Kudos on sticking to trading the Daily, good idea when learning the method.
With regards to pullbacks: sometimes there will be pullbacks, sometimes there won’t, requires patience. That’s another reason why we have a good number of charts on our watchlist (increases probability of having A+ setups to trade).
When you do start trading the H4, you will notice more pullbacks ( and therefore more trading opportunities ).
A valid pullback on H4 would appear as just a few bars on D1.
In the meantime, stick your plan and you will do great!
Key point: manage a trade in the same timeframe in which you took it in.
That is: if you took a trade setup on the H4, manage that trade fully on the H4
Secondly: better to stick to the higher time-frames ( particularly D1 ) when starting out, avoid the H1, less reliable.
With regards to the trade itself: the pin on your H4 is not a pin we would trade according to this method. “Bullish signs” are not enough, we need a CLEAR and OBVIOUS price action signal, at a KEY LEVEL. That pin is hanging around no-man’s land.
Thank you Dudest Yes, for know I will go only with daily, maybe after time I will start looking and H4 chart, but for know will stay out from lower time frames ( yes I will miss some possible trades, but I think for now- little trade, but on above TF= better for me)
Thanks again
Can you tell me how to calculate position size for indices?
A lot of currencies have 100 000 units, a lot of gold 100 troy ounces, a lot of oil 1000 barrels, but indices don’t have units like commodities or currencies so I don’t know how to calculate how many lots should I open if I want to risk X $. Is there a calculator on internet for indices?
I trade at Hotforex and I see a lot of silver has 1000 troy ounces. But from what I knew a lot of silver has 5000 not 1000 troy ounces. If I want to open a silver trade at HotForex of let’s say 500 troy ounces I should open 0.5 lots or 0.33 lots?
Hi everyone I am new to this awesome thread. First of all I would like to thank Johnathon for this masterpiece. Also I firmly believe in PA methods and what you are doing here guys. I have been reading this thread every page and every comment one by one for more than 3 weeks. I had some questions in my mind which i was strugling with. I would appreciate if you could help me.
1- I have know idea what “New york close chart” is !!! is it something has to be provided by the broker or i can install it !!! My trading platform is MT4…
2- I have noticed that it has been written about every detail of the method throughout the thread but the exact entry & exit points??! As you all know better than me in order to have a profitable system which generates constant profit in long term, we have to know where exactly to get into and where to exit. !!! I know I must see a clear A plus signal on key levels to jump in but what is the trigger ??! how many pips above or below the last swing the SL has to be placed !!! in what level I should start moving my SL towards break even line or further !!!
3- is it possible to apply the method to small timeframes ???!!
Actually you can. The software was changed last year to allow you to close a portion of the lots in an open position with Trading Station. One can right-click an open trade, select Close Position(s), modify the Amount(K), and easily close out partial trades (even with FIFO acct so long as there’s only 1 open position).
Can one use close only/line charts to plot support and resistance lines or is candle charts the most ideal ones (I look at S&R as zones rather than lines though).
Can someone recommend to me any website (other than forexfactory.com) that i can rely on for the timings of market opening and closing as well as release of news for information only. I am from Asia so I am presently trying to match my timings with the timings of the forex markets world wide.
For taking trades on Daily Charts based on NY charts - I guess it is okay for the trade to get executed in the Asian trading session/timings or should one wait for trading the UK and US sessions only (This may sound as a stupid question - but am new to the Forex Markets so kindly excuse my ignorance).
Thanks for the answer dudest) I think using the trailing stop function of the MT4 is also one of the good options for protecting your capital and locking in profits.
Thanks.
For me i think the best way to use trailing stop is not to use it at all, i prefer moving my stop loss manually…don’t worry, with time you will know what i mean…
I already have that calculator but it’s not good.
If you don’t trade many money the calculator will show 0 units.
If you trade more money the calculator will show only round numbers (1,2,3,…)
I think the numbers shown are lots but it’s useful only for those who trade round number of lots.
I’ve also found other calculators but you should enter the number of lots you want to trade, the open price and the close price and they will tell you how much you win or lose. But I want a calculator that tells me the number of lots to trade if I enter the amount I want to risk.
PS 1: note that for Indices, you can not open partial lots, it must be in full lot units ( with 1 lot being the minimum ). From the specifications in link above, you should be able to calculate how much u need (margin) and how much your risk is (pip cost).
PS 2: for anyone else who was wondering about the same thing, your broker should have a similar list specifying margin requirements and pip cost for different forex/metal/indice instruments.
Kudos for putting in the time and hard work to read through the thread, will help you more than you now know!
With regards to your questions:
[B]1) NY-close chart[/B]
An New York-close chart is one where the Daily bar closes when the New York session closes (the unofficial daily close of the forex market).
This, by extension, also means that the Daily bar opens when the Asia session opens (the unofficial daily start of the forex market)
So this works out to a chart having 5 Daily bars in a week ( not 6! ) with the open at start of Asia, and end at close of NY.
Not all brokers (MT4 or otherwise) offer a chart whose feed conforms to the description above (actually, most DON’T).
The description above is used by the BIG BOYS who move the market (banks, governments,etc).
Price action trading is following and taking advantage of the movement of raw price (i.e, what the BIG BOYS are doing), so for that we need to use 5-day NY-close charts.
A couple of brokers offering these type of charts are listed on POST #1 of this thread ( examples: HotForex, Pepperstone, AxiTrader )
You can open a DEMO MT4 a/c with any of these, and you’ll see the same things we’re seeing [ and hopefully start posting up your trade ideas ]
[B]2) Entries and exits[/B]
Mr J reserves details on trade management for members of his forum, but if you were taking notes (I hope you were :)), you’ll see the reference many times to placing entries/stops above the high/low of a setup. The specific no. of pips is your choice.
Mr J does throw in many treats though, for example on this page: 301 Moved Permanently
Summary: there’s enough info in the thread on placing of entries/stops and the foundational concepts on how to manage trades. Just go through your notes and you’ll see.
[B]3) Application of the method to smaller timeframes[/B]
Can it? (in theory) Yes
Should you? No
Why? Smaller timeframes have alot of NOISE, i.e, unreliable signals.
This NOISE gets filtered out as you move up higher timeframes.
Since you’ve started learning the method, begin at the Daily timeframe.
The truth is: if you can’t apply this on a Daily timeframe, you are kidding yourself thinking you can trade on a lower timeframe. [ Most of my trading now is still on the Daily, after having played on the H1 and H4. The D1 rocks!, you’ll find out more as you continue ]
Remember it’s not just the technique you’re learning to the develop, but the MINDSET (which is what will determine whether you’ll be consistently profitable or not).
I hope that helps If something is still unclear, just say and someone will offer help.
-> News: not necessary. We only avoid entering USD trades before high-impact NFP Payroll (first Fri of every month)
For Daily trades: doesn’t matter which session they get triggered in.
Once you have set your entry + SL + TPs, you’re good to go.
Lastly: you’ve said you are new to the Forex Markets. Kindly go through this thread ( at least first 50 pages ), and also the BabyPips School (see SCHOOL tab at the top of page). Will give you a great foundation to grow on
Yes, for know I will go only with daily, maybe after time I will start looking and H4 chart, but for know will stay out from lower time frames