I tested too many technical indicator, some with better results some without. Also for some indicators I only read the mathematical concept, and did not bother to even test them. To be fair, i'm not a fan of indicators for some reasons.
1. Indicators are driven by price, they move with price. Almost all of them behave the same because they use same price action. 2. Millions of traders use same (or similar) indicators. 3. They lack good money management, also hard to find the target on any trade. 4. Technical indicators are easy to lean how to trade them and also can be easy programmed on EA. 5. Technical indicators don't predicts market turns. etc
In trading I'm not driven only by profits but also by the glory on being able to predicts price action. The only strategy that can do that is EW Theory (in my view). I like to trade not on a mathematical formula but on my view and understanding of the market. That way I'm forced to make rational decisions.Trading with EW also require a good understanding of the fundamentals, so I'm required to read a lot. It is good to read because that way I get information about the world around so it is a win-win situation.
I'm not trying to teach a strategy or trading method, it is up to the trader to chose the strategy that fits him. I'm trying to teach money management (which is very important). Of course knowledge and experience is to be shared and not sold, so I'm offering it free.
About Ichimoky, to be fair. Of the all indicators I saw it is the best and I believe it can bring results. The perk is that it brings results only on trend and not range. So when market is in range it will eat most of your profits. I would advice to use market sentiment as a filter. That way will filter out many loosing trades. If you have no knoledge about sentiment, let me explain:
Sentiment is the ration (longs vs. shorts) of retail speculative traders. It show how many traders are short and how many long in percentage. Most of the retail traders lose money so it good to do the opposite. If more traders are long than short, look to go short, and the opposite. To find good data on sentiment go to: https://fxtrade.oanda.co.uk/analysis/open-position-ratios
As an excample of EURJPY sentiment 43% of traders are long and 56% are short. So look to buy. If Ichimoku give you a sell signal don't make the trade, if it give you a buy signal make the trade. Hope I was clear.
I will write some basics of EW and how to find the first wave (it is not possible to find first wave, only third, then some reverse/back engineering) but some days later, maybe on the weekend.
Elliott Wave Theory is a technical analysis tool that helps to analyse market cycles and trends. EWT states that investors psychology moves between optimism and pessimism in natural sequences. These sequences make patterns that are fractial (similar in different time frames)
Elliot wave states that there are five dominant waves (1,2,3,4 and 5) and three corrective waves (A B and C). I't is a very big subject but I will try to make it simple and not only explain wave structure but also the psychology and reason why it happen.
1. Wave one is a new trend market. When the first wave of a new trend market begins, the fundamental news is almost universally negative. Wave one consist of five dominant smaller waves (i, ii, iii, iv and v) 2. Wave two is a corrective wave but it can't never correct fully first wave. Usually the price retraces between 61.8% to 76.4% of first wave. Typically, the news is still bad and most of the traders can't figure out the new trend. It consist of three smaller corrective wavew (a, b and c). 3. Third wave is usually the largest and most powerful wave (but never the shortest). Wave three often extends wave one by a ratio of 1:1.618. It consist of five dominant smaller waves (i, ii, iii, iv and v). 4. Wave four is corrective and usually price moves sideways. Most of the times price makes a triangle. 5. Wave five is the final wave of the dominant trend. The news is almost universally positive and everyone is bullish which makes a market extreme. Wave five makes a new high (at least one pip above wave three). A. Wave A is a corrective wave of a trend market. In wave A of a trend market, the fundamental news is usually still support the trend. Because to many stops get hit the wave A consist of five smaller impulsive wave (i, ii, iii, iv and v). B. Wave B is a corrective wave and consist of three smaller corrective wave (a, b and c). Usually wave B makes a pattern that many traders recognize as 'head and sholder' and gives way for wave C. C. Wave C is the last corrective wave of a trend and is impulsively in five smaller waves. Wave C is usually 100% of wave A and may extend also to 161.8%. The complete correction of A B C usually correct the rally of 5 big waves from 61.8% to 76.4%. From there the trend may continue. The best waves that i could find on this basic pattern is Crude Oil (only current market is a bear market not a bull one). To make it easy to notice I made the bigger waves in RED and the smaller waves in WHITE labels.
There is no doubt Elliott Wave works because that is the psychology of the market and most of the traders make the same mistakes over and over again. The only problem traders face is counting waves (correctly) which requires a lot experience and patience.
Hello Dear Ardit, I really Thank you about all you your kindest effort, during last daies I was tired and lazy, and have traded maybe under stress of aspectatives, and without fixing 3 stops, so, the market shouted me out, it has been wonderful and funny lately playing without stops, but, once and at once my very little capital was puff.. just gone. Why? because I did NOT paid the right attention and made correct studies. So, I'll start again also studying your wonderful Elliot Waves and in Demo account. Thank you so much and I'll read you very carefully again from tomorrow afternoon. Thank you and Take care.
EURJPY support lies between 137.80-136.50 then the pair should trade higher. The pair is in a fouth wave correction (A,B and C) and we should se the begining of fifth wave. The fifth wave can reach as much as 152.
My trade idea is about constantly buying the pair on this level with two targets first 50-100 pips and second above 1,000 pips. If first target gets filled I will trail the stop.
I is good to be patient and wait for the market to come to you.
Dear Ardit, thank you so much for your kindest reply, I bought the book that you have suggested in my language, tomorrow I'll here studying Forex, I just came home from my job. I switched on a demo account before burn others money I prefer follow your very precious advices. Take care and very much thank you
EURJPY is behaving just as expected. I bought at 137.70 and added at 136.50. Which are longer term trades. I also scalped on the buy zone collecting about 1,250 pips. Now the trade is free and I will let the profits run. I'll have more time focusing on other trade opportunities.
I decided to stay out of EURAUD because it did not behave on short-time frame as I wanted to. And it was a wise decision :)
EURJPY in clear impulsive rally (five waves within five waves) from the 123.6% extension level at 136.5. I'm expecting three waves correction to add to longs. Support lies between 137.50 - 138.00 and next targets 140.90 - 142.00.
Hello Ardit, how are yoiu doing!' I just came back from my daytime job, today has been tired day, Thank you for your advices, I bought the book you suggested, still did not received it on Elliott Theory. I jumped into the EurJpy following your trading ideas, Thank you. At 19,00 - 20,00 I have one hour of studies on Forex.
Today's new high on EURJPY changes the view of 5 wave rally. More likely an AB-(A)(B)-AB type of move.
I moved the stop to 139.15 which I locked another 235 pips profit. I target the area 141.20 - 142.00 (100%-123.6% extension) where I will start to take profits. From there I will wait for correction to enter long again. Patience pays.
Trying to find another setup. Only short NZDUSD seem promising. I will try to short here around 0.8326 with 0.8435 stop. Two targets 0.8216 and 0.8030. Good luck.
NZDUSD chart a little bit ugly, but ideally the rally should be stopped at 76.4% retracement and price should turn lower. I entered short but on small position. If I get stopped I locked enough profits on EURJPY to cover the losses. Lets see.
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