Leoheart wrote:LeMercenaire wrote:thepark wrote:
The thing is I never tried trading with my first idea because I've always had an elaborate set of rules to keep me out of trouble and I've never traded consistently.
Really the princples im trading with are buy or sell at the point of origin of buy or sell breakout, but when im trading with rules im usually entering later with a m15. its hard to say with what method i would do better with. What do you suggest LeMercenaire? I know MO didnt give a damn about confirmation, but im no MO.
sidenote: i pretty much look for H4 break out/breakin then a m30 40 sma cross to confirm the direction and continue trading with the H4 momos until an opposite H4 bo/bi. i will miss the trades where H4 just pops without a pb.
I wouldn't presume to tell you which method you should trade, only you can tell how comfortable you are with any given technique.
What I would say, is that to me, you are looking at things the wrong way round. You are finding your set up and then waiting for confirmation from your sma cross. Any kind of moving average cross is always going to lag, that's a given, so you're always going to be behind the curve unless you get some kind of test-retest kind of thing going on. As you noted, this doesn't always happen and you do indeed miss the boat.
You need to look at finding your directional bias before you find your set up. If the trade (a breakout for instance) breaks in the wrong way, then you simply let it go, only taking the moves that go with the bias you have already established.
If you like the H4 tf and a breakout / break-in (WZ) type trade, I would suggest looking at AU and a specific candle (the 04:00 - 08:00 UK time candle). This has been extensively researched by a colleague who knows his stuff, using frequency distribution stats and - to cut a long story short - if the break of the high or low fails to make the target (+5% or pips, your call), then the stats show that the reverse will go a good distance toward the daily range.
This reverse can be done using a counter trade, or if you are not able to use counter-trading due to country-restrictions, then a hard-stop and re-entry can be used just as effectively.
I use this method combined with WZ and it improves the results even more. That as well as S+D cw pivots and weekly open for my directional bias.
As noted, the target is seemingly modest, however we all know the power of compounding.
Anyway, so much for not suggesting a specific method.
My main point would be to strip it back and simplify your approach. As it stands now, you are showing a classic case of ''paralysis-through-analysis'', overthinking everything to death.
(If you can't easily trade that candle due to time-zone differences, then there are other options for you. If this kind of thing interests you, let me know and I can get you the details).
Details please and examples. We see in pictures. Not sure you what mean about target +5% or pips. This number Changes at will? How do you run stats on variable value? Sorry I am confused.
Also not too clear on the counter trade idea. As country-restrictions was mentioned.Let’s say our broker permitted hedging, are we hedging our bets?
No worries - I'll try and put together some examples.
Not everyone is comfortable using a percentage system of tp, so what I meant was, it's just as easy to aim for +5 pips if that works better for you. Using a percentage tp is easy for me as I am using a spread-betting broker and it makes it a doddle to calculate ''stakes''.
Countering means that if a trade goes against me before the tp is reached, I will open a position in the opposite direction. So yes, it is in effect, hedging, or nedging as it is known to differentiate it from true hedging.
This keeps any negative as a ''floating loss'' in limbo, where it can be worked on at leisure. Unwinding the counter a bit at a time. It's not for everyone and those in the US who are prohibited from hedging, can't use it anyway (well, they can - but it involves opening two accounts, one to go long with, the other short).
I should say that this method is not my own but borrowed and adapted from a friend who uses it in a slightly different way. The principles are the same, however.
As I said, I'll try and put together some examples. I don't use the AU 04:00 thing so much any more, preferring my own DAX-Monster trade at the UK Open. Can't normally do both.