predicting where prices will go when false breakouts occur. But also, just watching non-stop for over a month has given me a good idea of how volatile a pair can be, and even better- how the pair reacts at certain times of the day. The reason I chose to start with the concept of fading breakouts was because, generally, breakouts occur when the pair is ranging. And pairs range 80% of the time, which would present me with more opportunities to trade each day since I want to trade on a 15 min chart. But of course, I don't plan on making 5+ trades a day. 2-3 well set up opportunities sounds more reasonable. My goal is to gain 25-30 pips a week and using a compound strategy of leaving everything in my trading account so I have more capital to work with. I don't plan on supporting myself through trading for a few years, so I'll have to have a job on the side. We'll see how that goes lol

I wasn't meaning to sound lippy, I apologize for that. But as far as I understand from what you're saying, it's best not to have a strategy at all? Unless your strategy is strictly risk management? In other words, in your opinion what is the best way to trade a major trading pair like the EUR/USD? I'm trying to come up with a strategy that fades breakouts on a 15min chart, probably with the EUR/USD. I wanna do what the profitable traders are doing, or the opposite of what every once else is doing. From what I understand, 95% of retail traders are losing money. So I want to watch the markets and for the most part, trade against the masses when false breakouts happen. I want to use a great deal of market sentiment in my strategy, but don't want to be naive and not use fundamental or technical analysis. And of course risk/money management and candlestick patterns are shoved in there somewhere. Any thoughts on my approach? I really appreciate the feedback so far, so thank you to everyone.

There are patterns. Elliot says so. But yes, you're exactly right, I want to create a hybrid pattern of the "set it and forget it" strategy. I want to use my own discretion on most trades, but I'd like to use the technical approach to find setups easier. Just need to figure out the best/most efficient way of getting numbers like that guy did in his article.

Lol so what is a shrew in relation to being a trader? Another word for "noob?"

What's a shrill? -----------------------

I do understand that concept, completely. I'm not trying to build a system that is fail proof and one that I can "set and forget." I find joy in watching charts and have found I have a knack for predicting market sentiment, mainly on the small time frames. But more importantly, I think, is that I'm aware that there are scientific patterns that the markets have followed ever since the beginning of time. Strategies don't account for the general mood of society during that day, week, month, or year, but there are patterns out there one should be aware of. Like what days of the week the markets are most liquid, what hours of each day I should avoid trading, etc. Those are the things I'm looking for. I was just wondering if there was a more efficient way of getting numbers like that, rather than manually looking at everything day by day. For example: I found a great article on developing a trading strategy on the Trade 2 Win forums, but the guy never explained how he got his numbers. I wanna know how he got these numbers is all. This link below is the great article I read: Developing a Trading Strategy

Could you elaborate Obsidian? I didn't really understand this part of your reply

I'm trying to take the initial steps in creating a rough draft of a trading strategy and I decided to start looking for patterns. However, I have no idea how to backtest a theory. For example: many people believe the highest range of trading happens within the first couple hours that the market is open, or for the FX, the first couple hours of the London/NYC market hours overlay. I have no idea how to begin testing and searching for patterns. I thought that MT5 might have had a feature that allows you to enter an equation and spits out results, but even then I wouldn't know how to write the equation to get results. If anyone knows anything about backtesting theories, I would be extremely grateful for any amount of help! Thank you!

In all honesty I think greed is the reason why the majority of people aren't profitable in the FX. I'll keep testing my 100% risk, 70% certainty, 4 pips a day strategy. I know it'll change at some point, but it will probably conform to what I'm best at and what I'm willing to lose in 1 trade.

Well I'm not trying to make 100 pips in one trade, I'm going for maybe 5 a day average. I don't plan on making good money till after a couple years, and during the first 2 years leaving everything I make in my account so I can use as much leverage as possible. If I can clearly see a trend, and I can make 6-10 pips a day on trends, then I've already made more than my goal. "Slow and steady wins the race" is the strategy I'm trying to build and use successfully.

Well, being 80-90% wouldn't be a normal thing. I'd say it'd be good to average 70% certainty on every trade. Which also means you might only do 1 or 2 trades a day. And if you're ok with the losses you sustain the rest of the 30%, then why not use more leverage? Just makes more sense to me, but again, I'm new to this.

I have a question about this .35% rule. If you're using leverage to buy 10,000 Pounds with around $315, why would you only risk .35%? Wouldn't that make the process of earning the necessary pips to earn the 2% longer? The only reason I'm entering a trade is if I'm certain I know which way the pips are going, so why not use the $315 and make the 2% quicker? And have a well placed stop loss? I would like to know why using the entire $315 is a bad idea if you're 80-90% sure of where the pips are going. Thanks again for the patience!

Ok, that brings me to my next question. When you purchase, say, a 10,000 mini lot of GBP/USD, does that mean you have to constantly watch the pair? For example, if I enter the trade and make 5 pips, which is more than my goal per day, can I exit the trading for the day and be 5 pips higher than I was before? Or do I have to keep watching it? I have small goals for each and every day once I start trading real money. I plan on keeping all my profits in my trading account for 2 years, while working a normal job. Using a compound strategy I should be able to make a good living after 2 or 3 years. Anyways, I have a million questions, but I'll leave them for another day. Thanks for the help guys

I understand that being profitable in the FX is supposed to be wildly difficult and often takes years to master. But if you look at the 2% compound strategy, and take, for example, 1 standard lot size of GBP/USD at 1.5824, you'd pay 3164.8 for the lot. And if 2% was your goal, you'd have to be up $62.30, or 6.23 pips. Is 6 pips hard to average a day? I still feel like I'm missing something, because after a few days of studying candles and Fib support levels, I started paper trading. And over the past few days, 6 pips was extremely easy. In fact, 2 nights ago I was up 32.6 pips in 45 minutes... After hearing how hard trading the FX is supposed to be I've been containing my excitement because I'm afraid I'm doing something wrong. Anyone insight would be extreeeeemely appreciated. Thanks

Oh and another thing, is 2% as "easily attainable" as you think? If the GBP/USD opens at 1.58014 (like it did today, the 3rd) it would have to move 316 pips to reach 2%! And you'd have to average around 300 pips a day for those 365 days, as long as the value of the dollar stayed around 1.58 for the whole year. I looked up the average volatility for the GBP/USD for the last 10 weeks, and it said the average per day was 122 pips, or .78%. So, you'd have to be able to watch the forex every minute during the most volatile hours to be able to go long and short at the right times. PLEASE tell me I'm looking at the numbers wrong. Otherwise I'll just have to say I knew becoming a millionaire by 365 days was too good to be true (I was planning on using $1k on my first day, compounded daily at 2%, which would have put me at 1.37million at 365 days).

Do you mean 35% risk? And where does this number come from? I love this strategy btw...I've always been a fan of compound numbers lol

I appreciate it Tim, now I can stop sleep walking around the internet.

1. Why I'm 23 years old and was recently told I won't be able to fulfill my lifelong dream of being a pilot in the military. Instead of moping and being stagnant, I decided to get going on another career I've been interested in for many years. So, I guess that means I want to make this a career. 2. Commitment Well, I'm moving to Phoenix in a month, so I'll need to get a job to support myself. But I plan on putting in several hours a day into developing a strategy and system. 3. Timeframe and method I'm brand new to this, so I don't know what a swing trader, scalper, position trader, or news traders are. All I know is that I want to eventually just be dealing with futures, and if I'm successful enough, start a hedge fund. 4. Account/Investment size I'm starting with nothing. I don't expect to be live trading for a few months, so that gives me plenty of time to paper trade and come up with a strategy. Not sure how much I'll have to start with to open an account with a broker. I don't even know what markets are available for futures contracts traders. Like I said, I'm BRAND new to this. 5. Money management Like I said, I'm brand new. But I plan on using the next few months of paper trading to come up with a trading method. I come from a poker background, and I've become pretty disciplined in that I don't let my emotions affect my strategy. Once I developed that discipline I've been able to win at least 90% of all the weekly home games I play with my friends. So I know I have the ability to develop a method that will become profitable. 6. Product Like I mentioned before, I want to stick with futures. The amount of research and speculation involved in stocks is a headache to think about. Futures has a huge amount of risk, but also a massive amount of potential for serious profit. I would like to use my own cash to develop my own portfolio. Not too interested in using other people's money to make money. I would feel a lot better about losing my own 10 grand than losing someone else's. I realize it may take 4 or 5+ years to have enough cash to support myself, but I'm willing to go thru all the bad times to get to the good times. 7. Broker No idea who I'd use, I'll think about that once I have cash and a strategy. 8. Platform I don't know which platform would be best for me. But I can say that when I start live trading I'll be using a Mac, and that I'll be dealing with futures. 9. New Source I suppose news will have an affect on futures, but I'm not sure what I'll do when the time comes. 10. Computer I'll most likely be using a Macbook Pro when the time comes. 11. Internet My internet in Phoenix will be high speed and sufficient. If anyone has any suggestions on where I should start, like what books to read or what websites to look at (especially for futures contracts) It would be much appreciated. I'm currently spending anywhere from 4-8 hours a day of research online, but if I knew where to focus my energy I'd learn a lot quicker. Thank you!