CLOSED
I DON'T TRADE THIS WAY ANYMORE
I start this journal because I am beginning the test of a system. It is the first time that I have the sensation of having a real edge. I began to trade 3 months ago and all I know is that you have to test everything that sounds good until you find something that gives you the edge.
Find the conditions for a trade:
First rule: Only trade in Wide Open Spaces. You can't predict where the price is moving, but you can predict where is going to be the next supply/demand zone. If the space between the price and the next supply demand zone is bigger than 15 pips, I want to trade it if I see a good setup. For this I use trendlines, S/R zones, channels and fibonaccis on the Daily, 4H, 1H, and 1m timeframes.
Second rule: Trade strong currencies vs weak currencies (during the session). For this I use an indicator I found in this forum that compares the strength of all currencies in all timeframes and plots it in a line graph. It is very interesting how you can apply technical analysis to this lines also. When a potential reversal zone matches both in the strenght graph and in the pair graph, you get a very good setup.
Third rule: Use price action principles to decide if an entry is worth a bet. If you have access to the money flow use it, if you don't, use reversar patterns (dojis, morning stars, clouds, blablabla...).
About trade management:
First rule: The only real edge is to trade from breakeven. Enter the market with the smallest SL possible and move to BE if it moves away 3 pips. It is the opposite that is told everywhere, but before I started to learn about trade management I used to do that by intuition and worked much better than when I started to "learn" how to place 20 pips stops. At the beginning you follow your intuition, and my intuition says that a free ride in the market is the best way of trading, you can reenter if you are stopped out and if it goes in your favor again, you can reenter the trade, it is free and you win points for moving money (if you broker does that).
Second rule: Before entering a trade, know where you are. Your trade management will depend on this. Are you in a reversal zone from a 1m trend, or in a 1H trend or in a daily trend? If you are entering the market after a 61.8 rebound from the last 4H trend swing... maybe you can leave your SL at BE and trail your stop different than if you are entering the market after a 100 pips move in the same direction.
Third rule: Use rule 2 for take profit placement also.
Fourth rule: Don't scatch a trade, use a trailing stop. Using a trailing stop is just easy and calm, and on the long term you can get like a 80% of the swing if doing right. Don't use a trailing stop, and then you will press the panic button at the first stone in your way. There are many ways, personally I find using TrendMagic indicator one of the best, you can use it in any timeframe. I have also use trailling stops from the last fractal, but I consider that you give back a lot of your money in the last swing of the trend because it is usually the longest and your SL would be stupidly far away. On the other side, TrendMagic gets closer to the price as momentum goes away, and that is just brilliant, otherway you have to be thinking all the time where to put your SL, use this tool and stay calm, on the long run, it pays.
About risk management:
The normal trade is 1% of my capital. But, if it is a high probability setup I can go with a 5%. After some time looking at price action, you see what works best.
One final note:
Work every day, search for new trends, new lines, new channels, new supports and resistance, don't do this, and everything else will go nowhere.
I DON'T TRADE THIS WAY ANYMORE
I start this journal because I am beginning the test of a system. It is the first time that I have the sensation of having a real edge. I began to trade 3 months ago and all I know is that you have to test everything that sounds good until you find something that gives you the edge.
Find the conditions for a trade:
First rule: Only trade in Wide Open Spaces. You can't predict where the price is moving, but you can predict where is going to be the next supply/demand zone. If the space between the price and the next supply demand zone is bigger than 15 pips, I want to trade it if I see a good setup. For this I use trendlines, S/R zones, channels and fibonaccis on the Daily, 4H, 1H, and 1m timeframes.
Second rule: Trade strong currencies vs weak currencies (during the session). For this I use an indicator I found in this forum that compares the strength of all currencies in all timeframes and plots it in a line graph. It is very interesting how you can apply technical analysis to this lines also. When a potential reversal zone matches both in the strenght graph and in the pair graph, you get a very good setup.
Third rule: Use price action principles to decide if an entry is worth a bet. If you have access to the money flow use it, if you don't, use reversar patterns (dojis, morning stars, clouds, blablabla...).
About trade management:
First rule: The only real edge is to trade from breakeven. Enter the market with the smallest SL possible and move to BE if it moves away 3 pips. It is the opposite that is told everywhere, but before I started to learn about trade management I used to do that by intuition and worked much better than when I started to "learn" how to place 20 pips stops. At the beginning you follow your intuition, and my intuition says that a free ride in the market is the best way of trading, you can reenter if you are stopped out and if it goes in your favor again, you can reenter the trade, it is free and you win points for moving money (if you broker does that).
Second rule: Before entering a trade, know where you are. Your trade management will depend on this. Are you in a reversal zone from a 1m trend, or in a 1H trend or in a daily trend? If you are entering the market after a 61.8 rebound from the last 4H trend swing... maybe you can leave your SL at BE and trail your stop different than if you are entering the market after a 100 pips move in the same direction.
Third rule: Use rule 2 for take profit placement also.
Fourth rule: Don't scatch a trade, use a trailing stop. Using a trailing stop is just easy and calm, and on the long term you can get like a 80% of the swing if doing right. Don't use a trailing stop, and then you will press the panic button at the first stone in your way. There are many ways, personally I find using TrendMagic indicator one of the best, you can use it in any timeframe. I have also use trailling stops from the last fractal, but I consider that you give back a lot of your money in the last swing of the trend because it is usually the longest and your SL would be stupidly far away. On the other side, TrendMagic gets closer to the price as momentum goes away, and that is just brilliant, otherway you have to be thinking all the time where to put your SL, use this tool and stay calm, on the long run, it pays.
About risk management:
The normal trade is 1% of my capital. But, if it is a high probability setup I can go with a 5%. After some time looking at price action, you see what works best.
One final note:
Work every day, search for new trends, new lines, new channels, new supports and resistance, don't do this, and everything else will go nowhere.
Live and Keep Calm