It’s a strange, strange situation!
My immediate reaction was the account might pick up a bit,
but I’ve limited my profit by cutting back on my positions.
I resigned myself to not seeing 9.9% monthly profit again
for a long time
but surprise, surprise, I’m already up 10%+ so far this month!
from an all time low of 5,936,00 to current equity of 6,600,00
of course that can change, but it’s looking good at the moment
It may take a bit longer to get the other 25% back, but I will
Planning my next move
My Daily TF trades are several weeks old and still not near hitting targets.
They will, but they can’t be rushed
This seriously limits the profit I can make.
My previous 9.9% whilst quite good, was achieved with 10x position
sizing, in other words gambling
it came with a price of -35% DD the following month.
So if I am going to use sensible risk management, I will need
a turnover of trades.
the bands bend on lower time frames, so they can only be
used as a guide
but I’ve got some ideas
On USDCAD, price is above bands from H1 to Weekly
So trading the H1 it will return to bands
but I need to see distance from bands got that
I need to see Divergence got that
I need to see missed pivots got that ( on D,W, and M )
I need to see a close over EMA 8 not happened yet
I need to see supporting P.SAR not happened yet
I need to see cross of blue over red on Aroon not happened yet
When all these things come together price will start to move down
Impulsive moves rarely exceed 200 pips on H1.
Should the trade become delinquent and continue the trend beyond
the 200 pip zone, the hedge kicks in.
Of course hedging can go wrong like everything else in Forex, but
it can be invaluable should price go seriously wrong with a long distance
runner
I couldn’t believe when my one hedge was triggered, how that my
free margin dramatically increased.
So here is my idea for trading H1
We may have a set up by tomorrow morning, with trade completed
same day hopefully
Up 13% so far this month 
of course it can all be gone by tomorrow but I’m savouring
the moment
meantime, another interesting set up approaching
why is it interesting when nothing is giving an entry signal?
because price has already moved down 250 pips from
top to bottom and should be running it’s course
That will be confirmed more when all the indicators line up
on the H1, you don’t need so many set ups concurrent,
which is good because you need to nursemaid them
far more than Daily
so just one or two a day could be around 30 trades a month.
at the moment, I’m only managing five trades a month
and of course, you don’t make more money on Daily,
you just make more pips, but the average profit per trade
is exactly the same
just six times the frequency
pleased to see that things are moving in the right direction. The hedging really helps. It limits DD, allows time to think which results in confidence to trade. You mentioned margin. I am in the UK and I am a professional trader with IG. With them when I place a hedge it uses little or no margin depending on its size relative to the live trade.
yes I really don’t get the whole free margin thing. it seems when you hedge
you don’t need any margin for either the hedge or the position you are hedging,
I’m probably wrong but that’s what it seems like
Anyway, the account is much recovered, with around 2,000 to play with now
and profit on the month up 15%
I’ve also opened my first H1 trade on Demo. It will need a lot of work, tweaking
and monitoring, The risk is based on a stop 100 pips ( immediately cancelled )
and the corresponding hedge kicks in at that level.
I had nine set ups, but as before a lot of correlation. On H1 I only need one
open position. They’ll be plenty more
This set up is fully qualifying with a cross Bands move ( or wave ) of 374 pips.
That really is a lot for H1. I’m not expecting it to travel on hundreds more pips,
but I’m ready for that with hedge in place
If it doesn’t move further away, the bands shouldn’t move, and I have targetted
a supdem level at 136 pips distance
we also have Divergence, PSAR, Harmonics, STR window, White Harmonic arrow as before, close over EMA 8, and also trialling the red and blue dot indicator. It’s
quite selective, and I suspect doesn’t repaint too much, but we’ll see
so RR of 1:1.36 which will be good if I can go back to my good three month
success rate prior to November.
It would need a lot more than that! of the nine set ups yesterday,
this morning none even slightly resemble a set up! Bands have
moved right into price area, PSAR, EMA 8, also has made nonsense
of te set ups already. In short, the D1 system simply does not
translate to H1
However, two of the nine may be adapted to H4
H4 may be a workable compromise
retaining enough substance to still be workable, whilst trade
duration on average should be around five days, that sounds
about right… a trade opened today could be expected to close
next wednesday or thursday.
The Dailies however, can take one month, or in the case
of all my current trades, maybe two months or more
This limits profits, but to be fair, the main problem was I only
had five trades on D1 with no option of opening further trades
due to lack of margin
For example, I now have an imminent new position on GBPAUD
which I can now open, last week I would have had to let it pass by.
So it’s possible I may revert back to D1 trading but with an eye
on H4, as I don’t really enjoy waiting several weeks for trades
to play out
What a case in point, and what a beautiful sight!
This H4 trade could hit TP today, quite possibly, seriously
I don’t want to see it drag on to next February!
I’m confident to trade H4 on my live account
Some developments
This trade is missing divergence, but it’s really not
necessary, the only attachment I have to it is that
it has a 100% win rate when used as part of a two
step plan
but the two step plan should work without it
and if not, that’s why you have a hedge
points to note
I’ve added blue red dot reversal indicator
it seems to be the holy grail of blue red dot indicators
( I can dream, can’t I? )
although actually it might just be ) it certainly doesn’t simply
attach itself to every swing high/low retrospectively
in fact, it’s refreshingly selective
so in the case below, I feel it is a reasonable substitute
for Divergence
I bought back Harmonindi and White Arrow Harmonic indicators, both
are good, especially when confirmed they don’t repaint on
higher time frames, like below
( you might not have known White Arrow I’ve been using last year
was an Harmonic indicator )
Also I found the VDub indi in the window, it’s basically just
MACD with BB
Someone wrote you can create some amazing systems with it
You can!
For our purposes it’s red over white for a signal but blue is
very, very powerful! in crossing over BB before price reverses!
could be useful
Also entering at cross of trendline and/or close over EMA 8
Also I am using HA template when price has moved significantly
and there is no clear level to exit. maybe just exit at change of
colour HA candle
yes you can give too much back, but always the possibility to re enter
as price often has a second wind
PS note hedge placed under Support
Unbelievable, and underservingly, account is up 18%
I so hope pride doesn’t come before a fall 
but it would be nice to recoup that regrettable 35% DD
from last month
I was concerned about letting trades hang over Christmas,
but historically no problem
Only one chart, price conspicuously reversed prematurely
just before Christmas, went 136 pips DD then had a second wind
and moved 630 pips profit.
so I have hedges in place, time to relax a little and just let the
trades play out in their own time.
Even though I’m still in DD I feel far more bouyant, and largely
thanks to Diabolo for the hedging suggestion
I did lose a little by hedging when price chopped up and down, but
it can save you thousands should price move seriously against you,
and most importantly, you don’t have to leave the house dreading
coming home to face more Forex carnage
I think you do need to enjoy trading
I am really pleased that you are happy with the hedging, it transformed my trading. Interested in your thoughts for the Christmas period. I am considering leaving any trades that I have open with sensible hedge protection in place.
It’s very early days for me with regard to hedging
What I wrongly did was to only partially hedge, missing the point
completely. The Hedge Lot size needs to neutralize the original
trade should it go temporarily astray. It doesn’t matter how far
away if goes if you hedge proportionally.
There may be some similarities to a Stop, for example a trade still
needs room to breath before Stop or Hedge kicks in
so the adage to place the Stop at the point where you know the trade
no longer qualifies as a set up could hold true for the Hedge, but even
more so.
So if the Stop would normally be placed 10 pips under recent Swing High/Low,
then Hedge needs to be maybe double that
If the price is just a few pips delinquent a Hedge is not necessary, but we need
to protect against catastrophe (think SNB )
Providing the SNB hedge was actually triggered, I assume the drop of 1,900 pips
wouldn’t have affected your overall equity, and eight weeks later you would be
back to the pre SNB level.
I’m nervous about hedging, I’ve got this notion I will probably lose both Long
and Short, mainly due to margin stop out. but of course, I’ve seen that
doesn’t happen as Hedge protects against that very thing.
but I’m still musing over the ramifications of both my alleged 9% monthly
profit and my subsequent -35% DD
It’s not what it appears. I used all my margin so could not hedge, which
tells me my position size was 10 x too big.
meaning, in real terms, I should consider monthly profit to more realistically
have been +0.9%, followed by -3.5% DD
both highly unimpressive but not disastrous
The problem with November’s trades was not that they were bad, on the
contrary, it was just a cash flow problem due to mismanagement
I could conceivably have had the original Lot size if I had placed pending
Hedge orders before things got out of hand
and I would now stand to possibly double my account with the Hedging
protecting from risk.
If you have the full hedge in place you don’t need microscopic cent
account Lot sizes that will never make you more than a dollar,
I listened to an entire trading psychology seminar on decision
making. it was all true
any upcoming situation that smacks of some past trauma is
not going to be treated nonchalantly as the bias would be
to move away from pain or threat of pain.
so any decision I could make that feels like it will lead to
-35% DD again is likely to meet with resistance
so I had already decided to protect my account by reducing
my Lot size to the absolute minimum
and I can do that, or I can hedge, but I obviously don’t need
to do both
I think Lot size on H4 may be based on a 100 pip distance to Stop,
if I had a Stop. with Hedge kicking in further away still. If I don’t
get a Margin Stop out, I won’t lose as the Hedge protects against that
so some of my positions with add ons drifted up to around 10 std Lots
and maybe I could get away with that now, but I will try to find a happy
balance whereby I can be content with the profit I make, and any
amount of price delinquency won’t faze me.
I really don’t want to get rich quick, even should that prove to be an option.
Slow steady profits is preferred
a record of consistency in other words is the most valuable commodity.
but I already have a ball park plan in place, maybe six D1 trades a month
yielding 6% profit, and 16 H4 trades a month yielding a further 16% profit
If in the event I could make 7% - 10% per month consistently, I would be
more than happy.
0.9% per month is of no interest to me, although 10.8% pa interest on
your savings is arguably very good
Astonishingly, Equity is already up 23% over last eight days
The two additions to my template are blue/red reversal dot.
it seems uncannily accurate, but we’ll see.
The second is VDub, which is based on MACD and BB
so far, the two key ingredients are, where bands suddenly
widen due volatility ( which btw doesn’t correspond to std BB )
and the way Blue interracts and crosses over outer bands or
rebounds from them, or crosses over red or white
rather than write pages of hypothesis, just note screenshot below
Blue crosses back into outer Band of BB but that isn’t an entry due
low volatility
but note how Blue moves up and retraces, then moves up again,
and as it reaches point it started to retrace we now have
volatility on the outer Band, along with all the other confluences
PS probably wouldn’t have taken this set up as its not
significantly below Bands, nevertheless everything is screaming
price is moving up
PPS but the subsequent trade I did take, as you can see is moving down from
supdem level, is significantly above Bands, and now, we have Blue crossing
White and Red
PPPS you can see the Hedge right at the top. I will move that much higher
Monday morning. As it stands, it can easily be trigerred if price moves back
to entry level before it’s second attempt down ( which is invariably far greater
than first try down.
Added ATR to window. It feels like a very professional thing to do.
an indicator that is not about entry or exit, but about the far more
important issue of trade management
At the moment I am thinking, place full Hedge 3 x ATR
In the example below ( which is just for illustration, as it’s not
quite a set up yet ) …
TP is about 900 pips away, I am fully expecting it to be hit
with a big retracement half way up, so a two step move to target
My main confidence is the 2,250 pip move down. That is an
excessive move down without moving back up through bands
so I believe the cross up through Bands is imminent and overdue
I’m sure the TP is at the right place and will be hit soon, or eventually
at the latest
Lot size and Hedge size is 0.6 and TP is 130.00 profit, and that is
the best possible outcome
Price may hit Entry Buy Stop order but then move back down
The maximum DD before Hedge is triggered is 88.00 which I can
comfortably live with, and whatever happens I should never be more
than 88.00 DD
When price returns to Hedge entry level and crosses it, it should
be time to close Hedge. I should now be 88.00 DD and decreasing
as price moves up
As it continues up convincingly I will reinstate Hedge at the original
level and size. In reality managing Hedge is a skill in it’s own right…
I anticipate it will cause some minor losses but prevent major
disasters
The idea of 3 x ATR is intended to avoid the need for Hedge and
any losses the Hedge might cause, but it’s there if things go
seriously awry initially
I feel more confident than usual, as though I’m trading in a far more
professional way.
Certainly there is less emphasis on magic indicators and far more
focus on risk management
PS The worst possible outcome therefore is that price somehow
ranges between Entry and Hedge, that could prove tedious and
there will inevitably some wastage when price chops about
and Hedge won’t protect every single pip, it’s not an exact science,
but skill and intuition will improve with experience
Fairly static Monday, no great change from Friday
I still have my seven open positions, all properly hedged
at 3 x ATR
I am allowing a lot of breathing space which means the
possibility of returning to further DD, but this time not
into oblivion, it’s now under control.
I am watching a further six pairs, five H4 and one D1
which is about the right ratio
Gold is possibly the most interesting on H4, and I’m
particularly interested to see how blue/red dot performs
Here is an interesting conflict
It should be a passable set up, and the assumption
is always that it will cross through Bands
but if Bands were’t there I would never take this
trade, with such a strong level of Resistance likely
to become Support
from break of trendline to this significant level
leaves little room to move
Like the video above, the guy was always looking
for WOS
If I remember ‘WIDE OPEN SPACE’
we don’t have that here
I don’t want to be blinkered, Bands are only part of
the equation, not some Holy Grail
If I have a choice of set ups and some are offering WOS
it makes sense to take these and leave the rest
The Gold H4 doubled back and doesn’t look such a
great proposition at the moment
AUDNZD is looking much better.
One thing to note is the relatively high Lot size of
6.0 for both entry and 3 x ATR hedge
I just am guided by the maximum DD before hedge kicks in
and the TP amount, not so much RR, but is it worth
having
I think in this case maximum DD is 120.00 and profit
should be 150.00 which is not overly ambitious, yet
enough trades like that would yield a significant monthly profit
Being H4
D1 would yield the same, but as I am finding out, can drag on
and on! some of my D1 trades are six weeks old now and
still DD.
If I can possibly trade H4 profitably I would prefer to
The trade below may close by this Friday morning hopefully,
in any event i don’t see it dragging on for several weeks
Although I would prefer hedges never need be triggered, I
am eager to experience hedging from a psychological
point of view, to see how it should affect confidence levels
Actually, the good thing about Gold is that it is
supported by D1 which also shows Divergence
Again, quite a high Lot size but maximum DD and profit
target are both around 190.00
but my account DD is still rising as before, and I need to
watch free margin % as opening trades with high Lot
sizes eats the margin and pending Hedge orders don’t
mitigate unless triggered
Here is a good example of waiting for SAR dot to appear
before entry. no harm done this time, but they are a good
precaution. Green arrow is where I should have entered.
This hopefully, is a good example of how target is reached in two
steps, a retracement often occurs mid way. We note in both these
screenshots that Bands have slipped right down to around the
Entry level. so we cannot simply count on crossing Bands, we need
WOS beyond Bands to aim for
SIMPLIFIED
This is worth investigating, a much simplified
version of the strategy on H4
Price must be significantly above/below bands
there must be recent Divergence and/or white Arrow
Enter at PSAR
It seems to very profitable from what I have back tested,
and Divergence and PSAR don’t repaint, and White
Arrow should be permanent by the time reverse PSAR
appears
Equity seems in an endless range, it goes up
it comes down.
I’m very cautious with regard to lower time frames
but I’m watching GBPJPY on H1
The WOS is between the two mauve lines
if price closes under the first I will enter if
a Bearish PSAR appears
It makes perfect sense, but if TP isn’t
hit fairly quickly I would’t be inclined to
let the trade linger
