Winning tactics, part 1.

So I've had no questions or feedback or questions on the last release, so many things I could maybe gather from that, but I'll not speculate, maybe no one read it, or ye are all already smarter than me at this trading game, and keeping your cards close to your chest, but whatever, nothing to clarify as of yet and I can write what I like here as it's the last edition of 2023, YIPPEEEEEE, well I'd a good year anyhow and looking forward to 24, looks like we'll be hitting the ground running on account of last trading day of the year being such a good one here in this corner, but more on that maybe later.

But I've been thinking I'd maybe go into the odd tactic or 2, and why not start with this 1. Now seasoned traders will know this un, but for anyone getting started on this road to prosperity, here's one I use myself quite a lot, now it's an old, famous and well established tactic, and by using it myself today, I was able to make a nice wee profit, so figured I'd share it with seasons greetings and all best wishes for the future.

Ok so a critical skill you'll want to get the hang of is timing your entries and exits, or getting into and out of trades in other words. This skill is crucial, or you may be leaving a lot of cash on the table, or else just losing it with stop losses or whatever. There are various strategies and indicators you can use, and they mostly all work at times I'm sure, but it's still not written in stone with any of them. Any given indicator can throw you off and lead to a loss, sometimes repeatedly if you're using it wrong or at the wrong times. But I recon this works pretty much I'd say at least 85% of the time for me.

There's a huge lot of articles on this topic, but if you want to multiply your chances of success, what you really want to do is find the underlying trend. You see for any given instrument, on the various timeframes a trader might want to look at can seem to be trending up, or down on 1 timeframe, and completely the opposite on another timeframe. So finding the underlying timeframe, which is going to be on the longer of the times you should evaluate, before trying then to find the suitable signal on t
he shorter of the timeframes. But folk so often overlook this, They believe their entry point is good, get into a trade, or forget to get out of a trade at a good point just to have the market reverse against them where they'd have had a tidy win.
Here's what I was looking at earlier today, minus the circles.


So blue circle on the right is where we were today, nice looking upward trend on the 1 hour chart, and I'd 3 open on coffee. How high's it going you wonder, hopefully as high or higher as the red circle where it was 2 Tuesdays ago where I'd have been better advised to get out, and believe it or not, I'd been speaking to a friend of mine online earlier telling him maybe expect a drop. And there's actually loads of signals there to get out of the trades which I'd had on then also, but for some reason I didn't.
But it's always good going back over the charts afterwards to see what you missed so maybe you won't miss it the next time, cause this red circle would have made my quite a bit more than I made today. For instance where it reversed, it's right at the resistance line of the pivot point calculator, you can just make out the pale green of it. This would have been ideal place for a take profit, or there's the RSI indicator line also telling you it's overbought, so possible pause at least, if not reversal, but for some reason that I'd other things on my mind, distracted or whatever. But I was patient, and held on till today.
So here we are in the blue circle, nicely going up, will I hold, or sell. You can see the tall wick on the doji candle just before the drop, so that's a good sign of a reversal, however, in a trend you may often just get a pause or a retracement, before it continues on in the same direction. If you get out, and it continues, ya be wishing you'd stayed in it. So what I did was looked at the higher timeframes of 1 day, and 1 week before deciding.

 So daily chart here showing a very good doji signal again, tall upper wick so indicating the reversal again, but you can also see it did the same thing again yesterday, got a little higher then refusing to go any further, and again also being confirmed by the RSI indicator, but all these things disagreeing with the moving averages as they were on the hour timeframe, what about the weekly candle so?

 We'll have a quick look

Right, weekly also indicating down. so the way it works is like the bigger timeframe's the boss, what ever it's doing you'd be wise to pay attention, as all of the other lower timeframes are subservient to it. Now there will certainly be other conflicting trends and many other opportunities on the lower timeframes also, but you should always just be wary of what the underlying trend is also and don't lose sight of that. So what I did here was get out quick, (G,O,Q), closing my 3 long positions, and put on a short before it dropped any more. As you can see drop it did, and when it started to pause, it was clearly at a support zone, take profit. Sweet, a very nice 45.1% to add to my account at the end of the trading year thank you very much.
Another way of thinking about this multiple time frame trading which was put to me years ago, think of it as water, either the ocean, or lake or something. So the trend if there's one on the bigger time frame are proper waves, breakers or white caps or something, but the trends on the smaller timeframes are more like ripples on a smooth surface on a calm day, of course the breakers have more power.
So thing to do is find underlying trend on a bigger timeframe, then look at the smaller time frames, and then you can use the other indicators to choose the best entry/exit points. Give it a go and no doubt you'll see results.
So till next time, have a good one and Happy New Year! Here’s to feeling thankful for the year behind and enthusiastic for the year ahead.