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Chapter 8, Part IV. How to apply all these lines in trading? Page 2

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 15, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Pipruit: I think to wait a confirmation is safer. But will the enter price for both scenarios be the same?​

    Commander in Pips: No, they will not. Confirmation suggests that you enter the trade after the bounce from the line with worse price, but with higher probability of profit.

    Pipruit: Once we’ve pointed that trading should be made in terms of probability. The first entry – without confirmation reminds me of a slice & dice game, but entering after the bounce is a logical entry. Besides, the fact that I’ve entered with a bit worse price does not mean that I will take a loss. So, I choose the second way – after confirmation.


    Commander in Pips: You’re absolutely right. Entering after confirmation is much safer and has more chances of success, than entering ahead of the market. Do not ever try to predict the market – wait for when the market itself will show you what it intends to do. There is a proverb – “it is unwise to run ahead of a train”. In this meaning entering before a confirmation is equal to catching the falling knife. And this is really more gambling than trading. Trading is a business – not a gamble.

    Take a look at the #1 chart – this is 60-min EUR/USD. Here we clearly see a support line, and let’s assume that we want to buy here. I’ve marked two ways of possible entering. The first way – is to enter without confirmation (short blue line) and the correct entry is the green line. The stop loss order is marked by red line. So, you can see that let’s call it as “gamble entry” has some advantage in price level, compared to “Proper entry” – but both positions will make profit from this trade.

    Pipruit: Well, Commander, your speech is confusing me – once we’ve said that we should not enter without confirmation, and here you show that this position has advantages in price level – because “Gamble entry” got in at a lower price, hence the profit will be greater than from “Proper entry”.​

    #1 EUR/USD 60-min
    [​IMG]
     
    #1 Sive Morten, Dec 15, 2013
    Lasted edited by : Feb 14, 2016
    Hamza Samiullah and fran alvarez like this.
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