Since we are discussing trading approaches in a 5 pip market, it may sound silly to some, it surely does to me, I kid you not I went on a run years ago trading macd on a 1 minute chart, taking 3 to 5 pips a trade, 10 to 15 times a day with accuracy. Thought I was Joe Montana. And then………the inevitable 30 point market pounce against me. Important to have a sense of the bigger picture. It caused me to trade with no indicators for quite some time.
A CTA told me many years ago the only reason other CTA’s trade Fibo levels is because they know other market makers do, therefore there will be liquidity and possible start/stop areas. Nothing else. No other reason. I found that trading certain percentages of gain/decline from the start of the Asian session is strong.
IF 5 pips move makes one nervous if not outright panicky – just as you enter a trade in the negative due to dealer spread – you have no business trading.
You need to have the cohones to be in the red for a few minutes without having to consult your emotional support dog for help deal with anxiety / emotional distress
11:31 Belgrade Bobby: tks for the glimps into part of your trading /
I am not a fan of elaborate, complex, multi multi-conditional parametric trading, especially IF it is demanding way of trading, both physically and psychologically that ultimately has to rely on having to use very simple techniques
It sounds to me that a simple (i.e. no martingale) scalping robot including a programmed dynamic spread conditionals (fixed is not a guarantee of execution) might make for an easier trading day including opportunities for yoga / meditation and screw the coffee in favor of a satisfying celebratory sip of Russian Standard vodka
USDJPY 15 MIN CHART
Let’s take a look at a shorter-time frame chart
USDJPY has backed off from a tepid test of 148ish and is still trapped with a bid while above 147.70 support (noted earlier).
See my blog article Is a BoJ Rate Hike Discounted? How Will USDJPY React?
EURJPY 4-Hour Chart
Red AT lines are now dominating as pre-BpJ trading sees USDJPY firm back towards 148 and offsets giving EURUSD some support.
Levels are clear on the chart with a bid while above 161.56 and the trendline.
These are fickle times ahead of the BoJ but for now there seems to be some cold feet from the JOY longs.
5 Pip trades
When we talk about idea – strategy to trade for cca 5 pips profit per trade, I have to say that it is Real.
I have been trading that way in last 10 years constantly , developing different systems and learning from every single mistake that I made. It is very demanding way of trading, both physically and psychologically – and probably that is a bigger problem than achieving 5 pips…
You can use from 2 min to 5 min chart ( 1 minute is untradeable in real market conditions )
Firm Risk management has to be applied :
R/R minimum 1:2 – preferably 1:3
Stop Loss pre set and never changed
Profit taking manually depending on the situation ( experience )
Leverage High to Extremely High ( so from 1:100 – 1:500 otherwise you are wasting your time )
Never change the trading plan in between ( you enter on a signal of 3 min and decide to stick around longer as you saw something on 5,10,15 min chart – you’re dead )
Never hesitate – just execute – or from +3 you go to -5 in seconds
Probability of your system has to be over 80%
You can’t chose which signals you’re gonna trade and which not – you must execute all of them. Or you’ll end up picking the wrong ones.
To be able to come to such a system, you have to use very simple techniques – anything even remotely complicated takes too much time – trade gone ( also, no time to do your yoga exercise prior to entering the position – coffee is ok as long as it is on the table and exactly in the same place …every single day, or you gonna have it all over your comp )
Trading can be done in hour and half to tops 2 h at the time..anything more, you are lost.
Important – you have to have a broker that gives you max 0.5 spread, or fixed 0.0 with the commission .
Depending on the day, you end up with everything between 2-3 and 30+ pips
You trade only in the bracket between Europe open and NY close
High liquidity will pump up your profits, but there are days with Low liquidity that made my day big time – somehow clearer to trade…
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