How to make money trading the FX market

I normally trade US stocks intra-day but occasionally trade FX.
I've just come back from a three week holiday and very unusually for me position traded cable for a few days from a poolside - the classic and normally mythical dream !
It seemed to me that fundamentally cable was heading south for a while and my falling candles set up occurred so I took a modest short position so I didn't make a huge amount of profit but it was 257 pips.
I didn't take a larger position size as I felt I needed to give it a bit of room and I didn't want to be constantly checking the price and movement - it was a holiday !
The entry point was at the point indicated and the image taken at the time of exit.
I felt it was approaching that earlier support zone and had fallen quite a way over consecutive days so the probability of a reversal was rapidly increasing.
The first image is obviously of the trade, and I took the second one today to show what happened after my exit.
On the "How to make money trading the markets" thread I talk about one of the dozen trading set ups I use every day trading US stocks and this is a slight adaptation of that method. FX is different to stocks as trends tend to be fewer and persist for a much shorter time than with the stocks I like to trade. In other words I don't require a pre-existing strong trend, just a strong move at the time of entry. These moves aren't predictable in advance, I just look at the major pairs and see if anything is actually happening at the time.
I intend adding to this thread if I think something might be of interest or use to people.
There will be plenty of losing trades but they will be smaller than the winning ones as I will be using similar principles to my stock trading, set ups and price action over different time frames. They will also be far fewer in number as I prefer stocks which offer a huge range of trading instruments, not just a handful of FX pairs.
Many of my methods work on FX but not with as high a success rate as with stocks.
Hopefully some people will find the posts helpful.
If the methods are sound, then they can be adapted to some, not all, different trading instruments.
I don't expect there will be many wins of such a large size !

Hi Mr Charts. I only trade fx and have a method that uses something similar with volatility being the entry criteria. I should point out that these sorts of moves in smaller time frames are often followed by a reversal. It is okay if you manage the trade correctly for a BE or tiny profit on about half the failed ones. The signal is definitely less likely to fail on the 4 hour and higher. Just thought I'd share my 2 cents on this.

Thanks for the positive contribution. Volatility and range are key considerations, I agree.

Good spot. This pair flashed a short signal to me too last week. I was also away on hols, but without comms so this is just one that got away.

Thanks both for this discussion, it has sent my mind back to thinking about exits, which is where the real money is made in trading, literally.

GBP/USD is clearly not in an established downtrend so early exits for profit would be appropriate. But long and stable trends do occur in forex - e.g. AUD/CHF etc.. I am going back over my charts to select criteria for with-trend trades in "supertrends", where my usual risk-averse tendency to get out too early should be definitely resisted. Thanks again.

And another multi day trade in cable +204 pips, just using the one method in my US stocks thread i.e. falling candles.
Exited because of support zone.

Obviously losing trades happen, but position management ensures they are smaller than the winners.
There will also be trades over shorter time frames.

As mentioned in the last post, here is a short term trade from this morning, a scalp really.
I happened to see a sudden surge in cable and jumped on board the one minute rising candles till it looked as if it was running out of steam and so then exited for +8 pips.
The difference in approach to the rising/falling candle in my other thread on stocks is that there is no pre-requisite for a strong trend.

There will be losing trades using this method (and the others I use) and I'll also post the losing ones, but so far I'm having a good run

You can see the progressively shorter candles which suggested it was time to take profit.

nice rising 3 min candles EUR.CHF scalp

GBP.USD jumped on falling 1 min candles and this one was a loser -6 pips

EUR.USD +46 pips using falling three min candles set up

I'm finding it very interesting how many of my set ups I use trading US stocks work well on FX
Here's a chart of that last trade closed a few mins ago for +46 pips

A brief trade whilst preparing for the US stock market open.
Simple break out in trending pair
Entry

Exit for +23 pips

Please focus to the simplest thing, create order and hit TP or close trades at positive position. Everyone has their own secret to make this real, find by yourself.

GBP.USD. 15 sec charts
falling candles +29 pips
then again falling candles +14 pips
both trades exited when candle took out high of previous

trades on results of BoE decision
don't normally trade on such a short time frame

too busy to take chart images at the time, sorry

R -
Delighted you have started trading the FX charts at last.
Keep up your very good work.
TEAMTRADER

TEAMTRADER said:

R -
Delighted you have started trading the FX charts at last.
Keep up your very good work.
TEAMTRADER

Click to expand...

Thank you