What would you do in this trade setup? | Currency Futures


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What would you do in this trade setup?

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ho chi minh city
 
 
Posts: 52 since Mar 2011
Thanks: 16 given, 9 received

What would you do in this trade setup?

So I am fairly well on in my way to creating an extremely comfortable method for intraday trading in the forex markets.

I use constant range bars as the foundation of any setup as I find the reduction of noise in the price bars creates a very clean trend.

I normally look for mean reverting setups back to a previous pivot but lately I have been really excited by my odd willingness ) to check out the 'dark side' as I call it.

I'm not by nature a very good "trend trader" since I suffer from terrible 'recency bias'.

So I am entertaining the radical notion of trading without horizontal price levels. Just pure trend baby.

I present a setup to you here with a small problem. I invite you to give your feedback as to how to resolve this hiccup on the way to profitability.

Please try and focus on the highlighted blue box area of the trade setup. This is what I hope you'll do anyways.

If the first trade is taken as a long once it closes above the supertrend level stop band and the immediately preceding fractal level is considered the stop, what to do once price crosses back below without having any chance at profit? After all the cross back below the supertrend stop band is a new opposing signal (at least in this case I want to keep with that possibility).

So I see I have 2 clear choices here and I hope you can suggest some other ideas I had not considered yet.

1) I will reverse the trade and take 2 losses. As you can see the 3rd trade here is the real winner.

2) Do I ignore the opposing signal to go short since the intial stop was never reached? And assume this manor of honoring the original stop is a good way to avoid overtrading while keeping stops as reasonably tight as possible on this time frame.

I know there is no right answer. But perhaps there are traders who have considered this problem before and came up with a novel solution.

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