WaveRider - Back to Basics - S/R, Price Action, MM, Smart Exits, One Indicator, and patience...
- Thread starter WaveRider
- Start date
WaveRider
Master Sergeant
- Messages
- 350
Forever a student of something
Thanks guys for the encouragement.
Along, I lost a good amount on the little live account some months ago and it hurt (my ego) enough that I'm ready to eat slow. Great advice. This pinbar strategy is talked about by the james 16 group on Forex Factory and on their own web site but is pretty old and doesn't originate with them. Sive's Military school has a great set of price action images indicating bearish and bullish market action and sentiment candlestick setups. I've printed them and am spending time memorizing them. The trader will snap support resistance lines based on old price action. No need to understand why price changed direction or hesitated at any given spot, just acknowledge it changed and that it will likely change again or at least hesitate there before continuing. If market action/sentiment says down, it should be either showing price rejection of the price trying to move into the next higher profit zone (pinbar a.k.a. hammer or shooting star, and its variations) or it should show decisive movement into the next lower zone (bearish outside engulfing). Opposite for bullish action. Add confluence with Fib's, whole round numbers, weekly pivots and trend and it makes for a pretty high probability trade. Worth checking out. I read the James 16 thread and loved that lack of indicators and the simplicity. With some good position management, it can do even better. It is a 100,000 + post thread and years old with a lot of successful setups. It was what I have been looking for and wish I had found it when I was first starting out. I wasted a lot of time on moving averages, millions of indicators and EA's based on them.
Rahman, more good advice about switching to micro live. I agree, thanks. Once I went live, demo trading held no draw for me but I didn't start making money until I traded small lots with the trend. Sounds simple but I was thinking about home runs, not base hits, and the trend is like a freight train that you either get on or it will run you over. Since I'm trying a completely new strategy, I'm trying to (1) train my eyes to see the patterns I want and (2) get used to managing multiple positions, both as I'm opening them and again once they are open. The second point is a mechanical thing that takes a little time and if I'm lazy i won't do it. I'm trying to get faster at it and figure what works for my personality and risk appetite. I made an excel spread sheet page that calculates my positions based on entry, SL and TP. It divides the trade into two or three separate positions that I'll punch in at the beginning of the trade but again it takes a little time. Even bad trades at this point are still good for my learning process. I'd like probably another month and 10 trades getting these more mechanical aspects down before before I felt comfortable risking real money and dealing with the psychological issues. Please, keep the advice coming.
This thread is probably the best thing I could have done for my trading. I'm afraid of looking like an idiot (too late!)so I'm really careful about my trades. I missed 3 or 4 great trades because of caution but that's okay. Great trades are plentiful. It forces me to analyze trades for the good and bad, not just whether I won or not. With the last trade, I found myself thinking "I've already won some, so I can lose some and it'll be okay." Stupid, stupid. Exactly the kind of psychology that makes traders fail. Every trade is its own beast and every day is a new opportunity to win or lose, without regard to whether I'm positive in the account or not. I'll keep everyone updated here about my progress.
Thanks guys for the encouragement.
Along, I lost a good amount on the little live account some months ago and it hurt (my ego) enough that I'm ready to eat slow. Great advice. This pinbar strategy is talked about by the james 16 group on Forex Factory and on their own web site but is pretty old and doesn't originate with them. Sive's Military school has a great set of price action images indicating bearish and bullish market action and sentiment candlestick setups. I've printed them and am spending time memorizing them. The trader will snap support resistance lines based on old price action. No need to understand why price changed direction or hesitated at any given spot, just acknowledge it changed and that it will likely change again or at least hesitate there before continuing. If market action/sentiment says down, it should be either showing price rejection of the price trying to move into the next higher profit zone (pinbar a.k.a. hammer or shooting star, and its variations) or it should show decisive movement into the next lower zone (bearish outside engulfing). Opposite for bullish action. Add confluence with Fib's, whole round numbers, weekly pivots and trend and it makes for a pretty high probability trade. Worth checking out. I read the James 16 thread and loved that lack of indicators and the simplicity. With some good position management, it can do even better. It is a 100,000 + post thread and years old with a lot of successful setups. It was what I have been looking for and wish I had found it when I was first starting out. I wasted a lot of time on moving averages, millions of indicators and EA's based on them.
Rahman, more good advice about switching to micro live. I agree, thanks. Once I went live, demo trading held no draw for me but I didn't start making money until I traded small lots with the trend. Sounds simple but I was thinking about home runs, not base hits, and the trend is like a freight train that you either get on or it will run you over. Since I'm trying a completely new strategy, I'm trying to (1) train my eyes to see the patterns I want and (2) get used to managing multiple positions, both as I'm opening them and again once they are open. The second point is a mechanical thing that takes a little time and if I'm lazy i won't do it. I'm trying to get faster at it and figure what works for my personality and risk appetite. I made an excel spread sheet page that calculates my positions based on entry, SL and TP. It divides the trade into two or three separate positions that I'll punch in at the beginning of the trade but again it takes a little time. Even bad trades at this point are still good for my learning process. I'd like probably another month and 10 trades getting these more mechanical aspects down before before I felt comfortable risking real money and dealing with the psychological issues. Please, keep the advice coming.
This thread is probably the best thing I could have done for my trading. I'm afraid of looking like an idiot (too late!)so I'm really careful about my trades. I missed 3 or 4 great trades because of caution but that's okay. Great trades are plentiful. It forces me to analyze trades for the good and bad, not just whether I won or not. With the last trade, I found myself thinking "I've already won some, so I can lose some and it'll be okay." Stupid, stupid. Exactly the kind of psychology that makes traders fail. Every trade is its own beast and every day is a new opportunity to win or lose, without regard to whether I'm positive in the account or not. I'll keep everyone updated here about my progress.
RahmanSL
Major
- Messages
- 2,938
Hi WaveRider,
"....Please, keep the advice coming."
WaveRider, I don't know whether my "good advices" are that good as I am very sure some seasoned forex trader veteran do not agree with my trading style. But, as I was informed right from the start of my forex journey, all new traders will eventually develop their own individual trading style & system that best suit them as no two traders will trade exactly the same way. I guess that's the unique human factor
Ok, another trading strategy which I have very recently adopted in my forex trading strategy was a remark made by one of my business associates who has absolutely no experiences in forex but is a shrew businessman.
When I mentioned to him that at times I am "forced" to cut my losses due to market reversal, he asked me why I have to do that? I told him that if I don't take the losses or to hedge them to increase my equity these losses might jeopardize my trading account leading to a margin call and possible account stop out.
His simple answer is, "Why don't you dump in more capital into your trading account since, as you said, the market will eventually reverse turning those losses into profits;right? If you take these losses, that money would be gone and you will be down so many percent of your capital or profits. But if you add in more capital, you not only keep your account safe but have the potential to add more profits into the account if some good trading opportunities arises".
That makes perfect sense to me and so, from now onwards, I will simply drown my losses with more capital. I don't have to use all the available free margin but simply keep them for entering trades when good setups are present.
I think I will dump in more spare capital into all my existing trading accounts as I don't have to use them all to make trades, but it does give me the luxury of choosing to use or not to use these spare capital as I see fit and, if I enter good trades setups, I will be able to make more money than any bank in the world will give me for interest
As I have mentioned, I am sure a lot of traders emphatically do not agree with my trading style, but that's my style and I am comfortable with that.
So, my young friend, I wonder what trading style you will adopt as you matured in trading the forex!
All the best!
"....Please, keep the advice coming."
WaveRider, I don't know whether my "good advices" are that good as I am very sure some seasoned forex trader veteran do not agree with my trading style. But, as I was informed right from the start of my forex journey, all new traders will eventually develop their own individual trading style & system that best suit them as no two traders will trade exactly the same way. I guess that's the unique human factor
Ok, another trading strategy which I have very recently adopted in my forex trading strategy was a remark made by one of my business associates who has absolutely no experiences in forex but is a shrew businessman.
When I mentioned to him that at times I am "forced" to cut my losses due to market reversal, he asked me why I have to do that? I told him that if I don't take the losses or to hedge them to increase my equity these losses might jeopardize my trading account leading to a margin call and possible account stop out.
His simple answer is, "Why don't you dump in more capital into your trading account since, as you said, the market will eventually reverse turning those losses into profits;right? If you take these losses, that money would be gone and you will be down so many percent of your capital or profits. But if you add in more capital, you not only keep your account safe but have the potential to add more profits into the account if some good trading opportunities arises".
That makes perfect sense to me and so, from now onwards, I will simply drown my losses with more capital. I don't have to use all the available free margin but simply keep them for entering trades when good setups are present.
I think I will dump in more spare capital into all my existing trading accounts as I don't have to use them all to make trades, but it does give me the luxury of choosing to use or not to use these spare capital as I see fit and, if I enter good trades setups, I will be able to make more money than any bank in the world will give me for interest
As I have mentioned, I am sure a lot of traders emphatically do not agree with my trading style, but that's my style and I am comfortable with that.
So, my young friend, I wonder what trading style you will adopt as you matured in trading the forex!
All the best!
Last edited:
WaveRider
Master Sergeant
- Messages
- 350
Sorry everybody for the silence. The new school semester started and I still work and manage a small kingdom, fix cars, do dishes, etc. I havn't logged into the demo accounts in so long they have expired so I have no idea what happened to the trades I made. I think they probably lost but I'm not sure. I traded live today and lost on the first and won on the second so the account is nuetral for the day, week, month. The first order was whim and not thought out. The second I snapped S/R lines and sold for 10 pips. I would be a much better trader if it weren't for me getting in the way. Probably won't be around till the summer. Good luck guys. If I trade I'll post.
WaveRider
Master Sergeant
- Messages
- 350
Got the big move friday on the EURUSD:+65.3,+85.7 pips
Since the demo accounts have expired I went back to trading on the live mini account for dime pips in mid March.
The last 30 days has grown the account 8.8%. 18 trades total 6 losses. Easily half the losers were boredom trades.
Again, this about knowing yourself as a trader and knowing the market and how it behaves. One successful trader says the biggest hindrance to a new trader is the small account size. You need to be fearful of the loss because it means big money. If a win means $10,000, you'll wait for a perfect set up. If it means $6 or $50, you're not as likely to watch a screen all day and not trade. You'll overtrade. The solution is fund a full big account.
Since I'm putting myself through a "job interview" style trial period, I'm not ready to fund a big account. When I've proven to be responsible, consistent, deliberate, I will fund a larger account.
Friday. We got this great move down. The big problem on this trade was it was overleveraged. I think I risked about 8% of the account value for a 7% take. No need to do that, though it is tough on a little account to get double positions and keep risk in check. It didn't quite hit my profit target on the second position but was so in the green by 3pm EST, I took the profit. Looking back at it, it's easy to see the stop loss was a little sloppy on the smaller position and the profit objective should have been right were the price ended up or 10 pips shy of that, not 10 pips further on the second larger position. I should probably have taken profit earlier on the small position. Just watching S/R and Price Action. It was a good trade, could have been entered into better, more intelligently executed, risked less, and there was a little luck. The price came within 3 pips of the SL on the small position. The price ended on a solid support with a tiny penetration of the support. Friday, it seems few institutional traders want to stay open during the weekend so they close positions and enjoy their weekend and wait for the next move and all price action peters out in the mid pm.
The red "1" shows great confluence resistance. This is where the SL was hidden. I figured if the price broke this 61.8 and 38.2 and a significant S/R from past price action, this trade would be invalidated and I should be stopped out. When I entered it did move against me by 30 pips, but Sive noticed if it moved up, it would likely complete a butterfly pattern and turn down. It did complete the butterfly and went a little higher up, but according to the original analysis, the trade context was still sound.
The red "2" shows the entry point. It was on the third bar from the top of that move. The price hit the double 38.2 ret and plunged in my favor (I would have been fine to take profit at that point-I stayed in because of greed and I was upset about some losing trades I wanted to make up for), then went against me to complete the butterfly pattern. Dropped again for the profit.
Since the demo accounts have expired I went back to trading on the live mini account for dime pips in mid March.
The last 30 days has grown the account 8.8%. 18 trades total 6 losses. Easily half the losers were boredom trades.
Again, this about knowing yourself as a trader and knowing the market and how it behaves. One successful trader says the biggest hindrance to a new trader is the small account size. You need to be fearful of the loss because it means big money. If a win means $10,000, you'll wait for a perfect set up. If it means $6 or $50, you're not as likely to watch a screen all day and not trade. You'll overtrade. The solution is fund a full big account.
Since I'm putting myself through a "job interview" style trial period, I'm not ready to fund a big account. When I've proven to be responsible, consistent, deliberate, I will fund a larger account.
Friday. We got this great move down. The big problem on this trade was it was overleveraged. I think I risked about 8% of the account value for a 7% take. No need to do that, though it is tough on a little account to get double positions and keep risk in check. It didn't quite hit my profit target on the second position but was so in the green by 3pm EST, I took the profit. Looking back at it, it's easy to see the stop loss was a little sloppy on the smaller position and the profit objective should have been right were the price ended up or 10 pips shy of that, not 10 pips further on the second larger position. I should probably have taken profit earlier on the small position. Just watching S/R and Price Action. It was a good trade, could have been entered into better, more intelligently executed, risked less, and there was a little luck. The price came within 3 pips of the SL on the small position. The price ended on a solid support with a tiny penetration of the support. Friday, it seems few institutional traders want to stay open during the weekend so they close positions and enjoy their weekend and wait for the next move and all price action peters out in the mid pm.
The red "1" shows great confluence resistance. This is where the SL was hidden. I figured if the price broke this 61.8 and 38.2 and a significant S/R from past price action, this trade would be invalidated and I should be stopped out. When I entered it did move against me by 30 pips, but Sive noticed if it moved up, it would likely complete a butterfly pattern and turn down. It did complete the butterfly and went a little higher up, but according to the original analysis, the trade context was still sound.
The red "2" shows the entry point. It was on the third bar from the top of that move. The price hit the double 38.2 ret and plunged in my favor (I would have been fine to take profit at that point-I stayed in because of greed and I was upset about some losing trades I wanted to make up for), then went against me to complete the butterfly pattern. Dropped again for the profit.
Attachments
Last edited:
WaveRider
Master Sergeant
- Messages
- 350
I'm going to try one more indicator. The 200EMA. For the way I trade, this may serve as a significant S/R because it is used by so many, especially in on the 4h and greater charts. It would be another way of figuring confluence for establishing a safe SL level. Maybe if the profit target requires price to pass it I, would expect some healthy hesitation on it and not get jittery when I see a doji or hammer/shooting star form on it. It may also just be clutter and not useful since the system I'm using is already pretty good less mistakes from the trader. It looks good when scrolling back but that isn't really very accurate.
I currently have three EURUSD charts I use with different information. One has psychological levels plus weekly and monthly pivots, another starts clean but I fill with S/R and fib lines. This is the chart I make decisions from. The third is a template I got some time ago called the THV. It's pretty accurate on 30 and 60 min charts. I like to use it as confirmation I'm not doing something crazy but it doesn't take into account S/R or candlestick patterns so I wouldn't trust it to make decisions for me.
Sive's school is second to none. His chart patterns table is very relevant to my trading style. Understanding market psychology as seen in candlestick patterns collaborating with S/R is the compass. That tells where the market is going next - continue or reversing. The next step is establishing profit objectives and SL level. The SL is the point at which your analysis has been proved wrong with great certainty. The TP is the next relevant S/R. This could be the completion of a pattern, like ABCD, or butterfly, which I don't have on my platform, or at a significant confluence area. All TP and all SL should be confluence areas. A major psychological level like 1.45 is its own confluence level. It's both 100 and a 500. It's stupid to TP or SL at some arbitrary number based on an EMA no one uses (like Raghee Horner) or because it fits into your risk % level, or because it has to conform to a proper 1:1 risk reward ratio, or because it is your favorite number.
I currently have three EURUSD charts I use with different information. One has psychological levels plus weekly and monthly pivots, another starts clean but I fill with S/R and fib lines. This is the chart I make decisions from. The third is a template I got some time ago called the THV. It's pretty accurate on 30 and 60 min charts. I like to use it as confirmation I'm not doing something crazy but it doesn't take into account S/R or candlestick patterns so I wouldn't trust it to make decisions for me.
Sive's school is second to none. His chart patterns table is very relevant to my trading style. Understanding market psychology as seen in candlestick patterns collaborating with S/R is the compass. That tells where the market is going next - continue or reversing. The next step is establishing profit objectives and SL level. The SL is the point at which your analysis has been proved wrong with great certainty. The TP is the next relevant S/R. This could be the completion of a pattern, like ABCD, or butterfly, which I don't have on my platform, or at a significant confluence area. All TP and all SL should be confluence areas. A major psychological level like 1.45 is its own confluence level. It's both 100 and a 500. It's stupid to TP or SL at some arbitrary number based on an EMA no one uses (like Raghee Horner) or because it fits into your risk % level, or because it has to conform to a proper 1:1 risk reward ratio, or because it is your favorite number.
along
Corporal
- Messages
- 174
Hi wave,
I think another good method to use is to divide your chart into weekly column. this is what I did for all my swing trades. for this I can analyze market on weekly basis and I used h4 for this, attached the screen shot. Just to share with you if you like it.
wish you all the best
I think another good method to use is to divide your chart into weekly column. this is what I did for all my swing trades. for this I can analyze market on weekly basis and I used h4 for this, attached the screen shot. Just to share with you if you like it.
wish you all the best
Attachments
WaveRider
Master Sergeant
- Messages
- 350
+ 13 pips live account: inc. account val of 0.5%
PA early this morning would either indicate a continuation to the downside or a retracement. We had a great thrust down on Fri with no retracement so a retracement was due this morning. Buy position. In at 1.3052, out at 1.3065. Simple, one position. This trade was against the trend. The first time I've done this in months that I can remember. The 38.2 is at 1.3075 so I probably should have held on for 10 more pips. Still, a win is a win. I got out because I didn't want to risk reaching Fridays low at 1.3072. This moved against me about 20 pips but was bouncing off the 23.6 and an older S/R line so I held on. PA had no real reason to head south.
Quiet morning. Don't do many Monday Trades but I'm a little buzzed about Fridays big win.
PA early this morning would either indicate a continuation to the downside or a retracement. We had a great thrust down on Fri with no retracement so a retracement was due this morning. Buy position. In at 1.3052, out at 1.3065. Simple, one position. This trade was against the trend. The first time I've done this in months that I can remember. The 38.2 is at 1.3075 so I probably should have held on for 10 more pips. Still, a win is a win. I got out because I didn't want to risk reaching Fridays low at 1.3072. This moved against me about 20 pips but was bouncing off the 23.6 and an older S/R line so I held on. PA had no real reason to head south.
Quiet morning. Don't do many Monday Trades but I'm a little buzzed about Fridays big win.
Attachments
Similar threads
- Sticky
- Locked