In the upper left hand corner of my screen there is a money management readout. The first thing I look at is the maximum lot to trade. When first starting out take that number and divide it by ten. That is your maximum amount you should trade until you gain more screen time.
As you get better you can in crease this. I go as high as two thirds of the number. Usually 1/3. But that is because I only go in when I am confident and get all my ducks in a row. I'll explain that in the entries post. I am super selective in my entries and I find if I act too quickly and don't check all my boxes before pulling the trigger I am wrong.
Once in a trade I watch the % of balance number. At first only one should pull the plug and discard the trade once it goes above 2-3% drawdown. I do not use a hard stop because usually everyone has their stops in the same place and when they start getting hit price keeps going in that direction for as bit before reversing. I look at price action to tell me whether its going to come back or not. If its a slow gradual decline I may ride it out, if its a fast spike I usually get out fast.
My stop itself is just there for the break even function. I'll explain how that works in exits.
I personally cannot stand FIFO, If I believe a trade can return I may take a trade in the opposite direction. If I do this trade usually has a very tight stop. And a small take profit as well. This will not work on US brokers,
I don't do this very often but if I am highly leveraged I may take the hedge to increase my equity. Most of the time I just pull the plug somewhere between 5% and 10% but it doesn't happen often. Most of the time I break even or hit my Take profit.
I realize that this may scare some of you. But remember I am so selective in my entries I rarely miss. If I don't like what i see or am tired or like yesterday I mowed the lawn and had a few beers talking with friends I do not trade. That big spike up last night in asia has me on the sidelines for now. That and the beer! LOL. Don't drink and trade.
Remember, Being on the sidelines is a position. If the waves don't look right stay out.
The reason I use ten percent is that it only takes 11% to take you back to the prior level. 5% is better but if I am highly leveraged I may ride it to ten if I'm confident. I usually don't have to worry about that at 1/3 max lots but at 2/3 I do. Its best just to pull the plug and live to trade another day.
as the equity risk goes up the comeback percentage rises exponentially. That is if I risk 20% it takes over 33% to get back to the prior level. risk 50%and it takes 100%! It gets even worse. Like 90% risk takes 900%.
I don't care how good your method is. You cannot beat the exponential nature of risk. That's why most stay around 2% to 3%. I'm a bit of a renegade as if I do take a loss I take a day or two off too cool down. I'll go into psychology next
Yep, Happens everytime. I pulled the trigger thinking the retrace had ended without looking at the economic data and got stopped out on the ZEWnews. erased yesterdays gain. Happens everytime I don't check all my boxes. I saw that it was expected to be a lot higher over previous month and thought it may be too high so I stayed in. but I didn't check til after the fact.
I can use this as a reference for later on. So I don't pull the trigger prematurely.
It's good to document your losses so you know what happened and more importantly not repeat them. By reviewing your loses as well as your gains you can minimize them.
Keeping a trading log helps you to see patterns in your trading. Good and bad. Im one of the few that will actually post losses. The cements pain in my head so I do not do it again!
It looks an interesting system but I can't see where you have uploaded the S_R Barry-Eli_ MultiTFm indicator and also to use the JMA_Slope MTF I think its necessary to have the regular JMA_Slope in the indicators folder as well or it won't work.
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Sorry Lastingwell! I just caught this. will fix it right away. I will add the regular JMA slope as well although Mine works fine. Try changing timeframes. Sometimes I found it gets stuck.
edit: The S_R Barry-Eli Mutli TF is uploaded. Sorry about that!
Trading requires emotional discipline. You can't get too excited when you profit or too angry when you aren't correct. The most important thing to remember is do not jump the gun until all your ducks are in a row.
When you lose take a step back and look at why the trade went bad. This forces you to become objective and minimizes the time needed to recover emotionally. There is no use getting upset over it. You will be wrong time and time again. You just learn that if everything lines up you pull the trigger. If it does not. You don't pull. In this mindset you see what Should happen and get out if it doesn't. In the example above the price Should have retraced back down. When it did not I got out immediately. I took the loss and analyzed why I did take that loss. If I had looked at the economic calendar I may have set it up as a sell stop instead of a market order and I would have been out of a bad trade. It's not the broker's fault, It's not the Wall Street tycoons out to get me. the fault is my own. And the faster I get that the faster I can accept it.
Grieving a loss has five stages. Denial, anger, bargaining, depression, and acceptance. The faster you get through this the better. remember its only money. If you find yourself, angry depressed or talking to the forex Gods or in drawdown denial better take a look at what you are doing. The faster the better,
Then there is the flip side. you get on a hot streak. Trade after trade is going your way, Equity rising like crazy, you feel invincible! Danger! That is greed and it will take you down faster than fear will. The best mind is a quick objective one. who pulls the trigger without fear or greed but because the rules line up and what should happen may happen. If it does we have done our job and give ourselves a little pat on the back. If it does not we can analyze what went wrong and see if we followed all the rules. When wrong we admit it. chalk it up to experience and part of the business then move on.
Entries.......
OK! I know you have been waiting for it Entries! How do you put this all together. Well This is what I do.
I make a cup of coffee.
I check my emotional and physical well being. If im really tired, angry, or sick I do not trade.
I check the RTT news feed headlines to start to get a feel of the market. I may open up a story if it interetst me.
I go to forex live and check market news, orderboards and Economic calendar for upcoming major news events I may read through all if time permits.
I pull up my charts and look for a few things.
Is the market channeling? is it whacky congestion like today was? Is it trending?
Once I figure out what kind of waves Im dealing with I can figure out what kind of trade to take.
I basically look for retraces, break outs and bounces.
Thats it! Nothing fancy. I look for everything to line up set my stop or limit orders and leave it at that!
From here out its best to show examples of how I utilize the tools to find these. Ive given two examples of retraces and one example of a bounce. still waiting for a break out. And its best to show by example of an actual trade then me going into some windy hypothetical trade. Id rather wait for a real one and show you live.
You never go broke breaking even or taking a profit. Only a big loss can hurt you.
because I use a soft stop I place my hard stop like 600 pips from my entry. I do that so there is a stop there for the EA to work with. The key is to move the stop to Break even as quickly as possible. I set the EA up to run. It has these cool lines I can click and drag to set up my Break even line and Take profit line. I set the break even line usually around the 23 fib retrace line or about 1/4 the way up from the previous move or 1/4 of the way down on a retrace. In asia its usually tighter than in Europe or NY sessions. On average its about 5 pips but may be as big as 10 or as small as 3. It really depends on the volailtiy of the session. Asia usually only moves about 40 pips where as NY and europe can be a hundred. So I adjust the BE line accordingly.
The take profit line is placed just under or over the first major support or resistanc eline. I bring it just under becasue often it has a tendency to turn before it actually reaches. If I'm lucky and see its probably going to bust through and hasn't takenb profit I will start a manual trail and raise the TP while squeezing the stop til I squeeze the trade out. This takes a lot of screen time to spot and I hope to have some examples soon. Its a price action called wedging.
Now If I have done everything correctly on my entry I should go into profit fairly quickly. once I reach my Break even line price will have retraced about 23% if it turns back and I get stopped out I lose nothing. If it continues to 38% line usually I get to my TP. I may readjust my TP but I never touch my stop unless I see signs of wedging that could be the start of a trending market. I get stopped out for Break even quite often. You cant go broke doing that so don't get frustrated if it happens to you. all my trades last week broke even. Its better than losing.
Asia is strting to wake up. I like to look for bounces during this session.
As a rule Bounces are much more likely to happen than a break out so don't expect any long running trades during asia. Mostly bounces. I like to wait til China runs the stops. That usually defines the top or bottom of the channel.
If there is an interest I can open a skype room. I see a lot of lurkers but not a lot of responses. I appreciate you all letting me talk but Now its time for examples. Let me know if there is an interest. I learned the most by going into trading rooms
Another thing I like to look at is Oanda's historical open orders. It's a heat map of buy and sell orders. This is my back up go to map when Forex live hasn't posted any orderboards. From the heat map I get a good idea of where S and R lines are and it shows the barriers really well. I do'n use this as much as forex live because it can cause analysis paralysis. Just use this one if Forex Live guys are being lazy.
The asian channle has formed up. Had there been better support and resistance lines like h1 and h4 to back up the m15 support lines I would have taken both the lower trade and the upper trade. But because of yesterdays crazy whipsaws I didnt feel like they were safe enough to take. But i am pretty confident where the channel will go tonight. wish it was a little wider.
The cnadle clusters at the top and bottom of the spike were clues that it was a support and resistance but not enough info from them to tell if they would hold. The bottom one was much stronger in that the congestion candles had long beaks dipping down into support. I call these candles "hummingbirds" because they are small and dip their beaks into the nectar before flying off.
The top congestion candles had wicks on both ends. More of a spinning top formation.
I had a buy limit deep into 1.33. close to the big fig but China had other plans. Looks as though some buy stops were tripped above the congestion candles creating the spike.
Edit: Just took another look and hovered my cursor over the wrong part of the Longer resitance line. It showed up as m15 where I hovered but h1 Resitance was on top. That would have been a good trade. Note to self. Hover the cursor at the end of the line to get the most recent reading. Missed a good trade.
Well I got to go to bed. Have fun ya'll. This channel looks strong tonight. I just missed my entry at support by a pipette! Getting a little sleepy and frustrated so I will call it a night. Look for a break of the box at the frankfurt open. Right before asia closes. I don't get to that move too often. But watch out for the false break out. I usually wait for the first retrace and enter there. Price will shoot out of the box then retrace down back to its previous level look for signs of it taking off again. But watch for the franky fake!
One of the uses for the MTF jam slope is to run two together. This template has the h4andh1 JMA' slopes in separte windows. the bottom one is the h4. I drew two lines on it to help determine whether the market is trending or ranging without having to zoom out. I call these lines FO' Sho' lines in that it's a FO SHO thing that we are trending once the histogram crosses that line.
We have been stuck in this crazy congestion for so long I forgot about this. The upper level winds show signs of the e/u weakening but don't count them out yet.
When the Histogram crosses the fo so line and price is obviously telling you that as well. don't trade against the fo Sho line. trade with it. If its near the edge ort inside the fo sho line trade the ranges.
From the heat map I get a good idea of where S and R lines are and it shows the barriers really well. I do'n use this as much as forex live because it can cause analysis paralysis. Just use this one if Forex Live guys are being lazy.
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Could you please elaborate - a screenshot would be awesome - on how barriers can be read from the heat map ?
When I get to the historical open orders page I change the timeframe to onbe day. Then I look at the net buy and sell. these are the areas where the sharks lie. This is only Oandas slice of the pie though so it is not written in stone. But the darker the color the more chance it has of being a barrier.
I dont pay any attention to the cummulative map. just buy orders, sell orders and Net (buy-sell) orders.
Here's a quick little scalp I saw when I got home from work today. Sydney scalps a very safe and effective way to build your equity. I used my 2/3 maximum on this one and added 3.3% to my account while I took a shower. Like a salmon jumping in the upstream price was getting tuckered out. I just took the last little jump before NY retired. ZERO draw down. As soon as the sell limit was hit it backed off and stayed positive for the entire duration.
here's a buy reversal that was stopped for Break even. The humming bird dipped her beak with the hard candle and I took a chance with a small amount. Broke even. better than losing and I can look again for more humming birds.
One more. was looking for a reversal at 1.33 but the Chinese are off kung fu fighting somewhere tonight. No buyers to be found. Stopped for a BE.
BE happens alot with this method. It's better than losing. maybe should have looked to sell the retrace instead of buy the reversal. I usually take a big Fig over a trend. as the bulls are fighting hard here at this line. Just not hard enough.
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