As I posted in the other thread, I deleted the Stock Market Forum because it was dead, nobody was posting in there so I thought nobody cared.
Now I see that some of you are interested so I will take the post I did and repost it here for those who missed it...
Cheers,
Merlin
Simple trading system
Re: Simple trading system
Alright, here we go.
First of all, what will follow takes for granted that you know about Stock Charts, Candlestick bars and simple indicators like Moving Averages. If you don't then go do your Trading 101 courses.
In almost every trading courses, they will tell you about using 2 timeframes a small and a big one. The big time frame can be an 1 hour chart and the small TF can be a 5 or 1 minute chart. They will tell you that you look at the Big TF chart to determine the "BIG TREND" where the price will go for many hours if not many days in a row and to look at the Small TF chart for knowing when to get in and when to get out of the trade.
With Stocks and Futures (Commodities), you take a huge risk by staying in the trade after closing time (around 4 PM Est.) because the price usually creates a big gap during the night and you can wake up with a big gain or a big loss the next morning but with Forex (FORreign EXchange or International Currencies) the market is running 24 hours a day and takes only a 5 minute break near 5 Pm Est. to balance the books then it starts again usually at the same price that it closed 5 minutes ago.
The reason why I say this is because with FOREX, you can STAY in the trade many days in a row when the trend is going in your way and make a TON of money using just one trade and NOT be afraid of those overnight gaps that Stocks and Futures have.
Because you can stay into the trade longer, you can use a much larger "Big TF chart" so instead of a 1 hour chart, you can use a DAILY chart like this one here...
Now let's zoom in the green section here to see the latest moves of the past few weeks...
I am using an Exponential Moving Average (25 EMA) here that I programmed to change color when the price goes under (magenta) or when it goes over it (blue).
So right there, you can see if the price has an uptrend or downtrend bias. Of course you Sell short when the price is below the EMA and you Buy when the price is above the EMA.
But as you can see on the chart above, on the 10th of September (green circle), the price jumped above the EMA but when should we enter our trade you ask?
Now let's take a look at the Small TF chart (5 Min chart) which is like zooming in to see what the price does during those daily bars.
On this chart, I use a 5 Min chart, a normal Moving Average (25 MA) and also an indicator that I created myself which looks like the MACD for those who knows it.
As you can see on September the 10th, on this 5 Min chart, between 6 and 9 AM, you had a few crossing above the 25 MA so there you would have been 2 possible entry points around 1.32400. After those little valleys, the price goes up and up and you have nothing to worry about for many WEEKS ahead. How cool is that? 
Now if you look above on the Daily chart, you can see that the 25 EMA stays blue aaaaallllll the way to 1.36000 (red circle) so in just ONE TRADE using just ONE contract that would have made you around $3,600 if you used a Standard Lot. With 10 Lots, that would have been a $36,000 trade in what? 6-7 weeks?
Not bad hey?
So Big TF chart to know which direction the price is going and Small TF chart for entries and exists.
No need to have 10 flat screens flashing every second with tons of indicators and websites and chatroom and TV open to receive tips on what to buy and when to get in, etc... NONE of that crap.
The price bars crossed the 25 EMA on the upside, the price want to go up so you turn to the 5 min or even 1 minute chart and buy the valleys (when the price bounces back from the bottom and crosses over the MA).
It may take you many attempts to get in but once it goes up, you can now relax for days even weeks and watch the MONEY flow baby.
No need to do 50 trades each day and spend all your profits in commissions. Look at this trade, and the 1st chart I posted, you will see MANY long magenta and blue lines which mean usually $1000 trades with just ONE contract here..
Start with this and you should be fine. You can always add new indicators to get a better entry signal and get in and out many times during these long up and down trends to make more $$ but you can make AT LEAST you current job's salary with such simple and riskless trades here.
Why riskless? Because you lose peanuts when you get in and it reverses on you but when the trend finally starts to move, you sit on your ass for a long time and cash in big because time = $$$$$$$.
There you have it. Hope you enjoyed.
Merlin
First of all, what will follow takes for granted that you know about Stock Charts, Candlestick bars and simple indicators like Moving Averages. If you don't then go do your Trading 101 courses.
In almost every trading courses, they will tell you about using 2 timeframes a small and a big one. The big time frame can be an 1 hour chart and the small TF can be a 5 or 1 minute chart. They will tell you that you look at the Big TF chart to determine the "BIG TREND" where the price will go for many hours if not many days in a row and to look at the Small TF chart for knowing when to get in and when to get out of the trade.
With Stocks and Futures (Commodities), you take a huge risk by staying in the trade after closing time (around 4 PM Est.) because the price usually creates a big gap during the night and you can wake up with a big gain or a big loss the next morning but with Forex (FORreign EXchange or International Currencies) the market is running 24 hours a day and takes only a 5 minute break near 5 Pm Est. to balance the books then it starts again usually at the same price that it closed 5 minutes ago.
The reason why I say this is because with FOREX, you can STAY in the trade many days in a row when the trend is going in your way and make a TON of money using just one trade and NOT be afraid of those overnight gaps that Stocks and Futures have.
Because you can stay into the trade longer, you can use a much larger "Big TF chart" so instead of a 1 hour chart, you can use a DAILY chart like this one here...
So right there, you can see if the price has an uptrend or downtrend bias. Of course you Sell short when the price is below the EMA and you Buy when the price is above the EMA.
But as you can see on the chart above, on the 10th of September (green circle), the price jumped above the EMA but when should we enter our trade you ask?
Now let's take a look at the Small TF chart (5 Min chart) which is like zooming in to see what the price does during those daily bars.
On this chart, I use a 5 Min chart, a normal Moving Average (25 MA) and also an indicator that I created myself which looks like the MACD for those who knows it.
Now if you look above on the Daily chart, you can see that the 25 EMA stays blue aaaaallllll the way to 1.36000 (red circle) so in just ONE TRADE using just ONE contract that would have made you around $3,600 if you used a Standard Lot. With 10 Lots, that would have been a $36,000 trade in what? 6-7 weeks?
Not bad hey?
So Big TF chart to know which direction the price is going and Small TF chart for entries and exists.
No need to have 10 flat screens flashing every second with tons of indicators and websites and chatroom and TV open to receive tips on what to buy and when to get in, etc... NONE of that crap.
The price bars crossed the 25 EMA on the upside, the price want to go up so you turn to the 5 min or even 1 minute chart and buy the valleys (when the price bounces back from the bottom and crosses over the MA).
It may take you many attempts to get in but once it goes up, you can now relax for days even weeks and watch the MONEY flow baby.
No need to do 50 trades each day and spend all your profits in commissions. Look at this trade, and the 1st chart I posted, you will see MANY long magenta and blue lines which mean usually $1000 trades with just ONE contract here..
Start with this and you should be fine. You can always add new indicators to get a better entry signal and get in and out many times during these long up and down trends to make more $$ but you can make AT LEAST you current job's salary with such simple and riskless trades here.
Why riskless? Because you lose peanuts when you get in and it reverses on you but when the trend finally starts to move, you sit on your ass for a long time and cash in big because time = $$$$$$$.
There you have it. Hope you enjoyed.
Merlin
Re: Simple trading system
First of all the BEST TIP that I can give you is to NEVER trade yourself. What I mean by that is that you are a human and humans ALWAYS FUCK UP, sooner or later. Not only that but even going to the bathroom for 5 minutes could be THE big move of the day that you will miss.waywyrd wrote:Hi merlin,
Thanks for this post. Certainly looks easier than a trading course I paid hundreds of pounds for several years ago. It was a monthly course, so by the time they got to the meat of the course, what you actually needed to trade with, etc, I had virtually paid for the whole thing.
Where, in your opinion is the best forum and trading platform to start with, i.e small cash amounts and easy to place and monitor trades. I remember the one you were going with needed about $5-10,000 to start with.
I need somewhere I can place a trade and not have to monitor every single day, more like every two or three days.
Thanks again,
Waywyrd.
This is why I tell everyone to either learn how to program your own trading system or to get it programmed for you. This way, your computer will work for you and your automated system will analyze the chart for you and buy and sell when it recognizes opportunities so that will leave you free to do what you want.
However, having your computer trade for you DOES NOT mean leaving and not looking what it does for many days like you said. This is THE recipe for failure. What if the market crash and your PC was down? OUCH.
What you want is to set up your iPhone so that you can see what the market is doing and watch the trades your PC is doing.
http://www.youtube.com/watch?v=1WVqFC_z1BY[/youtube]
http://www.youtube.com/watch?v=yUiJ5BPd6Lk[/youtube]
As for the forums or places to get tips, that's old school, the type that I just mentioned you must avoid where you trade yourself and look at many screens, websites, chatrooms and email alerts. That will drive you nuts.
Automatize everything and then step back and look at it work. Just make sure you have backtested your system for a least 1 year or 2 to see if it crashes and then find out what type of day made it lose that much and fix it. Fix all the holes you may find to have a bullet proof system.
Once the system has been backtested then FORWARD test it for a few weeks by watching it trade with fake money live during the day to see if it would have bought and sold at the right spot.
When you trust it then trade with real money while staying at home that day and watch it trade and again see if it does the job right. Then you can leave your PC open 24/7 and let it trade according to your system.
Before you trade with an automatic system, you need to learn how to trade so that you can create a system that works. My advice, forget about the Stocks and the Futures, they do not pay enough and they are open only during 8 hours if not less.
Learn about the FOREX market which is open 24 hrs during the 5 business days of the week. You don't have the morning gaps that I talked about and you can stay in a trade for many days in a row which makes you more money and less trades and stress too.
Just use this simple 2 timeframes concept that I explained and work something around it. This ain't rocket science and it works.
Look again at these last few days... You would have entered around 1.35200 near this green circle where the price crossed above the Moving Average and then you let it ride. As we speak, the price is at 1.37600 so a nice profit of $2,400 with 1 contract (I will move asap to 10 contracts so that this would make me a $24,000 trade) since Nov. 25 in what? 2-3 weeks.
Not bad hey?
Re: Simple trading system
Thanks for re-posting this.
Re: Simple trading system
I've been making 20% per month with my trading system for the past 3 months.
Back testing results shows it should continue. All winning trades.
Back testing results shows it should continue. All winning trades.
Current NAP: Success of affirmations while awake.
Re: Simple trading system
Continue NAPing on Money if you don't want to lose it all back.alexburke wrote:I've been making 20% per month with my trading system for the past 3 months.
Back testing results shows it should continue. All winning trades.
Merlin
-
Idealistic
Re: Simple trading system
Man, I'd really like to try this myself!
Where the hell to start though...
Where the hell to start though...
Re: Simple trading system
Hey, Merlin…anymore of this hippie talk and we'll have to rename it the Vortex Market Trading System.
Thank you for providing your advice for free, it's very kind of you.
Thank you for providing your advice for free, it's very kind of you.
Re: Simple trading system
Your system is more like swing trading over day trading. SOme successful daytraders wished they would of swing traded all along, but developed the skill set necessary from the nerve bending experience of scalping and many other attempts of making a system.
The few successful traders I know have their own unique style. They try to help others and sometimes don't understand why many are still not successful using their technique.
Volumes of books are written about "kill the losers quick and let the winners run".
If you want an automated system, maybe Big Mike's Trading might have some ideas if you have the time to read thru thousands of posts.
I personally can't program my way out of a paper bag and would like to watch some charts then trade what I see, get out and do something else.
It is method, management and MINDSET. THe SM has a kinda of a bogus ego that makes many traders fail.
I trade futures. Why? I tried forex and did not like it.
I think the ego of SM wants to be original, using its creative nature and protect ideas, even if it is wrong.
The few successful traders I know have their own unique style. They try to help others and sometimes don't understand why many are still not successful using their technique.
Volumes of books are written about "kill the losers quick and let the winners run".
If you want an automated system, maybe Big Mike's Trading might have some ideas if you have the time to read thru thousands of posts.
I personally can't program my way out of a paper bag and would like to watch some charts then trade what I see, get out and do something else.
It is method, management and MINDSET. THe SM has a kinda of a bogus ego that makes many traders fail.
I trade futures. Why? I tried forex and did not like it.
I think the ego of SM wants to be original, using its creative nature and protect ideas, even if it is wrong.
Re: Simple trading system
I think I couldnt do this if I only had 50 euros to open the account and invest right? I should have more money to invest, back up etc?