Good to hear from you Simba. You are one of the few who have something of worth to contribute and have started many a fine thread.

Simba you are pretty much bang on the money regarding previous statement. I already commented why it is that the momentum principle as El Cid suggested is flawed so I will try not to rehash.
Basically, so many of the indicators we use are archaic and lagging but what's worse is the actual lack of original thought and blind use of them. I say this because its amazing what you can accomplish with a couple trend lines, price and volume. Unfortunately my next comment will upset many newcomers looking for the easy answer but sorry...becoming intimate with the market and it's ways takes time and effort.

All too often the biggest mistake in trading is being faked. For example, the market breaks up and by the time you have gathered the gumption to buy, much of the energy has expired and it comes tumbling back which then causes you to stop out and then perhaps panic opening a sell in order to recover the loss in which case that also has lost energy and sometimes fly's back the other way again. GBP is notorious for this. So begins the spiral of doom until account is wiped and your trading psych completely decimated.
The answer is in ANTICIPATING the markets next move whilst not FORECASTING/PREDICTING it....and yes there is a huge difference. Anticipation is based on sound principles, tried and tested over time but humility and wisdom stops you from assuming you know where the market is going to go.

Yes, I am getting to the point. El Cids method is that of trying to get on the horse 200 yards after it has jumped the fence and galloped across the paddock and this is no good. By the time you catch the horse and sit astride, it will likely just stand there all worn out and wander back to the hay trough.
Getting on the horse FACING THE CORRECT WAY is like being in the starting gates with it pointed in the direction down track. When the barrier explodes open, away you shall fly with all the pent up energy the horse (price) had locked in it's loins.

Simba touched on filters and trend and he is 100% correct. It SHOULD be in every traders knowledge that the trend is your friend (as tired as that saying is) and yet how many counter trend systems do we see here (most failures). No jockey who wants to win the Kentucky Derby, walks the horse into the gate so that the ass of animal is pointing in direction where all the others are going.
So firstly lets improve our odds by up to 90% (yes that much) by aligning with the trend. Now, I'm not going to tell you how to do this because everybody has their favorite indicator/trend line/method to determine trend and if you don't know how to read a chart, then you should not trade, PERIOD.

Next - ENTRY - Lets assume by our determination, the trend is UP and therefore only Buys are on the cards.
Right now I am going to mention a couple VERY profitable methods and all you have to do is be mechanical about it.
Many traders I know use the simple method of applying a 50SMA to M5 chart to determine trend. When you have a decent angle of ascent (use the eye - 22 degree plus) and the intraday trend has been in play long enough to establish 1-2 lows that seem to coincide with the angle of SMA, then its a simple case of buying in the dips when the price falls back towards 50SMA. If this were the EUR/USD, your standard upward advance might be a 25 pip forward push with 15 retrace back to towards the 50SMA at which time you would literally enter almost at bottom of swing. Place your stop at the level of previous low (see chart). Bare in mind that the price will not always come back exactly to 50SMA and sometimes it shall actually fall through it, trading is not an exact science but the idea is to align the odds in your favor. The rest of Risk is taken care of by way of MM/Stops and that's what they are there for.
Now, I have quoted pip figures for EUR/USD which comes from years of watching price. Each currency has it's own quirks and volatility including times in which it is ideal to trade. For instance, the EUR will usually give you fantastic channel trade scalping opportunities during the Asian session after which it might start trending towards Europe. Here again, you then need to know how to draw simple lines that interpret to you that the currency is moving sideways or trending.
GBP/USD, when smooth trending tends to cycle in 35 - 45 pip advances and sometimes as much as 85% retrace. Here again, your saving grace will be moving with the trend only and I cant stress this enough.
Rather than just using price (which takes years to get a feel of and yet is the best indicator of all), chose your trend tool, take into account the distance price has moved and then perhaps pick another indicator to guide your entries even better.

Just using something like the 50SMA method placed on 3 currencies, should provide you opportunity for at least 2-3 trades a day with expectation of 20 - 50 pips average. (Don't be lazy and ask for an EA. This is not a method easily adapted and trading is meant to be WORK)

I hope this has helped

Regards

Pilot

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