This is nothing new, I cannot claim this as my own, all the major traders trade this way.
This is a strategy a lot of traders use. It is one of the most simple trading methods available. It is simple and effect, you dont have to risk everything to be successful either. You don't need any fancy indicators.
I cannot express enough how important Stop-Losses are.
This works extremely well in sideways movement. If the market is trending, then it is best to find your entry and follow it up with a stop to avoid missing out on gains.
This image shows 6 executed trades of which 5 trades were successful. - No strategy is invincible.
There are 5 Stages.
1 - We make a new low, or a new high.
2 - We establish the entry point by the bodies of the candles (The longer the wicks the more diligent you need to be with your Stop-Loss - The riskier the trade is)
3 - We attempt a move up that is rejected, this is important as we want a proper test of the new support/resistance.
4 - Place your Long/Short entry at the S/R line. - In the case of extended wicks, you lower your R:R you can aim for a lower/higher entry point to yield a better R:R
5 - Target previous highs.
- It would be ideal to take 50% or more of your profits here at the first S/R level.
- You can follow the rest with a trailing stop loss if you are unable to monitor the trade or set your targets further away
R:R - Risk to reward ratio - The higher the number, the better the trade
S:R - Support and Resistance.
This is a strategy a lot of traders use. It is one of the most simple trading methods available. It is simple and effect, you dont have to risk everything to be successful either. You don't need any fancy indicators.
I cannot express enough how important Stop-Losses are.
This works extremely well in sideways movement. If the market is trending, then it is best to find your entry and follow it up with a stop to avoid missing out on gains.
This image shows 6 executed trades of which 5 trades were successful. - No strategy is invincible.
There are 5 Stages.
1 - We make a new low, or a new high.
2 - We establish the entry point by the bodies of the candles (The longer the wicks the more diligent you need to be with your Stop-Loss - The riskier the trade is)
3 - We attempt a move up that is rejected, this is important as we want a proper test of the new support/resistance.
4 - Place your Long/Short entry at the S/R line. - In the case of extended wicks, you lower your R:R you can aim for a lower/higher entry point to yield a better R:R
5 - Target previous highs.
- It would be ideal to take 50% or more of your profits here at the first S/R level.
- You can follow the rest with a trailing stop loss if you are unable to monitor the trade or set your targets further away
R:R - Risk to reward ratio - The higher the number, the better the trade
S:R - Support and Resistance.
评论:
Trading View did not have the option to add a photo - here is the side by side comparison.
1Hr on the Left - 4Hr on the right
http://i107.photobucket.com/albums/m283/Mimic-G/Entry.png
1Hr on the Left - 4Hr on the right
http://i107.photobucket.com/albums/m283/Mimic-G/Entry.png
Although, Looking back, we would have had an excellent entry if we were using the 4Hr candles