I was doing exactly that, switched from indicators to chart analysis to trade the BoE announcement, I had a trade setup above and below the trend on GBPUSD and that would have worked, my trade on the FTSE100 was based on momentum.
Then, I think you are right and know what has to be done.
Just curious, canāt you accomplish the first 2 with a tight stop loss? If it nosedives or slowly loses, it hits the SL and you donāt have to screw with it manually.
Donāt get me wrong, Iām not being critical, just thinking about how I could incorporate some of this into my thing. My strategy uses dynamic take profit and stop loss values based on current conditions. Every now and then it takes big swings, and in the rare percentage of times it gets those big ones wrong, it can HURT! Iām thinking about changing that up. Maybe if itās a WAP (Wide *** position). I tell robot not to tolerate as much negativityā¦
This deserves a much longer response but those 5 points are brilliant. Did Tom Hougaard write anything on the subject?
Iām going to work those into my exit plans as theyāre very simple but effective.
I donāt completely agree with some of these points (no disrespect whatsoever), but everyone has their own style. Price action will tell you what you need to know. I like to put my SL at specific areas where when breached, will close the trade.
Letās look at a trending market as an example of a long-term trade. If you zoom out you can get a much better picture:
In this example, when price breaches the pattern of higher lows, the trade is cut off. This method is simple and involves you moving your SL manually, every few days. You could also use a trailing stop, which mimics this, but can close you out prematurely with volatility. (I donāt use TLās).
A ranging market is a bit more tricky. Your SL could be based on several things like support/resistance, swing highs/lows, fib levels, MAās, etcā¦ (I trade supply/demand and use swing highs/lows for my SL).
But I believe in always having a concrete plan that includes a hard stop at a preset level that should be wide enough to weather daily volatility. I canāt count the number of times Iāve watched price fall and fall, so I close the trade just to see it shoot back up into what would have been profit.
Long term trades need occasional maintenance, short-term trades should be set and forget. But this takes time and experience. So keep practicing.
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Information overload with multiple indicators conflictingā¦try not to clog your interface with indicators less is betterā¦concentrate more on price action
Hi Ameorogun,
Nothing Iām doing here is to do with the indicators, I have them for a seperate analysis, this trade was made based on price action and a strategy based around trading the news.
I think more what I took from the 5 points is that analysing the market in such a way helps you think about momentum and what is happening with the price. What Iāll take away is that I need to think about the prices action as a whole and not just what I think itās doing right now.
I Range trade therefore I do the technical analysis and use News Event as a Confluence factor
I say from my personal experience, I trade a lot on the same day and gain profit on all trades.
If I see that the market is volatile, then I close that trade, and when it takes an impulsive form, I enter the trade.
Ah, if it was that easy. Hopefully, when we enter our āgoodā trades according to our strategy, we have a positive probability mindset. We just donāt know whatās going to happen, and accordingly we maintain our RRR as usual. Only when the trade is up and running for 10 -15 minutes we see whether the probability of a winning trade is likely or not. Then itās our decision whether to rely on āhopeā or just accept itās more likely we got it wrong.
As I see it, most new traders put a stronger emphasis on being right, than cutting losses which causes them pain. Itās a psychological emotion that we need to control. Remember, thereās always another trade awaiting, why waste time and money on a loser.
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The explanation came from an Youtube Vid featuring a longevity successful institutional pro trader, whose interviews covered most aspects of how to trade profitably - IMO, a more conservative pro than Tom. He also advocated traders first aim is to reach the breakeven point ASAP - again saving money, which is critical to being profitable long term.
While some may disagree, the reality is in how our trade is performing. We need to make a decision whether to rely on factual evidence, or hope for the best. Which is understandable - trust our system to deliver - which I respect, but sometimes I get it wrong, as we all doā¦
As for me, Iād rather lose small than lose big. And by cutting, it doesnāt stop us re-entering the trade at a better point - which is what traders overlookā¦
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Tom Hougaard doesnāt look like a pro trader.
As long as you honestly believe this and do your best to āallow the learning to happenā, youāll be fine.
Going to be honest- this was a major red flag, and something I did not expect you to say. We all have our own reasons, however, my personal recommendation would be to stop this immediately. If Iām understanding it correctly, youāre attending some web-based discussion where youāre digesting someone elseās analysis of the market?
Of course.
Youāll never stop learning. The day you think youāve mastered it, the market will remind you who is really in control. The only measuring stick you should apply is one that is reasonably set based on your prior executions + a few % points.
This is key, but, it can also lead to you missing out on a string of successful trades. So, rather than just disappearing, itās good to have a hobby that allows you to channel some of that stress out- archery, exercise, martial arts, video games-- anything stimulating and challenging. Revenge trading sucks, missing out on a string of 2 3 4 5 trades sucks more.
The quicker you can reset and just accept that losses are always going to happen and are as much a part of the game as wins, the quicker youāll get to place where trading is robotic and systematic.
Unless you write an algo that trades 100% of the time without you tuning it, then emotions are always going to be a part of the equation. Even thenā algos need to be tweaked from time to time. We are human beings, not machines. The market is the manifestation of human emotions- fear vs. greed. Trying to take emotions out of the game is impossible. Wins make you feel good, losses make you feel bad. Everyone just processes them differently.
The crazy thing is that you can actually trade pure fear- it is a commodity. The purest form is the VIX. However, when you take a step further to understand implied volatilities and their nature- thatās where the edge truly lies.
My tips would be
- Let your trade play out - give it the breathing room it needs i.e will it take x amount of hours/ days/ week to play out. This is a good way to develop your edge and consistency.
- Avoid instant gratification
- Be ok with being in the red and understand itās all part of the process
- Determine your RR ratio. If youāre struggling to hold a trade you might be risking too much.
- Trade with a black chart
Hope that helps!
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Sorry let me clarify, itās not one person speaking about their opinion and me copying, its actually a group of people all doing different strategies on morning entries and then just a bit of banter and discussion at the end where we all talk about our trades and analyse, its actually been quite helpful. Itās more like a digital hangout I guess?
I avoid the one-man-band analysis āexpertsā at all costs, so donāt worry Iām not that naĆÆve haha
OK Iāll give this a try, I had a mixed week this week, but being able to sit it out and keep my mind focused would definitely help.
Do you mind elaborating a little bit here? This sounds intersting.
Also, since you last spoke Iāve started reading āTrading in the Zoneā which is turning into a really good read.
Can you elaborate on what you mean by this?
My RR is 1:2, so far this has been working out, but I sometimes come out at 1.5 if its choppy or looks like its going to reverse.
This is something I actually did before seeing this and youāre right it absolutely does help!
By avoiding instant gratification I mean avoiding the desire to see a trade go into profit straight away/ zero drawdown. Something I need to remind myself so that I am not constantly checking my phone every 5 minutes or allowing trades to play out. 
This is pretty much all Iām working on at the minute, the issue is that the trades Iāve been brave enough to hold have stopped out! Just my luck.
Itās better to lose confidently than make a quick exit though I guess?
All part of the fun 