GBPUSD MT3 Short at R2 90% ATR 88% Fib

The nature of any HILO signals mean reversion /range trading forex, futures system means that on a day where the market trends steadily to a point of resistance there is bound to be false signals along the way, having too mnay filters or rules will get you in the trade when profit oppurtunity is less, it may also mean you get your stop whipsawed - not having enough confirmation is increaasing risk and places emotional burden on your shoulders which may mean you dont take the winning trade of the day - the trade you dream of catching.

Discretionary system trading - you follow a set of rules for the system and manually place the order - using discretionary elements not impulse to take or filter a trade. You can trake every trade which is recommended for a beginner - learn good habits first get clever later.

System Settings for one day are not so good for another - but over time a setting may the best approach for all conditions- or you may compile a set of rules defining when to trade a parameter set of settings - so you can use a system which will miss easy trades on some days but can stop you falling prey to the days where it trends and you pull the trigger so many times that risk reward means your 3 or 4 losers is a break even profit when you do win - if you havent hit your daily loss limit or trade maximum.

There are some patterns and multiple combintations of tehcnical levels and analyses that can be used to assist - so you can get your winning ratio way up in the 70% area versus 35 to 50% etc - however this does not neccesairly mean it is a better approach - it may simply be a lower frequency system- only a full set of stats will tell you that - the point of this blog entry is all about a psychological styling of system.

Whenever you filter out losing trades you will also filter out good winning trades- however we are interested in what we leave behind - which is an easier higher probability trade setup and entry.

In the attached image:
MT3 Params
The MT3 is set via the range filter to filterout signals until the current session high to low range >= 70%
Trade Setup Mode 2 - means the Setup Bar at the high must have a candle following it which closes below its low..
Look at the price action indicator - those new reds - only the daily candle was still green
The divergence on the slope indicator peaks
The ATR HTF almost at 100%
MT Signals Oscillator fired in confluence

Timing we tail off at 11AM GMT - the market had pushed and volatility and momentum was now falling...

There are many many other reasons on higher time frames
CCI divergence
Bollinger top Penetration and close back within
Close back under previous daily high on the 60
A 4 hour bar!

Weekly bounce at dynamic resistance and 2SMA High
many many reasons...

Discretionary Filters
MT Levels Woodies: R2 Level - combined with the Trade - cut out all the false signals
that level was also a 88% fib from the previous month

This was a peach of a trade - and I was not able to trade it as my trade plan states - no trading at this time - I trade early GMT - I am also too busy developing the silver bullet to trade it - but it was a text book trade.... recognise it - print it - remember it....

The target was ajust above the open 100pips or so in the bag...easy with a systematic approach.

Even so it doesnt gaurantee that you can put all your cash on red and pull the trigger, this is still a 2.5% to 3% max risk trade 0 -but it has around a 10 to 1 reward for you...

If you are learning trade all the signals first on a simulator - learn as you go - log and backtest - look for combinations of factors that can improve the trade or even make it worse - use multiple time frames and trends

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