"Take Risks: If you win, you will be happy; if you lose, you will be wise. Nothing ventured, nothing gained."

Saturday, April 24, 2010

Revenge of the Chart.


Learned a new technique from some site posted by some guy... so decided to try on it since he was so sure that it works and that he tested it numerous time. He succeeded almost everytime he use it as he claim. Well, i backtested and it looks ok so... i tried to do it.

This technique goes like this, consist of 3 period 50 Bollinger Bands (3 4 and 5 deviation respectively) and if the price touchs the blue one(second Bollinger Band), there is a high possibility that the price will retrace to the middle red line which is the 50ma. I did succeed a few times with this system, its kinda not my style though, as this is more used for scalping whereas i go for longer period trading kind.. so i managed to scalp 2 times of 10pips and once 2pips. But this flop destroyed me.

For what actually happened, u may refer to my attached image above. Well maybe someone can modify it abit and make it more reliable? Who knows... im just sharing yea? There maybe some potential to it. Lol. Cos the price as promised... always do retrace to 50ma. Just that the entry isnt good enough and before it can hit the target.. my stop gets hit.

I tickled the chart for a few pips and it punch me for 40... F***


Bottle
Once u learn to quit, it becomes a habit.

10 comments:

Risk Control Master said...

Hunging there bottle, and keep in mind, there is no technique wins all the time and expect a 40 to 50% losing rate, so keep your stop in place at least your trading account is protected. 40 pips is nothing in a monthly / yearly view, what's important is you keep trading and keep improving on yourself.

Bottle said...

yea, i find myself naive too... should have know long ago that such technique dont exist. Yes i will keep trying n try to improve. can't always let the loss shadow over my profits. Its bad for health. Lol.
Thanks for the advise!

Black said...

I'm sorry for the loss bro, but I juz cant stop laughin at the description in the image, lol.

daytrader233 said...

Counter-trend traders bleed to death.

Looking at that chart I see a very nice trend that could have been entered at any point where it touched the moving average with very little, if any, thoughts of testing a stop loss. Indicators such as RSI and Stochastics trap more traders into counter-trend trading more than anything.


I understand the need to test different ideas but trading against the trend, imho, is not the way to go.

Bottle said...

Yup maybe i should have gone with that uptrend instead of trying for a retrace...

I will try next time by going against what im taught(not gg for retracement)

Thanks for enlightening.
Indeed, i lost a few bags of blood trading against trend.

Bottle said...

Lol Black.. but thats how i felt deep down inside man... all bandaged up... LOL

The forexbird said...

my little advice, if you permit : take ALL indicators with a pin of salt. No indicator will ever replace the careful observation of price action..

Mike K said...

Bottle, if you want to trade this type of pullbacks to 50 MA (or any other MA) against the trend, you might want to use disperity index. It simply measures how far price is away from the MA of interest. Can be plotted just like any other indicator. In reality, though, it is better not to trade against the trade until there are signs of reversal. At your entry point, even candlesticks look bullish, with nothing to indicate imminent trend change. Better luck on the next one!

Bottle said...

Forexbird - yes mr bird... Guess i need more experience in that.. Learn to observe more of these actions. Thanks for your advise, appreciate that :)

mike k - yes thanks for that, i'll certainly give it a try next.. Well i was trading during a low violatile period during asia hours, hence got that " price aint gg to go far from here" thinking... Guess i'll have to think twice abt that again. Thanks for sharing :)

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