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Measure Move Trade - PlangCha |
This is an example of a measured move trade I learnt from a Forex trader John Carter I have modified it a bit to suit the Futures which I trade exclusively . The examples show the setup on the NQ Futs on a 15 min chart. I have traded this on a 60 min chart and a 48 tick and many in between; much smaller that a 48 tick chart and you are struggling to get enough room to get a profit out of it . I have traded it a lot on the EUR, quite a bit on the GBP , the Euro Bund and the ESTX50 and the US Equities particulaly the NQ. It has a high % success rate , with 15 min and up charts I often need to hold the position overnight and with 60 min charts sometimes longer .
This description of the trade is basic and you may want to put your own spin on it , if so please share anything you find that significantly improves the % success rate of the setup.There are many MM trades that work; this one I find has high % success .I am not going to cover management of the trade I see this as a seperate area , suffice it to say I do enter with a position and take some off after the move has given me something so if it all goes nasty I have taken the sting out of the stop out. I generally do NOT watch the trade progress after that , I am a scalper so I leave it to do what its going to do, forget it and either do some scalping or leave the screens altogether .
OK the trade is a consolidation breakout entry with a stop order if you look at the chart PlangCha 74 (Sep 14th 2006)
bear in mind times are in UK time now I am looking for a HORIZONTAL channel where the top and bottom of the channel is held a minimum of 4 touches (I want it to hold the level sloppy isnt good enough a look through by 1 pip hmm maybe but not much more , the % probability of success drops ) I have marked them on the chart, now I then sling a line (Purple line ) 3 pips above and 3 below the high and low of the channel , 3 pips is my handel on this but some markets like the Russ and YM for example I take notice of round numbers like 11660 or 11665 11670 etc etc so if my level at top of consolidation came at 11664 I'd moove it up one .
OK now that line is the entry line wether the market
goes through it above or below the consolidation level (I am not interested
in which way it goes , just that it breaks out long or short) bear in mind
the stop order price is NOT the price at that line but 1 above or below it
the BREAKOUT ,,,,,,,,,,,,,,,,OK were now in the trade we have a stop order
filled (the Breakout) and another stop order not filled (the opposite side
of the consolidation , that is still left there that is the stop now for
the trade were in , OK the target ,,,,, the target is the measurement from
the bottom to the top of the consolidation (thick Blue line )
Thats it I do have a look around at the bigger timeframes make sure the setup
isnt running up against some strong level of support or resistance just before
it gets to the target if so I may not take the trade or I may have my target
just inside the level of support or resistance , but basiclly this is a stand
alone setup I have tested it over time and has high % probability of success
and is very simple .
Wishing Everyone Good Trading Sanuk Namaste PlangCha