The biggest advantage of writing a journal is exactly this. You get the chance to reflect over things. You update it during times of relaxation. Your mind is relaxed and you can see the chart "objectively" a state of mind and perception process that you want to carry on and would love to posses during trading hours. An objective care free state of mind where nothing is filtered.
"The transition to M5 will not be easy", I kept warning you but everyone wanted it
Well, one factor everyone would know already is that, it does requires slightly bigger stop loss per trade as compared to M5, but obviously with bigger potential gains. The gains are actually far bigger than m1 not only in pip wise but risk reward ratio wise as well and let me explain a bit why. M1 is too fast and the waves do not last very long "time wise" and pip wise and hence the quick entry and exit which is good for part timers. However, you'd notice that m5 is more in tune with H1. And H1's usually have wave 3's that last 2-3 days. And when its a good up day on h1, m5 usually stays going and going in that direction all day. It is when h1 is doing a 4th wave when M5 does the 100 pip up and down zig zags. The reason that m5 keeps going in one direction for a few hours create "more opportunities" for us to make our winners even bigger
e.g. just imagine if you had taken the first breakout and added on 4 more times. As you may remember from the book this is our ultimate goal. WE want to excel to the level when we are able to add on upto 4 times after initial fruit entry. Now, compare that to m1, we will NEVER add on more than once or lets say 2 times (rarely happens for me) but on m5 we can go the full monty.
WE can aim to
1. add on 4 times plus the initial fruit and
2. once we have stayed consistently successful for 6 months, we can start using Reverse Pyramiding where we will then quadruple our results.
But whether its is good for the 2hr formula? I don't know. And this is a big question. As we discussed many a times in our skype conversations I do believe that M5 trades, the big ones, often require you to manage the trade all day or a few hrs. Today is the proof of that.
So we have two options/solutions for this question
1. Exit the trade where ever it is at end of the 2hr session. or
2. Automate trade management.
My 0.000002 paisa's worth!
