Cord, in my younger and more foolish days I used to scalp news, but I don’t really trade it now. If there is a big news flash coming out, which I define as the red news announcements on Forex Factory, I will wait a bit on entering a new trade. I may get a better entry in just a few minutes or save a stopout after the news is out. If I’m in a trade already, half the time it helps and half the time it hurts. After it comes out I’ll enjoy the help, or exit quickly to reduce the pain.
I don’t want to answer for him, but from what I have saved he used them in 2 instances. The first instance he would use them in the lower TF (less than 1H) to quickly see what the trend was. In the second instance, he used the default Stoch (8,3,3 setting) as a trade filter to help stop stopouts.
It worked this this: Before making a BB DNA entry, regardless of the TF to make the entry, check the 15M chart. If short period/fast stoch line is above the long period/slow stoch line, only take long trades. If the fast line is below the the slow line, only take short trades. This is the trade filter technique employed to reduce the number of stopouts. As he warned, only employ after backtesting to make sure it works for you.
The folks at GFT helped me set up a way to trade the 5 lot system without averaging. Only had it set up a few days so I’m still getting used to it but it seems to work fine. Great to hear from you Tyman.
Perfect answer Hordane. I don’t use the stoch for entry signals. I just use it as a filter to to keep me from taking a trade that is likely to head off in the other way. Until Tymen presents something new, I still use the CBL as an entry signal and I just use the stoch filter to confirm or reject that entry signal.
Thank you [B]Hordane[/B] and [B]Gravition[/B] for your response. Greatly appreciated. And [B]RenLa[/B], thank you for the referal to the PA and Master Candle site. I have read all 62 pages and now have another significant tool in my chest for reading PA and the best part is…no indicators…still Naked:D:D
Thanks Grav. I think my query is similar to that asked by Hac in a later post. After seeing Hac’s screenprint I am clear. Can’t wait for a JediMaster to teach his Light Saber technique (Swing Trade). Since I still need to perform a fulltime job for the moment, I will surely been keen.
Welcome Back Tymen! Hope everything went according to plan. Can’t wait for you to get back into action again.
I believe we have gone through most points of a successful day trading system now. There’s been good results achieved in back testing and in live trading. For most who have helped develop this thread, all that’s needed now is analysis, planning and practice. Once initial results are achieved with the Multi-Time Frame Trend Trading method, focus should turn to achieving consistent and repeatable results. This is accomplished through careful post trade analysis and minor evolutionary (rather than revolutionary) tweaks of the system over a long period of time. In the end, the Holy Grail of day trading is a system developed for you by you and it will fit your trading personality like a glove.
The post trade analysis is as important as the pre-trade analysis in creating your personalized trading plan. As we move forward I’ll go through some main points in post trade analysis that should be employed to achieve continuous improvement in reducing risk, increasing profit and achieving consistent and repeatable results. Consistency is perhaps the most important and difficult objective to achieve once a winning system has been developed.
This thread will branch into several different directions now. We have several people who are running back tests and forward tests and are achieving results that are sometimes quite amazing. Their input going forward will be invaluable in optimizing our day trading system. We have both demo and live real time trading going on during every trading session in the chat room set up by MP and it has evolved into a virtual trading floor where the best ideas of many are put forward and considered by all. As many of you know, Tymen is now back ( a HUGE welcome back!) and is preparing to give us new and improved tools for our trading tool kits. I’m excited as a kid on Christmas morning to see what new and improved tools Tymen will offer us. As noted above, much effort now needs to be devoted toward achieving consistency of results. But something is still missing.
In spite of all the great effort put in so far by both junior and senior traders, the system we have developed is a day trading system that requires many hours each day staring at screens while the markets are trading. For some traders, it is just not possible to devote that time as they are working full time jobs and caring for their families during most hours of the day. For others, the pre-trade analysis and post trade analysis required to be successful in day trading is so intense, it leaves little time for actual trading. For those who enjoy the active day trading and have been successful at it, we will continue to improve our skills and tools until each individual has developed their on personal “Holy Grail” trading system. For those who need to do their analysis and trading after the day’s work is done, we will open up the new topic of swing trading.
The good news is that every skill and technique developed so far for day trading will apply to swing trading. The main difference is that most of the time in swing trading we will be concentrating on longer timeframes. There are some pitfalls in swing trading that do not exist in day trading and we will need to employ a few new methods to avoid them, but the rewards can be great for those willing to slow down a bit and make fewer and better trades. The main pitfall in swing trading is overtrading. If you are compelled to make several trades a day and really enjoy the excitement of day trading, swing trading may not be for you.
Since we will have many topics going at the same time in this thread now, it will help if posters will title their posts with a clue as to which topic it concerns. So the title of the post will be something like, Day Trade Stops, Day Trade Post Trade Analysis, Swing Trade Entry, Backtesting 5 lot, etc. Generally, detailed discussions of Tymen’s methods and tools should be posted on his excellent thread, The Finest In Trend Trading. I’m happy to discuss how his methods and tools apply to our quest for every traders personal “Holy Grail”, but Tymen has researched and tested his methods and is the expert in the tools he presents.
We won’t give up until each and every contributer to this thread has found her or his own personal “Holy Grail”. Some may look quite different from others at the end of the quest, just as we are different from each other. Some will find their “Holy Grail” before others. Two old timey sayings apply here. Keep it simple and if it ain’t broke, don’t fix it. We have to realize when we have found a system that is successful and fits our trading style. That system should be encoded into a trading plan and from that point on, changes to that plan should be evolutionary, not revolutionary. Any major changes to the plan should be throughly tested in demo to assure they really produce better results over the long haul. A fresh demo charged up with no trades yet, should be kept at the ready at all times for testing any crazy idea you think of or read about on the internet. Your live account or “good demo” is not the place to deviate from your trading plan. If you do that, you can never improve your plan as you never have a good read on how it is performing without the mistakes of taking hunches and fliers or testing out new stuff.
With that said, let our quest to find each individual traders’ “Holy Grail” continue.
All this big swings and i couldnt catch any of them,spent the entire week trying to enter in the middle of trends and getting stopped,put a 30 pip SL to see it retrace 50 pips and return the original direction when im away from the computer.Get back,see what it did,try to enter again and get stopped again.
Return in the next day to see that it moved 150 pips after 3 AM and that i cant enter again.
There was one trade that i tried to enter,put a 30 pip SL only to see it get hit in 10 minutes.Return 20 minutes later to see that price went up another 10 pips,then went down 70 and that now is late to enter again.
And this is how i lost 350 pips in the week that the euro drop 700 and the pound drop 500 pips…just put 1 lot at each in the beginning of the week with no SL and forget it would bring better results.
Multi-Time Frame Trend Trading or just MTF for short is something I put together for myself after decades of analysis and trying to catch the best sustained trends and ride them to the most profit possible with the least risk possible. It was originally developed for trading futures and I have now adapted it to trading Forex. There are many similar methods that have been presented by others and I’m not saying my method is best for everyone, only that it’s best for me. I have presented it as an introduction to deeper levels of analysis that can yield better trades for those who have found that just focusing on a single Time Frame, or TF, hasn’t produced the trades they were looking for. If you already have a method that is giving you everything you want in trading, I suggest you consider it as just an additional viewpoint and not something to be allowed to mess up an already successful system.
We trade our beliefs about price. The core belief in MTF is that all TF charts in a pair are just different views of the same thing, price. Every TF chart has something to tell us about the price action in a pair. If we combine all that information with a little basic fundamental analysis, we can form a picture of how the markets should behave. We really trade that picture, as long as it is valid. If it becomes invalid, and we have to define just where that is the case, we abandon that picture and start to form another. Nothing works all the time forever in the markets. We must be patient and build some flexibility into our plans to allow them to slowly evolve with the markets.
We also have other beliefs in this system, such as some pairs tend to trend due to technical and fundamental factors. This means future price changes are not a random walk, but rather are correlated to technical and fundamental factors that can be analyzed and understood. We believe that price does not exactly follow the math model of a normal distribution. That rather it has extreme “Black Swan” moves up and down and long term trends that form a “Fat Tail” of trending movements that can be exploited for profit in some instances. It doesn’t work on every trade, but it can work over the long haul average to provide consistently larger profits than can be found in other investment classes.
We know for a mathematical fact that higher level charts are simply compressions of data from lower level charts, all starting at the tic chart and flowing upward. We believe that longer term trends shown on longer TF’s have a statistical correlation with price movements on lower TF charts and that statistical correlation flows downward from longer to shorter TF’s.
This is all very philosophical as beliefs often are, and it is only one of many belief systems about price, but without some beliefs we are left with nothing but random price changes to trade and ultimately the spread will consume all our trading capital. The challenge then becomes to convert these philosophical beliefs into hard and fast mechanical trading rules that can yield consistent profits over a trading career.
In MTF our work begins with a careful study of price changes on all the TF’s of a pair. This is really hard work and anyone that is looking for a magic formula to make quick riches with little or no work should look elsewhere. I don’t believe they will find such a magic formula, but I wish them all the best in their search. My own personal experience was that I wasted years of time and much of my capital before I finally accepted that this was going to be long and sometimes tedious work, like running a small business, and there was no instant path to success.
In MTF we begin at the highest TF chart and try to understand everything it has to tell us, and only then move downward to lower TF’s one by one gaining more detail and information as we go. We are trying to form a complete picture in our mind of what the price of that pair is doing and why it is doing it. We add some simple fundamental information at the end to complete our picture. Once we have that picture formed in our mind we will trade it as long is it remains valid. When it has proved invalid by our objective criteria, we will quickly abandon that old picture and begin our search for a new one. Hanging on to an invalid picture is no better than taking random trades and it can only lose spread to the broker over the long haul.
Luco, this might not work for you. There is no use trying to make a system work for you that does not fit your personality or trading style. Trying to place trades in this method without first having done many hours of analysis and planning is no better than taking trades by the flip of a coin. It is probably going to be even worse. I’m not one to advocate giving up easily, but let me suggest you study other things before continuing with this method.
I’d suggest you first go completely through the baby pips school and then do some additional research into candle stick and price action interpretation. You should research and demo trade popular indicators and try a few different trading systems in demo. After a few months of research and demo trading you can read Tymen’s thread start to finish and then reread this thread start to finish and do all the exercises and practice in both. Only then if you have good results in demo for an extended period of time, say three to six months, should you open a live micro account and trade it for real money.
On the other hand, you may find another trading system in your research that fits you better and you have better results with. If so all that work and research will have paid off. I wish you well and all the best of luck in your future endeavors.
The two things needed to make this method work is lots of detailed pair analysis and a detailed trading plan. We can start with the analysis first by looking at the longest time frame monthly chart and working down to shorter time frames and finishing our picture out with a bit of fundamental information. I’ll use the EUR/USD pair to give some quick examples and then we will move on to formulating hard and fast rules for a trading plan. I’ll warn you again, if you want to use this method, it will take many hours of analysis and practice. I know of no shortcuts that will avoid this or make it an easy path to quick riches. Skipping the analysis work is like trying to go through a thick forest blindfolded. Running faster won’t get you very far as you spend most of your time recovering from running into obstacles. Moving slowly and carefully will take so long to make progress that you’d be better off just putting your money in a savings account and enjoying life in other ways.
So on to analysis. Studying the Monthly chart is like studying the Roman Empire. It’s so far back in history that it has little to do with what is happening today directly, but there are still lessons to be learned that can be useful today. That’s why we study ancient history in school and why we look at a chart that shows ancient history. Pull up the EURUSD monthly chart. Zoom all the way out till about April 1989 or so when the data began. You can see that the pair first traded around parity and within only about 6 months moved up to about 1.3650
by August 1989. It was a very good start with a huge move in a nice sustained trend.
You can see many nice up and down sustained trends over the next decade where lots of pips could be made. Each of these major moves had a fundamental reason at the time. Fundamental traders would say that was the real reason for the move, technical traders would say it was made up after the fact to explain a technical move. Then late 1998 the euro went into a dive that plunged it from a high of about 1.2350 to a low of about 0.8250 by Nov 2000 and I remember folks saying that was the end of the Euro then as well. This plunge of about 4000 pips is important to know about, at least in a historical context.
So far, we have learned the euro had a range of about +3000 and -2000 pips in it’s first decade and the moves of 1000 to 2000 pips in 6 months to a year were not uncommon. Next you see a nice move back up to about 1.3800 over the next four years, a nice move of about 5600 pips and a short retracement of 1600 pips over the next year.
Zoom in now to only show from the bottom of that retracement around Nov. 2005 to current. That long move up from Nov 2005 to April 2008 was my first position trade in Forex. I then swapped to short soon after the all time high up around 1.5670 in July 2008 and rode it back down till the trend changed at the end of 2008. After some consolidation (it’s important to note the consolidation that sometimes happens before a trend change, sometimes not) the trend up began and I rode it up until it broke the trend line in Nov 2009. I then went short and rode it back down until it broke a little above the down trendline in April of this year, 2010. That little blip can more easily be seen on the weekly chart so lets move to it now, zooming all the way in to only display that last move down over the past 7 months or so. I got back in short after price dropped back below trend line and I was convinced this was consolidation before resumption of trend and not consolidation before reversal of trend in May 2010 and remain short on this position trade to the current time.
So the monthly chart is mostly for historical perspective. I do use it as a higher timeframe reference chart for the weekly chart, but my position trading is really done from the daily and weekly charts . If you look you can see the upper and lower trend lines in the weekly chart and I mark them on the weekly chart and then refine them on the daily chart. The daily chart and those above it are what I use for position trading and we will discuss this more at length later.
Moving down to the daily chart and displaying about the last 7 months of data shows the down channel clearly. This is my home chart for position trading, using the weekly chart for higher time frame trend reference. Here you can clearly see where the upper trend channel line was penetrated by increasing price in the 2nd week of April, where I exited on the possibility of consolidation before a trend change, and where the price moved solidly back below the trend line in the first week of May where I decided the consolidation was that occurring before a continuation of trend.
I’m currently short on this position trade and will remain so until I have a signal that the trend is changing back to an up trend, be that days, months or years. For those who think this down trend must be near an end, remember the previous drop to the 0.8200 region before bailing out thinking it’s so cheap it can’t go any lower.
We move on down like this performing analysis at every level, trying to squeeze every drop of information from every level. Swing trades are made from the 4 hour chart with the daily chart used for higher level reference and day trades are made from the 1 hour chart with the 4 hour chart used for higher level reference.
In the end, when we think we have squeezed all the information available from the charts (there’s more there, we just can’t see it yet), it’s time to add a little fundamental information and complete our picture. If the picture seems incomplete or confusing, don’t trade it. Just set it aside and sleep on it and start over again tomorrow. Only trade things you understand, or at least things you think you understand.
Should we refine the overall trend line as we go into the lower TF looking at the picture, or is drawing the trend line on the Weekly and refining on the Daily sufficient?
Also, can you look at my trend line, I believe I drew it correctly.
Now we are down to the level of trading. A swing trade could currently be initiated from the 4H chart if an entry signal was found, since the higher level reference chart, the daily, is also in a down trend. Of course, even higher level charts, the weekly and monthly, have some statistical correlation to the success of the swing trade, but that correlation rapidly drops off as we move further out from our home 4H swing trade chart. In this case, all higher level charts are also in a down trend, so there is no conflicts to resolve and all higher level trends point to a higher probability of a successful sell swing trade than a buy swing trade off the 4H chart.
But we can’t just jump in and hope things go well. We need a good entry. To get a good entry and have a good trade, we need a good trading plan. If we don’t have a good trading plan, we would be just as well off, and perhaps better off, just flipping a coin to make our decisions. We’ve discussed trading plans for day trading already. They have to be general enough to apply to whatever day trades you might want to take that day, but specific enough that you can’t mess them up. It’s not enough to say get a good entry. What is considered a good entry must be specifically defined before the entry is made. The goal of the day trading plan is to have all the decisions made before you get into the trade, but still have it general enough that you can take any good trades you may see during the day. If a trade opportunity comes up that is not covered by your day trading plan, you just can’t take it. You have to write a plan for say entering a squeeze breakout into your plan before taking it. That’s the only way to be successful at this business. You should have a cap on the maximum number of trades you will take in a day as part of your plan to prevent overtrading. If you initially set that cap low, at say 5 trades per day maximum, you will find yourself being much more selective in your trades, making better trades and making more profits with less stop outs. You can adjust that number later after some experience, and you may want to adjust it down if you find you are still taking questionable trades, but more than 5 a day when just starting out has to be considered overtrading.
Swing trading goes much slower. You have very few on the spot decisions to make. You generally have hours to look trades over carefully and make good decisions. Any swing trade you enter without thinking it trough for at least an hour or two is questionable. Your trading plans for swing trades will be different too. They will be more detailed and more specific for that particular trade. Hachiko wrote a trading plan a while back and I said at the time it was probably too single trade specific. At the time we wanted something general enough it could apply to anything that might come up during the day. But I also said it was a good example of a longer TF trading plan and we would use it later. Well, now is later and here it is again:
USD JPY Trading Plan - May 6 2010 (GMT+8)
Long Term Trend:
Review of Monthly, weekly and Daily charts using Linear Regression channels shows that the downtrend could be ending in a breakout that commenced in late 2009. Daily is bouncing off the upper BB heading down.
Medium Term Trend:
H4, H1 & M30 are all in down trend, hence this is deemed to be an opportunity to take a medium term short position.
Strategy:
• Enter short on retracement to catch the remainder of the Daily chart drop from mid-BB to lower BB near 92.00, some 160 pips.
Tactical Plan:
• Enter short when M15, M5 & M1 are all below mid-BB and stochastic filter clears short entry.
• Set initial PCI SL above high of retracement of 93.99 on the H1/M30 charts.
• As SL in vicinity of Round Number, move SL a few pips higher to avoid stop outs, ~94.05
• 1st target for scaling in is lower BB of M30 ~93.52. Currently around 30-35 pips but may change as BB’s move
• Add additional lots at targets based upon multiples of 30-35 pips. Intend 93.52, 92.91 and 92.61
• Lots are not taken off but locked in with SL when next lot is added
• Manually trail SL for all using STARC band with 2 x ATR setting
• Close all positions before 92.00 (say @ 92.10) since round number will likely act as support for a bounce.
Regardless of whether you like these strategies or not, this is an excellent example of the level of analysis and thought that needs to go into a swing trade trading plan. You should limit your swing trades to about 5 per week max to start, so you will have plenty of time to think them over carefully and plan each out. Without something like this, you will lose, just like you will lose in day trading without a trading plan. The only difference in swing trading is you will lose more per trade without a trading plan, but on fewer trades.
By the way, Hachiko can confirm this, but I believe he made many good pips on this very trade. Pips good.
For these very long trendlines used in swing and position trading, I will draw them rough on the weekly and revise it to be a little more accurate on the daily. For shorter term trendlines, like something for day trading the 1hr chart, I may draw it where it is clearest and easiest, say on the 4 hr chart, and revise it to be more accurate on the 1 hr or even 15 minute chart. I kinda go back and forth until I’m satisfied with the result.
Your trendline looks good. No two people will draw these exactly the same. I would personally draw the top to touch at that last pin bar candle that is about 6 candles to the right of where you drew your top to touch. That reduces the penetrations of the trendline by one, and was the exact spot I thought the up trend had maxed out and trend was turning down, because of the pin bar candle there. I only took about half my position off at that point and I waited for the market to confirm my suspicions and that cost me a couple hundred pips, but no worries. The entire previous buy trade ran over 1800 pips with many lots, so risking a couple hundred pips to be sure the market wasn’t giving me a head fake seemed a reasonable decision at the time.
Cord, just wanted to say, I wasn’t trying to brush off your question, that’s really how I trade through the news these days. Here’s a more detailed answer.
I was actually was quite good at scalping the news when I was a younger trigger happy trader. I would watch the market just about 5 minutes before the news came out. Price would usually start drifting a little one way or the other. Most of the time that is the big players positioning themselves for the news. If price drifts a few points or pips up I’d buy, a few down and I’d sell. When the news comes out, the market would move in the predicted direction most of the time. I would only ride it until the first tiny sign of a pull back, sometimes 20 points or pips, sometimes 50, then I would exit and the trade was over for me. It didn’t matter after that if it went up another 50, or dropped 100, I was out. I wouldn’t advise trying it these days though. The competition is way too tough for these quick pips now.
Now that I’m older and hopefully just a bit wiser, I trade longer Time Frames. If I’m nearing an entry just before the news is coming out, I’ll wait well after the news is out before entry to see that the market has fully absorbed it. That might take 30 minutes or an hour or more. Once the market has settled well I’ll trade as usual.
If I’m already in a trade but don’t have much at risk, I’ll probably just ride it out risking a small stop or a nice boost in pips. If I have concerns and time, I may watch the price just before the news breaks as in my old scalping days. If it drifts a bit in the direction of my trade, I will usually get a nice boost when the news comes out. If it moves a little against the direction of my trade, I may prepare for a major move against me. That may mean moving my stop to break even, tightening the stop, or rarely if I feel my pips are really at risk, exiting and waiting until the news is out and re-entering later, hopefully at a better price. If I don’t expect the news to be too serious though, I’m more likely to try to ride it out.
The goal of a swing trade trading plan is the same as a day trading plan, to make every decision in advance before precious capital is at risk. assuming you’ve already done your analysis, you already know which pair(s) you want to enter. Your swing trading plan should specify just what method(s) you will use for entry in a precise manor so there will be no doubt as to when or when not to enter. Position size and management of the trade such as when to add lots and when to take profit should be specified in advance. What size stop loss to use, or what criteria to decide stop loss size should be specified in advance. What to do if the price moves suddenly and deeply in your favor or against you. Under what conditions will you exit early?
Swing trades usually run from 1 to 4 days and sometimes are held over the weekends despite the opening gap risk. If you are trading a very large position you could purchase a futures option a couple hundred pips out of the money as insurance against some catastrophic occurrence over the weekend. You can sell the option back Monday morning if the worst didn’t happen over the weekend. This can take quite a bite out of profits though and if you are that concerned about your level of risk, you might just close out on Friday anyway and reopen with the market open the following week if it still looks good. In any case, all these decisions should be made in advance.
The biggest advantages of trading longer time frames are small time requirement and really big pips, 300 to 500 pips in a volatile pair in a week is quite common. Using a system like 5 lot can easily turn that into 600 to 800 pips per trade per week or more. if you can get just a couple or few good trades a week, the return can easily exceed day trading with much less time invested.
Since you’ll be trading off the 4Hr and daily charts, only one candle will be printed every 4 hours and it’s easy to be away from the screen for hours at a time. Many people who work day jobs adapt this trading method to their schedule and do quite well. Another advantage is since so few trades are made, spread costs are much lower than day trading.
So why doesn’t everyone swing trade? I believe many day traders like the action of placing many trades each day and are bored by making pips without many trades. And there is also the concern of the higher stop loss values required. The initial stop loss required for these trades may be 40 to 60 pips. But since you put so much time and effort into making sure your entry is good, stop outs are more infrequent than in day trading. If necessary, you can reduce your position size to keep the risk the same as you would incur with a 20 or 30 pip day trade stop loss.
If you already have a system you are happy with, I wouldn’t change it, but if this style fits your your situation better, by all means go for it. It’s great fun to come home in the evening and see your first lot took 80 pips profit during the day and two more lots were put on with stop buys or sells and now are well into the money. Waking up with 200 or 300 pips profit is a great way to start the day as well. Another advantage of trading the longer timeframes is the trends are more stable and it’s much easier to manage putting on multiple lots because of the slower moving trades.
So just how do we go about entering these trades without getting eaten up with a series of 60 pip stops being hit?
Hi Graviton,
still awake? how much new material I missed yesterday, I am going to study
Do I understand correctly that swing trade is in common the same trade as on 1H chart(or any lower) only on the high timeframe chart like daily, weekly
and we use the same trade method on 1H as well as on Daily Chart
swing tranding method is the trade on Daily chart with the same method as we use on 1H ???
hmm, just kaleidoscope with bits of words …
well,
what is definition of the swing trade and what position trade is?
is it not the same thing?
from my understanding position trade is the trade when you enter to the market by the order at the particular price, that you have desided, aslo you specified your SL and TP, but it can be done on lower TF as well
and what is the difference between swing trade and position trade?
RenaLa, all good questions. Good questions really help me organize my thoughts on these subjects.
Different people define this differently, but as I define it day trades would enter and exit in the same day. Rarely a day trade would be carried over to the next day. Usually these would focus on 15M to 1H TF.
Swing trades will last from 1 day to 4 days. Rarely these trades will be carried over the weekend and run for 2 weeks. Swing trades will focus on the 4H and daily charts.
Position trades will last from weeks to months. In some cases they may run for more than a year. Position trades will focus on the daily and weekly charts.
As it turns out, because of the fractal nature of price movements, the techniques you have learned and practiced in day trading translate directly to swing and position trading. My testing over the past few weeks indicates that if anything, the CBL entry actually works better at the longer timeframes. Trends tend to be more sustained at longer TF’s, so multiple lot strategies work better and there are lots more pips to win between entry and mid Band BB and opposite BB.
It turns out that nearly everyone who seems to be having problems making these techniques work has the same problem of over trading. If trades are selected carefully on objective criteria and carefully post-analyzed, over trading can be avoided. In day trading I limit myself to 5 trades per day. Once I hit my limit, I’m done for the day, win or lose. This forces me to be more selective in my trades and eliminates over trading. Since more pips are at risk with longer term trading, I’ll go into methods to deal with overtrading first and answer questions on that subject. Then we will look at entries and position management.
Long term trading will be the last part of what I had intended to discuss in this thread. I will go into a bit more detail on how I do pre-trade analysis, design a trading plan, optimize entries and perform post trade analysis. After that I will answer questions to the best of my ability and try to help resolve any specific problems individual traders are having with their trading.
Once again, because of the fractal nature of price changes, techniques perfected at higher timeframes apply for the most part to the lower time frames of day trading as well. So even if you find long term trading too boring, there should be information discussed that will greatly improve day trading.
While I day trade to practice and perfect my skills, these longer term trades account for 75% of my profits in the Forex markets. There are many days that I don’t day trade because the markets aren’t favorable, but I nearly always have swing or position trades running.
If anyone has any questions along the way though, please feel free to ask and I’ll give the best answers I can or enlist the help of other senior traders to find answers.