Imagine this, you entered a position signaled by your system or method and then you found out later you are riding a good looking trend and it looks like it will stay for days or even weeks. There’s a temptation (Greed) inside you to add more position but your gut (Fear) tells you it’s not good money management. What should you do? Take a look at this:
I've been doing your system this month and I did something different last week. As my position goes my direction, I added position depending on the strength of the trend. Last week I have long positions on GBP/USD and GBP/JPY. Like what you do, I adjust my stop loss according to daily technical. Sometimes my stop loss on GBP/USD is 200 pips due to volatility during big news. Last night I adjusted my Stop Loss GBP/USD to 1.9660 and GBP/JPY 238.55 Here is the result:
GBP/JPY If my stop loss is hit at 238.55 Then:
2 lots at 232.36 = 1238 Pips (619 x 2)
1 lot at 234.05 = 450 Pips
1 lot at 235.22 = 333 Pips
1 lot at 236.42 = 213 Pips
1 lot at 237.32 = 123 Pips
Total = 3038 Pips
GBP/USD If my stop loss is hit at 1.9660
2 lots at 1.9474 = 372 Pips (186 x 2)
1 lot at 1.9566 = 94 Pips
1 lot at 1.9641 = 19 Pips
1 lot at 1.9677 = -17 Pips
Total = 468 Pips
Are you doing this too?
Rick
As of close of Friday 1/19, my positions are still open. So, let me show you how I decide to add positions while riding a trend.
First: I found a certain pattern that has a higher probability for adding position during a trend. It’s in the 4-hour chart. The pattern looks like stairs and only that pattern works. Check picture.
Second: You can make horizontal lines on each step that’s forming for support and resistance.
Third: Placing only order entry at 30 - 50 pips above resistance (for up trend) and set the stop loss for this order only ;30 – 50 pips below the support. (Reversed for down trend) Number of lots depends on your risk tolerance or money management. Another stop loss can be the daily low (Uptrend) or high (Down Trend)
Fourth: If the trend continues, you will be filled and you don’t adjust the stop loss of this position until the rest of your position’s stop loss catch up. If the trend reverses, your order stays but don’t forget to cancel the order.
Question: What's the target price? NONE, I cut my loss small and let my profit run. The market kicks me out of the game.
Question: Can this be done on GBP/USD? It depends. I noticed with GBP/USD it’s hard when it is volatile. You can check it out and try if you can figure out the stairs. I did have a hard time adding those positions with daily low as stop loss.
Question: Is their a good probability that the trend will go in my favor after I placed an order entry? What’s a good indicator for this? This is where the momentum factor is important. Momentum factor, according to Wells Wilder Jr, is the measure of acceleration and deceleration of a Trend. You can use the DMI/ADX and other momentum indicators. The one I use is from EJ 4H method by eurousdtrader. The indicator name is EJ_Trend.mq4 You can find this in the Trading System forum of FF. Check out the GBP_JPY_1_19 picture. Blue indicates bullish, Red indicates bearish and Green a possible reversal. You will notice steps 1, 2 and 4 are all blue, this is easy to decide…high probability of a strong trend. Steps 3 and the top are mixed.
So, you may say that I fabricated this to my liking because I use historic data. Well that’s why I worked hard to post this before the market open. The picture GBP_JPY_1_19 is current and you are with me making a decision. Rather than telling you what I think, it’s better to start the discussion.
· There is no correct or wrong answer. The market will tell us later.
· You can show any method or system that the probability is going up or a reversal is at hand.
· Please don’t criticize someone.
· Let’s learn from one another.
Regards,
Rick
Hi Steve, (1/19/2007)
I've been doing your system this month and I did something different last week. As my position goes my direction, I added position depending on the strength of the trend. Last week I have long positions on GBP/USD and GBP/JPY. Like what you do, I adjust my stop loss according to daily technical. Sometimes my stop loss on GBP/USD is 200 pips due to volatility during big news. Last night I adjusted my Stop Loss GBP/USD to 1.9660 and GBP/JPY 238.55 Here is the result:
GBP/JPY If my stop loss is hit at 238.55 Then:
2 lots at 232.36 = 1238 Pips (619 x 2)
1 lot at 234.05 = 450 Pips
1 lot at 235.22 = 333 Pips
1 lot at 236.42 = 213 Pips
1 lot at 237.32 = 123 Pips
Total = 3038 Pips
GBP/USD If my stop loss is hit at 1.9660
2 lots at 1.9474 = 372 Pips (186 x 2)
1 lot at 1.9566 = 94 Pips
1 lot at 1.9641 = 19 Pips
1 lot at 1.9677 = -17 Pips
Total = 468 Pips
Are you doing this too?
Rick
As of close of Friday 1/19, my positions are still open. So, let me show you how I decide to add positions while riding a trend.
First: I found a certain pattern that has a higher probability for adding position during a trend. It’s in the 4-hour chart. The pattern looks like stairs and only that pattern works. Check picture.
Second: You can make horizontal lines on each step that’s forming for support and resistance.
Third: Placing only order entry at 30 - 50 pips above resistance (for up trend) and set the stop loss for this order only ;30 – 50 pips below the support. (Reversed for down trend) Number of lots depends on your risk tolerance or money management. Another stop loss can be the daily low (Uptrend) or high (Down Trend)
Fourth: If the trend continues, you will be filled and you don’t adjust the stop loss of this position until the rest of your position’s stop loss catch up. If the trend reverses, your order stays but don’t forget to cancel the order.
Question: What's the target price? NONE, I cut my loss small and let my profit run. The market kicks me out of the game.
Question: Can this be done on GBP/USD? It depends. I noticed with GBP/USD it’s hard when it is volatile. You can check it out and try if you can figure out the stairs. I did have a hard time adding those positions with daily low as stop loss.
Question: Is their a good probability that the trend will go in my favor after I placed an order entry? What’s a good indicator for this? This is where the momentum factor is important. Momentum factor, according to Wells Wilder Jr, is the measure of acceleration and deceleration of a Trend. You can use the DMI/ADX and other momentum indicators. The one I use is from EJ 4H method by eurousdtrader. The indicator name is EJ_Trend.mq4 You can find this in the Trading System forum of FF. Check out the GBP_JPY_1_19 picture. Blue indicates bullish, Red indicates bearish and Green a possible reversal. You will notice steps 1, 2 and 4 are all blue, this is easy to decide…high probability of a strong trend. Steps 3 and the top are mixed.
So, you may say that I fabricated this to my liking because I use historic data. Well that’s why I worked hard to post this before the market open. The picture GBP_JPY_1_19 is current and you are with me making a decision. Rather than telling you what I think, it’s better to start the discussion.
· There is no correct or wrong answer. The market will tell us later.
· You can show any method or system that the probability is going up or a reversal is at hand.
· Please don’t criticize someone.
· Let’s learn from one another.
Regards,
Rick
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