i need an opinion on a forex strategy i use. here is what i use my time frame is the daily charts and i only trade the majors i use the following indicators Heiken-Ashi, and a 5 day on the open & 6 day on the close EMA plus a MACD and the ADX indicators on the bottom and i trade the crossovers is there anyone here that trades the forex with a similar setup what im looking for is just some opinions from some more experienced forex traders ive been back testing this for a couple of months and seems to be profitable but maybe i might just be missing something a more knowledgeable forex trader might be able to help me tweak it some more i realize there is no holy grail but any opinions would be greatly appreciated thank you for your time ive traded stocks for 30 years but the forex is a whole new ballgame

Answer
Opening and closing prices in forex do not have the same weight they do in stock trading, since forex is a continous 24 hour market. If you are using a 5 and 6 day EMA, and trading the crossovers, you might get many false signals. Test EMA 5 over EMA 13 on the close prices.

I have never used the Heiken-Ashi, but the MACD is pretty accurate on the daily chart when it gives bullish or bearish divergences and that is confirmed by a crossover or another signal elsewhere.

Back testing has the drawback of allowing the trader to 'curve-fit' the chart, better to test how the indicators perform in a demo account.

ADX is an okay indicator, but proper use of EMA with MACD will probably give better trade calls over the long term than the ADX alone.

Do not neglect the fundamental picture and know when to stay out of the market (major data, announcements), practise, practise, practise.

And good luck.

What would you recommend? Forex or StockMarket?

What is easier?, More Fun?, More rewarding?

Personal experience please

Answer
Alex is right, trading is the hardest thing you can do. There should be 1 and only 1 reason for trading - to make money. If you're doing it to have fun, and get personal satisfaction, you're doing it for the wrong reason.

Now, which one is better? In my opinion, Forex. Here's why:

1) The average daily dollar volume on the NYSE is about $35 billion and in the gobal equities market, about $200 billion. In the forex, average daily dollar volume is $2 trillion conservatively, but actually is estimated to be as high as $6 trillion.

2) There are 1700 issues on the NYSE alone and around 40,000 worldwide. That's a lot of information to sift through. On forex, there are 6 major currency pairs. Sure, you can get into the cross currency pairs and exotic currencies, but why. Of the $2 trillion traded daily, the EUR/USD pair accounts for 50% of that volume. You really need not go much beyond looking at just 4 currency pairs: EUR/USD, GBP/USD, USD/CHF, USD/JPY.

3) To effectively trade stocks, you need several thousand dollars. With forex, you can start with as little as $100.

4) No commissions in forex. The brokers make their money on the bid/ask spread.

5) Forex starts trading around 5 pm EST on Sunday and doesn't stop till about 4 pm EST Friday, so if you can't trade during the day due to work schedule or such, doesn't matter. You can trade forex at 2 am if you wish.

6) Equities are subject to the short-sale rule, forex is not.

7) Equities have max 2:1 leverage, forex has up to 400:1 leverage. But beware, it's a double edged sword.

8) Forex offers demo accounts. The demo accounts trade just like a real account. In fact, you use the same terminal to trade a demo account as you would a live account, so you can practice and test your strategies in real time and see how you do before you commit real money. Sure, you can paper trade equities, but paper trading doesn't take into account slippage, what prices order at filled at, etc.

9) You can trade standard, mini or micro lots (depending on your broker). A standard lot is $100,000, a mini is $10,000 and a micro is $1,000.