TheRumpledOne wrote:
"I don't see how they're not being effective"
Maybe I can explain why with my thought process, as someone who still can't figure the wick zone out (since I believe the wick zone is about scalping, or at least that's what it seems like from what I've seen in the videos and/or comments).
This is a thought process of the U/J chart you showed in the video, or at least how I see it:
- 1.png (22.44 KiB) Viewed 2434 times
In my broker the previous daily bar has a body that's smaller than the spread so I'd avoid the inner break because of a conflicting bias.
Entry (Candle #2):
Let's say I risk 1% over the zone (10 pips) and I'm looking to trade the break outside the zone. I go long at candle 2. There's no way I would move my stop to breakeven with only a 0.5 pip profit because it's very likely that I will get stopped because of the range (that would be extremely tight for no good reason). The candle closes and I'm at -2 pips (0.5 pips - 1.5 spread). What now?
I'll still trade long if I get another trigger because that's my bias. If I exit now there's a high chance that range will get me another entry within this candle (only 0.5 pips away) so exiting now seems like a bad deal because if that happens I'd be paying the spread again for no good reason. So I stay in the trade.
Candle #3:
So in the spirit of cutting losses short and protecting my money, where could I exit if it doesn't go my way? Looking left the only place that makes sense to maybe cut a trade earlier with a smaller loss would be candle #2's low (because price doesn't like staying in the wick zone and left it to the downside when I'm long). If that happens I'll exit with -6.5 pips (5 pips + 1.5 spread). Luckily that doesn't happen and I stay in the trade. The candle closes with +4.5 pips (6 pips - 1.5 spread). What do I do now, do I exit or stay? Price could keep going or reverse, there's no way of knowing. If I were to look left the next high is from 6 days ago, and I don't know if that means much, if anything.
I could:
A) Exit now. (+4.5 pips)
B) Stay for (maybe) more profit since the daily range isn't even at 50% of the average.
B-1) Using candle #3's low wouldn't really work here because I'd be closing with a loss when I'm in profit right now. (-5.5 pips)
B-2) Move my stop to break even +1 to at least make it "worth it" if I get taken out. (+1 pip)
B-3) Use another candle's wick (candle #1), and exit if price crosses candle #1's high. (+0.7 pips)
Then price went up after 3 out of 4 candles closing lower than candle #3. I can't see how one would've made it to the bigger run without risking all the current profits.
And that was the entry for the day. Which is fine.
It's like I see how one would be able to play these zones, but then I can have situations like this and I remember that spread is a thing:
- 2.png (21.82 KiB) Viewed 2434 times
This one's particularly bad but I do recall having 2 or 3 bad scratched trades within the trading session that when you factor in the spread make it harder to recover from if I'm trying to scalp.
It's hard for me to cope with spreads when scalping. It really feels like I have to win twice to win once, and losing once feels like losing twice. Which is always the case because the moment you enter a trade you're already in a little bit of drawdown, it's just part of the game. It has much less of an impact if I'm trying to go for the range, but it always kills me if I try to scalp.
Is there something I'm not seeing or taking into account? My utmost respect to the traders that can scalp and almost always end the session with a profit, it always leaves me scratching my head (and my trades
).---
"Don't let one loss wipe out 5 wins."
On the contrary, could something like "Let one win wipe out 5 losses." work?
.