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Let's assume for a minute that you find yourself with a little extra cash and decide you want to start trading Forex. You could start by going to the web searching Forex trading where you will find a wide variety of information some of the good most of it crap. On the other hand, you could try reading a book there are hundreds of them, most of which I have read and there again you have the same problem there are some good books but most of them are just rehash. Maybe you decide to join trading room where you'll soon find just like the webs and books most are just no good. So maybe you'll just download MT4 and buy a robot to do the trading for you. Then you will soon have your account wiped out because all robots free or the ones that you can afford are no good.
This is my standard type of entry for Range breaks and news trades.
This is my standard type of entry for reversal trades and pullbacks. The orders look the same at a glance but their not.
I use a couple different methods for getting into and out of me trades. But one thing never changes . My orders always go in with preprogramed profit targets and stop losses. One click gets me in and out. No battling fear and greed. .
BEFORE YOU START ANY TRADING METHOD TRY THIS :
FIGURE OUT WHAT YOUR AVERAGE LOSS WILL BE TRADING THAT METHOD THEN NEXT TIME YOU ARE OUT AND ABOUT WALK UP TO A RANDOM PERSON YOU DO NOT KNOW AND HAND THEM THE SAME AMOUT AS YOUR LOSS IN CASH AND SAY THANKS AND WALK AWAY..... IF THAT BOTHERS YOU THAN YOU CAN NOT TRADE THAT PLAN BECAUSE THATS WHAT EVERY LOSS WILL FELL LIKE.
I believe after several years of studying everything there is about Forex trading, I have concluded that there are only two ways to efficiently take money from the Forex market one commonly called scalping that's what going to discuss here. The other is long-term trading.
Let's start by discussing what scalping really is. Scalping is a trading method where we take advantage of the imbalance of order flow. We are not trend traders or range traders. We look to take advantage of a temporary change in buying or selling pressure. For example, when we see that the current market direction is up, we look to go along when there is a lack of sellers or an abundance of buyers.
While there are many scalping techniques out there the method, I use is a modified version of price action scalping that I learned from Bob Volman in his book "Forex price action scalping". If you're going to be scalping in Forex in this book is a must-read. There are seven basic setups that I look for my entries there all versions of range breaks were pullback entries. But the real secret is understanding price action being able to watch the charts and see the order flow and determining the best time to enter based on the absence of buying and sell orders. This is not as hard as it sounds, the seven setups are easy to learn. That is just a matter of watching for enough order flow and trade volume. This is something that you will only master with lots of screen time.
After the news release its back to business as usual monitoring the EU tic chart for an entry.
Around 11:00 AM New York time my trading is done. It varies a little day-to-day, basically when the volume dries up, I am done. Most days I am setting at a nice profit. At this time, I update my journal and include a picture of each trade. I do not use a mess of indicators or multi time frame charts. Adding anything to your chart just blocks your view of price action. The methods I use are all-simple and clear-cut. And most important they are profitable!!
Now I just set back with my coffee, watch the action on a tic chart of the eur/usd, and look for one of the price action patterns/setups to appear.
At 8:29 EST I change over to the charts I’ll watch for news spikes and be ready to fire off an order. If I am in any other trades, I close them I never hold a trade through a news release. I have one trade plan for trading news spikes and I trade it repeatedly. I do not change it ever because it works.
What is important to me is how the overnight (European open) trading went and is the EU above the Asian opening price (5:00 PM the prior day), near the high of the day, near the low of the day, or just flat. I am trying to get a feel for the market.
Next, I open a forex calendar to see what news events have occurred and what is coming up for the U.S. trading session.
This is how I go about my forex trading day. I get up in the morning about 8:00 New York time, and go get a cup of coffee to my brain functioning. As I head to my den, I pass my router, so I give a reset, so it can refresh. Then set down on my leather chair (it is important to have a comfortable chair) and power up my computers. One is a desktop I trade on and the other is a laptop for a backup.
Then I open my Ninjatrader chart program and look at the euro/dollar.
Of all the aspects of trading your method of entry is the least important. The most important part of your trading plan should be understanding the market and correct market timing. Next would be selecting the best trading vehicle for the current market conditions. Then proper money management you must know where you're going to exit when you're wrong and how and when you should start locking in profits. Last and least important is your entry method, for example if you trade with the correct market direction and stock for the current market conditions whether you buy the stock at 9.50, 10, or 10.25 it makes very little difference if in one month the stock is trading at $20 per share. So focus on understanding the markets and lining up the correct trading vehicle with the market, learn proper money management and the rest is easy.
A friend asked me for advice on how to improve his trading this was my answer It's a tough thing learning how to trade. I've never seen you trade so I can only guess what troubles you are having. Most likely it's because most of what you learned about trading is 100% wrong, it doesn't work, and it's nothing more than a mass market gimmick. Most trading books and trading educators have never traded a day in their life. So the reality is number one. You need to forget most of what you learned it's probably useless. Number two, don't try to reinvent the wheel find someone who really trades for a living and learn to emulate them. If there a full-time professional trader that makes money they probably already worked out most of the bugs in their method. When I trade the FPAS method and stick strictly to the rules plus use my knowledge of market movement I learned from many hours of screen time I have a very profitable month. Number three, I remember you (the guy asking for advice) mention you trade futures I don't know your finances but I do know people close to me that have tried to trade futures and none of them have a large enough account size for proper money management I would suspect that this is probably one of your biggest problems. Most futures trading methods require trading multiple lots than selling half once you're in profit territory and letting the other half run with a stop at breakeven. This requires a very large account. That is what makes Forex or suitable for traders with less than $35,000 US in their account. I would like to suggest that you spend a couple weeks to a month reading and rereading Bob Volmans book set up your trading platform so that you have nothing but one 70 tick chart showing as described in the book. Then spend the next month just following price action on that 70 tick chart get familiar with how the Eurodollar moves on the lazy days as well as the news days. Then on the third month start trading with the real money not paper trading using only a couple micro lots do this for the entire month adding only one or two micro lots each week if you in the week profitable if not subtract 1 or two. Do not cloud your mind with other indicator, websites blogs or anything else. Do not worry about what the news is only be aware of the times the news is coming out. From this point on do not lose focus increase your position sizes as stated in the book. You may think you're getting nowhere fast but the reality is your retraining your brain and your thought patterns. Just trading these patterns doesn't work you have to be familiar with the movement of the Eurodollar. Put them together the methods taught in FPAS and the intimacy you learned from focusing only on one chart. And you can become very wealthy. This method is not easy and it's boring but it makes money and that's over here for.