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So here was the trades I took yesterday, after I took profit with first trade above a bull doji + bull trend bar, I took short under a bear doji + bear trend bar, expecting that bear trend might resume, but got immediately stopped out by a big bull trend bar, then thought it was probably a good buy setup and bought at the top of the big bull trend bar. But after that I was disappointed by the bear doji + bear trend bar and exit.
My rules tells me to exit once I see two consecutive reversal doji + reversal trend bar in a trend, in case I can avoid big loss and make a big profit in a break out or a tight channel. But once I meet this type of deep PB channel, I would be losing at least one or two trades, what can I do with this situation?
My rules tells me to exit once I see two consecutive reversal doji + reversal trend bar in a trend, in case I can avoid big loss and make a big profit in a break out or a tight channel.
Its usually better to rely on your stop loss, instead of exiting after 2 reversal doji + reversal trend bar.
the reversal trade did work here but only after a pullback, bears tried to continue the push down but failed and it went up.
And some traders after taking a loss would rather wait a 2-3 bars before entering another trade. Plus its always harder for traders to reverse their bias immediately.
And there is also context dependent reasons to not take the losing short trade you took. If the bear leg on the left side of the screen in the 3rd push in an existing bear trend. The odds of a 10 bar, 2 legged reversal increases in that case 1st entry sell would be part of the 2 leg correction and would be a bad trade to take.
The losing buy trade is part or the 2 legged correction but you exited early exactly at the trend line that was the parallel of the trend channel line in the bull pullback.
Hope this helps.
You answer really opens my mind. Especially the TBTL part and the part that I exited too early.
So I am considering to hold my position on break out until I see reversal doji + reversal trend bar cause it usually breaks the trend line and seems relatively strong for at least minor reversal. And exit until I see clear break out of the trend line and decent follow though in channel or small PB trend.
By the way I don't simply rely on my stop because I enter in a trend usually in different part and it's hard too measure how much profit could I possibly make, sometimes I see measure move and just think that both risk and reward ratio and probability are seems to be negative, especially I always try to take profit equal two times risk.
I would be really appreciate it if you have any advice for my consideration, looking forward to you reply, thank you.
this trade management rule you made up that you are following will play out differently depending on context and market cycle etc. I suggest you throw any self-made rules uninspired from the course, out the window. they will only be a hindrance.
