First of all I trade retests of breakouts, support resistance and trendlines. I had a theory and tested it, it is something like this. "I want a strong breakout and a weak pullback then I will take the trade." But does it actually matter? Because I find that a strong breakout and a strong pullback work as well. A weak breakout and strong pullback not so.. http://prntscr.com/c7b0ev Here is an example, the pullback is slightly stronger than the initial breakout. Any tips/clues on how to figure out which to take and which not to? I do not take long pullback swings, I find them to not work out, e.g. price breakouts 80 pips from a 40 pip range < figure that because sellers have already sold if breakout below, buyers have already bought if breakout above. Why did these not work out? Trade 1 http://prntscr.com/c7b7l9 http://prntscr.com/c7b7w3 Trade 2 http://prntscr.com/c7b8dm http://prntscr.com/c7b8jg I find them to be OK setups.
Your message is confusing. You said its what you trade and that you tested it. Now you're asking anonymous folks does it actually matter when you should only be following your backtested results and your trade results...you then said it work "as well" to imply you have backtest results to verify such. Do you not trust your backtest results ?
I find that it works 50/50, was looking if I can filter out more setups. 5 winners 5 losers, filter out 2 losers I am 5-3. So, what kind of pullback do you like?
Sounds like you not done much at all of studying price action, until you take a year off from trading, you won't be able to take next step. Your problem most likely is not with enough signals but cutting back on signals by developing patterns that won't allow you to take certain trades. Way too many think it is speed or volatility that makes difference to filter out trades, but unless you can "NAME" a price pattern and be able to test it as a way to avoid a signal, you will be forever taking two trades a day that won't work. Before asking what are signals or filters, ask yourself what patterns will "shut off" your ability to take any signals or force you to take deeper retracements.
These are just a few individual charts with focus based on no objective rules. What happened to price over time on one chart, are not significant in any way for your next 1000 trades. Do objective analysis across all relevant data you can come by, split in two if you want to test changes out-of-sample. Now you might have something to talk about. Or not, since most people detest statistics (which will be part of your edge). Simple takeaway: Individual charts mean next to NOTHING concerning probabilities (price can at any time go "anywhere"). That's not saying there's no ideas to be gleamed from individual charts. Just that you need to generalize it (both logically and verifications from backtested performance), and not fall in love with one specific period in history. Such work need some uncommon kinds of thinking out-of-the-box, like an entepreneur. This kind of thinking is inhibited and discouraged throughout society: from kindergarten, in school and at work. So require an individual to strive for freedom on many kinds of levels, while still being "in the system" for necessary support. I've had to bear the cross of statistics myself now, inspired by obviously more experienced ET posters. Btw interesting claim on this podcast, trading is not really gambling (find out here): soundcloud.com/chat-with-traders/086-jared-tendler-mental-game-coach-world-champion-poker
no it does not what matters is to correctly to define trend and its borders one should enter breakout , not its retests real breakout - always breakout, and what follows next: - strong or weak pull back does not matter you should be already in... actually this is a recipe for "always in" trading , because exit from one trend will automatically means entering another one in opposite direction
1. Define strong. 2. If you are going to take a breakout from a range, a good setup isn't going to come along every time. You need all all or most of the elements to be working, and that doesn't happen often. Live with it. If it's not working get out. If it does start to work again, try to find a retracement to get in. 3. Don't go to the well too often. 4. There are more than one of us who are wary of trading the British Pound. If you don't know why, you probably shouldn't be trading it.
If price retraces more than 50% of the prior swing (drawn from correct swing points) it is not longer currently expanding and trend is slowing. Now that doesn't mean it can't resume expanding and continue recent trend. Just one of many things to look for.
Not really. Sometimes it is, others times not. There is no absolute rule when it comes to fibs or price movement itself.