Dr Pip

Hi Everyone,

I am looking for advice and/or a mentor to help me take my trading to the next level.
Since this is my first post I'll start by introducing myself.
Hello everyone,

First off I'm 23 and have been trading since late 2005. I started off in stocks with hits and misses for the most part. To make a long story short I destroyed a few small accounts, experience as I like to call it. Now that I have graduated college and have had free time awaiting acceptance into a medical program, I dedicated the past few months to Forex. I have read as many books as I could get my hands on (around 10-12) and I have gone through Shoot's pro course 1.5 times so far. I must say I was ready to give up on trading all together till the course opened my eyes.
Now that you have my background maybe someone can help me further my knowledge. For the past few weeks I have been breaking even and I'm ready to step up my game plan. My current strategy is as follows: (demo trading for now)
EUR/USD New York session
5min and 15min time frame
Price Action based on what I see and Slow Stochastics (8,3)
My Risk/Reward is 20pips/13pips (questionable I know but it seems if I place my SL any closer I risk getting whipsawed out too easily)
I look for 2% daily (about 20 pips ) and trade 4 days a week.

My account has its ups and downs. Last week for example I had a two and two day streak. The first two days showed me a 5.7% gain and the next two I managed to lose it. Based on my plan if I lose more than 3-4% in a day I quit trading for the day.

Here is last weeks trades as an example:


These trades netted me 2.7% for the day. The second trade I like the setup and traded off of instinct instead of stochastics closing it out early. As you can see it would have completed about 4 mins after I closed out the trade but the trend was reversing so I closed the trade and called it a day with 21 pips profit.

Hopefully you can see kind of how I'm trading and maybe someone is willing to accept a student to help me reach a new level of trading.

Cheers,
Dr Pip

BrendanEgan88

Hi Dr. Pip ,
First off welcome to the community

If you haven't already be sure to check out the videos in the InformedTrades University as there are some excellent Forex videos in there.

There are also four links below this post that I strongly suggest checking out as they are all loaded with information, primarily on price action and market psychology which in my opinion are critical to any trader in any market.

I think you are in the right place to help bring your trading to the next level and I look forward to seeing you around the site.

-Brendan Egan

Swedish

Im def. not a pro and a beginner in forex just like you. But it seems that we both use the stochastic oscillator at least

I use the standard parameter in metatrader for stochastic oscillator which is %k 5, %D 3 and slowing set to 3. Do you find 8,3 better? or it might have been your standard parameter in your software?

Anyway, what I look for is pos/neg divergence between price and the stochastic oscillator, and RSI . I would'nt take a trade if I don't see a divergence. Of some reason I have easier to see negative divergence for the stochastic oscillator.... ...so it seems that I'm left with most shorting opportunities

I also use RSI , because RSI (as I see it) really determines where the price is overbought or oversold. Here I check the 1h chart also to see where a new trend might start. When 1h RSI is overbought/sold we often bounce back and start a new trend. This is also common in the 15min chart, but if the currency pair is in a strong trend, RSI and as well as other indicators will be misleading. That is why I wait for a divergence. The very top often ends with two tops, quite close within time, showing negative divergence.

The stochastic oscillator bounce between overbought/sold all the time. Yesterday I implemented (thanks to Cody) pivot points, and I must say that those pivot points seems to give me much better entry points. Price often hit those pivot s/r, and if RSI is overbought/sold at the same time it gives me more confirmation that price must reverse. So if I see this and two tops where the stochastic oscillator shows negative divergence I would take a trade.

Well this is basically one of my systems, perhaps this helps you as well.

You are very welcome to add my msn: fredrikmagnusson205@hotmail.com
Since we are both beginners maybe we can help each other become better and reduce mistakes!

Best regards!

__________________
/Swedish

coronajazz

My advice is to look for trades that have bigger profit margin . I have around 60% losing trades most of the time but still end up profitable at the end of the month.

__________________
I dont care if it goes up or down as long is it moves
http://www.informedtrades.com/blogs/coronajazz/

Dr Pip

Brendan - Thanks for the warm welcome and advice. I will check out the videos as I have time, hopefully soon. I also have been planning on writing a review of your and Shoot's Pro Active Trader Course. In a few quick words the course helped open my eyes to learning to think like the pro's. I still have a long ways to go but after reviewing it I can honestly say it was the push I needed setting me in the right direction.

Swedish- Ok I have reviewed what you suggested as your system and plotted it in my demo. I originally had the slow stoc. at 8,3 as a personal preference. I will switch it to 5,3 as it will be a little faster. I originally started trading with tons on indicators in a system (as most newbies look for). Now I try to keep the chart as clean as possible and trade from instinct more or less. I do like the looks of adding RSI to the chart so I will be playing with it tomorrow. As far as pivot points I have a decent feel for reversal based on S&R and adding pivot points seems too messy for me.

coronajazz - I may need to step up to a larger time frame for a bigger profit margin ? Two trades easily makes my goal for the day with my current plan so I may need to guard my stops manually as in if it starts against me get out and look for a better entry..

Those are just some ideas. I hope to keep this updated daily so I can keep myself on track. Thanks for the positive responses informed trades as a whole seems to be less ego based and more on helping each other .

Thanks,
Dr Pip

BrendanEgan88

Glad to hear Dr Pip ! Good luck with your trading and remember we're all here to help

Tekmnd

Hi Dr. Pip

My suggestions:
Give up med school; statistically doctors make the worst traders

On a more serious note-
The problem is going for such small moves (20 pips gains, 13 pips stops).
Part of the reason is the spreads; part of the reason is that you aren't giving the trade any room.
If you increased your time frame a bit and doubled your profit/loss (went for trades with profits of more like 40-50 pips with about a 20 pip stop) I think your success might improve.

Cheers
Tek

Dr Pip

Good morning everyone,

Tek - Thanks for the suggestions... I had a good laugh for sure at your comment that doctors don't make good traders and... I assume engineers don't either?? (considering its my current profession! ) Looking at my charts and indicators last night I was not seeing how I would trade the larger time frames bc no trades were lining up with my strategy.

Later last night I read some more of a book by Alexander Elder that basically said that people looking at one TF will be in for a surprise when they are trading off of a smaller time frame and a larger time frame reversal sneaks up on them.. I used to trade off of three charts anyways and decided that was a missing key in my current strategy.

Swedish - Thanks again I really like the added RSI and slow stoch 5,3 settings as they are slightly faster.

NOW... This morning I get to work only to find a trade sitting in my lap as all three charts appeared and this is how I saw it:

My planned entry was 1.4690. It escaped me by a minute so rather than chase it as it ran 6-8 pips I waited for the retrace and got in at 1.4692. The trend was more or less a downward channel but the 5, 15, and 30 min stoch and RSI were showing oversold. I placed my order to go long for 40pips with a stop at 20pips.
5 min Chart below


15min on top and 30min indicators below that


My pip goal is about 20pips daily. Here is how I played the trade: I looked for an entry on the 5min. It immediately went in my direction upon entry and when It reached 10-15 pip profit I moved my stop to a pip above break even. I wanted to close out the trade as it hesitated near the downward channel line I drew. I waited as it broke and aggressively chased with my stop above the channel as it climbed another 10 pips to lock in a minimum of half of the movement. The price hesitated at the 1.4720 line so like an amateur I exited early with a 26pip gain. Within a minute it easily exceeded my 40 pip target.

Overall I quit the trading day with a 26pip gain and 3.78% gain on my account. This is good in my opinion but I was not happy about deviating from my plan.

I need some professional advice on what sites have the best calendar for news releases. As of now I ignore them but this needs to be a part of my daily routine so I can avoid trading those times. Also if you look at any other markets to gauge the the trading day this is another step I think I need to add to my daily routine. (I only trade the EUR/USD if it makes any difference)

Thanks in advance,
Dr Pip

Tekmnd

Hi again Dr Pip

I made that statement in jest, but actually it is true- statistically doctors make the worst traders. This is because trading takes accepting that you will be wrong a lot of the time.
In general, doctors are used to being right, and used to it not being questioned.

Engineers struggle with rigidness. The see everything in absolutes (black and white). This is my problem as well. Dave used to call me "Precision Tek" because of it. I actually never even realized it until he pointed it out in something I wrote, and then I started noticing it more and more in other areas.
Be aware that this could be a difficulty that you must overcome.

It seems new forex traders always scalp (I did at first as well). For me, I found that I was much more successful when I switched from scalping to day trading.
Part of this is if you are trying for a small amount of pips in profit, you can only risk a small amount of pips . Otherwise your risk to reward ratio is off and you will lose out over time as a few losers will wipe out the gains of all the winners.

This means that you would have to be almost perfect on your entry and that is hard to do consistently. Also, the spread kills you as you start each trade down a fairly large percentage of your profit goal.

There are a bunch. I use DailyFx.com. They have a calendar link with all of the upcoming economic reports for each country. You can see the expected results, the previous reports results, and you can click on the report name and find out info about it. For the most part, I only pay attention to the major reports.

Trading For A Living is a great book.

Cheers
Tek

Swedish

If you look careful you see that stochastic osc. shows a positive divergence before the price starts to trend up. And before the whole downtrend the stochastic osc. showed a negative divergence. I really like the stochastic oscillator
At least in your 15min chart, the chart I use right now for my new system that I analyze.

__________________
/Swedish