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,
My Answer:
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:
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 appreciate how you placed one trade and then proceeded to execute more. Many traders neglect this. They often get so fixated on the screen, watching how the price action unfolds for their initial trade, that they overlook other opportunities. Entering more trades 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.
Thanks again for your email,