Hi all,
Like Andhra, I am fairly new to this and have been reading and training with a demo.
So far, I thik I prefer trend following using macd as my main strategy, perhaps because I understand that fairly well. I have one question though regarding exits.
In most cases a trade seems to be moving rather inconsistently and doesn't really hit the stop loss or take profit positions set. What do most traders do. Is it wise to sit and hope the trade goes your way ? is it unreasonable to take whatever profits come your way when you are still in the green or is my psychology wanting ?
Thanks
Ken
Hey Ken, It is hard to answer that question really - there are too many things going on to know. What you should be asking yourself is, "Does the way I feel in anyway effect my judgement?", if you are in sim,then possibly this will not be an issue - it will come into effect when you start with real money - again start very small and build slowly.
The litmus test that I use, is to question whether my reason for taking the trade in the 1st place is still valid, has anything in the market place shifted that would make you beleive you have less of an edge. There is absolutley no reason not to change your mind if its based on changes. A lot of newbies tend to start looking for excuses in their trades as a reason to exit prior to their Stop, or Profit - and indeed start to move their stop further away (though fear) and also their limit further (through Greed). It is a fine line to tread and you have to be honest with yourself as to why you have made a change to your original plan.
If you find yourself making adjustments infrequently, then probability is that you are ok - but if it is becoming a common thing then start looking at why you are doing this.
Ask yourself if you have adequately defined your trading plan, and perhaps you need to adapt it a little. ? You may for instance introduce another rule - "If the market stalls, then monitor closely and exit early if it breaks out against my initial direction".
I cannot help with your Strategy as I don't base my trading on any Indicators - I personally don't like any. My advice it to just watch the charts, you will eventually develop an eye for what is happening and be able to trade without any lagging tools that lead you into a false sense of security - but to each their own -
I hope this was of some use.