jrtrading wrote:I thought the first part of accumulation was with small stops on small charts, and then as the multiples became significant we turned to larger charts within the daily range - sorry I must be very slow -
but do I understand it correctly in that macro pips (i.e. larger stops on a larger chart) is the way to go for the whole accumulation process?
You might trade at $8 per ONE (aka "micro pips")
or $8 per TWO
or $8 per FOUR
or $8 per EIGHT
or $8 per SIXTEEN,
but you are never trading for more than $8 per unit of movement.
Larger macros don't have larger stops, every macro in the above example has a -$40 max stop.
If I make 6 macros trading FOURS then I have +6 macros for trading TWOS or ONES or EIGHTS or SIXTEEN.
I would love to make $800 when price moves 100 pips, but I don't want to suddenly lose $400 if price spikes down 50 pips.
Why not add pips using EIGHTS, then add pips using FOURS, then TWOS, and finally ONES? The risk is 8 times smaller &
the reward will be there when I am ready to claim it.
Higher volatility, larger macros.
Lower volatility, smaller macros.
That is all that you really need to know...that and stacking is sexy