Forex Trading Strategy
Figuring Out How to Make A Lot of Money in a Matter of Seconds
Time to jump back into Forex training!
I really like the idea of scalping. Being able to make a few dollars in just a few seconds is exhilerating to me. Plus the small dollar amounts keeps my anxiety down so that I can trade with less emotion involved.
I’ve created the beginnings of my Super Simple Naked Newbie trading strategy based on the great Trading Heroes website.
It is rudimentary at best:
Title: Naked Newb V1
Pair: USD/EURO
Indicator: BUTT NAKED!!
Timeframe: N/A (goal is to scalp)
Entry Signal:
- Conditions?
- Invalidated?
- Externals?
- Time of Day?
- Long/Short?
Stop Loss: ⅓ take profit
% Risk Per Trade: 1%
Partial Take Profit: ?
Stop Loss Move: ?
Add-on Position: ?
Re-entry: (Two-strike rule?)
Exit Signal: (TP + Anti-Greed?)
Other Considerations? N/A
Backtesting Results: N/A
Forwardtesting Results: N/A
There’s a lot missing.. But the main thing is to figure out what my signals are, for Entry, as well as a more concrete Exit.
I’m not sure exactly what to use, being that I don’t want to utilize indicators just yet. But perhaps the basics will suffice.
I’m going to just put my thoughts here in hopes that someone more enlightened with this can provide insight…
Entry Signal
This should dictate and define the exact reasons that I would get into a trade. Thus it should have all the prerequisites to make the decision as easy as possible. It essentially uses systemazied pre-decisions to make ‘in-the-moment' live trading more effective and independent of any personal fears, indesiciveness, or insecurity.
- Conditions are basically the most important part… they’re the patterns that seem to point to a high likelihood of my thesis being correct in regards to whether a good Buy or Sell is ready to pop off. These are the fruits of the Technical Analysis. Therefore, for me, I think I’d start with my conditions being (a) trend line with at least 3 connected peaks or troughs to indicate Impulsive markets, (b) clearly defined Box to indicate when the market is consolidating or if its about to/in a break out, and finally if (c) Spread is low… I guess below 2 to 3 pips, since I want to scalp quickly and don’t want to have to deal with all that
- Invalidation markers simply are anything that make my signals moot, such as market closes, and maybe even my own Anti-Greed policies after I’ve won (or lost) too much money for that span of time (day, week, or even month)
- External factors largely relate to Fundamental analyses. Political, Government, Big Bank, and major Corporate news being the main influencers to watch out for. Unless it indicates a market close, or consolidation, I doubt I’ll have much of a need for this due to how there seems to always be a good time to scalp
- Time of Day that best works for me is in the morning, and on my 2 hour commute from 9am to 1pm. During lunch around 5 or 6pm, and maybe my night commute from 10pm to 12pm, if I’m not too tired. Best would likely be in the AM for me.
- Long/Short preferences seem to favor going Short, based on my Demo account trades. But I’ll revisit this after some Backtesting.
Thus is my Entry Signal strategy… I’ll go over my Exit signals tomorrow.
