This will be a relatively shorter post and is a follow up on Part 1 (phew.... Good for me and you LOL)
So, i got this situation where there was a breakout on the 4 hour, mark with a dash line on the 1 hour.
The first thing that came to my mind will be:
A) I want to long
B) I will not short even if there is a reversal (Unless 7700 is broken)
C) Where will i long? What is my initial risk to reward?
So, instead of chasing price action, i'd use a very simple method for a certain completion of the latest low.
The key part to succeed here is you have to start watching the market and wait for a classical higher high
higher low formation usually in the form of 2 candles.
You might be asking "Don't you use some sort of indicator"? As a matter of fact, i rarely use it because i find
it too troublesome. I'm watching a lot of markets and i'm not going to throw all my eggs in one trade.
But if you want, i could use an ATR (for stop distance placement) or RSI (below 80 or above 20). That's it.
So, after the formation of "higher high, higher low", my entry is 2 pips above its last high, and 3-5 pips below
the swing low. Don't worry about it because my first target is usually conservative at 1:1 risk to reward and
likely i'd take half or one third. No right or wrong but try to fix at predetermine amount to exit.
The position size i take is never more then 2 percent of my equity but the actual size depend on the stop
placement.
Once this is achieved, i simply move my stop to break even and target 1:2 risk to reward. I may have exited fully
or still have one third of position left. I'd simply trail it with swing highs and low. Remember the golden rule that
stop can only move when it is meant to lock more profits then before.
I felt this is a very simple way to trade and is easily executable by anyone although it does take a lot of practise to
do so. Why rush anyway? Trading is a marathon and the longer you are in the race, the more you are likely to succeed!
I hope this simple method helps you. Free free to drop me any questions i'd try to answer as much as possible!
So, i got this situation where there was a breakout on the 4 hour, mark with a dash line on the 1 hour.
The first thing that came to my mind will be:
A) I want to long
B) I will not short even if there is a reversal (Unless 7700 is broken)
C) Where will i long? What is my initial risk to reward?
So, instead of chasing price action, i'd use a very simple method for a certain completion of the latest low.
The key part to succeed here is you have to start watching the market and wait for a classical higher high
higher low formation usually in the form of 2 candles.
You might be asking "Don't you use some sort of indicator"? As a matter of fact, i rarely use it because i find
it too troublesome. I'm watching a lot of markets and i'm not going to throw all my eggs in one trade.
But if you want, i could use an ATR (for stop distance placement) or RSI (below 80 or above 20). That's it.
So, after the formation of "higher high, higher low", my entry is 2 pips above its last high, and 3-5 pips below
the swing low. Don't worry about it because my first target is usually conservative at 1:1 risk to reward and
likely i'd take half or one third. No right or wrong but try to fix at predetermine amount to exit.
The position size i take is never more then 2 percent of my equity but the actual size depend on the stop
placement.
Once this is achieved, i simply move my stop to break even and target 1:2 risk to reward. I may have exited fully
or still have one third of position left. I'd simply trail it with swing highs and low. Remember the golden rule that
stop can only move when it is meant to lock more profits then before.
I felt this is a very simple way to trade and is easily executable by anyone although it does take a lot of practise to
do so. Why rush anyway? Trading is a marathon and the longer you are in the race, the more you are likely to succeed!
I hope this simple method helps you. Free free to drop me any questions i'd try to answer as much as possible!