Hello ForexMentor,
Thank you for the kind words and for helping me with the questions I had. I have read the reply of yours but will do multiple times to give it time to sink in and to see what I need to ‘fix’ in my thinking regarding trading.
Its nice to hear that my ‘only problem’ was the wrong quadrant of the order open book!
I will continue to study your site and I’m confident more people are understanding what your explaining.
Thanks for offering more help when I have questions, I will try to collect several if I have any and sent them ok?
One thing I find difficult is, or perhaps I need to change my thinking yet regarding this, how to spot ‘profit taking’ by the banks and when its just a reversal…
This tends to scare me and take profits to early.
By the way, UJ had an engulfing pattern on Daily last Monday (?) and I opened a 1st order, then the following day (im trading mostly the London session) I managed to ‘stack’ two more times on it off of H1 pins… Though it was on a small live practicing account , it was awesome to see those trades workout… I closed all three of them with over 120 pips which for me is huge!
Thanks again for taking your time to explain things on your site and for gaining us a unique insight in your analysis.
By the way, I’m looking forward to your other oderbook strategies!
Best Regards,
Phil Meijer
Response:
Hey Phil,
No problem at all. I’m always glad to help with some advice.
So, about your question on profit taking:
If the current trend on the time frame you’re trading has been in place for a while – in other words, the market has been consistently moving up or down with multiple instances of pullbacks and consolidations – then, it might be a good idea to prepare for a potential reversal. I can’t pinpoint the exact moment the market will reverse, but I can tell you that banks often cause a reversal when a sizable number of retail traders are on the wrong side of the market. This typically happens when the market has been trending in one direction for an extended period of time.
Here’s a safety precaution I use to manage my trades: I wait for a break of a high or low.
If I place a buy trade and the market moves up, I’ll keep the trade open as long as the market keeps making new highs. But as soon as a new low is made, I’ll take my profits. Most of the time, I’ll try to execute multiple trades – similar to what you did with the UJ trade. If I have more than one trade open, it gives me more flexibility in managing them. For example, I can decide to leave one trade open and close the rest if I anticipate a market reversal. I can also employ a variety of other strategies, depending on how many trades I’ve managed to execute and the prices at which they’re positioned.
Your UJ trade sounds well-executed. I particularly appreciate how you placed one trade and then proceeded to execute more. This is a strategy that many traders neglect. They often get so fixated on the screen, watching how the price action unfolds for their initial trade, that they overlook other opportunities. This approach can ease the pressure and expectation on whether their first trade will be a win or a loss.
Apologies if my answers to your profit-taking/reversal question seem a bit vague. It’s challenging to fully address this in a single email, as it requires a deep dive into several different concepts. I’ll aim to write a more detailed post on this topic in the future, which should hopefully clarify things.
Thanks again for your email, Phil. If you have any other questions, don’t hesitate to send them over. I’ll do my best to give you my perspective.
Stay awesome,
Brian
Hey Phil,
Super stoked I could help you out!
So, your question about profit taking, right? Well, if you’ve noticed a trend on your trading time-frame that’s been sticking around for a while, and the market’s been climbing or falling with several pullbacks and consolidations during that time, it might be a good cue to brace yourself for a reversal. I can’t predict exactly when the market’s going to flip, but I do know that the banks usually stir a reversal when enough retail traders are betting on the wrong side. This usually happens when the market’s been cruising in one direction for a long stretch.
One tactic I’ve found handy to hang onto trades is waiting for a break of a high or low. So, if I go for a buy trade and the market picks up, I’ll keep the trade going as long as the market keeps setting new highs. But the moment a new low pops up, I’ll cash in. Most of the time, I aim for multiple trades similar to your UJ trade. If I’ve got more than one trade going, I’ve got more wiggle room. I can decide to keep one trade open and shut the others if I sense a market flip, or use a bunch of other strategies depending on how many trades I’ve gotten in and their prices.
Your UJ trade sounds pretty savvy! I appreciate how you set up one trade and then kept going with others. That’s a move a lot of traders don’t make. Most folks place a trade and then get stuck staring at the screen, obsessing over whether the price action’s going their way. But by doing that, they miss out on chances to get more trades in, which could ease the pressure and anxiety they’ve loaded onto that first trade.
Apologies if my answers to the profit taking/reversal question are a bit vague. It’s a toughie to tackle in a single email ’cause it needs a deep dive into a bunch of different concepts. I’ll see if I can whip up a post on it in the future to help clarify things.
Thanks for reaching out, Phil! If you’ve got any more questions, don’t hesitate to drop me a line and I’ll give you my two cents.
Catch you later!
