Hi watchiepips, thank you for your great suggestions on trading times. Very much appreciated.
Yes, day trading time frames are safe and secure for him and I strongly appreciate your suggestion.
Thank you waltoncharles.
Hi Tommor,
With this trading strategy, do you have any suggestions with money management? People always say money management is the most important thing with a strategy. Thank you for any help or suggestions for further resources. Thank you.
I usually place the stop-loss at the other exreme of the trigger bar or 1.5 x ATR(14) from entry, whichever is the greater, and adjust capital risk to 1% of current account capital or as close as possible.
Hi tommor,
Thank you very much. I have been reading on so many money management strategies but what I have read thus far seem to leave little wiggle room or were for the smaller time frames or really wide. How many pips in profit do you wait to move your stop-loss to breakeven to trail the stop? Using the daily chart is new to me. Most of what I have read was for the smaller time frames but I see how the daily would best fit with my sleep schedule. I really appreciate your help.
The time to move the stop-loss to the entry price is when the unrealised profit on the position equals the loss you risked if the stop-loss had been hit.
At this point move the SL to the entry price so that risk from a loss on this position is now zero.
But even better is to immediately add a second position and set its stop-loss the same number of pips away from entry as the initial trade had. The loss on the combined position has not increased between the loss on your first position, but the potential profit is now doubled. Keep adding new positions and moving the stop-loss the same way.
If you prefer, isntead of automatically adding a new position each time risk becomes zero, wait for a new entry signal from your chart. This is less aggressive but potentially safer.
Hi tommor,
Thanks so much for that information. It makes a lot of sense. I am going to backtest everything to get more familiar with this strategy. Thank you.
It’s a simple principle but it benefits from demo trades.
An issue with all pyramiding is that you get a lower win rate. But you get a lower loss rate and a higher break-even rate, plus the winners can be ridiculaously big. A nasty trap is when you keep pyramiding but have forgotten to keep assessing the TA to make sure you still have a strong trend.
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Thank you tommor, I am going to keep that in mind when I start my backtesting today. I think I would rather have the ridiculously big wins since the stop-loss is capped. How many trades do you enter in a month?
I usually run about 25 D1 trades a month. Some of these will be pyramids on existing positions, so not completely new. Some days I have no entries.
If I’m trialling something intra-day ithey could be another 20 or so but I try to stay away from intra-day, I don’t find the TA to be reliable enough.
Ok and a big chunk of those are breakevens?
Yes, if pyramids are involved.
Alright, thank you 