So, I am not quite sure how your trading, but I just got an entry, and made some paper trades.
I entered a paper trade on both UsdCad and the cad futures, so we can see how they both function, but I only showed a picture of UsdCad to the right. So, I’m long USDCad at the top white arrow in my picture. My stop loss is below the support around the bottom white arrow. My goal here is to create a trade that follows this trend and creates a trade that has a very favorable risk to reward ratio. I think that all traders need to realize that risk to reward ratio is pretty much the foundation that allows traders to be successful. They have to build a trading plan that revolves around it and allows them to achieve it. I think it’s in the human nature to end up trading such that one has a very bad risk to reward ratio. They cut off winners when they have a little profit. Then, they let losers run and hope they come back. So, they have to figure out how to beat the human nature. I like to keep things simple, so I see markets like this. Trending markets tend to break support or resistance. Sideways markets tend to hold support or resistance. Sideways trading seems attractive, but tends to create trades that have much smaller risk to reward ratios. Waiting for trends can require a lot of patience. Now, with my trading, I think of it this way. The market breaks resistance. It retraces. It holds up the new prices. This is a characteristic of a trending market. Most people use indicators like the stochastic and never really understand it. Personally, I don’t really think I understand it either. But, if they don’t understand really how it works, or why it works, why the heck would they ever want to use it? It might be an ok indicator for trading bounces in sideways markets. But, if you want to trade sideways markets, just wait for resistance or support to hold, and trade off an engulfing pattern that symbolizes strength. With this trade in UsdCad, it has broken resistance solidly, and it has retraced and seems to be holding up the new prices. It has engulfed and seems to be showing strength in my direction. It actually seemed to reject the 61.8 level on the fibonacci retracement. Now, even though I don’t use indicators, I do look at fibonacci retracements. While I don’t think professionals generally use things like the stochastic, I think they do use fibonacci retracements. The fact that they use them makes it work. So, I think that since people use it and believe in it, it creates a self fulfilling prophecy. The fact that it consistently bounces off these levels shows that big people who move the market are looking at it. Now, it doesn’t always bounce off these levels, but it does it enough that I think it is not a coincidence. Small resistance breaks can be a characteristic of some sideways markets like flags and wedges, and these breaks don’t tend to retrace and hold up the new prices. My risk here seems kind of high, but I can seek to hold this trade through the next leg of this trend. I will break the trade even and lock in profit at successive support levels as per my trading plan. I really only use these ma and keltner channels indicators at all for an easy visual indicator of the general momentum of a market. The trend characteristics can be seen without them.