StewartR - I want my trading to be boring.

Start with the 4 hour
Moving averages have crossed to show an uptrend. But its only just starting. I prefer to enter when the MAs are spacing out and the trend is really moving. I would not be entering this market. My trade is to 'wait'.

Daily - trend is sideways to me.
So daily is sideways, 4 hour is sideways - I'll sit it out and wait. I wont even bother looking at the 1 hour.

Next I'll post what I consider to be a good entry on another pair.

USDJPY trade I am in now.
hour chart
21<55<89 - meets the definition of a trend
stoch
at extreme
price showed some weakness by closing near the bottom of the candle

There are enough of these trades to keep my satisfied, there is really no need to go for anything less than this type of entry.
(I am up 60 pips on this trade so far).

Notice there was another very good entry (outside bar) the last time price retraced to an extreme.
I like this type of trading because the stoch and the emas define the pull back and the trend for me. Its no longer 'gut feel' and its not 50 indicators. To me, a trading system can only be robust (consistently profitable) when it follows basic principles. ie. cut your losses to be as small as possible (done by entering from an extreme stoch as the pull back is running out of puff), let your profits run (trailing a stop in a trending market), protect capital (move stop to BE when price has moved in your direction by the amount it usually moves in a day).

Again - this method is based on Jacko's philosophy but takes Jacko's excellent "GUT FEEL" out of the equation.

Here's the same chart but on a daily time frame.
Strong trend.
Its been trending for months - there have been heaps of entries on the 4 hour chart and even more on a 1 hour chart.
THere's no need to trade when the moving averages are 'messed up' when these trends last so long and give so many entries anyway.

So the system is simple.
Requires patience at times.
Overall its robust and reliable.
Next comes the important stuff - how much do you bet, how do you increase or decrease the position size, when do you take profits? These are issues I am still working through - but I am doing this for a living now( I have no other source of income), so these are truly important to me.

Hi everyone: I have had a couple of people send me private messages asking about cross overs of the emas. I am grateful for the questions. They encourage me to crystalise my thinking too.

Please let me wax lyrical for a moment:
The best advice I have ever heard was "keep it very very very simple".
I believe trading is not precise.
I believe there is no indicator that is perfect.
I believe that principles and concepts work - therefore
I believe there is no need to search for ideal settings on indicators and
I believe indicators should be taken with a grain of salt and
I believe that only simple approaches are robust enough to be consistent.
I believe the 'system' that you use is nowhere near as important as what goes on in your head.
I believe that being a good trader is a financial exercise rather than an academic exercise (in other words I'd rather have a bad system and make a lot of money than have a system that squeezes a million pips from the market every day and my account balance never changes.)

The system doesnt have to be that good if your trading account is big enough.

My trading is based on the following principles.
1. Markets have a tendency to trend.
2. Entering on a pull back will result in smaller losses and potentially bigger wins than entering on a break out.
3. Trailing stop will eventually get me out.

I use indicators to help me define each of these concepts.
3 emas in relative positions to each other define the trend
1 stoch defines a pull back
ATR defines the trailing stop distance.

Which 3 emas, what stoch and what ATR are very close to irrelevant. Therefore I only have to find settings that are comfortable for me.

I am happy with this simple and robust approach.
The bigger issues are position size, adding to winners, and goals.

S

I really understood alot of it... I will practice alot ...hope that you dont mind if i ask more questions but awsome stuff....


Thanks

was up 100 pips at one point.
Stop was moved to +27 pips to make sure I never let a profit turn into a loss.

I have been able to combine your strategy with my fibbs...thanks alot...

Took this trade a few hours ago - so far up 35pips - moved stop to b.e.
Now I'll leave the stop in place until I get a clear indication of a reversal.

went to bed - had a good sleep - woke up to see the trade had moved exactly 100 pips from my entry and then reversed.
I was stopped out at +10

This is not one of my typical trades. I am a trend trader and I enter on pull backs. But this trade was screaming "short me you id**t!". I tried (I really tried) to stick to my plan and not trade it - but I remember the voice of Jim Rogers (Market Wizards) saying he waits until the money is just lying there asking to be picked up. This was one of those moments for me- so I took the trade.

Daily Euro - double top + pin bar + stoch at extreme.

I am sure the Price action traders from the James16 thread are all short on this one.

Closed at +81 pips.
I moved the stop when price hit a support area and started stalling.

Daily trend up
4 hour trend up
Price action - Pin bar
Stoch oversold (possibly meaning the correction has had enough)

I entered at the close of the pb with a stop below it. I suspect there'll be a retracement on the pin bar that I'll have to weather.

Anything can happen. There are no guarantees. Only probabilities.

Stopped out: -60 pips
What did I do well?
I followed the trend (up trend).
All the conditions were in place: stoch oversold (pull back) Emas stretched out (trending), daily trend in place too. Price action (pin bar). Had courage to take the trade (even though I closed a short trade on it only minutes before and had written a post in the Jacko thread suggesting that the bearishness would continue). So I followed my rules.

What could I do better?
The motto is 'buy low, sell high'. The pin bar (by definition) is formed when the price has already reversed from its swing. I could have halved the loss by waiting for a pull back (of the pin bar) on a lower timeframe (something I suggested when I placed the trade), or done the opposite and waited for a confirmation of the pin bar by waiting for the high to be taken out. I think the message is 'patience'. I chased the trade and entered too high.

Overall - I rate the trade as a 9 out of 10 and give myself a pat on the back. I followed the rules of probabilities and that is my job. The market moves independently of my trades, my wishes and my hopes. The market just moves.

Now I'm waiting for another indication that the trend has resumed upwards.

ok stewart things like this happen all the time.
one question:did you wait for the bar to close because in my chart (alpari)i have no pin bar.
go on. i play like you 2 years now and i think is the most profitable way.

Yes I waited for the close. I use IBFX so their 4 hour candle is different to alapari.

I think (feel) that the euro has more correcting to do; and I dont want to catch the falling knife. But how can I possibly know if the knife has further to go? I can't possibly know what is going to happen. My job is to take the trades

- trend is up on 4hr and daily.
- there's been a pull back (evidenced by stochs at extremes)
- entered at 1.5606

at previous resistance
has had a strong run up for last 16 hours without a pull back
trend is down on daily and 4 hour
pull back is extreme (stoch)

the rule is to sell high - so I'm in.

perhaps twould be better to wait for price action to confirm - but the logic of selling at previous resistance is sound.

I think my intuition is getting better. I am trading full time now and I was not happy with this entry. My charts gave me a trigger - yet my intuition was saying the pull back has further to go.

Loss of 60 pips.

I cannot control the market. And I am trying to teach myself the discipline of staying with the system and taking trades when I see one.


What did I do well?
I took the trade. All conditions for entry were met. I kept my risk low. I have not been hurt by this loss.

How do I feel?
Dissappointed at the loss. I would like my win loss ratio to stay right up there.

What could I do better?
Perhaps be even more selective and wait for a really good pin bar or bearish outside bar.

I've two attempts at buying this dip so far and lost on both.

Result - loss of 50 pips

What did I do well - took the trade. It met my criteria.
What could I have done better.
1. Kept to the rules on the stop size and put it 2 x atr(100), because my system is still giving me an entry signal and I have already been stopped out.
2. I was up 30 pips. I could have moved the stop to BE. 0 is a lot better than -50.