Trade stopped out...
Last night before going to bed I moved my stop down to the 20 SMA (60 min chart). Reasons for crowding my stop:
1. Weekend approaching
2. Five waves down from the most recent significant top
3. Momentum divergence on 15 min chart; may develop on 1 hr
4. 2.618 target reached
5. Bounce off 0.382 Fib support on Day chart
6. I could see that the trend channel on 60 min chart was about to break
So, when the most recent low was registered, I moved my stop down and it was struck while I was asleep. Interesting, the stop would have been hit on the first strike, but, while eSignal showed the price had been hit, the broker (FXCM) didn't deal it, so it stayed alive a few more hours.
Results for this trade:
Risk: 30 pips x 2 mini-lots = $60
Reward: 141 pips x 1 m-lot + 130 pips x 1 m-lot = $271
Ratio: 271/60 = 4.5:1
In % margin terms: 5.4% risk, 25.4% gain
Note that the strategy of buying/selling the 60 min 20 MA would have been successful in this case also. On the most recent crossover up, I could have reversed my position, and with a 30 pip stop, at least broken even, and potentially booked upwards of 30 to 50 pips, which is enough to reward:risk to accumulate margin over time with a 50% winning trade percentage.
Simple strategy:
1. Look at 60 min chart
2. Buy when price crosses/closes above 20 SMA
3. Sell when price crosses/closes below 20 SMA
subject to:
4. Use one or two simple indicators to indicate probabilities for a move
5. Consider an Elliott Wave count, when the count is clear
6. Consider higher time compressions for "bias": Day, 4 hr
7. Put 60 min and 4 hr 20 SMA on 15 min chart to get a little bit better entry (i.e., on 15 min chart, put 20x4 = 80 SMA, and 20x4x4=320 SMA)
Attached are my charts and trade station.
Now of course I have to wonder if I should still be holding my short entry... if anybody has good ideas about exiting, please comment. Thanks.
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