i want to draw daily and hourly trendlines, focusing on hourly breakouts, trading on a 30 min chart, about a 5 point stop loss. i want to enter this way but im not sure how to exit. it seems like i would usually get 1 trade a day. Im thinking about using pivot points as objectives but not sure which ones to exit at.....exit at the farthest one? the next one? or maybe just exiting at the next major high/low support area, (i think i like this the best) any suggestions for exiting on a 30 min chart are welcome(pro traders who bank lots of dollars are preferred)
i think i will watch several of the "cheaper" futures such as corn, wheat, gold and euros. their low margins mean i could practice longer yet make less money but thats ok for now, im learning how to fish so i can eat for the rest of my life. could always catch bigger fish later. i think i should exit at pivot points, that seems to be a general purpose for them anyways. if you use pivot points as your objective/profit taking method, post a reply. i would appreciate any advice.
Careful that they don't have huge tick sizes. I think some of the currency futures are $6 something per tick. Some of the other ones I played around with a while ago were more, like $16 per tick or something nutty like that. The margins might be low, but if a reasonably placed stop loss will drain half your account, you might be better off trading something else. You could always just use a demo account. Or get a Forex account somewhere where you can use tiny lots where 1 pip = $0.01. Then you could play around forever pretty much. With a $1000 account it would have to move 100,000 pips against you at $0.01 per pip in order for you to blow your account. Just be careful of shady Forex brokers and forex taxes (if you're using real money) because I haven't met anyone who knows how Forex taxes work. Some sources say they're super simple, and other sources say they're ridiculously complicated, and even if you're profitable you still might end up paying more in taxes than you made (some weird law or something). Even the websites I've looked at say "consult a tax professional."
i have been watching U.S. Dollar futures and a couple other currency futures.....i dont want to trade actual FX spot rates or pairs. i think if i stick to their futures counterparts then i should be ok........i should check on the tax treatment for everything and compare.
when entering on breakouts of hourly trendlines, i think i found 4 rules to follow that improve my chances of a good trade... 1)price needs to BOUNCE off TL just prior to breakout 2) Pivot point should be extremely close or on trendline during breakout 3) the next pivot point(objective) should be a ways off so dont enter if its too close 4)if its a really big breakout bar then wait for a pullback to the previous pivot point to enter from what i have seen in the past 2 weeks or so, if all these requirements are met it will go to the next pivot (my objective) and if any of them are not met it becomes a fake breakout and never touches my objective. anyone use rules similar to this?
i like congestion breakouts....its similar to triangle/wedge patterns. here is an example of a potential trade coming up in gold futures... btw, zoom in on the pic to see it correctly
ok forget those rules... i was enlightened on entering Breakouts that go with the prevailing trend. and that concept kinda blows my rules down. still want to use pivot points as objectives, entering on hourly trendline breaks.....but i think now i can be more prepared for the fake breakouts (if they are not with the recent trend and there is no good reason for a reversal) i used recent 20 days of nasdaq 100 emini futures to show examples....i feel like this is a major improvement for me lately
Stephen, the simple straight lines you've drawn are what many professionals are doing. Don't listen to the knucklheads & their indicators & oscillators. Bollinger bands are so stupid I don't know where to begin. You're on the right track, friend. Keep finding those S/R lines!