I don't think you could have a realistic stop to work with.
turbo
Sure you could. It's all relative. You're probably going to make the same amount of money.
I've jumped from the 4H to the 1H for two MAJOR reasons:
1) Because 1H is 1H, and not a compound value, my bars and your bars will look alike. Anything 1H or less, will look alike, anything above 1H will not. This is critical. Is your 4H bar starting with GMT 0, or Local time? Yeah, exactly.
2) I (potentially) can have 4x the amount of trades vs the 4H. I will have a lower profit yield, but my win% should stay the same or increase, and my frequency will make up for it.
These are so critical that I won't go to 4H anymore..
And there in lies the fallacy... If it effects you in the shorter timeframe, it will effect you in the longer timeframe as well (to a certain point).
If I traded on the 15M chart, but put my stops like I was on the Daily chart, what's the difference?? The difference of course, I see the reactions of the markets faster.. It's the difference between boiling a potato, vs boiling a chopped up potato.
The shorter timeframes don't have more risk; but the overhead does become a bigger percentage in the shorter timeframes. If I'm risking 5% of my account against a 100 pip move, then the chart I use becomes irrelavent. So we have all been lied to by "classical" education. The math simply doesn't support their fallacies.
Let's say the market averages 100 pips move per day. But it averages 10 pip move on the 30M.
If the bid/ask is 4 pips; on the daily, that's 4% overhead. On the 30M, that's 40%!!! overhead!! And this is what you assume is the "riskier" part of shorter timeframes.
You can try it yourself, you'll be surprised. Take a 15M chart, and zoom out as far as you can go. Now open a 4H chart next to it. What's the difference?? NOT MUCH.
I sometimes do this to verify my mouteki WYSIWYG.. Most think trading the 15M is risky, that's why they trade the 4H. 15M has no compund time problem, and zoomed out, it looks like a slighly more detailed 4H chart (which it is). That's it.
Great question, wish I can give you a cliff notes version.
You can do it one of two ways:
1) Mouteki method. Put in your entry, put in your stop, put in your take profit, and turn off the computer. This then becomes a classic las vegas game of locked payrate. I now do this, highly recommended.
2) You understand what the market is saying, and can spot the reversal or the weakening of the position. If you abide by what Phantom says from the book "Phantom's Gift" then he says, you should not be waiting to "throw in the towel", but rather, you should keep forcing yourself to be proven right and right again, otherwise, throwing in the towel is the FIRST CONSIDERATION, NOT THE LAST.
Remember, the slogan is:
CUT YOUR LOSSES, and let your winners run.
it doesn't say.
LET YOUR WINNERS RUN, and cut your losses.
There's a reason for the order... If you keep cutting your losses first, whatever you don't cut, becomes winners and you let them run.
If you let your winners run, they might run and run until big losers..
Way too much fundamentals for me to type.. read a few hundred books, and it will become crystal clear ;-)
..
TwoBlinks, I back test the Mouteki's strategy on a 4 Hr 10 Days chart and on a 1 Hr 10 days chart.
My rules of taking positions and placing stops
Take a position when the bar closes above/blow the supply/demand line.
My stop criteria, close the position only when the a bar closes above/below the projected 33% stop price.
Rest every thing is according to Mouteki
Trades place on the hourly chart
+47
+30
-37
-20
-28
+26
-21
-29
+52
-19
-25
+60
+32
-----
68
Trades placed on the 4 Hr chart
162
Those are the results I got.
Or maybe I missed your point all togather, I'll go over your thread a couple more times.
