I think I will agree with forexpolice, it is important one takes note of news when he opens and closes positions. Data like interest rates from the US Fed are too important to ignore. Most times some trend movement signals end up as fake outs because the market simply responded to the news, this is why I try to merge my fundamental analysis with my technical analysis.
A Free Strategy that works
- Thread starter PipLord
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Don't believe in news too much; just like Michael covel said, just follow the trend and then you'll make money regardless of news, market condition...
I always follow the trend and the most of time, I predict the next price movement really accurately.
Just my two cents is that if you're looking for some cheap strategy, use the combination of bollinger band and moving average; at least you won't lose your money and will make some good profits; have some research on these two indicators; Some people suggest the use of volume, but volume isn't a good indicator, it only confirms what just happened...following the price movement is better
Good luck
Victor
But you can't say just following trend is enough. Once I was trading on my EURUSD H1 chart making use of the moving Average. It showed a forming uptrend and I rushed to open a position. But at last it was a false signal as the market just reacted to the release of a major news. So it is not safe to ignore news entirely in your technical analysis.
Are you a fundamental analyst? Regardless of taking note of news or not, market makers set prices, not us like small traders.
That's why it is better to follow trend.
By the way, I would not use H1 time frame in intraday market when I make prediction. I would use smaller time frame...
Good for you. Most trend followers can't do this. Somewhat surprising that you seem not to know that.
Trend following strategies are notoriously low-accuracy for the most part. Michael Covel will charge you $3K to teach you a trend-following strategy that, by his own admission (in an ET post, not at his website), has winrate no better than 40%.
Just out of curiosity, what is your winrate? Thanks in advance.
Good for you. Most trend followers can't do this. Somewhat surprising that you seem not to know that.
Trend following strategies are notoriously low-accuracy for the most part. Michael Covel will charge you $3K to teach you a trend-following strategy that, by his own admission (in an ET post, not at his website), has winrate no better than 40%.
Just out of curiosity, what is your winrate? Thanks in advance.
Sorry, I was just trying to tell him some cheap strategy and put less emphasize on news.
Of course, news provide good volatility to the market!
I do follow macroeconomic news but I do not try to analyse the news.
I know if there is bad news, prices will drop and if there is good news, prices will rise but it's upto the market makers to decide "when". This is what I was trying to say (but I may have left wrong impression).
More often than not, prices initially move in the opposite direction.
“The market can stay irrational longer than you can stay solvent.”.
My winning rate is high.
But when market gives me a false signal, and the false signal is confirmed by something like a long hammer (a candlechart pattern which you can observe in either 1 or 5 min ute time frame, but unable to observe in 1 hour time frame) when I was expecting either bearish of bullish engulfing patterns, I exit my position without hesitation but with a little loss...
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PipLord you asked a question and the answer to that question is, you will have to find a strategy that works for you as a trader. Each trader are different in many ways and trading has a lot to do with how you are as an individual ie are you an emotional trader do you get emotional when you lose a trade, angry, lose focus, try to make back what you have just lost, trade a bigger lot size after a lost trade etc. Trading is long term and you should trade like that. Don't think you will become a millionaire in a few days or weeks, maybe even months. You have to look at trading and being consistent and profitable over time. You will come across many traders with different trading style, approach, strategy etc. Many traders will disagree with other traders because they don't think or believe that strategy will work for many reasons. I believe you will have to find what strategy works for you and over time if you need to fine tune your strategy to get better results do that. I do agree with you on paying close attending to the news events that are scheduled as most Tier 1 high impact data release will impact that particular currency. The reason I am agreeing with you is because I personally trade those economic events and have the knowledge, experience and know how to trade or approach those economic events. Some traders will disagree and that's fine. Do what works for you. I believe if you were properly trained/coached/taught, having the knowledge regarding fundamental analysis and understanding how to apply that knowledge when trading you will realize that knowing what is moving the price is very important in trading. Knowing what is the reason behind the move/price will give you the confidence to enter your position and not second guess your trading ability. You should ask yourself before every trade these questions. Why am I taking this trade? what is the rationale behind this trade call? what is the current sentiment on this currency/s. If you can answer those question correctly before placing a trade you will be entering a high probability trade, which will give you a high conviction on your trades and over time you will see consistency, good profitability % and most of all low drawdowns on your trading account. The trading strategy that I use and it works like a charm for me is trading a Strong currency against a weaker currency pair those two together and trade them. In other words trade a Bullish sentiment against a bearish sentiment. If you have any question questions I will gladly answer them for you or anyone who have any questions.
Here is an example of what I mean about what is the reason, the rationale behind a trade call. I will example about a trade a took at the beginning of this week. 1/4/16. Lets start from the Sunday 1/3/16. At 8:45pm EST we had China's: Caixin Manufacturing PMI - what is that? It's a leading indicator of economic health, businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy; For the pass 4 months this data has been under 50 which is bad. The data come out 48.2% and it were forecast 48.9 so it missed on expectation. So the health of the economy doesn't look too good. If you weren't aware of this Australia has a close ties to China as far as business relationship ie oil, iron etc. This means if China economy is not doing good and this pas week china also intervene in the markets and devalued their currency hence the weakness we saw this week in the Aussie dollar along with declining oil prices, metal prices and also a miss on expectation on AUD- building Approvals. When their are Global Growth or any uncertainty in the markets, we have a few currencies that are safe haven currencies and the YEN (JPY) is one, Euro and GOLD. Having the knowledge regarding that we would look to SELL AUDJPY or BUY EURAUD. AUD sentiment was bearish for all the reason I explained and the YEN (JPY) sentiment was bullish because investors/traders rush to funding currencies such as the JPY and the EUR. Easy trade to place this pass week. If oil continues to plunge like it has for quiet some time now we will continue to see the AUD and CAD currencies suffer as they are commodity link currencies. If you have any questions because you were lost or just don't get it let me know and i will try and explain it so that you understand properly. If you have any question regarding next weeks trade of the week just let me know or lead me to a educational Forex chat room and not a chat room where we have more arguments than the main purpose we are all here to share our opinions and insights as traders.