MG99, I still don’t quite understand your risk management style fully. Can you please elaborate using real life example? How can I apply it on the MT4 platform? Also you mentioned you opened 28 trades at once, how is this possible…do you use a mechanical system to do that? Thank you.
This weekend I plan to walk through a trade. I don’t trade mechanically. It’s all discretionary.
Hi MG!
Just wanna know what you do to all open trades or rather how you manage them before NFP release
I ignore all news.
Boom. When the market as a whole moves, the account tends to appreciate that. 
this is a refreshing change
There’s a saying, success is doing what everyone else isn’t doing, and not doing what everyone else is doing.
If you’re just not getting this to work, then it’s time for a change.
Watching for areas of support and resistance.[/QUOTE]
Great thread, MasterGunner. Since I’ve seen varying definitions of "support and “resistance”, how would you define those terms as used in your trading? Thanks!
This weekend I’ll post a trade example with a thorough explanation of my decision making.
I agree with what you say about letting the market work for you in regards to placing your SL. I, however, am not brave enough yet to go in there without a SL at all…maybe someday… When placing my SL, I look where I think the price “could” go and then place it far enough beyond to where I won’t get stopped out on a random spike. I agree with the theory of a 1:2 risk reward. The part that I agree with is that at some point, the reward must outweigh the risk. I don’t agree that it has to be true in every trade. If I risk 150 pips and after several days the market starts ranging, and I exit with only a 100 pip profit, I’m perfectly fine with that. A win is a win and I think eventually the risk reward ratio will be there as a whole. Do you agree with that, or will that eventually come back to bite me?
I measure my risk reward by the overall results of multiple trades. And while I don’t have set stop losses and take profits, I look at the average drawdown vs what I pulled in profit.
At times, I might have risked 100 pips only to end up with 10, but that’s okay with me as long as my overall risk:reward ratios are okay.
So yeah, if price showed you it wasn’t going in your favor and you pulled out with profit, then that’s a win.
Support and resistance is a funny term because it can mean several things; Horizontal lines diagonal lines, even long term Fibonacci retracements and extensions. My question is do you use Fibs in your analysis to identify S/R.
Great Weekend
Brian
For me, I view horizontal areas of support and resistance. I do incorporate fibs in my analysis, but I hardly ever actually draw them out. It’s fairly easy to eye up 38.2, Golden Ratio, etc.
Okay, using some old algebra, here are a few of the derivable numbers:
of Winning Trades = 26
of Losing Trades = 30
Winning % = 46.4% (very nice, but of course not as important or nice as your 2.57 Reward:Risk ratio)
Sum of Wins = 6232.2 pips
Sum of Losses = 2797.8 pips
Which prompts the question, MasterGunner: What – assuming you’ve kept track – has been your largest drawdown this year in both (1) # of pips and (2) % of account?
An optional (likely to be explained in your example, so feel free to ignore) question following up on my earlier one about how you define “Support” and ''Resistance" in your trading: Do you use levels (i.e., a range between two prices) or a specific hard price number for these values?
Thanks in advance,
- Shain
It depends on how you describe drawdown. On an individual trade? My equity falling below my account balance ?
With support/resistance, I look at a range and see how price reacts around it.
At least twice a month, I will post the last trade I made along with explanation supporting it. Thereafter, any adjustment I make to that individual position I will update on this thread. I do not recommend you take any of these trades. All trades will have been made in the past, though likely still active. They are just as susceptible to being losers as they are winners. And since I’m arbitrarily picking the last one entered, I will not be partial to picking better set ups than others.
Uploaded is a daily screenshot of USDCHF. Now, I have drawn lines along with Fibonacci for illustration purposes alone. When I’m monitoring a chart they are completely naked and I can visually spot these reference points.
The arrow on the chart indicates the candle I was looking at to enter my trade from. Looking back over the last few months, USDCHF has been bearish, so my overall bias on this pair would be to focus on short opportunities, rather than long opportunities, but I was not opposed to long positions as this was potentially looking to be a time for a trend reversal. In fact, I was able to snag 38 pips on the way up when I entered a long on the 15th and closed it on the 25th when I realized a reversal wasn’t going to be happening yet.
The top line is an area of resistance that I drew that stretches back to as early as May of this year. Price hit the area, and it was successfully rejected for that day as illustrated by the pinbar. However, that wasnt enough for me to go short on mainly because I was already in a long position. I held on for the few days with those smaller indecisive candles as those were potentially going to be bouncing off the 38.2 Fib line. However, when that was broken by the next day, I decided it was time to get out. From there, I monitored to see what it was going to do. I wanted to make sure I knew the direction price was going to go, before re-entering into another position.
When price closed below the Golden Ratio, I decided that was an indication for me to enter into a short trade. For if price was going to continue farther past the candle that already closed below the Golden Ratio, it was looking like price would just continue on further down to at least complete the distance of the entire distance I drew with the Fibs.
As you can see, the next day, price rocketed down. Now thats where most people would take profits and that’s what happened as price halted and even the next day the candle wasn’t doing anything impressive. However, that’s not how I roll. I’m willing to give back some profits in the chance this turns into a nice size move downward. Remember, I look for the big move. I’m patient for when they occur and I’m careful to be sure to pull profits when I can and not be foolish in the process.
The following day, price kept going down and it looked like it was going to just keep on dropped. When it rejected after hitting an obvious area of support, I looked back and saw that sure enough that was another area that price danced around dating back even a year ago.
So that’s where we are so far. We’re a few days into this trade and 107 pips up in unrealized gains. Price does look like it might retrace, but we have enough banked at this point to be able to withstand a retracement, in hopes that it will be temporary and continue on back down.
That was a lengthy explanation, but it probably didn’t take me anymore than 30 seconds to assess what was going on here and I moved on to the next pair I monitor.
Any questions?
I was very excited to see you post this tonight so far ahead of the Super Bowl. It seems like your approach is to use Fibs from the previous swing leg to determine a breakout point. Now I’m not intentionally discussing any other teachers or approaches, as I’m struggling to implement my own approach and to make my own plan, but I have a couple of questions:
Looking at the low that formed in September, which took out the previous intermediate swing lows from June, it would have seemed to be an earlier indication that a sell structure existed. This seems to have been confirmed several other times with increasingly lower lows being formed. Looking at a Fib high from 11/12/12 down to 1/1/13, a retracement to 70% occurred on 1/17/13, on an indecision candle. Why wait so long to get in to this trade on the break-out and lose pips. Slow Stochastics and Relative Strength also confirm an overbought situation around that point. Honestly, MG I know it looks like I’m throwing other teachers methods out here, and that is not my intent. I would like to understand what the most efficient approach to this trade is, and what my thought process should be.
If it were me, I’d be a little concerned by the bullish pin-bar that formed on Friday at an area that looks very over-sold on the indicators. I know you have a different approach, but I’d probably be taking some profit and moving my stop down, in anticipation of taking another sell / increasing my sell position on a retracement.
My number one concern is thinking like a trader not trying to instigate, so please understand that I’m not trying to start a debate between followers of other methods and your method. Rather I want to know if my thought process is good regarding this trade or if it could stand some tweaking. I also came up with similar results looking at things from a supply and demand point.
Be careful with the language. I can’t lose pips that I never had.
I don’t like guessing the directional change in price. I prefer to go along with it. So when I spot something, my general thought it to wait a day and see what price did.
I don’t take partial positions or move to break even. I look for big moves that I can hang onto for weeks at a time.
While I agree that price is looking to retreat, it hasn’t yet. It just looks like it. Come Monday the story could change and if it does I will be more inclined to place a stop loss to look in pips if still available.
Also, I don’t buy into concepts of oversold and overbought. Price is price. It can’t be overbought or oversold. It’s exactly the price its supposed to be as dictated by supply and demand.
So you waited to see if the 62 level held. If failed, you enter short? At what point would you have considered the trade bad if it went against you?