Trading is as simple as ABCD

Talking about being more selective on our entries on these 1 minute charts here are some of my favourite entries around Daily laevels, like yesterdays close, high and low. Thats why I have them on my template, have a look at some of these entries...

See the pressure growing under yesterdays high then Whooosh and its a perfect breakout trade with absolutely no retest to worry about, those are my favourite breakout entries after a bit of pressure has built up, the breakout would of gone to BE in the same candle so risk off table in less than a minute. Now thats what I call an entry...



Here's an interesting observation just looking at my post, the first break of yesterdays close didn't have a build up of pressure it just went straight through and we got a retest. However the break of yesterdays high had a lot of goes before it broke through so pressure was building then when it did break through, no retest!!!

Hmmm wonder if we could use that to identify when to use breakout entry only after pressure builds???

Thank you Clive,

Would you MA_in_Color indicator settings be same as on 1min (500LWMA) or you will make it different due to different tf?

That wasn't very clever had a 25 pip profit almost turned into a losing situation but managed to exit at net BE in the end...

Heres how not to do it, got myself nicely up on my first entry a break and retest of BRN and up about 25 pips at one time but then got cocky as usual and decided to add at next break and retest of 1.8625 level but jumped in too quickly after only a 5 pip break and left myself hanging straight into draw down on 2 nd trade. This happens a lot to me trying to grab that 2nd entry. The biggest problem is my "fear of missing out" at work thinking I mustn't miss out on this great move...

Even when I had the chance to go to BE I didn't as thought it was going to go. However it just couldn't break its last high properly and then started looking decidedly dodgy and a bit turn overy so had to make a decision how to handle the tricky situation I got myself in. Now not losing money is my prime goal so decided to just get out at BE asap and the only way was to put my stops for both trades together so at net BE if it hit and thats what happened..

Had one more go a much better entry which took support off of the last HH which went to BE fine and got stopped out for nowt.



This whole situation makes me think about the whole strategy here and whether I should just take my profits when they come and drop any ideas of trading the trends??? But then I catch a good trend and I think nope this is the way to go, trade the trend until it ends. One thing is for sure its very difficult to be thinking about both, I have to decide one way or the other, I can't be thinking about both methods at the same time. Scalper or trend trader???? Which is it going to be???

Or could I be both??? If I set some firm rules as to when I'm going to scalp the momentum runs and when am I going to hold and trade the trend???

For instance I could say if price has just reversed eg a MA colour change then try to catch the first 3 CCI signals and hold until next MA colour change. IE in trade the trend.

However if I've caught the move after say half the daily ATR away from the MA turn then just scalp each momentum run...

Whatever I decide I have to accept whatever I get and be done with it and not expect to get it right all the time...

Hmmm food for thought

Meanwhile I've been watching some quite incredible price action on GBPAUD which I can honestly say I haven't seen the likes of before in a fairly tight range 1.8625 to 1.8615 with massive moves both way at lightning speeed, looks to me like a battle royale between 2 big boys. I put a pending order above and below the range with the firm belief whoever wins is going to drive the market flat out their way so hopefully with me on board....

That worked out rather well now how long to hold??? Well this is a very early entry in a potentially good move so will go with the trend trading strategy here and hold on the MA colour change lets seee how it pans out???

If you want to know what price actions all about then do yourself a favour and open up the tick chart on GBPAUD there's a horrendous battle going on. I reckon after the last 2 weeks of the GBP running up about 1400 pips on the referendum someone has decided that its there under false pretenses and they're clearing their books out...



Thats what it looks like to me...

Anyway who cares less what its about lets just make some money out of it so just added another trade on that last pullback and at BE now so lets hope they've got loads more to clear out...

Pressures biulding so hopefully a breakout with no retest....

Well that all ended in disaster again my "breakout trade" got slaughtered for 20 odd pips and my other 2 trades got taken out for BE's so a net loss of 20 odd pips from that move....

Not too clever is it???

Somethings amiss with my whole philosophy of trading. I'm missing something here big time because the number of times I get up in a trade then get stopped out at BE or even worst like today end up losing from a very positive position. This happens to me far too often for my liking I've got to radically re-think my whole outlook on trading. There's something not quite right with my psychology or ego or something????

Its like I'm more interested in not losing out on a few extra pips as against just taking my profits when I get them.

I somehow feel like I've failed if I don't drag every last pip out of a move??? I'm more terrified of leaving something on the table than I am of actually losing!!! Sounds crazy doesn't it??? I'm trying to trade "text book" trends , instead of focusing on "making money" which at the end of the day thats what its about. Thats whats going to feed my family come the day I trade full time.

Now take today as an absolutely perfect example , I've been up 25 pips on my first trade today but blew that by trying to add too soon. I've just been god knows how many pips(50 plus???) up on numerous entries on my last venture but come out 20 pips to the worst??? Something is radically wrong with my trading psychology.

I feel like this is the final piece of the jig saw for me to become a successful trader. Just gotta fix this last thing and I'll be there....

I know something else that happens when I'm trading too thats not helping. I get an idea in my head why price is moving one way or the other so get attached to a direction then ignore any technicals that tell me otherwise, that old "our beliefs are our world" theory. So no matter what price action I see i hold on to my belief that its going down. Something you just can't do on 1 minute timeframes because things change so quickly.

Take that last drive down, you could either see those tests of support at 1.8575 as price knocking to go through so place a pending sell stop to catch the breakout or as support holding and a possible reversal about to happen. All depends on your point of view and my belief was that it was going down so I placed a sell stop.... Now maybe a more experienced or successful trader would have seen the opposite and realized they were failed drives so close out all trades on the next failed drive???

I guess a good trader needs to assess very quickly the situation and make a decision as to whether to "Hold em or Fold em". Thats why poker players apparently make good traders because they quickly assess the higher probabilities and act accordingly. Now this could be the answer couldn't it? Rather than to assess what is the probability of the trade continuing and what is the probability of it ending?? It would be more prudent to consider what are the financial consequences of it continuing or not. Basically to change my mindset to a purely monetary point of view rather than a directional view on price?

Looking at my last trade like this might have led to a different outcome, first of all the 3 failed drives tell me its time to consider what actions I should take. Do I fold em or hold em?? Well with hindsight this is easy but with a little thought to financial consequences it becomes a no brainer.

If I hold and it goes against me I'm out at BE with no profit.
If I hold and it goes further I make more money.
If I bank and it goes against me I make money.
If I bank and it continues I can always enter on a breakout or break and retest and I still make money..

Looks like a no brainer doesn't it?? Theres basically no monetary value in holding when the trend is under threat!!! No point at all as if it continues I can rejoin the trend soon enough one way or the other and if it doesn't I've got my money in the bank!!!

Also theres no need to deliberate over it is there? Take your money and then have a look to decide what to do next. I can also trade these trends in steps there's not really a lot of point keep holding and holding is there??? Just some bloody stupid ego thing about being right!!! One other thing I could do is if I do bank profits and then the trend continues I can put the old trade back on as if it never got banked by just increasing my lot size.

So there you have it no need to keep holding and holding just bank when trend under threat and if it continues add back on.

Job done..

Just to lighten the mood here's a little song that says it all!!!

Hi Knez

Sorry late answering only just saw this post, it depends which timeframe you want to use as your master as what we're doing is putting the higher timeframe 100lwma on your 5 min chart. For me I'm looking at the 5 min 100lwma on my 1 min chart so thats the 100 x 5 = 500 on the 1 min.

If you wanted say the 15 min 100lwma on your 5 min chart then use 3 x 100 = 300lwma. If you wanted the hrly 100lwma on your 5min chart then its 12 x 100 = 1200lwma.

I just multiply them up but I think you can get indys that put the actual higher timeframe lwma on your 5 min charts. I'm not convinced theres much point as I'm only using them to tell me whats going on above me but many use the multi timeframe ma's as support and resistance too so then the right one might be better but I don't think theres enough in it to make much difference.

Hope that helps..

Here are a couple of thoughts for you. I have been at this FX thing for a long while. To long really. I should have more success than I do. One of the things that drew me to trading to begin with was when I heard two friends talking about trading stocks and some of their friends who were very successful at it. The terms they used and the mentality they described was identical to poker, which I play a lot of and do very well with.

In poker, the best pots to pick up are the uneventful ones. The ones that have a few chips in them with not a lot of action. They are called "orphan pots" (political correctness aside) because nobody is particularly interested in them. If you can pick up enough of these pots, you will win overall. They end up paying for you to test waters on other pots that turn into big pots! You can see the analogy of picking up 10 to 15 pips as often as possible versus looking for a 50 to 100 pip runner.

Another easy analogy that I hear traders talk about a lot is with baseball. These games are won with singles, not homeruns. All you need to do is get really good at hitting singles, and you will win the game. Every now and then you will see an obvious set up for a runner, but that will require you to take a higher TF view so you can see what the M1 chart is drawing out. Consider this, starting with $1000, compounded at 2% per day is $1,000,000 in 3 years! It only takes 2%, you made over 30% on Monday and Tuesday I think you said. That is awesome, you were 3 weeks ahead of schedule! Singles win games!

On your last GBPAUD short, the M5 MA would have been a great target to take profit at. If you were looking at the M5 chart, you would have looking to possibly enter a long at that point because the line was still green. You have banked plenty of profit there. The next natural target would have been the previous support zone, as seen to the very left of the chart. This is where it took off long to begin with.

I do not think you need to change your trading ideas or anything radical like you suggested. Your entries are decent! Simply learning to take the orphan pots will change things, fast! Professional poker players will tell you it is the hardest way to make an easy living. This is the same thing.

Hi Capstone

Yep makes a lot of sense to just keep taking the momentum runs and not the trends. I think one of my problems with forex has been trying to capture these long trends eg 100 pips etc which of course do occur but not that often but the far more higher probability is the smaller 10, 20 or 30 pip runs. Thats as I understand it is how poker players do it going for the high probability occurrences not the rare 3/4 of a kind etc.

Of course our ego , wants us to show how clever we are by catching these lovely long trends etc and trading them perfectly but like you say the fact is they are rare, whereas 10 to 15 pip runs are all over our charts aren't they? Makes so much more sense to just go for them doesn't it???

But having said that, heres a thought for you if we are talking about high probabilities and nothing else, in poker there are numerous differing hands dealt to you probably over a million I'd guess. But in forex theres only 2 hands dealt to you to choose from, up or down??? Don't talk to me about ranges because ranges can't lose you money as they don't go anywhere so its just up or down...

Now if we say the definition of up is the 1 minute trending up and the definition of down is the 1 minute trending down and we say the trend is defined by the slope of the 100lwma then we have a pretty simple system don't we?

If we also say the start of a new trend is the end of the old one and to enter we buy dips in an uptrend and sell peaks in a downtrend. (defined by 8 CCI signals) then we have a pretty easy system to follow.

Lastly as we want our winners to be bigger than our losers we only risk 10 maybe 20 pips on entry and close out when we get a trend change. Oh and only look at big movers so the top 8 daily movers eg GBPJPY, GBPAUD, GBPNZD, EURAUD, EURCAD etc Heres a list of top 8 movers last 5 days...



Take the first CCI signal after every MA colour change and move to BE pretty quickly to avoid unnecessary losses.

Lets keep this simple, what I'm saying is buy when it turns up sell when it turns down. Not rocket science is it???

Here's a chart of EURAUD today which shows both examples up and down, there's a little blip in the downtrend but apply a little trading savy and we can see it didn't take out our LH's but even if you closed out still a winner.



By the way something else to consider everyone knows price moves in waves retracing about 70% of the previous move so lets use that instead of running scared of it just like this move if something moves strongly one way odds on its going to go 70% the other way and if with the trend then 130% the other way.

This is what I base my trading around but discipline is my issue as I start thinking about it too much and then start believing I know better etc etc but if we keep it this simple we can't go wrong can we???

That all said I'm still up about 40% this week even with todays cock up so if I can just resolve these discipline issues who knows what I can achieve considering the growth figures you've stated above.

Just another thought which keeps me going every day, I have doubled my account in a day before now using this system so with a bit more risk control and constant tweaking I think its very feasible to double my account on a weekly basis so that being the case if you start with £100 and double it every week after 14 weeks you'd have a £1,000,000 now I'm not saying that's what I'm going to do I'm just saying its food for thought if we can just simplify this goddam forex trading game.....

Guys it can only go up or down!!!!!

I gotta go to work but one other thing I forgot to mention we even know when to expect these 1 minute moves, they happen around or just after market opens as the money comes to the table so we even know when these moves are likely to happen....

Heres dear old EURAUD again showing us the way at all 3 market opens Tokyo, London and even New York...

As if by magic, here's what I'm talking about guys GBPNZD just changed slope colour around NYO so take a quick break and retest entry and see where it goes????

Nope another BE from being almost 30 pips up to nowt, hmmm Mr capstones words are ringing in my ears, take the money , take the goddam money!!!!

But if I can keep entering fairly accurately then my day will come, either that or I'll have to start banking half and riding half, would be crazy not to as then I get the best of both worlds , scalping and running. Crazy to keep getting such great entries for nowt...

Still work in progress but I'll get there , i'll get there I promise you...

So it looks like you would be up around 70 pips today on 3 trades had you pocketed your hard earned cash. What percent of your daily account is that?

The goal on any trend trade is the meat in the middle. This is the easiest to grab. Do not think you can pick a top, because you cannot, nobody can. Just like you cannot pick a bottom, which only leaves you with stinky fingers!

I use to trade at 1% per pip so that would be about 70% those were my double the account in one day days..

But in preparation for going live I decided to reduce it to 5% across 20 pips so would of been up about 17.5% I guess... Mind you had some losers today getting frustrated with all my BE's.

Guess this is where I'm at right now, got a good entry system which regularly gets me in and to BE quickly just need to decide when to cash in I guess...We should work together Capstone as we appear to have the complete opposite problem, you come out too soon and I come out too late...

The reason I get larger moves than you is probably due to the fact I only trade the strongest movers so when I enter they usually fly away from my entry pretty quickly. Not always of course but generally speaking therefore I'm in no rush to close out. Far from it I always imagine they're going to run forever, mad or what..

Ok so here's my question for your good self Capstone and anyone else whoose interested...

What would you do if you were me and regularly getting a few pips up??? What would be your method of exit?? Please don't say just so many pips as thats not what I'm about. I want a system whereby the market takes me out therefore I'm getting as much as possible without staying too long. I know, I want it all, yep thats right I certainly do..

Come on all you traders out there whats the solution????

You know the more I think about the more I'm starting to realise its all in my head isn't it???

If I could convince myself that the momentum run is enough whatever it is and that if its a trend then I can just trade each move as an individual trade rather than part of the trend trading strategy. Then on a rangy day like today I'll do fine and on a trending day I'll do fine too so best of both worlds I guess.

The other method is to take half off on the first run especially if it falters at B then move stop to BE and see what I get...

Hmmm difficult, difficult to know whats for the best...

novel idea here....pick an exit strategy. backtest it over a significant portion of time. detail the results.

pick another exit. backtest it over a significant portion of time. detail the results and compare it to the first results and go with the greater return.

pick another exit. backtest it. detail the results and compare them to the previous winner's results.

then you're not doubting. you're not overconfident. you're simply trading a strategy you believe in because you've seen the steady results over time. not potential. not emotion. not the hope that because if you did this yesterday, you would have made this much....just successful trading.

but i'm sure you know better. time after time i've seen you solicit help only to discard it.

i appreciated this thread b/c it reminds me what not to be doing. every successful trader's probably been through the phase you seem to be stuck in. they've just chosen to make the necessary decisions to move past it. that choice is still up to you.

trading should be boring.

Well, I would do what I am doing, which is to target 2% per day. You are killing it though at much more than that. Take half off at 10 pips, half again at 20, then let the rest run with a trailing stop. This way you are getting all of your daily needs and then some. This also allows you to enter other positions because your capital is not all tied up.

Or use your quarters as targets as well as entries. Mongolian uses every 12.5 pips as entries and exits. It makes sense. The goal is profit! You will not feed yourself by hanging on for dear life just certain that you finally caught a runner. If you can profit 15 pips on 3 trades everyday, fairly stress free, why wouldn't you? You will be free from your current job (your stated goal), trading for 4 hours at MOST, then living life!! THAT IS THE GOAL! That is why baseball players go for singles and doubles and not homeruns every time at bat. It makes them consistent and consistent pays bills and keeps you from having a boss! That same baseball player will see a weaker pitcher every now and then though, and that is the moment to shoot for the fence.

When I play poker, I win from orphan pots and high probability set ups. I play the math. I only push all in when I KNOW I have the best of it! Then I get paid. That is why I play after all, for the cash.

Are you trading to make a living or for the bragging rights of 100 pip runs? That run you catch is lightning in a bottle, it is the black swan. However, 15 and 20 pip runs will keep you eating!

Sorry if that was not the answer you wanted, but I think most people will concur.

Hi Nightstocher

Hear what you're saying about backtesting and I must admit I do find it rather boring and tedious, not to say I haven't done my fair share of it of course. Problem is I'm not even convinced it means too much because the market is such an ever changing environment what works one day won't work the next. If that was the case I'm sure some bright spark would of written an EA to trade automatically and never fail to make money.

No the reason I ask for help is just that to see if anyone has any ideas they would like to share etc that might help me and anyone else reading this thread. Sorry if you feel I don't listen as I can promise you I do just can't promise I will follow every bit of advice I get, some I like some I don't some to be quite honest I'm probably not ready for yet..

But I do remember the last time you posted and you advised me to find a strategy that would work just as well on rangy days as trending days and thats something I haven't forgotten. Been working on that one full time. Thats partly the reason for asking for any exit strategies, I need one that does what you suggest, gets me out on rangy days yet keeps me in on trending days...

Anyway thanks for your advice my friend I will get there in the end I assure you, we all have our own path to find and follow and I'm on mine. I'm sure I will come out the other side soon a fitter,better succesful trader and if I've helped others one way or another on the way then its a bonus...

Would you like to share your chosen exit route by the way???

Many thanks Clive..

No far from it that was exactly the answer I'm looking for, totally honest and to the point can't get any fairer than that can you... I've never been interested in playing poker before now but all your talk about it is making me consider taking it up to help my trading.

I've got a feeling the poker mindset is very similar to the one needed to trade forex. You see i feel fairly comfortable with my technical skills to trade its just my mindset thats amiss.

got a feeling thats why 95% of traders lose too, its not their lack of trading skills or their strategy, its their mindset...

I've got to rush out right now but thanks for your thoughts I'm going to give it some thought and let you know my conclusions but its got to be along the lines you're suggesting.

catch you later must run..