There is No Edge in a Single Candlestick

So I stick to original plan. And guess what:
Trade closed at traget. So the trade reached target in 3 hours with over 2:1 reward:risk ratio and almost 0 draw down (spread). Images from mobile phone.

i guess you just have to zoom in to smaller time frames within a larger unfinished time frame, if the current price is higher than the opening price of the larger time frame, you only look for buy opportunities, for example, based on price actions of smaller time frames.

this completely ruled out the interference from the previous completed candles of larger time frame (psychologically as brains tend to trick us or we human only want to see what we want to see). yes, it is arguable that in a daily down trend for example, the chance of winning in a long position is low, however, traders who use this strategy only focus on smaller time frames so that they can get in and out rather quickly, of course the expectation of profit per trade is also limited to intra day (or whatever larger time frame referenced).

the fact is there is nothing 100% guaranteed in trading, thus, any reference point, for example, the opening price of a daily candle makes sense and at the same time, doesn't make sense too. it boiled down to how a trader anticipate and participate in the market. no participation = zero change in account balance.

the larger time frame doesn't bother this type of traders as they are looking at the fine details of price trajectory, both buy and sell, the first retest of a reversal is going to be the time/price area they switch buy to sell or sell to buy.

it works, and it should work because this type of traders are trend followers of smallest applicable time frame, and they participate both long and short to potentially maximize milking the market.

the only draw back i see is, they are going to glue themselves to their screen a number of hours, but what job doesn't require that nowadays? although forex trading is 24 hours, the really good hours to trade is after London open, forget about Asia session, waste of time, money and energy and more than often, both high and low of Asia session will be taken out intra day before the price moves in one direction.

I suggest to take a look at millipede thread by PipEASY, http://www.forexfactory.com/showthread.php?t=245149

PipEASY claimed that a lot of his positions survived on the wick of a candle (weekly, daily), that's because of his participation in the market in a smaller time frame (1h, 5m).

I see the only difference between PipEASY and other scalper traders here in this thread or the other thread is, PipEASY will move stop loss to break even and let his positions die without taking short term profits. either way, PipEASY and the scalper traders here make money, and a lot of money without being bothered to post anything on this chaotic forum.

traders need to be open minded and accept the fact that in the market/life/universe, ALL is relative.

I value your post zxdtrader, and I agree with most of what you said.

pipEASY thread is one of my favorite threads, but it is a completely different story. I even automated a system inspired from that thread and the fact that says “cut losers short and let winners run”, posted in HERE in “Robot Lab” thread. Simply put, pipEasy method is a long term trend trading method.

There are different types of trading including (the codes between brackets are the time frame traded IMO, and not periods of holding the trade):
· High Frequency Trading - HFT – [Tick]
· Scalping – [M1,M5,M15]
· Intrad-Day Trading [M15,M30,H1]
· Short Term, Swing, Range Trading [H1,H4,D1]
· Long Term Trend Trading [D1,WK1,MN1]
· Investment [MN1]

I will not dig deep into the characteristics of each of the above trading types as it is out of the scope of this post. However, it’s apparent that each of the above trading types needs to be approached differently, using TA, FA or a combination of both in order to be consistently profitable on the long run.

Nothing guaranteed in trading is 100% correct, and that is applicable to all types of businesses. However it is more apparent in forex trading, and risks/rewards are magnified because of leverage.

Successful traders approach forex as a business while dreamers approach it to “get rich quickly” out of a micor account, although that can happen, exactly as it can happen in gambling or lottery.

In the first post of this thread (which was not planned at all as I have my hands full already, and most of you knew by now why it was opened), I posted the latest GBPUSD H1 chart, why that chart in specific, well, I leave that for you guys to discover.

I posted the chart with my levels on it before the market opened, and traded the chart live step by step on an account linked to a trade explorer on my profile so that everyone can see what is happening, and I managed to capture the meat of the day range (73 pips out 110 pips), with minimal draw down (spread only). Will it work all the time, of course not. For the R:R ratio used it is enough to work more than third of the time, and it will be very profitable on the long run.

Is the market predictable? Of course it is, otherwise it is better not to waste our time and money trading it, and better go gamble in Las Vegas while having a great time.

The question should be to what degree is the market predictable.

It’s a probability business, and in order to be successful in this business you need to have more odds on your side.

Regards,

Khalil

There will be no need to continue this thread.

However, I will keep checking the activity until end of this week and respond if needed.

Have a good day.

Before leaving the live example trade, I think it could be good to study it in a single post from beginning to end instead of it being scattered in multiple posts inside this thread, maybe it will be useful for some (from a technical point of view).

1. Define the market you'll be trading , in this case the GBP/USD pair
2. Decide on your type of Trading, in this case, Technical Intra-Day Trading
3. Determine the Time Frame your going to use for Entry/Exit, in this case H1
4. Analyze the chart that combines the above, and define :

1. Main Prevailing Trend : in this case a down trend (you can not define this based on a single candle)
2. Current Market Type : in this case Ranging (you can not define this based on a single candle)
3. Draw important levels, trend lines, or use any other tools you're comfortable with

This is the chart posted with the above (taken from the first post)

5. Put your plan on how you are going to trade using the above
This was my plan taken from posts 6 and 7.

Looking at the chart from 1st post, the question is how are you going to trade it next week.

Although I am not trading GBP/USD at this time, but if I will, I would have:

1. Pending Buy Limit Order around 1.486x with TP at 1.495x and SL at 1.479x
2. Pending Sell Limit Order around 1.495x with TP at 1.485x and SL at 1.500x.

So why not trade the break outs using buy/sell stop orders in the previous example.
Well as you can see the whole price action for the latest 2 weeks is capped by High and Low of March 18th, so basically we are in a range.

I would trade breakouts at March 18th High/Low break.

6. Read Price Action, and review your trading plan

This is taken from from post # 29

Referring back to GBPUSD, H1, example chart posted on 1st post, and updated with today PA as below.

Why price would go down to "test" 1.486x, or go up and "test" 1.498x. "test" here means bounce or break.

Those are the closest areas of interest for the price at the moment.

1.486x represents a cluster of shorts who :

1. Still think the major down trend will continue

2. Have wide stops

3. Will average on a higher price/or already averaged at a higher price

It also represents a cluster of longs who :

1. Think that the major trend is reversing, or an up swing is forming

2. News traders (NFP) who left some of their positions on the table for more profits

1.498x is a cluster of short Stop Losses, and hence is highly protected by bears, because if it is taken, price will go directly to the next SL cluster at 1.516x area.

7. Read Price Action, and review your trading plan
This is taken from post # 50
On the GBP/USD H1 example chart the price is now approaching 1.498x (currentlt at 1.4963). Lets see how it will behave around 1.498x area.

Attached Image (click to enlarge)

8. Take action when according to revised plan
This is taken from post # 52

This is my pending sell limit order.

Attached Image (click to enlarge)

This account is already have a TE shared on my profile "Metals_Basket_Demo" which I use to trade metals basket on, but put this order as an example only.

Evaluate current situation

So far price looks SHY of the 1.498x level, as I mentioned earlier this could be a bear area that they are willing to defend. If broken might lead to 1.516.

9. Check PA as frequently as your time frame offers, in this case Hourly
This is taken from post # 55

Price reached 1.4980 and started going down, missing my limit order by 3 pips, so what to do now ?

1. Increase the sell limit entry price to above 1.5
2. Trade the break up of 1.4980 by a stop buy order
3. Trade the break down of 1.4853 by stop sell order.
4. keep everything as is.
5. delete the limit order and step aside

Which one would you choose ?



9. Make your decision (in accordance with your plan) and execute (in day trading acting should be quicker than swing or long-term trading)
This is taken from post # 55

I have chosen number 3.

10. Watch PA and evaluate compared to your analysis and plan
This is taken from post # 58

The sell order is working fine, and in profit almost immediately after opening.
I am gonna leave it as is, and go home after a long working day.



This is taken from post # 58 (image from mobile phone)

The example trade is reached 1:1 R:R in 2 hours.

Attached Image (click to enlarge)

10. Control your emotions (remember this is Business)
This is taken from post # 60

A trader usually thinks of different options in such situation, unless of course he pre planned and sticks to his plan. Those options might include:

1. Close the whole position before target.
2. Close partially and move stop to open price.
3. Keep the whole position and move stop to B.E.
4. Add to position.
5. Close partially , move sl to be and and increase target
6. Stick to the original plan
7. ... etc.

This is taken from post # 61

So I stick to original plan. And guess what:
Trade closed at target. So the trade reached target in 3 hours with over 2:1 reward:risk ratio and almost 0 draw down (spread). Images from mobile phone.

And this is the trade from Desktop MT4


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Was it possible to close in loss, Yes, possible and planned, I won't bather, as long as I know and limited my risk.
Was it Rocket Science, No.
Was it something I invented, No.
Was it based on fancy or secret indicators, No.
Was I a genius or a professional trader, No. In fact I rarely trade manually.

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Happy Trading every one.