Re stops:
I initially started using a 8 pip stop but that didn't seem to work. Now what I do is once I have determined the trend I look to find a good location for a stop eg resistance, pivots. I then watch the price action and when I see a good combination of stop placement and HH/LL pattern I will enter a trade.
When I have a good entry and stop the trade usually goes well, I have found that when the stop get hit
Re Targets
I initially started using a 6 pip target, but as I didn't think this would give enough margin to be profitable, I started looking at scaling out and found that usually the trade ran a bit further, so I now let them run watching the HH/LL waiting for either a congestion or reversal pattern before exiting. I tried using the HMA for an exit signal but that was too late as well. I've picked more than a few 30 pip runs.
Re indicators
I've tried indicators and they only seem to work after the fact, ie a few bars after the trend has changed the indicator will give you the info and it is usually too late. I actually do better just watching the HH/LL and switching between 3 and 5 minute bars.
Re congestion
I've been caught out badly a few times trading when the market exhibits congestion, or is moving within a narrow range. I didn't actually realise this until I read your post where you spoke about the difficulty in trading when the market is choppy. Nearly all my losses have occurred under these conditions. I think this is a key idea ie avoid these market conditions.
Profitability
My profit margin is 37% ie [pips won-pips lost]/[total pips won and lost], which [may it continue, I may have just been lucky I will keep you posted] gives a little room for some bad days. If you are following a strict 8pip stop and 6 pip target you need a 57% hit rate to break even and a 75% success rate to get a 38% margin.
Summary
So basically I just watch the screen and look for HH/LL patterns. If I can't see any set ups I'll go away and come back again later, also I have found its a good idea to have a little break between trades, winning or losing.
I initially started using a 8 pip stop but that didn't seem to work. Now what I do is once I have determined the trend I look to find a good location for a stop eg resistance, pivots. I then watch the price action and when I see a good combination of stop placement and HH/LL pattern I will enter a trade.
When I have a good entry and stop the trade usually goes well, I have found that when the stop get hit
Re Targets
I initially started using a 6 pip target, but as I didn't think this would give enough margin to be profitable, I started looking at scaling out and found that usually the trade ran a bit further, so I now let them run watching the HH/LL waiting for either a congestion or reversal pattern before exiting. I tried using the HMA for an exit signal but that was too late as well. I've picked more than a few 30 pip runs.
Re indicators
I've tried indicators and they only seem to work after the fact, ie a few bars after the trend has changed the indicator will give you the info and it is usually too late. I actually do better just watching the HH/LL and switching between 3 and 5 minute bars.
Re congestion
I've been caught out badly a few times trading when the market exhibits congestion, or is moving within a narrow range. I didn't actually realise this until I read your post where you spoke about the difficulty in trading when the market is choppy. Nearly all my losses have occurred under these conditions. I think this is a key idea ie avoid these market conditions.
Profitability
My profit margin is 37% ie [pips won-pips lost]/[total pips won and lost], which [may it continue, I may have just been lucky I will keep you posted] gives a little room for some bad days. If you are following a strict 8pip stop and 6 pip target you need a 57% hit rate to break even and a 75% success rate to get a 38% margin.
Summary
So basically I just watch the screen and look for HH/LL patterns. If I can't see any set ups I'll go away and come back again later, also I have found its a good idea to have a little break between trades, winning or losing.
