Disliked{quote} Morning - a couple of things in response. I still have the long open, and will probably leave it until it reaches TP - I have the position hedged by a previous short I had taken - so I'm quite comfortable with it doing what it wants. If I am being a purist with T4F the trade you point out on the chart is not a trade signal - it is a setup signal - T4F is triggered by a fail and a sign on a trend reverse. In this situation you could use that short signal as your stoploss or if your being aggressive reverse the trade to the target you point...Ignored
- Joined Mar 2013 | Status: Putting it all together... | 1,185 Posts
{quote} OK understood, is an atypical operation. I have a question about coverage. How many pips you expect the price goes against you for a operation of coverage?
I tend to look at any signals on other templates on the opposite side of the trade. So for example - I think there is a bearish signal on the AU T4Y_680 which is targeting 0.8700 - so in theory I am prepared to let it go at least to there - BUT, remember I am hedged, so I am not actually carrying that DD. I will carry the hedge down to 0.8700, but I will also take T5_103 shorts on the way down - this will effectively reduce the overall impact of the hedge by increasing my equity (even though the hedge on the charts and trades remains the same) - so theoretically I could close out having recovered the amount in the hedge (or more) on the trades down. Hope that makes sense.
When price reaches the final target, I have two choices -
Close out everything
or
Look to the original long position to complete (even though it is a long way off).
Factors that help me decide are whether there are any other long signals that have not completed - particularly larger templates (1130 and 680 being the most reliable) and I also look at the overall high time frames PA, SR and TLs (or ichimoku if it's EJ) and see whether we are at a likely S/R point. If I see a head and shoulders, Pbar, engulfing etc - these are not essential but they add a little confluence I will likely look for the price to go back, but I will be watching it carefully until I have other templates confirming we have changed direction.
I did this with EJ last year and it worked really well - I did post a chart with the trades indicated - I'll see if I can trace it.
EDIT
Chart below from 1 Nov 2013 - in the middle of hedged scenario
Chart below - how it worked out in the end on 24 Nov 2013
- Joined Mar 2013 | Status: Putting it all together... | 1,185 Posts
Was anyone else in the GU T5_103 short - with my broker it missed the target by 0.2 pips!! Still, if the T4Y_680 signal is valid (which I believe it is, it should hit there again. I think there is also a T4Y_1130 signal long (depending on whether we count last years PA for signal validity, if so) I am expecting/hoping for a good drop down before price reinstates it upward trend.
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- Joined Mar 2013 | Status: Putting it all together... | 1,185 Posts
Is anyone else in this EU T5_103 short? 
- Joined Jan 2010 | Status: Trader | 2,841 Posts
Is anyone else in this EU T5_103 short?
- Joined Mar 2013 | Status: Putting it all together... | 1,185 Posts
Is anyone else in this EU T5_103 short?
Closed out on the 23.6%. A few pips early of TP, but I needed to shake it off as I am starting to get a bit more exposed than I would like.
Still, pips is pips.
- Joined Sep 2013 | Status: Trader | 1,396 Posts
{quote} Closed out on the 23.6%. A few pips early of TP, but I needed to shake it off as I am starting to get a bit more exposed than I would like. Still, pips is pips.
- Joined Mar 2013 | Status: Putting it all together... | 1,185 Posts
{quote} Great hollwohead
Thanks - I'm still short on the T5_680 trade, but it's a smaller lot size as the DD can theoretically be that much bigger, conversely my T5_103 trades tend to be more aggressive in terms of lot size. It tends to work until you get failed T5_103s and then the DD get's big (like the long EU jaylovin referred to), so the hedge has to be an equal lot size which then leads to significant exposure - I was starting to think it could get to a stage where I would not being able to trade the signals up and down the hedge.
