Here was a story told to me by another trader about how he lost $ 750,000 in 1 day. He had open positions on Forex and his wife was sick and he had to take her to a hospital. He normally does not use stops but his broker would close his positions on a margin call.
The problem was as the positions were going against him, his broker closed them 1 at a time instead of all at once so he kept losing money until he got back and saw he lost around $ 750,000 that day.
Maybe I do it different, but when family member or good friend needs me now, I close out all day trading positions, I have zero to think about and can concentrate on other pressing needs. Platforms have a zero out button, one second.
That is not a trader. Vacation now and then, of course. But if the market is open traders trade. They don't do Zoo trips, they don't do lunch, etc.
That said I don't trade pullbacks per se, not what I am looking for.
Have had 8 surgeries in 8.5 years, they won't do them on weekends, I go to zoo once a month, they have Wifi-get to watch monkey's pick their-reminds me of people. You ever hear about automation?
First of all I trade retests of breakouts, support resistance and trendlines.
I had a theory and tested it, it is something like this.
"I want a strong breakout and a weak pullback then I will take the trade."
But does it actually matter? Because I find that a strong breakout and a strong pullback work as well.
A weak breakout and strong pullback not so..
http://prntscr.com/c7b0ev
Here is an example, the pullback is slightly stronger than the initial breakout.
Any tips/clues on how to figure out which to take and which not to?
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It depends on how you define chart patterns and how you define Breakouts, it is better to think in terms of how to define for a Programmer.
1. Define Trend
2. Define how to draw trendline, this is actually harder than you think, took me many years to get a good definition of what pivots I can start a trendline and how to determine how far I can draw trendline, too steep % goes down as being successful and too shallow often bounces off.
3. Define break-what type of break-how far-how little-where is the open or close.
4. Define what next bar should do, with trend, no trend, against trend.
5. Define how many bars it should just hang there and what to do.
6. *Define breakouts for other reasons, like take out HOD/LOD
7. Define too strong/too weak retracement.
8. Define volume when price comes to trendline, if increasing, chances are they it will continue and if volume is reducing it may bounce.
It like 50/50 of going through little bit then stall then change of trend or continue of old trend. I love the old signal "Let's screw Weak Traders Signal" Most enter 2 ticks beyond trendline then market goes another 2-3 ticks of slippage, but Pros not selling so they buying and bring price back to same trendline 1-2 ticks higher then trendline to trip weak hand stops and reverse in so many bars back down, by time Pros have all they want, weak hands jump on it and away we go. I will miss out on the trades that keep going but will get onboard with higher low breakout later or not, do I care if I miss a huge move-LOL nope, there be hundreds of thousands more.
Just remember when drawing trendlines, there are others who are jumping on board to go other direction, so it could be the way you drawing trendlines would better for going as bounce trade other way.
