# Incorrect usage of entry chart and anchor chart in forex?



## StockyGuy (19 July 2019)

So just recently returning after long absence to forex.

While I have been profitable in all three trades, I'm disappointed at not cutting losses early on one trade.  I let it come back round my way - so it ended as small profit.

I'm not using much leverage so could handle price going against me to significant extent but still...

Anyway, I knew I was pretty safe as I am almost religious in taking the trend on the hourly ONLY when it matches a trend going in same direction (up or down) as daily.  Any forexers would likely know longer timeframe is called the anchor chart, shorter is the entry chart.

Basically I'm trying to extract value between high impact news events - getting out before these events take place.  Hold time should only be a few hours.  So if I'm being consistent I should not just say, "oh it'll come back round my way because overall trend agrees with my position" - I should close the position as soon as my prediction/thesis for the direction over following few hours is disproven.  But, I'm sure we all know, realising a loss is never pleasant.

The problem is I KNOW that normally such trades will turn my way a day or two later, until that say one in 10 where I get slaughtered, due to longer term trend changing, which obviously happens from time to time.

Anyone else hope losing trade on shorter timeframe will come back round your way due to longer timeframe trend in that scenario?  Any tips on ruthlessly closing those trades as soon as hourly chart clearly going against my position?


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## peter2 (19 July 2019)

I commend your use of the two time frame charts. I do the same myself. I'll offer a few suggestions for you to consider. 
1. Do you consider the age of the trend in the anchor chart? 
When the trend is new I wait for that first pull-back and jump on the setup in the entry chart. These provide the biggest R:R if I can hang on to them. When the anchor trend is getting "old" ie nearing strong resistance/support (for shorts) or when the trend has gone parabolic and is outside the Boll bands, I'm reluctant to start a trade and if I do take quick profits.

2. Understand the distribution of results that your trading strategy provides. Sometimes you just need a few attempts to get into the trend. 

3. Understand the psychology that's required to stick to your strategy. 

Make sure the system that you're using fits your risk tolerance. This is a combination of points 2 and 3. Sometimes you have to make several attempts in your entry time frame to get into the anchor trend. We must be comfortable with this. I'll exit quickly take the loss and wait for another setup in the entry chart. I don't hold on to the loss and hope that the anchor trend will save me. The anchor trend may be changing direction and this will be seen in the entry chart first. Take the loss when you should every time and be prepared to have another go. 

4. Time of day. Do you consider the time of day important for your entries? I don't trade break-outs in the Aust session but love them when they happen in the UK and US sessions. Big volume trades in these later sessions. Price is usually in a corrective pattern during the Aust session.


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## StockyGuy (19 July 2019)

Thanks, peter2.

With regard to age of trend I go through ALL pairs to select strongest option, chart-wise.  So yes age of trend will favour that one pair over another (but RSI overbought/oversold obviously will make something less attractive for following a trend).  I have couple indicators I favour, part of ichimoku, and I keep an eye out of for chart patterns, S&Rs.  

I may start opening two or three positions at a time.  I think I will be less emotional where I've got more than one on the go.  I need to look into the correlations topic a bit more, though.  I don't want to be mimicking poor results on two trades because of strong correlation.

I have traded exotics when everything seems to converge okay.  Some steer clear of exotic pairs but you can get really clear signs in them.

I'm still studying and trying to add nuance to my approach (well I suppose this never entirely ends because the market itself changes).  For that reason I've been entering only after NY session opens and after any high impact news takes place (so I'm getting that NY and London session combination volume) - not intending to trade Monday and Friday sessions either, for time being.


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