maybe throw this Tortoise technique in with some horizontal trading.
Was trading horizontal lines today 1 trade an hour - market orders in the direction of the H1 at the psych lines - was really getting bounced around and stopped out just by a bit each time ( sometimes more than a bit - but rarely did price cross the "next pysch line) - and of course, go the "right" way. These psych lines were really reactive and I didnt want to loosen up my SL by too much as I wasn't getting a huge bang for the buck on my trades or make more than one trade an hour
Then, I thought to myself, what would mightyOne do here.........
To paraphrase - rather than hitting a market entry, go for a limit entry where you would have put your SL
So rather than trading with H1, I traded the psych lines with D1, when price would approach a psych line, I would let it, bounce and retrace and then have a limit order (today they were buy orders) at 15 pips below the psych level that is being worked on - (with a 15 pt sl) but with a much bigger TP level - typically the next psychline up, so about 50 points. In other words, I used the previous psychline that had just been crossed rather than the one price was working on - which is usually quite reactive (except it seems on a counter trend move - could this be what MO was talking about when discussing his diamond and angles....)
and for your view pleasure............a chart - 15 minute candles with 1 h overlay.
I suspect that this approach takes some of the volatility and guess work out of Horizontal lines (like when should i kill a trade type of thing)
MightyOne wrote:I considered for hours upon hours which method of money management offered to lowest draw down and the greatest potential reward and have come up with a few answers.
Method 1: The Tortoise:
Let us say that you wish to go short 1 standard lot upon receiving an indication to do so:
1. Instead of setting your one click entry to 1 standard lot set it to 2 mini lots.
2. Push the button and enter 2 mini lots
Did price slam into your SL? No biggie!
3. Does every thing appear to be ok ie no adverse reactions? Ok then push the button again and now you are up to 4 mini lots.
You don't have to wait for a specific amount of time; think of it as crossing several streets pausing for a second at each one to make sure that there are no oncoming cars.
If price retraced 6 pips and held steady then your next push of the button would contain a SL that is 6 pips higher than the first short.
I would consider an adverse reaction to be a near instantaneous move against me of 9 or more pips.
What if price shoots up 40, 60, or 80 pips and I only got 1 click off!
How often does this happen?
You should trade as if only bad things happen and consider the good times to be a blessing.