(binned per thread starter’s request) Trading with the Blues?

Hey Merka,
Entering with trend is the higher probability trade but if the trader understands what he/she is doing then there are often very good trades that may occur otherwise. I've commented on entering on a HTF using a LTF and it not something I endorse. Going against multi-time-frame-analysis dogma is probably heresy but imho it is one of the number one reasons traders lose.

You can trade just using one time frame with logical analysis and a firm understanding of the nature of trends. It's not necessary to use time frames like indicators and you shouldn't. If you are and your not making dough then this might be one of the reasons.

In regards to supply and demand I've been with that camp but I do not trade like any supply/demand traders on these forums and please don't confuse me with any of them. Supply and demand is just how markets operate. There's buyers and sellers and they can be seen on a price chart. We should do our best to trade with these market movers.

https://youtu.be/w9dfw_di9Jc

Definitely you have a different approach than most supply&demand traders over here.
I'm curios also about your 1 TF trend trading.
Will keep reading you.
Cheers

yet the layouts were with me. how to avoid this failure?

Look at the black line. It has acted as support and resistance many times within a small time. I call this level as an intermediate level. (I guess the more widely accepted term is intermediate pivot or something like that). When you see that price is acting like this then you wait for the market to breakout.

Failure is not something to avoid. It is a normal part of trading. All we can do is exercise very good money management.

Having said, that let's pick things apart a bit to have some fun. Let's enjoy it. Here we go!

When I get ready to actually enter a trade I like to get a "big picture" overview of the pair within the time frame I am trading. In this case the 1 hour. That doesn't mean I look at the H4 or the daily. No! I just zoom out on the H1 time frame. So here it is.


Next I like to see the behavior of the pair. Notice the pullbacks in this pair as it has trended up. We can see pullbacks or corrections in different configurations. I notice 2 leg corrections and complex corrections. Despite any of these corrections the pair continues trending up. Yet what do most of us tend to do? That's right. We try to call the reversal that starts a new relatively longterm down trend.

Now that we know that we should examine ourselves in terms of our expectations or what we think should happen since I think I know so much. Whether I know trends like the back of my hand or something else we must accept that no matter what our expectations will often be shattered.

So now let's get up close to this pair and the recent activity that might have led us to try selling this pair at what seemed like a pretty good spot. In fact I'm not going to say it was a bad trade and we should have not taken it. It was an excellent trade and just because it didn't work out doesn't matter. If you took a reasonable stop then let's learn what we can and move on.



First this is a deep 2 leg correction. Price corrected back to an area where there is definite evidence of sellers. Price descended with a large WRB and this may have been a signal for some to sell here either as a breakout or on pullback to the base of the WRB. I will say this WRB was suspicious and reeks of a fake out and IMHO the trader might have done well to see it follow through which in this case it did not.



Instead price moves up taking out the WRB to the upside and in fact the pullback was a "buy" opportunity. Yeah I know, hindsight is 20:20. But were learning something for the next time not bashing what you did or didn't do. So that's it. Now let's chill with some slow blues.

https://youtu.be/HyScf5PXTQg

https://youtu.be/pgPwWJ1gMAc

Avoiding losses should not be a trader's primary concern. Mitigating losses should be the primary concern of traders. How to do this is usually ignored by the vast majority of traders. It is the reason why most traders lose, not because they have the wrong method, system or strategy but because they develop horrendously bad habits in regards to money management and risk:reward. Most will have a hard time swallowing this one but it's the truth.

Each trade involves an initial investment. The investment is your stop loss plus cost of the trade. Since trading is intermittent your investment (stop loss) on each individual trade will have significant impact on your ability to make a profit over a series of trades and then a series of trades over a period of time.

It is the accumulation of losses vs wins that ultimately decides whether one is in the red or in the black. However this does not mean that if you win more than you lose that you will be profitable. Therefore one's win rate will not determine ones profit. This is because loss size does not equal win size. Therefore by determining that win size will always be greater than loss size (stop loss) one can stack the odds in his/her favor. Another way of saying this is to never accept a win size smaller than your stop loss size and probably never equal to your stop loss size. Traders often say that you need an edge to make money in trading (which is just another way of saying I can win more trades than I lose). Yeah right. I don't think so. The edge is not in some magical application of indicators or other mysterious mumbo jumbo that you think is going to increase your win rate but rather...The edge is in money management and more specifically R:R.

Since trading usually involves price charts one should determine the initial investment based on some type of market structure that the price chart reveals. Although there are probably many ways to do this one way is by using swings within trends. So if one enters a trade below or above a swing then the swing high above a sell or the swing low below a buy often prove to be acceptable stop loss locations. The actual stop loss will probably be a small distance above/below the swing. Therefore ones entry will determine the stop loss size or initial investment and ultimately if it can be afforded by the trader. The profit target should definitely be larger than the initial investment ideally three or even four times the size of the initial investment. Accepting a doubling of the initial investment demands a very high win rate to be profitable. If the trader decides he/she "can get out early" on a trade that is really too expensive thus accepting a smaller profit than what his/her trading plan states then the trader begins a potential slide down a slippery of slope of bad habits that will ultimately destroy earnings and eventually overall profit. Akin to this is getting out of the trade early as one's stop loss is approached only to have price turn and achieve the original profit target. Another bad habit that will only lead to overall losses. The cure for this is taking only the trades that fit your budget. Yeah I know, that get-rich-quick crap seems well....CRAP.

Get your calculator out and start running the numbers. Actually you don't need a calculator but it sounds good.

1. What can you really afford on any given trade?
2. What would happen if you lost 10 trades in a row given your typical trade (this has everything to do with your stop loss size or initial investment per trade)?
3. If you lose a trade how many trades do you have to win to make up for the loss and then to get into profit. If you lose two trades, how many trades do you have to win to make up for that loss and then get into profit? Do it for three losses, etc. etc. Get my point
4. If you win a trade how many trades do you have to lose to lose your profit, and to get negative. Do this for winning two trades and for three trades.

UJ was uptrending on the left. LHs and His shown. On right price now showing clear evidence of potentially downtrending. Limit sell shown. Would have been in early but I do actually sleep at night. LOL!

Similar as previous post except potential new uptrend.

Any thoughts anyone?

https://youtu.be/_QGtybVPmFY

EDIT - High possibility of a LH

no real thought on the other hand the rectangle I would have put one like this

which would make me switch to buying on EUR / CAD apart from the new trend that you are offering

the wave of the red arrow which breaks the red rectangle of the trend of the pink arrow

I would have entered the retracement of the red wave (blue arrow) certainly towards 1.47320 with a stop on the lowest green rectangle with an objective of 1.48200


why did you think that the prices will go back to 1.47229?

The one I would not have had the idea to take (this is not a review my English is very bad and I use google translate :-))

a nice messed up demostration

Hi thomi,
Can you explain the logic behind the rectangles?

Remember that if your losses are smaller than winners then you can survive.

red rectangle are just support and resistance.
blue rectangle are areas resulting from large candlesticks Winston will be better off you explain it than me, there was recently a line on the subject