Tip 1- Use statistics to avoid bad setups, and enter and exit at high probability areas
Example: Wanting to join an early trend on a pullback? It probably is a bad idea to enter before 50% retrace.
Elliott rules even say wave 2 typically retraces to 78.6%, so it's probably a good idea to wait for a big retrace before going in.
Of course, and this could be another tip of itself, Elliott never made money investing, so it's best to learn from the charts than him.
Tip 2- Use the daily chart, or more precisely the 6 months to 5 years chart
By studying the charts one quickly learns that price evolves on the "daily chart". By this I don't mean the candles absolutely have to be 1 candle = 1 day, as long as depending on several factors 6 months to 5 years of price data are visible. Typically I go for about 2 years, and clicking on "D" is what looks best. Plus humans are on a 24 hour cycle, so daily candles just makes sense. Some people can't stand noise and just look at moving averages.
Tip 3- It is probably a good idea to not try to join very extended trends on a pullback
When an extended trend finally has a pullback, it's often going to be a big one.
We all heard over and over some numbers such as "1.618". If 90% (totally arbitrary number) of EURUSD trends that make it to 2.618 and pullback end up reversing, and only 1% make it really far, you sure you can get a 1 to 100 risk to reward? Some areas might be best to avoid.
In all competitions champions find all the tricks to make it as easy as possible. That's how one becomes the best.
Not by being a complete idiot that goes straight ahead tries to brute force.
"I die, yes, but with honor!". No no, no honor, you die like an idiot the enemy is laughing at you, and your village will get raped and burned to the ground. People love to be hipsters. I prefer to win, to crush the competition.
Tip 4- You already heard this: Cut losses, hold winners, be disciplined
Are bagholders hipsters, or just weak? Clearly all the "diamond hands" are simply weak cowards that piss themselves at the idea of taking a loss.
I do not want to waste too much time on this one, a very easy way to gain a huge advantage over the competition.
Just careful beginners with huge rewards and tiny stops. Greedy stops won't lead to great profits, but to death by a thousand cuts.
Tip 5- Do not daytrade, day trading is stupid
Ah the day gambling hipsters. "I'll be the one in a hundred that makes it". Even roulette and sports betting have better odds.
And the 1 in 100 that make it, assuming it's not just luck, make PEANUTS. They'd earn more flipping burgers.
As I explained, price action is based on the "daily" chart. Trends last months, they can be divided in smaller moves that last days to weeks.
And the price, as I also explained, reacts around these daily chart swings, and daily chart extensions. Another reason why daygambling is so troll.
And since day gamblers "close at the end of the day" (vomit) you could be right and lose money! You could be wrong and lose money!
So even if they have some edge, they add enormous randomness (and ruin an edge) because there is a time factor we have no control on, they'll close before bed at a completely random price, just because "the day is over". Same concept as the binary option scam that got banned. That's literally gambling!
Oh and when they "close at the end of the day" 🤢 they will be making even less than 15 pips, with spreads still the same size.
Tip 6- For the noobs: Start with something simple that works and conditions will be added over years
I think the best course of action would be to go for the basics, something that is expected to work, going with the trend, not focussing too much on the entry, having a reward better than the risk but not too tight (greedy). And with time improve it.
It's like making muscle. If you stop trying to be a hipster and just do what you are been told (don't daytrade, don't hold losers, don't go against the trend), after the initial learning curve (1-5 years, sorry for the dreamers/gamblers) on year 1 you gain 7.5 kg muscle (7.5% returns), year 2 5 kg muscle, year 3-5 5 kg muscle, year 6-20 maintain, maybe small additional gains. Guys like Bill Hwang have shown someone could be a self-made billionaire making 60% a year, so these numbers are just illustrative. The idea is traders develop over time. All the famous ones really got good after several years, and peaked decades after they started. There are no steroids in trading. Ok I guess there are, those would be insider trading, but this isn't easy to access, and a crime.
Tip 7- Noobs again: use indicators if you want too, but don't waste time trying to look for indicator edges
If you think indicators look good then use them, but don't waste too much time looking for an edge. We'd know if there was one.
Don't be lazy, when starting one probably should spend a little bit of time backtesting indicators, and quickly will find out there is nothing of value, no edge based on the indicator itself. And then they can look for something else with a clear head, without wondering "did I miss something".
Tip 8- Beginners or intermediate traders that are not yet profitable: Don't aim for huge asymmetric risk to reward
You look at charts, there is volatility, in the real or original sense of the word. Trends have plenty of pullbacks, 23.6%, 38.6%, 50%.
You might have noticed those were quite significant pullbacks. Not tiny 5-10% pullbacks. So how does a risk to reward of 1 to 20 or 1 to 10 make sense?
And how is someone not yet experienced, not even profitable, going to pinpoint exact high and top? I know NO ONE that can be that precise.
When George Soros broke the bank of England, he sold at the upper end, and had a large risk to reward. Correct me if I am wrong but he sold for 10 billion, made 1 billion, and said his risk was below 2% (200 million). That was the trade of a lifetime and his reward was 5 times his risk "only".
I think he said his hit rate was below 30%. I doubt he typically takes trades with a risk to reward of 20. Or ever.
Maybe there is an edge out there, with 100 RR, who knows? But I think it is more reasonable to start with something between 1.5 and 3.
Tip 9- Strong trends are the best, pretty obvious but people seem to avoid these
On strong trends retail positions are massively on the wrong side, some sources show the percentage of positions and some show more.
The very few traders that are in the correct side have tiny gains, out of hundreds of thousands of accounts the people going in the correct direction and holding can be counted with 1 hand. Makes me feel very special. 1 in a thousand. Even 1 in 10,000.
It's really simple too.
I was tired of try harding 2 years ago, and I just yolo'd in trends, and it worked out. And last year I repeated it, and it worked again! So I focussed on that, and added a strategy to my arsenal. I call it "breakout" but there's really 2 strategies and one of them is not a breakout at all. I wish I started with this, because it is a real goldmine. Not just the easiest, but most productive too. And I'd build the other strats later. When I started I quickly noticed big patterns that flashed in my eyes, once you see them you cannot unsee them, so I went in that direction, obviously.
If you're onto something do not spit in the soup! But if you have a choice, let's call it that, I encourage everyone to aim in the direction of trend following! It's well worth it. If you want to make money. For those that would rather be hipsters, well, have fun.
Tip 10- Breakouts! Strong trend breakouts! Be patient
And final tip, with breakouts in strong trend, they very very often don't go anywhere. Best way to lose money is to fomo.
I'd rather miss out.
So the trick is to have a condition like this: "It has to go far enough."
Or it can go like this: "I want the price to remain above the previous high", that's not realistic, so it could be "I want 2/3 of the price to be above the previous high, and then to double bottom with the high of the bounce above the previous high", which is more reasonable.
This is all just my personal opinion, I do not offer refunds. And it is all specific to Forex.
Do you own research. With the charts. All praise the charts. Glory to the charts.
Example: Wanting to join an early trend on a pullback? It probably is a bad idea to enter before 50% retrace.
Elliott rules even say wave 2 typically retraces to 78.6%, so it's probably a good idea to wait for a big retrace before going in.
Of course, and this could be another tip of itself, Elliott never made money investing, so it's best to learn from the charts than him.
Tip 2- Use the daily chart, or more precisely the 6 months to 5 years chart
By studying the charts one quickly learns that price evolves on the "daily chart". By this I don't mean the candles absolutely have to be 1 candle = 1 day, as long as depending on several factors 6 months to 5 years of price data are visible. Typically I go for about 2 years, and clicking on "D" is what looks best. Plus humans are on a 24 hour cycle, so daily candles just makes sense. Some people can't stand noise and just look at moving averages.
Tip 3- It is probably a good idea to not try to join very extended trends on a pullback
When an extended trend finally has a pullback, it's often going to be a big one.
We all heard over and over some numbers such as "1.618". If 90% (totally arbitrary number) of EURUSD trends that make it to 2.618 and pullback end up reversing, and only 1% make it really far, you sure you can get a 1 to 100 risk to reward? Some areas might be best to avoid.
In all competitions champions find all the tricks to make it as easy as possible. That's how one becomes the best.
Not by being a complete idiot that goes straight ahead tries to brute force.
"I die, yes, but with honor!". No no, no honor, you die like an idiot the enemy is laughing at you, and your village will get raped and burned to the ground. People love to be hipsters. I prefer to win, to crush the competition.
Tip 4- You already heard this: Cut losses, hold winners, be disciplined
Are bagholders hipsters, or just weak? Clearly all the "diamond hands" are simply weak cowards that piss themselves at the idea of taking a loss.
I do not want to waste too much time on this one, a very easy way to gain a huge advantage over the competition.
Just careful beginners with huge rewards and tiny stops. Greedy stops won't lead to great profits, but to death by a thousand cuts.
Tip 5- Do not daytrade, day trading is stupid
Ah the day gambling hipsters. "I'll be the one in a hundred that makes it". Even roulette and sports betting have better odds.
And the 1 in 100 that make it, assuming it's not just luck, make PEANUTS. They'd earn more flipping burgers.
As I explained, price action is based on the "daily" chart. Trends last months, they can be divided in smaller moves that last days to weeks.
And the price, as I also explained, reacts around these daily chart swings, and daily chart extensions. Another reason why daygambling is so troll.
And since day gamblers "close at the end of the day" (vomit) you could be right and lose money! You could be wrong and lose money!
So even if they have some edge, they add enormous randomness (and ruin an edge) because there is a time factor we have no control on, they'll close before bed at a completely random price, just because "the day is over". Same concept as the binary option scam that got banned. That's literally gambling!
Oh and when they "close at the end of the day" 🤢 they will be making even less than 15 pips, with spreads still the same size.
Tip 6- For the noobs: Start with something simple that works and conditions will be added over years
I think the best course of action would be to go for the basics, something that is expected to work, going with the trend, not focussing too much on the entry, having a reward better than the risk but not too tight (greedy). And with time improve it.
It's like making muscle. If you stop trying to be a hipster and just do what you are been told (don't daytrade, don't hold losers, don't go against the trend), after the initial learning curve (1-5 years, sorry for the dreamers/gamblers) on year 1 you gain 7.5 kg muscle (7.5% returns), year 2 5 kg muscle, year 3-5 5 kg muscle, year 6-20 maintain, maybe small additional gains. Guys like Bill Hwang have shown someone could be a self-made billionaire making 60% a year, so these numbers are just illustrative. The idea is traders develop over time. All the famous ones really got good after several years, and peaked decades after they started. There are no steroids in trading. Ok I guess there are, those would be insider trading, but this isn't easy to access, and a crime.
Tip 7- Noobs again: use indicators if you want too, but don't waste time trying to look for indicator edges
If you think indicators look good then use them, but don't waste too much time looking for an edge. We'd know if there was one.
Don't be lazy, when starting one probably should spend a little bit of time backtesting indicators, and quickly will find out there is nothing of value, no edge based on the indicator itself. And then they can look for something else with a clear head, without wondering "did I miss something".
Tip 8- Beginners or intermediate traders that are not yet profitable: Don't aim for huge asymmetric risk to reward
You look at charts, there is volatility, in the real or original sense of the word. Trends have plenty of pullbacks, 23.6%, 38.6%, 50%.
You might have noticed those were quite significant pullbacks. Not tiny 5-10% pullbacks. So how does a risk to reward of 1 to 20 or 1 to 10 make sense?
And how is someone not yet experienced, not even profitable, going to pinpoint exact high and top? I know NO ONE that can be that precise.
When George Soros broke the bank of England, he sold at the upper end, and had a large risk to reward. Correct me if I am wrong but he sold for 10 billion, made 1 billion, and said his risk was below 2% (200 million). That was the trade of a lifetime and his reward was 5 times his risk "only".
I think he said his hit rate was below 30%. I doubt he typically takes trades with a risk to reward of 20. Or ever.
Maybe there is an edge out there, with 100 RR, who knows? But I think it is more reasonable to start with something between 1.5 and 3.
Tip 9- Strong trends are the best, pretty obvious but people seem to avoid these
On strong trends retail positions are massively on the wrong side, some sources show the percentage of positions and some show more.
The very few traders that are in the correct side have tiny gains, out of hundreds of thousands of accounts the people going in the correct direction and holding can be counted with 1 hand. Makes me feel very special. 1 in a thousand. Even 1 in 10,000.
It's really simple too.
I was tired of try harding 2 years ago, and I just yolo'd in trends, and it worked out. And last year I repeated it, and it worked again! So I focussed on that, and added a strategy to my arsenal. I call it "breakout" but there's really 2 strategies and one of them is not a breakout at all. I wish I started with this, because it is a real goldmine. Not just the easiest, but most productive too. And I'd build the other strats later. When I started I quickly noticed big patterns that flashed in my eyes, once you see them you cannot unsee them, so I went in that direction, obviously.
If you're onto something do not spit in the soup! But if you have a choice, let's call it that, I encourage everyone to aim in the direction of trend following! It's well worth it. If you want to make money. For those that would rather be hipsters, well, have fun.
Tip 10- Breakouts! Strong trend breakouts! Be patient
And final tip, with breakouts in strong trend, they very very often don't go anywhere. Best way to lose money is to fomo.
I'd rather miss out.
So the trick is to have a condition like this: "It has to go far enough."
Or it can go like this: "I want the price to remain above the previous high", that's not realistic, so it could be "I want 2/3 of the price to be above the previous high, and then to double bottom with the high of the bounce above the previous high", which is more reasonable.
This is all just my personal opinion, I do not offer refunds. And it is all specific to Forex.
Do you own research. With the charts. All praise the charts. Glory to the charts.