THE JOY OF CANDLESTICK TRADING - Part 2

[tymen1]

And now to the Strategy B......


By tymen1 at 2009-02-23



At first look, this seems the same as the standard Basic level.

But when you look further, it is not.

Description

Only 1 amount is entered at the beginning.

Then, 10 pips into profit, a 2nd amount is entered.
The stop loss is immediately moved to the 1st amount entry point.



Results

If the profit target is reached it will be reached with 2 amounts, that is, maximum profit.

If it backfires, you will lose 1 amount of 10 pips.



The Advantage

The stop loss at the very beginning is for 1 amount only.
The take profit is for 2 amounts.

In that way you have firmly increased the risk/reward ratio.



Final Conclusion

Strategy A is designed to increase the win/loss ratio.
Strategy B is designed to increase the risk/reward ratio.

[tymen1]

OK that it from me till tomorrow.

I have covered enough ground to chew on just now.

[gasanvill]

Nice stuff tymen!

I have a question.What strategy should we use? A or B? I mean, both are good strategies but how do we know when to use A and when to use B?

Thanks!

[tymen1]

Originally Posted by gasanvill

I mean, both are good strategies but how do we know when to use A and when to use B?

Thanks!

It is entirely your choice - depending on which you like best!!

If you think that there is going to be very little price action in your favour, with most of it retracing, then you would be better off with strategy A because it gives you opportunity to grab 10 pips before the price action backfires on you.

But if the trade shows good prospects, then strategy B is far better because it will give you a 2 amount profit as compared with only 1 amount + 10 pips for strategy A.

Hope this helps.

[tymen1]

Next posts - Strategy B on the Intermediate level.

[wrtm_19]

Soldier on!

[o990l6mh]

Originally Posted by tymen1

Have a look at this............


By tymen1 at 2009-01-16


Which group do you think you are in?

Since I arrived on this forum, the number of new posters has increased enormously.

We know that forex is a closed loop.
That is, your gain is someone else's loss.

In that sense I suspect that a lot of the posters here now will not be here at the end of the year.
We have no idea as to who will drop out and who will survive.
It is wait and see.

However, if you follow this thread and become a dedicated candlestick/price action trader, then you will have a powerful edge or advantage, and the probability that you will survive will be greatly increased.

Very interesting, may I ask where that pie chart comes from?

Nice to see you back here now. Will follow your thread with interest.

[husky_1]

I know the starc band code for MT4 took a few minutes for me to find.

Here is the code for those that need it. Copy and past the code into a notepad document and save it as "Starc_Bands.mq4" under your MT4 indicators directory Ex. (c:\program files\MT4\Experts\Indicators\)
Once save, open the file in metaeditor and compile, then finally it should appear in metatrader.

//+------------------------------------------------------------------+
//| STARCBands.mq4                                                   |
//| Copyright © 2005, scorpion@fxfisherman.com                       |
//| http://www.fxfisherman.com/                                      |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2005, scorpion@fxfisherman.com"
#property link "http://www.fxfisherman.com/"

#property indicator_chart_window
#property indicator_buffers 3
#property indicator_color1 Red
#property indicator_color2 Red
#property indicator_color3 Red

//---- indicator parameters
extern int MA_Period=13;
extern int ATR_Period=21;
extern double KATR=1.5;
extern int Shift=1;
extern color UpperColor=Red;
extern color MiddleColor=Red;
extern color LowerColor=Red;

//---- buffers
double MovingBuffer[];
double UpperBuffer[];
double LowerBuffer[];

//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
  //---- indicators
  SetIndexStyle(0,DRAW_NONE,0,1,MiddleColor);
  SetIndexBuffer(0,MovingBuffer);
  SetIndexStyle(1,DRAW_LINE,0,3,UpperColor);
  SetIndexBuffer(1,UpperBuffer);
  SetIndexStyle(2,DRAW_LINE,0,3,LowerColor);
  SetIndexBuffer(2,LowerBuffer);
  //----
  SetIndexDrawBegin(0,MA_Period+Shift);
  SetIndexDrawBegin(1,ATR_Period+Shift);
  SetIndexDrawBegin(2,ATR_Period+Shift);
  //----
  return(0);
}

//+------------------------------------------------------------------+
//| Bollinger Bands |
//+------------------------------------------------------------------+
int start()
{
  int i,k,counted_bars=IndicatorCounted();
  
  //----
  if(Bars<=MA_Period) return(0);
  
  //---- initial zero
  if(counted_bars<1)
  for(i=1;i<=MA_Period;i++)
  {
    MovingBuffer[Bars-i]=EMPTY_VALUE;
    UpperBuffer[Bars-i]=EMPTY_VALUE;
    LowerBuffer[Bars-i]=EMPTY_VALUE;
  }
  
  //----
  int limit=Bars-counted_bars;
  if(counted_bars>0) limit++;
  for(i=0; i<limit; i++)
  {
    MovingBuffer[i] = iMA(NULL,0,MA_Period,Shift,MODE_EMA,PRICE_CLOSE,i);
    UpperBuffer[i] = MovingBuffer[i] + (KATR * iATR(NULL,0,ATR_Period,i+Shift));
    LowerBuffer[i] = MovingBuffer[i] - (KATR * iATR(NULL,0,ATR_Period,i+Shift));
  }
  
  //----
  return(0);
}

//+----------scorpion@fxfisherman.com--------------------------------+

[carraroe]

Hi Tymen,
You could become every forum member's favourite teacher!!

[damo989]

Good to see ya back tymen. Followed you through the first thread and i will be following this one very closely.