Multi-Time Frame Trend Trading

Beginner Questions
1207

lucominato, do you short on au?

1211

Hi graviton! I understand you always use multi lots, but i wonder how many percent of it do you risk on the subsequent lot?

Makes more sense to have a heavier lots at the start, and lessen it as you go along?
This way you won’t get wiped out should the trade go against you?

Would love to hear what you think of it :smiley:

1212

Hi Graviton :slight_smile:

can we look for some pairs to trade for tomorrow? which one you can recomend?

1213

Luco, the answer to your problem isn’t larger stops. In fact, if you are losing, larger stops will just cause you to lose more in the long run.

You are overtrading. There are simple solutions if you have the discipline to implement them. I’ll work with you on this if you’ll follow my directions and keep me posted on your progress. This will have to be worked intensively to fix it.

Cut your position size to 1/2 until you get this problem solved.

Make a rule that to enter any trade, you need three good reasons to enter.

One reason can be a valid cbl out of a squeeze.

If you are in a no trade zone, follow these rules:
Do not take anything less than a 2 candle cbl. A three candle CBL will count as one good reason. Do not enter in a no trade zone if more than 3 candles have penetrated the BB against the direction of your trade since the last expansion from the last squeeze. Do not enter a short trade in the no trade zone if the BB Mid band is pointing up more than 2 o’clock. Do not enter a long trade if the BB Mid band is pointing down more than 4 o’clock. If you can’t tell, don’t enter. Do not enter against the direction of the higher TF trend.

Other reasons you can use to enter are, a bounce off support or resistance line, a break of a trend line, an indicator divergence, etc.

Keep good records of your 3 good reasons to enter each trade and other important info like stop loss etc. If you are still having problems with entries, post the problem trade marked up with info on it and I’ll work my butt off to help. You have to do your part too, that includes trading with discipline, keeping a good trading journal and having a good trading plan.

Don’t be concerned. This is very common. We’ll work through it.

1214

The rule is gaps usually close before price makes a significant new high (or low) in the dirrection of the gap. This seems to work a very large percent of the time, but nothing is 100%.

In the case of AU, the gap only closed about 1/2, so if the rule holds, and it isn’t 100%, price should come down some more to close the gap. That usually happens within a week or so. Remember these are probabilities, not certinties. Don’t bet the ranch on it :slight_smile:

1216

Thank you for the kind words Don. Much of what I’ve learned about trading was shown to me by others kind enough to share. I’m glad I’ve been fortunate enough to have a chance to pay some of that back in some small way. Happy trading.

1217

Graviton, your thread is very popular. :slight_smile: To many advertisement’s agents want to post their ads

1218

Hi Graviton!

Without knowing the trend(of course, we do not trade in that way:o) would you pick this kind of trade? Or what do you think about this kind of ranging market?

I personally do not trade this kind of PA, but it would be nice to trade the trend on the right side of the picture where we can see a BB walk. Is it possible?

Thank you very much!

1023×504

edit: do not trade, because this is only 30min chart and I prefer H1 and H4 charts.

1219

All my lots are the same size, 1% of my account balance risked. I may have many lots on, but I never risk more than 1% of account balance on any trade. If you review my strategy, you see I take profit off the first lot as soon as the third lot goes on. After that point I have no risk, so I never get “wiped out”. At worst, I lose part or all of my stop loss on a single lot, which never exceeds 1% of my account balance.

There must be 100 good variations. One is to cut lot size in half, to 0.5% of account balance. Then lots go on in pairs. The first half goes on and if price goes against you a little, you wait. If price immediatly goes in your direction, you immediatly put the second half on. If you have a bad entry on the first half, you don’t put the second half lot on. This further reduces risk. Does that make sense?

1220

Just saw your post. I had a minor A/C problem that I had to get repaired. I’ve already posted about AU, but be careful, it’d very volatile. AJ will follow AU, but it’s even more volatile. The best way to handle the volatility is to reduce position size, trade off longer term charts with larger stops and insist on only the best entries.

EU has broken down out of it’s trtracement trend channel. It should return to it’s major trend down. EJ will follow EU, but it’s volatile.

If the above 4 pairs are going down, then GU will go down and GJ will follow. These are the most volatile.

If all the above happens, it creates a strong dollar sceniero where any pair with USD on top is likely to go up and any pair with USD on bottom is likely to go down.

1221

I think if you take every valid CBL shown on the chart you present according to my rules and those of Tymen both, you’ll make 3 times off the range trades of what you’ll make on the BB walk, and get the BB walk too. The trick is don’t exit a trade until a valid CBL is made in the OPPOSITE direction, and take them all. See what I mean?

1222

Everyone watch the nice daily CBL’s forming as the market moves from weak dollar to strong dollar. Some really good swing trades forming. Some will run for days or weeks.

1224

If I understand it you would jump from one trade to antoher without knowing the trend on every valid CBL.

So, little improvement?

  • if you analyze the the pair, you would only take the trades which are in the direction of the main trend?

And this would be very nice on H1 or H4 chart(my favourites), but this is 30min chart. So it is more risky to trade that TF or u would still pick this trades?

1225

I have read in the book that the gaps and Island Reversals Tops are different PA patterns.
For me AU PA looks like Island Reversal Top.

thanks for pair’s behavior explanation :slight_smile:

1226

I am already bulling on usd/cad

1227

I agree - see below.

The trick is don’t exit a trade until a valid CBL is made in the OPPOSITE direction, and take them all.

If you exit on the touch of the opposite BB you will make more pips.

I picked several trades from this chart, each from a squeeze area and avoided the no trade areas.
Blue - OBB price action.
Pink - OO price action.
Green - OM price action (to mid BB only).

There may be more trades, depending on how it appears at the time of entry >>>

865×431

1228

Graviton,can you look please at your usdcad 5min chart,
can you see there are two candles bullish and bearish (open& close @1.0251).

Was it a valid cbl entry for short?. I have exited long trade

1229

The post of the 3 reasons for a trade is a good one,seems that all my losing trades had one or 2 good reasons to trade,and in the ones with 3 reasons i was late to enter-and that seems to make the trade lose 1 or 2 reasons to enter

1230

Interesting what pair will follow usd/cad? looks like uptrend is over

1231

If I identify a range, I have no problem trading it both ways. The problem is identifying a range in time to trade it. Half the time the range trade is near completing by the time I identify it, so I only get one or two swings before it takes off one way or the other.

I can’t see the higher TF trend, but odds are it was in an up trend going into the trade and reverses into a down trend at the end of this range trade. So this range trade is just the consolidation at the top of the higher TF trend reversal from up to down.

Every squeeze, or consolidation ends in a BB walk, or breakout in the end. If you properly range trade, you will most often already be on the right side of the trade when the breakout comes at the end of the range.

It doesn’t matter much what time frame you choose to trade. Because of the fractal nature of the market, the same techniques work on all time frames. The advantage of trading longer time frames is the spread is a smaller percent of the profits. That is, fewer trades with more pips in each trade. The disadvantage is the trades take longer. I trade time frames one hour and up, but I’m watching all the shorter TF’s to time entries, add lots, take profits and adjust stop losses.

The shorter TF’s I use for practice and the longer ones I use to pay my daughter’s college tuition. You just can’t get much practice trading a weekly time frame where you only enter a trade once a month or so :slight_smile: