No BBalazs it is not that simple.
The tool is only for defining your risk restricting it to the level of your choice from i.e 1% to 5%.
It is not a tool to define your entries or exits... This is for you to define via your own trading system/s
Take a look at this 1 minute chart where my trade has just completed. It is the AUD/JPY.
When I come to the table I have no I have no notion of which way to trade, I let the chart tell me.
You see here the first two tests for entries were to small but the 3rd one was just right with a 7 pip Quartile.
My spreadsheet tells me the lot size to trade risking 5% for 7 pips, I already have the stop on my order because I know it is the top swing high. My entry here is based on the close below the EMA and the trend line and this is where the Quartile is expanded to.
Now I wait until the EMA makes the higher high threatening a turnaround and close the trade. The Quartile tells me I made 7 increments of 5% profit for the risk of the initial 5%. What I am saying here is I make 35% profit and couldn't care less how many pips it was.
Now if the trade upon entry had even slightly gone against me I would have bailed possibly losing 1 or 2%. At this level one pip is almost 1% that is why I bail quickly.
There are many ways to trade and the Quartile tool is very handy for making the pending orders and working out the risk involved. I don't always know how much the profit will be, my concern is with the risk.
The tool is only for defining your risk restricting it to the level of your choice from i.e 1% to 5%.
It is not a tool to define your entries or exits... This is for you to define via your own trading system/s
Take a look at this 1 minute chart where my trade has just completed. It is the AUD/JPY.
When I come to the table I have no I have no notion of which way to trade, I let the chart tell me.
You see here the first two tests for entries were to small but the 3rd one was just right with a 7 pip Quartile.
My spreadsheet tells me the lot size to trade risking 5% for 7 pips, I already have the stop on my order because I know it is the top swing high. My entry here is based on the close below the EMA and the trend line and this is where the Quartile is expanded to.
Now I wait until the EMA makes the higher high threatening a turnaround and close the trade. The Quartile tells me I made 7 increments of 5% profit for the risk of the initial 5%. What I am saying here is I make 35% profit and couldn't care less how many pips it was.
Now if the trade upon entry had even slightly gone against me I would have bailed possibly losing 1 or 2%. At this level one pip is almost 1% that is why I bail quickly.
There are many ways to trade and the Quartile tool is very handy for making the pending orders and working out the risk involved. I don't always know how much the profit will be, my concern is with the risk.