@nunrygguy
(This is slightly off topic btw) but there is a recent thread on this forum that seems to advocate that higher TF (such as 1h, 4h etc) are better for trading that lower TF (such as 1min, 5min). nunrygguy do you agree with this view?
I'm not really advocating anything different, I think the very first charts I posted which just showed some basic trend following were weeklies and dailies (or was it monthlies and weelies?). My view is you need to know what's going on in the bigger picture, take your significant price levels from what's going on in that big picture then take your entry based on what's going on on the micro level, big levels usually trump small levels but there is movement between the smaller levels until they are all cancelled out, then price moves to the next big level. I've not got into levels yet I know as I wanted to do this in a certain order but for me all the important ones start with a momentum breakout because that's where there is an imbalance between supply and demand.
If you're entering on the 5m or 15m you are STILL trading 1hr, 4hr whatever. As I've said, price and price levels are the same on all charts. I personally don't use price LEVELS for entry areas and targets from anything smaller than a 1hr viewpoint, price isn't going to do anything REALLY significant in a time period less than that but I do look 'inside' to see what's going on for entry. Just to clarify, you can find significant price levels from different chart viewpoints, the larger the chart the more significant the levels...why? Well think about the size of the levels and the difference between them and the amount of money it has taken to get from one level to the other. But PLEASE don't let it then fool you into thinking you are trading the xxx timeframe. Your aren't you are trading PRICE not a timeframe. I may have confused earlier on on this issue as my first charts were showing trend following and yes they did appear to use price bars BUT they were significant bars - monthlies and weeklies etc. I could have started with levels and momentum etc first but thought the way I started may help... Did last week close up? Did it close within the top third or so of the bar? Hmm Bullish close then (yes I know, opinion not fact, but it's an opinion based on fact) therefore this week, we're PROBABLY going to be bullish (unless we're hitting a big supply area). Why did I start how I did? To show some thinking on identifying turning points (although as later transpires I personally don't use all of them) and to give confidence in staying in a position for longer: don't a lot of people cut too soon? Does some simple 'trailing logic' help?
If you're looking at a price level you think is there on a 1hr chart and you see an entry and what you think will be an exit area that will give you enough for your risk, price comes down to your entry price area what do you then do? Just place an order or look to see how price is moving? What the best viewpoint of that? A small chart. What are you looking for on that chart? For price to turn around and show some momentum in your direction for one - and if it's doing this what are you also going to see...some short term supply/demand on that tiny timescale maybe? Will every entry be 'the one'? Absolutely not. That's why I advocate getting out as soon as a 5 min bar closes against if you're not up and waiting for the next entry:
But I've had two losers this doesn't work!
What's better two or three 6-10 pip losses followed by a profitable trade or a 150 pip loss (this is a '4 hour' trade with a potential win size of 200 pips right) ? (Comment: Yes I know that pips size will be differnt in the two examples but there again one is only givng you 1:1, the other potentially around 20:1)
But having a low win rate is psychologically difficult/damaging!
Not as damaging as losing your shirt.
Where's the stop? Think about average range on your entry chart and if you're wrong what's the best chance of getting out at b/e before your stop is hit? Do you move your stop? Hell no. Do you move your stop to b/e? HELL NO especially on 5min, almost guaranteed to get whipped. Hmmm. OK well how can I protect myself from the scenario of this trade going up a bit then coming back without moving my stop? Maybe have a think about average price? There may well be 3,4,5 entries down to that price on a 5 minute chart you absolutely don't just have to take one and stay in. Here's a thought, 5 min range is 8 pips, you use a 15 pip stop, trade one loses 3 pips, trade 2 wins +10 because price closes against. Price drops back and you enter again, same position size, same risk but now you can afford a 20 pip stop,at no more risk to your capital. Is it easier to hold with a bigger stop? Should be. Anyway, none of this really has anything to do with the thread
The example of the failed trade this morning was trading the 30m chart but what I'm suggesting is not just blindly taking a trade at a level (you CAN but there are things to take into consideration such as smaller R:R - if you're happy staying with 2:1, 3:1 that's cool and workable, does keep the average win rate up too). I can't remember exactly what you put in your post now - did you get stopped out? Was the stop just below the supply zone? What was average range at that point? What did the 5 min chart look like? Did it gap? Which way did it gap? NFP anyway, hope you were using limits?
Just some things to ponder, not rules just things to think about and either take on board or discard because ultimately it IS about what works for you.
