Thanks for the prompt reply! I agree with what you said, my system is based on consistent compounding as well(if only doubling my account in a week was possible…).
Sounds like you’ve got a sound, conservative goal, I wish you best of luck, it sounds very do-able considering your system, and overall plan. The only thing I find troubling is the idea of risking 5% per trade. I usually risk 2% per trade, but there was a time where I risked 4%, although it went well, the psychology, and emotions killed. You probably have a much larger risk tolerance than I, but I don’t know the win rate of your system to saw how the 5% risk will do.
But 3 winners in a month sounds very realistic! I wish you best of luck, and once I understand your system more, I will follow you through your journey.
Hopefully as I post live trades day by day it will become clearer. I know the writeup intro had a lot of rules but it’s quite easy now I find to follow.
In the risk category, right now I’m trading a small account and its not really money I’m worried about. That being said I’d still like to train my psyche to deter emotion while trading and also test the limits of this system. When time comes, I will most likely adopt a more conservative risk strategy of 1-2% per trade.
Apologies, I could not make it to the forums to post as the trade occurred. Here is how it went though:
At 09:00EST here is what the chart looked like:
I’ve purposely chopped off the next candle so we can analyze as if it were real time. Note the previous candles. We had a bullish pin bar at 5amEST and then a range of trading without significant direction. Also, the 4H chart shows us we are right in a support zone.
Back on the 1H chart, we also note that the candle formed shows us bullish intention. The SMA is also pointing upward.
We enter on the open of the 09:00EST candle for a long position.
This is where money management saves us. The trade continues upward and JUST makes it to the 25pip profit point. This is the level at which we move our stop to BE. Quite promptly after that, the market falls off and we are out for no loss.
I will continue trading like this, however may experiment with moving the stop to BE+5 instead of just BE to keep some profit out of being exposed to the markets.
I was just wondering if you have paper traded this system before taking it live? If so, what’s the win rate on it? And you stated you are aiming to grab 50 pips each trade, but what are the SL like? Because that determines the overall R:R ratio.
My biggest concern trading with this system is that I may be trading low reward compared to risk setups… and the main way to make up for a low R-Multiple is a high win rate.
Yep, that’s how I see it, minimizing any potential losses, capital preservation, etc.
Paper traded literally on paper haha. Took notes on why I would take an entry, why not, all that sort of thing and that helped me come up with the rules for trade management and risk. For the span of time I paper traded it, (looked at a span of 5 months, looked at the one candle every day) I had a win ratio of about 78% give or take a few decimals. One thing to note however is I include a break even trade or a stop out for profit as a winner.
In terms of the risk being high sometimes, I never take a trade with a RR ratio below 0.8:1. Basically if I aim for 50 pips, my SL placement can be no more than 60 pips. I understand having the lopsided RR is not good, probably not even recommended. Hence the need still to refine and that’s why I came here to the forums.
Hopefully if others have some input or try it out we can come up with something a little better.
I’ve also been thinking about the point mentioned about taking 50pips as a TP.
I may begin looking at the 4H chart when the trade is near completion (on the winning side of course) and look to see if there are viable situations where the trade can be left running (either a portion or the whole thing). This most likely will depend on the day’s range, S/R on the 4H and daily charts, news announcements etc.
Any input on this? Or any one who knows more about when/when not to leave a trade running after meeting the initial TP, I’d love to hear more
Just dropped a trade on the euro. Overall trend still showing bullish tendency with a bullish engulfing candle on the 1H at 09:00EST. Range for the day around 130 pips. This is a risky trade though as we’re sitting right at hourly resistance.
I would say your best bet would be to look at the ADR while keeping S&R in mind, perhaps even pivots. Either way, it would be awesome to maximize the reward of a winner if the market conditions shows that it is viable.
120SMA is flat, however looking at the hourly we are now making Lower Highs. 4H shows we’ve come off from a resistance level and are trading down to a support level. The daily chart shows the same as we are trading off the resistance provided by the trendline.
Taking into account the ADR, 5 day average is 138 pips, today has provided 170 pips of movement in a long position. Thus, a short could be viable.
Today’s trade shows a 50 pip TP right smack in 4H support so unless the move has substantial momentum I doubt I’ll let it run. Pivots have never worked for me so I don’t think I’ll use them for this method but the ADR is a great tool and should help.
UPDATE: I closed the trade manually for +44 pips, reason being momentum has slowed significantly as this drop was fairly quick + were in the middle of that 4H support area. I’m fine with that trade. So far still negative for the week but making forward progress now.
Just a head’s up I won’t be able to trade tomorrow morning but I will post the analysis on whether I would have taken the trade or not right @ 0900EST. I just don’t have a way to monitor the trade while I’m at work start 0930
On the 1H chart, it is easy to see we are at 1H resistance formed over the past 3 days (since the 19th), the candle pattern formed signals a buy however the 120SMA is flat (no discernible direction) and the range for the day is already ~135 pips.
Looking at the 4H chart, we can see we are right at a level of resistance, same with the daily. Although breakouts may occur at the start of a session, the ranging nature of the euro right now means we could just as easily see a drop.
I apologize for not having posted for the past three days. Exams have kept me super busy; eyeballing the chart really quick I don’t think I missed anything major so far. Here’s the past three day’s 0800EST candles:
The Monday candle formed no discernible pattern and at the time, the 120SMA is flat providing no clear direction. No trade on Monday.
Tuesday has a strong bearish candle BUT the 120SMA is still pointing for a long. No trade there either. Had you decided to take the trade you would only be in profit for 30 pips after which some whipsawing takes you out at break even (refer to a 15M chart on Oct 25th if you want to see it)
Today’s chart at 0900 showed heavy ranging with a flattened 120SMA. That specific candle did not for a doji to attempt short, and did not provide a strong enough bullish signal to go long.
So 3 day’s no trades. Lets see if anything comes up tomorrow when I’ll finally be able to get back to this consistently.
Today’s trade was a judgement call that didn’t completely follow the rules of the system but worked out.
Trade signalled long on the 1H, 120SMA was up, bullish candle. Range for the day however had already exceeded 180 pips. Reason I took the trade is based on the 4H chart, we had pushed through one resistance level and had momentum behind us to reach the second, which would still need more than 50 pips of movement to the upside.
Took the trade at 0900EST. Out at 0913 with +50 pips.
my daily range was showing around 100pips…