"...I was expecting..." -Razorboy
The only thing you use analysis for is entering so that more often than not you are in profit by at least 1/3 of your risk almost immediately.
I take profit quickly to reduce or eliminate risk and then hold for large gains based on the time frame that I am considering:
If I am up 9 pips and I exit 1/3 of my position then price must fall 13.4 pips for me to break even (9 / 0.67).
Lets look at the same 9 pip gain and different exit amounts:
1/4: 12 pips to BE
1/2: 18 pips to BE
3/5: 22.5 pips to BE
2/3: 27.2 pips to BE
3/4: 36 pips to BE
4/5: 45 pips to BE
If 9 pips = 1% then the distance to BE now = 1%:
If you exit 1/4 of your position then every 12 pips is a 1% gain.
If you exit 3/4 of your position then every 36 pips is a 1% gain.
(Zero risk and unlimited potential gain if you are one to not count chickens before they hatch)
If my initial risk is 9 pips and 70% of the time my risk is moved to zero then my average risk is 2.7 pips per trade.
If 9 pips is 1% then 2.7 pips is 0.3% risk.
If I make 5% on my remaining position then my ratio is 16.6 to 1.
Now if my risk is zero AND my SL is LARGER (not in profit, not at the point of my entry, but LARGER than my initial SL) then the probability of a longer term gain is increased dramatically.
Price moved up 9 pips, but it has to reverse a greater number of pips to zero me out at which time I am ready to try again.
If the market is offering you 5 or more pips then reduce your position and expand your SL.
(Imagine if price spiked 18 or 23 pips!)
You can exit the majority of your position and move you attn. to other pairs or you can exit a small amount and focus on a single pair.
The majority of your success will come from: low initial risk, taking profits quickly, & taking profits slowly.
Master all 3 and nothing will be able to stop you from being successful.
Was playing the ej today - the day after a what i thought - major support line was broken.
As per my pictures, I was expecting a new res line to be formed at the 126.20 region - yellow line
Things didnt pan out that way and price kept rising - almost exactly to the point of zeroing out the first "big move down"
looking back at the charts, i suspect my problem was that i didnt let the market define it at the 126.20 region ( should have waited for a lower low before I shorted)
Anyway, I suspect I am probably answering my own question here (or this could just be total gibberish), but when using the idea of Zeroing out other large moves, do you find that longer term S/R lines usually form at the origin of a big move (rather than an old support line automatically turning into a res line), or do you just wait for the market to define itself over a certain range that could be considered support ---------------ok i obviously just answered my own question, but have put all this time in so I will just throw up some pics