Tuesday, April 14, 2009

Trading Rules

I got these "rules" off another site, same old stuff.... throw up a few rules, make them general, hopefully the reader will buy the course they are selling.

Here it is:

Forex trading is really just about buying support and selling resistance. It's easier said than done, but here are some easy rules to follow:

Buy low sell high [ya, OK.]

Do not assume support and resistance even if there is precedence; let candlesticks indicate market sentiment at anticipated levels and act accordingly. When in doubt, let the market test and retest price levels. [and then what do I do?... I watch smaller time frames, sometimes a tick chart....but that if I'm trading off the H1 or H4.]

Apply a moving average as a simple visual way of indicating trend then buy support or sell resistance in favour of the trend [and what time frame are we talking about here? And what moving average period? How about just using higher highs and lower lows? Works for me.]

Retail speculators often get the big picture right but get killed by volatility at the lower time frames; increases chances of success by following the big picture more and this is really about 15 minutes or higher. [I agree with this, just ask Ryan O'Keefe!]

To sum it up, play with the trend, follow the big picture and apply wider stops that are more tolerant. That will really save you from a lot of nasty whipsaws but you will get it right when price reverts to the mean. In terms of strategy, nothing beats a simple one so you can get it right even if you wake up on the wrong side of bed. [I agree with this to, but it's general and doesn't really help a new trader]

Anyone have any comments on these so called "rules" that are more guidelines than anything....

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