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Post by traderAllen on Feb 15, 2015 13:38:00 GMT -5
This video is meant to show the main criteria we look at when determining if we should take a trade. Once our pre-trade setup is done (trend direction and cycle) we have three criteria to evaluate a setup. At this point we already see the setup occurring whether it's a first breaks second break block break or range break. Now we set about quickly evaluating the trade setup . 1 we want to see that we have room for the trade to complete. 2 we want to see that we have a support nearby for stop. 3 we want to see that we have sufficient order flow leading up to and at the moment we enter our trade.
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steve
New trader
Posts: 37
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Post by steve on Feb 15, 2015 15:57:29 GMT -5
It doesn't get any better then that. I have to ask though. Would you have ever really taken a 13 PIP stop on a trade like that? And if so, under what circumstances would you let that happen?
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Post by traderAllen on Feb 15, 2015 16:40:49 GMT -5
Would I ever have taken a 13 pips stop on a trade like that? Yes and I do quite often. The only thing that would bother me about this trade would have been taking it at the low of the day. As most of you regulars are aware, the low of the day trade are the ones out least like to take. However, a properly placed stop outside of the volatility gives your trade room to work out without being stopped out from the normal ebb and flow of the market. Granted I've been doing this method longer than most here. Therefore, those of you that are new may want to skip a trade that has a wider stop. That's totally acceptable especially if the market is a narrow ranging market. When the markets are on the move you may find few opportunities for example if all the up and down swings on the market for the day are 15 pips either direction you will likely get stopped out each time you place a 10 pips stop. More often than not anyway. An ideal set up would've had the area of recent selling at about six pips so your stop placement could have been eight. We don't always get those ideal setups so we have to make adjustments. The volatility dictates the stop loss and the profit target. This holds true regardless of your time frame, which is one reason that makes a valid. The same methods we apply here we could apply to a daily chart however on a daily chart we may have a stoploss of 100 ticks are more and a target of 100 ticks are more. Scalping gives us the advantage of not having to risk such a large amount. But we still need to understand that volatility is what rules the market and that's how we make money we set our targets within the volatility and are stops outside of volatility allowing us to profit from a high percentage of our trades.
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Post by juanmc on Feb 18, 2015 5:39:17 GMT -5
Great video, thanks. I also have a question: How do you messure the Order Flow to see if it is good for the trade? I mean, is it a sense of speed of orders being placed, compared to other moment of the day? Or do you have a rule?.
I thought you fired the trade once a BB is broken - for example -. I didn't know you wait for the last 10 ticks to enter. What happens if the break is produced, let's say within 60 ticks remaining and with high volume involved. Do you skip it?.
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