Just a question... I have recently missed a weekly BUEB long entry on USD SGD (See below)
My question is, if price were to retrace back to this BUEB closing price in a reasonable time, would it be an opportunity to enter the trade? Or is it a case of if you dont get into the trade at the first opportunity, then leave it out?
Basically your questions is for others who don't fully understand is; Is it still okay to take entry after price has broken away and confirmed the trade and then turned around and bounced back to the entry point?
To answer this we need to look at why it is we use the confirmation and the break of the EB or Pin Bar for the entry. We use this form of entry because this gives us confirmation of the signal and a lot of other orders build at the same area. What happens when price breaks the pin/EB is price will often get a sharp and quick movement higher/lower which will put our trade quickly into a profitable position. Trading this way we are taking more of the risk out of trading which we are trying to do all the time. We are trading with the momentum on our side. When we are entered price is trading in our direction. This is vital!
Now if you take entry after price has broken the high/low and gone off and moved and then retraced back to the entry point you are giving up all this advantage and more. The orders that are normally there built up to help the market shoot off in your direction when your entry is ticked have been sucked out of the market because they were already eaten when the trade first triggered. Now also instead of you trading with the momentum in your favour you are trading with price going against you. Price has now already moved higher and by entering now you are going to be entering when price is moving back lower at you rather than if you had gone long at the break when price was moving higher in your direction!
Few things to think about. This questions is few weeks old but it is something that a lot of people think about.
Im in the EUR/USD Trade. My TF is 1HR. What do you guys think? Im selling it.
I have no idea how this worked out as I can't even find it in the maze of candles on the 1hr chart. That should be saying something right there.........
The smaller the timeframe you go the bigger and better the signal you are going to want to be playing and this is just really small and not really telling us anything. It is in the middle of nowhere and just does not hold much weight. If wanting to trade the 1hr you still need to look for trades from key areas and a solid way to do this is trade from areas that you have marked as support or resistance on your daily chart.
Thanks a lot for your reply. I would of course always have two split positions targeting two different trouble areas. I am not in his advanced course so it is NEWS to me that Johno teaches retracement entries for engulfing bars there. Now that is going to take me some time to digest....and think through. So I wont comment on that. As far as my understanding of Johno's method goes, there is not much worry about RR, it is about picking high probability entries and trading with confirmed price action upto the next first trouble area with a reasonable reward. Wonder if ANY OF THE SENIOR TRADERS HAVE DECIDED TO TAKE THIS LIVE.
This is something people get confused about. Yes out method is about picking the best trades and having a high win rate. This will mean that we don't need the huge risk reward winners that other traders who take more losers do because as we are banking more profits and don't need to cover the extra losses that others do. This will mean that we have a steadier increase in our account if we can bank regular profits. This is preferred to using the high risk reward and lower win method. With this a trader can still be profitable but you have to be prepared for your account to go into heavy drawndown and then wait for that large winner toi put you back in front.
Now Risk Reward IS IMPORTANT! You can still have a high win rate and lose money if you don't bank enough money on your winning trades! So traders need to work out and continually check that they are making enough money in their winning trades compared to their win rate.