METHOD 2 - Mastering The Fakeout Stop Hunt Candle
METHOD 2 - Mastering The Fakeout Stop Hunt Candle
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- - Mastering the Fakeout / Stop Hunt Candle (https://www.forexfactory.com/showthread.php?t=888931)
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The Routine
No Routine, No Payday!
1. Make sure you follow the trend when setups are found - if your objective is to Buy the pair, make sure you are
looking in an Uptrend - only do counter trend setups after you perfect the with the trend setups. So, draw in
your diagonal trendlines!
2. If a counter trend setup is found make sure it's coming off or near the diagonal trendline,
or recent supply/demand
or support/resistance.
3. Calculate the candle bar's length from its high to its low.
Time frames higher than that 300+ would be within the attackable zone.
You'll need to experiment or back test what the largest drawdown is when setups have been found, find
the mean average and that will be your lowest number to place your SL at. Add 50 percent to that to find
your Max SL.
Then adjust your lot size to compensate for a larger SL.
Don't worry about reward to risk here. It's about winning consistently!
One of two things will happen:
1. Your trade will instantly go into profit or will fluctuate in and out of profit within that bar, now when I talk
about this, I'm only going to be referring to the 4H time frame in this entire document. And the trade can be
open for 2 days or longer, so be prepared. Sometimes the TP is hit within the 4H bar.
2. Your trade will go against you for some time, instantly or some time thereafter. If you calculate your SL
correctly you should be well within any attackable area to stop hunt you.
N.B:
If do this correctly off of the right areas when setups are found, or counter setups, the drawdown will be
respectfully low and ideally within your allotted risk & money management (example shown below).
If you don't want to lose more than 10 percent of your balance. Calculate for it.
Divide the total Stop Loss Value into your total risk. Then divide that by 10 to get lot size.
If the SL is not large enough, add more, then recalculate for the correct lot size to use, it'll be smaller this time.
Then sit back and watch what happens.
If you're going to open a 2nd trade on a different pair, you'll have to allot for your floating equity, and not your
balance. You only work from your balance if you have no other trades open.
The Rules
Remember these and you'll be fine!
BUY SETUPS:
Both bars ideally should have a healthy body in relation to its overall size in length from high to low.
Wicks/Shadows ideally should also have noticeable length, i.e., not be tiny.
SELL SETUPS:
Should come off or near your diagonal trendlines, Resistance, or Supply.
We're looking for a 2-bar formation in the ideal location
Both bars ideally should have a healthy body in relation to its overall size in length from high to low.
Wicks/Shadows ideally should also have noticeable length. i.e., not be tiny.
The Setup - With the Trend Setups
please take note that this is not the best setup because its previous bar is also a Bull bar, the best setup
is when the previous bar is the opposite type of the setup bar.
a perfect setup should have its previous bar representing itself as a Bear Bar, then the setup bar being a
Bull bar and preparing for a Long Trade.
5. We measure the PIP length of the setup bar from its low to high. In this case we calculated 42 PIPS, this then
becomes our TP (Take Profit) Level.
6. We enter manually at the close of the setup bar / open of the next. Or we set a pending order there.
7. Enter our TP Level
8. SL can be around 1:1 of the TP level, or 150-200 PIPS as an arbitrary number. Experiment with it.
Trade 1, Sell/Short:
Trade 2, Sell/Short:
1. Resistance is found.
2. Our setup bar breaks resistances but closes lower and makes a lower low than the previous bar.
3. Our setup bar conforms to having its high be higher than the previous bar's high.
4. Not a perfect setup as previous bar is of the same type.
5. we calculate its length to get PIP total to act as TP and look for confluences.
6. There's definite Demand zones lower, and we are indeed coming off a major push to the high all a while our
setup bar totally engulfs everything on the left. There's our sentiment to warrant a sell trade on the stop hunt
bar.
7. TP hit!
Although we could use other technicals, however you don't really. Follow the setup rules. Apply. Set 'n' Forget.
Now let's show two more examples, this time they'll resemble the perfect with the trend setups and counter trend
setups.
Trade 1, Sell:
1. Our setup bar created the reference point to place our trendline on, giving us a downward trendline, depicting
price is making a move lower
2. Our setup bar engulfs its previous bar
3. our setup bar is indeed of the opposite type, and its high is higher than the previous bar
4. We Sell immediately on the close of the setup bar and calculate its length
5. 90.7 pips was calculated and acts as our TP Level.
6. TP Hit!
Trade 2, Buy:
1. Our setup bar, as before in our Sell opportunity forms a low to allow a reference point for our upward trendline
2. Our setup bar engulfs the previous bar and various others to its left
3. Our setup bar's low is lower than the previous bar, warranting a Buy
4. we calculate the PIP length of our setup bar to act as our TP
5. TP of 82.9 PIPS was calculated
6. TP Hit!
That's about it Ladies & Gents. I'll edit the post if I find any to add, or correct.
P.S.
Use a script that hides your TP and SL
Thank You.
Thank you
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Quoting CroFX
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Thank you Sir, now go to bed! P.S. Use a script that hides your TP and SL I meant to as about this.....where does one go to find
such a beast
Put it into experts for hid stop-loss to work, it does not work when shorting, you will need to adjust your values in property's first,
I would suggest you play with this in a demo account until you are happy with it
Hidden SL.ex4
http://www.indicatorforex.com/conten...e-stop-hunting
Really appreciate the time and effort you have put in to help us all - Trading so often is soul destroying but you are giving us all hope.
Thank you!!!