Wednesday, 29 February 2012

Mistakes of trading with moving average

Name of the strategy: Dancing with EMA (given by owner)
Strategy collected from: FF

Last 5-6 weeks, I followed this single strategy from Mr. Zebulon, the owner of this strategy....While following the strategy, I've made quite a few mistakes which forced me to suffer the consequences, that's loss in trade. After regularly communicating with Zebulon, I found that what I was missing was patience and discipline. These are integral part of forex trading. Without these a winning strategy can wipe out one's account.

Now, let me share my mistakes, so that you can skip these mistakes. Unfortunately I can't post images now. But I'll try to as elaborate and as simple as I can and I'll post the images as soon as possible I can.

One mistake I did is the entry point. Due to lack in discipline and time to monitor the chart, I missed several entry point. At one time, I missed a good entry point at price 100 pips beyond the 50 EMA line..... when I came to the chart, it was 19-20 pips over the original entry point. I entered straight way so the my S/L will be 19-20 pips above the S/L of main entry point. So when price moves opposite direction more than 80 pips but less than 100 pips, my S/L gets the execution but the legal entry escapes the S/L hitting. In this way I suffered loss in more than couple of entry position.

Another mistake I did was due to my over enthusiasm and lack of patience. When the price moved more than 200 pips, I should have move the S/L to BE according to the rules. But I moved 100 pips beyond my entry... But price again moved against my direction more than 100 pips and my S/L got hit. In this way, my trade were closed prematurely either with loss or less profit. This strategy is for riding the trend and get as much pips from the trend as possible.

I'm trying to learn from my mistakes and now I have two open trade in EUR/USD and GBP/USD pairs. I'm trying to be as patient as I can and trying to monitor as frequently as required. Let's see what happens.

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