|Ultimate Trade Analyzer Discussion for Ultimate Trade Analyzer owners to share results, questions and other feedback.|
|02-25-2011, 09:40 PM||#1|
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Choppy Price Action
How Does the SST Deal With Choppy Forex Price Action?
During our live demos of the SSTFX yesterday, a common question kept coming up, "How does the SST deal with Forex chop?" My answer was that it actually handles it pretty well.
It is a combination of a few critical elements:
We acknowledge that there will be losing trades within a winning strategy.
We go onto acknowledge that you can not divorce the losses from the winners or you will NOT get the winners.
Instead of trying to avoid the losing trades (which in our opinion is 'holy grail' stuff and does not exist) I designed the SST (and SSTFX) to mitigate the losses.
It is a combination of great setups that take advantage of edge of the chart price action, smart confirmations, smart RULES that include how to make minor key level adjustments, disciplined dynamic goal setting (we call it, "Power of Quitting" and it really works), tight and concise tradeplans that should be followed the same way every day, a dynamic stop strategy that cuts risk and seeks to get to a risk free position AND two types of targeting -- a high percentage pretuned fixed target and an effective trailer.
With all that, we then accept the losses that we do get, trade through them, and let the magic of the system work itself out, which is why we keep getting all those attractive equity curves you've seen. The losses get you to the winners.
The trade examples today, exemplify ALL these elements, working together, producing the winning edge that the SSTFX will give you IF you have all your '7 summits' covered. The EURJPY 233 tick is one of the original FX daytrade charts that I used to help create the SST. To this day, the plan continues to work.
The Session had two trades and two winners, including an add-on position which can be thought of as a third trade but really it is apart of the trade you are adding on to.
The first trade was a Reentry short which hit full target for +17 pips. The trailer came up and stopped out for +12 more pips. There was a real nice early move down but it was before our start time. But the time this trade hit its target, there was no more momentum to the downside and our trailer locked in what it could. Net on the trade was + 23 pips after spread.
We reversed to long. This trade took us into a long, slow, grinding, messy 'chop fest' but at the right edge of the chart, how could we or anyone else know. We aknowledge this 'impossibility of knowing' as stated above, but here's a great example of all the elements listed above working together.
Notice how many entries showed up in the choppy action that didn't get triggered in and cancelled out. The price hitting the entry IS the final confirmation.
Notice where the yellow arrow is, a possible add-on position that we did not take. A minor key level adjustment kept us flat on this entry. A 3 pip adjustment to get around resistance is acceptable in this type of price action and that was enough to stay flat.
Same thing happened on the lower side of the channel. A minor adjustment kept us flat. These adjustments are part of the 'smart RULES' as stated above.
Finally we get to add to our original position and get long. The trade has been retuned to the market condition making a much smaller trade. Maybe we'll make it up with our trailer.
We almost get stopped out but again, a key level adjustmet that moved the stop one pip below a key round number, kept us in the trade for a possible greater potential.
Of course you can see, that didn't happen. The trailer took out both positions and only gained a pip or two. Still though, we hit all of our full targets and were done for the session as per our 'dynamically self adjusting goal setting strategy, the Power of Quitting."
The Net on this lengthy, slow grinding session was +37 pips. We could have kept trading and if you look at the chart, you can see that more profits were to be had in this market. BUT, that is NOT our tradeplan, the very tradeplan that has been serving us so well for so long. If you remember the big WYSIWYT example that looked like Mnt. Everest during our demo.. the one that got over +300 pips in one daytrade session.. Well, it was the very same tradeplan. We approached today's session the very same way. How can you expect to get the +300 pips on that session if you don't trade today's session the same way? It's the tradeplan that allows you to take 'what the market wants to give you' AND 'allows you to quit positive on most sessions.' Make sense? This is SO hard for people to learn but once you do, you will have scaled a major summit off your own.
EURJPY Example; Nets + 37 pips on a slow, grinding US Session
EURJPY WYSIWYT example; in case you missed the SSTFX Demo or forgot this example. This is th exact same tradeplan on the exact same market on a different session.
One last thing before I end this post. We had a great session across multiple markets and timeframes today. I'll try to post some more of today's trades over the weekend if I have time. But I did want to leave you with this screen shot of a live trade we showed yesterday, which is actually, still going. It's a 4 hour USDJPY. The first target was hit yesterday as I showed, for +86 pips. Our SSTFX Trailing tool has handled the consolidation well, so far, and has moved quite a bit lower. This example is on an MT4 chart. If the price can push lower, we have a chance of another leg down. Regardless, it is already another very successful trade. Check it out and follow along.
USDJPY Active Trade; +189 pips guaranteed and still going
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