Trade What You See - Almost Naked Trading

If you want to learn how to enter on a 4 H chart, read this thread on the weekend (or 2) 4 Hour Strategy (MACD)

And how about F10 ? did you ever try that?

I just did some manual bactkesting with 3 taps from august 2010 to present day in order to improve my future trading with them. Hard job manually! Here is some data.
I tried to find all the potential 3 tap setups from 4H chart of EUR/USD. Some of them were consecutive meaning that one setup entered before might have been running while new setup formed. This is not ment to be a thorough backtest, but to give idea about SL and TP levels with 3 taps as well as the TF how long should you let them run before close. I´m not taking any responsibility of your possible future trades with this theory, but to give something back for the help I´ve had from this thread (god bless you all and especially LG to share 3 tap)

If you like, you can do the same analysis with E/U or other currencies. I would be happy to hear from your results and to share the work
I used only 4 h chart and tried to visually evaluate daily and weekly trend direction giving the setup for 3 tap (because I dont have the tools and stuff to switch charts fluently, moreover any programming skills to create a script from this). I made "entry" from the half of the trigger candle so if youré in early you could expect a little more profit and smaller SL. I "closed" my positions by visually evaluating the trend direction and not necessarily on S/R or levels but let them run if the trend was going on and stopped them appr in the middle the consolidation level in the top of the trend so the potential profit is not what you might have, but the potential in the trade if you just let it run. I used ema 2 and ema 5 crossing to evaluate the exit, but not in serious/systematic way anyway. However it may give some clue for exit. I also traded naked on the basis what I saw, which is also the point of this thread anyway. SL´s I put some 10-30 pips abowe/below last swing high/low depending from the direction of the trend. So here are the results. Happy to share ideas if this is something that you may find of your interest and this type of approach to suit your personality as a trader.

Trades
Stop loss level Potential profit Days to reach the profit
130 50 2
100 50 2
70 120 3
110 Hit SL
100 140 6
120 600 10
160 400 9
100 500 8
60 250 7
180 160 5
180 300 8
100 270 6
210 90 4
200 240 3
200 350 8
180 90 2
180 100 3
230 530 7
90 300 5
200 70 2
70 160 6
80 120 2
110 180 3
80 60 2
100 350 2
160 250 2
140 140 1
170 300 6
100 80 3
150 110 3
130 HIT SL 2
100 350 4
50 50 2
80 100 4
160 HIT SL 3
50 110 2
100 60 2
130 20 (OR HIT SL IF NOT TAKEN) 2
130 200 10
130 100 2
40 50 (OR HIT SL IF NOT TAKEN) 2
60 100 2
80 20 (OR HIT SL IF NOT TAKEN) 2
40 200 3
50 30 (OR HIT SL IF NOT TAKEN) 2

On the data there are trades, which I most likely wouldn´t have traded on the basis on how TF´s and S/R lines would looked like. I just thought to show them all that you can make your own opinion of them. Hope this helps with SL´s and TP´s on 3 taps. At the moment I think that i´m in a little breakthrough here with this, but monday will come soon and this may turn out to be be something else than I at the moment expect it to be.

Happy to share my/your ideas with these.

BTW for the purposes of someone interested in creating a script for 3 tap entry CCI 40 crossing 0-level might give some idea of 3 tap entrys, but not all the time.

Wow, whistle, you're a maniac! That is some impressive backtesting! Thanks a lot for the info, it's very educational. Amazing work really, definitely inspired me for next week. As LG said before, one can make a good living off EurUsd only. Many pips to ya! May the forex be with you...

Thanks. It may be so that some of the last four sudden changes, which ended to SL on my previus list of 3 taps results were because of unexpectedly good news from US. Now with the expectation of ECB rate decision, euro is probably continuing to trend upwards and the positive US news do not weight so much at the moment. Check out from FF calendar good news from US on march 15 th there was also FEDs rate decision on that day. They led the 3 tap setup in the 4 h chart from the day before to hit SL. I believe that markets reaction to the unexpectedly good news and expectations of a bullish speak from FED leading to possible FED rate hike changed the EUR/USD trend temporarily. => One should be aware of the timetable of important news on the currencies youre in and to be exceptionally careful if the contents of the news is something else than markets have expected (in other words deviates greatly from the forecast).

Well this is a preliminary theory and should be tested more thoroughly, but may give some ideas about 3 tap entry/exit also. It may be worthwhile to have a little awareness on fundamentals also allthough as LG said before, they dont weigh so much from the perspective to total profitability of ones trades, but may give some extra risk management edge especially if youre trading with a small account.

With 3 tap exit notice also that there is very often a possibility to exit in (almost) the same level atleast twice in 4 h charts especially in if the price is in consolidation. So typically there should be a plenty of time to analyse and make decisions.

BTW writing down these ideas and discussing them with you all helps me a great deal also.

Afternoon guys

Im interested to know what platforms you trade from..?!.

Whistlepips, wow thanks for putting in so much work. I primarily trade the EU, unless I see some other pair is a lock. I do keep an eye on the news because it can have an affect on a spike hitting your SL, which usually corrects itself pretty quick.

The Difference Between Demo and Live Trading:

Psychologically it is just different and there is no getting completely around it. But we can minimize the transition as much as possible and we do that with familiarity i.e. doing the same thing the same way over and over again until we are so comfortable with the process that we are almost bored.

I highly recommend demoing with the size account that you will be trading live. $5,000, $10,000 or higher. That way the lot sizes are exactly the same in the transition, thus taking away one psychological problem. It makes little sense to demo on a $100,000 account then move to a live $5,000 account as everything changes--lot size, potential profit and loss, your entire mind set. Sameness/consistency is what we are looking for in making the transition. It's much like an animal trainer teaching a dog a trick...same thing over and over again, with rewards in between.

A $10,000 live account is ideal, if possible. Trade it with the same lot size over and over until the account gets to $15,000. Do not vary the lot size until you reach $15K. Withdraw that $5,000 and do something with it. (Give it to your spouse to spend without any questions asked...they deserve for all the time you have spent on trading and ignoring your family!)

Then start again with the $10K with the same lot size , same everything, until it gets to $15,000 again, pull out the $5,000. start with the $10K again....nothing changes..no psychological hurdles to overcome because it never changes, as we are not trying to double our account (even though we are doing exactly that) Trading is really very boring because of the sameness of it all.

You're exactly correct about the method here because anything extra that I make goes to my wife and daughter to "invest" as they see fit. Seriously, when I demoed, I tried to use the same lot size and everything, but there was no pressure. When you go live, you feel more pressure which sometimes affects your rational thinking.

Every trader should study charts and look for previous set-ups for the system they are using. It is Trading 101. Do not depend on anyone else doing it for you, because it is part of every traders learning process. It trains the eye and makes one more comfortable with the process..a necessary part of what I posted above..getting comfortable with what you see, almost to the point of boredom.

I have taken GBPUSD below and marked the chart for 3 Tap H4 trades only from roughly the end of Feb to the 24 0r 25 of March. I saw three nice trades. Remember that these are only 3 Taps...not BO trades. Lots of pips to be earned from just one pair.

I moved the above chart to H1 timeframe to look for BOs within the last ranging area marked by the purple horizontal lines. Another 300-400 pips in BO set ups in that ranging period alone.

LG, is it better to wait until Tues/Wed - Fri for 3 taps for more confirmation on the weekly? Thanks

Thanks. Youre right with this.

I have done BT on this methods we use in the thread but what I personally like the most is keeping a record on setups that occur every day, the ones I saw and took as a trade and the ones I missed at the time, I'm kind of giving this "journal" a defined structure so it will always have important things such as the time the setup occured, the time the trigger occured, when did I put the pair on the watch list to look for a setup, max. profit, max loss, when and why I got out, etc. We could say it is a trading journal but this includes non taken trades as well, it's just a personal preference, ad my trading journal is kept apart. I just found things that are important for me to notice and keep a record of. This recording method is still in process of becoming better structured but this is an example... (sorry it is in spanish, but the main point here is to share the idea not so much the content)

I trade on MT4 my broker at the moment is Gain capital...

Thanks Anthar.. im on esignal but just switched broker to gain from igindex

Thanks a lot LG and everyone.
I'm with FinFx, ECN broker, awesome spreads and fast, no problems so far.

I keep a kind of trading journal also, but to go through the history of setups with EUR/USD, was indeed a good learning experience for confidency building.

Im also in Gain. Mostly with their webbrowser, but use powercharts as a charting tool.

LG excellent idea to give the money earned to one´s closest. I´ve had some problems with it because of spending all the spare time in forex

Sure it is, nothing beats getting some time with them, but they would definitely understand our forex fixation better... lol

Its 9-10pm sat night here in the UK and i have just been told to turn it off the markets closed !

Have a good sunday guys

Saturday for me... have a nice sunday dct... see yah