Feeling a bit chatityty chatitity so i thought to share this trade setup.
The Argument
I dont know when price will go up or down but i do know price will retrace after a rally and thats where I come in. After a rally up, I will sell . After a rally down , I will buy.
Advantage
Stop will hardly ever be touched
Trade mostly ended positive
Disadvantage
Bad Risk and Reward ratio
Probability to enter a trade in a day is less than 50% most time
What we need
1.simple moving average (12)
2.simple moving average (200)
3.some subjective horisontal , ascending / decending line
3.statistic of daily bar (high - low) the more days , the better
4.trade will be done on hourly bar
5.trade will be close after a daily bar close (in case of emergency, trade will carry on up to 5 hours after daily bar close)
point 3.
If you put in an excel sheet the difference from high and low bar every day on daily chart, you will see the behaviour of the price. For example on my data the GBP/USD is averaging 180 pips / day
The extereme move daily:
326 pips (1 time)
261 pips (1 time)
my data is about 30 days , I know there is time when it could move 600 pips or more but i have to ignore that considering the market right now.
Entering a trade
risk is about 200 pips with multiple entry at different price. After price move in either direction, I will add the price by 180 on the low / high (intraday) with stop 100 - 110 pips exceeding the 261 pips. Target is about 40 pips.
If orders are triggered will close trade after daily bar close, if not break even, will wait up to 5 hours… limit is 40 pips or after price touch SMA 12
Friday is a no trading for me unless price will approach its average move by 11 gmt and if i think i can get out before 13:30 gmt where many economics data are release ,and beside the big player are moving around near the end of trading day, making an unexpected jump ,
For G/U, the average daily move is 180 pips and max / day is 260 pips (1 time). (as per my 40 days data - 1 time it also moved to 326pips , I’ll ignore it).
Entry for sell will be = intraday low + 180 pips
For today , current intra low is 16112 at 07:53 gmt , so 16112 + 180 = 16292 or therebouts,
my entry for today
Sell 16290 stop 16390
Sell 16330 stop 16390
Sell x2 16360 stop 16390
Total Risk 220 pips
my stop is 16390-16112 = 272pips above it previous high of 260pips so the price will be very difficult to pass it in one day
also I put a buy order
current intra high 16158 - 180pips = 15978 or therebouts
Buy 15980 stop 15880
Buy 15950 stop 15880
Buyx2 15910 stop 15880
Total risk 230 pips
and if intraday low/high change , I’ll have to adjust accordingly
about the trendline, price will probably stop at that line and will meet the SMA 12 before anything else will happen, TP at 40 pips or if price meet the SMA 12. I draw two line , the second line is another probability if price break first line. And the drawing is totally subjective to your liking as long as it coiincide with the average 180 pips move.
Now , today is Friday will close all order before 13:30gmt and call it a day
as this theory , the support line will allign with the intraday day high (16066 - average daily move 180) should be reliable for today. Tomorrow is a new day and try to spot the s/r.
mmm ,this is the second month i tried this method. January was around 120pips gain. My target is only around 100 - 150 pips / month is only realistic. As I only enter 1 lot / day (even my second n third layer were triggered - not massive profit - if carried over next day sometime have to cut loss) . It is 20 trading days / month (takeaway friday) is 15 days, and from 15 days the probability to enter trade is only about 7 days.
2009
I tried the no stop loss trading , been profitable at first, but when i got floating loss of 400 pips and 4 lots thats scare the hell out of me but managed to wiggle myself out unharm after about 2 month ,so i abandoned that,the last quarter (all ended green) i tried incorporating pivot points and then now the ‘buy low sell high’ …
Still trying to get the best risk reward composition ,
Friday
watching with excitement when it start to go down and nearing the entry order but , time to call it a day
Thursday
small move in price range, did not trigger anything,
Wednesday
again a nice setting for G/U , variance of high low at 190 pips. If you are lucky enough to follow the market till it make intraday high , should be able to enter buy order and limit that filled
welcome to the world of forex where opportunity and death lies ahead of you , pick your step and be wise as the market will show no mercy. Understand it and embrace it , it will give you knowledge and understanding so you may gain proceed as precious as gold — how’s my poem ? ----
Garcia, the best thing to do is the ‘school’ section in babypips. It is the best, don’t need to buy all those expensive hard cover book with forex title, it is here, all is available. In the forum , many of helpful experience trader shared their knowledge,
From me ,
The Theory
Price will move in a range daily. For example: GBP/USD 180 pips/day, if you see in the hourly chart that price already move to 180 pips thats mean it is about to retrace , so watch your step, and also have to be aware of the news, like yesterday there is the ‘Greece’ news , so it is (for me) best to stay away from EUR/USD cause the price may move outside its nature (including friday, most time price will move outside its nature) ,the same for GBP/USD
Only Friday is a good setting for trade G/U Variance at 188 if i entered i would have gone out before 13:30 gmt, too bad after a terrible battle at eur/usd in which no retracement and two days , end up wounded.
I just compiled asian session data for G/U and started my first trade on thursday night just after US rate news and waiting to buy low ,and woww no retracement at all in asian session , ended up scalping (not really my style) , and got out just before GBP news, but though this week still up 10 pips. God has mercy,
but managed to wiggle myself out unharm after about 2 month ,so i abandoned that,the last quarter (all ended green) i tried incorporating pivot points and then now the ‘buy low sell high’ …
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