Immy's Corner [The Setup The Hunt - T20's and more]

[immy]

Q. How to Trade the 4th Wave?
Ans: Don't.

[immy]

If you're display or check too many time frames, or have too many indicators attached
It may be an indication that:

You Are "Trying to Predict the Market's Next Move". "Wanting to know what is going to happen next before you can put a trade"

This will take you out of "The Now Moment". If You're right you'll be happy but if you're wrong you'll be unhappy and scared and the next trade will be hard.
After you get it wrong, the next time your pain avoidance mechanism may activate making you either take the flight or go catatonic or the subconscious mind will block or filter the information and you'll miss the correct setup.

e.g. We have a 3 down and we're going to get that 5 down. So let me put a trade. (Not a bad confidence boosting measure, but if you fail to "Identify the setup objectively" and made your entry without The Presence of the Setup. You have just lost your edge. if it does not work, you may lose your confidence. Next time you wont even have confidence in elliott wave count and you may left not only with nothing boost your confidence but you'll lose your confidence all together.

If You watch too many pairs or display too many time frames: This could be an indication that you're acting fro the fear of losing or missing out. You may be consciously or unconsciously scared of missing out. To get out of this take this example. E.g. You're trying to trade EU and EJ (of maybe even UJ) on m1. What you're doing is that you're trading two highly correlated pairs that could lead to over trading, risking double the amount when you see setups on both time frames, and losing your statistical edge if you pick and choose between two pairs.

Cheers

[PaulF]

My spread on EJ is 2.4. I assume there's no point playing M1 at that cost?

[immy]

My spread on EJ is 2.4. I assume there's no point playing M1 at that cost?

Paul! Long time not chat!

2.4 is rather much but tbh, these days, you'll be getting at least 20 pips on EJ so it will cover that. However if you trade M5, then 40 pippers are the norm.

cheers

[immy]

[youtube]jI7UZBNP8lI[/youtube]

[immy]

[youtube]uV_CGpMsEhY[/youtube]

[immy]

Lets Remind Ourselves. That we Trade THE Setup. We DO - NOT predict. We Stay in the NOW.
It is impossible to predict the future.
Anything can happen in the market
Every Moment in the market is unique.
Every Moment in the Past is Unique
Every Moment of the future is unique
The future and the past does not have any bearing on the Current Now Moment.
A setup you've just traded that caused you pain, because you were expecting it to move your way and it did not, has nothing to do with the setup you see right now in the now moment opportunity flow.
The Opportunity is Now-Here.

Displaying or checking several time frame is not for predicting levels or trends. Rather for trend (past information) confirmation. And probable target levels such as AIMS levels to the left fib levels etc. But we have to always keep in mind, that there is never 100% probability of something happening over something else. So it may bounce against TZ1 or Not. But there are higher chances that it may as compared to not. Roughly we can say 65% probability of hitting it. But then again, what you thought was a 5 could not be a five... so we keep in the now and only Expect Positive Outcomes. And the moment you have this thought, "why does the setup fail" "why has my trade lost money" "is it going to work this time". " I don't think its going to hit my sl or tp". the answer should be "as long as I traded the setup, I'm on the right track". I'll have to analyse at the end of 20 or 50 trades to establish how well I've performed. We cannot win them all. We may have even 10 rents in a row (very difficult for new traders to remain consistent after this) and still if we remain disciplined and consistent we will have a winning Account at the end of the day/week/month/year/life.

Consistency = Patience + Discipline
Patience =
1. Waiting for the setup to appear.
2. Waiting for the proper exit signal.
Discipline =
1. Objectively Identifying the Setup
2. Predefined the risk.
3. Acting on the setup without reservation or hesitation or procrastination.
4. following exit signals as and when they appear. (making the correct choice of exit signal for those who use more than 1 type of exit technique)
5. remain calm relaxed and neutral.

Lets not forget that during the beginning stages of trading all traders have to follow strict entry and exit rules. otherwise they can forget about becoming traders in the first place not even talk about becoming consistently successful traders of the master level where they start to trust themselves so well that they trade their belief system. Why? because they have become in tuen, in synch with the market and their belief system is in tune with the market so they can trade their belief system. new traders' are in the process of changing their belief systme to conform to hte market so they cannot trade their belief system correctly. So they have to follow the rules and that will ingrain the correct belief system and help become in tune with the market.

For Beginners, rules must be very mechanical. For mechanical type of trading, specially in the beginning its best to have a very clear objective exit technique. e.g. SL 10 TP 20. or exit on Black Dot and then stick to it no matter what. If you allow yourself to chose between 2-3 different exit techniques, you've suddenly jumped in the arena of the Master Traders. Advanced and experienced traders who've known the market for a while and now play with it on a daily basis. They know the idiosyncrasies of the path. They can do better subjective analysis but don't forget at one time they were also only objective trader)

Sunday Sermon Ends here

Have great rest of the weekend... I can't wait for the markets to open!

[PaulF]

Paul! Long time not chat!

2.4 is rather much but tbh, these days, you'll be getting at least 20 pips on EJ so it will cover that. However if you trade M5, then 40 pippers are the norm.

cheers

Hi - I haven't given up yet

I've found FXOpen, which offers smaller spreads than I'm used to... except they're variable spreads! I guess the only way to sensible handle long trades is to see what the largest "normal" spread is... At the moment EJ is flicking between 0-12 points, typically around 9-10. I guess the only way to handle this is to assume it's be 10 points. Or do you suggest avoiding variable spreads altogether?

[immy]

Should be fine Paul! ECN spreads are almost always variable.

[immy]

Nothing this morning so far. Missed the breakout long on EJ, did not look like anything to me. it sure looks like something now! oh well NEXT