The Dance

Hi Bary,
A couple of points on your trade for you to consider. First, we have to take into consideration that the market is trading sideways thus consolidating after a large bullish run. Second, a few bars prior to your entry we had a large bullish bar and often price will retrace on these bars. Third, is the round number itself, these areas are psychological levels that attract price and it's often a good idea to see what price will do before entering a trade. Lastly was the bar you entered your trade it has a very large upper wick which indicated a lack of bullish momentum.

I hope these points give you some things to consider when planning your next trade.

God Bless,
Mikali

Mikali,
All very good points. This is another reason that makes this thread so great, post a chart and many traders help. Thanks for your response.

Barry

Just my 2¢ worth. The charts always have more information that we need to make the good decisions. This area is a great learning area, not only because of the rules and what other traders have pointed out already, but I thought I'd throw in a bit more.

Don't get overwhelmed by any of this Bary, just keep on keeping on, and by the way, following immediately or at the same time with a good trade was excellent.

Here's my 2¢ worth on the image below.

P.S. now that I look at the chart, you're on a 5 decimal borker,,, have you modded the scripts to allow for that? if not there are some scripts in the thread that are modded for that.

Hi Clay,

Just wanted to say great thread and system thanks for sharing it.

Cheers

Phil

Clay,
Since the money management came up in the discussion, do you have any suggestions/tips to overcome the stress of increased lot sizes?
I know it's all in the head and I should be worrying about pips but I am concerned that big lots will mess with my psycology...
If Endroute reads this I would appreciate his comments too.

Regards,
Kostas

Hi kostas,
If I may, I would like to offer my two cents.....Lot sizes are directly associated with % of risk of capital meaning 2% risk of $100 is the same as 2% of $100,000 its always 2%. As traders our main concern should lie with the amount of pips we gain/lose because that's what adds to or takes away from our capital. Once we can get our heads around this fact the easier it is to not worry about lot sizes and the dollar amounts they represent. Money management starts and ends with the per cent risk (i.e. how much we are willing to accept losing as a percentage of our capital) we are willing to accept on each trade (meaning 2% is not a hard fast rule but only a guideline).

I hope this helps and God Bless,
Mikali

Thanks Mikali,
I agree with you, but I was wondering how people are dealing in their heads when their pip represents 10$ or more. Is there a way to have the MT4 show pips instead of $ in the terminal?

Kostas.

Hi kostas,
I can only speak for myself and what has simplified things for me, is having a set trading plan which focuses on attaining 30 pips per trading session. I'm not concerned with the dollars/pip values because of my strict money management rules which in my case is 3% of my trading capital on any given trade. What makes things effortless is the scripts included with the "Dance Trading System" which pre-calculate everything for me so all I have to do is concentrate on finding the triple A trades.

So essentially what I'm saying is don't sweat the dollars/pip values but concentrate on getting consistent finding the best trades and hitting your goals of your trading plan (which should be X pips per session).

I hope this helps.

God Bless,
Mikali

if you are getting freaked out trading full lots then don't, trade with a lot size that you are comfortable with even if it means trading with less than 2% risk and then slowly increment up a 1/10 of a lot at a time as you feel comfortable. Personally I have never met a trader that was "really" successful that just went out found a system and started throwing on multiple lot trades. If this means you have to start out @ $2 per pip and work up from there then so be it. This is not a race, this is a journey.

I just want to say thank you to eclayf for his article on Learning to Dance, i had been coming to that view when i watched a video on Flexibility Thinking in trading but your article just confirmed it in my mind.

previously i would stop after getting a losing trade, not realising that the losing trade was giving me good information that price was probably going the opposite
direction and to look for more setups going the other way, or just that my timing was off and look for another setup in original direction of course it makes sense but emotionally i felt WRONG and doubted myself and my system instead of seeing it as an opportunity if i just flowed with the market.

thanks
again

hi dancers,
im back after a long break. just took a short trade for G/U based on the fact that G/U D1 TF 35MA coincides with the round number 1.5200. got stopped out it preferred daily R1 instead but i have a feeling it is gona go down. ADP NFP numbers were out with a huge negative which mostly would fuel risk aversion. check out the pic.

question: when taking signals from D1, i think 10pips of SL is not enuf. even a small wick thru would have taken me out. should we just ignore the signal at all on the D1 n use it as a reference for direction instead.

Hello

I have been quietly reading this thread and would like to concur with all the others that this really is a great system and would like to thank Eclay for sharing .

I placed my first trade this morning, please see chart, I missed the first touch on the 35, but got in on the second, I am now at be+3 and about to move my sl again, as price is rising,

This will be my first chart ever posted so please be gentle!, Eclay... hopefully i have grasp the touch trades?

if im not wrong thats a constrainment on the GU 15mTF. and it overrode my D1 35ma touch signal T_T.

my apologies just noticed that my chart does not show the currency pair!... it was gbp/usd

Good to see so many working in unison and having fun learning and trading. Awesome. Just awesome.

Not sure if there is a way to do that Kostas. Wish there were, but I suspect that part of MT4 can't be changes.

What I did was train myself to ignore it. During the past year or so that I was working on this, I used EXTREMELY HIGH leverage and ON PURPOSE blew out many, many demo accounts, FORCING myself to become accustomed to a leverage MUCH HIGHER than what this Strategy used. NOW, it has little if any effect on me.

IT is NOT something I would recommend. THE BEST is to do what Endroute said to do. Trade what you ARE comfortable with and increment it a little at a time. If it takes you a year to get to where you are comfortable trading a full standard lot, then so be it. CONSISTENCY is the goal, NOT the size of the trades!

REMEMBER THAT above all else. Consistency and persistence WILL OVERCOME ALL OTHER ISSUES over time. Consistency WILL eventually give you the confidence for the larger lot sizes and so on. Persistence will keep you trading no matter what happens so consistency can work it's magic.

Hi happybunny, next to consistency and persistence the third most important ingredient is screen time, which can be greatly enhanced using the Simulator and watching how price acts and reacts around the lines.

You WILL begin to "see" things that others DO NOT see in the SAME price action because YOU are different and the way you perceive the world is different. That will eventually lead you to taking trades that work for YOU that are a part of this strategy, and "by the rules" but that others don't take. Then, after you become more consistent, you will begin to see new things NOT covered by the Rules and you will begin to develop rules of your own that will make you even more consistent and successful.

NO ONE trades EXACTLY the same way, NO ONE! Even if they are using exactly the same strategy and the exact same rules. They will STILL trade slightly differently because THEY ARE different.

That is part of what this journey is about. Learning YOU so YOU can trade what YOU see within a framework that works most of the time.

In dancing, often the highest score is given to a dancer who adds an extremely slight adjustment to the steps of a dance. That slight, often imperceptible adjustment creates a "flow" that is often visually stunning. Trading is NO different.

As time progresses, you WILL find "slight adjustments" that make you a stunning trader, and at times you will not even be able to explain why you are doing it, or how you are doing it. Learning to document that, when you get to it, will help you understand how YOU trade and maky your trading far, far superior.

Endroute was trading a strategy of using P/A, RNs and Spudfure's Stochastic threads on M5 when I met him. He kept making slight adjustments and several months back went "naked" as he called it, eliminating the stochastic threads from his charts. For the first two weeks he really had to focus on his trading.

I watched him go through this AS HE WAS TEACHING ME to trade at the same time and was sort of shocked and excited at the same time. I couldn't imagine trading without SOMETHING to "filter" the trades. Then as I watched him become even more successful. I have watched him grow his trading by a factor of at least six over the last seven months of so and he is still growing it.

BY "trading" I mean specifically the size and profitability of each trade, by the way.

You will get there HB, you will get there. He did it, I'm doing it, and so have and are many, many others.

Stick to the basics master them first, then move on to the things you begin to "see" that also work until the whole process gives YOU so meting YOU have created/mastered and can teach to others and give back.

Hi yunie, you're right, if you take it off D1, you WILL get burned, BUT IF YOU TAKE THE D1 SIGNAL AND FINE TUNE IT ON M15, "WHERE ALL SIGNALS COME FROM" then a very short SL WILL work. Remember, D1 is for overall trend direction, to define areas of S/R based on the lines and wicks, BUT ALL SIGNALS are taken on M15.

DO NOT ignore the signals on D1 or H1, FINE TUNE THEM on M15 so you can use the shorter SL otherwise you will most likely get burned on the entries or end up using some pretty large SL settings. Most daily strategies use 50 to 100 pip SL settings. NOT FUN, trust me.

Look for all entries on M15, but look for them really really closely when D1 of H1 is approaching a signal.

Looks good to me nixie. Just don't choke out the trade, but feel free to lock in pips periodically. Endroute quite regularly locks in as soon as he can about 15 or so.

Good work guys, good work. Love to see this happening and progressing.

There will be days when you may NOT even take a single trade with this strategy. Today, so far at least has been one of those days. You can see from the chart below, there really hasn't been a decent signal of any kind yet today. Still,,, with the gains this strategy provides, I don't mind a day off once in a while.

One could make an argument for a short around here,,, but there isn't a signal to that effect yet. so best to wait and see if the H1 lines give us a good signal here soon.

P.S. probably not much going to happen until the U.S. news comes out, so I'm off to get caught up on my sleep.

Forgot to say Hi Phil.. sorry. Didn't mean to skip you. Welcome and good trading to you.

Hi eclayf,

Hope all is good and you're trading well. I wondered if you'd be kind enough to take a look at a trade I didn't take. I'm wondering whether i'm being too cautious at times and giving myself too many reasons not to take trades.

I was considering taking a bounce off the 50 ema and RN confluence point on the M15 chart as highlighted. However, on the H1 chart, i've circled the two candles I could see at the time. It isn't quite representative though as the blue bullish body on the second candle was actually a red bearish body but it's changed with the bullish action since the bounce. As the first hour candle showed a long legged dogi/pin bar that was also a tweezer top and the seond candle was bearish, I took this as a reasonable indication of a reversal and got scared out of the trade. I had also noted that two previous M15 candles had failed to break the same point previously (It's actually R1 but i'll say it quietly!!) but saw that more as a possible TP area rather than a reason not to take the trade.

That trade is now at 35 pips and my risk aversion has cost me a really good trade here.

The question is then, would you have taken the trade (without using hindsight to your advantage of course!!). My other thought whilst mulling this trade over was that I could get away with a really low SL, maybe even 6+ spread. It was either going to break through that RN or it wasn't and with the bearish pattern on H1, you'd assume a break would hold so no reason to risk any more. Would this have been a sound move? Any thoughts would be appreciated, thanks

Trotty,

Your last paragraph pretty much sums up they way I look at a setup like this and are really beginning to get the hang of this.

When I am looking at a bounce setup like this I look for the following:

1. is there a definitive direction to the ma I am looking for a bounce off of
2. is there at least 15 pips between the close of the previous candle and the ma, I refer to this as space
3. are there other factors.

so in the case of this trade there was over a 15 space, the 50 was heading north pretty solidly, and we were right around a round # level. Typically I will wait a little bit if I have a round # just below an ma and enter at the round number. But regardless of whether you took the trade at the ma or the round # you have a very low risk entry.

Hi Trotty,

Not an expert here but I took a quick 10.5 pips on this. It's just that the slow price movement until the news made me nervous to close the trade at the 10/35/50 confluence in the M5. Since M5 is not by the rules for targeting you can ignore.... I guess my message would be to take such trades but keep a tight stop and monitor closely.

Kostas