I know it doesn't look like it but I have traded this method for many years with good success. I even traded it with market replay and simmed it for the combine to make sure it qualified. But now the results have been subpar.
I am getting stopped out due to the higher volatility this month and instead of stepping aside, I lowered the timeframes to decrease risk. Now I am getting stopped out from the noise on the smaller timeframes.
A friend of mine sent an email that I will post here for future reference: "Many traders will counter volatile markets by trading shorter time frames, so that you can reduce risk. For me, that has never worked very well. When you trade the short time frames...2 minute / 5 minute, whipsawing can be violent, which leads to not being able to to see a price direction expand. What HAS worked well is to take pause and consider the pulled-back view of the market. When I do that, I often see clear direction in general terms (via hourly or daily charts). It winds up that the smaller time frames is where all the hopping around occurs. These shorter time frame puts you IN-THE-MOMENT mentally and it's easy to have your emotions whipsawing around with the market as you fail to get trade-traction. A 'wider' view...a longer time frame chart...can often give you a MUCH clearer perspective. Try taking less shares/contracts and trading a longer time frame. I think you'll find clarity and your trades will get more traction."
Thanks Norm. Now maybe I can get back to the 80-90% win rates and pass this combine!
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What is your entry timeframe? Usually, when someone talk about such a high win rate it means he works very hard on a speedy timeframe. If you use a higher timeframe you should feel more relaxed and get a much lower winning % but a higher return. In other words, higher return with less effort. Lower timeframe is the opposite, more work for less. I wish you success on your combine.
I agree with your friend's email: I've always found that increasing timeframes reduces risk.
I was a little surprised to see you trading 5-lots yesterday, and (like Pedro above, I think) had been wondering whether you might be better trading something more like 2-lots and then adding to winning positions. That can certainly reduce risk, too.
Good luck with this!
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