Scalping: 3LZZ DSR

[Jhx]

This is what I mean in my previous post. This is probably an issue only on smaller timeframes / scalping. Even if RRs are like a mathematical tradeoff, the cost of trading gets diminished when using larger targets.

In the 3 pip SL example: (I'll use pips and not % or R to keep it simpler)

2:1 After costs you win 4.5, you lose 4.5.
1:1 After costs you win 1.5 pips, you lose 4.5.

If you were doing 1:1 instead if 2:1, you were really targeting half (50%), but you were giving up 66% of the trade in costs. Seems like a better idea to just let them run, even if you sacrifice some winrate.

Again, this really only applies on tight SLs like this, but when scalping they sometimes look like that.

I might be tired and the math is completely wrong; if so I'll delete this to avoid confusion lol.

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Also, doing much lower winrate trades probably implies not using x% per trade as you'd be winning less and losing more in the process of hitting the larger R, maybe another money management of having a 'set of trades' would work better there. But that's a topic for another time

[Jhx]

I think that the hitrate of the patterns are generally right, I'm able to more often than not see the 1:1 or the current direction of price, at least as of late (I don't want to get overconfident). Not to overcomplicate it but if I get the same idea off a larger chart, and enter off a smaller chart, I could manage to do something to what I said above.

The first thought would be "Then why don't you use a higher timeframe instead of m5", but then I would be risking the 1:1 and get wiggled out of a pullback or any of the other issue I still have on here. I think the benefit of using a larger timeframe for the 'idea' and a lower for the execution gives more opportunities to enter the trade (and more opportunities to get it right) and have a higher RR, no?

Just thinking out loud.

Okay so I just had a big lightbulb moment, I know this was said many times here, in many ways but this time it sank in differently. This really makes sense in my head and it's a patience game but I really think I could do it like this, like putting odds on top of odds, if the larger idea fails then it fails but if it doesn't you still get multiple chances to be wrong and still have a big RR, and even then, if it fails, maybe it failed without blowing up the whole 1R:

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[Don_xyZ]

I think that the hitrate of the patterns are generally right, I'm able to more often than not see the 1:1 or the current direction of price, at least as of late (I don't want to get overconfident). Not to overcomplicate it but if I get the same idea off a larger chart, and enter off a smaller chart, I could manage to do something to what I said above.

The first thought would be "Then why don't you use a higher timeframe instead of m5", but then I would be risking the 1:1 and get wiggled out of a pullback or any of the other issue I still have on here. I think the benefit of using a larger timeframe for the 'idea' and a lower for the execution gives more opportunities to enter the trade (and more opportunities to get it right) and have a higher RR, no?

Just thinking out loud.

Okay so I just had a big lightbulb moment, I know this was said many times here, in many ways but this time it sank in differently. This really makes sense in my head and it's a patience game but I really think I could do it like this, like putting odds on top of odds, if the larger idea fails then it fails but if it doesn't you still get multiple chances to be wrong and still have a big RR, and even then, if it fails, maybe it failed without blowing up the whole 1R:

Idea.png

That's what I meant. Trees vs forest.

See, if people just say this to you, you wouldn't be able to understand what it meant but if you see it yourself by thinking of it then everything will be clear. Now that you see it, the trees vs forest concept is "real" to you.

Getting 1R is good and there is nothing wrong with that. But what if you can make 1R and also massive R?

Go make millions!

[Jhx]

5W 2L.

Today while I was looking at this I noticed 2 things. Or maybe it's nothing new but I'm now looking at it this way.

1) If it's breaking out then it's not ranging and if it's ranging then it's not breaking out.
It seems "duh", redundant and obvious but what I mean by this is that if it's ranging I'm better off waiting for a continuation of the break. If it's ranging price needs to sort itself out in there and once it breaks, it means there was a reversal of some kind in there before breaking out, and once it does it might give the clue of it will do next.

Of course after a continuation of a break it could turn into a range again, but waiting for that seems like the better decision.

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2) This one's in regards to the small and tight pullbacks, specially the ones that happen after large momentum candles. As I said previously, super tight trades might not be worth taking, but I think there's an exception to be made when there is strong momentum behind and could solve part of the tight RR trades off a single timeframe. Instead of targetting the range to the stop, maybe I could go for something closer to the leg. I think there are some examples even on today's chart.

Back to trees and forests, not all trees have the same heights and branches, right ?

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[Jhx]

These last two days have been the biggest for me, not in terms of results but because something has changed in how I see price and trading. I've looked for examples of what I said above regarding HTF and pairing with the way I've been following price movement, it has really changed my perspective.

It seems that trading is all about patterns, their breakouts, a bias, and balls to execute..

[Don_xyZ]

These last two days have been the biggest for me, not in terms of results but because something has changed in how I see price and trading. I've looked for examples of what I said above regarding HTF and pairing with the way I've been following price movement, it has really changed my perspective.

It seems that trading is all about patterns, their breakouts, a bias, and balls to execute..

Very good start.

You must believe in your stuff before you execute. That is why you need screentime and stats. Put the concept into real practice to see the real potential because most of the time people "think" they got it but then when they execute the plan everything went down the drain. Coz doing it live is a whole lot different than seeing how the chart unfolds without taking action.

in general, you're already on the right path to make monster R. Sure there are still other stuff but you'll get them yourself if you keep trying to improve as you gain more and more experience.

[Jhx]

These last two days have been the biggest for me, not in terms of results but because something has changed in how I see price and trading. I've looked for examples of what I said above regarding HTF and pairing with the way I've been following price movement, it has really changed my perspective.

It seems that trading is all about patterns, their breakouts, a bias, and balls to execute..

Very good start.

You must believe in your stuff before you execute. That is why you need screentime and stats. Put the concept into real practice to see the real potential because most of the time people "think" they got it but then when they execute the plan everything went down the drain. Coz doing it live is a whole lot different than seeing how the chart unfolds without taking action.

in general, you're already on the right path to make monster R. Sure there are still other stuff but you'll get them yourself if you keep trying to improve as you gain more and more experience.

Totally agree; the focus is now on applying these ideas into live trading, I just had to visually see it in the chart to know what the idea looks like when it plays out (and also when it doesn't).

When gathering these stats, are you referring to hitrate and R:R potential? Or are there any other stats that I could gather?

[Jhx]

Today, to start the new month, I made my FTMO account to start a trial (obviously no challenge yet, just the trial).

10 trades, 5W and 5L, and total was -1% due to costs. I had a few 'doubts' with some of the trades but decided to take them anyway.

Quick notes: trade #3 was taken for other reasons, there was a range of 4 bars in a row with a range of 15 with the same highs and lows, and took a short. Wouldn't to it again though. Trade #7 was a re-entry because I barely got wiggled out of the pullback and still looked good, but wouldn't have done it again if it failed again.

When comparing the trades, I noticed 2 things.

Instead of just comparing winners and losers (which is the outcome) I decided to compare the trades based off a criteria I noticed, and then see what the outcome was, like doing it the other way around. The criteria is if the pullback before break #2 went over the break #1 or not.

Trades 1(L), 2(L), 9(L), all had the pullback before break #2 go past break #1. All 3 of those trades were losers. No winners.

Trades 4(W),5(L),6(W),7(L),8(W),10(W) didn't have the pullback of break #2 go past break #1. 4 of those were winners and 2 were losers.

On all four of the above winning trades, there was room to get at least 2:1 instead of 1:1. Going over one of my recent posts where I talked about the small pullbacks on larger momentum candles. The only reason I didn't target a 2:1 is because I had a few losing trades and didn't want to make it worse so I was conservative.

Now I don't want to say 'I should have or shouldn't have done X and should've been a +7% instead of a -1% day', but there is definitely something to some trades that make them better than others. For the sake of experimenting I'll keep taking these but only to test if the length of a pullback is worth noting to avoid getting into some bad trades. As an observation, this is also true if I look at the continuation of reversals for shorts (that I don't take because of the long bias), but it still applies there and can be seen on today's session.
And it seems that when the pullback is strong, then it makes more sense to take a bounce instead of waiting for price to get back to BO#2; it would provide larger RR but that would mean anticipating 1 step of the pattern. So that's for another time, I don't want more variables for now lol.

The way I've been following price like this makes total sense to me, I think I just need a tweak or two and I might be good to go (hopefully)

So to keep it short:
1) Start comparing the size of the breakout vs the size of the pullback to see if a trade is crap.
2) Let it run a bit more if the breakout was done with good momentum and has a small pullback to have better RR when that happens.

GU_08012022_1.png (204.79 KiB) Viewed 1629 times

Unrelated note on the HTF to LTF stuff: There is a logistics issue because those trades might take more time to develop, so maybe a few entries until I get it right and that it requires more follow through, if using an H4 how 'small' should I go for the entries, and so on. So I think I need to figure some things to make it work.

[Yirbu]

Today, to start the new month, I made my FTMO account to start a trial (obviously no challenge yet, just the trial).

10 trades, 5W and 5L, and total was -1% due to costs. I had a few 'doubts' with some of the trades but decided to take them anyway.

Quick notes: trade #3 was taken for other reasons, there was a range of 4 bars in a row with a range of 15 with the same highs and lows, and took a short. Wouldn't to it again though. Trade #7 was a re-entry because I barely got wiggled out of the pullback and still looked good, but wouldn't have done it again if it failed again.

When comparing the trades, I noticed 2 things.

Instead of just comparing winners and losers (which is the outcome) I decided to compare the trades based off a criteria I noticed, and then see what the outcome was, like doing it the other way around. The criteria is if the pullback before break #2 went over the break #1 or not.

Trades 1(L), 2(L), 9(L), all had the pullback before break #2 go past break #1. All 3 of those trades were losers. No winners.

Trades 4(W),5(L),6(W),7(L),8(W),10(W) didn't have the pullback of break #2 go past break #1. 4 of those were winners and 2 were losers.

On all four of the above winning trades, there was room to get at least 2:1 instead of 1:1. Going over one of my recent posts where I talked about the small pullbacks on larger momentum candles. The only reason I didn't target a 2:1 is because I had a few losing trades and didn't want to make it worse so I was conservative.

Now I don't want to say 'I should have or shouldn't have done X and should've been a +7% instead of a -1% day', but there is definitely something to some trades that make them better than others. For the sake of experimenting I'll keep taking these but only to test if the length of a pullback is worth noting to avoid getting into some bad trades. As an observation, this is also true if I look at the continuation of reversals for shorts (that I don't take because of the long bias), but it still applies there and can be seen on today's session.
And it seems that when the pullback is strong, then it makes more sense to take a bounce instead of waiting for price to get back to BO#2; it would provide larger RR but that would mean anticipating 1 step of the pattern. So that's for another time, I don't want more variables for now lol.

The way I've been following price like this makes total sense to me, I think I just need a tweak or two and I might be good to go (hopefully)

So to keep it short:
1) Start comparing the size of the breakout vs the size of the pullback to see if a trade is crap.
2) Let it run a bit more if the breakout was done with good momentum and has a small pullback to have better RR when that happens.

GU_08012022_1.png

Unrelated note on the HTF to LTF stuff: There is a logistics issue because those trades might take more time to develop, so maybe a few entries until I get it right and that it requires more follow through, if using an H4 how 'small' should I go for the entries, and so on. So I think I need to figure some things to make it work.

Oooo...you too! Great man. We will get there!

[Jhx]

Today I took 3 trades. 1%, 0.5% and BE. So 1.5% total.

Trade #2 again, I should've let it run because it's third time I mention targetting more on trades with small pullbacks on larger momentum candles lol. I saw hit 1:1, then turn, and exited at 0.5

The third one was similar but with much weaker momentum, went to 1:1 but didn't trigger (I think it was too quick), so I exited, which triggered at BE.

More observations today. Not going specifically over the trades, but over price. This is more of an exercise but I think I'm noticing something:

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On pullbacks:
So basically this. It seems that the deeper the pullback, the less 'expectation' I should have on the target. It doesn't always mean that it will fail but I guess those with stronger pullbacks are worse, or not worth taking at the break. More like a case of:
1) If the pullback doesn't get to the previous BO, looks good.
2) If the pullback hits the previous BO, then it's okay as long as it doesn't go way past it. This one could also mean taking the bounce and anticipating the pattern for higher RR.
3) If the pullback goes way past the previous BO, then taking the break is probably getting in late and not worth it.

On momentum:
The larger that goes with my bias, the better. Avoid trades with very weak momentum, and only on large bars attempt to get more than 1:1.

Also if the trade doesn't play out in 1 or 2 candles it probably went south and should see if I can get out when it makes sense as it forms a new pattern.

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