I use Insta and Roboforex and got no problem with this trick.
Hello Nikitafx, first off you are now my number two hero. Iām greatly enjoying your thread and so far am about halfway through. I was already trading bias before reading this with fairly good success, but had no idea what it was called. It just made sense and all your ideas are making me much more confident in my tradesā¦ I just have three questions that maybe you answered, but I missed them or didnāt get to them yet.
You said that if, on the D1 chart, yesterday was a sell then today would be a sell and vice versa. What Iām wondering is if yesterday was a sell, but was also a trend change candle such as an inverted hammer would you make today a buy or a sell?
Second. On price correlation. Iām still a little confused on this one. How does this affect your trading exactly? If, for instance, I had a trend change candle on audusd and bias was correct, but I then went and looked at the usdcad (they usually trend in opposite directions) chart on the same tf (1h) and it had no signs of reversal would this be a no trade? Or do you just do it by the price correlation numbers for the day (i found some sites that supply these for different tfās).
My last question. What do you use the elliot wave theory for? How does this help your trades?
hey teb5108 I will not comment on correlation as I am not to good with it but it is an important thing to watch. As far as your first question. When you see a reversal candle that could potentially reverse market bias. Then I strongly recommend you just wait on the side lines and stay out that market. Once the market decides what it wants to do then continue tradeing. You only trade when signals are clear. If market is not giving clear signals pick another pair or wait it out.
Well that answers one question 
thanks. Another thing, what exactly does it mean to misread bias? Is that usually human error or just a quirk where the market changes direction with no signals?
Hi Niki
Just a quick question which may seem pretty obvious but Iāll ask anyway.
Iāve saw you mention before that your account balance grows because of the compounding factor. What exactly do you mean by that?
Do you mean that if you make a profit on one trade, say by trading 1 lot, then in the 2nd trade you would use the profits made in trade 1 to buy/sell 2 lots this time ? Then presumably risking an amount that would have taken you back to the level you risked on trade 1.
I hope that makes sense. Basically I am asking how you work your compounding process.
Thanks
HoG
No compounding is lets say you make 5% of your account or 200 pips on a trade. And you just entered an trade that made another 5% of you account your profits in pips will now be 210 pips. The reason is because everytime you profit you can use that profit to make more with.
I see,
So if you profit, and continue to use a constant % of your entire balance, your balance naturally grows at a higher rate.
Thanks bobmaninc
yes sir thats how it works.
I am happy that my ramblings here has helped you somewhat in trading.
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I will keep an eye out for reversal but whether I take a trade or not depends on the signals I see on H1 or H4. Unless there is signals on lower TF and a valid SL I just watch.
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Price correlation is another signal / method to add to the accuracy of our chart reading. Just take three pairs, GU EU and AU. Sometimes, reversals and bounces are much more clearer, with very good SL in one chart but not the other. So it not only adds to accuracy of chart reading, but also gives us more options to trade.
I have stopped using inverted pairings to look for bias for sometime now. Use to be GU EU AU and UCHF on the other hand to look for correlation. Now its only GU EU AU and occasionally NU.
You are right when you say some pairs show a reversal and the other correlated pair does not. When it all does, then you know christimas is early this year. When its not, try to use all other tools you have to make sure you dont go on a loss.
Someone did point out pages where they give you numbers on correlation. I take this with a pinch of salt because the numbers represent what happened yesterday. Not whats going to happen today.
Correlation is not written in stone. It changes. So keep that in mind.
- I follow and read up on Elliot wave but I dont use it to trade. It does not suit my SL requirements.
I hope that helps with some of your questions.
We are not used to reading Candlestick charts. We were never thought how to. We are more used to reading linear and parabolic representations. Now throw money into the mix and you have a very interesting thing in your hands.
Our minds refuse to accept what the chart obviously says until after the move is over. Bounce and retesting prices is not how our minds are usually trained to interpret graphical data. So often we keep thinking its suppose to go the other way round when the chart says otherwise.
Its hard to just observe and not think.
Hi HoG, nice to see you on this thread.
Well compounding is just this.
Imagine you have 100 USD in an account and you are playing say 10 cents per pip as part of your risk.
Now imagine your balance is 1000 USD and you are trading for 1 dollar a pip. Your risk % is still the same if your SL is the same.
When risk % stays the same and your USD 1000 grew from USD 100, then we say that you are compounding your earnings. In otherwords, 90cents per trade from the 1 dollar trade is profits reinvested. Hence compounding.
But then I think you already know that.
I think what you are trying to ask is what happens when I run into a loss. Wouldnt I be loosing twice as much since I am risking more everytime?
Well if thats your question, this is what I do.
I calculate my SL for 100 pip block. So say I can risk 100 USD, it representing 1% of my account. So I know on this level, I can trade 1 USD per pip.
Then I go and trade. Most of my SL is about 20 or 30 pips. I take about 60 pips before calculating risk / compounding again.
It might be in one trade, or more than one. As long as I cross the 60 pip mark, I move up.
This method is abit different from what many do out there. They tend to calculate risk after they have found a trade set up and decided on the SL.
I dont like this method because it gives you no room for error and if it hits SL, you will be in a bad shape. I prefer thinking of SL as a purse to spend. If my first trade goes sour and I am out by 30 pips, I still have about 70 pips to spend for recovery. It really takes the stress out of compounding.
I hope this long answer helps you somewhat HoG.
And hey great work in coming back up to 113. Its great, especially when you were at 40.
Hey thanks for the speedy reply nikita! It really exlpained alot. ugh I just got the perfect entry on AUD and the new order button does nothing when I press itā¦ Iām guessing this is a broker thing. (fixed) ouch the trade just reversed over 100 pips in one candleā¦ fundamentals I guess
Iām curious nikita. When you say you confirm before pulling the trigger through correlation does that mean that all four of those charts (au, gu, eu, and zu) are correlated or just 2 or 3?
good luck on all of them correlating if you do you better listen on it. 2 is fine 3 is better 4 is great
Okey doke. Reason I was wondering is because I just got burned on aud even though au gu and zu were correlated (and still are). I really canāt find anything I did wrong it was a perfect shooting star right on the trend line with gu already in a confirmed reversal pattern. At least I was only trading a micro lotā¦
Thats all part of trading nothing is perfect. You didnt do anything wrong you read your signals and act accordingly. Proper money management and it will work out good luck
0.9448 would have been my last sell if you had traded AU and went in with candlesticks pattern.
You got about 40 pip from it before it reversed. your SL would have been at 0.9480.
I usually either move the trade to BE at those pip levels or TP.
Otherwise your trade was a good one.
Thanks. I just rechecked and realized I had set my TP too far (whether it was out of greed for pips or pure stupidity I canāt recall). Oh well it was only 4 bucksā¦
Just a quick, basic question. When you look at D TF, do you want the confirmation in the form of a FULL/āfinishedā daily candle, or is it okay as long as the current one is confirming? Thanks.
also, does anyone know how to liquidate half your position on FXCM, or do I have to make two different entries? For profit locking.
- Its always good practice to wait for candle to close before deciding which way its going to go. That includes D TF.
But then u have to be discretionary when it comes to trading bounces, like GU 1.5340 yesterday.
I didnt not take that trade as I was doing something and by the time I got back my SL had become 40 plus pips. SO decided to for go. But otherwise its good to wait for candle to close.
If you are using FXCM TS platform then u just click to close position and put in the desired lot you would want to close. It also works the same way with certain brokers using MT4 platform.