To be honest I wouldn’t call favoring quality over quantity a sacrifice.
In fact I’d call that a smart selection priority.
I agree in principle but it depends each trader’s risk tolerances and objectives.
For example, one might have a method that generates 3 trades a day giving an average weekly return of 8R. One might note that adding in a filter, such as an hourly stochastic hook, increases the win rate to >50% but reduces the volume to 3 trades a week, with a return of 4R.
In such a scenario one trader may consider that beneficial due to the smoothed equity curve or satisfaction of being right more often whereas another may feel it’s not meeting their required trade frequency of level of returns they are seeking.
It really is a case of finding out what your objectives are as a trader and then building the strategy around that, for there is no right way to tackle these markets.
For me, the most important quality filter I use is the percentage of ADR remaining - particularly for intraday bets (which I almost exclusively do). Avoiding trades that occur after a large chunk of the ADR has been used up keeps me out of trading at a time when the market is at risk of a reversal. Sure it sometimes keeps me out when markets are being aggressively punted in a single direction and the range markers are ignored but that’s the nature of filters - they aim to reduce the losses whilst sacrificing a few of the winners in the process.
As long as the filter ‘makes sense’, that is it cuts out more losses than winners AND tailors the method to your objectives, then you’re good to add it into the mix.
Your adr filter would definitely have saved your bacon today on the Aussie pairs, especially if you were seeking follow through in europe.
Do you use the divergence aspect of stochastic on the 1 & 4 hour charts when assisting with & planning your intraday entries Matt?
I read on the other thread where Carll has recommended folks pay particular attention to when price is pulling back in a trend & also signalling a divergence.
It doesn’t occur as often as you’d think, but when it does the resulting momentum move is usually quite impressive. It will also almost always mirror a 15 minute hook at the same level. Not always tradeable mind you, especially if you’re restricted to trading out of a specific time zone, but when it matches up with your adr filter it’s a pretty powerful confirmation.
For sure. Aussie chewed through a good 75% of the ADR in the Asian session and it would have taken something major to keep that momentum going through the European session. For intraday bets that would have had it off the short list for me but those taking a longer-term view might have considered a short from a longer timeframe once it retraced back to the previous week low/Asian session high/round number at 1.03.
I’ll certainly be taking a closer look at the pair tomorrow to see if it offers up any opportunities to join the short bias.
I don’t use it as part of my pre-trade criteria but I agree that it’s an added bonus when it occurs. The stochastic does a reasonable job of highlighting the natural rhythm of the market but ultimately it’s a crutch to aid in identifying those swings and my aim is to remove them from the charts in due course once I’m confident that I can be in tune to the markets, so I use them as a view on where the market is at or a confirmer but I’m tending to be more flexible than requiring a tag of 80/20 or needing to see divergence as an entry criteria.
However Cable is showing a much stronger trend at the moment. It failed to make any headway above the PWH today so tomorrow could prove interesting. An ideal scenario would be a break above and then a drop back to retest giving us some options for triggering in.
Daily is above 5SMA and Stochastic is above 50. On the hourly we have the 60SMA approach to showing the trend; both are signalling a strong up trend and that we should be looking for longs.
Nice. Very good job. Well executed. I appreciate people sharing real trades, even if I don’t trade the same way I learn new things that I might be able to apply to my trading. Continue to post your experiences. Good luck.
NZDJPY has been displaying some strong directional bias and recently cleared and completed a pull-back to the 6200 zone which coincides with the previous week low. As long as price remains above here then a bullish bias buying pullbacks is warranted.
The previous week high is currently providing some short-term resistance and price is offering a potential setup to test the strength of any break with a stop below the minor S+R at 6360 (current day low). For the more conservative you could wait for a potentially deeper pull-back to around the 6300-6320 area.
The only way to get any reasonable estimate for a goal is to start trading and record the monthly results. Most new traders start with losing months, so the goal should then be to become a break even trader and then from there to go into consistent profitability.
I think you lay it out very well in your post. Personally I don’t have any specific goals for monthly returns, but if I had to say something I would say that anything above 10% is excellent.
Dead Pips. Dead Thread?
There’s not much to add these days as there are far superior threads covering this material, although one has to look a bit harder to find them these days as they seem to have fallen ‘out of fashion’.
However, the methodology still works - of course. The breakdown in Gold today was well flagged for entry with a variety of triggers, including the three ducks, or the more aggressive 15 min IB. I took the more conservative approach with the break of the previous day low and, despite some slight slippage on the entry due to the 10-sec plunge, still pulled 3R out for the day.
There was more to be had as it turns out but I got out when my method told me to. Can’t say fairer than that.
I hope you’re all still trading well and looking forward to the holiday season. Take care as we head into the next few weeks as liquidity dries up.
Matt
Hey!
Good to see you around Matt! I guess as we find ourselves trading well we tend to drift away from the forums. I stole some pips from the Crude Oil Stocks news today myself, missed gold completely. Everything well with you and the lady?
Matt, do you consider expedient to trade the days near holdiays? What about volatilty of the major currency pairs? Should we expect enhancement of fluctuations or it gonna damp down? Any forecast from you on next forex year (I would like to hear your forecast on EUR/USD pair)?
The Inventory news yes. Although I do trade stocks as well nowadays, if investing in funds can be called trading… I’ve gotten a account with Saxo Bank, a “real” stocks/futures/forex/&etc broker based in Copenhagen… but I find I still like my dear old Oanda retail platform better.
Like you I’ve moved this year, uprooted myself and shifted to a new city and also living together with the gf now… It takes a lot of energy for sure. Starting to feel settled now finally. I check up on you sometimes on Facebook 
so I knew you were moving. I’m glad it’s going well for you!
Didn’t make it to the UK, not this fall either, maybe next spring could be possible. If so I will let you know.
All the best!
Another year goes by and the method still works a charm.
no fuss, no drama
ticking along under the radar
business as usual
just how it should be!
Looks like a good old thread I can learn from. 
I’ve been reading MG99’s swing trading thread and feel like I’m finally starting to get a clue about picking trends. My demo’s are looking good…, but I still need to learn when to exit. Money management looks important too. Well, now that I have a number of winning trades(presently anyway! lol)I can start learning how to cash in & repeat.
Any tips or recommended threads would be great.
thanks,
Hey thanks for stopping by. Certainly if you can identify a trend and trade with it rather than against it then you’re setting yourself up for success. But know the limitations of that approach and stay out when an obvious trend is not apparent - forcing trades because you feel you need to be ‘in’ is not going to end well.
Some might argue that your approach to exits and money management are more important than your entry. If you plot the major areas on the chart where price has paused or reversed on the last trip up or down then you’ve got a good idea of where price might be headed and can manage your trade accordingly. Whatever approach you take, make sure you are aware of the benefits and risks of your chosen approach. Don’t fall into the classic mistake of second guessing or moving stops - make your plan and stick to it in the knowledge that it works for you.
For threads, I have a very short list. Look out for the Alternative Technical Templates series. There’s three of them, here’s the first: 301 Moved Permanently
Everything you need to know is in there. Posts sometimes go missing on this forum so watch out for the ATT ‘book’ PDF that’s linked in there somewhere, it has snippets captured from long-since departed posts all of which add to a volume of great advice and guidance.
With those three threads you have all you need. If you find yourself wandering off into related threads and find value there then great but don’t wander too far from the path. It’s a lot of reading but take it slowly and [I]understand[/I] it rather than just consume it. Then ask questions - I know the crew are still around and willing to offer a hint when you need it.
Matt,
Thanks for pointing me to the Alternative Technical Templates threads.
I’d also recommend perusing the 16 candles thread. Similar material to ATT but focusing more on pull-back entries with the trend and reducing the emphasis on S&R. Just read it through and the core structure should become clear after a few pages.
http://forums.babypips.com/the-melting-pot/72819-16-candles-58-edsel.html
Gold gave a nice 3 Ducks entry today. Rinse repeat.
