Want to get it straght, once for all.

[lulu2199]

Hello everyone,

I think I have to get a cleanup there, since there is something wrong in my logic. Seriously wrong.

Where to start? I don't like to camp in front of CNBC or my computer, trying to see the news that come out. In other words, I hate fundamentals. This is precisely why I decided to go to price action. I love that way that I can spot places in pairs where I can enter to make some money. After seeing lessons of Nial Fuller and other mentors, this is all I've learned so far: If I see a fakey, inside bar, or a pinbar at an interesting level ( as long as it's not a flat trend, an interesting level would be either a very low or very high level, close to a resistance or support) However, it's been a number of times that I get screwed up by entering in a market after a huge pinbar at a low or high level.

The most evident example is on AUD/CHF daily, about a week ago. There was this huge pinbar on almost a 6 month support, and it still fell.

I mean, is it time that I combine price action with some fundamentals? Just in case to not getting in the opposite direction of the market?

To ask this question in a shorter way: When I look the market I basically hunt every pair for pinbar, fakey and inside bars. Then, I look whether they are in a resistance or support level. If these two conditions apply, then I enter the market, often with about 50% of my total capital.However, there are other factors that I don't know, and keep screw me up in my trades despite the two conditions mentionned above. Could somebody kind enough to tell me which ones are these other factors?

Thanks for your help!

I really need!

Lulu2199

 

[Easy Trader]

I don't pay any attention to fundamentals when it comes to trading. I also don't trade fridays so im safe from NFP releases. So I know you don't have to study fundies. Here is a video that may help.....or may confuse

http://youtu.be/kjWXX-hXhoY

 

[ezrydn]

Lulu,

50% of your account? Really? Now, there's a setup waiting to happen. Did you not read the advice of 5-10% of your account? Sounds more like gambling than trading.

 

[4xtradingcoach]

lulu2199,
this is a great post and I understand your frustration, (I was there too when I first started trading)

The good news is that it sounds like you are on the right path. It seems you have the passion and determination to figure out a successful method for trading.

When I read your post, the first thought I had was,
"Do you have a complete understanding of the trading methods you are using?"

Is it possible that you don't have enough experience to know when to use the strategies and when NOT to use them? This requires time and experience.

In the first year of my trading career, I ran out to the library, the book store and used the internet (this was in 2001) and I bought as many trading books and trading systems that I thought I could read thru in a couple of weeks.

I immediately scanned thru the manuals and books looking for any trading strategy that seemed simple for me to understand and one that would work on the first try.

If it didn't work right away, I quickly moved on to the next strategy without gaining the necessary experience.

I am not saying that you are doing the same thing, I am just trying to present the many possibilities as to why we fail and struggle with trading strategies that aren't our own.

When we learn a new trading method that has been developed by someone else,
we run the risk of making mistakes because we don't have the experience of time and know exactly how and why the methods works.

First of all,
every trading strategy will experience losses.
Some methods more than others.

John Bollinger (the creator of the Bollinger Bands)
In his live seminars, talks about how we can improve our winning trades versus our losing trades.

This was a break though concept for me in the beginning of my trading career.
In order for me to fully understand this idea and apply it to my own trading,
I had to create my own strategies. Using methods taught by others only worked for me to a certain degree. I had to learn why the trades worked and why they failed.
I had to understand that markets change and I had to learn that there are times when I shouldn't be trading because the technique is likely to fail under certain conditions.

This is information that takes patience, experience and knowing that the market is going to provide you with the lessons that will make you a better trader.

Now I realize this doesn't really answer your question so I will offer my thoughts and I hope they help.

Pin bars, hammers, shooting stars and morning stars... I see them get wiped out all the time. However they do work a certain percentage of the time.
I would recommend that if you are dedicated to using a strategy like that, you must study why the trades fail and why they work. Then learn to identify the market conditions that will provide the best opportunity.

For example, trying to trade a hammer inside of consolidation might not work and is sometimes a unreliable signal. So that might be one of the first conditions for a valid signal. You could ask yourself, "Is price in consolidation or trending?"
If its in consolidation and that is when you notice certain trades failing, then a rule could be to stay out of the trade.

This takes patience and discipline but it is all worth it.

I am sorry the explanation is so brief but there are just too many variables as to why some of your trades are failing. It would be difficult to determine without more information.

Good luck

4xtrading coach

 

[lulu2199]

lulu2199,
this is a great post and I understand your frustration, (I was there too when I first started trading)

The good news is that it sounds like you are on the right path. It seems you have the passion and determination to figure out a successful method for trading.

When I read your post, the first thought I had was,
"Do you have a complete understanding of the trading methods you are using?"

Is it possible that you don't have enough experience to know when to use the strategies and when NOT to use them? This requires time and experience.

In the first year of my trading career, I ran out to the library, the book store and used the internet (this was in 2001) and I bought as many trading books and trading systems that I thought I could read thru in a couple of weeks.

I immediately scanned thru the manuals and books looking for any trading strategy that seemed simple for me to understand and one that would work on the first try.

If it didn't work right away, I quickly moved on to the next strategy without gaining the necessary experience.

I am not saying that you are doing the same thing, I am just trying to present the many possibilities as to why we fail and struggle with trading strategies that aren't our own.

When we learn a new trading method that has been developed by someone else,
we run the risk of making mistakes because we don't have the experience of time and know exactly how and why the methods works.

First of all,
every trading strategy will experience losses.
Some methods more than others.

John Bollinger (the creator of the Bollinger Bands)
In his live seminars, talks about how we can improve our winning trades versus our losing trades.

This was a break though concept for me in the beginning of my trading career.
In order for me to fully understand this idea and apply it to my own trading,
I had to create my own strategies. Using methods taught by others only worked for me to a certain degree. I had to learn why the trades worked and why they failed.
I had to understand that markets change and I had to learn that there are times when I shouldn't be trading because the technique is likely to fail under certain conditions.

This is information that takes patience, experience and knowing that the market is going to provide you with the lessons that will make you a better trader.

Now I realize this doesn't really answer your question so I will offer my thoughts and I hope they help.

Pin bars, hammers, shooting stars and morning stars... I see them get wiped out all the time. However they do work a certain percentage of the time.
I would recommend that if you are dedicated to using a strategy like that, you must study why the trades fail and why they work. Then learn to identify the market conditions that will provide the best opportunity.

For example, trying to trade a hammer inside of consolidation might not work and is sometimes a unreliable signal. So that might be one of the first conditions for a valid signal. You could ask yourself, "Is price in consolidation or trending?"
If its in consolidation and that is when you notice certain trades failing, then a rule could be to stay out of the trade.

This takes patience and discipline but it is all worth it.

I am sorry the explanation is so brief but there are just too many variables as to why some of your trades are failing. It would be difficult to determine without more information.

Good luck

4xtrading coach

Thanks for your detailed answer!
I think my problem is that I don't look sufficiently the bigger picture... After all, I only learned the existence of price action 3 weeks ago. I started to hunt for these pin bars and hammers and what not patterns ever since. Therefore, every time I see a descent pin bar or hammer etc at a good level (as long as their not consolidating on daily chart), I jump in and crossed my fingers. Don't Gert me wrong, it does work, on the majority of the cases.

BTW just saying, my overall P&L is still positive.

However, l realise that sometimes, the fundamentals can smoke my patterns away. For example, the GBP/USD pair of last week. Before BOE said that they gonna print more bills, there was a nice hammer at a resistant level suggesting that the pair is gonna rise. When I woke up in the morning, I was getting screwed my this news happened at 5 am in my time.

This error pushed my to believe that there is something wrong with my methods, and I can't solely rely on these patterns, but to check the overall trend as well.

Looking back, I started at December 2012 without even knowing which button does what loooool. Today, I make at least profit on my demo account. That's a long way...for a 18 years old student...

I'm going to post my newly remodeled plan in another thread later, and will probably keep updating it as a progress log.

Again, thanks to you all who helped me in the past. Without your help, I would be still camping on CNBC for news, or begging for some miracle systems ( no offense).

Lulu2199

 

[james88]

I guess you are right. Using 50% of your capital is more like gambling because one wrong turn can blow your whole account. It is safer to trade with 5% or 10% of your capital. 10% is even risky unless you have a huge capital

 

[okon2much]

Better slow down or start all over again. I guess you are confused because you've not relaxed. You need to retrace your step and look at your strategy once more. Something is wrong somewhere and you need to fix. More importantly do not be greedy.