₦airaland Forum

In my very limited forex experience, i've observed that a lot of traders i've met spend years barely breaking even before eventually giving up because the spend their time chasing patterns. Most others prefer the lack of accountability with trying to make 'their strategy' work. What's common is that these people prefer the comfort of the popular forex tropes and platitudes while ignoring the science and art of trading. It's the easy coping mechanism. That's not to say you cannot be a profitable trader from recognizing certain patterns and trading them but you greatly improve your learning and success rate by combining them with technical knowledge. This thread would be for the manual exploration of the technical underpinnings of my EA's strategy.

I am not exactly the smartest cookie in the jar, so opinions from others who are more educated on the subjects would be very much welcome and appreciated.

monikulapo:
I am not exactly the smartest cookie in the jar, so opinions from others who are more educated on the subjects would be very much welcome and appreciated.

One thing you should know is "Never you place your whole emphasis on indicators cos it might look profitable at the start but disaster in the long run. I'm speaking from experience

IntlBigCeo:
One thing you should know is "Never you place your whole emphasis on indicators cos it might look profitable at the start but disaster in the long run. I'm speaking from experience

Thank you very much for this. That's why I added this "That's not to say you cannot be a profitable trader from recognizing certain patterns and trading them but you greatly improve your learning and success rate by combining them with technical knowledge.". I find that a lot of people become gamblers instead of traders because they limit themselves due to other peoples hearsays and limitations. Plus they also fail to understand and acknowledge where they stand on their objective expertise on the subject.

For example, 100% of people I have encountered on nairaland never trade with the martingale strategy, yet they always have strong negative things to say about it due to the general preconceived notion of how it works. But from over 6 months data on my EA my martingale EA is at most 2% less than the fixed lots EA profit wise but when it comes to drawdown it performs more than 80% better.

Now when someone tells me otherwise I don't even waste time explaining because I know they are coming from a place of weak math aptitude, and how many people would admit they're not too strong at maths ?

That's to point out that a lot of people misunderstand indicators (which for the most part are lagging) yet would blame their shortcomings on the indicator.

You have a point in what you have just said about indicators , but for me I am more concerned about mastering naked chats first and knowing how to read patterns in the market before I am fully in.

Aeman:
You have a point in what you have just said about indicators , but for me I am more concerned about mastering naked chats first and knowing how to read patterns in the market before I am fully in.

This is essential and candlestick analysis is the basis of all technical analysis. Besides, 'Putting in the 10,000 hours' cannot be skipped.
I was at this stage about 8 months ago ... now reading a naked chart feels like gambling

MACD INDICATOR
The MACD is a momentum indicator that helps identify trend changes and entry/exit points in forex trading. It's like having a radar that detects when market momentum is shifting. The lower the time frame of observation, the clarity of entry. The higher the time frame of observation, the clarity of direction.
MACD stands for Moving Average Convergence Divergence. It consists of three main components:
* MACD Line (Blue): The difference between a 12-period EMA and 26-period EMA.
* Signal Line (Orange): A 9-period EMA of the MACD line
* Histogram: The difference between MACD line and Signal line

Key MACD Trading Signals
The basics of understanding the MACD indicator for the trade entries.

Observation of the correlation between the change in MACD histogram and change in trend on the XAUUSD 15 mins timeframe chart.

Observe what happens on the candlesticks charts at all points of crossover on the MACD indicator. The higher the time frame the less false positives you get.

Observe how it works like a radar on a very volatile news day. This is observing the XAUUSD charts on a 5 mins time frame.

Next I will be talking about the RSI indicator and how I use it in conjunction with the MACD indicator to determine whether a price zone is overbought or oversold.

It is important to note that while emphasis is on the use of indicators, they are essentially the closing steps on a journey that starts with analyzing the chart with the correct market sentiments.

RSI
The RSI (Relative Strength Index) is a momentum oscillator that measures the speed and change of price movements. It's your "market thermometer" - telling you when prices are getting too hot (overbought) or too cold (oversold).
RSI is excellent for timing entries and exits, but always confirm with price action and trend analysis.
Never trade RSI signals blindly. In strong trends, RSI can remain overbought (>70) or oversold (<30) for extended periods.

Observation of the relationship between MACD and RSI.

God willing, next week I will be posting manual trades entries using the MACD indicator on the 15mins TF XAUUSD charts. Load up a demo account, learn and risk with me.

Since the signals are tailored for day trading .. For all trades, you initially open with a 100 pip SL then adjust to break even after 1 hour. I expect a TP of 70 pips or more. Patience/greed/luck determines the eventual amount.