No I wont risk 20% of the 1000. Makes trading mch more difficult in the beginning.
Take 100USD from that 1000 in your account and make a say 20% projection. This is when your reading of bias is down pat. Or reasonably good. atleast 10 or 15 trades in a go without loss.
That means ur only starting with 2% risk from your overall capital.
But then you take 20% risk on your profits.
Always make it a habit to preserve capital. Dont hold positions that are eating into your deposited equity.
I use a calculator to just bang in the numbers on a piece of paper for about 15 trades and then paste it on the wall infront of my screen. That way I get a referral guide on where I am and what I should be doing.
In regards to point 7. Todays open will be above yesterdays open if it was a continuation of a buy. Now draw a line on that price. Price will retrace below itā¦then it will start shooting up, usually during the UK open and then all the way to the NY open and further.
Buy when it crosses the line on its way up after the retrace.
Again you wont get this sort of trades on a daily basis. Its just an idea to explain the concept.
hahhahaha Tom 82ā¦sorry it was a typoā¦ take 100 USD and risk 20% on thatā¦
Ur account will still have 1000 USDā¦but your money management is staggered that way.
Draw a line on EU D TF at 1.4368. That is the opening for today. Had u sold when the price started crossing that line from the top on UK session today, you would be looking at about 70 pips as I am posting this.
For todays entry, Look at the candle stick pattern on both EU and GU. You would not have sold AU cause yesterday was still a healthy bull candle.
so EU and GU was a sell yesterday. Sell today. That is for D TF analysis. Look at H1 entry and see how there was a beautiful pullback candle. If you had entered as the pull back candle finished, your Draw Down would have been negligible. I am already out of EU. My GU is at about 19 now. I might move the GU trade to BE now since I already hit my target for the day.
Since we already have an image up, might itself use that to post further dissection of H1 entriesā¦
See the left most period separator?? ( the horizontal gray line on ur left ). The third candle from that was the entry for a buy on Tuesday. Friday and Mondays candle were submerged without any momentum hence the lousy trade opportunities. Still it would not have cost you pips had you just followed the Communist Doctrine. you would have still made 40 or so pips and It gave you plenty of time to cut off without a loss.
See Wednesday, the space between the 2nd and 3rd period seperatorsā¦if you had waited for a buy then you did not get an entry signal on H1. So you dont buy. Had you waited for a few pips like me, you would have went short on the 17th candle from the second period separator. Got you some nice pips there.
So then todays trade has been concluded. It takes some practice but its a good way to increase your equity massively cause you can see the good ones from the bad trades easily with price action. And you can hold for BE if you made mistakes.
The nearest HH for that wave would be the smallest valid SLā¦which is about 1.4403 or there about. Right at the peak of the previous candle wick and please dont forget to add in your spread.
Look at GU, See how had you entered after the H1 candle did a pull back it went up against you by 20 pips but it did not go higher then the first wick where your SL would have been??
I waited for my EU to be in a profit and then took GU as additional because the second wick being shorter confirmed to me that the buyers have abandoned fort.
Red arrow would be the hour that this trade should have gone in. This would have been a smaller risk trade as there is no valid candle formation on D TF. But its still safe as the previous candle shows that its running out of steam and other USD pair correlates to show a fall.
If we had entered on the hour shown by the red candle, the yellow line would have been our entry and the yellow line at the top would have been the SL, which also turned out to be HH for the day.
Now its interesting to note how my SL has become so big now by entering where I did. The SL will still remain at the peak of todays HH as there is no other clear wave on H1 TF. That is why I keep telling newbies never enter a trade in the middle. Avoid entering a trade if you have missed the boat.
I get away with 10% risk and much much more than that because I never take trades in between. If I am so very tempted and my fingers are itchified to grab a few pips in the middle, then I drop my risk to less then 5%. It increases ur SL, shortens your TP amount and if it goes against you, it takes too much from your account.
5 hours into the trade I could move it to BE safely as we can see a sort of a pull back and a wave forming before prices continued south. That incidentally was my new SL, at BE after 5 hours of holding.
So I hope there is another pointer on picking SL.
Hope that helps.
Happy Pipping
( P/S this was an over night trade with 100 pips banked in )
Another very very very important tip when trading.
Regardless what TF you are trading, always wait for the candle to close before assuming anything.
Do not enter before a candle has concluded thinking that you are going to catch a price at an earlier level and make a few more pips in the process.
A candle that pulls back all the way to the opening price can always shoot back up and end as a very strong full bodied candle.
The same applies to SLs or cutting a trade when you are at a loss. I know this is easier said then done but most of the time, the prices comes back closer to your entry price as the candle finishes.
So there you go.
ALWAYS WAIT FOR IT TO FINISH!. Then decide on the next opening hour on what we going to do.
Kummi 90, I thought I explained what I think of Bias and Trend.
My compounding limit for a lot size is 60 pips. Give or take say 10 pips.
I dont hold a given lot size for a few hundred pips before changing gears to compound my earnings.
So I dont bother about trend, which is long term.
Its much more profitable if my trades were bias based.
Sometimes you have to wait for a week or two before you can get a trade with trend.
In the mean time you are already 2 to 300 pips ahead with bias.
Secondly bias allows you to pick SL that are ridiculously small compared to trend entries.
Finally you dont have to wait for that āswingā to come in to effect to see your trade in black. Nearly all my trades are in profit in the first hour.
Hi Nikita, first of all I am loving your thread, I too think all indicators are a waste of time as they only take past price action and give it back to you in a different format.
I have read all of your thread at least twice now and maybe I am missing something regarding bias. I understand the difference between bias and a trend, but I think I am missing something in the D TF thing. Supposing in GU the daily chart prints a hammer candle at the bottom of a few days down candles, but the close of the hammerās body is below itās opening price, would you consider today to be a down day or an up day? My understanding is that the hammer candle in this position is suggesting today will be an up day despite the close price being lower than the opening.
Oh, nearly forgot, do you trade in the asian open session or the UK/USA open session, Iām having difficulty working out from previous posts. You see, Iām thinking if you trade GU and EU in the asian session, you are avoiding all the news spikes coming out of the UK and USA as we are all tucked up in bed!!
Well the closing price is not really that important if you compare it to the shape of the candle itself. If its a pull back from a certain level then it most probably is a bounce of that area. All we have to do now is find where the big players are placing their order to move the price in the direction of bias.
And that can be seen in the same way we look for bias pull backs on DTF. H1 TF will show the same classic entry patterns.
Ideal entries would be a hammer followed by a candle confirming the direction then our orders but I guess if you do it often enough you can get away with breaking a few rules and taking an extra days profit.
In regards to your question regarding trading hours, I trade all markets. The most important thing is bias and waiting for that classic signals. These no doubt happen on active market sessions, but we cant be rigid in our ways and say we only trade this or that market hours. Flexibility is important, as much as being rigid with the rules are.
News spikes do one of two things.
Either it goes against bias, or goes with bias.
If it goes against bias and you are in a trade, all you have to do is make sure you dont have a SL at news hour and then hold for the market to spring back to where prices were before it fell.
Market will adjust itself to the range bound area after an anomaly pushed prices contra to where it was going ( in this case the anomaly was speculators putting in a massive order speculating that good or bad news will attract other speculators to go in the same direction, so that collectively they will move the market for a few pips together. That is one of the reason you see a sudden spike on the dot of time of news release. Ever wondered how come market surges when news is announced at say 8.00 am and not a second more??? Its not the effect of the news. The guy would not even had time to read out the news for the market to react. Its the speculators ).
If it goes with bias and you are already holding a thread, then you have just been surfing and suddenly a big huge wave of speculators have entered below you and pushed your position much higher much quicker.
Either way, learn to read bias and you can do this full time without breaking much of a sweat.
Thanks for speedy reply, but Iām still a little foggy (age thing I suppose). In your post #5 rule 1 says if yesterday was a buy, then today is a buy. Rule 2 says if yesterday was a sell, then today is a sell. So far so good.
Take today GU for example, looking at D TF Yesterday was a buy? but today opened at 1.6358 (midnight GMT), price peeked above this price in 4:00 GMT candle then goes down. Am I right to assume today is a sell day in spite of yesterday being a buy day?
I take it you actually take into account previous dayās candle and position, as I can see it GU is presently coming down from a HH of 26 July, so today would go with that bias as a sell day.
Thanks again for putting up with a rather confused newbie.
Ltrader I think you missed all my post regarding correlation.
I trade USD and Yen pairs in two groups and I watch 7 pairs.
GU EU AU and UCHF as the first group and GJ EJ and UJ in the second group
If you had watched EU and AU, even NZD USD yesterday you would have realised that correlation was for a sell.
So we would have looked for a sell in GU H1 TF.
If we look at the charts you would see one spike up and then the price pulls back, then the next H1 candle goes up also but it does not go above the wick of the earlier candle and starts falling.
That is our cue to hit a short. The top of the wick will be the HH SL. It would have given you a smooth 40 to 50 pips with next to nothing as retracement.
If you had not taken the 40 or 50 and held it over night, it went against you and the candle did end up as a small bull but then it fell the next day, which is today and it gave you about 80 pips. This scenario is ofcause if you believe in bias and dont use SL.
I hope that clears things up for you.
Use the other pairs charts to help you decide when things are not so clear. Its our second confirmation.
