Ooh, there is a lot to discuss there, and I don’t think answering it does the question justice in one short (or even long) babypips post.
But here goes.
It’s been said many times before; that you need a trading system that compliments your belief system or personality.
Well I cannot trade both sides of the market. I used to think it was me being crap at shorting - its not - its me crap at flipping my mind from long to short, and back again.
So I focus on the long side only. There are enough opportunities from one side. Trading in one direction takes away complications, and for me it’s always about keeping it simple.
S&R levels - i don’t give a damn about them, all a fuss about nothing in my opinion. Another belief of mine, the further away the current price action is from an S&R level in terms of time, the less that level counts. In fact, they don’t count at all.
For me only the most recent short term daily high or low pivots have value for trading.
Sure you could argue, what about the level that capped the dow at 1000, for 20 years, or oil at $40, or gold at $2000 whatever? Or any other mythical line in the sand touted by newsletter writers who want to earn subscription fees.
But what you will find is that these levels were broken at some level on the short term chart and not on the main resistance level so touted.
So it’s my belief that we can only spot useful SR in the very recent past.
Ok so some will saying, but what if you are a long-term investor? You don’t want to be placing positions every time a short-term resistance is broken - correct you don’t - again these are my beliefs about the market, not necessarily based in fact.
But if you start trading other people’s belief systems about the market…well you won’t be trading very long.
My entry points are what I consider, exact price level (no areas of support or resistance in my trading).
These price levels I consider the optimum time for a change in direction of short-term momentum.
Do they always work? No not all but they work enough.
The trigger points can be breaks of short-term consolidations (inside bars), they can be the highest high of the past three bars, they can fractal patterns (BIll Williams Trading Chaos), they can be DeMark Trendlines.
But the one I favor the most these days is just buying the high of a red bar, if it made a lower low than the previous bar,
None of my systems are complex, I look at most of the charts people throw up on here, quite frankly I am not clever enough to understand them.
There is so much a trader has to contend with emotionally, the last thing he or she wants to do is second guess the trade because it has too many discretionary aspects to the technicals.
I never use take profit orders, or figure out risk-reward prior to a trade - that’s right NEVER.
I am not blessed with a sixth sense, and in my experience, the best trades are those you didn’t expect to win so much.
Even if a trigger point of mine was sitting right there underneath some touted resistance level, I would STILL take it.
Sure, I might lose, but there are so many touted resistance levels, that if you took them into account you’d never trade.
What I do do though, is manage my trailing stops well. If I enter a trade say on an 8 hour, then I trail my stop, to the next highest low, at the close of the next 8 hour bar. I do this until I am stopped out.
Some would say that’s too tight, but it works for me. I tend to get the meat of good trades, and can get out (usually) before a trade goes bad,
I have documented many of these systems in my blog https://tradeneophytes.com/.
My apologies but its been a long time since I have posted, but coming back to this forum, is a first step in renewing it.
