Hello everyone,
What’s in your opinion is the best way to identify a pullback on a 5m-15m timeframe. I notice, that I’m missing a lot of good trades by closing for very little profit, thinking price is reversing. Usually it happens when the price retracts close to my entry and I’m thinking it’s forming resistance. Instead it bounces back and moves to my TP.
I think you should accurately describe the moment of opening and closing the transaction. What you are doing now is emotional. Regards Greg
Apply a moving average or two.
Use pivot points / FIBs.
Apply support/resistance on higher timeframe charts.
If you weren’t working on such short time-frames I’d say stop treating a trend as a set-up for one big trade. Enter on a pre-set trend-following order which triggers when the first pull-back fails and the trend resumes. Pyramid your position at least once, exit the full set of positions when the chart shows a sequence of powerful with-trend bars and wait for the next pull-back so you can repeat the game. But this is all going to be tricky on time-frames measured in just a few minutes.
Thank you for your response! It could be. The trade size was 5%, so I wasn’t attached to it much, but I didn’t want to loose, considering that the resistance lvl was right there. I thought it just didn’t break and pulling back now.
Thank you, I’m trying to get better with fibs, what would you recommend to study for it?
I found out, that I have more success in trending on 15m-30m timeframes between support/resistance levels, then trend-following. Could you please tell me more about pre-set order and pyramiding the position? Thanks!
Using a pre-set order is possible more often than traders believe, depending on your strategy, but you need a simple plan.
A classic example would be in an uptrend which makes a pull-back. As long as the trend is not broken, the most likely next outcome will be that price rises from the pull-back levels and continues the trend higher. So its possible to set a buy stop order above the pull-back price levels. If the pull-back is a reversal the order is never triggered. If the pull-back is just a pull-back and the trend resumes, the order is triggered. A classic place to set a stop-loss would be below the lowest price of the pull-back but in practice both the entry level and stop-loss level can be varied according to your personal risk tolerance.
Pyramiding means adding another trade in the same direction after the first trade has become profitable. This can be done multiple times in a continuing trend. Many people wait for the profit level to equal their original risk level and then add a second trade - the second trade has the same position size and stop-loss distance. When the second trade is opened., the stop-loss on the first is moved to its entry price. Now you have two positions open but still at the same aggregated capital risk. These sorts of strategies can be tricky to run and should be tried through a demo account until you have your own preferred approach and it becomes natural.
The best way to learn is to apply it in your every day trading. Drop FIB retracements, focus on the 236, 50, 618, and 786 levels and see how price reacts.
