Here is one more example of my contingency plan if a trade changes direction on me just after I get into profit. I use semafores. Yes, the dreaded semafore! And before I get a lot of "hater-ation" mail, let me repeat - "I use semafores". That doesnt mean you have to.
Why do I use semafores? I use them as my caution light. They tell me something is "about" to change. That is all I use them for: not for entries, not for exits. They will mess you up if your strategy depends of them for entries and exits.
This picture shows several entries that were qualifiable by my scalping partner. Not all of these qualify as a reverse trade so keep that in mind as you look at it and say "that is not the rule!"
In this picture, I use the Sacupay-Montana v2 as a bottom indy. (found in this thread) It uses a 0 line as a cross over into bull or bear territory.
As you can see, when it crosses over the 0 line (your confluence with what is happening above which is our third step in the rules) And you get entry signal with the SSL...you got a trade. The first trade to the left went well.
The second trade was a good entry and then 6 pips into the trade the #2 shows up (semafore retracement level). And then, the SSL crosses over. I AM OUT OF THE TRADE. I only had 6 pips profit. I could not withstand a retracement (because you never know what the market is going to do). I get out and wait for the very next qualified entry which so happens also to be marked by the #2. It was a choppy ride up (signified by the spikes to the bottom and top of the HAs). But, I would still come out a winner.
Now look at the last trade all the way to the right of the screen (green circle). About 9 pips into profit, the #2 shows up (red suare) AND it bounced off the inside line of the CoG (signifying to me that some accumulation may be due) and then the SSL cross over. I am out of the trade, no questions asked.
The little pips I would have gathered from those swings in this picture would be worth more than 60 pips!
I wouldnt be worried because I have safeguards in place for a trade gone wrong! In the picture above, with the contingency plan, you would not have lost any of the trades. You would have to sweat a little more...
Because of my contingency plan and my humbleness to take only a few pips if that is what the market gives me freely (or at a cost of 2 to 3 pips) I rarely lose a trade. The only time I lose is if I am not paying attention but my back plan and safety net is always my SL.
In these cases, the 0 line (or 50) line may or may not get crossed because it is only a retracement.....but come on ppl....think about it. You are only 5 or 6 pips into profit, your stoch has reached a top or bottom of a cycle and is about to turn around (just in case you dont use semafores). You are not sure if that cycle is going to take 5 or 10 pips from you but it is going to take....something
You can either safeguard your pips with a contingency plan (which I recommend if you trade a 1 min TF) or you can suck it up and hope the market doesnt hit your SL. It is up to you.
Duces!
Why do I use semafores? I use them as my caution light. They tell me something is "about" to change. That is all I use them for: not for entries, not for exits. They will mess you up if your strategy depends of them for entries and exits.
This picture shows several entries that were qualifiable by my scalping partner. Not all of these qualify as a reverse trade so keep that in mind as you look at it and say "that is not the rule!"
In this picture, I use the Sacupay-Montana v2 as a bottom indy. (found in this thread) It uses a 0 line as a cross over into bull or bear territory.
As you can see, when it crosses over the 0 line (your confluence with what is happening above which is our third step in the rules) And you get entry signal with the SSL...you got a trade. The first trade to the left went well.
The second trade was a good entry and then 6 pips into the trade the #2 shows up (semafore retracement level). And then, the SSL crosses over. I AM OUT OF THE TRADE. I only had 6 pips profit. I could not withstand a retracement (because you never know what the market is going to do). I get out and wait for the very next qualified entry which so happens also to be marked by the #2. It was a choppy ride up (signified by the spikes to the bottom and top of the HAs). But, I would still come out a winner.
Now look at the last trade all the way to the right of the screen (green circle). About 9 pips into profit, the #2 shows up (red suare) AND it bounced off the inside line of the CoG (signifying to me that some accumulation may be due) and then the SSL cross over. I am out of the trade, no questions asked.
The little pips I would have gathered from those swings in this picture would be worth more than 60 pips!
I wouldnt be worried because I have safeguards in place for a trade gone wrong! In the picture above, with the contingency plan, you would not have lost any of the trades. You would have to sweat a little more...
Because of my contingency plan and my humbleness to take only a few pips if that is what the market gives me freely (or at a cost of 2 to 3 pips) I rarely lose a trade. The only time I lose is if I am not paying attention but my back plan and safety net is always my SL.
In these cases, the 0 line (or 50) line may or may not get crossed because it is only a retracement.....but come on ppl....think about it. You are only 5 or 6 pips into profit, your stoch has reached a top or bottom of a cycle and is about to turn around (just in case you dont use semafores). You are not sure if that cycle is going to take 5 or 10 pips from you but it is going to take....something
You can either safeguard your pips with a contingency plan (which I recommend if you trade a 1 min TF) or you can suck it up and hope the market doesnt hit your SL. It is up to you.
Duces!
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