DislikedI trade the 4H myself and would be interested in what theories you may have in regards to re-entries. I like to add onto my positions when I trade the 4H but have not had much luck picking good re-entry points. I would normally add a position when I see an uptrend forming on the 15m, but am thinking of revising it to the 30m. Does anyone else have any good ideas?Ignored
From all of my experience, I think (actually ... I know) the best way to trade and add on positions which limits risk (and later eliminates risk) in a trade sequence ... and really bumps up profits. The hard part (for me at least) is to hold on to the positions ... its hard psycologically to hold on to large profits, and watch them grow ... and continue to add to the position till you are stopped out by the market with a trailing stop. Its hard because I almost always punch out early (usually I justify this to cover small losses which occur when SL hit to establish a position). This year one of my goals is to work on that psychological fault, and to hold for the bigger gains. Just one or two of these a month would yield HUGE gains.
I'll outline a trade sequence of what I did (and what should have been done ideally). Please refer to the attached charts of EU.
1) On 4 hr chart on EU on 1/10, Fisher/AO indicator had a buy signal. I did separate analysis and thought this was a good buy area at 1.29. I entered 1 position at 1.29 (roughly 1.29 ... I forgot exactly where, but lets say 1.29 for comutational purposes), SL at 1.28. From here on out for scale of comparison, 1 position is 1 mini contract ($10000 in currency) ... or 0.1 std contract per $10,000 in the act. This is only using 1:1 leverage at 100:1 margin. So if SL at 1.28 hit, its only $100 loss (1%), since $1 per pip.
Positions: 1.29
Risk: $100 Open PL: $0
2) Price on hourly breaks a downtrend line, and heads up. Price is flat for a while, and later candlecode indicator (CC) on bottom of chart indicates a buy (blue arrow) where CC crosses up above the lower bollinger band. This price is about 1.295. At this point I move FIRST POSITION SL to b/e at 1.29, and buy one more at 1.295. I increased risk a little bit, but have 2 positions:
Positions: 1.29, 1.295
Avg 1.2925
Risk: $150 Open PL: $50
3) I let it sit for a couple of days ... price meanders around, and heads up, and later breaks 200 period ema (yellow line). That's a good sign! It retraces and retests the 200 period EMA on 1/13, and I buy TWO more positions at 1.31. If price goes below the 200 EMA, its not a solid move up. My avg price is now 1.30125 for 4 positions. I move SL to that level ... I now have a ZERO RISK TRADE!!! My plan is to move SL up, and continue to buy ... trailing SL.
Positions: 1.29, 1.295, 1.31 (2)
Avg 1.30125
Risk: $0 Open PL: $350
*** Now, what I actually did is punch out at 1.305 or so (that was 200 EMA on hourly, and also some other serious resistance on daily charts). I didn't think it would break through that. Sure I made a few pips ... but kicking myself for it now. I should have stuck to the plan and went for the big move. Lets see how this played out if I would have done my plan (add on dips, trail SL).
4) So 4 positions now ... zero risk, and up a few % in the act. On 1/13 price shoots up to 1.335 ish! If I held I would not have $1350 open PL on a $10k act ... 13% in a couple of days. I think it would be very hard not to punch out here (for anyone ... especially me!). Lets stick to the plan though ...
Later on 1/14, CC goes below the lower bollinger band. I see it turning up, which will generate a buy signal. I could probably enter better, but lets say buy at 1.335 (2 positions again). I now have 6 positions:
Positions: 1.29, 1.295, 1.31 (2), 1.335 (2)
Avg 1.3125
Risk: $0 Open PL: $1350
I have moved the SL to 1.3125 for all positions. Now I implement the Chandelier trailing SL (blue line on hourly chart). This is basically highest high of past 24 bars minus some value (some multiple of ATR over the past 24 hrs).
5) On 1/17, Chandelier SL moves up to 1.32. I move SL for all positions here. Price moves down ... If I were still in, I'd be sad to see 13% gain drop away and dip down, and on 1/17 SL nearly hit. On 1/18, I see CC buy signal, but its at 1.332 (below last buy), so I don't add. I suppose one could here with little risk though.
6) Price continues up ... on 1/20, next CC buy signal is around 1.345, so I enter 2 more positions long. I have been moving up Chandelier SL, and its now at about 1.33.
Positions: 1.29, 1.295, 1.31 (2), 1.335 (2), 1.345 (2)
Avg 1.3206
SL 1.33
Risk: $0 Open PL: $1950 PL if SL hit: $752
7) 1/21 ... CC buy signal at 1.35, but I'm pretty long now and price is getting overextended at this run. From separate TA off daily, my main price target is 1.375. I have been moving SL up:
Positions: 1.29, 1.295, 1.31 (2), 1.335 (2), 1.345 (2)
Avg 1.3206
SL 1.3423
Risk: $0 Open PL: $2352 PL if SL hit: $1763
8) Several more buy signals by CC on 1/25, but price stalling at 1.365. With FOMC on 1/26, even though my 1.375 target not hit, I'd punch out here (or 7/8 positions). At 1.365 PL is $3552 on a $10k act ... so 35% gain!
Now this is an ideal case, and traded with hindsight .... the main point here is:
1) Limit risk (and eliminate it), by entering positions, moving SL to b/e, then later moving net SL up to b/e for all positions, then trail to ensure profit.
2) Ensure higher profits by stacking positions.
1.29 to 1.365 was a 750 pip move ... but the above would yield 5x that amount by adding! Very little risk also if done properly.
I need to work on this (holding for the big move). I think its the most difficult thing to do psychologically!
Regards,
EZ
Attached Image(s) (click to enlarge)
