I disagree with those who say that years and years of study, combined with voluminous textbooks, are required. If trading were about knowledge then all the economics professors around the world would be as rich as Croseus. From what I've seen they're always whinging for payrises. Trading to me (although I am not claiming to know everything) is simply about practice. EVERY single trading system works, it just doesn't work ALL of the time. In fact, it isn't possible to create a trading system that always loses. If it were, you would just do the opposite of what your system was telling you and always win!
This clearly never happens. The reason why any system doesn't always win is because the price moves at different speeds. When it's gently moving, your indicators can keep up, and you make money. But then the price moves more rapidly and your indicator(s) can't keep up, you get 'whipsawed' (as they say) and lose all that you had initially made. In my (humble) opinion, indicators are like motor cars. If you were learning to drive, it isn't the type of car that matters, it's the practice required. It's just 'screentime' (as they say) that matters. Those traders who have degrees galore only have more knowledge in WHAT to trade, Options, Futures, CFDs etc. They know HOW to trade these exotic securities and derivatives, but it's their experience that tells them WHEN to get in/out. Their previous knowledge is neither here nor there. I'm not sure about computer algorithms though, computers doing the trading in milliseconds. There may be something in that, but I doubt we pleb traders could afford such technological shenanigans. Best to trade the old fashioned way, by putting in the screentime, practice practice practice. Use just TWO indicators, one to define the trend, one to define a pullback. If you don't get a pullback, don't bother with it, scratched trade, move on. All the indicators repaint, even moving averages, but some repaint less than others and are more stable. Check them out, there's websites full of free ones.
If you're curious, my system uses:
Renko-SignalAM indicator to define the trend.
bbflat indicator to define the pullback (using the 0.00 mid horizontal line).
I only trade the EUR/USD on the 5min timeframe on Metatrader4.
Where to exit is up to you. I don't take less than 10 pips profit, as my stoploss is 10 pips also.
I used to use a Keltner channel as an exit point, but now just watch and see what happens.
I don't see the point in watching silly Bloomberg type TV channels, or listening to anyone. All the world's waffle is contained in the price at that moment in time. It's doing whatever it's doing and that's that, just react to it. I don't consider the price to EVER be ranging. It is ALWAYS trending, it's just the trends can be smaller and more numerous. Just watch the Renko-SignalAM indicator (which looks a bit like the stochastic, moving average type thing) and is easy to watch, and doesn't repaint that much. If it changes against you, just move your SL to breakeven, or get out and look to trade in the opposite direction (waiting for a pullback on the bbflat).
It took me many hours of heartache to cobble this simple system together. It's your for free if you want it. Good luck, Chavtrader xxx
