First off I traded off one minute bars, so distances are geared for this timeframe. I have gain little info from losing trades, too many people try to made them into winning trades. It can happen when trading options but too much risk trading underlying. I have gained much information from winning trades, how many minutes, seconds, days, weeks to get to enough in one direction to lock in small increment or get rid of one side of option spread, learn by winning trades how far the protective stops should be capturing 90% of them, but also wave lengths or wave ranges should be studied as their are corrective waves what are called by others "dip or retracement" and where entering on breakouts puts signal in which quarter of the distance, too high and often giving many way to get out of their longs and you late to party getting in. I never used "thrust bar" as way to get in other than trend. Some of the management rules have to do with before the signal. You have perfect retracement signal except the distance from lowest pivot of Swing low is eight points from now, it is due for reversal over 50% of the time, so I have much less than chance of trade going up, price has set up Triple tops or quad tops, or well defined double top(double tops by themselves are poor signals) you want tight clustering, Head & Shoulders, these are all great at areas where ES should reverse, so even though a signal might look to take, other factors should be in your trading plan to negate the signal, newbies often take two signals a day where experienced traders don't. Megaphone patterns I have tested for my trend entries, one that fails is retrace then breakout as I be getting in area where in megaphone most likely will reverse, whereas retrace to Bollingers, you getting in much deeper and where you might be getting into breakout trade, often getting out with two points. Deep enough retracement that most would not take a trend trade but not so much as breaking last two pivot lows. I don't stop taking all trades in Megaphone, but you find what signals don't work for you. Also, I would trade fifteen minutes before opening and then hour after as I think it offers easiest trends, whereas after it is like pulling teeth for me to make more than 2-4 points while having to risk more than 3 points. But I am not "Doubles/Homerun" day trader, I average small amounts for the week $13.50 to $50 based on each original entry, I do much better on the ave by averaging down where that goes $24.50 to $99. But if you trade three/five minute, you have to study what lengths are the swings and counter-trend waves. I risk more than most, but I don't want to get stopped out on noise of one minute timeframe. Study range of signal bars, if counter wave is 4 points and signal bar it 3.50 points long and you getting in 2 ticks above high, you getting in near high of the expected wave top, and since you want to risk before the bar's low, risk exceeds 3 points. So range of bars matter for me. Detest inside bars and Dojis unless they are island tops/bottoms after eight points, too many do the rest.
Handle123, i have a trading system with 85 % winning rate (40 % profit trades & 45% break even trades with +1 ticks of profit ).it produces only 18 signals per trading month on 2 minute chart of CL.it's capable of generating 3000$ per 1 lot in CL where each profitable trades is +400 $ and each losing trade is -100 $ . the main problem is lack of signal for successive days which is too much boring on 2 minute chart. option 1 : trading this system with high percentage of win & tolerate several boring days without signal option 2 : downgrade to 1 minute chart and trade this system with lower percentage of winning option 3 : add another instrument besides CL to increase numbers of signal in 2 min time frame (and lower winning pecerntage) option 4 : adding counter trend trades to my system which will result in 70 % win rate & 2 signals per day i should mention it took me 5-6 years to build this system and i have backtested it on a few thousand samples of data .which option is wise to select in your opinion ?
First off, Congrats you are able to do what very few have been able to do, but you forgot option 5, automate. Sounds like my scalping systems and automating it watches over 40 futures markets. So instead of being bored, learn to automate it. HUH, I use two minute charts in my long term, but I risk quite bit more and I hedge. I trade size and when I nail down 6-7 points based on one lot, cut size 80%, you can keep the two minute system and get size up to five plus lot, then trade one minute on 2 lot. I wouldn't stop the two minute, but increase size on that and add signals with reduced size.
Thanks for wise answer .automating is my next few years target .however my method is not going to be automated easily because identifying pullbacks is subjective
Best bet is to not risk more than 2% of your Total Liquid Net Worth on any one trade/idea, and to let the trade run when right .
with risking 2 % , you may have 20 times of loss in a row and you'll see half of your equity is melted . risking even less than 1 % (say 0.5% is a better choice .(you make enough roam for 100 losses in a row) . i think above all , backtesting thousand of samples is a better way . then you would know real percentages .
%% Exactly' + make sure that includes both bull market+ bear market.......................................................................................................Like IBD[investors businesss daily] teaches= 200 day moving average is a good measaure
Only the best traders cut their losses without reservation or hesitation when the market tells them the trade isn’t working. They don't trade with the money that they can't afford to lose.They set a proper and reasonable stop loss for their trades. And only the best Forex traders have an organized, money-management methods for taking profits when the market goes in the direction of their trade.