Thank you so very much in showing interest. Being the two of you are currently online I might as well begin. After trading for so many years, I have been able to work my way all the way down to the lower tf. Although higher tf yield big pips, the reality is we tend to use much smaller lot sizes to compensate for the high “Pip-drawdown”. [B][I][U]Pip draw-down is the amount of pips a trader gives to the market in form of a open red position before he/she closes for profit,loss, or break even[/U][/I][/B]. On avg a trader who trades on 1h or higher time frame gives about 200+ pips to the market. Basically 4x the daily range of EUR/JPY.
As my trading progressed I wasn't at all happy with spending most of my time in red, as TIME is the ultimate factor of determining your success in forex, not the price. I then began to focus on patterns, tendencies to take "high probability trades". "High probability trades" is an utterly objective P.O.V. of a specific trade. To me a high probability trade is classified as a trade which allows me to spend less then 7% of my time in red, while hitting the 1:6 R:R..... In other words once you enter the currency pair of your choice, you should end up in green at the close of the next candle.
I then came across the 1m chart. The 1m chart to me caught my eye, as every breakout has to begin on that TF. I then began to search for patterns. I then found out tendencies the market has of breaking out such as out of accumulation, or extensions or sudden reversals of the overall trend. You would then notice that a reversal or extension is only as good as the last candle closes. In other words "engulfing" patterns. Studying engulfing patterns resulted in very high R:R ratios, and big time losses if the positions were not closed on time. On my losing positions I would spend 100% of my time in red until I margin called the position. Yes MARGIN CALLED..... Yet, there has to be a science between opening a position and being in red for 100% of the time, and opening a position and being in green 97%+ of the time.
That lead me to covering my trades. Meaning, I backup my open orders using martingale/binary options. As if to say… Say E/J is on a down trend. The price begins to retrace back to a specific MA line which I use as a point of reference, once the MA line is touched I then calculated all the reversals, and extensions once the MA line was touched. You then noticed that the market has a sweet spot. The sweet spot refers to a specific price in which the price doesn’t recross it before a R:R is hit… Basically I can risk 1 pip and make 6 pips within 4 trades, as if I follow my rules to the letter I should never experience more then 4 consecutive losses. Once you identify that it then leads you to use martingale to increase your odds of closing at a 1:6 R:R… Are you following clearly so far guys?