The ideas that I trade by:

[MightyOne]

Position sizing (how fast) & money management (how much) is more important than the chart itself;
the best chart interpreter in the world will fail without these things where as the worst will succeed.

You're right MO, i need to work some more on this.
I think about it all the time but I still have many questions.
"How fast" is one of these.
If I'm adding fast I'm making more but my space is decreasing dramatically, so I can switch to a bigger tf and double it.
Would you suggest to cut size in a specific "place" in the progression? Or when my sl is too tight to absorb the actual idea?

Thank you very much!

Position sizing is the number of pips that equals a specific amount of money.
Are you making...
$10 every 2 pips, 3, 6, 12, 24, or 48? How fast are you making money?
The speed at which you are making money is the distance between lines.

Now let's say that your initial size was $10 every 3 pips and you increased your size to $50 every 3.
To move from H1 to H4 you must halve your size so that you are making $50 every 6 pips.
To move from H4 to D1 you must halve your size so that you are making $50 every 12 pips.
Because half of the margin was returned to you, as you moved to the next largest period, you can increase your size to $100 every 12 pips ($50, $60, $80, $100) without consuming more margin.

There are many ways to make $50/12, you could divide it into three trades: $15/12 + $15/12 + $20/12
You can move them down to a lower period: $15/6 + $15/6 + $20/6 (same number of lines, but half as wide).
You can move one up to a higher period so that you can focus more on the others: $20/6 ---> $20/24 --->$30/24 (maybe you don't need as many lines)
You could split it like this: $15/12 + $15/12 and take the rest off the table...

If your stop is too tight then you can move up the periods, to enjoy the wider lines, or you can reduce your size to give yourself more space:
$50/12 & 1.25 lines remain:
(5/4)1.25 = 1.56 lines
(5/3)1.25 = 2.08 lines
(5/2)1.25 = 3.12 lines
(5/1)1.25 = 6.25 lines
So $20/12 & 3 lines or two trades of $10/12 & 3 or $30/24 & 2 should revive your space.

If you have size or space then you always have options.

[TygerKrane]

It's not FX but

Immagine.png

Hi Mira,
Can you explain to me how you are drawing these horizontal lines? What rules do you follow?

Thanks,
¥¥Krane¥¥

Hi TygerKrane!
It's only one day that i started to draw H lines in this way so, please, be careful with what I'm saying.. I'm still studying.
What I have always seen was momos, zlines and failed zlines in a mechanical way, but MO told me to focus on pattern and breakouts.
In all his latest charts where he drew ovals he was showing me the same thing: price closing over a line and price closing over that line again.

Here lines start from the first "something" I see (a line).
Then price closes over them.
And closes over them again.

IMG_1821.PNG

I made a chart with ovals too.. but they were nothing compared to those of MO!
If you look at the ovals he drew, inside the ovals (pattern) and outside the ovals (breakout) you'll see the line.
This is the "rule" I'm following.

I hope this makes sense to you on what I'm seeing.

Thanks Mira

I'll let you know if I have any questions

[TheRumpledOne]

Now let's say that your initial size was $10 every 3 pips and you increased your size to $50 every 3.
To move from H1 to H4 you must halve your size so that you are making $50 every 6 pips.
To move from H4 to D1 you must halve your size so that you are making $50 every 12 pips.
Because half of the margin was returned to you, as you moved to the next largest period, you can increase your size to $100 every 12 pips ($50, $60, $80, $100) without consuming more margin.

TRO001.png (45.33 KiB) Viewed 2837 times

Why must you cut your size in half? What am I missing?

H1 chart with H4 shaded candles. Price is the same on H1 and H4. What don't I see?

[Mira]

Now let's say that your initial size was $10 every 3 pips and you increased your size to $50 every 3.
To move from H1 to H4 you must halve your size so that you are making $50 every 6 pips.
To move from H4 to D1 you must halve your size so that you are making $50 every 12 pips.
Because half of the margin was returned to you, as you moved to the next largest period, you can increase your size to $100 every 12 pips ($50, $60, $80, $100) without consuming more margin.

TRO001.png

Why must you cut your size in half? What am I missing?

H1 chart with H4 shaded candles. Price is the same on H1 and H4. What don't I see?

Hi TRO!

I think that you move from H1 to H4 if you need to:

- Slow down your trade (=cutting size/doubling space).. now you have more time for planning what to do.
- Double your space (=cutting size/doubling space) and absorb bigger swings or if you think you need more pips for your trade.
- Move from one trade to a completely new one that, i.e., need a 4H chart

Then, when you think is time to become/return aggressive you can add again.. and you can do it on the 4h or moving to a H1 (doubling size/cutting space).

It's like having an accelerator/decelerator [but risk stays the same] at the disposal of your ideas.

[MightyOne]

Why must you cut your size in half? What am I missing?

Your 'risk-space' (stop loss to current price) is divided into lines which are spaced according to the period that you are looking at:
M1: 2 pips
M5-H1: 3 pips <--- roughly 2% of the median weekly movement of a pair
H4: 6 pips
D1: 12 pips
W: 24 pips
M: 48 pips
With the exception of M1, the distance between lines is twice as large when you move up one period.

So if you are trading H1 for $10/3pips and you move to the H4 chart then you are trading $10/6 pips which is half the size.

The lines are wider because the ranges of the bars are wider...
the period doesn't matter when you are scalping, it is only when you are holding a trade that your size and space must overcome the ranges of the bars that you are holding through; without increasing your total risk.

When each line represents a set amount of money, the only difference between trading small chart and a large chart is time.
If I show you three charts with lines that are equally spaced, as far as the eyes can tell, then you couldn't tell me what period you were trading & if I told you that each line is $100 then it would be all the same to you.

Why would you ever want to move a trade to a larger chart? Doesn't that just slow things down?
1) to return margin and propagate new trades
2) to free up time or the energy required to watch small charts
3) to reduce the effect of increased volatility
4) to obtain better risk/reward ratios
5) to minimize interest payments on highly negative pairs.
Just to name a few.

[TheRumpledOne]

THERE ARE NO CHARTS!

Think about that statement. When I first learned how to trade, there was no online trading. There was no online. No internet. We were still punching cards. The stock market existed.

If price moves 10 pips on M1, it moves 10 pips on MN1 and on every chart in between. I understand about range. Either price moves for you or against you.

Maybe it is how you are using language. I don't "move" my trade to a larger chart. I may look at my trade on several charts of different time frames but it is still the same trade.

[MightyOne]

I went through all of the trouble of buying a new keyboard... and stickers and spending 20 minutes applying them only to find a better way of typing Tamil.

Download by hitting the large red button, right click the icon in your system tray, set the keyboard to 'phonetic', and away you go.

It is free and I already scanned everything through Norton360 to make sure it is fine.

I am mostly posting this for Jala, if he is interested.

eKalappai_Tamil.png (105.57 KiB) Viewed 2833 times

[Mira]

THERE ARE NO CHARTS!

If price moves 10 pips on M1, it moves 10 pips on MN1 and on every chart in between.

Is the distance in pips between lines that changes.

IF

H1 = 10 pips

THEN

H4 = 20 pips
D1 = 40 pips

and so on.. if you risk 100$ over one H1 line (10 pips) then you could risk 100$ over one H4 line (20 pips) halving your size because lines are wider the double.

[TheRumpledOne]

THERE ARE NO CHARTS!

If price moves 10 pips on M1, it moves 10 pips on MN1 and on every chart in between.

Is the distance in pips between lines that changes.

IF

H1 = 10 pips

THEN

H4 = 20 pips
D1 = 40 pips

and so on.. if you risk 100$ over one H1 line (10 pips) then you could risk 100$ over one H4 line (20 pips) halving your size because lines are wider the double.

I just do not see the connection between chart time and price. As I pointed out in the chart, price is the same and you can have shaded candles, so time frame doesn't matter. Position size and price do not have anything to do with chart period and vice versa.

You can halve your size on the H1 chart and, guess what, the lines become wider if your risk is constant.

Once again, I may be too left-brained to comprehend this.

[MightyOne]

THERE ARE NO CHARTS!

Think about that statement. When I first learned how to trade, there was no online trading. There was no online. No internet. We were still punching cards. The stock market existed.

If price moves 10 pips on M1, it moves 10 pips on MN1 and on every chart in between. I understand about range. Either price moves for you or against you.

Maybe it is how you are using language. I don't "move" my trade to a larger chart. I may look at my trade on several charts of different time frames but it is still the same trade.

A trade "moves" to a different period when the speed at which you are making x dollars per line, as measured in the distance between lines and based on the assumption that it takes longer for price to traverse wider spaces and vise versa, changes.

Pips don't mean a thing to me, I could make 10 pips & lose 10 pips and be up $50; controlling the flow of money, that is what we are talking about.

Just because you make 5 tight lines, for a $50 profit, that doesn't mean that you have to further subject your OPM to short term volatility; you can make 5 wider lines for $50.

If all of this is obvious it is because it should be.

I just want to give a new person tools that he or she can immediately understand and use to grow in the understanding of what they can do so that they can make a more effective trading plan.

A bad man is scary, but a bad man behind bars is not so scary; control is confidence.

I don't believe in one trade, I believe in a series of trades that work under the canopy of a larger idea.

It is never about a single winning trade but how best one can utilize segments of risk to achieve the desired result.

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