What else to do to AVOID this?

[YourFriend]

Hi,

I am looking for your suggestion - what extra protections could I do, BEFORE entering into position, to avoid unwanted retracement into the opposite direction comparing to my opened trade. I am facing all the time this problem and result is wasting several months of waiting for the trend to go into correct direction matching my opened position. I am spending months by months where time could be invested elsewhere on different position. What I am doing is correct BUT I clearly need to do a lot of other work I am unaware of. Please if someone could help because of being additionally extremely worried due to negative Swap charges - they are rising (into negative = expense) day by day and trend just doesn't go where I it was going according to my analysis work so I could close position with at least zero profit to avoid the loss.

In order to ask for our suggestion, I obviously need to describe my strategy: it consist of Alligator indicator and Fractals indication:

UPTREND Position Opening: Trend of current green candle must go at least for minimum distance above the entire shape of valid ( * ) upward fractal but this green candle must fully form. Valid upward fractal must occur above alligator's TEETH line. The LIPS alligator's line must cross above both JAW and TEETH line for at least minimum distance above both. The angle of crossing doesn't matter. Additional situation that must also happen is that closure of green candle must be above all three alligator lines.

DOWNTREND Position Opening: Trend of current red candle must go at least for minimum distance below the entire shape of valid ( * ) downward fractal but this red candle must fully form. Valid downward fractal must occur below alligator's TEETH line. The LIPS alligator's line must cross below both JAW and TEETH line for at least minimum distance below both. The angle of crossing doesn't matter. Additional situation that must also happen is that closure of red candle must be below all three alligator lines.

* valid fractal is the one which is the closest to the said cross.

Besides this, I am doing three major part of work BEFORE entering position:

1. checking economic calendar. Assumption is the following: if relevant event occurs while i am in position or at least in first few hours after having position opened, then it could mean that result of event (forecast vs. actual) may cause trend to go into unwanted direction. To protect myself, I need to make sure there are no high impact economic events related to the symbol. Similar when trading stocks: to make sure there are no major meetings or news on relevant finance blogs websites about particular company.

2. analysis of support and resistance line. Obvious assumption is the following: if the support or resistance line is touched or even break out, without confirmation candle, then this could be a sign that trend will go into the opposite direction.

3. primary patterns such as bullish/bearish engulfing patterns, hammers, evening starts, dojis, etc. Assumption is the following: if such primary pattern occurs with confirmation candle then there is huge possibility that it is showing CORRECT direction of a trend. So i need to be careful there are no unwanted primary patterns near by showing opposite direction of a trend comparing to position i am considering to open.

**It just doesn't work!**

I am getting tired of situations as shown on THREE attached pictures. Note: manually drawn white arrow is pointed to show you approximately where/when i opened position. Even usage of classical indicators such as Stochastic Oscillator, RSI, CCI, don't solve the problem. Please see ATTACHED three files.

What else could I do to prevent all the time happening what is shown - occurrence of opposite trend? I am sure that all the work I am doing BEFORE entering into position is correct BUT i clearly need to do something else too and I am unaware of what else should be done? Hopefully someone will be able to assist, I simply won't be able to wait half year and more for every single position to be closed just to come to zero profit (covering negative swap) and avoid losing money.

Your assistance would be highly appreciated.

 

[FXX]

you are working backwards and using only a small piece of the information available to make a success of it. Charts and indicators can only tell you what has happened and not what is currently happening. Start by understanding why price is behaving and only when that reason aligns with the setup you are seeing do you take the trade. The fx market is driven by fundamental factors that drive sentiment and not by charts and patterns.

 

[Lightning McQueen]

all I can see from your pics is that you are attempting to enter trades against the prevailing trend, hence things turning quickly on you.

nothing wrong with counter trend trading per say, but in my mind the moves you are trying to jump in to could be considered small retracements rather than starting points of tradeable trends, or at least you are not jumping onboard these small counter trend moves early enough to take any advantage.

try looking at higher timeframes weekly/monthly to gain a clearer picture of the prevailing trend, when it started and the strength/momentum that you are trading against. is there any weaknesses evident in the trend your method could take advantage of? eg auddkk turned in march, the "bend at the end" of its last downward move, began moving up in march/april and strengthening as it moves up (crushing your short) the light at the end of the tunnel is it could be approaching resistance, which can be clearly seen, will it pause and turn? or smash straight through? thereby giving your method a chance of greater success if it turns, we'll have to wait see.

 

[YourFriend]

Thank you for your replies to both of you.

FXX: I don't really consider myself as a beginner with poor knowledge, I believe my knowledge is good but it seems like by far too insufficient. There is a lot more to learn for me. So I wouldn't say ''start'' but rather ''continue'' with whatever needs to be done (before opening position) that I am not aware of. Would you please clarify in more detail what do you mean with ''why price is behaving'' and ''that reason aligns with setup''? I doubt that you would be referring to any particular indicator here but perhaps some link (from you) to resource or/and explanation what should I do would be very much helpful. I am wasting months on praying that current loss on currently opened position will disappear and go, via zero, to minimum profit covering zero. This way i would waste months of waiting, wouldn't earn anything but wouldn't loss too. So more detailed answer by you what exactly should I do would be appreciated.

Lighting McQueen: All my analysis is being done on H4 time frame. From your reply I understand (perhaps my understanding is wrong) that I should work/analyse on D1 instead H4. But a question for you: Do you mean I should analyse on D1 only (so D1 instead of H4) or do you mean that I should continue to analyse on H4 but in order to gain best possibility for success, analysis on D1 is a MUST too (so both h4 and d1)? I am asking you which one? h4 AND d1 or just d1? The problem is that larger the time frame is, less possibilities are on chart to open position. This result into less potential profit and also less potential loss. I like to see more possibilities so i could have more chances to earn money. Obviously on d1 is happening a lot less per entire chart than on h4. Therefore h4 will show more chances because trend is more volative (more moving up and down in less time frame). However on the other hand, I just rechecked on d1 chart some of those opened positions i currently have in current loss. D1 chart is showing opposite situation comparing to h4 - talking about direction. So the opposite direction comparing to my opened position. If i was considering, on D1 chart, whether or not to open position of same symbol at exactly the same time as i really opened those positions, there would be two possibilties what could I have done:

1. not opening a trade due to either of two reasons:

seeing opposite direction comparing to direction i was considering (and opened it on h4)
or
seeing ''correct'' (according to d1) direction of a trend but not opening it because of being worried the trend has been lasting for some time and retracement could happen at any time

2. opening a position in direction matching current trend on d1 (opposite to the trend on h4) and taking whatever profit is left to take before retracement on h4 happens

both 1. and 2. shows that you are correct. Currently D1 is guaranteed showing situation which wouldn't make me open the trades (still having them opened) that are currently in loss. But as I said, the problem is that D1 ''dynamic'' isn't large enough. It doesn't happen as much as it does on H4 and quantity of possibilities of entering the trade decrease by far. Lightning McQueen I would really like to see your opinion about that - particularly related (referring to your opinion) to the fact that on H4 are by far less ''happenings'' than on D1. Perhaps better idea is to keep looking for chances on H4 but situation (color of candle, current direction of trend) must not be the opposite ones. Honestly on D1 there is/was opposite and probably this is where my failure was. Should I analyse only on D1? Or analyse on H4 but make a final decision on D1? What else, besides what you already said, could I do? Would appreciated more detailed steps please, perhaps with some pictures if you have any...

Thank you in advance.

 

[FXX]

Why price moves is mostly down to sentiment driven by fundamental factors. When I say start with discovery of the reason its behaving in a particular way. I am talking about sourcing the fundamental drivers behind the move. If you are selling into a move that juat had a beat on cpi for example, then sentiment might be focused on changes to central bank policy and the probability of adjustments to the existing policy. This would inform you that a sell is not the best move to make and potentially, you could look for a long position instead. Obviously it's a little more complicated than that because you want to be pairing strongest with weakest so you would need to source information to discover the weak sentiment.

If you just look at technical analysis then you are missing a major facet to the equation. Why try and predict future movement based on past price when you can react to information that's driving it now.

The neurobiological study of co-

incidence rests upon the brain’s

need for order and predict-

ability. Coincidences alert the brain to

possible causal relationships between

events. Through the apprehension of

such relationships, the world appears

as more orderly and more predictable.

Even though the scientifi c method has

created a systematic way of determining

the validity of possible causal connec-

tions between events, the human brain

persists in its often non-scientific inter-

pretations of coincidences. brain processes that manage coincidence
interpretation can yield the strangest su-

perstitions as well as new ideas about the

nature of reality.

http://drjudithorloff.com/main/wp-c...9/Psychiatric-Annals-Brains-Seek-Patterns.pdf

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[YourFriend]

FXX: Im sorry but what are you talking about? To find the source of information which caused trend going up or down? This is not possible. You cannot know when will some major trader (e.g. entire bank) open breath-taking position and when not. Even on major high impact news, once result is online, trend could go down or up due to different reason and not necessary result of particular economic calendar event. I don't know what you meant. Not sure what you are saying what/how else should i do to prevent problem i described in my first post.

 

[C-12]

Try waiting until you get daily / weekly PA in the direction you want to trade in. Don't try and pick tops or bottoms on a H4 chart using moving averages.

Toss out all the indicators and look for areas of price history or swing points.

 

[FXX]

FXX: Im sorry but what are you talking about? To find the source of information which caused trend going up or down? This is not possible. You cannot know when will some major trader (e.g. entire bank) open breath-taking position and when not. Even on major high impact news, once result is online, trend could go down or up due to different reason and not necessary result of particular economic calendar event. I don't know what you meant. Not sure what you are saying what/how else should i do to prevent problem i described in my first post.

You don't need to know if a whale is trading or not, all you need to know is if they are going to react based on data that has affected market sentiment. Don't tell me. Its impossible because I do it daily and other traders on here do the same. Without approaching it like this, all you are doing is assuming price direction off a random pattern in the market.

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[YourFriend]

C-12 and what if on daily chart was already green candle either being formed or already closed (fully formed) just like on H4 showing me Uptrend position opportunity but then it went downward after i opened position? with ''swing points'' you probably meant candles with very large lower or upper shadow. I did but it doesn't help.

FXX: with full respect to you and appreciating a lot your time and effort to reply but kindly note that its very hard to understand you. You are not showing me any examples of what are you referring to, neither suggesting any tools (NOT indicators) with live data (without manual downloading every time) to be added to MetaTrader for representing your words

 

[FXX]

C-12 and what if on daily chart was already green candle either being formed or already closed (fully formed) just like on H4 showing me Uptrend position opportunity but then it went downward after i opened position? with ''swing points'' you probably meant candles with very large lower or upper shadow. I did but it doesn't help.

FXX: with full respect to you and appreciating a lot your time and effort to reply but kindly note that its very hard to understand you. You are not showing me any examples of what are you referring to, neither suggesting any tools (NOT indicators) with live data (without manual downloading every time) to be added to MetaTrader for representing your words

For someone with a forum handle yourfriend, your approach to others isn't very friendly. Good luck

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[YourFriend]

huh? no idea what do you mean

 

[mpups]

Hi,

I am looking for your suggestion - what extra protections could I do, BEFORE entering into position, to avoid unwanted retracement into the opposite direction comparing to my opened trade. .

from the examples you gave i suggest the best protection would be to stop trying to use this system

have a good day

 

[kalott]

about euraud h4

all i see is a downtrend?

 

[YourFriend]

from the examples you gave i suggest the best protection would be to stop trying to use this system

why?

 

[Hoggums]

I think the problem here is confirmation bias.

Your testing/live trading has given you clear evidence that your system isn't profitable, yet you are doggedly carrying on trying to get it to work. Protection is not the answer - protection costs money and will be expensive. You should go back and look at your entries and start using stops.

 

[Lightning McQueen]

it's just a basic observation, that is all. I've tried to put my previous words into a pic.

for convenience of clearly showing the prevailing immediate trend i have coloured the bars by way of heiken ashi candles, if you prefer to see the bars without the fancy fluff obscuring price action, colour the bars with an rsi overlay, you'll obtain the same result.

i never mentioned daily, did i? apologies if i implied daily.


so to the pic. can you see the immediate trend and your short.

so going forward and to possibly help avoid future turns against you, maybe an idea to pick trades from your method in your timeframe and mark/draw out a series of trades. switch to the higher timeframe of weekly and mark out turning points/trends and see if your method entries match points of confluence with turning points (major and minor) or if not, at least check trading in direction with the trend, if neither exist then tweak method, or find another.

 

[tomorton]

Stop chasing reversals. Follow trends.

Use the highest practicable time-frame for trade decisions. If you hold multi-day, this should be D1. Refer to higher time-frames such as W1, even M1 for support/resistance etc. if you need to, but for reasons to scrap trades, not reasons to get in. Don't even look at less than D1.

 

[YourFriend]

Why are you using weekly chart? Even worse than daily I believe. The problem is that higher the time frame is, less dynamic you see on chart (less happenings). Therefore there is even less possibility to earn income from trading.

Anyway, on the picture you are showing (weekly) looks like uptrend is going to Resistance line and here we assume retracement will happen: downtrend occurs so my Short position should be right but from current loss, it seems like its not.

 

[mpups]

why?

because you don't know what you're doing

 

[YourFriend]

In my first post, I uploaded EURAUD (H4). In attachment to this message is EURAUD (Daily). Manually drawn white arrow is showing where I entered position according to H4 analysis and not Daily analysis although it seems like i should be looking at Daily too. But here is the problem: obviously the candle where I am pointing my white arrow was NOT yet fully formed. Therefore impossible to know in advance how will this candle look like and what color.

But unfortunately for me the key point is the following: the SECOND-previous candle from candle i am pointing at (white arrow) is primary pattern candle. According to my collection of primary pattern candles I worked hard to create (referring to collection), the candle seems to be exactly Inverted Hammer showing uptrend. This way, considering Daily chart (i didn't, i did only H4), the Uptrend position was correct decision. How about that?