Trading Forex with Divergence on MT4MT5 & TradingView by Jim Brown

Author:Jim Brown
Language: eng
Format: epub
Tags: Forex, Forex Trading System, Jim Brown Forex, Forex Trading Method, Forex Trading Strategy, Forex Books, tradingview, best forex books, best seller forex books, fx, foreign exchange
Publisher: Jim Brown
Published: 2017-03-24T00:00:00+00:00

Figure 39. Safe Conservative Trade Example on Gold Daily

Figure 40. Safe Conservative Trade Example on GBP/USD 4hr

Figure 41. Safe Conservative Trade Example on GBP/JPY 1hr

Figure 42. Safe Conservative Trade Examples on EUR/USD 5m

12 STOP LOSS PLACEMENT

Now this is very subjective and a lot depends on what you want out of your trading. Some traders are happy with +30 pips profit on a particular time frame trading a particular pair, whereas other traders may want to squeeze as many pips as possible out of a trend. It is up to the individual trader.

No one knows how long a trend will last. I understand that by using technical analysis, we are trying to work out things like trade direction, trade duration and also possibly trade targets by using tools that we think gives us an edge. This is all generally based on historical data where we believe what has happened in the past, has a fairly good chance of happening again, or something like when price hits a certain level, then this should happen. Whatever you think should happen or may even happen will not necessarily happen, because at the end of the day price does what it pleases and is not dictated by your theory or anyone else’s theory.

Sometimes you can get caught up in the analysis side of things where subconsciously you may form a certain opinion that is difficult to shake. For example you might be adamant that the Aussie dollar is weak so you would be more inclined to sell the AUD whenever the opportunity presented, and be reluctant to buy if there was in fact a valid buy signal. This is something you have to be aware of and actually trade what you see and not what you think should happen. I have been guilty of this at times and you don’t realize until it is too late, and in the meantime you have missed out on potential profits due to an ego issue. Trade what you see in front of you and be ready to change your mind if there is a reason to. We are here to make money, not show off or prove to your trading buddies that your analysis was right (eventually). So now I will give you some of my thoughts on this.

First, I will discuss stop placement. The methods I have discussed previously, nearly all involve turning points in the market which are either confirmed by a red/blue dot on either the QMP Filter or the MACD Platinum. These make it very easy for the placement of a technical stop just on the other side of these turning points.

I would be looking at placing a stop a few pips above the recent high or just below the recent low. Remember your money management rules, so you can work out a position size based on your risk percentage per trade. As in this case, you will not have the same size stop for every trade due to the fact that you are basing your stop loss on a technical point and not a fixed number of pips.

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