Thanks for your message. I'll attempt to go through my entries as I think this is as equally important when deciding upon targets. Well as you know, having read FXP's thread, the entry criteria, trade with the longer term CCI, use the shorter CCI to get you in with a 123 move usually being a safer option to confirm s/r. Even though, often the case may be that waiting for the 123 move to happen means loosing out on a few pips.
When I see an opportunity, the first thing I look at is where could it go, then if that is to occur, where should it not go. When I first started few years back, I placed every trade with a positive r/r ratio or stops being in the right place. As many, doubled my account, then get cheeky, forgot all about r/r and lost the lot. What I have learnt, above everything else is that stops NEED to be in the right place. You're looking at this trade, or the opportunity to trade because you feel that the instrument will move to X price. Have belief in yourself, because what you'll find is that more often that not, you're right. Why do so many novices get burnt?? From speaking to various new traders, it's too tight stops! Now, having a good r/r ratio is one thing, and having the stops in the right place is another. Or is it? Well, firstly, I guess what is a good r/r ratio, 1:5, 1:2 or 1:1.5. This is a personal matter but personally I'm happy with the last two. The way I manage the trades, is to close 1/2 the position at target 1, and 1/2 at target 2 (or 1/3 if there's three targets). To clarify, I think having a good r/r is great, I'd say a minimum of 1:5 but above all the stops need to be above/below previous lows/highs and/or s/r levels. Yes it may not hit the level before hitting your target, but that's what you want, right? A level that is unlikely to hit if your analysis is right.
As for where I get my target levels from, usually the 1st target is on the 5/15 min chart then the rest is on the time frame above. Something to note is that I often reduce my SL to break even so that my risk is minimal. OK, so the opportunity cost is there, you could have banked £10 per point an 100 pip, instead you took 100 @ £5. But, in my opinion, that's the money management side of trading. Plus you have given youself the opportunity to maximise you pips. This way, as your stake increases from say £10 to £20, you're still banking 100 pips @ £10 when closing 1/2 a position.
In relation to the thread, the problem I am finding is trying to chat in the room, and trade whilst posting setups on here. In particular, the shorter time frames, as often by the time you have posted, the moves have started. This is something a few of us are working on and hopefully we should have a setup to accommodate for this.
I hope this helps answer your questions, if you would like to discuss the matter in more detail, feel free to add me on Skype: hemal_pandya
Best Regards,
H
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Hi Hemal,
Thanks for that, found it very useful. You're so right about the sl's!!
Thanks again, this is one problem I'm addressing with my trading!
You're welcome, since I have actively traded with appropriate stops in the relevant place, well my account has seen the difference... on the positive side. I think this is one of the hardest areas of trading. I guess this all falls under money management. This is something we can work on as a group. Anyway, it's friday.. off too check out some local bars in my new town.
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Joined Dec 2005
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Thanks for starting this thread, HMS. I've been following your friend FXP, who has suggested that on the 5m chart to only trade south if your below the blue 960ema (4hr 20ema). Let's see what happens at the check mark.
Crude is formed into a little triangle on the 15 min chart. A break of 101.90 to the downside or 105.50 to the upside.
EURUSD has broken its support line on the 1hour chart and the angle of the 4hr 20 and 4hr 50 are showing some possible US strength on the back of the rescue plan. One of my golden rules is never to sell after red, so I'm just waiting for a slight retracement back up to 1.4500/ 1.4525 mark. Given the angle of the MAs the 4hr 20 & 50 MA should cross in the near future.
Cable is setup in a similar way to EURUSD in that it has broken the support line and the 4h 20 & 50 MA look like they want to cross to the downside. It's just finding support of the daily 20 where a break could the 1.800 mark very soon. Once again, I'd let the break occur, wait for a slight retracement before entering a short position.
Crude is formed into a little triangle on the 15 min chart. A break of 101.90 to the downside or 105.50 to the upside.
EURUSD has broken its support line on the 1hour chart and the angle of the 4hr 20 and 4hr 50 are showing some possible US strength on the back of the rescue plan. One of my golden rules is never to sell after red, so I'm just waiting for a slight retracement back up to 1.4500/ 1.4525 mark. Given the angle of the MAs the 4hr 20 & 50 MA should cross in the near future.
Cable is setup in a similar way to EURUSD in that it has broken the support line and the 4h 20 & 50 MA look like they want to cross to the downside. It's just finding support of the daily 20 where a break could the 1.800 mark very soon. Once again, I'd let the break occur, wait for a slight retracement before entering a short position.
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Crude 101.90 to 99.90... 200 pips
EURUSD 1.4500 to 1.4350... 150 pips
GBPUSD 1.8265 to 1.8075.... 200 pips
Not a bad start to the week. Think it's time for a swim and some breakfast.
Could please you explain what you mean by never selling after red? Do you mean after the first red Heiken? Thank you.
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Hi Rialto,
Say if you had a 200 channel and the price suddenly broke out to the upside following a 180 point move. I wouldn't want to just buy on the break. The reason for this is that X has just moved so much in a single move without a retracement. A retracement is always likley and therefore require a bigger stop loss. In the example above I'd like to see the break, then retrace back to the top of the channel, which is now a possible support line (which will be red heikn ashis) then because we want to buy, and seen red and support id of the top of the channel, I'd look to buy.
If we use GBPUSD as an example... It broke out of the triangle through the asain session. Although I was fast asleep, I would not have traded the breakout. I think you never know when it is is true breakout or just a flasie. Another reason is that for the stop loss to be in the appropiate place it would have to be above the previos high around 1.8470 mark (over 100 pips). On the 5 min chart, look how we saw some green candles but the pair found resistance of the 15min 20 MA. Given our break of the triangle and this setup, it looked very weak and allowed a 30 point stop.
Key point: Always sell after green, buy after red. You can always go to a smaller time frame to get in on the small retracement if need be.
Although I have closed GBPUSD, it still looks weak. Maybe a few more pips in it if anyone is still holding. There is some support around the 1.7920 area to be aware of.
With gold looking weak, think this silver could be a player.. have a look at the Silver daily chart. It's finding resistance of the daily 50 MA. the break of the lows at $13 is the level I'm looking at.
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Hi, I mentioned this a few days back. It looks like it want to re test the 1hr 200 so may just hold this one.
With cude finding a bit of support and gold trying to test the previous high, if I was in cable, I'd be looking to take some profit if not close the position around here. :-)
I'm working on setting up a live chat room for trading. It should be alot easier than trying to blog and trade at the same time. Let me know if anyone is interested.
Just been setting up my new computers with a few more screens to make life a bit easier.
With crude continuing it’s move from yesterday gold could be a nice player. Have a look at the 5 min chart, where the price has broken the daily pivot. The 1hr 152 CCI looks quite weak. I’d be targeting 890 as a first point of call.
