Thank you once again for posting the new rules. Would you be able to clarify a few points for me:
1. When you say "when price breaks last resistance, if both 10min and 30min stochastic are up you buy normal size" is the last resistance you're referring to the 15 EMA or are you talking about previous support and resistance levels?
This should point i think i have made clear, last resistance point is the LAST possible resistance price have to go true, thats one of the reasons u have 6 charts, when price is above all resistance, then its above ALLLLLL the moving averages on all the chart, not just he 1min chart.All the chart.Dont think level of suuport or resistance, dont make it more complicated then it is, above all resistance is basicly above ALL the moving averages on ALL the chart.
2. When going long if the 10min is up and 30min is down but 3min is up you are saying buy your normal size on a retracement to the 15 EMA? Or should you buy less than normal size and wait for retracement to 50 EMA?
Buy less then normal size, but execute the trade in similer way as if both 10 and 30 was up.As writen, you only buy at the 50expon if only 10 is up and 30 is down and 3 is down.
3. When you say "If you manage to squeeze 3 pullbacks from a move then be happy with that" what do you mean exactly? Don't you follow the system's signals each time a set up is presented regardless of how many pulls back there are? Are you saying after 3 times the EMA support or resistance won't hold in a non-trending market?
Price goes up and down on waves, and when price is going up and u are doing a pullback, you will be able to get around 3 good pullbacks, but after those 3 pullbacks price willrest for a little and maybe do alittle sideways action, its always like that. Does not mean u cant do any more trades, reason i am saying this is that most ofthe time the 10min slow stochastics at that time is getting pretty overbought and you are in the
risk of doing a 4 or a 5 pullback and suddenly 10 min could cross down and u are trapped, in those cases u will for sure get stoppped, i dont see any reason to risk that.
You should of course follow the rules and take the signals that pressent themsefl, but reallife trading is not that simple.Simple explenations is this, when all the rules are in the green and u are looking for longs, buy that time, 10min stochastics is halfway up, and buy the time u get 3 pulpbacks 10min stochastics is pretty overbough and u are in a
high risk area of getting trapped, imagine u have done 3 pullbacks, and u do a 4, while on the 4, 10min crosses down? Its just no reason why u should risk that, i think that quite while the game is sweet, and there are many other good trades waiting for you either way. I would rathre win 3 times and no loosser, then win 3 times and get stopped and give profits back, and its not good for the selfconfidence, and that is very importent in trading.
4. When you say if all the EMA's are slopping down and price moves above them all it's most likely a fake out then how do you differentiate when a price move justifies a real change in trend? Would the EMA's have to slope in the new up direction of the price move in order to be valid?
For me to think that a change in trend can accure , then the 50expon ma and 100expon ma need to be sideaways as a minimum, if price then goes up i could consider this to be a new direction, but NEVER if 100expon ma and 50expon is slopping down and price going up.But if price is going up and both 50expon and 100 expon ma are slopping up, then i would be pretty confidence about the price direction.but these things can change pretty fast, so its something you have to keep an eye at.
If u look at the historie, u will almost never find places where price have changed direction and 100expon ma and 50expon are slooping down.Thats very rare.
5. When you enter a new trade with your "normal" size position do you buy or sell 3 contracts at one time with a 30 tick stop? So if you are stopped out you take a $450 loss (30 ticks x $5) x 3 contracts.Yes, i always buy 3 at once, and ifiget stopped i take a
loos of 450 usd. I know alot of people like scale up buy, but most of time u will miss the trade, u might get 1 contracts and dont get filled at the 2 other higher up.
But i prefer getting in with 3 at once, i do see the benefits of buying 3 and scaling up.
But that i leave up to the individual trader, i prefer going all in at once.
6. Can you recap how you scale out of your "normal" positions and your reduced positions? Also how you adjust your stops as you scale out.
These days i only do 2 contracts , i like odd numbers, like 2 and 4 and 8 and 16.Reason is as follows.
I i do 2, i sell 1 at +10, and then i have my stop get automaticly at -6 my entry, taht way if the trade goes back up i will not loose anything and it will cover my comiision and 1 extra tick for slippage. And second target is +30. That way , when my first target is hit, i am then careless. then marked can do whatever it like to do, if i stops me at -6, then i will just reenter, only if the trade still looks good.
SO when i sell my first contract i have basicly removed my risk and i am just all relaxed, and nothing can bother me
If i was doing 4, i would do the same, sell 2 at +10 and rest at +30 and stop would be at -6 after first target is hit.
And nother thing, i am no longer using +30 ticks as my stops, im using 20 now, since marked is alot calmer now,and 20 ticks is enough so far, unless the marked gets very volatile. This method gets you in at the support and resistace areass, so if its a failed trade, u will most likelt get stopped either way, so i am happy with 20 tick stops so far, when the vix is no higher that 60 , i do 2o tick stops, if its above 60 i do 30, if its above 70, i consider stop trading until it comes does.
If i forgot something and if u dide not understand something , then let me know and i will try to explain.
With kind regards
Bashir Naimy
