This type of system is how large traders trade. As their bets get larger, they run in to a problem with liquidity. Retailer’s advantage is there is not a problem with liquidity. We can trade like them.
There is no edge in one single trade. Just the odds playing out. If I trade 0.8R, I will win about 54% of my initial trade, then about 80% of my secondary trade, and an additional 80% win rate for the 3rd entry. All in all, the odds of losing 3 trades in a row are 1.8% (0.46 x 0.20 x 0.20).
It’s support and resistance because I couldn’t think of a more simple method of entry that didn’t limit the occurrences. We need occurrences so that there’s enough for the odds to play out.
Entry to sell at resistance, buy at support. It’s subjective. No two traders will see exactly the same. Trade exit at +.8R, or +.5R, or 0R (breakeven).
Okay… But not sure why you are explaining this in this context?
So can I interpret it as the follows:
You are NOT demonstrating the success of your trading system. You are simply demonstrating that with a lower risk reward ratio, you will get a higher win rate to balance out the 50/50 probability of the market.
Honestly I’m just trying to understand what is the point you are trying to make here…
It seems like you want to journal your trades according to your system. And you make comments like “good end to the week”, which seems like you have faith in your system and it is profitable. It is also supposedly evidenced by your forex factory records.
However you make claims that there is “no edge in trading” in your first post. And in this post, you said “there is no edge in one single trade”, so I assume you mean there is edge in your system OVER TIME across many trades… But you also said this is NOT a system and is simply a “simple method of entry”, which makes me assume you are demonstrating that there is no edge in the system…
Yep, no edges exist in retail Forex. Which is why I have to use multiple positions to create positive expectancy. I have been very “lucky” with 75% win rate, average win is 3x the average loss. Interesting to see where the final average lands.
Through my research on EurUsd, with random entry, 40 pip TP and -50 stop/invalidation has been one of the most profitable scenarios with the least drawdown. The rest of my trading comes from various forms of order flow analysis.
My thought process is that if price entry does not matter, then I’d like to enter a 54% chance to win after at least one failed trade… Preferably two in a row. Here is the most recent short from 1.0777. The failed trade would have been a short from 1.0732, then I enter on the next opportunity.
On the retail order book, we see there is an accumulation of orders at 1.0790 to create resistance, and a large group of buy stops at 1.0950 to enter short if price goes there without a retrace.
These are contradictory points. Having a positive expectancy is by definition having an edge. Having no edge is having 0 expectancy in the absence of fees. It doesn’t make sense when you have no edge but a positive expectancy.
We are only net positive at the moment because of chance.
Hope everyone survived CPI & FOMC today. Been playing both sides of EurUsd, flipped short Euro/ long Dollar after EurUsd spiked on CPI news. Powell gave the Dollar some strength to finish the session. I’ll be looking for more short if we can get a move to 1.0860-1.0900 zone.
The 1hr chart looks more even to me… 4hr is too zoomed out… 30m/15m is too zoomed in. Timeframe doesn’t matter though, whatever is easiest for you to follow.
I usually pick a round number to trade at… or entry after a break of a swing high or swing low. It’s better on drawdown to enter short when price runs up through an area of buy stops or buy when price crashes through sell stops below. There isn’t a right or wrong as entry price doesn’t matter… Ive back tested scenarios where I buy where I sold and sold where I bought… very similar returns.
How can this be? There’s so much stuff on “get your entry right to be a successful trader” and “exits are even more important that entries”. How can your entry not matter at all. Hard to make that work in my brain.
