Day-Trading 2.0 for small traders

Re stops:

I initially started using a 8 pip stop but that didn't seem to work. Now what I do is once I have determined the trend I look to find a good location for a stop eg resistance, pivots. I then watch the price action and when I see a good combination of stop placement and HH/LL pattern I will enter a trade.

When I have a good entry and stop the trade usually goes well, I have found that when the stop get hit

Re Targets

I initially started using a 6 pip target, but as I didn't think this would give enough margin to be profitable, I started looking at scaling out and found that usually the trade ran a bit further, so I now let them run watching the HH/LL waiting for either a congestion or reversal pattern before exiting. I tried using the HMA for an exit signal but that was too late as well. I've picked more than a few 30 pip runs.

Re indicators

I've tried indicators and they only seem to work after the fact, ie a few bars after the trend has changed the indicator will give you the info and it is usually too late. I actually do better just watching the HH/LL and switching between 3 and 5 minute bars.

Re congestion

I've been caught out badly a few times trading when the market exhibits congestion, or is moving within a narrow range. I didn't actually realise this until I read your post where you spoke about the difficulty in trading when the market is choppy. Nearly all my losses have occurred under these conditions. I think this is a key idea ie avoid these market conditions.

Profitability

My profit margin is 37% ie [pips won-pips lost]/[total pips won and lost], which [may it continue, I may have just been lucky I will keep you posted] gives a little room for some bad days. If you are following a strict 8pip stop and 6 pip target you need a 57% hit rate to break even and a 75% success rate to get a 38% margin.

Summary

So basically I just watch the screen and look for HH/LL patterns. If I can't see any set ups I'll go away and come back again later, also I have found its a good idea to have a little break between trades, winning or losing.

 

try this

 

Oh, the J. Wilder trend drawing indicator.

 

google on 'Wilder + trend line' I find

This is more like confirmation in candlestick analysis from J. Person rather than from J Wilder.

 

Thought you were joking; my bad. I'm not into TA or indicator variants.

 

Are you saying only enter if the second bar closes below (for short) or above (for long) the signal bar?

I'm not sure if that's a good confirmation tool.





And I assume you would expand this so that if the 2nd through nth bars after the slope changes don't close below it to still go short after the next bar does close below it, right?

Even that isn't necessarily any higher-probability...

 

thanks IronFist for sharing, looking through, I think there is one piece of PBP missing in these trades. That's to trade with macro direction. Not sure will this improve the overall result in your set of data.

 

Hope this helps

 

Hey, welcome to ET

I think the 240WMA is the macro direction, so trading when both that and the HMA are lined up is trading with the macro direction.

Correct me if I'm wrong.

So you're only taking long trades after HL and HH, and short trades only after LH and LLs.

The reason I started taking every trade where the slopes matched up was because I saw a lot of situations like this:



Here's one more example:



Another:

 

Hi Mr_Black,

I'm afraid I don't understand what filter criteria you used or what your rules were.

(I'm assuming SS = short sale and B = buy)