MoneyTec 2.0 - Online Forex Traders & Brokers Social Networking Community » Trade Recommendations » Intraday Trade Recommendations

[gstefanick]

Hello All,

I'm new to the Forex market, but have traded futures and options for 10 years. I like the Forex for a number of reasons mainly the ability to trade 24 hours and the ease of the software to get in and out of the market.

I have notice over the years that nothing trends like the currencys. I would like to know if anyone has taken advantage of the long term trends in the AUD or the EURO vs the dollar...

Also, I suspect there are 80% day tarders in the Forex.. Is that percentage correct...? If so, with Trends like the above to Majors why day trade?

Thanks

George

[novice]

There are a few trend traders (like me) out there!

[gstefanick]

Novice, how long have you been trading Forex? Do you use a particular trend following system?

[krnce]

Hi gstefanick

I also am a long term trader, or i hold a position for some time.
Most my trades are with the trend but on a gut feel i will buck the trend.
For Eg: the system i use has given 28 buy and sell signals on the up trend of the EUR/USD since Feb 7/02, an average of 24 days a position. If you were to have followed just the trend of buy signals you would have made 15 trades, 13 of those were winners and 2 lossess. The other 13 sell signals were 7 winners and 6 losers. So yes the trend is your friend.
if you would like to no the pip value of these trades email myself as i do not want to upset Moneytec

[novice]

Originally posted by gstefanick
how long have you been trading Forex?

Just under one year.

Originally posted by gstefanick
Do you use a particular trend following system?

Entries

Elder's triple screen, with changes especially the third screen entry methods.

Exits

Trailing stops

[WRR]

Krnce,
what system do you use?
WRR

[socrates]

Hi gstefanick

The problem with long term trading is that most day traders can't afford the drawdowns associated with the longer term trends (should the trade go against you). That is to say the possible loss of money before a trade goes your way.

Of course we would all like to trade that way, the potential profits being what they are.

But a long term trend may require a stop loss of a few hundred pips, maybe more.

So we stick to the shorter day trades (maybe a day or two) and allow our equity to grow that way.

I hope this helps in answering your original question.

Stuart

[krnce]

Hi WRR

I use the above system ITS, I do not have the time in the day to figure out the angle of the dangle every 10 or 15 min. This system has allowed me to start small and then increase the size of my position in time.And all I have to do is wait for a little arrow to show what direction to go.

[WRR]

Novice,
I just listed to an audio book of Alexander Elder's Trading for a Living where he discribes the Triple Screen method. I also read a series of articles by Jason Va Bergen on the investopedia.com site so I am now familiar with Triple Screen. I like the concept and it seems to make sense.

You mentioned you make changes - especially the Third Screen entry methods.

Please elaborate on the differences between Elder's recommendations and what you do and why you made these changes.
WRR

[novice]

WRR

Sorry for the late reply as I have not checked my email for thread notification in a while.

Elder's standard entry method (i.e. intraday breakout using trailing stops) uses daily data to find entry points. The big difference between my entry method and Elder's standard method are that I use intraday data and market opening hours to make a final entry decision after the first two screens have signalled a trade.

In Come in to my trading room, Elder briefly covers the use of real time data to enter position trades and day trading. Also he writes about his Impulse system. I use an intraday version of this as well as market opening hours to find entry points.

I found that with an intraday breakout using trailing stops either 1 tick above the previous days highs for longs and 1 tick below the previous days lows for shorts I had to risk too much. I need to place a stop loss order below the latest low for longs and above the latest high for shorts. Anything less I feel leads to being stopped out on profitable trades. If I was placing a buy stop order above the previous days highs for longs and a stop loss order below the latest low I would often have to risk 200+ points. Basically I use a different method to try and close the gap between my entry point and a good stop loss point.

I have read Trading for a living and Triple Screen at investopedia.com (that is the one with about 8 parts right). Also Elder's new book Come in to my trading room is very good. It is much the same material as Trading for a living but there is much more practical advice.

For example the last trade that my triple screen method signalled on EUR/USD. I did not take my signal to trade mainly because of anixiety but it show the different risks involved with different entry methods.

[WRR]

Novice,
thanks very much for your reply. Your entry method makes sense considering the higher volaltility and leverage found in Forex compared to the markets Elder normally trades. The only concern I have with it is that you are not following Elder's rules. But if you are having success with the method then there is no issue.

The level of risk with Triple Screen the way Elder recommends it was one of the main reasons the method did not appeal to me. I guess you could still follow his method word for word where previous day volatility is relatively low and your risk perameters are met.

Yes, I was referring to the 8 part series in investopedia.com. I'll add Elder's new book you mentioned to my long this of things to read.

Thanks again for your response. It's simple and it makes sense.
WRR

[novice]

In come into my trading room, Elder says that successful traders who use his triple screen method and his other methods take his standard method and adjust it to their needs. I still use his triple screen decision-making tree but have changed the components of the three screens to suit my needs and temperament. I don't see any real need or sense in slavishly following someone else. Understand their methods take what you like and discard the rest.

Also the big problem with stock and future methods in forex is the lack of a set-trading day. How your choose to deal with this will determine the way you can adapt stock and future techniques to forex.

elder.com has a free 45-minute audio interview with the man of the moment about his methods, which is quite entertaining and informative.

yahoo has a open CIMTR group about Elders methods, but it is mainly stock related.

[WRR]

Thanks Novice.