Dear David thanks for all the help you are providing for us.....
i just wanted to ask you something about the double top as you showed us in the video of the double top you told us that the entry will be after the market break the support level and the stop loss is above the resistance with few more pips and the profit target is number of pips forming the neck line right ?? if this is so then the risk to reward ratio would be 1:1 how can this be and maybe more risk to reward then how is this gonna be a good trade ??? :S:S:S and yeah one other thing do you think thats in the eur/usd daily chart a double top is forming or it is nothing cause i thinks it is a double top ?????
i hope you can answer me soon and thanks again daived
Houssam

Hi Houssam,

Glad to hear from you.

It is a good point that you raise about the double top which another trader also raised the other day. Please see my answer here and let me know if you have questions after reading that.

Regarding the Euro, yes this is a double top formation on the daily chart as you can see in the chart below. The one area of disagreement some may have with trading this as a double top is that it is not at the top of the trend in the Euro which occurred to the left of the double top.



Best Regards,
Dave

Thanks alot Davied that was helpful information

Anytime.

Best,
Dave

Hello Davive i know i'm annoying you with my questions but you opened this door on your self hehehe.
i wanted to take your opinion on a couple of trades i made if there is no problem...... to start with : i used for the ranging market of the eur/usd the following indicators (daily chart) :
1-Bollinger Bands.
2-ADX to confirm ranging market.
3-and RSI to confirm up or down range.
i'm trading 2 mini acounts at a time with intial balance of 2000$
i started the first trade on 5/6/2008 daily chart i took the way long till i took profit of 132pips i was going to stick till the candle hit the upper band of bolinger my stop loss was below the lower band with few pips..my next trade was on 9/6/2008 i went short till i made 117 pips and took profit short also my stop loss was above the upper band of bollinger with few pips..and now i'm kind of waiting for the double top i told you about so can you tell me if i made something wrong in these couple trades and thanks again Davied
by the way the market is trending on the 30 minutes chart but the adx isn't confirming it so should i not takent any of these traddes or this is how things goes???
Houssam

Hi Houssam,

No worries always glad to hear from you.

It sounds like you made money on both of these trades so that is normally a positive sign;-)

Let me start by saying that I am not an investment or trading advisor but just a trader looking to learn and help others learn so I don't give trading advice.

With that being said it sounds like you are using 3 indicators to enter these positions and exit these positions. In order to give my opinion on the strategy I would need to know more about what the criteria is that you are using to enter and exit the trades. I see you say that you are using the RSI to confirm up or down, what do you look for in that indicator in order to confirm that?

Once you feel that your indicators are telling you that the market is in a range, and you have established which direction you think the market is going to go, what is your trigger for entering the trade?

Let me know this information and I will be happy to provide my opinion.

Best Regards,
Dave

Hello David....
well as for my entering stratgey i used the Bollinger bounce as you know the market tend to bounce of bolinger bands so i waited till the market went to the lower band and didn't broke it and i took confirmation from the RSI when it was heading up above 50 as for my exit on this long i was willing to exit when it hits the upper band but i decided to exit early..
this was for the long as for my short entry i did exactly the opposite i also didn't wait for the market to hit the lower band so i took profit early the confirmation i recived to enter from RSI is that it was heading below 50 my exit is to hit the lower band... this is the stratgey i used
and thanks again daive

Hi Houssam,

Thanks for the reply.

It sounds to me like you have several pieces of a strategy there but that you are also using a lot of "gut feeling" as to when to enter and exit trades. For me personally I like to take the gut feeling out of it and trade via a strict plan but I do know other traders who like to add the gut instinct into it. With this in mind I don't think there is really any right or wrong here but just preference for how much detail a trading plan should have and then how closely one should stick to that plan.

As far as for me I like to know and follow all of the things which are in my video on trading plans here.

Hope that helps.

Best Regards,
Dave