A penny for your thoughts

Hi all,
I would appreciate some constructive advice on my trading plan. I’m trying to keep it as simple as possible and know it really well. But I seemed to have lost the plot recently, and I’m starting to doubt it. Sometimes it works a treat and other times, it has me guessing. I'm thinking of including maybe 1 or 2 indicators for extra confirmation, could anyone recommend the best ones that would work in conjunction with my plan?
I'm really worried about analysis paralysis, so I will only try out the top 2 that are recommended and see how they go.
My target is 100 pips per week, and when I can achieve that on a consistent basis I will up my lots to make more profit.
All feedback is appreciated,
thanks

I've read your trading plan, and want to give you some PERSONAL (my personal point of view) advices, so take only as a my personal thought:

1) You base most of your trading plan to "pips" value, i would advice you to not count pips, but % of your account growth or loss.

2) Where you write:
"1.Only enter a trade where there is a reward to risk ratio of at least 1:2, preferably 1:3 or more.
2.Identify likely stop and target that matches reward to risk ratio."

My advice is to not think as targets for now, we trade "market moves", all we can control is the risk of our trade, and where to place our stops.
With this, you can adjust your trade-size to fit your preferred risk, let's say you want to risk MAX 2% of your account for every trade.

But what about target points? Nobody know if the "move" will be strong enough to reach a target, or if it will be much strong and go far over the target, that's why my advice is to not use targets, simply monitor your trades, and when the move is loosing strength or just end, close your position.

Some time you will get out in a loss before the SL is touched, sometime you will exit at b/e, sometime with 20pips profit, sometime with 100pips profit or more, but it's decided from the market, putting a fixed target is just an error.

BUT

Knowing this, you can still calculate your "max profit", a fixed target point like "i don't want to have a profit of more then 5% of my account", well that can be a good idea, just place tp according to your position lotsize and desidered %profit, but of course manage the trade, if the move finish before reach the target, close it, don't wait until it become a loss (i hope you understand this).
Sometime targetpoints are the most dangerous thing in trading, price arrive at 5-6 pips of distance from the target, then reverse, and the trader don't close the position waiting to the target to be hitted, and an inevitable loss come.

So, at this point..

3) Risk vs Reward.
My advice at this point is to forget risk-reward, if you don't know your target, you cannot decide which trade have a good risk-reward and which other don't have, just CONTROL your risk, let it remain low, if your entries and exits (as written above) are good, the reward will be good too!

4) "Managing the trade"

"When price reaches 30 pips, move stop loss to the break even point."

Why? do you know how many times price move of 30-40 pips and then retrace it all? Putting the stop at b/e and waiting to let it been hit will only give you a loss of 30 pips (yes loss of a profit!), fuck the stops, if you want to move the stops with your move, do it moving them below the last support or resistances, so let's say if price retrace you close position at +20, surely better then +0.


"When price reaches 50 pips, move stop loss to 30 pips, locking in a 30 pip profit."
...
"When price reaches 70 pips, place a 20 pip trailing stop loss, which will lock in a minimum 50 pip profit."
...
etc etc

Don't use fixed sl/tp, that's my advice!




5)
"Be focused, only trade when there is a high probability for success.
Be disciplined.
Be patient.
Be alert.
Do not trade for the sake of it."

PERFECT

Wish you the best!

P.S.
don't take this post too seriously, everybody have his personal rules and trading-style, as the thread title say this post are just my thoughts

Thanks for the advice Tunera, it all makes good sense. I can see where you're coming from and i'll adjust my plan. Is there an indicator you prefer to use that might fit with my plan?
Thanks again,
Gruzza

That's what I was thinking, Tunera Nicely put! Oh, and for an indicator...try price charts and S/R.

I don't agree of leaving out targets. I think it doesn't make sense that since you speculate an entry point and a stop point then it makes sense to speculate where the trade will go with the same analysis.

Of course you can never predict how hard the move will be, but since you're predicting entry and stop..why not set a high probaility target. Your risk:reward is up to you, but just think about how often you are right when setting these R:R.

One advice I have is to not think of moves in specific pips. Volatility changes from day to day and market to market. I would suggest using ATR or other indicator to measure average moves so that you wouldn't be taken out by the current volatility.

peace

"and for an indicator...try price charts and S/R."

That's what i was thinking, LizardGizzard Nicely put!

ahaha

Are you trading profitably tunera? If so, for how long? Just interested.

Regards,
Leon

It's soon to say that i trade profitably, but i think i'm on the right path, and you?

Trading Plan

1. Complete trading checklist, if every thing is in order continue, if not, DO NOT continue until it is.
2. Complete technical analyses for the daily and 1hr charts. (Place old support/resistance lines on daily before switching to 1hr.)
3. Circle the ROARS.
4. Place a 15 pip market noise on all relevant trend lines.
5. Q1: Is the market in an active or passive state at the moment? Only look to trade when the market is active. And, Q2: are the Bears or Bulls in charge? DO NOT trade if they can’t decide.

Reward to Risk ratio

6. Only enter a trade where there is a reward to risk ratio of at least 1:2, preferably 1:3 or more.
7. Identify likely stop and target that matches reward to risk ratio.

Entry

8. IS IT THE CORRECT CURRENCY IN THE ORDER BOX?
9. Enter the trade when the price breaks through the market noise of the relevant trend line at a ROAR on the 1hr chart, and there is a positive candle set up on the 15min chart.
10. Trade with the trend: in a rising market, look for a positive candle formation at the bottom of a retracement, and vice-versa for a falling market, look for a positive candle formation at the top of a retracement.

Stop

11. Look for horizontal trend lines around my entry which could be a valid stop loss.
12. Factor in the 30 pip market noise when placing the stop, and use it if it’s appropriate.
13. Do not enter the trade if the risk does not comply with my risk/reward ratio.

Target

14. Place target under/over a past horizontal trend line where price will likely find resistance/support when reached.
15. Only have a reasonable target to satisfy my reward to risk ratio.

Managing the trade

16. Place 3 alarms on the chart: 30 pips, 50 pips and 70 pips.
17. When price reaches 30 pips, move stop loss to the break even point.
18. When price reaches 50 pips, move stop loss to 30 pips, locking in a 30 pip profit.
19. When price reaches 70 pips, place a 20 pip trailing stop loss, which will lock in a minimum 50 pip profit.
20. Move the target to just under/over the next appropriate horizontal trend line, and let it run.
21. If price hesitates and finds resistance/support at the original target, place a shorter trailing stop loss of 5 pips.
22. If price stalls and hesitates around my initial entry for up to 1/2hr, EG: finds support/resistance at the ROAR, get out and try again somewhere else. I need a strong positive move in my desired direction.
23. I must be able to identify as soon as possible if the trade is working to my plan or not, if not, get out and try again elsewhere.

Trailing stops

24. When placing a trailing stop, remember: LONG = SELL
SHORT = BUY

Remember

· Be focused, only trade when there is a high probability for success.
· Be disciplined.
· Be patient.
· Be alert.
· Do not trade for the sake of it.
· Accept the risk; always check the correct currency is in the order box.


the entries are kind of VAGUE to me.
You can get an EA to automatically adjust the SL if you are using MT4.
Only trade between 3am-11amEST if you want good price movement.
You have a good start, but I can see why you would second guess and hesitate..you need to nail down your entries and money management rules.

i just want to thank all who have had an input, i appreciate it and will take it all on board,
happy trading,
gruzza

I won't speak for Tunera but will answer with my own reasoning for entering and exiting trades without targets. My entries are not speculative...they are based on previous market S/R being definitively broken. Thus, my exits are also based upon the same, though in reverse polarity and unless I exit due to a confirmed candle pattern reversal or divergence with trendline break. But that's just me. They are surely plenty of ways for one to take chunks out price movement.

-Liz

I smell a Sticky.