Fri Aug 22 - Back in the Trenches

EURGBP. 4H retraced up to trapped trader highs. I boxed an area of focus which confluenced nicely with a DTL - either should bring in sellers. To the left there was also a gap trapping buy-side traders from the previous session. The 4H looks like a doji but a look at the 15m shows it had already topped and was working its way down. I entered on 15m with a LO at the MAs at about  a 40% retracement. Tgt was +20, SL-10.

15m shows the 2hrs chop before it finally cratered and reached tgt at the obvious zone I chose from the lower left.

Summary: 1W for 2R

Switch to Bigger Timeframes

The lack of volatility this year has forced me to scrap the scalping and revert back to trading large timeframes. Ideally there would be sufficient movement and range to capture smaller moves several times a day and to amplify the gains with bigger size.  However, conditions are not optimal for scalping. Markets mostly sit around waiting for news or report catalysts. When that happens the moves are often instant and reach their destination without pullbacks for me to enter with a favorable R:R.

My focus will now be on 4H for view and 15m charts for entries. I will be locating areas of trapped traders at support/resistance areas and target the most logical next support/resistance. Trades will be all in/all out with a minimum of 2:1 Reward:Risk.

My results will be in terms of risking "R" rather than pips.  A 2:1 Reward:Risk trade could have a 40 pips stop and 80 pips target or a 10 pips stop with a 20 pips target.  Either way they target twice what is risked so the actual pips amount is not meaningful. Selecting 2R (or higher) setups also takes away any emphasis on win/loss percentage.  The 2:1 risk parameters means I only need to maintain a win rate of 34% to break-even.  My "R" maximum risk per trade will represent 0.3% of my acct balance, a loss will be -1R while a win of 2R will be a gain of 0.6%.