stop beyond former high, solve for target exceeding trend high

There are two factors driving this type of decision. 1. You want to get in before price makes another move up. 2. You still want the stop loss in what you feel is a safer position. When

considering these decisions, keep in mind that 76.4 is the final stand for this new wave. Usually, 76.4 is going to be enough. In particular when 76.4 is above the former high.

The only reason you could possibly justify placing the target so high is that

who you are, and make changes based on your experience in a series of trades. Your experience may change how you feel about this.

Keep optimal target, enter at 38.2 (first possible), solve for stop

This is still a bit on the aggressive side, but certainly okay. You

choose your optimal target, which is great. You then go in at the first possible chance at 38.2. Then you solve for stop to get to .75:1. Note that you are making the judgement that price is unlikely to reach beyond 61.8.

Optimal target, stop below 76.4, solve for entry

This setup focuses first on optimal target, then on good stop position (beyond 76.4), and then solves for entry to get .75:1

This is probably the right balance between conservative and aggressive. That doesn’t mean I’m telling you to do it. You should examine all of these setups I’m illustrating and see

what you feel best about. It’s okay to have more than one way of entering. In other

words, use the logic, trade what you see, and then after you have made the trades, take a look at what is working well for you, and what you see well. The community will help with this, too. In a 3-4 weeks, you

will gravitate to the ideas that you like most and which work best for you.

In essence (for a buy trade),

the lower you move your stop, entry, and target, the more conservative a trade you are taking. The opposite would be true when selling.

In this setup, probably the first thing you do is place your stop in what you feel is a safe place. Then you likely choose the entry at 61.8 or better, and then solve for target to get .75:1. You also could have ended up with this same setup by choosing a different order: stop, target you think is likely, solve for entry.

I know that what I’m sharing with you might not seem very specific, but this is intentional. It is important for you to find out how you trade best, not for someone to teach you how to

trade. Yes, we teach you the logic and the options, but not exactly what to do. What you need to do exactly will be revealed in a short period of time, by practicing in your forum.

I encourage you to simply do

your best. That’s all there is.

The community will recognize what you are doing well, and what you need to focus more attention on.

What if Price is in a Range?

Usually, your guidelines are going to determine whether or not a range is big enough to trade. For a good starting point, if the market is sideways, you will only trade if the range is bigger than 50 PIPs. And in this context, you must get in and out of the trade (profit

target) before price reaches the top/bottom of the range.

As you will find, much of this will be decided for you. For example, by the time the moving averages establish in position, price might have already hit the top or bottom of the range. Naturally a “range” can be subjective. In other words, one trader defines the range in one way, and another trader defines it differently. All that matters is how YOU define it. I didn’t make a picture here on purpose. When the time comes, you will remember that you need a

minimum range of 50, and you must get in and out of the trade before price reaches the top or bottom. Naturally the moving averages need to have a cross, you need a new

wave, and all of the other criteria. I’ll talk more about this in level 3, once you have more experience.

Why can’t you buy on the bottom of the range and sell on the top? You can, but this is not consistent with the high probability logic we are using to reach your first goal of consistent profit making.

You might have noticed me writing “solve for entry,” “solve for stop,” “solve for target.”

This suggests that you found two of the three, and are now solving for the third, arriving at the .75:1 optimal risk to reward ratio.

Manually Calculating Entry and Exits

Solve for entry? Whether you are in a sell or a buy, you simple measure the difference between your stop loss and target, and then multiply that number by 42.8. When you get the sum, add it to your stop for a buy. Subtract if from your stop in a sell. This gives you your entry price. You can round your numbers for now. This will cause some inefficiencies, but is nothing to worry about right now. We’ll get that sorted out in Level 4.

Solving for your target or stop loss is very easy, too. If you are solving for target, measure the distance between stop loss and entry. The multiply that number by .75. Add that sum to your entry. If you are solving for stop loss, get the distance between your entry and target, multiply by 1.4, and then subtract that number from your entry. This will get you close.

I would encourage you to go through the level 2 section again. Write down the rules you think you can use. Write down what you will be observing, and write down the ideas that I said I would be covering with you later (if you want to).