So, thanks to some smart people out there, I have a trading strategy. I think that is genius. But, here’s where I have tailored the strategy to myself. From the beginning of my history, I have always knew to keep things into perspective. Proper perspective. And this is a huge dynamic to the strategy.
Man Journal, you might remember when I first started going live, that I had a similar thinking. I think it has merit.
I’m going to be trading in different time frames.
Monthly.
Weekly.
Daily.
Even 4 hr. Time frames.
I have the system in place. All my charts will look like that, except in the different time frames. I will trade the same way, but with one slight difference. The position size. This is what I have decided. (Boy have I had to relearn money management! )
Monthly – 1% of the account.
Weekly – 2% of the account.
Daily -----3% of the account.
4 HR ------4% of the account.
I use the BP’s position size calculator. The biggest thing I need to come up with is the stop loss, to complete that calculation. I will use the purple line for that. So, when I get in, it will have to be on the correct side of that line, with a cushion of pips back to that line. Basically just far enough in, in which I will have a stop loss and also a way to calculate the position size, to get in with. Of course it’s going to be rocky at the start. Price can toggle that line for some time. Who knows how long price will stay around there. And then even to dart out in the direction I am thinking it will go. It’s not going to be easy, but I need to remember that I want to be on the correct side. And then to stay in until the run runs out.
Journal, my plan is to demo this. And I have been now, for a week. The plan is to continue to demo until I have no doubt that this is going to work. I need to experience the bad times as well as the good times. I need to work out the losses. How much am I able to lose before I can get on a lengthy ride. But most of all, I need to see this dynamic work out. And that is trading in the different time frames. Normally, when there is a major trend change occurring, it will play out, first, in the 4 HR time frame. Then proceed into the Daily. And then eventually up to the Monthly. So, I’m figuring it should be like this. I could be making money in the Monthly time frame, but it should be with such a small amount at stake. Those trades should be running for months and months at a time. Then there’s the weekly time frame trades. Those will have a little bit more on it, and to be running for weeks at a time. The reason why is because I am looking at the close of the candles more than the actual present price. I believe more in where price wants to end up, rather than where price stretches to.
So, let me show you some charts of what trades I’ve been doing so far.
Here’s EUR/AUD on the 4hr chart. So this is a 4HR trade.
If you look to the left, price was trending below the purple line. But it went above it. But, first off, I have the bias for the Comms. So, I’ve been looking for the Comms over the Majors. And this was evident on the left side. But, being on such a shorter time frame, price naturally will pop up over the line. That’s what happened there in the middle of the chart. Price shot up at an extreme high in such a short time span. That makes the yellow line move high pretty quickly. Even over the green and purple lines. But the longer trend is the purple line, which that line levels out. That gives me a good opportunity to get back in on the trend going south. That’s what I did, there at the arrows. You can see that the yellow line (short term price average) crosses over both green and purple lines. And that’s my goal, to get in as close to the purple line as possible. Man, is this working out good. So, how about the stop loss? Well, I must periodically move that because that is the purple line, and that moves a lot. I guess it’s a good thing because it seems to act like a trailing stop to some extent. So, the plan here is to ride this run on out till I get stopped out by the purple line. Now look to the left, on the chart. See how price rose up and closed above the purple line? But, the yellow line did not move up that far. It didn’t even cross over the green line. So, should I wait till price closes above the purple line? Or when the yellow line crosses over the purple line? Well, I need to remember my rule…I do not want to be on the other side of the purple line. So I choose price, and not the yellow line. I could have gotten back in on that trade. Especially when they were already lined-up.
I’ll come back with more charts.
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