Trade what you see, not what you think
{quote} Hi thanks for the reply, around 4%+ growth on a live account is pretty impressive imo, hands down and congratulations. If you could bail out an 20 per month eventually you'll be rich according to math. So i'm interested in here. I check up for strong psychological resistances & supports on the 30mchart, markets have a tendency to reach previous highs and lows, it happens all the time. When the price moves there, i'll look for divergence confirmations and sell the new high or buy the new low, IF the price pierces through them recklessly,...
Trade what you see, not what you think
{quote} Thanks for the drawing on the chart. I’ve never been very good with chart patterns. You said you have a good ability to see them easily whereas I end up convincing myself that there is something there when there isn’t more often than not which gets me into trouble. So based on your drawing of where we are at now it seems to still be in the latest bear flag? And what level does it need to break to say the trend may be reversing? Maybe we’ve found 2 ways to get to the same result!
Greetings i don't bet on reverses thats first but, if the bear flag breakdown does not play for the next 5-6 daily candle close, perhaps it's aiming towards higher prices then. But again, would not buy unless there is a clear bull flag pattern represented.. that being said it's better to go short again if we have a significant candle close below the flag line. Logic behind here is, i want to markets to lead me, i don't want to force things. In addition looks like we have completed 3 bear flags in a row already, so odds are getting lower and lower to win again in the same pattern. But you never know, for example s&p500 have been rising forever.
Thus; i prefer to look for short term trends and execute the patterns in a scalp way.. Long term swings might change anytime with the fundamental rush / bank positions or whatsoever etc.
From what i understood, you try to do counter trend moves, actually you are looking for divergences but in a different approach. To me it looks like you are searching for divergences in the volume & movement signifinancy with the ATR. Thus, it might force you to always trade against the trend, and always buy low sell high.
Bank traders & agressive scalpers do this strategy without regular stop losses. They build pyramids with LARGE stop losses and whenever the price favors them they'll book profits. I know a DeutcheBank trader that managed to turn 5000$ into 228k$ in a month.
What he did was pyramid the gold: He would sell resistances and buy the supports, take profit is around 3-6$ in the price (300-600 pips)
Stop losses were wide about 10-15$. Not recommending this to anyone. He is an extremly skilled risk manager, have graduated from one of the China's best universities and have certifications in the related field, they use super different risk management approaches, unlike what the most retail traders do (put tight stop losses, stop losses at the last swing.. stop losses that are couple of pips because the trader thinks he is the breakout master, etc.)
He would pyramid agressively and use wide stop losses because trading against the trend and always trying to catch the top or the bottom is a really risky strategy.
Only way for him to survive that was using wide stop losses and keep growing the account whenever the markets favored him.
So to wrap up, you might win here and there but eventually always counter-trend trading might be troublesome if you will.
Also, i've been simulating your trades and no wonder crosses make you more profits they range and whipsaw more at least, most of the time.
So there is uncertainty of the trend with the crosses, thus: they are up & down all the time and as you stated, if you are trying to pull some pips out, yeah.
Majors have a stronger tendency to trend.
GBPUSD & GBPCAD & GBPNZD Which are ranging?.. which one is making significant swing moves?
Best wishes
