One Hour Triangle Trading
Long time lurker at this thread - figured I finally be a better presence since I've gained so much from this website. I wanted to start a thread only trading triangles and wedges on the hourly chart. I am definitely a short term trader, but I never could figure out how to make money consistently from trading 15 minutes and under (if anyone has a short-term strategy that actually works I'd be VERY interested). So, naturally I decided that the next best timeframe for me was the hourly chart - I tried the four hour and daily charts and couldn't stand watching my trade go for 6 days and then taking a loss - talk about a waste of time!
So here is the system in a nutshell (if anyone has any suggestions for improvements I'm more than willing to listen!):
Timeframe: Hourly charts only
Chart Pattern: Wedges and Triangles (Symetric/Ascending/Decending - I literally don't care)
Money Management: Here is the key part of this strategy - Place a market order once you see a triangle/wedge form (I usually go 1% of my account). After the trade is up 0.5 RR add another 1% and then move your initial stop down to .5% of your account. Why? Because I found that with triangle trading most trades don't even make it out of the gate - if you can make it to .5 RR, then you have a pretty good shot at a successful trade. Exits? I always shoot for 1.75 RR of the initial trade for a total of 3% profit (1.75% from the first trade and 1.25% from the pending order).
I know a lot of people will be confused why I don't take support/resistance or anything else on the chart into consideration. I actually found that through backtesting there's really no 'good points' to add onto a trade. As Mark Douglas points out you need to take every single trade that is presented to you because you don't know if it's going to be a winner or loser.
Here's an example of this method in action - I entered on the trigger bar at 1.00413. I then added a second position at 1.04339. At this point my stop is around 1.045 (a 1.5% loss). I literally just wait until my target is hit at 1.04159 at collect my 3%
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