Trying to get the bigger pips

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newscalper
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Trying to get the bigger pips

Postby newscalper » Fri Dec 03, 2010 2:17 pm

I wasn't sure whether to put this in beginners or general so I hope this is OK?

Recently I've been looking into trying to play the longer timeframes as I prefer but with much smaller stops, waiting 12 hours for 1:1 is not much fun.

This is what I've come up with. What do you think?

Image

I think on the diagram I have put the partial exit in the wrong place as the hour candle has not completed - partial exit would be at the next pullback that has the 2 sema above it. Either that or we'd partially exit at the close of the hour.

Does this look a feasable 'scalping' strategy?

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cwn6161
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Re: Trying to get the bigger pips

Postby cwn6161 » Fri Dec 03, 2010 2:54 pm

newscalper wrote:I wasn't sure whether to put this in beginners or general so I hope this is OK?

Recently I've been looking into trying to play the longer timeframes as I prefer but with much smaller stops, waiting 12 hours for 1:1 is not much fun.

This is what I've come up with. What do you think?

Image

I think on the diagram I have put the partial exit in the wrong place as the hour candle has not completed - partial exit would be at the next pullback that has the 2 sema above it. Either that or we'd partially exit at the close of the hour.

Does this look a feasable 'scalping' strategy?


That looks more like scalping while keeping longer term direction in mind. I agree that waiting 12 hours for 1:1 isn't fun - so why not go for 4:1 or 3:1? If you want to move up to the higher time frames, base your methods on taking 100 or 250 pips per trade.

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Postby newscalper » Fri Dec 03, 2010 3:39 pm

That's why I'm looking at this - the 100-250 pips trade isn't the problem for me, it has been the size of the stops to do it, which have been based on the timeframe I'm trading. Say if trading 4 hour with a 4 hour bounce off support that holds the stop from entry to 4 hour low can be 100 pips easily, that's why I'm looking at the short timeframe entry into a longer term trade.

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Postby cwn6161 » Fri Dec 03, 2010 3:41 pm

Whats the maximum stop in pips you are comfortable with?

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Postby newscalper » Fri Dec 03, 2010 4:00 pm

:) Comfort doesn't really have to much to do with it. Each timeframe has a certain amount of average volatility so basing a stop on that on 4hr, say 2ce is around 100 pips for cable. Risking x% over 100 pips with a 150 pip win say is only giving us 1.5:1...if we win. Why cut the trade at 150? - PA dictates, it may go further it may get nowhere near that.

What I'm looking at is, say 1% risk based on a 5 or 15 min TF volatility stop, say 20 pips, to gain that same theoretical 150 to 200 pip win. I'm not an inverse R:R kinda guy.

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Postby cwn6161 » Fri Dec 03, 2010 4:30 pm

I use 25 to 50 pip stops when I trade the 1H candles, and look to get 200 - 250 pips back.

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Postby newscalper » Sun Dec 05, 2010 7:11 pm

That's great.
The trade I've illustrated is what I'd consider to be an hourly trade as the low I was trading from was on the 4hr and only a minor swing. Stop size here would be in the region of 15 based on the 5 minute entry. A 4 hour trade would be similar, in fact the trade above could have been turned into a four hour trade. I'd manage a 4 hour trade exactly the same except there's need to be a 3 sema at least on the 4hr, preferably a sema on the daily or weekly. Then I'd run the trade as in the diagram except this time I wouldn't cut on hourly momo against, rather I'd cut another say another 25% from the position and let the remaining run until I saw 4hour momo against.
All theory at the moment though as I've yet to run a trade like this.

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