Hi Mike, again, hope things are well with you and your family. 
The Ever Wishing Well VIPER
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Say it isn’t so Mike. Could it be???
Yes, but please remember trading around the mean can be dangerous, really the best way to do it is really scale down on the fractal you are trading on, something like _bob.
Yup a trend within a trend.
[quote=“jseymour84, post:218, topic:116275”]
@TradeViper, did I learn the intended lesson here or did I miss something?
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Yes, well said. One more thing, as you can see, different markets, different strategies, at least one strategy for Trending and one for Ranges, after you get these down to a profitable level, you might want to add a very short term/small fractal system like _bob’s.
The Ever Super BusyVIPER
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I guess the next step then is to figure out how to play the trend to minimize my exposure to the market entering a range. From what I have learned so far, if the market is in a bullish trend but fails to put in a new high before tracing again then I need to be on the lookout for the trend ending. Am I thinking about that right?
Thank you! It definitely helps my confidence to hear that I am on the right path.
Ok so if a resistance level is around a mean in a ranging market on a higher time frame then don’t play it as a pull back because the price action on the higher time frames are a better indicator of long term sentiment. Instead wait for the play at the high or low of the higher time frame range. So if price action is bouncing off a resistance level that is also at the same level as the higher time frame range high that is a better play than playing a bounce off a resistance level that is in the middle of nowhere.
So trading support and resistance levels would be my trend strategy, especially if I use something like a double top / double bottom as an entry signal. I know, candlestick patterns are not the most popular idea around here but man, money talks and if it makes me money then it’s good enough for me.
Example: On the daily chart, we are ranging. Low of the range at 1.0100 and high of the range at 1.0600. Mean at 1.0250. In the four hour chart, price has just bounced off the 1.0600 and is moving down to 1.0100. As price crosses 1.0250, I drop down to the hourly chart to look for a more precise entry. I see price come down to 1.0100, pull back to 1.0200, then come back down to 1.0100. The bar tests 1.0100 and the bulls push it up to 1.0111 before it closes. I get long at 1.0111 with a stop loss at 1.0050 (we’ll say that the bar had an ATR of 50 pips just to make it easy). I set my first target at 1.0200 and if price hits that, then I move my stop to 1.0116 and set my next target at 1.389 (the assumption on this is that the market likes to move in harmonic patterns so that puts the second target at 189 pips (distance from entry to target 1) above target 1. Now if my stop gets hit, I still bank 5 pips on the second half of my position and I have already banked the first half. Plus exiting near the mean reduces my risk from the uncertainty of trading around the mean (or to be more aggressive, set my second half target to the high of the mean, but that goes against my desire to be in and out of trades within a few days. Since the market is ranging on the daily, I can drop down to apply my trend strategy to the fractals within those moves by using the lower time frames to get more precise entries as long as I align my entries to the highs or lows of the range.
Is my thought process on this solid or am I making some serious logical missteps? Also, I wrote this entire example without looking at a chart because I wanted to practice my visualization techniques to see if I could visualize the chart by just reading the numbers.
Thank you for all the help so far @TradeViper - I feel like this is all finally starting to make sense now. I still have a lot more work to do in testing my ideas out - I do love to see stats for several years of data and back testing also trains my eyes to spot the setups more reliably too - but I feel like I might be ready to enter the market for real in the next 4-6 months.
Yes and no, you are always going to give up some profit when the market goes from trend to range. This is part of the trading experience. If you are in a productive tend, you have to realize that you will have to get out sooner or later. If you wait too long, you will end up giving back a significant portion of your profits, if you get out too soon, you will miss some opportunity. Sooo, you have to decide which is more acceptable.
[quote=“jseymour84, post:228, topic:116275”]
Thank you! It definitely helps my confidence to hear that I am on the right path. [/quote]
What matters is Green/Alpha.
[quote=“jseymour84, post:228, topic:116275”]
Ok so if a resistance level is around a mean in a ranging market on a higher time frame then don’t play it as a pull back because the price action on the higher time frames are a better indicator of long term sentiment.[/quote]
Yes, and you are looking for a reversion to the longer term mean, at the high, short, low, long.
Yes, prices that hover at a long term Mean usually generate a Yuuuuuge amount of noise, now if you are _bob, that is great, but you have to be trading very small fractals to get these moves. Most folks, even pros find it untenable to do this and leave it to the machines.
Most trend traders here didn’t even realize that they were in the middle of nowhere, which explains why, during the last market shift, they all blew up and disappeared. Looking at a four hour and one hour chart, without understanding the context of the Daily and Weekly, is a huge mistake.
If you are coming off of a high into a range, that first low will be your bottom. You then have to wait for the next high to be established. Once you have established a low and a high, you can preset a long at the low, and short at the high. The only warning I can give you about this is that in the market we are in now, EUR/USD, Daily, the ranges have a directional bias, downward, and a lot of overrun spikes, so your bias may have been better served by only taking shorts. One good thing is, that had you Shorted every double top on the daily, and not treated it as a trend, but more a quick swing, there was some good greenage there. Also a recognizable “Head and Shoulders” on the Daily from 8/02 ending with a break through the neckline Short, on 10/26, so your Trading Bias would be Short at this time.
I need more time to make a comment on this. But I think you would be better off to focus on just getting the direction right on one trade, until you are comfortable with your entries, then you can focus on TP, and exact stop placements and ratios. Set your stop at your max loss, like 1 or 2%, this will keep you from blowing up on one trade. Also, as I understand it, because of the FIFO rule, multiple entries are aggregated, so if you had one entry 2k at 1050, and one 2k at 1060, both would move to 1055, and if you closed 2k at 1075, it would be from 1055, not 1050, and the next 2k would be from 1055 also. If I am wrong, someone please correct me.
[quote=“jseymour84, post:228, topic:116275”]
Plus exiting near the mean reduces my risk from the uncertainty of trading around the mean
[/quote]
Good plan
The Ever Interested VIPER
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At the start, I am going to play it safe and get out sooner rather than give up pips. I would rather protect capital than aggressively chase opportunity until I develop better intuition about the market.[quote=“TradeViper, post:229, topic:116275”]
I need more time to make a comment on this. But I think you would be better off to focus on just getting the direction right on one trade, until you are comfortable with your entries, then you can focus on TP, and exact stop placements and ratios. Set your stop at your max loss, like 1 or 2%, this will keep you from blowing up on one trade. Also, as I understand it, because of the FIFO rule, multiple entries are aggregated, so if you had one entry 2k at 1050, and one 2k at 1060, both would move to 1055, and if you closed 2k at 1075, it would be from 1055, not 1050, and the next 2k would be from 1055 also. If I am wrong, someone please correct me.
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Let me see if I can clarify this idea. Let’s say I am trading 2k units. I would have one entry for 2k 1050 and then close 1k at 1075 and 1k at say 1090. The stop loss would close 2k at 1040 for example. Thus with only one entry, there would be nothing to aggregate.
At first I would probably just focus on getting good entries with 1k units (or whatever my account size allows within my risk rules) before adding the two target strategy.
I think I have enough here to start trading for real. I opened an OANDA account and funded it with $100 before leaving for Phoenix and I plan to start doing trend trades on the 4 hour chart with that money trading at a max 1% per trade risk (2% max risk so 2 trades simultaneously), and a $5 weekly limit on losses from the weekly starting balance. For example, if I hit 5 losing trades in a row, then I am done for the week. If I win 5 trades (up $10), then I can hit 15 losing trades in a row before stopping for the week. I also set my account to 20:1 leverage so I would have $2,000 buying power. I also won’t be able to take trades with less than 2:1 risk reward ratio.
I am not going to get rich doing this, but I can test my ability to trade the trends and ranges without risking a huge amount of money. If I hit my weekly loss limit, then I can replace that very easily. As I get more confidence then I will deposit additional capital.
Once I get the hang of trading the 4 hour charts, then I will add the 15 minute charts with the same strategy, only using the 4 hour for long-term context, 1 hour for directional bias, and then looking for entries/stops/targets on the 15 minute charts.
Now to just wait until Sunday when the markets open again.
Ok, time for me to breakdown my first real money trade that I will be taking. First, here is the chart.
EURUSD broke out of a weekly range that had a high at 1.14597. This gives me a bearish bias as I have seen markets break out of a range then return to the high of that range to retest the high as a support level. In this case, it took quite a while but price is now moving towards that level.
On the daily look, we moved into a range from between 1.15593 to 1.16632. Price is currently near the high of that range so once the market opens I will be looking to get short with a stop loss at 1.16732 and a target at 1.15593. If price hits my target, then I will get flat and look to see if price bounces or breaks through 1.15593 on its way to 1.14597. If it breaks, I get short, and if it bounces, I will get long. If price gets to the mean of the daily range then I will move my stop to break even to eliminate the risk in the trade.
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Hey J, I think I would prefer an entry closer to 1700, on the daily, price has whacked 1700 a few times as support since Aug. My main concern would be having a market entry at open, then having price run up to 1700, then get rejected, and break lower. If your entry was at 1665, you are only 35 pips away from 1700, It may be more prudent to place an order around 1685, or so, then you would have more stop room. Also I think your stop will be hit, if I am not mistaken, and I might be, I’ve been working outside in the cold all day so I am tired, I think I figured 8 pips, that means there is not much wiggle room. There are spikes on the 60 that are up to 13 pips. Also on the 60 Min there is the Now Infamous ascending pennant/triangle thing. I’m not saying don’t trade it, but just giving an alternate view, give it a try, that is what speculation is all about, you may beat this tired old reptile 
The Ever Speculative VIPER
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Sorry, I do not follow the EUR/USD
But if I could give you something to consider which is, what caused that yellow circle dip and why should the market be heading bearish or bullish? if you can answer both questions, you got yourself a high probability trade.
My thoughts.
I thought about that, but I figure I would try this trade out. The last few candles on the 4 hour chart have been pretty short, so price hasn’t been super volatile. My backup plan is that if I do get stopped out is to wait and see if price is going to start getting bullish or if it will get rejected like you said. If price starts getting bullish then wait to see if a new trend is created and if it gets rejected then get short again.
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Quick trade update…
My limit order got filled at 1.16606 and my stop loss is at 1.16820 with a take profit at 1.15605. 22 pips of risk with 100 pips of reward. I changed my original trade from 1,000 units with a 10 pip stop loss to 500 units with a 20 pip stop loss to give my trade more room to work. Right now, I am 2.3 pips green, with the max pips green looking to be around 14 judging from the overnight candles.
It’s looking like there might be minor resistance forming at 1640 on the four-hour chart which would be keeping with the pattern of every single other range trade I took in demo. I enter the trade, then a new structure level forms blocking me from my target. Price still can’t penetrate 1665 so I am cautiously optimistic in this trade.
If I get stopped out it’s a $1.10 loss. You can’t even buy a cup of coffee for that these days so the risk level of this trade is appropriate. I am still debtating in my head if I want to take off half my position at the mean of the range and move my stops to 10 pips profit and let the other half run to be a bit conservative, or if I want to be like Clark Griswold in European Vacation and be a pig and let the whole position run.
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Ok, it’s shortly after lunch, and time for a trade update.
Trade #1 - EUR/USD
Entered short at 1.16606 as price action was hovering near the top of a range. Profit target was 1.5605 and stop loss was initially 1.16820 for 500 units. Position was filled 4:00 PM CST on 11/12, and exited less than 24 hours later. During the day today I used the lower timeframe charts to slide my stop down as new lower high levels were set. Ended up stopped out at 1.16668 for total loss of 6.2 pips.
Trade #2 - AUD/USD
Entered short 500 units at 8:08 CST on 11/13 with a fill price of 0.76373. Initial stop loss was 0.76520 with no profit target. Closed position at 8:12 AM at 0.76406 for no apparent reason. Bad trade - no plan, shot from the hip. Loss of 3.3 pips.
Trade #3 - AUD/USD
Entered long 1,000 units at 8:13 AM on 11/13 with a fill price of 0.76396. Initial stop loss was 0.76294 and trade was stopped out 2 hours later. Loss of 10.2 pips.
Trade #4 - AUD/USD
Entered short 1,000 units at 10:32 AM on 11/13 with a fill price of 0.76288. Manually closed trade at 0.76201 for a profit of 8.7 pips. Bad trade, no plan. Only saving grace was that I recognized that bullish momentum was slowing and was able to get out with a small profit.
Trade #5 - AUD/USD
Entered short 1,000 units at 12:05 at a price of 0.76207. Stopped out at 0.76245 for a loss of 4.5 pips.
Total Gains: 8.7 pips
Total Losses: (24.2) pips
Net: (15.5) pips
I am pretty sure I am overtrading. I am not waiting for quality setups, but just taking what looks like it might work. This isn’t going to work long-term so I am done trading for today.
Lessons learned:
Must be patient and wait for setups - I don’t need to be in a position around the clock.
Need to have a better-defined plan for managing trades re: when to move stops and targets
Stick to one time frame for now - don’t try to mix intra-day trading and swing trading. Focus on one and then add the other after the first one is profitable.
I now understand why 95% of traders fail. This learning curve is rough! I thought I had an idea of how to trade, but my first 7 real money trades see me with 1 win and 6 losses. The losses are mainly because I am too aggressive and get into trades early. I got short AUD/USD at 0.7642 because the price was coming up to a resistance level on the 15-minute chart and couldn’t penetrate it. The bar closed, and I get short. Price immediately breaks the resistance and goes up to tickle my stop loss without triggering it.
What time did you trade AUD/USD 
,
I am trying to specialise in that market, I only saw 3-4 excellent opportunities in that market today, if you did 6 in total, I think you are overtrading if it was solely based on AUD/USD for your six trades.
I went to eat dinner afterwards, so no idea what caused the maniac bull rush.
The times are noted in the trade logs, but primarily morning (US Central time zone).
Likely I was overtrading, but not sure why it seemed like a good idea at the time. I think it stems from lack of clearly defined entry rules and signals.
Sometimes the secret to the right answer for the questions we seek come from an understanding of self.
I believe your understanding of how to generate a profit from this game has a long way to go. These types of statements would indicate a greedy trader. Why are you being so greedy is a much better response. Have faith in your analysis, give your trade time to move, don’t be greedy. You can’t “create” a market according to your needs.
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Same as most things in this game 
In my head, profit comes from buying low and selling high, or selling high and buying low. In that same line of thought, a good entry is more important than a good exit. I am sure there are more nuances than that I am not considering.
Looking back at my trades, I think this all stems two things.
First, a lack of confidence in my technical analysis abilities. Yes, I had profitable trades in the demo account, but they weren’t good trades. Looking back at my demo notes I was all over the board in strategies and entry techniques. I need to settle on a single trade plan and learn to execute that plan flawlessly each and every time. However, I keep jumping around because I hit a streak of losing trades and because I lack confidence it makes me second guess the strategy.
Second, my time frame and personality aren’t matched up. By that, I mean I am trying to swing-trade with a day trader’s mindset. For me, swing trades are easier to pull off (in my thinking) because I can do my market analysis and look for trades after work and then monitor from my phone (I am using OANDA because of the flexible lot sizing). My hours for being available in front of my charts are 6:00 PM - 8:00 PM CDT (-5:00 UTC) so that leaves me with the Asian sessions to trade.
I tried the range bar strategy from your thread, but that doesn’t work for me because I am using OANDA and I can’t get range bar charts to work in MetaTrader. They work natively in NinjaTrader, but my capital isn’t large enough to trade with brokers that support NinjaTrader.
So now the question becomes how to fix these two issues?
The first one I think can only be solved by spending more time on charts analyzing markets, recording my analysis and subsequent market movements, and reviewing those videos regularly. After I while I hope to be able to start spotting predictable market movements and increase my technical analysis skills. Also, re-read the Baby Pips course and pick up a few books on technical analysis. I am a pure TA kind of person that believes that market already knows what fundamental changes are coming and has it priced in already.
The second issue is to learn to day trade the Asian session or change my mindset to a longer-term outlook. At this point, I think it might be a horse apiece because I am not sure how many opportunities will come day trading the Asian session for 2-3 hours a night. In looking forward to what life might look like as a full-time trader and figuring out what I need to make to cover the bills, I know I need to cover $70,000 a year to maintain my current lifestyle ($35,000 once I get rid of all my debt!). To make that, I need to trade standard lots ($10 average pip value), and pull in 7,000 pips or trade 10 standard lots ($100 average pip value) and make 700 pips a year.
Those numbers lead me to swing trading where trades can move 100-200 pips. Trying to scratch out 7,000 pips per year with day trading and average moves of 20-30 pips per trade seems nearly impossible to me at this time. Of course that could be the voice of inexperience and I know that I don’t need to reach that level tomorrow. I am giving myself 10 years to learn how to reach that level. However, I am not a person that likes to wait.
I know these challenges are just the next step in my evolution as a trader. They won’t stop me from becoming consistently profitable, and I will succeed at this. I just need to find a solution and implement it.
It sounds like you don’t have a proper trade plan,
You know in 2 weeks of journalising, making a trade plan and practicing on a demo account has really helped me view my past views and improve on it. If u are not willing to be self critical about your past trade plans, you’ll never know what you did wrong. If you cannot answer why you enter a trade, do not trade, that’s my philosophy, do not enter a market you do not understand.
Quote of the Millennium, and the ruin of many a young man.
The Never Visiting The House Of The Rising Sun VIPER
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@jseymour84 That is a lesson right there - The psychology of the market is such that those you are trading against know exactly how to sucker us in ! - The fear of “losing the chance” is something we all feel and I too am usualy in far too early. The positioning of teh stop loss is one of teh most important skills you can learn. Look carefully at that stop placement, ir seems to have been good, but maybe a little more room next tiime ?
Your record of 6 losses and one win is something you can replicate any time, just sitting of front of a 1 minute or 5 minute chart and trading it ! You WILL Buy tops and sell bottoms all the time.
Why is that ? - PSYCHOLOGY !
I was lucky when I first started that we were in a trading range and simply taking up bets and down bets when “It” had moved a reasonable distance worked well enough!
Oddly, as soon as I started studying, I started losing and having lost aroung half my account in six months, I anylised my trades. I found, that if I ignored teh spreads, I was nearly £1000 UP 1 (£5000 account) - So I stopped looking for small movements.
Next I lost a lot of money, trying to “get in” on a trend.
Next I developed a system which worked well and started recovering my losses. However, My analysis now demanded discipline and patience. So much so that the conditions only came right between 1 and 3 times a YEAR ! - and by the tiime the setups came up, I had got bored and missed the trade more often than not.
There are those I know who can trade the shorter timeframes successfully, @_bob and @TradeViper, both seem able to do that and @tommor is a trend follower which I can’t cope with psychologically. @Simple_Simon seems to be successful and seems to take the longer view as well, but I’m unsure as yet what his strategy entails.
All I can say is that @TradeViper has offerred you some very valuable advice on this thread so far and I suggest you read his posts again, looking at the principles rather than perhaps the detail so much and think about what he says.
You have seen in the last few days some of the tricks the market plays on us and it is still uncertain whether we are waiting for a downside break out (EURUSD) on the basis of the “Head and shoulders”, are entering a range trading situation, or whether we are going to eventually see a “Bullish rectangle” with an upside breakout in the fullness of time. At each extreme of the current range, you will see emotion change from Up to Down and back again. We all tend to get suckered in to the “Crowd mentality” and since well over 90% lose money at this game, that means that invariably at tops and bottoms, the Crowd is WRONG !
You’re on your way.
Persist and learn 
[Edit - Sorry about the spellings and typos, can’t be bothered to go back and correct them all - sorry ! ]
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