My FAILED system...

[dimitriforexworld]

Hello Traders,

I havent been around because i emptied my mini account and took some needed vacations.
I want to post my system, because maybe through your knowledge we could tune it up. Here are some bullets of my system:

Mini Account : $350
Broker: Gft
Lasted: 9 days

• Focused on one currency EUR/USD
• Open 3-15 positions (one at a time) per day
• Stop loss : $12 -$20 (5.7%)
• Good Tecnical analyisis, bad timing
• Traded against trend
• Indicators: MACD, Slow & Fast Stochastics
• Looked for Divergence- one time frame yes another no
• Multi time Frames Weekly Daily, 8 hrs, 4 hrs, 1 hrs 30, 15 5min
• Bad time zone: Im in mexico i traded after NY session
• When Stopped, Immediately opened another position
• Did not study moving price averages
• Did not check daily, weekly, monthly % performances
• To many trades per day

This is just some of the things i think i did incorrectly. Am i missing something????

It would be great if you posted some of your ideas-experiences-opinios about my trading system.

Very thankful
Dimitri

[Fetor]

Originally Posted by dimitriforexworld

Hello Traders,

I havent been around because i emptied my mini account and took some needed vacations.
I want to post my system, because maybe through your knowledge we could tune it up. Here are some bullets of my system:

Mini Account : $350
Broker: Gft
Lasted: 9 days

• Focused on one currency EUR/USD
• Open 3-15 positions (one at a time) per day
• Stop loss : $12 -$20 (5.7%)
• Good Tecnical analyisis, bad timing
• Traded against trend
• Indicators: MACD, Slow & Fast Stochastics
• Looked for Divergence- one time frame yes another no
• Multi time Frames Weekly Daily, 8 hrs, 4 hrs, 1 hrs 30, 15 5min
• Bad time zone: Im in mexico i traded after NY session
• When Stopped, Immediately opened another position
• Did not study moving price averages
• Did not check daily, weekly, monthly % performances
• To many trades per day

This is just some of the things i think i did incorrectly. Am i missing something????

It would be great if you posted some of your ideas-experiences-opinios about my trading system.

Very thankful
Dimitri

First of all I wouldn't use the word system to describe what you were doing. It wasn't really a system or method as much as it was a salmagundi of various pieces of information, indicators, and ideas all piled together. That is what is wrong with your list. It doesn't make any sense. You're switching between time frames, placing arbitrary stop losses, chasing trades, etc. I don't know how that could be good technical analysis and bad timing. It's bad technical analysis with no framework. Your trade choice is basically random, like closing your eyes and throwing a dart at the dart board. And there is nothing on your list about the use of S+R lines, the absolutely most vital aspect to trading. You can't trade without them. Maybe you used them and didn't list them, but I would suggest making better use of S+R lines (which show you true buying and selling pressure), learning where to place your stops so you can stay in trades until they really do go bad because you'll nickel and dime yourself to death, and not chasing trades as a starter.

[rasico]

If you would really take the time to read Nick's method, you would be a whole lot better off. It appears that you have not read anything that he has posted or tries to teach. But from reading many posts in this forum, there are plenty of other people in the same boat.

[4ow4ow]

I know how your feeling is, Dmitri.

I think you should take a break. Redeem the feeling inside you first. When you're ready, try to not trading first. Follow nick's up-to-date information or his webinar, keep learning and absorb them, and you will recognize where your obstacles were, because only you can recognize them by yourself.

PS : You may also read my journal on the first page.

[Pearson]

Dmitri,

I am going to give you the benefit of the doubt. I want to pretend without knowing exactly how you are using your indicators, that you really do know what you are looking for.

Having said that I want to focus in on a few keys to your 'system' that might help you understand what you are trying to accomplish. Fetor has a point about trading in the market, but remember there are lots of ways to trade this market. What I am briefly going to explain should help you trade the market as you saw comfortable for you. As is with anything you will only be comfortable if you're doing something you like doing and are ok with it. So here goes:

You are trading divergence. You are looking for something that was already overpurchased and waiting for it to be even more overpurchased, thus increasing your odds for a counter trend trade to take place. This is a good way to grab some quick pips on a retrace.

Timeframe: You need to stick with one timeframe, in this case, I strongly suggest you start with 4 hour/Daily candles. Why? Because these candles will help give you the patience that you need. If you are impatient with the market you will always be looking for the big home runs and burn yourself more than you can handle.

So now that we have the basics covered with Divergence, and your timeframe, 4hour or Daily. let's look at what you have to do next.

Your stoplosses are 5%....kind of risky, I suggest you lower it to 1-2%.

You have an issue with getting stopped out and then re-entering. This is understandable considering you are trading divergence, your thought process is probably somewhere along the lines of how can this be going any lower or higher? Everything I have says it should be reversing. Am I right? Well If you get stopped out of a trade with divergence there are two possible things that happened. Either your stoploss is too close, and you got stopped out early(trading too big, stopped out early) or the pair you are trading is TRENDING.

Let's backstep a little bit, Pairs either range or trend, divergence works very well when markets are ranging. But when markets are trending, divergence trades have to be VERY precise, and you cannot be looking for a lot of pips, even on a 4 hour chart. When markets are trending, they often looking VERY overpurchased and create many divergences before they actually reverse for real.

You were trading Eur/Usd....this pair along with most xxx/usd pairs was trending these past few weeks, so it is very understandable why you were losing on counter trend trades having to do with them.

Let's recap what you should be doing with your method.
Trade Divergence, use higher timeframe (only one), widen your stoploss and risk less % for each trade.

After that is all said and done, I think there should be one question left on your mind.
How do I tell if the market is trending or ranging. Well back to what I said about Fetor's post being important, is that you need to observe S/R lines. If you are trading divergence you should be doing it in a way that says Point A is the low, now Point B is lower than A and I have divergence time for a counter trend trade.

Two thing can happen at that point, you either get stopped out, and the trend continues, or you get some profit.

If the trend continues, this is why observing S/R lines is important, because the more significant an S/R line is the bigger the break will be. I suggest you take a look at how Nick places S/R lines on a chart. Use this to trade with the trend and use your divergence to trade against the trend. The stoploss is there to protect you from the trend continuing. I'll let your imagination run wild with how you can use trading the trend and trading against it to your advantage. S/R is important.

Synapse

[dimitriforexworld]

Dear Traders

Thanks you for your warm advice.. i deeply appreciate it!!!! Sorry i have not replied in a while i really needed to clear my mind and take some vacations.

My commitment is to go back to basics and to read completely nicks method to tune up my "system". I did implement S-R lines but was disappointed that it always went above or way below that, but ill have a look at nicks way of placing them.

I understand what is a trend in general terms but im not sure what exactly is a range (i have an idea though).....

Good trading
Dimitri

[Fetor]

Originally Posted by dimitriforexworld

Dear Traders

Thanks you for your warm advice.. i deeply appreciate it!!!! Sorry i have not replied in a while i really needed to clear my mind and take some vacations.

My commitment is to go back to basics and to read completely nicks method to tune up my "system". I did implement S-R lines but was disappointed that it always went above or way below that, but ill have a look at nicks way of placing them.

I understand what is a trend in general terms but im not sure what exactly is a range (i have an idea though).....

Good trading
Dimitri

Hang in there Dimitri. Don't give up and keep working at it.