[B]“I will find other things to do besides watching my trades after they are live”[/B]
From the period 29/7/13 to 10/08/13, I will be following only 3 signals and these 3 only:
Inside bar (IB)
Outside bar (OB)
Pin bars (hammers, dragonfly, gravestone)
So my trading plan:
[U]Time Frame[/U]: I will be trading 4H only which means I’m not shuffling TF to justify myself an entry when no signal appear.
[U]Pairs[/U]: Mayors: AUDUSD, EURUSD, GBPUSD, USDJPY
Cross: AUDJPY, EURJPY, GBPJPY, NZDJPY & EURAUD
[U]Managing money system: [/U] R=3, meaning I will use position sizing to adjust the lots and not the pips in order to set my S/L
The S/L will be 3 pips above/below the H/L of the mother/trigger bar, however the size of the tail.
[U]Trailing stop:[/U] quite tricky at this point I will use it only once I reach R=2.5 so that I will shift S/L to R=2
[U]Miscellaneous[/U]: few things that at this point needs to be tune:
-Signals at confluence zone such as S/R, whole round number such as EURJPY=1.3300:
- Pin bars should be straight forward and treated as reversal/retracement
- Inside/outside bar: this is the tricky one, how can I differentiate between continuation and reversal?
My approach, based on observation of the AUDUSD back testing period 1/4/13 to 1/6/13, is that:
a)Bars formed over the S/R or small bar without touching it = continuation
b)Bars formed around S/R but without actually touching it at all= reversal/retracement
[U]Doubts I need to work out: [/U]
- In the cases of the inside/outside bars, is the shape of the mother bar important? it can be two hammers for instance? two doji?
-The importance of volume: I’m using a indicator from Sonic system that paint my candlestick in such a way that can depict volume on it. So, again, base on my observations on the AUDUSD between 1/4/13 to 1/6/13, I found that when volume intervene in my signals I could successfully expect a better reward, meaning if my R=3 I can easily expect R=4. This has, in my opinion, a theoretical support, or at least it should. Nevertheless, i need to workout the IB/OB behavior at confluent level such as round number.
[B]“I will not interfere with my trades without just cause”[/B]
[U]Exit rule[/U]: I will exit any open position if and only if:
-S/R proved to be valid, by proved I mean an opposite signal
-Gaps, not quite sure at this point, yet I will use it as exit until I found otherwise
