Since I see no questions or comments, I'll ramble on a bit while waiting for the market to work it's magic. In my own humble opinion, to be good at something, you have to be obsessed with it. Trend trading is no different than being a musician or scientist or doctor. You'll find very few that are successful in the field that are not obsessed with it. In fact, most get obsessed with a very narrow branch of their subject. You rarely see a successful musician playing all sorts of music on all sorts of instruments. Similarly, every successful trader I've ever known specializes in a very narrow area of the markets and has a very specialized method of trading those markets. I spoke earlier about why I trade trends. You either believe that there are trends in the market that can be traded for a profit, or you don't. If you don't, there is no use in trading since the spread cost will impose a negative expectation on any random walk through the markets.
If there are trends, then we can say that the spread cost of a trade is fixed, but the trend can affect price for a very long time and the longer a trend affects price, the better the chance that it will eventually overcome the negative expectancy imposed by the spread cost. That's the reason that all my trades are attempts to trade longer timeframes. So, from my perspective, to be profitable one should become an expert in trading trends on longer timeframes.
Seeing no comments or questions, I'll move on. Here is how I do a first pass 20,000 foot scan for possible entries using my multi-timeframe approach.
Short timeframes: 1M, 5M, 15M. Medium Timeframes: 30M, H1, H4. Long Timeframes: Daily, Weekly, Monthly.
If all timeframes are trending up, I want to watch for an entry up.
If all timeframes are trending down, I want to watch for an entry down.
If long and medium tfs are up, but short tf's are down, I consider that a shallow retracement.
I don't try to trade counter-trend on shallow retracements. I do sometimes use them as good entry points when the retracement weakens and price starts to return to the longer term up-trend. That may be obvious, but I'll try to post a screenshot of that later.
If long timeframes are up and medium and short timeframes are down, I consider that a deep retracement of an up-trend.
Some would do well trading that counter-trend retracement for quick pips short, but I'll just wait until the short timeframes indicate an end to the retracement and a good entry to the resumption of the main trend. Do what works for you there.
Edit: There is the situation we spoke of earlier where the higher and lower time frames are up but a middle timeframe is down. This is the situation of a deep retracement where the shorter timeframes are now turning to rejoin the longer term trend and the mid-term timeframes are likely to follow soon.
If trends are mixed up's and downs across various timeframes, I consider that a bad situation and will pass on trading that pair.
This is a simple observation that can be made across all the timeframes of 24 pairs in a very short time once we are used to looking at it from that point of view. It would take posting about 45 screenshots to display examples of all the above situations in all timeframes however, so I will only post screenshots on these situations to answer any questions or comments.
I'll let this sit for a bit for the reader to consider as the trading week winds to a close. I'm currently carrying +400 pips into the weekend and hoping to get some more good positions on next week. Have a great weekend all.
If there are trends, then we can say that the spread cost of a trade is fixed, but the trend can affect price for a very long time and the longer a trend affects price, the better the chance that it will eventually overcome the negative expectancy imposed by the spread cost. That's the reason that all my trades are attempts to trade longer timeframes. So, from my perspective, to be profitable one should become an expert in trading trends on longer timeframes.
Seeing no comments or questions, I'll move on. Here is how I do a first pass 20,000 foot scan for possible entries using my multi-timeframe approach.
Short timeframes: 1M, 5M, 15M. Medium Timeframes: 30M, H1, H4. Long Timeframes: Daily, Weekly, Monthly.
If all timeframes are trending up, I want to watch for an entry up.
If all timeframes are trending down, I want to watch for an entry down.
If long and medium tfs are up, but short tf's are down, I consider that a shallow retracement.
I don't try to trade counter-trend on shallow retracements. I do sometimes use them as good entry points when the retracement weakens and price starts to return to the longer term up-trend. That may be obvious, but I'll try to post a screenshot of that later.
If long timeframes are up and medium and short timeframes are down, I consider that a deep retracement of an up-trend.
Some would do well trading that counter-trend retracement for quick pips short, but I'll just wait until the short timeframes indicate an end to the retracement and a good entry to the resumption of the main trend. Do what works for you there.
Edit: There is the situation we spoke of earlier where the higher and lower time frames are up but a middle timeframe is down. This is the situation of a deep retracement where the shorter timeframes are now turning to rejoin the longer term trend and the mid-term timeframes are likely to follow soon.
If trends are mixed up's and downs across various timeframes, I consider that a bad situation and will pass on trading that pair.
This is a simple observation that can be made across all the timeframes of 24 pairs in a very short time once we are used to looking at it from that point of view. It would take posting about 45 screenshots to display examples of all the above situations in all timeframes however, so I will only post screenshots on these situations to answer any questions or comments.
I'll let this sit for a bit for the reader to consider as the trading week winds to a close. I'm currently carrying +400 pips into the weekend and hoping to get some more good positions on next week. Have a great weekend all.