The Chart is 5min EUR/USD. For who don't know my trading method, I used the wedge. I trade breakout consolidation. Pure Price Action, No indicator, No Bias.
Until now, I trade the futures. I like futures since it's fast and liquid. Though it's risky and dangerous. I want to trade FX Spot for the reason below:
1. Futures is not flexible, especially for my thin capital :) 20ticks/pips SL worth more than 2% of my capital. While 20pips is sometimes isn't sufficient.
2. Long Screen Time. Though I can leave it mechanically, I couldn't rest assure. If my SL failed I could blew $500 or even $1000 in just 5min. No choice I have to keep eye my position.
3. Unstructured Stop Loss. If the Consolidation Zone is too wide, I can Stopped Out multiple times only later re-entry at the same price. This things sometimes annoying especially in chop and slow market.
Now, the method of Spot Trading is because of the flexibility and easy adjustment. Here's what I can do with Forex Spot:
1. No more re-entry...If I long one on breakout, I'll put two short at the opposite side. No worries for wide range since I can adjust my lot for example:
Long = 26554
Short= 26550
Wide = 4pips
Lot = 0.5% Capital Risking 4pips let's say = 100lot
Long = 26466
Short = 26334
Wide = 13.2pips
Lot = 0.5% Capital Risking 13pips let's say = 35lot
And so on...
2. Flipping and Structured Stop Loss. I can limit my trade only 2 trades per setup. Means only 1% risk per setup. I can flip exactly the place where price confirm reversal. No bias, just flow with the market.
3. Risk Reward Ratio also adjustable. More likely 3:1 or 5:1. For the wider range, the RR may 3:1, narrower range 5:1.
This method adjustable and based on pure price action. The theory is when consolidation it mean buyer and seller fighting and the price represents the result. If bull win, it mean the upper breakout and the seller may fight back or give up. If fight back, the price may go back to consolidation area again. If give up, they will cover their short and won't do any fighting, while the winner will pump their position until they want to keep profit. This momentum give a very good profitability trade and it pure price action. I have convicition this system will prevail through any market condition.
I find it interesting how you trade... :)
ReplyDeleteYes, maybe you should try :)
ReplyDeleteIt's quite easy to make a wedge. Just drawing triangle or you can google it. They called it wedge, triangle, flag, whatever.