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My Buy in Price becomes the Pivot Point 100% of the time

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Hi, maybe I've got a bit of cabin fever staring at charts for the last month while I'm learning, but I swear....I swear, 80-100% of the time, my Buy In Price becomes the point of change, either Reversal, Horizontal or acts as the future Resistance going either Long or Short.

Is it my head?  I've been trading Spot Gold for the past week.  Lost around £200 on a £1400 account.  Went back to the Demo and proved 8 straight wins for £300.  Went back to Live, lost £200.
 

Even today, I've been stuck in Spot Gold since 10.41am UK time.  it's now 16.30! and it's gone back up bounced of my Buy in Price at 1295 ish, and gone back down to previous 1290 support.    £5per point!!!  It turned after a clear upward trend had started and gone down to 1290 support and back up and back down.  Almost every trade i have tried has done this.

What am I missing?  Volume?  Computers? The only daft lad trading Spot Gold??  

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@nit2wynit,

To try and assist you and get to the bottom of your problem one needs to understand how you are trading Gold.

What indicators are you using to determine entering a trade?

Are you a swing trader, trend follower, momentum trader, etc?

What timeframe do you use?

There are many questions I could ask but we can start here and see where this discussion leads. 

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Hi guys.

I watch the Daily for the trend.  Then each time segment going down to see what the colour of the candle is, then adjust based upon the most recent 5 minute and then back to the weekly to see if there's a larger pattern and a trend reversal due.  I also check the news.  When I've decided I use the 1 minute to buy in. then sit back to the 5min to keep an eye on it.  I think with the Gold I was dealing at times with too little volume.  Often below 100 per minute.  I'd bet on it, it changes every single time I get involved.!  I'd make more money betting against' myself lol.

I've made mistakes starting out with a £1400 account to use around 90% of my buying power.  However i wasn't allowing for volatility or movement so was getting stopped out often.  I adjusted this to allow for a 3pt deviation (£15pp on Spot Gold=£45) but this clearly wasn't enough room, and now decided I'd need at least 5pt.  My timing was well off.  At first I was watching the 1min chart too closely and as soon as I saw a spike, I'd jump in, only for it to drop down and quite often reverse, or go sideways.  To keep this short I basically made all the obvious mistakes!  I've written several A4 pages of notes on my dealings and learned a lot about what I am doing wrong.  But it is uncanny.  Really uncanny, how many times my Buy in becomes the Resistance.  However, on my most recent it was £1295, so I've put this one down to the Dead Man zone of Spot Gold and what has happened over the last month.

Don't get me wrong.  I have made gains of £25, £50, £80 or so, here and there but lost it again.

I've 1k left.    My new strategy, is to bid smaller, and longer.  I will be Trend Following for the Day, and not trying to make larger amounts quicker.  I just want my account back to £1400.

As for Indicators etc.  I only really use Volume first (Patterns being a Pre-Requisite) observe Break Out potential, plot my Support and Resistance, then wait for the chance to get in.


The most recent Learn I have is that the charts are looking at the past!  I've no Idea how far in the past; assuming only seconds, but probably far enough that it makes it too difficult to make large gain in short time, that I must go long when Spread Betting.

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@nit2wynit,  it's a learning curve, we all know. Using my process this is how I would have described gold on that Friday morning.;

Daily; Look at chart structure then look at yesterday's candle.

The higher high, higher low pattern has broken down so the market is no longer trending, stick to trending charts, look at yesterday's candle, major bear strength, don't try to fight it.

The overall look of the chart and yesterday's candle are shouting out that the bears are gearing up for a major try on that support level, trying longs - definitely not here, maybe on a bounce up off 1280 but not here.

image.thumb.png.f2258242d5a40a67b365701735be4b47.png

The H1; and I would see most likely scenario after that strong impulse move down is a pullback and another push down to challenge support, not looking for longs. 

image.thumb.png.9971327ab0ff492a40581118ca1d0476.png

I wouldn't even bother looking at the 5 min because I know major support is just below so the chart structure has ruled out longs (bear strength) and shorts (reward not big enough for the risk), look for another market.

The candles are stamped in the now, indicators compare now to the past, volume is a difficult one to use because it often smolders before igniting. Chart structure is more important anyway and shows what the big players are planing.

If you are constantly trying to catch breakouts you will usually get caught out buying the high or selling the low, that's just how they work, the rewards can be big but the strike rate of timing them right is only 2 out of ten, unless you are playing on a large time frame chart with a massive stop.

Settle on one setup (btfd in a trend) and practice it over and over until you are good at it, then maybe look at adding another type of setup.

(Buy the Failed Dip in uptrend, or sell the failed rally in downtrend).

Decide your basic plan for the session before hand using the higher time frames to to give a sense of bull and bear strength, go with the flow rather than looking for reversals.

 

 

 

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Excellent advice @Caseynotes  Thanks for taking the time.  I'll certainly take another look at it.

Do you have any advice on what I should be going for with a small account?  I don't mean specific stock, just the price range etc.?  Any constant Trenders etc.

I'm looking to start the week slowly.  I'm being realistic and hoping to slowly climb with £25 per day wins.  Maybe even this is over reaching?

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@nit2wynit,  as you see, not getting trapped on entry is crucial, so you need to get good fast and that's why you should concentrate on just one setup first, that means using one setup on multiple charts rather than trying to play multiple setups on one chart. 

So get all the daily fx majors charts up plus some major indices, quick scan them all once a day and note which are trending, now you have a few charts and you know the direction so use support and resistance to plot likely targets.

Of those trending, on the H1 - M5 look throughout the day for weakening pullbacks, you are looking for the pullback bars to get smaller (weaker) and trend bars to start making an appearance, the point is you know what you are looking for and roughly where it should occur. Before entry find your stop loss level first. On the smaller charts there will be a level that the pullback simply cannot pass and then the trend bars start getting stronger, the actual bar of your entry is not as important as the identification of that stop loss level.

It's a bit like picking breakouts in reverse, price can't go beyond that level no matter how many times it trys and now the trend bars are getting too strong.

When only looking at small time frame charts you so easy get lost but by having a basic plan such as above you know what you are looking for, if you don't see it stay out, no harm done.

The more time you have the closer you can drill down and observe and so the tighter (and cheaper) your stops can be. Everyone is going to be different.

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@nit2wynit,

You may be interested in reading my 'Potential Long Gold Trade' thread. There may be snippets in there which could possibly be of interest to you.

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Is it safe to assume that the price feed in live and demo accounts is identical?

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5 minutes ago, dmedin said:

Is it safe to assume that the price feed in live and demo accounts is identical?

yes, it's just that occasional glitches occur on demo that may affect the feed, all brokers who have developed a platform have an identical demo platform primarily for testing, sometimes the tests fail, they also allow clients to use it to practice on.

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Ive found no discernible difference using the Demo from the Live account, except the irrational buy and sell impulses that go with an almost unlimited account.  I now try to use the Demo not to practice the charts and placing the bet, but practice my own patience and to treat it as if it is real money.

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@nit2wynit,

I think Caseynotes mentioned this in either this thread or another but I agree with him. For new and inexperienced traders it may be a good idea to bet the smallest amount you can in a live account and build those positions up by adding to them should the trade move in your favour (direction). This will help to build your confidence and allow you to really monitor the price action and try and understand why it is moving the way it is. 

However, I would like to add that before you do this make sure you select your asset to trade wisely. Make sure you entry point is thought through carefully. If certain indicators are not met then you should seriously consider waiting patiently until they before entering any trade. 

Sometimes the wisest thing to do is nothing. Do not feel obliged to place a trade. Make sure the conditions and set up are in your favour based on your trading strategy and system. 

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