I consider them, but do not use them to guess market direction.
My max drawdown, which would be the lowest my account dropped before heading back up is 18.2% if Iām looking at this report correctly.
I donāt keep a running tally of my average per trade, but I do look at that from time to time to see if there any holes that need plugging. When I made reference to the average, it was more of less arbitrarily picking a dozen or so random trades and looking at what the individual drawdown was.
MG, if I were going to explain your overall approach to analyzing the market based on what I know so far, it would be:
- develop an overall directional bias
- identify s/r for potential change in direction (horizontal & diagonal)
- using fibs and candlesticks to identify breakout points and trade entries.
You use fibs to identify breakouts of the corrective wave resuming its journey with the overall trend. The pips you donāt take by waiting to enter a trade are seen as offset by having a better percentage of winners overall.
Is this summary correct regarding your with trend approach.
First thing I look at is the candle. I think in terms of buyers and sellers so I look at the structure of the last daily candle. If it looks like itās reversing or going deep in one direction or the other I look to spot any support or resistance that could be the cause.
I donāt try to guess where itās going, Iād like for it to already be on its way, so if I see a doji candle or huge pin bar sitting on a fib and another area of support, I donāt just trade that right away. A lot of times I will wait another day and see if prove moved in the suspected direction. If so, I hop aboard and buckle up.
The first few days donāt always determine yet if Iām right or wrong, so even if it starts out bad I give it a chance. Most losing trades are closed in under a week. If itās a winner I am most likely holding it for two or more weeks.
I rarely draw fibs. I can just eye it up. Odds are you can too. Same with support and resistance. I view it as areas and not just a single line or price.
My goal is to obtain a reasonable idea that Iām hopping on price as its moving the way I want to go. Itās not trying to guess if it might go that way. Itās not trying to determine where it might go. Itās really focused on waiting around and catching waves hoping one of them will be the big one.
Generally, Iām always in some big trend that stretches across several pairs.
I confess my results are crazy high right now. Iād actually appreciate some losers so I can show you guys how I contain that and ride out the rough patch until the next wave hits.
What monthly return do you expect/maintain trading this method?
I donāt anticipate monthly returns as I feel that skews my psychology when trading. I let my methodology dictate what it can do, and not the other way around.
As it stands for the year thus far, Iām 45.22% for the year. I however do not anticipate seeing that type of gain continue consistently throughout the year. Would be cool though. 
I prefer to get excited about what Iāve obtained then what I could get. Each trade is a reward for me as I know whether win or lose I average a .59% gain to my account.
FYI Hogarste,
I believe MasterGunner has previously stated that he only uses horizontal Support/Resistance levels (i.e. [B]no diagonals[/B]) ā¦
Nice catch. Thank you.
How did you fare on your USDJPY trade? Did you stay in?
Was late getting in some trades tonight. There was some movement here in the Asian session.
When your risk is smaller per trade and you need 100ās of pips to be profitable, itās forgivable to get in after the move has been made.
Within reason of course. Last week or so, I realized I mussed EURUSD, when I had noted it to enter the trade. However, it had already moved up 100 pips.
20 or so, I donāt mind, but when it gets to far thatās pushing it. Iāve still maintained my edge because Iām not looking for a few pips that strap me to the computer at specific times. I have the flexibility to adjust accordingly at the expense of fractions of percentages in profitable loss.
This is looking to be a perfect example why you allow price to decide if the trend is over, and not allow your own judgement. A few days back, we were all certain that price was setting up for a retracement. Itās been falling for weeks on end now and it has not been this low since March.
So yes, we saw a single candle that began to tell a story. However, the story wasnāt over. The next day what happened? Price made an attempt at a new high, but it failed. There appeared to be a struggle of sorts because in relation to the other candles, it was pretty small. There was a good amount of indecision. So it was logical to wait. It took off of 2 seconds for me to make that decision. The following day, what did we spy? It did the same thing again. It tried to head up again, but it was rejected and it began to fall. Thatās two days now where there was indecision but the bears were coming out slightly ahead. So today, we wait.
Now I have no idea what price is going to do today, but it as broken the low of the candle before it. Thatās a good thing. The next 20 hours will be interesting to see which direction this candle goes.
For now, Iām staying with me short. As Iām writing this Iām 124.2 pips up on the trade. Weāll see how this one develops tomorrow.
As for everything else, Iām sitting at 45.22% in realized profit for the year and have and have 40.59% more in unrealized gain as there are 4,260.3 pips that deserve a happy home in my bank account.
I really want you guys to embrace this methodology. This site is full of people that work too hard at this. Clear your mind. Erase what youāve learned before. Start fresh. Letās start making some pips. If you have questions ask. If you want to post a chart, post it. Iāll provide my feedback. Letās do this thing.
Yes, complete turnaround from last night. I was sitting about 60-70 pips down last night wondering when enough was enough, but then I just set a stop loss about 5-10 pips below the previous resistance turned support (91.75) and just knew it wouldnāt get that low, but if it did, that was the point Iād bail. I woke up this morning and I was about 70 pips up and now Iām nearly 120 up. Iād still like to see it get between 93.95-94.00 before I get out as I think thatāll be the next resistance, but I wonāt quibble too much over 10 pips. I think itāll take a big push to get to that 3 yr high of 95.00. Maybe late week, early next. Your thoughts? Did you hang in too?
Yeah Iām still in. Up 315.8 pips at the moment. Iām not one for guessing where itās going to go. Iāll wait for it to tell me when itās ready and Iāll put in a stop when I see it turning back down. Iāll keep you updated if you want. Just donāt bank on it, as it sounds like I have more leeway in my trade then you do. I can have it back up 100 pips and still be in healthy profits.
If you were looking at this chart today without having a position, do you think that you might wait for the corrective wave (retracement to form first, and then get short with the Market looking bearish. Iām thinking that 61.8 move up to around .9245 is a better place to short from if we dont have a position already.
I know this sounds ridiculous, but Iāve never posted a chart in BP. I know itās a two step process, with saving the pic and then uploadingā¦ I think. Could you tell me which programs you use, as your charts do look good, Iāll figure out how.
If I saw this trade and I wasnāt already in it, I would have wanted it higher before it dropped to get in.
I use imageshack.us to post up pics. Itās pretty easy to figure out.
Want to know that is it a good idea to apply any hedging if price starts going against you?? For example, you are going long on the USD/JPY, and it starts to retreat, but isnāt so sure whether its just a little retracement or trend reversal, will you open short on USD/JPY in order to reduce risk and to also profit from the downside if it turns out just to be a retracement (close short once price resume its uptrend momentum) thanks alot
I will get up to speed with charts, thanks.
I think GBP/CAD looks interesting for a short. Support at 1.5610 seems to have broken yesterdays candle with bearishly engulfed (big time) the prior day. Any suggestions regarding the level to short here.
Thanks,
Brian
Iām in Godās country where mental illness is sold as a gun control issue and hedging in Forex is outlawed.
The closest I get to hedging would be in the form of trading other pairs that have the same base currency. Such as long USDJPY, but minimizing my exposure to USD with a short to another USDxxx pair.
I am short. I rode up that ugly candle the other day, but it went back in my favor. Now could be an optimal time to take a short.
Yeah, I would much rather be in your position than mine. Iāve been watching this pair for a while now, as this is the one I really focus on for intraday action since it tends to create more exaggerated trend movement. I canāt be too upset if it retracts a bit though. Like you said earlier, you canāt lose pips you donāt have. I usually nickel and dime this pair for 20 here and there so 120 pips to me equals 3 solid 40 pip trades per day and thatās considering I donāt lose. And those are hard fought 40 pip wins since I have to be watching the charts pretty closely for those entries. This was extremely hands off. I found myself aimlessly checking the chart throughout the day with really nothing to do with this pair. Thank you so much for really simplifying everything and showing that common sense does work in forex! I know this is a small win for you, but coming from the small 2 hour trades that Iāve been making, a 120 pip win would be my biggest single hit. Iām going to hang in a bit longer to see if it wants to break through 94.00. If it doesnāt act like it wants to, I may bow out tomorrow morning. One thing that this trade taught me was that when you look at price movement as a whole through days instead of hours, itās really all relative. I may have started out down last night and been scared as the number was bigger than I was used to, but in this methodology, the wins are bigger than I was used to as well. So instead of risking 20-25 pips to get 40-50, Iām risking 75-100 to get 150+. I look forward to continue to follow along and maybe even get brave enough to start managing a handful of long-term trades at a time! Letās keep it going!