Zak! Has more than 20 Questions

[Dave]

You’re in luck Zac! I’m in an airport with nothing to do for a couple hours, so here we go….

do you personally trail the aims levels on the 5 min or the 1 min TF?

My personal approach to trade management has changed significantly in recent months. I now employ the close 50% at TP = SL on every time frame that I trade (although to be honest 99.9% of my trading is still M5/M1) so that I achieve the “free trade stress free state of mind”. So my trade management is as follows:
- If trade is open and position has not yet hit the TP close 50% then I trail M1 AIMS levels. So I may have a loss = initial SL, but more often than not I at least minimise the loss with a trail.
- Once TP is hit if I have been trailing M1 levels then I reset my SL to it’s original entry position and then trail M5 AIMS levels, trying to give the trade every chance to run.
- If I add to my position with another entry I may remove the close 50% at TP and instead close the add on at = SL of initial position. This allows the same free trade but now with full position size and not 50%

does the alligator have to sleep before setup 2?- since that would give the trade more momentum.

Setup 2 by definition has an open alligator. The very best setup 2 entries are the very next AIMS level break after the signal. E.g. if you have a candle that pierces the AIMS level and then a new AIMS level forms two or three candle later then this is the best Setup 2. A setup 2 is not just any break of an AIMS level. As in the below image, the signal candle with the green dot has broken the AIMS level so is not a signal in itself, but the very next AIMS level to form is also outside the M5 AIMS high – perfect!

Screen Shot 2013-07-04 at 11.56.36 AM.jpg

what does fresh aims level after dot mean in the flow chart, and what does the dot represent again?

See above pic, that is a fresh AIMS level after a dot. i.e. since the green/pink dot has appeared showing the signal candle has already broken out of it’s AIMS box, has another AIMS level formed? The dot is simply saying that price has moved across the green line of the alligator. i.e. the previous candle closed on the opposite side of the green line to the current candle.

Do you have a take profit or do you just like to trail till you get stopped out?

A matter of personal preference. A TP at a notable level of support or resistance, such as a daily AIMS level, is not a bad idea, but if price slices through and moves 100 pips you’ll be cursing your TP. In the words of Immy, “Let chaos decide”, trail till you get stopped and give every entry the chance to be a home run.

what is the inital disaster stop loss that's in grant's trade management rules?

I think he uses 10 or 15 pips disaster stop. So when he enters any trade the worst result he can possibly have is a stop loss close of 10 or 15 pips.

Is there anything you do differently to grant?

Yes. Lots. But I firmly believe the essentials of ‘The Setup’ are the same and are common to everyone here. Regardless of the nuances of each person’s individual approach, the fundamentals remain the same. Just tattoo The Setup on your brain, put pictures of the perfect trades on your bathroom mirror, learn that exactly before changing anything.

You've said before that you trade only once if you hit your 1-2% target, but if you don't how much do you keep trading that day before you stop?

I think this is probably a question for Immy. But this is a matter of avoiding overtrading. If you’re trading short time frames you need a lot of concentration so I recommend to trade the first couple hours of each major market opening and if it doesn’t happen for you just turn off and come back for the next one.

After a bad london do you come back for the new york open? -or if the session is bad, is the day likely to be bad too?

Markets react to news and new information, so they can change at any minute of any day. They are of course more likely to move and change when the major markets are open, but there is no way of saying when a ‘bad’ market will all of a sudden become ‘good’. You also need to define for yourself what is a ‘bad’ market. For AIMS traders is probably a sideways range with tiny little false breakouts, and if you see that that is happening just wait for price to break it’s range and then look for fresh setups, don’t get caught in the whipsaw, and when it breaks (which it always does) the alligator will wake up and it’ll really be hungry for pips!

Is it a bad idea to trade if the m5 purple is not correct?

First you need to know what the M5 purple is. It’s the 5 x higher time frame red line, so the M25 red line. There is nothing wrong with trading against a purple line, but you need to remember that we want to always trade away from the alligator’s mouth. So what do you think is a higher probability entry? A trade that is away from the mouth on the M1 and on the M5 but towards on the M25? Or a trade that is away on the M1 and away on the M5 and away on the M25?

is a fresh cross of the 1 min needed for setup 2?

It is preferred. Remember that the fresh cross is just another way of saying that you’re entering at the start of a wave. So look at what the eWave is telling you, is it the start of a fresh wave that has recently turned to now be moving in your direction?

is a fresh cross on the 5 min good for probability?

Definitely! A fresh cross and a freshly opening mouth!

Do you only trade double aims?

No. But a break of a higher time frame AIMS level with a lower time frame size stop loss is a very good approach. The higher the time frame of the AIMS level the stronger it will be as support or resistance, so higher probability trades are of course breaks of higher time frame levels. What is more important is the distance to the higher time frame level. If you’re entering at e.g. 1.3000 from the M1 charts and there’s a M5 level at 1.3002 and an M15 at 1.3002 and a H1 at 1.3007 and a D1 at 1.3012 then you have a lot of resistance to break through to find profit. So in this instance a buy outside even the D1 level might be the way to go, especially if you can have a lower time frame size stop loss.

Do you use elliot waves to exit?

No, but I do keep an eye on divergence and a wave count, particularly to see where we are in the greater scheme of things. If we see complete wave counts across the board and divergence and eWave with a change of momentum I may choose to bring my SL in closer than the standard trailing method, but I wouldn’t just hit close based on the Elliott wave. If you just stick with The Setup for entries and trailing AIMS levels or dots for close and you can’t go far wrong.

And finally, metatrader crashes sometimes and asks for a password sometimes after downloading your templates, do you know how to fix this? Another thing is that the templates also glitch (with dots all of the screen and no aims boxes) so any ideas on how to fix this too?

I know some of the earlier indicators had built in passwords with expiries but that’s all in the past now. The best thing to do is to start with a blank chart, load your indicators individually and save your own templates. It doesn’t take long and if it teaches you about how to use MT4 then that’s a good thing. You can’t make money if you don’t know how to use your most important tool!

As I’ve mentioned before, decide on a method and stick to it. No method will show it’s true ability to be profitable or not within a couple days, it takes a big data set over a long time to prove whether you have an edge. There are plenty of effective methods of trade management presented here so the research has been done for you, but don’t go chopping and changing! If it’s Grant’s M1 management or Immy’s seed and fruit or classic dots or whatever, just give one method a go and learn it backwards. And, as always, good luck!

Dave

[immy]

You’re in luck Zac! I’m in an airport with nothing to do for a couple hours, so here we go….

do you personally trail the aims levels on the 5 min or the 1 min TF?

My personal approach to trade management has changed significantly in recent months. I now employ the close 50% at TP = SL on every time frame that I trade (although to be honest 99.9% of my trading is still M5/M1) so that I achieve the “free trade stress free state of mind”. So my trade management is as follows:
- If trade is open and position has not yet hit the TP close 50% then I trail M1 AIMS levels. So I may have a loss = initial SL, but more often than not I at least minimise the loss with a trail.
- Once TP is hit if I have been trailing M1 levels then I reset my SL to it’s original entry position and then trail M5 AIMS levels, trying to give the trade every chance to run.
- If I add to my position with another entry I may remove the close 50% at TP and instead close the add on at = SL of initial position. This allows the same free trade but now with full position size and not 50%

does the alligator have to sleep before setup 2?- since that would give the trade more momentum.

Setup 2 by definition has an open alligator. The very best setup 2 entries are the very next AIMS level break after the signal. E.g. if you have a candle that pierces the AIMS level and then a new AIMS level forms two or three candle later then this is the best Setup 2. A setup 2 is not just any break of an AIMS level. As in the below image, the signal candle with the green dot has broken the AIMS level so is not a signal in itself, but the very next AIMS level to form is also outside the M5 AIMS high – perfect!

Screen Shot 2013-07-04 at 11.56.36 AM.jpg

what does fresh aims level after dot mean in the flow chart, and what does the dot represent again?

See above pic, that is a fresh AIMS level after a dot. i.e. since the green/pink dot has appeared showing the signal candle has already broken out of it’s AIMS box, has another AIMS level formed? The dot is simply saying that price has moved across the green line of the alligator. i.e. the previous candle closed on the opposite side of the green line to the current candle.

Do you have a take profit or do you just like to trail till you get stopped out?

A matter of personal preference. A TP at a notable level of support or resistance, such as a daily AIMS level, is not a bad idea, but if price slices through and moves 100 pips you’ll be cursing your TP. In the words of Immy, “Let chaos decide”, trail till you get stopped and give every entry the chance to be a home run.

what is the inital disaster stop loss that's in grant's trade management rules?

I think he uses 10 or 15 pips disaster stop. So when he enters any trade the worst result he can possibly have is a stop loss close of 10 or 15 pips.

Is there anything you do differently to grant?

Yes. Lots. But I firmly believe the essentials of ‘The Setup’ are the same and are common to everyone here. Regardless of the nuances of each person’s individual approach, the fundamentals remain the same. Just tattoo The Setup on your brain, put pictures of the perfect trades on your bathroom mirror, learn that exactly before changing anything.

You've said before that you trade only once if you hit your 1-2% target, but if you don't how much do you keep trading that day before you stop?

I think this is probably a question for Immy. But this is a matter of avoiding overtrading. If you’re trading short time frames you need a lot of concentration so I recommend to trade the first couple hours of each major market opening and if it doesn’t happen for you just turn off and come back for the next one.

After a bad london do you come back for the new york open? -or if the session is bad, is the day likely to be bad too?

Markets react to news and new information, so they can change at any minute of any day. They are of course more likely to move and change when the major markets are open, but there is no way of saying when a ‘bad’ market will all of a sudden become ‘good’. You also need to define for yourself what is a ‘bad’ market. For AIMS traders is probably a sideways range with tiny little false breakouts, and if you see that that is happening just wait for price to break it’s range and then look for fresh setups, don’t get caught in the whipsaw, and when it breaks (which it always does) the alligator will wake up and it’ll really be hungry for pips!

Is it a bad idea to trade if the m5 purple is not correct?

First you need to know what the M5 purple is. It’s the 5 x higher time frame red line, so the M25 red line. There is nothing wrong with trading against a purple line, but you need to remember that we want to always trade away from the alligator’s mouth. So what do you think is a higher probability entry? A trade that is away from the mouth on the M1 and on the M5 but towards on the M25? Or a trade that is away on the M1 and away on the M5 and away on the M25?

is a fresh cross of the 1 min needed for setup 2?

It is preferred. Remember that the fresh cross is just another way of saying that you’re entering at the start of a wave. So look at what the eWave is telling you, is it the start of a fresh wave that has recently turned to now be moving in your direction?

is a fresh cross on the 5 min good for probability?

Definitely! A fresh cross and a freshly opening mouth!

Do you only trade double aims?

No. But a break of a higher time frame AIMS level with a lower time frame size stop loss is a very good approach. The higher the time frame of the AIMS level the stronger it will be as support or resistance, so higher probability trades are of course breaks of higher time frame levels. What is more important is the distance to the higher time frame level. If you’re entering at e.g. 1.3000 from the M1 charts and there’s a M5 level at 1.3002 and an M15 at 1.3002 and a H1 at 1.3007 and a D1 at 1.3012 then you have a lot of resistance to break through to find profit. So in this instance a buy outside even the D1 level might be the way to go, especially if you can have a lower time frame size stop loss.

Do you use elliot waves to exit?

No, but I do keep an eye on divergence and a wave count, particularly to see where we are in the greater scheme of things. If we see complete wave counts across the board and divergence and eWave with a change of momentum I may choose to bring my SL in closer than the standard trailing method, but I wouldn’t just hit close based on the Elliott wave. If you just stick with The Setup for entries and trailing AIMS levels or dots for close and you can’t go far wrong.

And finally, metatrader crashes sometimes and asks for a password sometimes after downloading your templates, do you know how to fix this? Another thing is that the templates also glitch (with dots all of the screen and no aims boxes) so any ideas on how to fix this too?

I know some of the earlier indicators had built in passwords with expiries but that’s all in the past now. The best thing to do is to start with a blank chart, load your indicators individually and save your own templates. It doesn’t take long and if it teaches you about how to use MT4 then that’s a good thing. You can’t make money if you don’t know how to use your most important tool!

As I’ve mentioned before, decide on a method and stick to it. No method will show it’s true ability to be profitable or not within a couple days, it takes a big data set over a long time to prove whether you have an edge. There are plenty of effective methods of trade management presented here so the research has been done for you, but don’t go chopping and changing! If it’s Grant’s M1 management or Immy’s seed and fruit or classic dots or whatever, just give one method a go and learn it backwards. And, as always, good luck!

Dave

The Best Post Reply EVER!

Thank you Dave. I cannot add anything but this... 100% agreed. \m/ (wd) (hug)