Example from Post number 1 continued and expanded.
This is the last few weeks Gold action (XAU/USD). This very last turn no-one expected to be this precise and strong. Many people got caught in losing positions after opening new short positions in the down move. We have earned already quite nicely 20% on the down-move. Our system now starts working without consideration of YOUR OPINION. At the end of the move the last few days have been barely moving and ur system smells a possible return.
This is the picture you’re looking at:
The system is about to launch a new position.
And it launches it. Without your participation or giving a 5cent about your opinion that it must continue further down.
This is the prematch of what we did in post number one
Remember this one:
Lets suppose you did everything right. In that case you are still in the long position and you have moved your stop loss several times till todays day. Then it looks like this:
You’re still long. You are winning. You are earning.
You do not close the trade. Since we don’t use indicators or oscillators there will be no contrary opinion onto why you should take profits now. Unless the 5 day rule (the stop loss which is at the lowest price of the last 5 days) is not violated you do not have any reason to close your position.
Everything is perfectly fine. You are winning, so lay back and enjoy the rising profits daily.
This is how you leave that winning trade:
The 5 day rule still in tact (it is always in tact - 24/7 [i say 24/7 because you leave your positions open over weekends, you do not close them Friday evening] and it forces you to keep the trade open)
the last few days have been choppy and according to the newest highs and lows you adjust your stop loss to the newest low (that is your daily job, you must do that every day).
At some point the lowest low of the last 5 days gets violated (this means your long trade has been closed)
and if you did your job right- then you wake up with a closed long position which gave you good profits of 1:5 Risk/reward ratio (your account grew by 10%) and a freshly open SHORT position which as well already has a stop loss in place (that all happened while you were away and not watching)
Remember the stop loss is equal to a entrée into a new position which goes the opposite way, this means that every time you adjust your stop loss in a winning trade you as well adjust the new short entrée to the exact same value- the new short entrée has the stop loss of the highest point of the last 5 days)
And this is what it looks like:
So today your system closed a profiting long and opened a new short position. Your job now is to enter a new long position at the exact value of the short positions STOP LOSS.
Then a few days later this will happen:
Your short was a false signal and it got closed and a new long position has been opened.
Your loss is 50% of initial stop loss (since we adjust the stop losses to the highest high of last 5 days - this means that if day 6 is higher it does not matter, it is out of the equation and the stop loss is lower than the high of day 6) simply because we adjust the stop losses daily the system took you out of the trade very early. Earlier than you would do it yourself if you were trading manually.
New long has been established which is in profit in the day after its opening. the week after the new long opening already is in profit with a RR-ration of /1 =2% new profit.
Leaving us with a profit of 11% with only 3 trades.
Here’s the picture: