Not quite exposure rather than analysis. I need to remember the KISS strategy as a guideline.
Basically this strategy is quite simple. Almost like a MA crossover. Sounds stupid, isn't it? It has a little twist, though.
All my previous posts used to show fib extensions and retracements and I'm not forgeting this. That could give me a bigger picture sight. Somewhere I read that you should have or develop a "Feel for the numbers" as a filter, so you can either take or not a trade. I agree. It's just too subjetive. Hopefully I'll do it fine.
In this strategy, the ATR defines the risk and potencial gain. Basically with a 3:2 ratio. In most places I've read that 3:1 should be considered but what the hell.
With a rigid StopLoss and ProfitTarget, that could remove the stress from any trade I make. If I use 1 ATR as a SL that could be just not enough space away from the market and could be stopped out to soon, so a 2ATR could be more suitable. But analyzing my previous post, if I trade one half-minilot in a 15 min chart with a maximum of 28 pips ATR, that would be 56 pips and my max risk is 86 so I could take just one trade at a time.
That's fine for me, but I'm making the consideration of a max ATR in a 171 (or so) period rather than the ATR in the spot. So, when I trade, I should consider the actual ATR instead the previous high ATR. That could give me some space. Also I have to consider that 86 limit is with a half-minilot and no one minilot.
Knowing how much I'm willing to lose, the profit target is rigid too. 1 ATR for a first half position, and 2ATR for the other half. If I'm trading half-minilot, that means 5k positions, I should open One minilot position (10k) and close the half position when it reachs the 1ATR level. Then as a general rule for any strategy, I could move up my SL to break even in the second half, or trail the stop just below the previous bar low for the rest half-position.
That's it. Simple isn't it? Now, how the &#$% to enter the trade. That's what I'm working on...
Next post...
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