Discussion about how to make this trade more profitable

[JSquiff]

Please see the trade that will be referred to below. I am currently trading using the Cowabunga System displayed on this site (it matches my trading style, plan and psychology to a T).

https://www.tradingview.com/x/mHwW6lBI/

So I am currently practice trading and this was a successful trade, aiming for the nearest psychological number which was 1.07850 achieving an R:R of 1:1.06, nothing to write home about, but I aim to be successful and profitable, not rich.

I marked the level for the next psychological number which was 1.07900 which was later reached, however, this was only after the price bounced back of my previous entry.

Overall, I would like to see peoples opinions on how they might approach this trade and what they would put in place to see a higher return, for context if I had stayed until the next PN I would have gotten a 2.44% return, and a 3.75% return at its current high.

Thanks in advance for any advice and discussion.

[ponponwei]

Not too familiar with the Cowabunga system. I’m a n00b myself but would like to chime in anyway!

Aren’t psychological levels typically whole numbers? I remember seeing it here somewhere. Here’s the link:

Psychological Levels - What Are They and How Do They Work?

As the title is simply put - I am looking to get more information on Psychological levels. I want to know what the levels are and how they work. I will be using them on smaller time frames - i.e. 10 and 15min charts as well as higher time frames (just for Support and Resistance confirmation). Any links to websites with information on these levels is also very welcome.

[JSquiff]

Hi ponponwei,

Psychological numbers are more commonly whole numbers or numbers that have a strong whole connotation. With Indicies, I would look for a price like 31050, with commodities I’d look for 3105.00 and with regular FX I’d look for 1.31500(change this for JPY pairs due to the decimal difference). Just to be clear these three numbers are just for examples to show the different applications between the three different instrument types.

For example, as above, price points ending in 00 or 50 can be good places to place TP as people see them as targets.

However, it is similar to Fibonacci levels in that they are a self-fulfilling prophecy, whereby because everyone is aware of them they often work.

https://www.tradingview.com/x/dckdgioh/

On this trade, I set my TP at 1850.00 because it is a VERY strong PN and was close to a previous low, but on its way to that target, you can see it bounces off, then continues, from both 1853.00 & 1852.00 on its way and actually bounces back towards my TP from 1853.50 almost perfectly.

As with everything in trading, it’s not a perfect science, but it can be useful to see where these numbers lie as it gives you stronger TP or SL position.

In the context of this post what I’m looking for is advice from possibly more high-risk traders or more experienced “safe” traders to see how they would approach it and see if that would apply to my trading plan and psychology.

Have you completed the School of Pipsology yet?

[ponponwei]

@JSquiff

In the context of this post what I’m looking for is advice from possibly more high-risk traders or more experienced “safe” traders to see how they would approach it and see if that would apply to my trading plan and psychology.

Ah yeah that is not me, sorry about that! And yes I have but it’s been a long time.

[JSquiff]

Same! I’m very much a safe trader, however from here I went on to research momentum and that’s helped, would rather take 1% when it looks like it’s gonna reverse than hold out for it to “go to the moon” or whatever!

Hope the absolute lecture I wrote out helped in some way, just saw it again and it was quite the wall of text!

[ponponwei]

@JSquiff

Hope the absolute lecture I wrote out helped in some way, just saw it again and it was quite the wall of text!

No, I really appreciated it! Thanks for breaking it down! Not many people take the time to explain things these days.

[JSquiff]

I’m always happy to discuss this stuff! Feel free to give me a message through my profile if you’ve any questions, I’m still new to a lot of stuff myself but very good at absorbing information, it’s just applying it that’s the tricky part!

[ponponwei]

Yeah man, good luck with the Cowabunga system also!

[JSquiff]

Thanks! FYI it works really well on USDJPY with Bollinger Bands as a helpful tool for a better entry!

[tommor]

I’m not familiar with the Cowabunga system.

However, the aim of the trade or any trade and all trades and of trading itself as a whole, is to make profit. More profit is better as long as risk is limited.

The best way for an individual trade to be made more profitable is by entering when it is firstly most likely to continue moving in your direction and secondly (because these are separate factors) least likely to take the opposite direction. Doesn’t this mean a trend?

Also, the selection of EUR/CHF is odd. Again, I don’t know Cowabunga, but this is almost the least volatile pair of the 28 leaders. Why ever trade this?

[JSquiff]

Hi Tommor,

Not sure why you put that first part, that’s obvious and I think you may have misunderstood the purpose of this post. The reason I put this trade up was to get the opinions of higher risk traders on any techniques or tips on how they would read this trade or decide to wait for the price to bounce back up.

EUR/CHF operates in a similar manner to AUD/NZD, often in ranging/broad moves. If you range trade, this is a good pair to go for.

When I put this up 2 weeks ago I was testing the strategy across lots of pairs, and this came up in my ranging watchlist.

The 4-hour trend was up, which means I was looking for long trades within the range to give me a higher chance of a breakout or stronger trend. It’s relatively higher risk than most trades in this strategy, but I’ve had a good experience with AUDNZD and EURCHF in the past so I was happy taking a chance.

There isn’t as big a requirement for volatility in this trade as I expected to be in for a little while, maybe the day, but I exited when I saw the momentum weakening to keep my profits.

[tommor]

You’re right on that, these two pairs are often ranging and don’t get involved in long steeply angled trending moves. Which naturally limits the travel of price. I’m going to have to recognise this isn’t a problem if your style and expertise make for serial unique range trades of limited duration.

[JSquiff]

I never stay in them too long, but there are times when it breaks out and you can take some good profit from them. I’ve stopped with them now though in favour of lower spreads.

[jassyrayder]

I’ve been scalping since months now and have made quite a good amount of profit trading with lowest spreads without having to wait the whole day analyzing the market. But now that I want to leave scalping, I need some guidance on how a forex broker could help me.

[alphahavoc]

@JSquiff

I marked the level for the next psychological number which was 1.07900 which was later reached, however, this was only after the price bounced back of my previous entry.

Overall, I would like to see peoples opinions on how they might approach this trade and what they would put in place to see a higher return, for context if I had stayed until the next PN I would have gotten a 2.44% return, and a 3.75% return at its current high.

When did you enter this trade?
( Date and Time )
What price level did you enter the trade, is it Long or Short?

If don’t tell us the context, there is no premises for discussion.

I looked at the 4hr EURCHF chart but was unable to infer how your target level can be 1.07850 or 1.07900 . Mind blogging

[JSquiff]

All of that information is in the linked image if you look…

[JSquiff]

Hi Jassy,

A broker is essentially a company or person that processes your trades. Do you mean a mentor?

[alphahavoc]

@JSquiff

All of that information is in the linked image if you look…

Yup, just saw it on the 15min chart.

https://www.tradingview.com/x/mHwW6lBI/

Well, this is what i observed,

1. The best part about your entry was, price were trading above BOTH 5 MA and 10 MA on the 4Hr chart.
2. You zoom into the 15min chart, your entry was made after 15min candle closing above both 5 MA and 10 MA as well.
3. RECEDING macd bearish histogram indicate that you place your entry JUST right after a minor pullback on the 15min chart. well done. Excellent Entry point.

Nobody can fault you for buying, when price on the 4hr and 15min chart were both trading above the 2 MA lines.

Now on the part about Targets projection, when you close your trade manually, there was a REASON. There must be, otherwise you wouldn’t have closed the trade, isnt it? You must have believe that it was reasonble enough for you to book profits. Have faith in your targets projection and stoploss level. As long TP and SL levels are within reasonably achievable boundaries. Nobody can fault you for being NOT greedy. Some daredevil may call you a ‘chicken’ but no one can say that you are wrong,

[tainfulbrish]

Your best bet in this case would be to opt for a forex broker that is ready to offer a zero spread account. I am assuming you’d already know this since nobody knows the importance of tight spreads like a scalper. So anyway opt for a broker that offers faster order execution and the better leverages for making money that matches with your trading style. Brokers like Avatrade, Fxview, and Oanda are known to offer lowest spreads. So you can give a try to these.

[scullianclockey]

Do different brokers offer different spreads?