Learning from an unsuccessful trading setup on a smaller time frame

[kingking 10]

One of my favorite trading setup is to trade in the direction of a possible trend after price leaving the coil of a smaller time frame (60tick). But one need to pay attention on the big time frame as well for filtering (300tick).

 

In this particular trade on the YM on 21 Feb 2007, I took a short trade (red arrow) at 12740 with 12 points of stop placement and a taget of 12 points. The reason for taking the trade was that YM form a coil between 12764 amd 12740 before 10:15. Then, price started probing lower at 10:30 to reach 12720ish and retraced to the daily S1 at 12740. This is where I short and lose my 12points. From hindsight, I should skip this trade as price tested yesterday’s low (20 Feb 2007) and rebounded (blue arrow on both the small and big time frames indicated the lows). Price trade higher on 21 Feb after bounding off this low. Next time, I will pay more attention to the support or resistance levels on the big time frame as a filter when taking my favorite setup.

[Soultrader 12]

Professionals loveeee the previous day high/low. Markets will often test these areas for supply and demand. I also focus on these levels and will not fade any move down to the previous days low if it is right below it.

 

It always a good level to watch

[walterw 10]

Excellent entry on that trade King, you know it could had been a succesfull trade anyway... if the market had taken that low you would have had a super down move... my positive critic to you is on stop placement, why do you use the same profit target as your stop level +-12 points... in this case when you took your trade at 12740 and things started to go on your way you had a clear pivot formed at 12740 a 2 point violation of that pivot at 12742 would had tell you that trend was not good and you would had taken a 2 points stop changing your RRR from 1:1 to 6:1... you see price action there clearly told you when that 12740 pivot was breaken that the trade was over.... no need to wait for a 12 point stop.... you want to reconsider that, remember that if you want to trade with a 1:1 RRR then you obligatory need at least a +60 % performance on good trades... thats statistically dificult... now if you have at least a 2:1 RRR then you can ease a little more your performance and be more relaxed.... that RRR has to be implemented as to my understanding on your stop placement taking into acaount the inmediat pivot prior to your entry... cheers Walter.

[kingking 10]

Hi Walter,

 

Thanks for the new thought about my stop placement, I may try to reduce it to 8 instead of 12. A 2 point stop seems to be too difficult to master.

[Vince50 10]

  Soultrader said:

Professionals loveeee the previous day high/low. Markets will often test these areas for supply and demand. I also focus on these levels and will not fade any move down to the previous days low if it is right below it.

 

It always a good level to watch

 

Soultrader, you might not remember even posting this it was so long ago but I have to throw my 2 cents in. I joined a service when I just got into trading futures as I was trading stocks and spot forex but never futures and so I watched this guy who would get go long any stock indice if it went over the high of the previous day and short if moving over low of previous day. Then the trailing stops were his own secret propriatary blend of a lot of things. Anyway he was winning at a rate of 400% at midcap 400 futures and almost the same for gold. My friend who recommended this service already doubled his account and after watching him for over a month I decided to take the plunge. Well, let me tell you...after almost 2 years of this system with just one entry rule kicking butt I was up about 20% in my own account in about 3 weeks, and then suddenly, every trade I took ,it was like the market makers knew that certain "entities would drive the price over the previous high to get momentum going but then another group would come in and make the momentum of that fail. Over and over! So within 3 months my acct was gone and in 6 months my friends was also. This was around 2008. So maybe it worked before then, but I would never trust it again. How have you made out all this time using it as a guide if I may ask?

[Vince50 10]

Hello all. My first post here. I am trading 15 years, I already have a successful Forex swing trading system Ive developed but I am dying to develop a system or method that specifically goes to a daily chart when I get a bounce off of , or price breaks thru the .618 fib on the 60 min chart. I dont even have the time to scan thru 20 different pairs on both an hourly and daily chart to find a break at .618. Any good ideas on a system?