that’s right… @dudupips of course it did.
here… let me help you out a bit ok.
LET’S DO SOME BASIC LOGICAL ANALYSIS
(and this is not by any means and exhausted list of things, FYI, i’m not even going to consider news or correlating pairs)
so. You’re trading AUD USD right on DAILY timeframe
first lets’ look at Monthly for direction
as you can clearly see the overall direction / Trend is UP
and can we make this logical assumption
FACT : if price drops below that red line, you can say with some degree of certainty that it’s on a run down.
so that’s point #1
Now let’s look at Daily
The green line is where you got stopped out. i’m just putting it here as reference… ok
now look at this
you should have drawn a trendline like this and concluded that if price goes below it it’s on a run down.
AS IT DID
you then wait for it to form the bottom and then draw another lines like this
you now conclude this…
FACT : if that bottom red line is not breached, Price can only do 2 things
Thing 1. it can go down ONLY TO THE RED LINE then continue going along the red line UP
Thing 2. it can only go UP
Makes Sense ? right ?
but, if it breaks the red line. You wait for it to form the next bottom section (double bottoms) if that’s what you want to call it.
so WE KNOW IT’S GOING UP… so… don’t fight it . You are Trading Long… ok
that being the case, you need to establish and entry point and risk
this is what you now do…
Now. i’m going to add a fib chart for 1 REASON ONLY…
TO SHOW YOU WHERE THE HALF WAY POINT IS ON THE RALLY UP (The 50% Line)
can you see it
can you also see how when the trend was going up IT TOOK A BREAK AT THAT POINT
and you aslo see how it came back to this point
yes it went down to the 61.8% sure, but it went back up again
it then retested the same bloody point on that spike down
then came back to it… HOW MANY HINTS DO YOU NEED
now that you know the 50% Mark, let’s put a black line there and get rid of the Fib chart
let’s also draw a lavender box and divide it in half
and then into quarters
NOTICE… THAT THE BOTTOM BLACK LINE WHICH IS THE HALF WAY POINT OF THE UPTREND ALSO MARKS THE BOTTOM QUARTER OF THE CURRENT LAVENDER BOX
the lavender box is representing the range that is now happening
the black line that is near the green line is the MIDDLE LINE of the range
YOU NEVER ENTER ON THE MIDDLE LINE
the middle line is like the safety point for the price if you will.
Price does something… it then goes back to the mid line
IN TRADING YOU ALWAYS HAVE 2 DECISIONS TO MAKE
ARE YOU WAITING FOR SOMETHING ?
if YES… then Wait for it
if NO… Then put a trade down
if you are not waiting for anything and you don’t have a trade down YOU ARE TRADING INCORRECTLY.
now HERE ARE YOUR RULES SO YOU DON’T GET STOPPED OUT
you wait until price comes back down BELOW THE BOTTOM BLACK LINE
aka… INTO THE "BUY AREA"
hence, you are buying into Weakness
or if you are selling
you wait for the price to go up to the sell area then you sell ABOVE THE BLUE LINE
BUT NEVER ENTER IN THE MIDDLE AREA (this is the area where you put your TAKE PROFITS
so… Buy Anywhere in the Buy Area (Aim as low as possible) but, anywhere is fine
then put your Take profit AT LEAST on the middle line if not above it, but NOT MORE THAN HALF WAY BETWEEN THE MID LINE AND THE TOP BLUE LINE (don’t get cheeky, don’t get greedy) ok
but you never ever ever enter at the mid line… that’s just plain stupid
so now that you understand
let me give you a setup ENTRY, STOP LOSS AND TAKE PROFIT OK
ENTRY = YELLOW LINE
TAKE PROFIT = DARK BLUE LINE
STOP LOSS = RED LINE
I WOULD PLACE THE ENTRY AROUND 0.7788
for the following reasons
it’s below the black line in the buy zone
it is touching 2 Low Points which means that if this range continues it will almost certainly revisit these points.
if it doesn’t, you have no risk and the trade won’t be triggered (sorry, i’m assuming this is a PENDING ORDER)
if it gets triggered IT IS HIGHLY LIKELY that price will increase
Now if it does not
this is where we place our stop loss
STOP LOSS = 0.7720
i place the stop loss here BECAUSE
it’s outside of the range area
the distance from the entry to the stop loss is 68 pips
and for the record spread = 1 pips, but lets assume 3 pips just to be safe… so we need to account for 71 pips
i put it here because I DON’T BELIEVE THAT IT’S HIGHLY LIKELY THAT PRICE WILL HIT THIS POINT
NOW we have 2 Outcomes here
- I could be wrong, in which case i lose 71 pips
- i could be correct WHICH IS MORE HIGHLY LIKELY
hence RISK MANAGEMENT SAYS that I am more likely to profit than to lose over say 30 trades.
so now it’s really just a question of LOT SIZE
so Use 71 pips as a guide
factor in your account balance
deduct your Nominal Margin from the Account Balance
then from that total
find 1% of that total
and from that … FIND YOUR LOT SIZE
Make sure the risk is acceptable
NOW JUST TO TAKE A GUESS.
YOU DID 0.10 LOTS BEFORE, and you got stopped out and you said… THIS IS BAD
so i would say Lower it maybe to 0.05 perhaps
BUT I’LL EAVE THAT FOR YOU TO FIGURE OUT
now as for the take profit
i would probably put it somewhere here
see what i mean, Just above the line but not too high
so the distance between Entry and Take profit is 106 pips
and IT WILL HIT
if you buy it that low, it will almost always come to the centre line
BUT WAIT THERE’S MORE
NOW don’t just be an idiot who let’s it run, because it could come up in profit , just touch the centre line and not reach your T/P… right?
then it could come back down and hit your S/L
so… do this
if the distrance from Entry to Take profit = 106 pips
then , When you get 15 pips in profit… MOVE YOUR STOP LOSS LINE TO BE +1 Pips in profit
then if the price goes 30 pips in profit… MOVE THE S/L to +10 pips in profit
and for every 10 that price moves from here… MOVE IT UP ANOTHER 10 pips
IF YOU DO THIS… YOU CANNOT LOSE
if it hits your Stop Loss YOU WIN
if if hits your Take Profit YOU WIN
you are only really at risk of Loss for a short period of time
now… if it hits your Stop Loss anyway… well. YOU GOTTA SUCK THAT UP and start over
but, if it does… it means it’s going lower and YOU GET A BETTER OPPORTUNITY
does this help you my friend
CAN YOU NOW SEE HOW , WHAT YOU DID WAS SILLY
you bought right on the mid line… hehe
and you traded upside down.
won’t don’t you try this for a bit and see how you guy… AND TELL ME THAT THINGS DON’T GET BETTER
it’s not rocket science.
in a few posts you’ll be like THANKS DUUDE
You’re Welcome mate