I know I said I would start trading again this week but I changed my mind. A week away from the charts has done me good so I want to take 1 more week away…. sorry guys!
Before I get back into trading next week I wanted to go over some of my methods guidelines. This is the stuff which I have been neglecting over the past few months. I also want to go over a few of the changes , so here goes…..
Scalp Line Life
With my method I have always given minor and medium strength scalp lines a life span of about three weeks. If they do not break within three weeks I would remove them from my chart. Recently I have been leaving scalp lines on for several months. Frome here on out unless it is a very strong scalp line I will remove it from my chart after 3 weeks without it breaking.
The only exception is if the scalp line is hit again or a candle bounces away from the area within 20 pips of the line. If this happens I will consider keeping or reactivating the line.
Also note that I said minor or medium strength lines. Strong lines will remain on my chart indefinitely.
I have always shied away from trading the New York session as it tends to serve up losing trades consistently. Recently I have been trading regardless of the time. After seeing the great statistics Metalhawk has gathered I see that the New York session has close to 100% losers.
Seeing that I have decided to stop trading the New York session. I will still trade the London and Asian sessions obviously.
This is an easy one. I stopped using S+R lines for a valid reason……. because GBP/JPY had dropped down to lows which it had not seen for decades. At these levels it was impossible to place historical S+R lines. Now GBP/JPY has been in these areas for a while so we have the data plus it has retraced into territory in which we have some historical data to base lines on. So I will start using S+R lines again.
Ok guys this is a tough one. I want to keep the same targets because they have consistently worked for me but stats do not lie. Metalhawk has put together stats on all the trades he has taken in over a year. He found that the most efficient target and stop is:
target = 80 pips
Stop = 70 pips
So what I am going to do at the moment is keept he same target but for the next month monitor each trade very closely. I want to see if I end up with more pips with the new target and stop. If the new combination works more efficiently after a month I will begin to use it experimentally.
More than anything else my method relies on discretion. I do not look at every line break as gospel, I look at a link break as a suggestion. The final decision to enter is based on my assessment of current market conditions. To my determent I started trading without discretion recently and not surprisingly my win rate begun to drop. So discretion is back!
I am finally implementing trend lines into my method. He past 6 months of trials have shown me that they can be extremely valuable to my trading. So trend lines are being added to the NickB method and I will write all about them in the new free e-Book.
Well that pretty much covers it all guys. I will get back into it Sunday next week.