Research and Development – Other – 25 October 2023

How a newbie starts trading?

I believe its just because he sees some Youtube videos of a content creator making millions and showing off his lavish lifestyle, starting his morning with a tea on his yatch in Dubai with 5 or 6 super models around him in bikini. Well this is not the truth, They are just content creator and their purpose is to dupe people in scams or referral based income. Here is how scammers use content creation platforms e.g. to dupe their viewers.

1. Referral Income – Giving a link to sign up on any particular broker

2. Paid training – Out of 1000, 1 will be for surely fall in trap of paid training as he dreams to be like him and be rich fast.

3. Signals : Most of the signal providers ask you to join telegram group for a fee. They usually promote it on social media with paid campaign and trap newbies.

Now lets discuss what is real trading. Real traders wont show off usually but some may, who knows. But it does not mean that by following them, you can succeed. I have been contacted by many traders from my Youtube but none of them shared good experience of success from learning from paid courses, signals or any other method which includes following up a content creator trader.

Before we start, Let me introduce I am having 8 years of trading experience, out of these 2 years I was a loser so 6 years of profitable experience. I am a trader first then coder. But being from IT background, I found MQL5 best for coding my trading setups.

Real trading is simple formula which is derived from lots of complexity. Only 5% people succeed in trading and 95% are either in loss or earning but they are recovering their own money which they lost earlier. These 5% Successful traders are big fishes who drives market. They make most of the money from aggressive buy or sell which is also called taking up liquidity, None of the method exists which can save you from big volume candles. That means a successful trading strategy will always lose many times in order to be a successful.

the only and final method of being successful is by trading the system you trust and backtested.

I have published a system “Cobra Levels” on mql5 marketplace which is backtested on last 10 years of chart with the strategy i mentioned on youtube video, but before using it you are required to backtest it yourself.

Here are few key points which a trader should understand before research and development. Most of the trader may lack understanding the basics which keeps incrementing their loss due to these small issues.

1. Highs and Lows : These are the main point which is considered on 90% of setups. There are some algos who never considers high and lows in market, but retail traders always watch this, this is a judgement point from where they may draw swings, add fibo or find break of structure, use elliot waves, draw trendlnes and many other concepts

There are many types of high and lows

– Wick based : A lowest and highest wick is considered low and high

– Close based : Lowest close (as per line chart) is considered low and highest close is considered high

– Body based : Either open or low whichever is lowest is considered low and open or low whichever is highest considered high

Your strategy may have chances of being compatible with either one of the methods

2.Trend :

Trend can be very confusing sometime, As retail trader knows it can be upward, downward or in a range (flat), but its not true.

A trend works with MTF as it has to override from LTF to MTF.

Example – A 15min chart trend is bullish then to break it upward or continue, a trend in M1 has to be forcefully bullish. It is definitely possible that a trend in M1 can be bearish but it can inverse within a second anytime.

So if trader follows up trend in LTF its highly likely that he will never get true definition of trend which is taught on books. So minimum 2 or 3 timeframes are required to be seen to understand trend in clear way.

3. Searching Algorithm : Elliot waves suggest that If wave AB’s breakout happens and price goes beyond B then it is considers a new leg which is called CD. If D’s breakout happens a new leg is born which EF

But this is not the way the real searching algorithm works. The searching algorithm used by hedge funds are based on mathematical and natural laws. Some theories are already published such as Monkey jump algorithm, Harmony search, IWO, Firefly and many others. These types of search algorithms are used in market by hedge funds which a retail may not ever think in his full trading career until he is introduced to these.

I have discussed a growing tree algorithm and how its applied in trading but it is in Hindi language https://www.youtube.com/watch?v=y8pa62Wo9v8

4. Documentation and Review : I will discuss some tools which helps in research and development for a trader.

1. OBS Studio : To record your strategy and explanation in a video

2. PowerPoint : Its necessary to know how to draw on powerpoint, you can learn from this video : https://www.youtube.com/watch?v=amLmGyfprvg You can use powerpoint to add image, audio, video and make sure all reamains in one file.

3. Evernote : Its a good app for documenting your journal

4. INKredible Pro : For android user, this is best app for writing notes

5. Google Keep : Best app to create sticky notes

If research and development is not done well, then it all will be waste, You will confuse yourself so all should be organized. You should clearly know what is working and what you should discard from your research.

Just a side note, All the discarded strategies which does not work can be put on codebase, they may help other learn

I hope this article is hopeful.

Have a great day.

Regards,

A.

https://twitter.com/DarkRyd3r