I will make fast, here the setup you start to know now :
We have a strong selling exhaust followed by a buying pressure conclude by buying volumes on support area and levels (resistances pullbacked becoming support, basic setup here), so the setup is in place.
I want to insist on another thing here, we have a nice candle of buying volumes but already really high in front of our selling exhaust. So it can influence the percentage of success of your trade if you base your targets on win/loss ratio like me. Furthermore the buying candle happen on the open of the US session and we have to take that in count to ask yourself if buying volumes are really relevant or not.
So when you have facts that could impact your probability of trade success you have two possibilities.
First you estimates that your success percentage is too much impact and could be under your profitability limit. So you don't take the trade and wait another setup.
In this case, I have a risk / reward ratio of 2:1 so I need to success at least 33% of the times in my trades to make profits. Do I think the reasons I pointed could impact as much to fall under 33% of success probabilities ? No, target isn't incoherent with the movement of the asset (under fibonacci 161% extension of the last movement) and breakeven level is in the resistance area of the last movement too (for the act of the tall candle). For the case of the US session open, the question is more could it be a panic buy here ? Here , and it's purely subjective , I don't think it is because of the support, because of the underlying pattern, because of the temporality of the consolidation, ... (But if it's not your case and think your strategy signal could be fake, just don't invest money in it because you are obviously directly under your profitability limit).
That why we come to the second solution : I estimate that profitability of my trading pattern isn't challenged but the probability of success could fall from 66% to 45/50% so I will limit my risk exposure. If you have a standard exposure of 1% of your capital, just edge it according to the quality of your pattern. Here the pattern is impacted negatively so for the example I will divide the exposure from two to be expose at 0,5% of the capital.
"Making money in trading is math and respect of strategy, so never let your emotions guide you in uncomfortable positions"
Here some of the work you need to do to aim for success in trading.
Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Like, follow or comment if you like, it give me some strength to continue!
We have a strong selling exhaust followed by a buying pressure conclude by buying volumes on support area and levels (resistances pullbacked becoming support, basic setup here), so the setup is in place.
I want to insist on another thing here, we have a nice candle of buying volumes but already really high in front of our selling exhaust. So it can influence the percentage of success of your trade if you base your targets on win/loss ratio like me. Furthermore the buying candle happen on the open of the US session and we have to take that in count to ask yourself if buying volumes are really relevant or not.
So when you have facts that could impact your probability of trade success you have two possibilities.
First you estimates that your success percentage is too much impact and could be under your profitability limit. So you don't take the trade and wait another setup.
In this case, I have a risk / reward ratio of 2:1 so I need to success at least 33% of the times in my trades to make profits. Do I think the reasons I pointed could impact as much to fall under 33% of success probabilities ? No, target isn't incoherent with the movement of the asset (under fibonacci 161% extension of the last movement) and breakeven level is in the resistance area of the last movement too (for the act of the tall candle). For the case of the US session open, the question is more could it be a panic buy here ? Here , and it's purely subjective , I don't think it is because of the support, because of the underlying pattern, because of the temporality of the consolidation, ... (But if it's not your case and think your strategy signal could be fake, just don't invest money in it because you are obviously directly under your profitability limit).
That why we come to the second solution : I estimate that profitability of my trading pattern isn't challenged but the probability of success could fall from 66% to 45/50% so I will limit my risk exposure. If you have a standard exposure of 1% of your capital, just edge it according to the quality of your pattern. Here the pattern is impacted negatively so for the example I will divide the exposure from two to be expose at 0,5% of the capital.
"Making money in trading is math and respect of strategy, so never let your emotions guide you in uncomfortable positions"
Here some of the work you need to do to aim for success in trading.
Disclaimer: This is NOT investment advice. This post is meant for learning purposes only. Invest your capital at your own risk.
Like, follow or comment if you like, it give me some strength to continue!
Trade closed manually:
Out breakeven by lateralization. Unfortunately no momentum here.