Well done to KENNETH LEE, Trav72, Vulcan Classic, Keitsuke and Sinn1.
Thank you all again for participating!
Now we progress a little further.
We [U]stay with the 5 minute chart [/U]but the MACD is now gone and we have replaced the Keltner bands with the Starc bands >>>
I have not shaded the Starc bands to make it look more like the real thing.
Our entry is shown by the black vertical line.
But our short entry of 1 amount has…ooops…shown a problem.
We entered at 107.93. Now whats this 107.92 ???
Well, we had a drop of slippage!! So we got in 1 pip less than expected. But never mind, [B]107.92[/B] is still an excellent entry!!
[U]The question[/U]
We see that, as the entry candle developed, it dropped from 92 to 88 at one stage.
a) Would you have exited at this point and called it a “pips first” trade?
b) If yes, why?
And if no, why not?
Be very specific with your anwers. [U]Do not waffle[/U]. Remember, you cannot waffle with your decisions when you trade the real thing.
Treat this as though you were trading for real.
I would wait until atleast 10pips before it becomes a ‘pip-first’ trade. This is because STARC bands are still going down strongly and Bollingerbands aren’t showing any bad signs.
I would hold for confirrmation before exiting. The candle is very indescive, Equal wicks top and bottom. The Starc is pointing down and BB is relativelly flat.
After strong Star pattern seems safe to wait for at least one more candle…
I would hold on as this candle seems to confirm the previous bear candles, plus exiting at 88 would only give a 2 pip profit, assuming it’s a two pip spread. Also, it’s only at the middle BB.
I will stay on with the trade as it has not reach my profit level or stop loss level. For me I will only exit if either stop loss or take profit level has been hit. Hope I am correct.
We wait to to see if we can reach our first target to take profit of 10pips.
At price 107.88 we would only have 2 pips profit (107.92 entry, less 2 pip spread = 107.90 ,therefore price 107.88 we would only be profiting 2 pips.) We wait for ten pips or for the candle to pierce the lower starc band and bollinger band. Sit tight for now with price at 107.89 (1 pips profit).
I have reached my first milestone [B]Newbie status[/B]…Thanks to this thread i am officially on the road
Congratulations to all who participated - everyone was correct!
a) No !!
b) The price action is merely going thro the middle Starc band, [U]not [/U]the lower Starc band.
If the price action had passed thro the lower Starc band, then an exit would be valid and we could call it a “pips first” trade.
I have question that is unrelated to the current exercises. If you have time to answer it Tymen i would appreciate it
How do you know when you’re in a losing trade?
For example:
On a pips first trade
- you take your pips first
- you wait for the retrace
- you enter after 3 candles have walked the upper band
- the price continues to walk the upper band (but still below the large stoploss placed above the evening star)
- the price continues to rise through the stop loss
At what point do we call it a loss trade and cut our losses?
One way i’m thinking is if the upper bollinger band is moving up and away from a risnig upper starc band. What do you think of that? (This is just something im noticing in a current trade i’m in now. I dont know for sure if its a definite sign)
Have you found any other sure signs of a losing trade?
You are in a losing trade when the price action goes thro your stop loss thus triggering it.
In such a case you will lose 2 amounts.
Yes, it is a lost trade, remember, there is always a risk of loss.
But a retrace, by definition, is just that - a top point. Passing tho the upper Starc band gives us a clue that the retrace is very near.
[U]The Starc bands are an envelope around the price extremes[/U].
However, there are some ways of minimizing the risk of losing a candlestick trade :
Always set your stop loss at the [U]highest [/U]position - 3 pips above the star.
Always choose [U]quality [/U]candle patterns.
3)Be very [U]wary [/U]of that BB.
If the BB is going up dramatically, especially from a contraction point, then just don’t enter.
Leave the trade alone. Its a high risk trade.
Yes, it might make a great profit. But you don’t know that.
We are not here to gamble.
You want the odds definitely in your favour.
Following the above 3 rules should see you make a profit. With these rules, the retraces may come very close to your stop loss but are unlikely to trigger it.
In the unlikely event that your stop loss [U]is [/U]triggered, well then, you have a loss.
The decision to enter a trade is made on the [U]main [/U]chart, not on the 5 minute chart.
What things you see in the 5 minute chart that scare you is irrelevant. We go by the method that is set and [U]stick to it.[/U]
The Keltner bands do better for the entry, although you can use the Starc bands if you wish.
The Starc bands are specially designed to mark out the price extremes. They do better at this than the Keltner bands.
If a price is at the upper Starc, then it has a high probability or returning to the centre. Same for lower band.
I find it useful to load the upper and lower Starc bands on my chart, together with a middle Keltner band.
This allows for both the entries and the retrace detection.
I use different colours for these bands (Starc = green, Keltner = orange).
At this stage, it is definitely a “retrace first” trade.
We note that the Starc band is going [U]up[/U].
So we are not in a hurry to enter that second amount since the price action may walk the Starc band.
There is a small possibility that the price may hit our stop loss, but providing we set it correctly, that is unlikely.
[B]
At this point we just wait and see what happens.[/B]
