27. Becoming familiar with a few currency pairs, a single currency at a time
Someone who is more successful than me recommended that I get to know the personality of a few currency pairs. He suggested that then I should trade nothing but that handful of pairs. He said that I should start out with a single currency pair.
By trading with only that one pair for a few days, I will get to know its quirks.
For further preparation, I went to the Forex Factory and looked for news items. If there is a red folder beside a currency, it is unwise to trade a pair with that currency in it within two hours. For instance, if it has 10 am beside a red folder, you should not trade that currency between 8 am and 12 noon. (Note that the times on the Forex Factory charts are adjusted for your time zone.)
Instead of giving a time for a significant event, it said Tentative. So, I chose to ignore it. (I was anxious to experiment with my single currency.) Ignoring it did not present a problem in the morning.
Most if not all brokers let you trade with play money while you are learning how to do it. I recommend that you do not start using real money until you are winning at least 70% of your trades. Make sure you thoroughly understand what you are doing.
Important principle for those using demo accounts: Take risks so that you lose once in a while. However, losing that trade was a useless thing to do unless you learned something from the experience.
Videforex is my broker. Today I learned something important about Videforex. I knew that there was a computer bug with their candle chart page. Today I found out there was a bug in their tick chart.
I wanted to put USDJPY at 163 or more. The orange bar said 108.163. So, I clicked the Put button. The orange bar was wrong. I ended up getting in at 143 and lost the trade.
As you see on the left, there are faint numbers and the orange bar is going up & down on top of it. The orange bar is supposed to reflect the faint number beneath it. I learned something from this loss. I learned that, with Videforex, I have to keep my eyes on the faint numbers as well as the number in the orange bar.
Using TradingView, you can take advantage of 2 very useful indicators called RSI and Stochastic. Use it to implement the concept of divergence. With it you can predict future movement that appears to be contrary to what the candle movement suggests.
At A the RSI is around the 80% range. If it drops to 60%, draw an arrow between A and B. The slant of the arrow suggests that there will be downward momentum. While the arrow was going down, the red candle was formed showing indeed that there was downward momentum.
It was short lived. However, the movement of the RSI could be used to predict the colour of the candlestick.
Single currency strategy, winning 5 out of 6
Yesterday I concentrated on USDJPY. Today I concentrated on GBPUSD. My first trade today was USDJPY. The next 5 trades were all GBPUSD.
I began by finding GBPUSD on TradingView. In order, I went to the 4 hour, 1 hour, 15 minute and 5 minute candles. Each time I added the support & resistance lines. On the 5 minute chart they appeared to be consolidating. I kept switching back & forth between Hourglass & TradingView.
I was very fussy. Cash Trap and TradingView had to line up. If TradingView suggested a put, Cash Trap had to suggest a put. The whole process took a couple of hours. I was researching other things while I was waiting for the two pages to line up perfectly.
My fussiness paid off. I won 5 out of the 6 trades.