Right guys. It seems like many panties are getting into a twist over countering.
There are a few separate issues going on here and I'll try and deal with them now - so, in no particular order:
1. You seem to be confused as to the reason for and function of the counter. This trade is not designed to make back any loss from a first entry. It is there to stop that first bad trade from getting any worse...ever.
Taking swaps out of the equation, this set-up can be left till the end of time and never drop any more into negative territory.
This gives you precious time to take a step back, catch your breath and figure out what you are going to do next.
At its most basic, you will now wait for the next main trigger. Emphasis on main. That, in the case of the Billy Bar or AU H4 Break, can be the next day.
That's generally the way Billy would run things. Bearing in mind that he had a few angles he kept hidden, mostly involving trading any retrace that appeared before the next main trigger.
Also, as an aside, please remember that he always didn't care less what happened on any given day, so long as he ended the week green.
Anyway, back to what comes next.
2. This is where Billy and I differed slightly in our approach but the overarching process and result is the same.
You look to eat back into that floating loss. The original trades may as well not exist, for all the influence they have on anything that you are doing now. How Billy would do this is look for retrace moves and scalp back a pip or two or three at a time. Just keep it grinding away. Once he had made that clear, he was quite happy (well, maybe happy is the wrong word - but content enough, certainly) to close out the original two trades.
For me, I would do the same thing but use different methods. I use Wick-Zone (both major and minor, whatever applies - and that would be my equivalent of Billy's retrace trade), Supply+Demand (again, major and minor), then, more recently, I have used a completely different stand-alone scalping method to eat away at that floating loss.
The key to these trades is to attempt as best you can, once you clear the spread, to never let them go negative. This is why I will use the scalping method, which looks to jump on board momo (momentum) and ride it for a quick handful and get out.
If they look to turn on you, close them out. Bag a couple of pips, one pip, a quarter...it doesn't matter. Bag it. They mount up.
If it goes back your way, re-enter.
Layered on top of these, you can use whatever stuff you have available in your traders' bag o' tricks - fibs, pivots, opens, yada, yada, yada. Name your poison and chug it down.
3. As I said, once you have covered that floating loss, you can close out happy. However, it is also possible to run this to maximise the return from the positive leg and minimise the loss of the negative one. If you get a big momo move, always look to close the negative leg first, close it on a retrace back against it for instance, letting the positive one run as long as you can. Once it is running, it is also possible to add-into that position, stacking as it runs.
If you really put your mind to it, it is entirely possible to also clear the negative leg and end the day (or however long you work it) with all trades completely green. For this, it also does admittedly help if you are a stubborn son of a **** like some of us are and hate giving anything back to the market.
4. Specific to The Frankenbreak, this runs its counter trades in a style of its own. Yes, you can keep it simple and run a sl and re-enter but that is not very efficient, though stats say it will only very, very, rarely not clear more than enough on the second trade to cover any initial head fake.
However, I run it by using the actual zone as a Wick Zone. The levels are established by the first candle's Open and the last candle's Close. This builds a custom candle and is run accordingly.
I will also run a fib-map through that zone and look at where the 50-Fib and any potential Z-Lines are. These are layered into the method accordingly.
For me, that's my thing, as I will look to set my counters / add-ins / whatever, using micro S+D or Fibs.
5. Finally, you must not let the distance between the two trades get too large. Yes, you could (would) clear the negative eventually but the tighter the hedge, the easier it is to unwind it. Billy would get around this by using techniques such as adopting his ''modest range'', which actually could be way less than the true range.
Letting it get too wide is where you end up with multiple counters running, as you are basically whipped to death.
Right, I'll let that lot lie there for a while. I hope it makes some kind of sense. Digest it at your leisure.
I'm off to visit my brother. I am tasked with helping him pick a new Merc. It's a hard life but someone's got to do it.
There are a few separate issues going on here and I'll try and deal with them now - so, in no particular order:
1. You seem to be confused as to the reason for and function of the counter. This trade is not designed to make back any loss from a first entry. It is there to stop that first bad trade from getting any worse...ever.
Taking swaps out of the equation, this set-up can be left till the end of time and never drop any more into negative territory.
This gives you precious time to take a step back, catch your breath and figure out what you are going to do next.
At its most basic, you will now wait for the next main trigger. Emphasis on main. That, in the case of the Billy Bar or AU H4 Break, can be the next day.
That's generally the way Billy would run things. Bearing in mind that he had a few angles he kept hidden, mostly involving trading any retrace that appeared before the next main trigger.
Also, as an aside, please remember that he always didn't care less what happened on any given day, so long as he ended the week green.
Anyway, back to what comes next.
2. This is where Billy and I differed slightly in our approach but the overarching process and result is the same.
You look to eat back into that floating loss. The original trades may as well not exist, for all the influence they have on anything that you are doing now. How Billy would do this is look for retrace moves and scalp back a pip or two or three at a time. Just keep it grinding away. Once he had made that clear, he was quite happy (well, maybe happy is the wrong word - but content enough, certainly) to close out the original two trades.
For me, I would do the same thing but use different methods. I use Wick-Zone (both major and minor, whatever applies - and that would be my equivalent of Billy's retrace trade), Supply+Demand (again, major and minor), then, more recently, I have used a completely different stand-alone scalping method to eat away at that floating loss.
The key to these trades is to attempt as best you can, once you clear the spread, to never let them go negative. This is why I will use the scalping method, which looks to jump on board momo (momentum) and ride it for a quick handful and get out.
If they look to turn on you, close them out. Bag a couple of pips, one pip, a quarter...it doesn't matter. Bag it. They mount up.
If it goes back your way, re-enter.
Layered on top of these, you can use whatever stuff you have available in your traders' bag o' tricks - fibs, pivots, opens, yada, yada, yada. Name your poison and chug it down.
3. As I said, once you have covered that floating loss, you can close out happy. However, it is also possible to run this to maximise the return from the positive leg and minimise the loss of the negative one. If you get a big momo move, always look to close the negative leg first, close it on a retrace back against it for instance, letting the positive one run as long as you can. Once it is running, it is also possible to add-into that position, stacking as it runs.
If you really put your mind to it, it is entirely possible to also clear the negative leg and end the day (or however long you work it) with all trades completely green. For this, it also does admittedly help if you are a stubborn son of a **** like some of us are and hate giving anything back to the market.
4. Specific to The Frankenbreak, this runs its counter trades in a style of its own. Yes, you can keep it simple and run a sl and re-enter but that is not very efficient, though stats say it will only very, very, rarely not clear more than enough on the second trade to cover any initial head fake.
However, I run it by using the actual zone as a Wick Zone. The levels are established by the first candle's Open and the last candle's Close. This builds a custom candle and is run accordingly.
I will also run a fib-map through that zone and look at where the 50-Fib and any potential Z-Lines are. These are layered into the method accordingly.
For me, that's my thing, as I will look to set my counters / add-ins / whatever, using micro S+D or Fibs.
5. Finally, you must not let the distance between the two trades get too large. Yes, you could (would) clear the negative eventually but the tighter the hedge, the easier it is to unwind it. Billy would get around this by using techniques such as adopting his ''modest range'', which actually could be way less than the true range.
Letting it get too wide is where you end up with multiple counters running, as you are basically whipped to death.
Right, I'll let that lot lie there for a while. I hope it makes some kind of sense. Digest it at your leisure.
I'm off to visit my brother. I am tasked with helping him pick a new Merc. It's a hard life but someone's got to do it.
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