the rat reversal

[2trade]

avery

when you take a rat reversal approximately how many times do you get stopped out. I get stopped out approximately 2 out of five trades, is that about right

[TheRumpledOne]

I usually do not get stopped out. I'll take 2 or more pips quick.

Maybe once or twice a week.

The other thing is to not be so quick to enter the trade.

If you are a green rat, you have to let the red rats eat their cheese. By that I mean, let price move close enough to average daily range. Also, let a red H1 candle close. Usually, price is going to retest that new low. If it makes a new low, wait and if it does not make a new low, then you have a reversal.

Of course, you may miss an opportunity if you "filter out" trades. But I like to see price moving up since I am a green rat. That is why I say "TRADE WHAT YOU SEE".

[forexbob]

I usually do not get stopped out. I'll take 2 or more pips quick.

Maybe once or twice a week.

The other thing is to not be so quick to enter the trade.

If you are a green rat, you have to let the red rats eat their cheese. By that I mean, let price move close enough to average daily range. Also, let a red H1 candle close. Usually, price is going to retest that new low. If it makes a new low, wait and if it does not make a new low, then you have a reversal.

Of course, you may miss an opportunity if you "filter out" trades. But I like to see price moving up since I am a green rat. That is why I say "TRADE WHAT YOU SEE".

i think there is a lot of wisdom in these words of TRO. if you look a lot at price action of a pair for long times you indeed see repeating patterns.
a new low formed
it retraces (you may think a green rat reversal ; but do not get in the way of the red rats just leaving their breakfast)
it breaks out further (break out traders ala 3clipz are having lunch) and a newer low forms
it retraces
finally it is loosing steam and retesting low (but doesn't break it)
it reverses (green rat reversal with probably less risk to lose)

just my observations during lots of screentime without trading.
so do not pull the trigger too quick. the market will not go away.
i sometimes missed trades, resulting in no trades for the day
just to return 2morrow and have lunch.

[nkhawaja]

I have the exact situation. So although i try to get 2 quick pips but if a stop loss of 10 pips happens, all the work is gone. I see that reversal can give you two quick pips but it destroys the R/R ratio.

These words of wisdom from TRO can only come with patience and experience.

[nkhawaja]

Also the Reversal is very dangerous too, as if you within 20 pips of the daily low, most probably it is in a down trend. I tried to trade when D1 and W1 were green and price was just above D1, yet it went against me.

[bredin]

thats why TRO mentions the daily range as a kind of filter.

I filter by Supply/Demand zones for the same reason that it lessens the chance of being the bunny..

G.

[forexbob]

i also think that a lot is mental, like not taking that 2 pips on the table and wait and get burned. (i see TRO as a scalper quick in&out; take the profit when it is offered by the market, and sometimes it runs ... which is the icing on the cake)

3clipz also mentioned in the past he had seen many reversal traders get burned, and he was much more happy trading breakouts.
trading breakouts is maybe for many a much better way 2go
(not immediate going in when it breakouts, but wait for a retrace and then go in the direction of the breakout)

[tfg]

i also think that a lot is mental, like not taking that 2 pips on the table and wait and get burned. (i see TRO as a scalper quick in&out; take the profit when it is offered by the market, and sometimes it runs ... which is the icing on the cake)

3clipz also mentioned in the past he had seen many reversal traders get burned, and he was much more happy trading breakouts.
trading breakouts is maybe for many a much better way 2go
(not immediate going in when it breakouts, but wait for a retrace and then go in the direction of the breakout)

My RAT experience so far agree with you forexbob. Most of my winners were entered at the retracement of a uptrend and unforturnately, most of losers were trying to pick the reversal of the rat zone. I feel that there is a lot of discretion (unwritten rules) needed beyond TRO's rat rule to be able to pick the winners.


How do you define a breakout in your context, particular for 5m and 15m? tfg

[forexbob]

i also think that a lot is mental, like not taking that 2 pips on the table and wait and get burned. (i see TRO as a scalper quick in&out; take the profit when it is offered by the market, and sometimes it runs ... which is the icing on the cake)

3clipz also mentioned in the past he had seen many reversal traders get burned, and he was much more happy trading breakouts.
trading breakouts is maybe for many a much better way 2go
(not immediate going in when it breakouts, but wait for a retrace and then go in the direction of the breakout)

My RAT experience so far agree with you forexbob. Most of my winners were entered at the retracement of a uptrend and unforturnately, most of losers were trying to pick the reversal of the rat zone. I feel that there is a lot of discretion (unwritten rules) needed beyond TRO's rat rule to be able to pick the winners.


How do you define a breakout in your context, particular for 5m and 15m? tfg

tfg,

although it goes beyond the subject of this thread regarding rat reversals,
i will drop in here the link of 3clipz method
http://kreslik.com/forums/viewtopic.php?t=1801
it has evolved over time. i think he nowadays is not
very often on the paltalk room. and now trades on the h1
and has his own room on vyew

when you have his templates loaded, you can (especially from early london)
see that if on the m1 the white 6 semafor breaks, it retraces breaks out further , retraces, breaks out further. of course not always, but enough for him to build a method around it.

and on this moment i only trade/follow EURUSD although with rat reversals
but still have the templates of clipz loaded on charts.

[TheRumpledOne]

A breakout on one time frame may be a reversal on another...

A break of the M5 high may be a reversal off the D1 low.