1hr tunnel trading risk management

Hi All,

I hope all is going well. I have a question in regards to the risk management for the 1hr tunnel trading. Vegas mentions about about various levels and proportioning the amount of profit. He mentions about using a minimum of 3 units to implement tunnel trading...using 55, 89, and 144 and to take a 1/3 profit from each. He also mentions that preferably u should use 5 units at levels 55, 89, 144, 233 and let one unit ride until it hits 377.

When he is talking units is he talking lots... correct? What does he mean by units?

Also to give an example if I was trading 20 lots how many lots should I give up in profit when I hit the levels of the preferable case (i.e. 5 units). So if I had 20 lots how many do I give to profit and carry on till the next level?

Thanks
Greg

Welcome to the best forum in existance Greg!!

There are folks out here that could answer this better than I but, I will give it a go and if I am wrong which is so possible, someone please step in.

For the above scenario, if you take out 20 lots,at each fib level, you would take off 4 lots so, 4 @ 55, 4 @ 89, 4 @ 144, 4 @ 233. This would leave you with 4 lots left to go to 377. this is how I take it as. I hope it helps. Good luck

I would recommend on the 1 hour tunnel to use 89, and 144 as your levels. With 20 lots, I would book 5 at 89, 10 at 144, and let the remaining 5 lots ride until I get an exit signal.

The reason being that you have more in play for a longer period of time. You're probably not going to hit 377 or even 233 in many cases on a 1 hour without an exit signal...

Regardless... I would backtest these scenarios and see which work best.