Trade what you see NOT what you expect

Can I have some strawberry Quik with my milk?


HOLLA

Hope everyone is having a great weekend..

In a attempt to get my trading to be consistent. I have finally, using the methods in the thread . Have written a trading plan of sorts. I have come to the conclusion that my main fault is not taking all the profits that are offered. Then letting a loser run to long and adding to it in the process. I have quit the adding to it problem and am not letting them run as far either.

I have made up to 30 trades a day with a average take of 4 or 5 pips.. But only have maybe one or two loses. I have done this for days on end. but it is not a good way to trade. I would much prefer to trade 5 times with a average over 20 per trade. I believe the few rules I have written will allow this easily. I don't think a lot of rules would be good as it would be to much to consider before each trade.

Some will disagree with some of my thoughts but the idea is these rules are a to be used as stepping stones to help get my trading moving in the right direction. Then add riskier trades as I gain confidence and experience. If anyone has anything to add please do..

Great Trading To all ... Ken Lee

Intraday Trading Rules

1. All trades will be away from the Ma's
a. This should make our trades with the trend 90% of the
time.
(See Chart A)
b. Even if we see a good reversal signal we will not take it
until the new trend is confirmed by a MA Retest. At
times a reversal is nothing more than a retracement.
This lost trade until we gain the exprience is minor in
our overall trading strategy.
(See Chart A)
2. The only exception to rule 1. Is the 1 hr 62 ema touch trade
and the 15 min 35/50 cross reversal trade. We will try and
have some confirmation of higher time frame charts to
support the trade. But normally just take them using a
tight stop.
2. If we find ourselves in a trade going the wrong way we will;
a. Close the trade at once, Hoping it will workout is not a
option. The quicker we do this the more likely we are
going to be able to enter the trade correctlly and make
up a smaller lose.
b. Then look to see if the trend has changed and if price
is or has come off a MA.
c. Look for a entry off a retest MA touch.
( See Chart B)
3. Profit Taking. I have always said I was a scalper. I have
come to the realization. That maybe I say this because after watching losing trades bounce around forever I am glad to just close with any positive pipage at all. Then when I do get in a trade the right way and it goes for mega pips I still close with a small amount because of the mind set I have built. To try and break this very bad habbit I will try and close most of my positions with a stop.
Instead of just closing, I will move my stop up to where I would have closed it anyway. Then follow the trade
with the stop at a reasonable distance.
4. I will take money from my trading account.. I am doing this to
make money to better my life. Not being able to use any
money to help pay the bills or do something extra isn't a
option. Until I get to the level where the money making isn't
a worry anymore. I will pull funds out on a weeklly bases .
No matter the amount I will take 50% of the profits over my
trading ballance from Monday. This way I will be helping
myself and If the account should ever need refunding
there will be some to do that with.
5. I will close my losing trades as soon as the price action
shows a different direction has begun. Break of a swing
/close opposite side of a major ma. I can always reenter
but just letting them go is the wrong thing to do. The
conservation of the account ballance is key to succeeding. I
don't trade long term so the stops associated with those
trades should not be in my day trading plans. That being
said I can always get in a long term trade at the right place
and LET IT RIDE...

If you see price going up, you buy because you expect price to continue to go up. Is that not the reason you buy?

Thank you for posting rules. Can you please share the template?

Actually if you read the thread and pdf. Most of the entries are against the trend at turning points .. In other words price is going up we take a short. But we take the short because the price action showed us the way..

There is no templates I am aware of. Those are just my personal rules to trade by. I think there is a template for Rumus software but I don't use it.

I meant the template of the chart that you posted, thank you.

Those come right of my trading platform if your looking for all the MA settings for the different time frame charts. It is in the pDF file on the first page of the thread.

I have added some more jpg pictures to my digital frame to remind me of my rules. here they are if anyone else would like to use them.

Hey Ken....

Once again great job.....

As far as profit taking, I know that it is one of my sticking points and probably a few others also. I know I hate when I close early, then see it run further in my direction.

The last couple of days I have been securing 10 - 20 pips profit and then letting a solider run and moving my s/l @ +2 and then move it along as/if the trade goes forward.

This way I'm securing profit and leaving some on the table to possibly receive more profit.

I would like to hear others thoughts on this subject of profit taking.

HOLLA

Sure, why not!

As for me...I prefer to drink my milk straight from the original container...still warm. Ride...............

Here is my template for all time frames for Meta Trader 4, I also added 2 indicators which I use to support profit taking and confirm signals.

Another quality post ken, this particular bit, No.3, that is me all over. Too many times I say to myself I'd be happy to break even.

bro if u work in advertising i totally understand...i love the picture aids....i should print them out, would help a great deal..

good job!

Thanks, I mainlly do this to help me remember stuff ,Like homework.. The pictures I have done I use on one of those digital picture frames I have on my desk. I just download them to a SD card and when I am trading I will put it in and let it just flip over. When I am not staring at the chart. I look at them ,at some point I might even remember some of it...

Evening all in this thread,

I don't specifically trade this method but I certainly appreciate whats going on in here, awesome thread, awesome traders, keep up the work.

I just thought i'd answer Turtles call for some more opinions.

I too found that I was "leaving profit on the table" so to speak, I straightened out this problem in my trading by :

My hit rate for %wins that achieve 1:1 risk to reward ratio hovers around 68 - 75%, but I found that the ones that reached that 1:1 went further, so what I did was :

I defined a "trend" (Theres obviously loads of ways to do it) I simply slapped on a 21ema and 50sma and I then called that my "trend" on the timeframe I am trading, any trades "with the trend", I took half my position at 1:1 and then let the other half run, I would then exit at the next MAJOR support/resistance on the Daily timeframe.

Thats my current strategy. . Oh yeah I forgot , for trades "against the trend" I simply TP at 1:1. However my Risk in pips often varies as it relates to the size of candles I go long/short off . . . If you get me .


Another idea I was using but I got annoyed by it psychologically. Was if you have a trailing stop which is based on volatility, I seen them around here on plenty of charts.

The result of this (for me anyway) was that I got many small winners, and many small losers, I had just slightly more .5 and .4 % wins than .4% and .5% losses, but I would then have massive trades that went for 3% or more. (I generally risk 1% on intraday trades) although there obviously wasnt a lot of those.


Maybe also experiment with 2 bar and 1 bar stops like the Turtles did ? They are really good when it comes to the likes of the 4HR and Daily timeframes.


Maybe also think about defining certain "zones" (Easier to do if you are a horizontal line trader like me, harder if you trade emas and trendlines) and once price breaks and re-tests a zone successfully try moving your stops to just under that re-test . . .


Hmmm, lol I am making myself think here.

Actually to be honest I think that the best exit is a manual one where I survey current market conditions, however my trading is very discretionary at the best of times, and I REALLY want an un-emotional and . . . I am looking for a "mechanical solution to a dynamic problem" if you get me.

Looking forward to reading some more opinions

Best Regards,
Jig

Well, looks like my trading day might be over before its even started, I broke the frame of my bed. I was sitting on it, and then I was sitting through it! Don't think the landlord is going to be too pleased when I tell her about it tomorrow, hence the short trading day.

My findings on the GBPUSD 1HR 62EMA

Firstly, I sent eohater a PM about the 1HR 62 ema ages ago, when I was new to forexfactory lol. I always loved his trading, and he is a super cool guy with regards to helping others and being humble.

(Also props to infinity, constantly learning from that guys posts as well, great trader.)

Anyway, I sent eo a PM about plotting the 1HR 62 ema on different timeframes, and seeing how it would "hold" so to speak, I did this AGES ago and then I forgot about it until tonight when I looked at eo's thread again for the first time in a while.

Eohater said to me (And I quote him from my PM inbox i just dug up)


So EO ! I have returned

I actually backtested and forwerd tested it for a few weeks and it proved to be awesome, however, I was busy learning the current method I use and didnt have time with my mountains of study to invest any more time in it.

It only came across my mind again tonight.

Anyway, onto the good stuff -



My Argument is this :

Playing the "bounce" of the 1HR 62 ema is an awesome setup, but I was confused as to "when will it hold and when will it not"

So I thought about plotting it on a lower timeframe - It's like putting a microscope on whats going on. surgical precision

My Observations are :

Theory - By plotting it on the lower timeframes, and keeping an eye on it. You see how price interacts with the EMA itself more clearly, you are more able to predict when it will hold and when it wont, this gives to distinct advantages and one disadvantage :

Advantage One : You know when it will hold and when it wont, thereby increasing %win

Advantage Two : I don't know what SL people are using for this trade, but outlined on a chart example below, SL for my style of Price action trading is only 22pips ! Now if people were using a 40 pip SL, your pip value and chances of the EMA "holding" have increased. Thats of course if you use a fixed %risk like I do

Disadvantage (Booo!) : You have to be looking at the chart at the time this is going on, so for some people who cant sit watching a chart all day (Due to work or whatever) then you wont be able to watch it .

(Extra Observation) When a lot of time has elapsed since the EMA was hit, it increases it's power to repel price, if price is stuck in a range around the EMA, it has less of an effect but can still be used as a "spring" with the lower TF + 1HR 62 EMAS.

The Setup

1HR 62ema
=
15Min 248ema
=
5Min 744ema

Observe when price hits it and trade off of the Price action of your choice.


But why does it work ?

I have honestly no idea why the 1HR 62ema holds, but it appears to hold . Almost to the pip a lot of times, maybe some hedge fund uses it in some system or something lol, and thats what generates its orderflow ?



Cheers to eo and all in this thread, and if it is "against" the eo way of doing things I will delete this post immediately (Just say the word eo) I just thought I would make people aware my observations . I hope it will be of use to someone.

Example on charts below.

Take care all, and trade well.
Jig

EDIT - Actually another possible disadvantage is you are getting it at a "worse price" than the price of the ema if you get me.

Heres another example

EDIT - Second chart just caught my eye. Thats a pure money make if you could have caught the train and rode it down heh.

Nice work, Jigsaw. Thanks for sharing.