In today forex faq, we have a question from one of our fellow traders asking me about his strategy and how to overcome his fear in trading when the market is going the opposite way.
Below is the question:
I have been training to a demo and a live account
trying to find a strategy that suits me. Your web site help me a lot. I would like to analyze the ichimoku cloud because i find it very interesting.
Finally I believe after three-four months that I have been reading watching and studying that I am close to finding a strategy that works for me combining the ichimoku with fibonacci and maybe RSI or DMI. First I want you to tell me if these indicators based on your opinion are good options and secondly but most important I think how can I overcome my stress when the market go to the opposite direction and I am getting myself to panic.
First of all, I am glad to know that my website has been a great help to you. As for your question on your strategy that make use of ichimoku, fibonacci and RSI, I have an advice for you.
I am unable to tell you exactly whether it works or not as I am personally not using this strategy. However my personal opinion is you should work out when you should enter a trade, where to place your stop loss and where to take profit first. Once you have everything ready, try it out on your demo account for 3 to 4 months. If you are making profit consistently, then it is a good trading strategy.
For all my strategies, I will try them out on a demo account for several months to see if they really can make me money before I go live with them. However from your indicators alone, it looks like a promising strategy as you have an indicator that can find you good support and resistance (Fibonacci), an indicator that can tell you whether the market is overbought or oversold (RSI) and the ichimiku indicator.
AS for your second question on being panic when the market is moving against you. This is usually the situation when you have no confidence in your own strategy. When you have tried it out for several months and you know that it makes more winning than losing trades, you will not fear when the market is moving against you as you have confidence that you will eventually make more profit than loss.
In addition, you can read the below article that I have written some time back.
I hope that I have answered your question. It will be great if you can come back to this post a few months later to tell me if your strategy works or not.