Dr Pip

DeeBee,

Thanks man. I'm taking what you said into consideration for my next series of trials. I have used methods in the past where I'll take a quick profit first get my stops to BE then try to let the rest run. Maybe as time goes on others can chime in as well forward testing these ideas.

Dr Pip

__________________
My Trading Journal

"Don’t argue with idiots. They drag you down to their level and beat you with experience."

Dr Pip

Hey Everyone,

I wanted to outline a trade where my limit order was triggered last night.

This is Aud/Jpy on 2hr TF

Aud/Jpy Short
Entry: 80.55 [red arrow/blue line shows trigger candle]
Stop: 80.90 [red line]
TP1 & 2: 79.80 / 79.25 [green lines]




Summary: This is the setup I prefer to trade. I set a limit order Sunday night and let it ride. I noticed however that the price stalled and created a new support level that made me question the trade. I decided to cancel the order altogether but by the time I got around to it the trade was under way.
Sticking to a trading plan was my next concern. Moving stops and such around will get you into psychological trouble fast so the order stood. As you can see it bounced around my entry some.

I woke up and closed the trade this morning at the yellow arrow for a few pips gain. I closed the order as part of what is referred to as a TIME STOP, and the main reason I'm sharing this failed trade with you.

Many of you may use trailing stops, stop loss orders, money stops (often set by % risk), manual trailing stops but how many of you use a time stop?

This is just another thing you can add to your arsenal of tools. In trading the main thing we must do is protect against losses. Winning is nice but one cannot be right 100% of the time. The principle behind this is simple, you calculate any number of candles (I may use 3-4) on the TF you picked out your entry. Here I have a 2hr TF and when I checked the trade I saw it was still stagnant after about 8hrs (4 candles) so I closed the trade. This time I happened to pick up about +20 pips.
Overall, the trade may or may not work out. Either way I followed a plan and guarded against unnecessary risk.

Dr Pip

__________________
My Trading Journal

"Don’t argue with idiots. They drag you down to their level and beat you with experience."

mattman

Great job with your journal. I have never heard of a time stop before. Have you had success using a time stops?

I like how you followed your plan and guarded against risk.

Dr Pip

Thanks!

Well honestly time stops are a newer concept for me. I guess I have know about them for several months but it was for more of a momentum trading style. All too often I have sat on trades that did nothing for several days then bam I get stopped out. To make things worse I get get charged interest every day I'm leveraged so my 2% risk is often exaggerated when I hold a trade a few day and take a loss. The trade I used this on did happen to work out a few hours ago if I remember my levels correctly, but overall I have taken more losses by sitting on a trade. My thoughts are if the level is strong the trade should work out right away, if price stalls then the prices are more balanced and my edge is gone. These are just my thoughts anyways, any suggestions?

Dr Pip

__________________
My Trading Journal

"Don’t argue with idiots. They drag you down to their level and beat you with experience."

mattman

Ahh, I see. I am curious why you picked the 2hr time frame on the aud/jpy trade. Is that a time frame you trade often? Or did you just spot a good set up on the 2hr?

I know the time frames that get the most participants are the 5m, 15m, 30m, 1hr, 4hr, and daily; since they have the most participants I would think the market reacts stronger to these time frames.

Dr Pip

To be honest I do not have a preference of TF that I use regularly. About 3 weeks ago I took several losses picking levels from the 1hr charts. Of course it was mainly user error and I detected the problem in hindsight. The losses caused me to focus on moving to higher TF's for better reliability with my trading style.

The way I trade (Sam Seiden's way of teaching) I do not think any particular TF is better than another once you get past the 1hr charts. Personally speaking I can spot the same levels from 1hr on up to daily. I will usually try to pick 2hr - 4hr supply and demand levels. The only reason I flip between times is to narrow down my entry and stops.

A chart is a chart is a chart, that's what some people say anyways. I have tried to trade the 15min charts using the same method and I cannot seem to do it. It could be lack of interest since I use a demo account for those entries. Do you have any particular TF you trade or find works best?

-Dr Pip

__________________
My Trading Journal

"Don’t argue with idiots. They drag you down to their level and beat you with experience."

Dr Pip

Hey Everyone,

My first trade for the week:

Aud/Jpy Short
Entry: 82.40
Stop: 83.00
TP1: 80.55
TP2: N/A

Result: +75pips (~1.2 R/R ratio)



Summary:
If you look at the chart you will see a yellow circle indicating an area I identified at supply. The blue circle shows the strength and momentum of the move. It took several days but I was waiting at the beginning of the week with my short order which triggered about where the large purple arrow is pointing. I had my concerns about the trade as we have recently made a high high and higher low from the range this pair has been in. That is showing indecision and has me guessing what will happen.
I left the trade running last night as I was up 40+pips and half expected to be stopped out. My reasons for closing the trade are based on it's actions. The huge move up should have resulted in a much faster break down, as I would expect the move to be lined with stop loss orders. The fact that I have to be out for the day and the failure to make a sharp break leave me feeling good about my decision rather than giving back 20-30 more pips.

Overall, I'm not too excited about the R/R ratio as my intent on any trade is 1/3.

(One last note I took a smaller position on this trade due to a larger stop than I normally use. Other wise I would have exited in 2 positions. Yes long term traders can have below 50pip SL orders if you pick good entries.)

If this continues down I would expect it to stop about where my yellow TP line was and if past that then on the the next demand area indicated by the red box I drew in.

I missed my entry on the Gbp/Jpy trade from the .50 area, due to a meeting at work. It continued on 100-150+ pips in its fall. We can't win them all.

Good luck trader's!

Dr Pip

__________________
My Trading Journal

"Don’t argue with idiots. They drag you down to their level and beat you with experience."

mattman

Nice selection of color, it looks like you're in time for Easter, lol.

It looks like you entered at a decent area of supply; risk to reward could the ratio is still not bad. I don't trade the yen often enough to really understand it's price action, but I know the aussie has been a strong performer and would feel uncomfortable shorting it at the for the time being. It sounds like you really doubted the trade by mentioning higher lows and higher highs, combine that with the lower than normal risk/reward ratio I may have given that one a pass, but I have not followed this pair for a while,so you may have some insight that I don't have on this one. I'm glad to see that it worked out for you.

Dr Pip

Matt,

Hey yeah the r/r ratio was sub par for my usual entries. I also meant to say higher highs and lower lows, showing the indecision and widening out the range this pair is in. The main reason I took the short was because the supply level was from the daily chart and because the strength of the down and up move prior to my short. A strong move into know supply without any pauses will usually catch many traders off guard when it starts to turn. Combine that with the emotions involved when one has a profit but see's it slipping and BOOM just the move I look for. This trade however didn't boom . I see price stalling again at the same level but sentiment has changed it seems. I usually look for specific setups but going long above 82.60 maybe a good idea.

Dr Pip

__________________
My Trading Journal

"Don’t argue with idiots. They drag you down to their level and beat you with experience."

mattman

Ahh, I see. It sounds like you knew your plan and were able to follow through which is the important part. As far as the no BOOM, I think that is from the lack of major news events that came out at the beginning of the week.