A trader should not expect the market to do the same thing over and over for years.
If you look at a weekly chart you will see periods of time where the market was in a
channel and going sideways.  Then it moves in a direction for thousands of pips which
breaks the pattern and the ability to make any long term predictions.

Back testing is good for learning how to use an indicator but trying to predict the accuracy
of an indicator by using old history doesn’t work very well because the market changes.
That is why we need the human decision making ability. The best way to test is in the
present going forward. it takes a little longer a few weeks but you can see what is
happing in the present.

Some traders spend too much time in the past and not enough time in the present.
By using indicators properly a trader can trade in the present, even using indicators
that are lagging indicators.

Take a look at the following video for more insight on back testing.

Fundamental Trading is: gathering economic information, following the news and
current economic events to make decisions on when to enter a trade.

Technical Trading is: reading indicators to determine the best place to enter a trade.

Some traders like to follow the news and economic trends then decide when they will
enter trades.  This method does take a lot of time and study to make a proper decision.

Some traders like to look for signals on indicators to make  their decisions to enter trades.
This can be confusing if they do not know how to use the indicators and read the signals.

We heard a long time ago from a seasoned trader that he had a specific way he used
Fundamental and Technical information to trade.

He said:
1. He would get fundamental information
2. Make a decision as to which way he thought the market would  move based on
this fundamental information
3. Then he would check the technical indicators to confirm his decision.

We came to the conclusion that it would be a good idea to know when the fundamental
information was coming out then trade from the directions the technical indicators indicated.

This is just our way of approaching the market.  This does not mean it is right or wrong.
It may not be the best or worst way to trade but it is effective for many traders.

Check out the video for an additional perspective.

When the market changes and does something different than what the automated system was programmed
to do then it doesn’t work any more and starts to lose money.

Over the years we have seen automated system come and go.  When the automated system reach a
saturation point the brokers shut them down.  When the system puts on 100′s of trades at the same
price at the same time the brokers and banks can’t fill all the orders.  In a few seconds more orders
can be filled in the mean time the automated system stops working.

We have seen situations when a trader tries to use several automated systems and has to watch the
market all the time to know when to switch from system to system to try and make a profit.  In the end
he makes very little and spends more time than if he has been doing the trading himself.

The bottom line is we have never seen an automated system work for very long.  If there is one that
does work, chances are that it is not being sold to the public.

Just some observations

Check out the video below for more clarification.

1.    How to find the trend or the direction a currency pair is moving.
2.    How to recognize when the trend is coming to an end.

Once you know which way a currency is moving then it becomes easier to
find trades and know which way you want to trade.  Then timing is the only
thing you have to thing about when you are getting into a trade.

A trading system needs to be looking at information in the present.
If you look at to much information you can be deceived and be confused
as to how to trade a currency.

We suggest you find the trend on the daily and 4 hour charts then time
your entry on a smaller time frame.  If you are using a small time frame
to pick out the trend you are limiting your income potential.

The patterns the charts display are the same in the smaller time frames
as they are in the larger time frames.  The only difference is the number
of pips you will be able to capture.

Summary:  Become good at finding trends and knowing when they are
coming to an end.

By reading indicators a trader can trade all the currency pairs.  He can trade what
is moving on any given day or time.

If your set of indicators allows you to read each currency and each time frame the
same you are increasing your income potential.  You will be able to take a trade on
any  currency pair that is moving.

This will greatly increase you income potential.  You may have 3 or 4 trades on at a
time rather than 1 trade on at a time.

If the currency pair you are trading is not moving on any given day then you are out
of business until it starts to move.  More often than not there is at least one currency
pair that is moving each day.

We suggest using the same rules for all currency pairs will allow you to make more
trades in a shorter period of time.

Check out the video below.

Most traders can trade during part or all of these two sessions.
When you look at Forex Factory’s news calendar you will know
which currencies may be effected by the news during these
major trading times.

The USA market opens at 8:00 am eastern time.  Many news
announcements happen between 8:30 and 10:00 am eastern.

I would suggest you start looking at the market at least by 8:00 am.
This way you will be able to have an idea of which currencies has
potential setups then see if the news causes a few currencies to
move in relation to the direction the news moves the market.

I like to use indicators to determine if a currency pair will move
because of the news.  When one or more currency pairs moves
because of the news, I let the indicators give me heads up as to
when to enter the market.

By using indicators to trade I have more opportunities to catch
the currencies that are moving because of the news announcements.
The most important thing is that I do not trade the news I just trade
around the time of the news.  Then I only take high probability trades.

Check out this video.  I hope it sheds more light on what I am
trying to share.

When I find a good trend on a day or 4hr the move will usually
give me more pips.

When I find a small trade on a 1hr the pips are usually less then
a trade on the day or 4hr but still can be a good trade.

My idea is to take what the market will give me on the time
frame that is easiest to read.

I have attached a video to illustrate my thinking and how I use
different time frames in conjunction with one another.

I hope this sheds some new light to think about with your trading.

Good Trading

Trading with a stop loss you are using good money management.  You are insuring
that you will be around another day to trade.

There are some that say they don’t trade with a stop loss.  I do not hear of too
many that trade without stop losses.  I am guessing that is because they lose
all of their money in a trade gone bad and have to stop trading.  They may
even lose their confidence and never trade again.

Summary:  Always trade with a stop loss as part of a successful trading plan.

When You find the larger trend then take most of the trades in a smaller time frame
going in the same direction as the larger trend.  You may have a small loss once in
awhile but you will have many more positive trades that will probably be much larger
then the small losses.

Don’t agonies too long over a trade.  Learn to trust the indicators.  See the setup
make your decision then act.

To gain experience fast and develop your decision making skills do simulating trading
every day.  At least until you can see the setups easily and take the trades with ease
and little thought because you know what to do.

You can’t make any profits if you don’t trade.  You can over analyze and miss out on
many good trades.

Summary:  Make many trades quickly and without much deliberation.  This will help
make you money with less frustration and negative emotion.

Choose a broker that feels good to you and gives you the support you need.  If you don’t like the way a client service person talks to you ask for another person at that brokerage or change brokers.

Summary: Do your home work, trade a demo account with the broker first then do a small live account until you are comfortable with them.