fed up with trading @ Forex Factory

Quote: Originally Posted by eagle_eye im fed up. fed up of this site and the other forex forums. spend so much time on it for so long but not yet found or been able to create anything that is profitable. feel like giving up but cant think of any other way of getting out of this s**t hole, i know it can be done cos i know someone who has made it in trading. so i come back here, try another system, dont work.... its a cycle...fed up. Eagle, I know the feeling all too well. About 12 months ago, Ifound myself going around in circles, testing variations of the sametired old concepts repeatedly. Feeling totally frustrated anddispirited, I quit; but then I returned after a couple of months, withrevised objectives and expectations. I can't prove (even to myself) thatI'm consistently profitable now, but I believe that I'm getting veryclose.

The two threads mentioned by Razorman back in post #6 might notnecessarily be the only way to succeed, but IMHO they are an excellentplace to start.

Gil Blake, interviewed in Jack Schwager’s New Market Wizards(Harper Business, 1992), attributed his success to the following formula(see p 248):

1. Focus on trading vehicles, strategies, and timehorizons that suit your personality.
2. Identify non-random price behavior, while recognizing that marketsare random most of the time.
3. Absolutely convince yourself that what you’ve found is statisticallyvalid.
4. Use this to set up trading (entry and exit) rules.
5. Follow these rules.

In other words, you need to find a pattern, or behavior, in pricemovement that recurs consistently enough, to give you an edge. Thendevise a way of timing entries and exits to systematically exploit it.The James16 and BillyRay threads can help on both counts.

James16 is essentially about high momentum entries. Outside bars arehigh momentum reversals or continuations. Long nose pin-bars in 'lowtraffic' frequently signpost the end of trends. Other types of candlescan signal indecision or continuation. Study lots of higher timeframe(H4 upward) charts and look at the candles' context within a trend, and(most importantly) around S/R.

I only discovered BillyRay's thread recently, but my initialunderstanding is that it complements J16's work, but with even greateremphasis on S/R. 'High quality' S/R (read the PDF in post #1) points to adecent possibility of reversal, allowing you to take potentially highR-value trades with great precision. Price moves are ultimately causedby order size and placement, and the way in which the big players useS/R to 'drive' price has a significant effect. S/R can help you timeboth entries and exits.

Skunny's thread taught me to look closely at Fibos stretchedacross daily candles, and I discovered that moves occasionally begin atFibo retracements (38.2, 50.0, 61.8), and end at extensions (138.2,161.8, 200.0). In lieu of 'quality' S/R, by making pin-bar/outside barentries/exits at these levels, if these ultimately happen to coincidewith a reversal, then there are minimal pips 'wasted'. Somewhat morescientific than simply setting arbitrary targets at 50, 100, 150, pipsetc.

There are other patterns that I've discovered largely by myself. Theyinclude what I call 'surge-stall-surge'; 1-2-3 fakeouts; reversals fromdouble/triple tops/bottoms or high congestion;'breakout-correction-resumption'; etc, and can be traded on lowertimeframes. Certain patterns of high momentum (big) candles, in asuitable context (S/R, overbought/sold) can give clues as to who iswinning the supply/demand tug-of-war, and where price might ultimatelybe driven to. I am slowly starting to master these ideas,especially the exit part of the equation.

I also look for confluences, on the basis that the more 'highvisibility' S/R types converging on a certain area, the greater theprobability that they'll be watched, and possibly acted upon, by a largenumber of traders. Some details here.

The DIBS method taught me to look for low risk opportunities, but notmuch more. IMHO inside bars represent indecision, that's all. Inthemselves, they offer no real guarantee of direction, let alonemomentum that will result in a decent move.

Indicator based systems can work profitably, but IMHO they must operatearound robust ideas (trend, pullback, S/R, momentum - those same oldconcepts again) to be really effective.

The problem with FF is that there are so many methods in the TradingSystems area, doubtless started by well-intentioned folk, but by thetime they reach post # 500, the contribution of every man and his horsehas resulted in a dozen more indicators added, in an attempt to filterout false entries. Then there are all the hopeful MM 'solutions' -Martingale, averaging down, no stoplosses, hedging. The whole problem isthat people are unwilling to accept losses. I went on that same search,shopping from system to system in the hope of finding something thatwas more accurate, more reliable, more profitable. I found myselfchasing my tail.

Mark Douglas' books can help with your mindset, but I don't believe thatthe burden of success rests totally with 'the trader'. Like Gil Blakesays, we also need an approach that provides a real edge, onethat locates and exploits genuine market inefficiencies. Hopefully I'vegiven you some clues as to where you might like to start.

Here's the good news: If it weren't for costs (spread, swap), we couldbreak even using random entries and exits. So the edge needed is notthat great (the bigger the moves traded, the less significant costsbecome, %-wise), but waiting for the perfect setup to occur is atorturous process, giving recent losses plenty of opportunity to play onour minds. As Karmostaji says - patience! (Right, Karmo?)

Most importantly, start with the right material. Then study andpractise. Then study and practise some more. Knowledge comes fromexperience, and brings confidence. Take the high quality entry. If ithappens to move in your favor, ride it, according to a predeterminedplan. If it tanks on you, exit, and wait for the next setup. Rinse andrepeat; manage risk; be philosophical. At the end of the day, it's allabout handling uncertainty - both methodologically and emotionally.

Good luck - don't give up altogether just yet, but by all means take abreak to clear your head if you need to.

David