tradingkevin

======= Which way do you know to trade i.e. long or short ? is it based on the trendline ?

I agree with what you said above but I think it also depends on ones initial risk and the average swing size. If you initial risk is 5 pts per contract and the average swings are between 15 to 20 pts then a 3x or 4 x risk is possible on your first target... now if your initial risk is 10 pts per contract then a 2x risk would be more appropriate for the first target...

I have a suggestion for exiting. enter with 2 units ( 1 unit could be 1 contract or 10 contracts or 100 contracts..thats up to your capital and risk i.e. max 1 to 2% of total capital) exit unit 1 at 4x your initial risk whatever happens ( so even if wrong on second unit, the unit 1 will cover the loss on unit 2. example. risk 5pts initial risk. 5 pts x 2 units ( 1 cts per unit in this example) = 10 pt initial risk. If you exit unit 1 at 5 pts x 4 ( 4x initial risk) = + 20 pts profits. if you are wrong on second unit then + 20 pts - 5pts = + 15 profit. now if you are wrong on your entry you would get - 10 pts. but since you make a minimum of + 20 pts per entry you are still working at a 2 to 1 reward to risk which is not too bad ( i.e. you can be 2 times wrong and still be break even ) Exit unit 2. exit at minimum 8x your initial risk. that s a target but once it reached that level, you can do 2 things. exit right there or trail it since market is showing lots of strenght ( i.e. each new bar is big and full ...not much shadow on the candles ) . it's a judgement call. Now if you exit unit 2 at minimum of 8x risk that would be 5 pts x 8 = + 40 on unit 2 and + 20 on unit 1 = +60 total profit for a risk of 10 origianaly . 60 / 10 risk = 6 reward to risk factor. so that means that for every trade you take, you can be 6 times wrong and still be at break even ( not lossing anymoney ) . This is a very favorable R/R factor. You cannot control anything in the market but using this simple technique gives you confidence and a frame work to work with for you targets by putting the math in your favor. YOu can play areound with the Risk multiplier to... If for example your risk is +10 per contract and the the average swings are about 20 to 30 pts, you might lower your 1 st target to maybe a 3x risk or 2 x risk. and on the 2nd target a 5 or 6 x risk. that 's all up to you. This idea is so simple that many people will overlook it but the simplicity of it makes it very stress free and builds your confidence over time since you know that you can be 6 times wrong and still not loss money for every trade that works out.