Last night as I finished my post and published it I took some time to see what other traders had done for the day. While doing this I spotted that a trader I respect had taken some trades around some levels that I was interested in but could not trade effectively due to my using the close for my entry. On examining his charts I saw (and know this because he has told me) that he does not wait for the close but merely for price to tick above or below the level he considers to be the turning point. I was very happy to see that I had spotted some of the entries that he had taken and even taken one of them (this was a big moment for me).
Here's a comparison of the 2 methods.
JMF3 (http://scalppipping.blogspot.com/)
Me
For me trade 1 was a zero sum game because I would have used the close below the doji as my confirmation. While on trade 2 I would have made a similar return to JMF3 because I would have used the formation of a hammer as an entry.
This got me looking back at my recent efforts to see if I could have been more profitable with a "tick" entry rather than a close entry. The simple answer is YES however it does require a variation on the setups that I am using.
1. The trigger must be the most recent with trend candle or HM/SS. ie...
uptrend = bull candle / SS
downtrend = bear candle / HM
2. The trigger must touch S/R ie...
21/252/fib/WN
3. Confirmation is a tick against the extreme of the trigger ie...
Long = tick above the highs of the most recent bear candle / HM at support.
Short = tick below the lows of the most recent bull candle /SS at resistance.
4. Initial Stop loss would be at the other extreme of the trigger. ie...
Long = the lows of the most recent bear candle /HM at support.
Short = the highs of the most recent bull candle /SS at resistance + spread.
5. Initial Profit Target would be a test (push through) of the next level of S/R. ie...
21/252/fib/WN
6. Risk requires a standardized lot size because conf can occur so quickly. ie...
1% CAP / 6 pips . Or 1%CAP / 5.2 pips AM, and 1% CAP / 6.6 pips PM
The following are the revised trades I would have liked to have taken yesterday.
1. short off 38.2 into 21EMA
2. long off 21EMA into 38.2
3. short off 38.2 into 21EMA
4. long off 21EMA into 38.2
5. short off 21EMA into 23.6
6. buy off 23.6 into 21 EMA
7. short off 21EMA into 23.6
8. buy off 23.6 into 21 EMA
9. short off 21EMA into 23.6
10. Buy of D1 S into 21EMA / 23.6
Here's a comparison of the 2 methods.
JMF3 (http://scalppipping.blogspot.com/)
For me trade 1 was a zero sum game because I would have used the close below the doji as my confirmation. While on trade 2 I would have made a similar return to JMF3 because I would have used the formation of a hammer as an entry.
This got me looking back at my recent efforts to see if I could have been more profitable with a "tick" entry rather than a close entry. The simple answer is YES however it does require a variation on the setups that I am using.
1. The trigger must be the most recent with trend candle or HM/SS. ie...
uptrend = bull candle / SS
downtrend = bear candle / HM
2. The trigger must touch S/R ie...
21/252/fib/WN
3. Confirmation is a tick against the extreme of the trigger ie...
Long = tick above the highs of the most recent bear candle / HM at support.
Short = tick below the lows of the most recent bull candle /SS at resistance.
4. Initial Stop loss would be at the other extreme of the trigger. ie...
Long = the lows of the most recent bear candle /HM at support.
Short = the highs of the most recent bull candle /SS at resistance + spread.
5. Initial Profit Target would be a test (push through) of the next level of S/R. ie...
21/252/fib/WN
6. Risk requires a standardized lot size because conf can occur so quickly. ie...
1% CAP / 6 pips . Or 1%CAP / 5.2 pips AM, and 1% CAP / 6.6 pips PM
The following are the revised trades I would have liked to have taken yesterday.
1. short off 38.2 into 21EMA
2. long off 21EMA into 38.2
3. short off 38.2 into 21EMA
4. long off 21EMA into 38.2
5. short off 21EMA into 23.6
6. buy off 23.6 into 21 EMA
7. short off 21EMA into 23.6
8. buy off 23.6 into 21 EMA
9. short off 21EMA into 23.6
10. Buy of D1 S into 21EMA / 23.6
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