if you use a pre-set order to trigger your entry, this can be set at a level where price is already resuming its with-trend movement: this builds in a degree of confirmation.
[quote=KayStreet;12910347]{quote} ___ If you could please clarify on that more. {quote}
Sure. Let's suppose you see a nice steady uptrend. Looking at the daily bars/candles, each has a higher daily high than the preceding series of candles. Wait for a daily bar with a daily high lower than the preceding candle: if you're aggressive, put a buy order just above the high of this day's range and a stop-loss just below its low. If you're less aggressive, wait for a second consecutive bar with a lower daily high, or even a third, and use that range as the "reference".
Adjust your position size so that the maximum loss (if your stop-loss is hit) is only a small percentage of your account capital.
If your buy order is not triggered the next day, but that day has a lower high, pull your buy order lower to the new day's range: don't forget to adjust your stop-loss and position size. Don't forget, if your buy order is not triggered, maybe the trend has lost momentum - find another target market.
Reverse the order directions for downtrends.
A recent example from AUD/CAD -
Uptrend identified.
Note progression of higher daily highs 06-14/04.
Note lower daily high 15/04.
Set buy order just above 0.8942: set stop-loss just below 0.8846.
Buy order was triggered next day and uptrend has continued since.
@tomorton
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Assuming the day's candle doesn't make it lower.
The Orange line qualify for a SELL stop as per your xplanation. Right? (leaving all other factors)
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@tomorton ___ Assuming the day's candle doesn't make it lower. The Orange line qualify for a SELL stop as per your xplanation. Right? (leaving all other factors) ___ {image}
Ignored
it should be like this, you can sell at the S/R level, if it reaches.
@tomorton ___ Assuming the day's candle doesn't make it lower. The Orange line qualify for a SELL stop as per your xplanation. Right? (leaving all other factors) ___ {image}
Ignored
Yes, if today's bar completes with a low higher than yesterday's, then the aggressive trend-follower would enter a sell just below today's low. A less aggressive, higher probability tactic would be to wait for a second or third higher low and use that as the entry level.
{quote} it should be like this, you can sell at the S/R level, if it reaches. {image}
Ignored
That is a viable tactic, involving perhaps a higher win probability, so its less aggressive than the one-bar signal. Less aggressive entries with greater levels of confirmation benefit from a better win rate but a lower return per winning trade.
Personally I don't draw s/r lines but the impact on the strategy would be very similar I am sure.
An even more cautious tactic would be to not use the opposite extreme of the trigger bar's range but to push the stop-loss level a bit further down (for longs / or up for shorts). So you could add X pips to your entry to SL distance: you could get the value of X either from familiarity with the particular pair or from an objective metric for volatility such as ATR.
