Welcome aboard! Things have gone so well, I’m thinking of rolling out something new. Well, really, it’s just a combination of things we’ve gone over and over before. It’s simply a longer term swing and position trading technique that enters mostly on a 1H TF and walks up timeframes using a multi-lot strategy to the daily or even weekly chart. It a more advanced technique and might not be suited for new traders, but for those with a little experience and who want to trade longer TF’s due to having a life, it should be great fun. Happy trading 
OK, I can see it now. So you are in a good trade short. You stay short until it retraces and breaks out above your yellow downtrend line. Think about exiting with at least 50% of your profit once you get over 50 pips profit. Price could then go all the way back up to the red up-trend line and test it as resistance, then bounce off it and move down again, Though as steep as the red up trend line is, I kinda doubt price will make all the way back up there before it turns back down. Then yes, it’s headed down to test the green up trend line. I doubt price will penetrate it. I’d expect it to bounce off and go back up again, but yes, if it does penetrate the green uptrend line it should head down for the blue support line.
Now that is just a possibility. It’s also possible that price will do just what it did last time, head straight down to the green up trend line support without retracing. It’s unlikely since that doesn’t happen that often. But in that case, you are in great position! So if I’m right and price tries to retrace back up and test the red uptrend line as resistance and you exit with half your profit, you win a little. And and you can always re-enter if and when price turns back down to head for the green line uptrend to test it as support again. If I’m wrong and price heads straight down without looking back, you win a lot. Good position 
Once price gets to the green line, it can bounce off or penetrate. Their are more bounces off a well established trendline than penetrations of it, so odds favor a bounce off and move back up. Of course, eventually, every trend line is broken. When they are, it’s almost always a good trading opportunity.
If you make it to the green line and there is any hesitation of downward price action there at all, take your profit and wait for the price to tell you what it’s going to do. Unless you get a strong fast downward penetration of the green up trend line, I wouldn’t risk much at all on thinking it will continue through to the blue support line. Even if it does, it’s likely to whipsaw you out of a big chunk of your profit before it does continue down.
I don’t know if you know this or not, but you have a great eye for trading trendlines. It’s just a talent some people have and some don’t. That in itself is enough edge to make you successful over the long haul if you are patient. There will be wins and losses as with any system, but if you can get the won pips to outnumber the loss pips over the long haul by exploiting that talent, you will be well on your way. You’ve come a long way over the past three months RenaLa. Congratulations on your progress
Hi, i have finally finish the thread and is now trying to do some demo trading. My tading plan states that I shouldnt trade against the higher TF(H4). But I have problem finding the main trade. How do we know if it’s a change in trend or it’s just a very strong retracement?
An example will be the GBPUSD,H4 where it trends downwards till around May then price moves upwards (i believe the trend has changed) and now it is going down again. So, is it going back to main trend or is it just a retracement?
I believe it’s a downward retracement as the high it formed is the highest in about half a year. Thanks in advance.
Fwoh, thanks grav! Never give back pips that you earned! That’s a super important rule that i’ll never forget.
As for the additional lots strategy, i believe all of us have different ways of managing the trade and adding the lots. Still thanks for sharing your ideas, i believe i could incorporate some of it into my own strategy.
Well, i won’t be trading this week as i’d be off to genting highland for a few days. To breath some freshh air and what not.
Have a great trading week all!
Hi Graviton,
having read through the posts for quite a number of days, and nights now, i wish to profoundly thank you for sharing tremendous knowledge and wisdom with such generosity and awesome patience.
before this thread, i often wondered how i could ever figure out my trading, seeing that i’d do the same mistakes over and again and not knowing what end to look for to start fixing. Then you showed the flow of time, walking frames, trade stats! things are rolling and p/l begins to show it 
‘m in the process as is, gathering stats, assembling excels, looking forward to more unbelievable learning and sharing. As well, expressing forward thanks and appreciation to Tymen and the great contributors on this- and ‘The finest in trend trading’ threads who’ve made such learning possible.
Great pips to all!
Welcome aboard! Looking at the daily gbpusd you can see a well established downtrend line that has been touched about 6 times starting on Aug 13. I’ve been selling each time price bounced downward off that down trend line. Each sell signal was confirmed by a 1H cbl down at the same time as we were getting a bounce back down off that down trend line. I will continue taking short CBL’s off the 1H as long as that down trend line isn’t broken. If it is broken, I would look to go long with a tight stop just below the old downtrend line. Right at this moment, price tested the H1 100sma and failed and is moving back down, but I’m waiting for another 1H cbl down to re-enter.
That’s great to hear IbePipin. You are doing the exact right thing, treating your trading like a business. Collecting your stats and tracking them with graphs and charts and such is almost like a magic bullet. Everyone I know that starts treating their trading like a business sees quick improvements in their results. Keep up the good work!
when I have gratuated trading class, I didnt like indicators for some reason.
the first thing I understood it was trend line.
well, the market today is very slow.
I did trade gap on that chf-jpy position insted of take short entry to the green down trend line :rolleyes:
thanks for explanation
why you didn’t like it? but today, you used to it, right?
I dont know why, may be it was so boring
today I made 60 pips on usd/cad and 40 pips on cad/chf (I have just closed my trades)
I had only BBands (20,1), BBands(20,2) and support and resistant levels and trend lines. That’s it.
Sometimes I like to use MACD to see where the price is.
I do like EMA (200) also
it was boring but I think it somehow helps you today in forex trading, if not that helpful, maybe a little help.
Trading seems to be improving a little as everyone gets serious after summer holidays end. I expect trading to improve each week until holidays hit at the end of November. That means longer trends and larger moves.
Be careful of Yen pairs. Rumors abound that BOJ will intervene holding the value of the Yen down and supporting pairs like uj, ej, and gj. These are just rumors since the BOJ has an official don’t ask don’t tell policy with regards to intervention, but markets are made on rumors every day.
Irish banks and Greece having problems, so I am trading short euro vs. everything else except the Yen. GU seems to have finished retracement up. I’m thinking of taking an M30 cbl down if it develops. We’ll see. Happy trading
Intraday Highlight:
GBPUSD - The ratio of long to short positions in the GBPUSD stands at -1.16 as nearly 54% of traders are short. Yesterday, the ratio was at 1.03 as 51% of open positions were long. In detail, long positions are 2.2% lower than yesterday and 5.4% stronger since last week. Short positions are 16.4% higher than yesterday and 26.0% stronger since last week. Open interest is 7.0% stronger than yesterday and 7.6% above its monthly average. The SSI is a contrarian indicator and signals more GBPUSD gains.
Maybe to be in use of someone.
Graviton,
Would you please discuss the SMA and how it appears on different TF’s? Say you look at a 200SMA, it’s above or below the price action depending on the TF. I think the simple explanation I get, it’s an average. There must be more to it, no? Do I need to tailor my use of SMA to the TF I am viewing?Maybe the 200 SMA is not that useful for the 15M chart. I imagine the 21SMA is not much help on a 4H or 1D chart. Why do they use a 21SMA instead of 20? Maybe Exponential SMA is better suited for multi TF usage? I could go on. I suppose reams have been written on this but maybe you can whet an appetite. Or maybe it’s not worth dwelling on? Your long-winded responses are always the best!
Thank You Sen Sai
Needy
Hi Needy. I’ve seen a dozen uses of moving averages. If you put every one that someone recommends on your chart you’ll have a big confusing mess. I usually have two or three on my charts. On about half my charts I have a 2ema that I use like a line chart to plot a line between candles. It’s kinda usless since you can easily see the direction of the candles without it. I’ve taken it off many charts since it really isn’t that useful. I have a 100 and 200 sma on all charts since many large traders watch those averages. I just use them as support and resistance lines. I don’t think they hold any special magic, but often price will bounce off them just like it does high-lows, Big Round Numbers and piviot points. That’s only because large traders are using those numbers to take profits or initiate orders.
There are a couple of recorded webinars that you can look at in the link below that discuss the 100 and 200 sma in detail. I’d take them with a grain of salt. I just noticed my windows security is blocking these webinars from playing on my computer right now. Oh well, I’ll look up the fix when I have time. Anyway, here’s the link:
Well! Who’d have thunk it? 3 weeks positive. Only 30% of previous weeks profits but at least it is positive. I nearly messed up big time though, taking a long trade on USD/JPY on Sep 7. Luckily I made it back out alive on a rumour based pop (even got a few pips as well ).
Currently short U/J at 84.272 but will close it before the weekend as I don’t know what will happen with BoJ.
I just noticed something I had covered in previous pages is giving many new traders a hard time. I had stated that when a trade goes against you right after entry, the best thing to do is exit quickly and re-evaluate the trade. If the trade still looks valid, then look for a better entry after the small retracement completes and re-enter. Also, that I will only take two losses in a particular pair using this technique. That is, if I can exit at break even or better, I’ll keep trying to enter as long as the trade looks valid, but if I have to take a loss to exit, I will only take a total of two losses in a particular pair before I give up on that pair for the day.
I saw that one trader said he had 10 bad entries in a row trying this, losing many pips. I suspect he was trying to enter the same couple or few pairs over and over against the trend of price. The only way he could have had 10 losses in a row had he cut his losses at two entry attempts and moved to another pair, would have been to take two losses each on 5 different pairs. So it’s extremely important that if you are using this technique that you cut your losses at two losing entry attempts for any one pair.
It’s also very important to carefully evaluate the trade basis after taking a loss on an attempted entry. Half the time the market is trying to tell you something. Perhaps price is trending against the direction of your entry, so any number of entry attempts in a row will fail. That’s the reason to cut your losses at two failed entry attempts for any particular pair. Sometimes the pair isn’t trending at all. It’s just ranging or consolidating. So if you are trying to trade short and you get an entry signal and enter, it will go a little way in your direction and then reverse back to the top of the range and stop you out. It will do this over and over as long as it is ranging and not trending. So to trend trade, it’s important to only enter trending pairs.
We discussed at length earlier in this thread on how to determine if a pair is trending. If it’s not trending, you have the choice of range trading the pair, or moving to a pair that is trending. So the first step in trend trading is to determine if a pair is trending, ranging or flat. You can’t make pips in a flat market so don’t trade it.
A ranging market on a longer TF, like the 4H, will often look like a trend running many hours on a shorter TF, like the 30M or 1H. Many traders trade those profitably, but you need to be aware of the range and time your entries and exits well. You’ll want to enter after you have a clear signal that the range has reversed on the longer TF, like a 2 cbl on the 4H TF. Trying to enter too early will put you in on the tail end of the end of a ranging move and you’ll be stopped out. It’s much better to be a little late to enter these trades than a little early. If the range runs 100 pips on the H4, you should actually try to miss the first 15 or 20 pips of the move, to be sure it’s not a short retracement before the move down continues. If the price is making a series of lower highs down, wait until that series is broken with a higher high, then enter when there is a retracement ending. You may miss 15 or 20 pips waiting for a good retracement back down to end and price to start climbing up again to enter, but that’s the price of avoiding bad entries. It’s actually good trading to try to miss the first 15 or 20 pips of a trend reversal.
If you have done all the above, you should be in a good position to enter. That is, you are sure the pair is trending and you have identified the longer term trend and are trading with it. You have waited patiently until you have a 2 cbl on the longer term trend before you try to enter. Say for a short trade you have looked at the series of higher lows on the lower TF that was occurring before the trend reversed down giving the 2 cbl down on the higher TF, and have verified that price has indeed made a lower low, breaking the up trend, then you waited until price made a lower high on the shorter TF, which was a short retracement to the new down trend, and entered as price was moving back down to make a new low, you should be entering the trend properly, missing the first 15 or 20 pips of a move down, but not entering on a continuation of an up trend. Doing this step by step should give you a 70 to 80% w/l ratio. You can draw up trend lines and down trend lines on the shorter time frames to help keep track of these trends if it helps you. It does seem to help me a lot.
Finally, if you find that you are doing all the above and still getting way too many small losses, say for 8 or 10 pips with early exits, you may just be trying to trade a volatile pair at a volatile time of day that is moving in a very choppy fashion. Price will move in a very choppy fashion when liquidity is low and big trades are coming through. Check the ATR of the lower time frame you are using for reference in watching the series of higher lows of an up trend or lower highs for a down trend. If the ATR is greater than your early exit point, you may be exiting on market noise rather than true price action.
For instance, at this moment I’m using the 15M time frame to watch the series of higher lows form on the eur/jpy pair. The 1H is trumpeting open and price is moving higher, and the H4 is at the top BB of a tight squeeze. The daily chart has made an up cbl. I want to make sure the H4 is going to move higher and not form a down cbl to enter. Then I want to enter as another higher low has just formed on the 15M chart and price is moving higher. That is the trade set-up I’m looking for. If it doesn’t happen, that is, if price goes lower and forms a lower low, then I won’t enter. If price moves just as I expect it will, then I’ll enter as the next higher low completes and price starts to move up again. Right now, the ATR of the M15, which I am using to time my entry, is 14 pips and I have a 4 pip spread. That means I need to allow a minimum of 18 pips for the trade to develop. That would be 1X ATR plus spread. Since this is a very volatile pair, and both London and NY are trading, on a Friday, this is a very risky trade. I’ll probably need 1.5 X ATR to stay in the trade, or 21 pips plus spread or 25 pips. So I have to ask my self, am I willing to risk 25 pips to stay in the trade? To get a good r/r on the trade of 1:2 the price will need to go up 50 pips. Since the daily has made an up cbl, and it’s about 95 pips to the midband, I believe if the setup forms, I have a very good chance of making my minimum 50 pips on the trade for a 1:2 actual risk/reward ratio. I could have taken the trade on the last formation of a higher low on the 15M chart, but I wanted to be sure I wasn’t buying right on the peak of a move, since the risk was so high.
Now 4 higher lows in a row have formed on the EJ 15M and price is rising above the last higher low. The H1 is still breaking out higher, the H4 price has moved a little above the top BB of a tight squeeze, the daily up cbl is still valid and I have entered. I entered with a 30 pip sl, but I’ll exit if this trade goes 25 pips against me. I’ve drawn in a trend line on the M15 and if price drops more than 25 pips from my entry point, it will break the up trend line and form a new lower low. At that time my trade basis will have been proved invalid by price action. I won’t try to enter on that trade basis again as it will have been proved to be invalid by price action.
So for this particular trade, I have very carefully decided to take a 25 pip risk. I put a lot of thought into the trade and I could still be wrong, but I believe I have a 70 to 80% chance of being right. Making trades this carefully, it will be very rare to have 10 bad entries in a row, but yes it is possible. In this case, the trade has already moved up 23 pips from my entry, which is nearly the entire risk I intended to take on the trade, so I consider this a good entry and I’ll move sl to BE at the bottom of the next higher low and let the trade run. Once the trade gets to 2 X risk, or to a risk reward ratio of 1:2, or 50 pips ahead, I will exit with a minimum of 50% of my maximum profit, or 50% of the maximum favorable excursion minimum.
If you believe using this method will generate 80% winning trades we can do the math to see how often we are likely to get 10 losing trades in a row. The number is 1/[(0.2)^10] or once every 9,765,625 trades. So this should be a very rare event. Even if the trade has only a 50% chance of being successful the probability of getting 10 losing trades in a row is 1/[(0.5)^10] or once in every 1024 trades, still a rare event, but that could happen if you are making 5 trades a day in about once every 200 days or so. So that means, if you are just flipping a coin to enter, you shouldn’t get 10 losing trades in a row more often than once every 1024 trades. It can and would happen, but it would be very rare.
So, in conclusion, if you get 10 bad entries in a row, you are doing something very wrong. If you have a very tight sl, less than 1 ATR, and you are trading against an established trend, it’s possible to generate 10 bad trades in a row, but it’s a hard thing to do. If you are using a sl of 1 to 1.5 X ATR, and trading with the trend, using good entry signals, and timing your entries carefully, this should not happen more than once in a trading career. If I can help anyone dig out of such a hole, I’ll do all I can to help. Please don’t suffer in silence. We can work this problem together and everyone will benefit from the exercise.
These are great results Hachiko! As I’ve said many times, it took me over two years to achieve those sorts of results. It’s all the more impressive that you did this during the low liquidity summer months. Can you please share your trading method or plan so others can benefit as well?
Thanks for the compliments Graviton, but my trade results are not impressive. I lost a bundle during the first 6 months of live trading due to poor MM, over-trading and excessive risk taking. I believe it will take me 8-12 months to recover my losses, but at least I can see a glimmer at the end of the tunnel.
My method is nothing more than following your advice, coupled with focusing on just the major pairs and having no more than two positions open at any one time, preferably only one. Position is defined as the combined trades on an individual pair. I may have multiple entries within one position.
As far as trading plans go, mine is very simple and is based upon the generic MTF plan you posted ages ago. I am supposed to write out a new tactical trading plan for each pair before an entry (but sometimes I am not as disciplined as I should be). Because I am such a dinosaur I prefer to write it out by hand and stick it next to my monitors. It helps me remember it and follow it. It evolves continuously but I try to keep it simple, like me.
Chart wise, I analyse using MT4 but trade on OANDA.
I only have candlesticks, BB and 8,5,3 full stochastics on my MT4 charts. I have two MT4 Profiles for each pair; an analysis view and trade view. I have posted screenshots of these profiles before for anyone who would like to see them.
In addition to the tactical trade plan for a pair, I have these web pages open at all times and review them continuously.
Forex News by Forex Live
Forex Calendar @ Forex Factory
Open Orders and Positions Summary - OANDA FXTrade
Open Position Ratios - OANDA FXTrade
I’ll type my trading plan up over the weekend and post it, but I can tell you, it ain’t nuthin’ fancy.
Thanks grav for sharing!
I believe many of us would benefit greatly from that descriptive detailed explanation of how you explained that particular pair.
It’s good exercise for us all as the weekends, and we can slowly go through the pair and see how you actually approached an entry and exit for it.
Great stuff and keep em coming!!