Thanks for the reply and clear explanation. To be transparent I did not use trendlines to become successful in trading. I’ve seen videos of people saying they are profitable so it can be done but i find it to be very subjective. From my experience, this is how I see your chart:
Red lines are resistance and support lines from recent highs and lows.
Purple line is the channel made as we’ve had 2 touches on the top and 2 on the bottom.
So if for whatever reason you enter short at the top then your stoploss should be at the resistance red lines or just above the top channel line. When it breaks the channel then you should be stopped out. Moving the SL is a massive mistake and I can tell you from experience you should not do that at all… even if you are 110% sure it will fall. Now you are looking for a reason to go short again but it broke the top channel so you need another reason to get short. See below chart:
I have drawn another trendline below the consolidation. Then you get a bearish pin bar to the top resistance red line which is a reason to go short. Otherwise wait for a breakout of the consolidation and have your stoploss anywhere above: furthest would be top red line, nearest is the consolidation trendline.
That’s how I see the 4hr chart.
Adding to the sell with another position is a brilliant technique but make sure you move the 1st position SL to breakeven then open the second sell. This way you havent doubled your risk. Hope it made sense. Good luck
@Regan64 Hi, Well a pullback is something you can see happening on the chart. In my opinion you never actually know when you’ll get a pullback, but there are clues. As the price is trending, look back at recent history on the same timeframe for any smaller levels of support or resistance, along your trend journey it’s possible the movement will use these as steps up or down to the next major level.
Something that you’ll commonly see with trends is drawing a fib retractment graph from the top of the recent high to the bottom of the recent low, these 618, 50 etc levels can hold clues depending on the market you’re looking at.
Another way to speculate would be using instruments such as bollinger bands or maybe an RSI, these are an easy way to see if a market is overbought/sold, typically when price breaks the highs or lows of these bands, you can expect to see a pullback, not always of course but it’s a good technique. I don’t really use lower time frames to detect an upcoming pullback, for me, there’s a lot of noise on the lower time frames and with that comes a lot of false signals.
@tradeforex077 thanks for the feedback, yeah Id say it’s always bad to enter trades where risk is more than reward. I dont even like entering trades where risk is 1:2 really, so i always try not to have this happen and i’m not quite sure how i got myself into it, it certainly didn’t start that way. i suppose it was worth the risk since i took the profit, it paid off - but i shouldn’t have let that happen. I think i also remember at the time reading that the price rising further would break a 1:1 currency value, which would be a major psychological barrier to break, which contributed to my increased risk appetite in this situation.
I’m currently in a trade on the same pair, this time going long. I waited until it had seen the bottom and started to rise, I jumped in in the pullback that happened just before the markets closed and i’m sitting on the current price, with the view that the upward momentum has begun.
What are your thoughts on this?
Thanks
Firstly, its difficult to analyse a chart in hindsight without having bias so you should take this with a pinch of salt. And use what I see as fuel for the next trade.
With regards to going long. You can see the 4hr went straight through the trendline and gave a bullish pin bar near the first support red line but your SL could be at the 2nd just below 9840.
However if you use the 1 hr then you could wait for a double bottom and could have gone long on the 2nd pin bar. The SL in this case wouldve been just below 9850. Reason being if it was going to be broken it shouldve done so on the 2nd move down.
With either trade you would be in profit.
However this is all hindsight analysis. And I’m sure everyones a professional analyst then, lol; just have a look on instagram!
For full transparency, I have circled a 1hr bullish pin bar right on the trendline which I think you couldve taken. If your SL was below trendline then that would be a loss.
Hope that’s helpful. It would be great to join you next time as you’re looking at a trade setting up. That way you can get a few different peoples views and if we all marry up you’ll have more conviction and risk management on the trade.
@tradeforex077 Great idea! would love that, I do have a couple of trade ideas actually that i’m interested in getting in on… if you like i can share my thoughts on them, it’s all potential at the minute but my inexperienced eyes do see opportunity! The question for me will be making sure i enter at the best time.
Anyway. Yes, about your comment here:
If you’re talking about your second screenshot with the 2 arrows to the double bottom lows, yeah, i watched that come and go and felt conflicted. hindsight says jump in, but the reason i waited was because of my last experience on the short where it almost went wrong. I saw a double tops then and jumped in and spent the next 5 days with price hovering around there slowly moving up before finally dropping - my take out from that was i wasn’t patient enough and jumped in too early without waiting for the right price. So on this occasion, my thinking was wait for some bullish momentum so i can get in with more confidence that it is going up, again this might not be the best approach either since price now sits further from the last support and profits are a little less since the price has already moved part way to the next resistance - but it’s truly hard knowing what to do at the time.
Thanks a lot for your views and insights, very useful for me to read and consider what you say, since i don’t know much better at this point, though i’m doing my best!
So heres a little trading psychology feedback.
Reading between the lines from what you are saying. I think you are risking too much on each trade so you are hesitant to take a loss.
Losers are a part of trading. If I gave you 10 shots to put a basketball in the hoop: you’ll miss most but get a few right, just like that some trades will not work out. Therefore you will have some losing trades. It’s easy for me and others to say this but for you to understand it will take time.
Once you accept no matter what the system you’ll have losses then you have to to think if I have 1 or 2 losses how much will I have in my account and how will they affect me? The answer is taking a small % risk so losses dont affect you or your next trade. There is nothing wrong with your trading if you stay consistent. Because sometimes it’ll work out and others it wont but when it does work out you’ll make more than you lose.
Only analyse each trade by itself. So if you analyse that double bottom and you shouldve taken the trade then you should take it regardless of what happened before. At present you’re taking too much risk so you’re emotion is getting the better of you. Lower the % risk and you’ll feel better about taking a trade. Hope it makes sense. It’s a very complicated subject and took me a while to get on top of it.
You realize that almost every strategy has its own peculiarities, which can be called risky, and you never know how it will turn out for you. So I would look at the situations in a philosophical way. You have made a normal profit, if you estimate the percentage of your capital. This is very good. If you feel that this approach takes too much effort from you and you’re very nervous, then you really need to change something. But if it’s okay for you, then you don’t work much in the market, but you use larger amounts, why not? Although I don’t think I can give any unambiguous recommendations on this issue. But I am familiar with traiders that trade riskyly and earn well.
Thanks for the feedback guys.
Just as a reminder i posted this because it was a one off - none of my other trades have been like this one and overall i am profitable at the end of each week, I’m attributing all mistakes and losses to inexperienced trading or just bad luck,
Sunday night i left that trade with a small profit. Which was great since it fell after.
@Doubar Thanks for the info, I did figure that once support has been broken then usually the market will re-test the previous level - but hearing this from you is great confirmation for me to learn.
This is the type of discipline I am working towards. My thought is a pip is worth pip no matter how many pips you have. They increase negligibly in value but primarily in number.
I’m trying to say is there’s minimal difference in collecting 100 pips in 10 pip increments or trying to ride a single trend for 100 pips.
Some may argue screen time but if you use stop / limit orders and TPs, that can be reduced dramatically.
Its said that the higher the risk the higher the amount is, but is it worth the cost ?
When you get into trading everything is risky but it depends on how risky it is and can manage after the loss and what would you do if you profit, take another risk or play it safe ?
