Am I missing something or is it slow for entry opportunities?
It has been so over the last two weeks. Its because everyone is waiting. Watch the explosion in opportunities after Wednesday FOMC event.
[QUOTE=āPhilipPirrip;706264ā] It has been so over the last two weeks. Its because everyone is waiting. Watch the explosion in opportunities after Wednesday FOMC event.[/QUOTE]
Do you ever incorporate other strategies to take advantage of huge news announcements? E.g. Setting a ābuy with OCOā with the OCO well above and below to take advantage of the initial spikes??
Or does slow and steady win the race?
I tried, but I realized after a point that I end up losing more pips than just stick to the original plan.
Look this strategy is not for people who want to look at the chart. You set the trade move on with your life, then at the end of the day see where the trade is at and manage it accordingly.
The information which you shared was informative. The new session generates inter-market relationships that can lead to excellent opportunities.
I saw yesterday on the case of an AUD-USD (3 + gmt), and I have only one question.
What if we found Stoch Index beginning with the candle at saturation area but not broken, and with the end of the candle became the mid-?
Do you every recommend taking a signal if it shows on a daily chart? I would think it would be even more reliable due to the long time period. Iām not looking regularly on daily charts b/c it would take forever to catch a signal.
But I saw an opportunity on USD/NOK daily.
The stoch dipped down, crossed up above the signal line and the RSI was at about 52.7. It has since dropped but I feel if the pattern holds then over time this could bring in a high amount of Pipsā¦ let me know what you think.
Am I missing something or is it slow for entry opportunities?
Trends only occur a fractions of the time, sometimes we need to play the waiting game. This system looks like it needs trending markets to work effectively.
Dear Philip,
I would like to remind you to publish your watching list for next week
Thank you in advance
I have a very important announcement to make in the next three days. And no, it is not something that involves charging you money. It is completely free.
And you guys will love it!!
Will wait here for the next 3 Years then with baited breathā¦( lol hope you meant weeks! or days)
hahahaha, fixed!
no more farm animals i hopeā¦
You are generous,
Thank you
A little hint?
I really want to take the three days to have everything ready. But its something a lot of the participants in the thread felt more wished they could do with the system.
When I first shared the pattern, I said I preferred working on the four hour chart. But I saw people were keen to bring the time frame down to the 1 hour and 5 minutes to try and day trade with it but the results were mixed. Ever since I have been trying to understand why.
The reason is very simple, (on the four hour) every move from a stochastic extreme to the other (OB to OS for instance) would equate to and EMA crossover on the hourly.
It was very rare that you could capture the same trend on the one hour chart. And so rather than holding what was clearly a retracement on the 4-hour TF, you were given a failed pattern on the 1 hour.
So if we cannot capture trends while trading on the 1 hour or 5 minutes, would that mean that day trading is doomed?
The simple answer is no. Then what? day trading is not designed to capture an intra-day trend. Its design to capture an intra-day explosion to lock in quick pips.
I will show you how to do that next.
Before getting into the actual strategy (and I want to do that before the weekend ends, so you guys are familiar with it). I just wanted to talk about day tradingās characteristics that make it different from the swing/longterm approach we would use on the 4 hr.
Because of course there will be a difference between a trade you hold for a few hours, and trades that you hold from anywhere from a week to three months. So letās write these differences so we are clear on them.
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When trading the strategy on the 4 hr, we approx. get two to three trading opportunities per pair in one month.
But when we start day trading, the opportunities are much more (about 2 to 3 a week using the 1hr or 2 to 3 a day using the 5 minute.) [B]Naturally, the opportunities on the 4-hr are of a higher probability than those on the 1 hr or 5 minute[/B]. Because as we said, on the 4hr we are capturing trends but in day trading we are looking for a bursting movement. -
[B]The stops when day trading are much tighter than when trading on the 4-hr.[/B] It is normal that, when day trading, you will have a stop loss between 5-11 pips. Compared to the 300-700 stop loss on the 4 hr.
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[B]As a result, you are likely to be stopped out much more while daytrading than trading the original strategy, but by the end of the month your profit/loss should not be that different.[/B] In other words, you could enter 30 trades in a week of day trading. 10 of those could have been stopped out for 3 pips (a total of -30 pips), 13 stopped for 10 pips (so now the total is -160 pips), but the seven you made have made a profit of 65 pips on average (ending the week +295 pips).
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[B]Combining 2 and 3, we get that day trading is much more hectic and stressful than the swing/longterm trading. As a result a day trader will only have to focus on two pairs (three at most) compared to the 4-hr chart where he could watch the entire market with ease.[/B]
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Since we are also trading much more, [B]The 1% rule per trade becomes too much! You should risk 0.1%-0.25% per trade only[/B]. Why? In the previous example we said we can make 30 trades a week. If we were to risk 1% on each trade, that means we risked 30% of our equity in just one week!. Imagine of those 10 losses of 3 pips would have been equivalent to 1%. In an instant you would have been down 10% of your equity! But if it was 0.1%, you would have lost just 1%. You would have gotten 0.65% on your winners. So by the end of the week you would be up 2.95%, so approximately +11.8% a month which is more than good.
As a general guideline, the appropriate risk is one that would allow your reward to double your equity in a yearās time.
So for example letās say I day trade AUDUSD, GBPUSD and USDJPY on the 1 hour. I know I will get an average of about 9 trades in a week. I will assume my risk to reward will at least be 1:2 (the system will give more reward). So I need to risk a total of 50% a year to double my money in a year. That means risking 1% a week. So those 9 trades combined should be worth 1%. If I think thatās too little, I follow only two pairs so that 6 trades are worth 1%.
Point 5 is the most important aspect of day trading you need to understand. Its why most beginners lose money while trading in the first place.
So what if you want to day-trade AND follow the entire market? Surely there must be a way to do that?
Yes there is, it involves you treating office trading like a job and being organized.
The trading day is divided into three zones: 1) The Asia timezone. 2) European/London timezone. 3) US timezone. Each one is about eight hours.
Dedicate eight hours to day trading. When trading on the 5-minute chart, you are likely to get at least one burst per time zone. So if you are trading the Asia timezone, where is the most likely bursting move coming from? [B]Australia, New Zealand and Yen![/B]. If in Europe? [B]Pound and Euro![/B]. If in the US, obviously the US and Canadian Dollars.
So its important to know which timezone you are trading. Then keep your eyes on the pairs that correspond to the timezone.
Iāll discuss the system next. Its not easy to day trade so keep focused!
So what if you want to day-trade AND follow the entire market? Surely there must be a way to do that?
Yes there is, it involves you treating office trading like a job and being organized
True, but sitting in front of charts all day is mentally taxing. You would need to take regular breaks and make sure you donāt fry your brain trying to keep up with 5 min charts all day.