I like to try to pyramid really early.
I will enter two trades with half of the risk on each and get one in even and one trailed up to reduce risk, then add to it. My anlaysis is usually based on 1 hour and I am entering on 15 minutes or 5 minutes and this can be done sometimes when price moves up just 5 pips (price action and SR are considered).
I know what your thinking ... whipsaw!
Yes.
This does whipsaw a lot. I will usually wait for a few retests of an area before I move my stops up. When there has been a breakout its common to see the price dwindle along sideways touching your enter point, going a bit into profit and then coming back to touch it again. There is a fine line between letting it retest a few times and missing the breakout. I tread that line.
I usually am looking to do this at an area where I think a correction is ending and the trend resuming. "C" points on Elliot corrections are a favorite. The idea is either you have the momentum of a new impulse leg starting and this will be likely to allow for you getting into breakeven easier and being able to add more lots.
At no point will risk ever exceed the initial risk allocation to the position, that risk level will be maintained or reduced but never increased.
When I feel I am on to a good one and want to add, based on price action and SR I will see if it is possible to enter with 5-7 pips stops, to keep the risk level I would pull up one of the original stop losses the number of pips I had in risk on the new trade.
MANY trades will hit a breakeven stop since stop losses on new risk are trailed as fast as possible, even if it "feels" like we will just retest and have a strong move, stops are trailed on new risk and I try not to lament on the ones that got away.
The aim of this strategy is to get really loaded into a position for very low risk of initial capital (although since positive equity is lost, there is draw down) then go for big targets with stops trailed in different ways.
Fast EMA crosses are good to use along with this for adding to positions and a certainly useful for staying in the trend.
This of course has a low success rate in terms of how many times it happens just as I would like it and me even getting 1:3 RR and the times I get more than that are a far smaller percentage.
Most of it is made up of frustratingly being taken out of the trade just before it boomed and stray wicks become your worst enemy.
If I could get successfully fully loaded I would have 5% gain potential per number of pips in stop loss. Stops are never more than 50 pips and usually more in the 25 region and 100 pips in the current market conditions can come (or go) very quickly so a fully loaded 100+ trade would be around 1/5 of the account increased (- spreads and fees). This is the jackpot scenario.
There are quite a lot of small wins. Breakeven if afterall breaking even and if you break even on enough positions you actually made a bit. Some trades will always have their stop trailing just under the previous candles H/L and be taken out the trade for a small profit (10-15 pips) and these about counter out the losses I have keeping the equity floating in small range (sometimes a bit bearish) and allowing me to keep taking shots for a jackpot trade.
This style will not be for many people since it is bloody annoying getting whipsawed so many times or they end up in the profitable trade but they are in worse positions (if the original trades hit breakeven stops and the added ones never hit their stop) and it feels like you are constantly giving up profits made (and you are) trying to load a position.
If you like price action you should try it though, on demo of course. I've noticed people flake out on this a bit live trading and the few that have got good at it opened a micro account and traded with sums of money they did not care about. It is not as bad watching $2 in profit turn into a $1 loss as it is watching $200 into $100 and this helped them to focus more on trying to just keep the account covering its losses with its small wins and scores of breakevens enough so you keep you bankrolled to use that $ value of risk you could allocate because you want the "One" to able to have as much risk on it as possible.
Sometimes all it takes it one big candle clearing you entering zone by 10 pips to let you have all stop losses in even, be running at 2.5x risk up per each pip gained and price never comes back to touch that area - this, would be catching the end of the reversal.
Getting stopped out on a doube bottom and not getting back in is the times most people jack this in.
For me, this works well. I use smaller timeframes but I am sure the same principles would work as good as, or better than, on larger timeframes.
I will enter two trades with half of the risk on each and get one in even and one trailed up to reduce risk, then add to it. My anlaysis is usually based on 1 hour and I am entering on 15 minutes or 5 minutes and this can be done sometimes when price moves up just 5 pips (price action and SR are considered).
I know what your thinking ... whipsaw!
Yes.
This does whipsaw a lot. I will usually wait for a few retests of an area before I move my stops up. When there has been a breakout its common to see the price dwindle along sideways touching your enter point, going a bit into profit and then coming back to touch it again. There is a fine line between letting it retest a few times and missing the breakout. I tread that line.
I usually am looking to do this at an area where I think a correction is ending and the trend resuming. "C" points on Elliot corrections are a favorite. The idea is either you have the momentum of a new impulse leg starting and this will be likely to allow for you getting into breakeven easier and being able to add more lots.
At no point will risk ever exceed the initial risk allocation to the position, that risk level will be maintained or reduced but never increased.
When I feel I am on to a good one and want to add, based on price action and SR I will see if it is possible to enter with 5-7 pips stops, to keep the risk level I would pull up one of the original stop losses the number of pips I had in risk on the new trade.
MANY trades will hit a breakeven stop since stop losses on new risk are trailed as fast as possible, even if it "feels" like we will just retest and have a strong move, stops are trailed on new risk and I try not to lament on the ones that got away.
The aim of this strategy is to get really loaded into a position for very low risk of initial capital (although since positive equity is lost, there is draw down) then go for big targets with stops trailed in different ways.
Fast EMA crosses are good to use along with this for adding to positions and a certainly useful for staying in the trend.
This of course has a low success rate in terms of how many times it happens just as I would like it and me even getting 1:3 RR and the times I get more than that are a far smaller percentage.
Most of it is made up of frustratingly being taken out of the trade just before it boomed and stray wicks become your worst enemy.
If I could get successfully fully loaded I would have 5% gain potential per number of pips in stop loss. Stops are never more than 50 pips and usually more in the 25 region and 100 pips in the current market conditions can come (or go) very quickly so a fully loaded 100+ trade would be around 1/5 of the account increased (- spreads and fees). This is the jackpot scenario.
There are quite a lot of small wins. Breakeven if afterall breaking even and if you break even on enough positions you actually made a bit. Some trades will always have their stop trailing just under the previous candles H/L and be taken out the trade for a small profit (10-15 pips) and these about counter out the losses I have keeping the equity floating in small range (sometimes a bit bearish) and allowing me to keep taking shots for a jackpot trade.
This style will not be for many people since it is bloody annoying getting whipsawed so many times or they end up in the profitable trade but they are in worse positions (if the original trades hit breakeven stops and the added ones never hit their stop) and it feels like you are constantly giving up profits made (and you are) trying to load a position.
If you like price action you should try it though, on demo of course. I've noticed people flake out on this a bit live trading and the few that have got good at it opened a micro account and traded with sums of money they did not care about. It is not as bad watching $2 in profit turn into a $1 loss as it is watching $200 into $100 and this helped them to focus more on trying to just keep the account covering its losses with its small wins and scores of breakevens enough so you keep you bankrolled to use that $ value of risk you could allocate because you want the "One" to able to have as much risk on it as possible.
Sometimes all it takes it one big candle clearing you entering zone by 10 pips to let you have all stop losses in even, be running at 2.5x risk up per each pip gained and price never comes back to touch that area - this, would be catching the end of the reversal.
Getting stopped out on a doube bottom and not getting back in is the times most people jack this in.
For me, this works well. I use smaller timeframes but I am sure the same principles would work as good as, or better than, on larger timeframes.
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