Hello Guys ,
I would like to know what you think about this strategy .
Mostly used it on the 5m TF .
Use it with support and resistance .
Stoploss mostly 5 pips , i place the stop above the tail/high of the candle .
Target 10 pips .
What do you guys think about it ? mostly 1 to 3 trades a day for this setup on eur/usd.
Thankyou and share youre opinion guys!:57:
Having an arbitrary “5 pip stop loss” and “10 pip target” won’t typically lead to a profitable strategy (more times than not).
The problem is, at that fast of a timeframe, you need to be deadly accurate or you’ll simply be whipped out of positions due to quick moves (which is common in the FX market) + spread fluctuations.
Taking that signal in the context of a larger price action understanding would lead to more success, IMO.
Jake
the stoploss is 5 pips target is 10 pips
Regardless what it is.
Take a few hundred dollars, open up a micro account and trade it for 90 days.
Do you have the ability to sit behind the charts for @ least 6 hours a day?
When do you plan to trade?
Hey Jake
Yes i have the ability to sit before my charts.
Ok, then you need to put the rubber to the road.
Fund a micro account and trade it for 90 days.
Journal every single trade you make…if possible, invest in a basic screen-recording software. Record every single one of your sessions, then upload them to youtube. Review your trades and journal your mistakes as well as right steps.
At the end of 90 days, you should know-
Your risk of ruin
Your accuracy
Your average W/L
Your share ratio
Re-evaluate, rinse, repeat.
Hi . from a newbie to another newbie. I was in a similar situation before. What Jake say is right. It might be good if you have a high win percentage. But , for me is the stress. Stress of knowing I need this to be 99% right. Especially with those SL . 5pips? Another thing is, monitoring it for 6 hours. Tha tis quite a lot of stress , I would say. In the end does the time spent on monitoring translate to profit? Or are you wasting your time. I have tried trading on 5m to 15m to 1 hour to 4 hour. I must say ,daily . or any longer timeframe allow one to have more time to think and react to situation . it also means less stressful. More time to analyse. And you would not get whipsawed so frequently
As in lower tf. Especially 5 min tf. Best part is you don’t need to be 99% percent accurate for you to earn. You can lose more trades than win. and still breakeven or with profit. I used to think that. Higher tf means less action. Well it isn’t, forex market is wild . volatility is high. The only way to combat it is higher tf. If you are afraid to over leverage. Adjust your lots. Money management is the only skill that we have and only tool we could 100% take control of.
Depending on individual personality and character. You might suit scalping more. IMO best way to learn is through experiencing the process of trading itself.
Just my 2 cents
Joe
Thanks for the input Joe…you’re right on all accounts.
Another major problem trying to trade this way, is that after a while, you start to get “ancy”. If there isn’t any action, you start seeing setups that are sub-par and not according to your trading plan. What typically happens is that this leads to over-trading and ultimately a blown account.
Very frustrating, but, happens all the time w/ newer traders.
How do you beat this- take an approach that is rooted in the fact that no single chart timeframe takes priority over another. Setups can be found across all timeframes, and, the best setups come where there is breadth behind the move from an order flow perspective.
Example- if you’re watching USDJPY, EURJPY, GBPJPY AND NZDJPY intraday via the M5 chart, and see that they are all breaking into new lows @ a key price weekly point. You also see the Nikkei breaking lower, and the S&P beginning to lose lows of the day. However, the AUDJPY had been lagging a bit, and is trading a bit higher than the others. Using an intraday breakout pattern you can identify that there is an edge to short the AUDJPY.
That type of trading (from a very basic viewpoint) will typically lead to more success, than focusing on a single instrument and time frame. Here is an exact example of the above mentioned scenario: AUDJPY MAR 9 2016
Another major problem trying to trade this way, is that after a while, you start to get “ancy”. If there isn’t any action, you start seeing setups that are sub-par and not according to your trading plan. What typically happens is that this leads to over-trading and ultimately a blown account.
Youre verry right about that Jake 
Youre a scalper ?
I don’t label myself as anything other than a market participant. If the setup calls for me to hold for 6 months, I’ll hold for 6 months. For 6 minutes, then I’ll hold for 6 minutes. Every day/week/month/year brings new opportunities, challenges, and lessons to learn. Check out my thread if you want to see how I trade and what “type” of trader I am.
I see. You are talking about correlation right ? Thanks for the idea. I could get as much idea as I can. Forex is a hard subject , even so with money on the line . imo, it takes a very highly skilled & experienced trader to give this sort of input. Thanks Jake .
Jake, for me I look only at daily chart. But I have like 24 pairs I’m looking at. Will only pick those with a well defined strong S&R lines. am still learning. Now, i’m much at ease with my life compared to when I was a scalper. Couldn’t get enough sleep, headache & etc. Too much pain for too little gain .
Candlesticks are generally well-known for inconsistency on lower timeframes and 5m charts are very erratic. It would maybe help if you only pick certain times when the market is active but then they may well be the times that these particular formations will be rare! But watching 5min bars in a slow market will surely drive you nuts very quickly…
I also wonder if, following a formation and gaining 10 pips, you might become frustrated to then see the market continue for another 30-40…
It is certainly not a “bad” idea you have here but I think it might be more useful as part of a broader system. Of course, you could consider runnng this as a kind of “sideline” along your main trading method that you take advantage of whenever you happen to see it occur - less stress and less disappointment.
I also fully agree with all the other comments given to you above.
BTW are there not some programs that identify and alert you of certain candle formations? I have never explored this possibility but I think I have seen these somewhere, might be worth investigating…
It’s [B]never [/B]about identifying a single candlestick, or really even a group. It’s first about context, then applying formations within the current market environment to understand the likelihood of future buying vs. selling.
I believe that is precisely what I was saying in my post if you read the whole thing…
Exactly, I was simply underscoring the importance of what you said.
Ok, then the point is now well and truly underscored! 