Forum - Commodity FX (CAD AUD NZD NOK) (Topic)

jcd5816

United States

Posts: 10

13 years ago

Dec 14, 2010 13:17

In my opinion, scalping is a hard way to trade for a living, like you said most traders will decide what type of trading suits them. It really depends on what you want out of forex trading. If you are looking to make big money and a good living, scalping the market everyday would be very hard. I would guess the people making a living scalping forex everyday is very low. I am sure there are some but they are the exceptions. Scalping also uses tremendous MENTAL CAPITAL, b/c you have to make so many decisions about what to do. The 80/20 rule probably applies in FOREX, in that 80% make most the money.

jcd5816

United States

Posts: 10

13 years ago

Dec 14, 2010 13:08

Thanks, DaveO. I did not say they were useless, note my last sentence. I was just trying to get across to use them in the context of market structure.

Caleb

DaveO

N.Cornwall, UK

Posts: 5733

13 years ago

Dec 14, 2010 13:08

Another point I would make is that some traders are born scalpers and cannot hold a position longer than 2 mins or 10 mins or whatever. Others hate scalping and regard 60 min best suits them. Others are swing traders typically trading 2 to 7 day moves because that is what best suits them as individuals. Others regard postion trading as being weeks and months. It all depends on what best suits the individual. If a trader suffers terrible fear you cannot advise him to lengthen his timeframe. If a trader has a day job to attend you cannot tell him he should be scalping. Most traders will manage to identify their own personal best timeframe within 3 years.

DaveO

N.Cornwall, UK

Posts: 5733

13 years ago

Dec 14, 2010 12:59

yes jcd, I agree market structure and reading "internals" provide the greatest value but this stuff is for advanced traders so I don't think we should dismiss classical chart patterns like H&S, like cup and handle etc etc. Traders have to start somewhere and we need to gently encourage further study which frankly is never ending imhe. Very good guidance you give there but even vix, breadth, volume and cot can sometimes be overridden by those who have great priviliges :-)

Qingyu

manchester, UK

Posts: 1763

13 years ago

Dec 14, 2010 12:33

i put too much "wishes" on china, thank you any way jcd5816.

jcd5816

, United States

Posted Anonymously

13 years ago

Dec 14, 2010 12:22

Qingyu and mo forget H&S patterns and focus on market structure, not price. One, every trader in every chat room, forex twits is only focused on price. If 80-90% of retail traders loose, why would you focus on what they focus on. Think about that. Price is the least important part of market structure. Let me give you an example. If you can, pull up Aussie weekly FUTURES CONTRACT. Since forex is not on an exchange you have to use the futures market to get volume and open interest. First, for week ending 12/10 open interest rose 24%. What does than mean, it means as the market retraced the previous week's gains(w/e 12/3) more people were interested in initiating positions. Who were those people? If you look at the COT report for last week you will see LARGE SPECS(i.e. hedge funds and big money) almost doubled their long position. I suggest it is reasonable to assume that big money(i.e. professionals) bought aud/usd last week. Another thing, if you follow the forex twits stream, most traders were shorting aud/usd(following these guys is a short cut to finding who the losing trader is). Traders who post their positions are, for the most part, day traders, small time frame traders. A good piece of advice, lengthen the time frame you trade on, it might mean less trades but to quote J. Livermore "The big money is made in the big swing". On volume, last week's down bar(12/10) had higher volume than the previous week's(12/3) bar. What does that say, more people did something than the week before, but notice the sellers were not even able to push the market down to test last week's(12/3) opening range at .9682. and the week left a small bid wick. Nothing in certain in trading, this analysis could be wrong, but I always think in terms of probabilities. Become a better OBSERVER of the markets, most people try to PREDICT where price is going. Sorry for the lengthy post but just thought I would share my thoughts, I used to focus on price and was, for the most part, ended up with net losses. I AM NOT SAYING H&S patterns are useless, just learn to use them in the context of MARKET STRUCTURE.

Happy Trading
Caleb

DaveO

N.Cornwall, UK

Posts: 5733

13 years ago

Dec 14, 2010 11:29

catnip, you could always download any forex broker MT4 demo platform which will give you the forex spot. MT4 is very user friendly and some forex brokers also offer some cfd's like crude and us indices. The CMC do not have an MT4 option and often the spreadbetters are slow changing to front month contracts. Just check first the broker has a good range of 40 or more pairs plus gold and silver spot. You have enormous choice out there with many rogue non regulated brokers to avoid. I run about 8 brokers. You might take a look at GoMarkets in Aus and AlpariUK. GoMarkets are an ECN whereas Alpari classic account are dealer desk. Their pro account is ECN but minimum volume applies. You could still deal through the CMC account but use your demo MT4 to compare data. Just thoughts!

Qingyu

manchester, UK

Posts: 1763

13 years ago

Dec 14, 2010 11:25

yesterday's mistake is all about timing

Qingyu

manchester, UK

Posts: 1763

13 years ago

Dec 14, 2010 11:23

after that rebound (01/12), i do not believe H&S any more.

DaveO

N.Cornwall, UK

Posts: 5733

13 years ago

Dec 14, 2010 11:17

MO. Personally I would rather be long audusd than short because I suspect it will finally finish with the H&S today. I could be wrong, you have to make your own decision and gl on that.