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2 TARGETS EXPLAINED - POSITION SIZING - BANKING PROFITS Hi All, I recently have been asked to publish this diagram for executing a 2 target order. I have labeled the diagram with order sequence in a perfect world scenario. Steps below relate to numbers on chart I am not telling you this is how everyone does it and this is only based on the questions I have been asked, every strategy has its own order entries stops and targets. 1. Price action comes down to hit your Limit Order Entry/Entries - when we find the reason for entry in this case we have identified this as an advanced pattern. When price action has at least past the B leg and we anticipate that price will continue downwards towards our D completion and predict where the Market is most likely to go after this, we then decide on our entry type and execute the order - The most important thing is to know where your entry stops and targets go before the entry level is reached. We mark these area's out and place 2 Order Entries @ Half position size. So let's say you would like to buy 20k EURUSD and the spread was 2.3 pips with a pip cost of $1 per 10k (minilot) trade. The cost would be: 2.3 pips * $1 per minilot * 2 minilots = $4.60 Now let's say you bought 20k in EURUSD, but this time, you bought two separate minilots, 10k and 10k. The cost for this would be Position #1 - 2.3 pips * $1 per minilot * 1 minilot = $2.30 Position #2 - 2.3 pips * $1 per minilot * 1 minilot = $2.30 The 2nd scenario costs the same as the 1st but allows two different sets of stops and limits (one set per ticket). So now we have the Order in Place with your target 1 and 2 and only exposing you to a stop loss of your original 20k After D has completed you need to make sure to bring your targets down until D has completed. 2. Now you have your order filled, based on historical data and forward testing results in the most likely of places price will retrace to being the 38.2% for T1 and 61.8% for T2 - now in your testing results you may just take one position and use the 50.0% for your one target. Keep in mind this is just an example. We have already banked our target 1 with 43pips - Price can do 3 things Go up Sideways or down. We hope price would just continue to hit our T2 - in this case price will retrace when sellers have their orders in at the 38.2% 3. We then move our stops up for position 2 to break even. 4. Price action usually will retrace and can indeed come back down to stop you out for a break even trade on position 2 but this has already banked 43 pips at 10k Half Position. 5. Price action doesn't stop us out and we are looking for Target 2 to be acquired, when T2 is obtained we have completed a perfect trade. And target 2 has banked 69 pips You can also trail a stop when the price action hits T1 if you need to sleep or leave for some reason and don't want to leave the position exposed to loss if it turns in the wrong direction. You can take step number 4 after the retrace and use the LLLC candle wick and trail the stop 5 pips below or above the HHHC candle wick depending on bearish or bullish. Note: some brokers or platforms do have the feature to have two limits on the one order. Also note the dollar figure is great that's what we all want is to make money in the market, the most important thing though is to not go broke, protect capital, dont expose yourself to too much risk, bank profits and don't be greedy. Being a consistently profitable trader putting yourself in the highest probable trades, Like Warren Buffett Says The stock market is a device of transferring money from the impatient to the patient. Their are a million ways to make and lose money in Forex - good luck I hope this helps for all those who asked to post it
Education
by Oztrade
2
Cypher Pattern, NZD/JPY, 30min Here i see a Cypher Pattern on the NZD/JPY chart. And what i noticed, if you zoom out; on the daily chart there appears to be a crab pattern that has rallied as if it going to complete as suggested, but this Cypher pattern has me thinking that the market will more likely continue in downtrend and break the structure of the crab pattern therefore ruining that trade. Now the cypher is still a safe trade if ,and only if, the market completes the Cypher then immediately reverses upon completion. But in short, I've decided to short the Cypher trade for a lot less return, but its safer. My entry is at the peak of the cypher pattern with stop around the highest high of the pattern, my limit can be debated, if we assume the market is going to continue in downtrend after breaking the structure of the crab pattern, you could move you limit to the next structure support level, but i always believe in consistency, so i have placed my limit at the 1.618 extension of the BC leg. Please , if you agree, like comment and even follow ! As always good trading !
Short
by Kylan_Laymance
Will There Be Continuation ??This is a WEEKLY chart of FB. You may need to look at the daily chart to see some of the things I am talking about. If you are a bear, you probably pondered this question all weekend. Last week was not such a great week for Facebook. And Friday was not a good day for Facebook. You had to be wondering if there would be continuation to the downside as this week began. FB reached a high of $86.07 on 3/24. Since then, the highs have been lower and lower. Even today, after a good day for FB longs, there isn't a clear sign that FB is headed for new highs. In fact, at this moment in time, FB is still under the downtrend line that starts on 3/24 and touches the tops of the candles from 4/13, 4/14, 4/15. The top of today's candle also touches that downtrend line. Remember, the trend hasn't changed until FB closes above the downtrend line. Even then, we like to see follow through. Also called continuation. If you were short on Friday, you had to be nervous when FB gaped up this morning. At some point you had to get out of the way. When? That depends on the trading plan you had when you went short. Maybe you said, "if FB gets above Friday's high then I will get out". Or maybe you said, "If I lose $100 I am out of here!". Whatever your plan was I hope you stuck with it. Maybe you said, "I will stay with this FB short as long as it remains below the downtrend line from 3/23". If that was your plan then you are still long. You may be nervous. But you are still long. If you came into today noticing that FB gaped up, You could have waited 15 minutes (or less), went long and set your stop at the 15 minute low of $81.24. If this was your plan you are still long. Why? Because FB never got that low again all through the day. If you came into today thinking FB would rally into earnings and you wanted to be long. You could have used the 80.75 ish level as your stop. If this was your plan you are still long. Resistance can (and often does) become Support. In this case, it looks like it has. So what now?? Will there be continuation?? You know what I like to say... Your guess is as good as mine. If you asked most shorts on Friday they would have been pretty comfortable with their chances for continuation to the downside. If you talk to most longs today they are probably pretty comfortable with their chances for continuation tomorrow. We will just have to wait to see what happens. A better question may be, "What should I do from here?". Honestly, only you can make that decision. But if you use the Daily downtrend line as a guide you may have an advantage over those who don't. Notice I said "may" have an advantage. All bets are off when it comes to earnings season. Sometimes you can get a clue to the direction of the stock and sometimes you wake up to a nasty surprise. It is always extremely risky to own stock when earnings are released. Many experienced traders use options to participate in the potential movement or protect gains around earnings. Some people just sell a majority of their shares before the earnings come out and then buy back the next day or so. It is all about limiting your risk.
NASDAQ:META
by TheTrendLineInvestor