A few years ago and even to this day I ask for help on the forums. I will try to summarize some experiences that have helped me along the way.
First, unless you are a good programmer and can be on top of your robot, technical analysis is not based on rules, it's just an indicator. The books that teach technical analysis are dated, old (most written in the 70s) and are backwards looking. (Everybody can see an ascending triangle after it was formed). You don't need more than some lines on the chart because: Trading is done outside of the platform. Yes, it is true. The Chart price is just another indicator like the RSI, MACD etc. Proof: you are given the trading platform for free with live data coming from the market, why? Staying in front of the platform will just result in lost time, no insight, no edge.
Second, low timeframe trading (below the Daily chart) is unreliable for humans. The lower timeframes are reserved for HFT & algos. you need to increase your trading timeframe if you want money.
Third, you need to learn statistics. This will be a difficult task and it's the missing piece of the puzzle. Watch some statistics applied to financial markets on Youtube, it will guide you the right way.
Forth, Excel. For manual trading you need Excel. I suggest staring with Statistical Distrubutions of EURUSD using the Analysis Tool Pak. Use =CORREL function on currency pairs to determine the correlation level. (Use the Excel I provided for some Insight)
Sixth, Follow all major Central banks (FED, ECB, RBA, RBNZ, SNB, BOJ, BOC, BOE) when their Governors are speaking, get acquainted with the jargon and listen carefully what they say about economic indicators.
Seventh, Economic indicators put in Excel. For US: ISM Manufacturing, NMI, M2 money supply, CPI, PPI, Retail Sales, Building approvals, Consumer Sentiment (University of Michigan), Business Sentiment. Reading about them will give you a future view about what the economy will do. Example: At the moment the US indicators are on a maximum but with no proof that a recession will hit US. THe EUR marked a narrow escape from recession with Germany GDP contracting, France GDP contracting and sentiment falling for EUR along with their respective PMIs (lMarkit Link above).
Eighth, Timing. Use COT. Search for terms such as FLIP, Commercials, non-commercials. Youtube is your friend.
Ninth, Stop loss is above your ATR. Find the ATR formula and calculate it yourself for pairs.
There is still a lot to say and the strategy requires a lot of effort, however it is one that I value highly because it plays on my strengths. Recently I decided to make money out of the 50$ bonus account from some random broker.
I hope that some of my tips helped you shape that trading behavior. This evening I want to talk about ATR and how to use it (again, google is your friend on what is ATR, how is calculated and variations of the formula). In short, ATR = SL (I'm taking some liberties here for the sake of simplicity). What ATR does is to measure the volatility of the asset so that we can measure 2 things: Where will my SL&TP needs to be and how long will it take to hit that target.
In the Excel example I have used 4976 days for the EURUSD pair to measure the average volatility(marked as 'Daily Global Average' in Excel). After that I have counted the instances above and below the average. You can see additional info in the Excel but we can draw the further conclusion 'Over the past years volatility has been diminishing for the EURUSD meaning our profits become less and less, regardless of leverage).
Lastly, there is a simple SL&TP formula to use in your trading. It's what I use and has been useful so far.
Ostrzeżenie o wysokim ryzyku: handel walutami obcymi wiąże się z wysokim poziomem ryzyka, który może nie być odpowiedni dla wszystkich inwestorów.
Dźwignia stwarza dodatkowe ryzyko i ryzyko straty. Zanim zdecydujesz się na handel walutami, dokładnie przemyśl swoje cele inwestycyjne, poziom doświadczenia i tolerancję ryzyka.
Możesz stracić część lub całość początkowej inwestycji. Nie inwestuj pieniędzy, których nie możesz stracić. Zbadaj ryzyko związane z handlem walutami i zasięgnij porady niezależnego doradcy finansowego lub podatkowego, jeśli masz jakiekolwiek pytania.
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