***Indicators may change over time. Please refer to "Quick Summary Post" for most recent setup***
I've decided to go back to basics and focus on the simplest strategy I could come up with. Part of this is inspired by the book Attacking Currency Trends, by Greg Michalowski.
One of my biggest problems is looking at too many factors at a time. There was a reason to be in or out of every trade. And when a trade went well, there was no clarity as to why. Therefore, I am going to focus on a very limited scope of setups, ignore the rest, and only move to more granular methods as skills permit. So, I am eliminating nearly everything and focusing only on trendlines and powerful moving averages. I have chosen these because they are universally respected. No MA crossovers, no oscillators (sorta, see below). Ultimately, the goal is to move to one minute charts and focus strictly on trendlines, patterns, and Bollinger Bands.
Indicators:
MA(200) - Red
MA(100) - Blue
MA(50) - White
EMA(20) - Orange
Entries:
If the price is over the MA(200) and MA(100), it's bullish, if it's below, it's bearish. I'm not concerned with crossover. I will be looking to enter on a trendline bounce. This trendline bounce should also have some relation with the moving averages.
Exits:
Exit would be a break of some line. Perhaps price moves quick and I close when it re-enters the BBs. Or maybe it runs nice and steady and I exit on a break of the MA(50) or MA(100). Or it falls through the trendline I entered on. Not sure which I will use in what situation. Will be part of the learning curve.
Money Management:
I am not using any techniques, as I'm not ready to think about this yet. At the moment I will start with the minimum of $0.10/pip (0.01 standard lots I think?). Enter with all of it, exit with all of it. In time that may change, but it severely distracts my focus right now.
Time Frame:
When I am trading intraday, I am using 5 minute timeframes. The 1 minute is too fast, the 15 minute is too slow, and I have a limited amount of time around work. Swing trades will be on higher timeframes. I will ignore multiple timeframe analysis because it is too distracting right now.
The Oscillator:
I dislike oscillators and have no intention of using them long-term. However, I'm finding that when price bounces around in a range, I get killed in too many trades before the price finally picks a direction. Therefore, to minimize damage, only until my skills improve, I'm using the Elliott Oscillator. This cuts my number of trades in half when ranging. I am also ignoring Fibonacci lines, as they are too distracting as well.
Goals:
I figure this is a good starting point. I won't have to worry about micromanaging my trade and can focus solely on recognizing price action patterns. Also, the trendlines minimize the loss on a trade because they are very defined. The goal is 5 pips max loss. 10 pips if price bounces quick and I get in a little late. My goal for now is to make 1 of 3 trades successful. My other goal is to be full-time trading come January 1st. This goal is not arbitrary, as I will have a three month window off of work for carpal tunnel rehab (this will be my longest post).
That's it. Was much longer than I expected for the first post. I hope this thread helps myself and others. :)
-Ryan
***Indicators may change over time. Please refer to "Quick Summary Post" for most recent setup***