I’ve been developing my own system lately based on Day Trading.
What I do is I find the weekly/daily chart and note the direction of the trend, and I find a support/resistance/trend line for my entry on the one hour or 4 hour chart and make my entry following the trend. This is all done on live price action and I don’t use any indicators.
This is going well, as I would say 8/10 of my trades usually go into profit by 20-30 pips, sometimes more. I always set a SL and a TP, but it never reaches my TP. I think I’m setting TP too far away, as I usually set it at a 2:1 RR basis at least.
I’m struggling to find a confirmation based on candlesticks that tell me the move is over, other than hammer throws (for when going short for example) but sometimes they still carry on from there, I know I’m not gonna get all of the move, but I kind of wish I had a clear signal to get out, as clear as I have for one to get into the trade. Due to this, sometimes these potential winners can turn into losses.
If people could recommend what they use for there exit strategy that would be great and I would see if I could adapt it in my system.
Hi, you could use many kind exit from transaction for example trailing stop, exit after bars, exit after time, other indicators and so on, you need to make research to find best solution. Regards Greg
You can Trade Exit Using ADR (Average Daily Range)
Exiting a trade using the ADR indicator is a strategy that would work perfectly for a daytrader. The ADR is a straightforward indicator that calculates the average market volatility in terms of pips range. The calculation is simple, as shown below. So let’s say we choose to have five days period as our average daily range, the calculation would look like this.
The more periods you take into consideration, the more D you will add, to then divide them by the same amount of D (days) used. Luckily, you will not need to calculate them manually, since the indicator will do that for you. The MT4 trading platform does not have the ADR as a standard indicator. You should be able to find one within the MQL4 community. You can search and use the one that pleases you.
A simple way is to set your target and have a 34 moving ave as a trailing stop. Keep stop loss a couple of ticks the other side of MA and you will either hit target or be stopped out. The 34 is fast enough to contain price but loose enough to allow noise. Could also have scale out points along the way. Happy trading
You can’t simply decide a stop should be 30 pips down and therefore you’re going to get 60 pips up as your TP. From your entry set-up and signal, the SL has to be indicated by the TA of the chart. This might be 23 pips today or 47 pips on the next trade, or 17 pips the trade after that. In TA terms, the location of your TP has no relation to how far from entry the SL is placed. All you can do, and what you should do, is make sure you do not take a trade where the SL is likely to be hit or where the TP is not likely to be hit. This could be due to support or resistance or simply an inherent outcome of the set-up/entry criteria that you use.
If the TA indicates a SL 34 pips below entry, you should know whether firstly the TA suggests a probability of price hitting the TP at entry + 68 pips. You should also know whether this set-up/entry criteria combination has shown a positive probability of a 68 pip rise on this market in the recent past when it has occurred. You should know if there is strong resistance at entry + 51 pips, or if this set-up/entry criteria combination has never ever produced a price rise better than 44 pips and take appropriate action.
Move down to the lower time frame 5/15 mins for example and look for rejections (candle wicks) from key levels. I also find that Fibs help a lot, especially the 38.2 and 61.8. Hope this helps.
I was delighted to see this post as I’m in the exact same position. I make good entries and see alot of my trades winning but they end up losers. I have been applying the 3:1 RR but I think that this is not a good strategy and that the chart will determine what an acceptable return would be.
I was using 1.5 x ATR indicator as a SL and then x this by 3 for my TP level.
I am going to apply a 2:1 RR ratio this week on back testing but I will also factor in chart levels. I’ll also try the ADR level.
