I pretty much just trade sing the SHI channel indicator, stochastics and price action candle formations for confirmation.
I’m not using the original indicator at all now so maybe we should have a new thread? I’m using a method that is explained in a fair amount of detail on this website here:
The indicators I’m currently using are:
SHI channel – although sometimes I disagree with it and draw my own trend lines and channels.
Stochastics (10,3,3) – very similar to using the original indicator set to 2,8 instead of 1,4. Mainly for overbought/oversold and divergences
SMAs – 150 and 200, not really using these for much except to see if the price above/below to get an idea of the trend
For an entry set up I’ll look for a long trade if the price is trending up and it’s just bounced off the lower trend line on a corrective move, stochastics oversold – ‘buy the dips’
A short trade is the reverse – the price is trending down and the price has bounced off the upper trend line on a corrective move, stochastics overbought. – ‘sell the rallies’
Ignore any moves in the middle of the channel, only take bounces off the outer trend lines. These are the set ups I look for and wait for.
For entry I now wait for confirmation. I want to see that the move is confirmed before jumping in, that means missing the beginning but I prefer a confirmed move to a bad trade
The entry triggers I now use are specific candle formations. Some of which you can read about here:
If the price has bounced off the upper trend line for a short trade I want to see a red bearish candle that is one of the above, the reverse for a long trade. Using price action instead of indicators I find far more interesting and also profitable. It also stands the test of time. It’s a massive subject that I’m only starting to learn fully, I’m following this ‘path of learning’ about it here:
[B]Money management[/B] – 2% always, the less risk the better. S/L x pip value = risk. If risk > 2% of account then no trade
[B]Stop losses[/B] – a few pips (about 10 or so) above/below the trend line (this can rule out moves that have already gone a fair way or are in the middle of the channel)
[B]Profit targets[/B] – I currently have 1 target profit as I only trade 1 micro lot per trade. It’s a conservative risk x 2, so I calculate my stop loss, multiply it by 2 and then find the nearest fibo/psychological level. I know this leaves pips on the table but a major problem I had was trying to take too many pips and not knowing to exit. With this method good trades hit the T/P almost every time. IMPORTANT - If a T/P of risk (S/L) x 2 does not look viable – no trade! I’m only going to risk 2% of my account if there’s a strong probability I’ll gain no less than double what I’m risking.
Those are my money management, profit/loss, risk/reward rules. If a safe stop is above 2% - no trade. If at least double the risk does not look viable – no trade. This means losing trades are 2% and winning trades are 4% - a 50/50 win/loss ratio is still profitable
When my account is large enough so that I can take out more than 1 micro lot per trade I’ll put 2 positions and go for more pips with the second position using trailing stops etc.
That’s pretty much it.