No Brainer Trades

Someone else can chip in here but this is my take...

I think there are a couple of recent results on the first page where there was a -40 drawdown and no profit (ie stopout). So no, not all trades are winners. As the record is not very current (only six of the trades have occurred in the last two months, two of them losers), I think one owes due diligence to watch the recent thread postings and see how these levels react first hand.

I think 80-90% reaction/bounce is an acceptable figure - IMO, sticking closer to 80% or 4 in 5 trades is most accurate in today's market. However, once you introduce human emotion & mistakes, the 80% figure can obviously take a hit.

Does this help? I picked up a little bit of skepticism in your post, which is honestly to be expected when you start throwing around 90% success stories...hopefully I provide (again, in my opinion) a more real world view of things.

I don't think BRV mentioned anywhere that trading s&r wins 90% of the time.

The purpose of setting up this thread was to discuss the small number of s&r levels that could be labelled a No Brainer Trade with a probable success rate of 90%.

EURUSD is breaking out to the downside as we speak . I'm short since 1.4136, so I guess I'll take my evening 45 pips

Heavy pressure on the trendline, nice bounce from H4 resistance, price under an H4 wave Fib level, pending a downside breakout. Looks like a no brainer to me. The daily also shows very good resistance at 1.4155 and 23.6% Fib.

Update: Hehe, I think I got suckered with this one ... Or not :-| ... -12 pips currently, but if 1.4165 holds, I may still have a chance.

thanks for the correction Sam & Red... I have a better understanding of Post #1


Walt

I am now short

My post back in April about measuring probability has been mentioned a few times here and in the chat room so I thought I would update it (and correct the spelling mistake!)


“When executing trades, plan them out vigorously. Delve into any relevant information you need in order to make an informed decision, and take only the trades which fit into the framework of your profitable trading strategy. Lack of proper planning or learning to take trades based on weak or fundamentally incorrect information, or worse yet, “hunches”, is a quick path to failure. A lot of independent money gets lost due to a lack of proper planning.” – BRV.


Wise words from an experienced trader. As far as I am concerned pretty much everything you need to know to trade support and resistance is in BRV's pdf and on www.nobrainertrades.com.

Looking for confirmation and validation of our s/r levels is just as important as picking the most visually obvious price entry points in the first place. However whether a trade is a winner or a loser, all too often we cannot accurately answer the question, “Why did I take that trade?”

If like me you create a daily plan you will find it easy to incorporate actually rating your upcoming price levels based on other confirming factors into your routine. Recording that rating is critical, whether you have a written plan, an excel spreadsheet or simply add the rating to your charts, recording the probability rating has two major benefits.

Firstly, when price finally arrives at xxxx price (which may be several hours or even days later) you can very quickly see exactly why you were so keen on that level and take the trade without hesitation.

Secondly, rating system records help with post trade analysis and provide a simple way of fine tuning your trading strategy.

My approach is really quite crude and unscientific as the scale has no definitive calibration, but for arguments sake let’s say each confirming condition like a trend line or Fibonacci level is worth 10% (you may want to add greater weight to the more significant factors).

Therefore roughly speaking a trade that has seven confirming factors could be said to have a 70% probability.

As with all the other aspects of trading this is open to interpretation and you should really adapt this principle to what suits you. One thing is certain, the more confirmation we get the higher the probability of market consensus and it is market consensus that we crave for very best reversals and break outs.

These are some examples of what I look for: -

SBR/RBS - Support becomes resistance and vice versa.

TF - The higher the timeframe the more significant the level. This can also help us in our trade management. As trades taken from short term s/r will generally have a shorter run.

000 - Round numbers. We're human we like them. (traders are human too!)

23/38/50/61/78 - Fibonacci. Levels from two different timeframes can double the confirmation.

R -Reaction. How did price behave last time it was here? Wicks at a swing high/low or a strong break out suggest a strong reaction this time too.

S - Space. A nice big arc gives us lots of space and time around our trade.

TL - Trend lines are also s/r so they can be used on both sides just like horizontal s/r.

BB - Bucket bottoms. A favourite of mine, bucket bottoms are a point of very strong former s/r. SBR/RBS is here too.

SB – Spike base. See nobrainertrades.com for an explanation.

HS – Head & Shoulders

FB – Fractal base

G – Gartley

and so on, you could add or substitute your favourites.

There we go that's more than 10 conditions so you could say:-

USDCHF 11780-11831
SBR
TF
000
78
R
S
BB

We could call that 70% at least.

One final point, if possible I try to have set ups like this in both directions for the pairs I trade, that way despite my bias I have a bit more of a neutral approach to the market and I am more prepared for unexpected changes in sentiment.

For those that queried what the codes are on my charts - now you know.

As always criticisms and suggestions are welcome.

Nice one, Sherm. Great stuff

Thanks for sharing RC, big help.

How much credence do you give to trading off the prior day's high/low, using those boundries as S&R??

Walt

Great last post Red Cabbage

To easy( its not as naughty as last time haha)... stop is now at break even...it can do what ever it wants now

Like I say if the risk is low and the odds are high we simply take the trade...

Here are my thoughts on E/U.
It is about to hit a the June 11th, July1st, tops, IF the price breaks through 1.42xx, then we have a new uptrend, BUT, these are historic highs, the price cannot stay there, or even go higher than 1.42.
Hence, the E/U is bound to retest 1.384 level, this week or next week.

My thoughts.

Morning,

Cable is a nice wedge formation on the 4hr and is trapped for the time being could be a breakout + pull back on this.

Also watching the 10630 area on the Swissy and 6552 on the kiwi. lots of possibilities today.

Nice post, RC, thanks!

A question though, what is a fractal base? Could you explain it a bit or post an example?

Alright I am currently up about 70 pips putting me well above 1 to 1 in my risk...so when the time is right and the charts tell me to protect profits I will do so...

Nice Siam...I've noticed you like these reverse TL touches.

I am curious as to where you think that might be, I am also short on AUD/USD

RedCabbage,
Thanks.
nice update on "Locate Rate & Participate"

cvcamper,
just look for heavy (former & new) S/R's.
looking at his charts, immediate support is previous lows around 0.7950/75, then 0.7900-.7925... 0.7850.