+17R on EDS !

[Steve Griffiths]

Hi Everybody

Nice to see that MTP had us long in EDS (from the very bar of the low on Mar 17), when support came in at the DP (with STF divergence).

Then as the first target was reached the STF strength band was exceed, so you should "run" the tarde with the ATRStop.

This kept us long to take advantage of the explosive rally yesterday as HP confirms it is in advanced talks about a possible merger......

As you can see, this is a brilliant tarde that is now sitting on +17R Profit !! yes, the current profit is 17 times larger than the initial risks, or put another way a $99 initial risk (0.5% on a $20,000 account) is now sitting on a profit of approximately $1,700 !

What a brilliant trade............:)

Steve

So the question now is - what should you do when you are in a trade and you get such a huge "gift" as this - Bank the profit or look to run further.... lets see how the next few days unfold to see......

[radar]

Steve,

This was a great call for MTP - no question!!:)

Please tell me if my analysis, below, of the complete trading scenario is correct:

You would have, initially, entered this trade on 12 Mar, when EDS traded above the high of the blue bar (which was one bar after EDS, initially, entered the DP zone) on 11 Mar? You would have, then, been stopped out for a 1R loss on 13 Mar (another blue bar), as the market whipsawed back down below the low of your trigger day.

Mar 13 was another blue bar in the DP zone. So on 14 Mar, you would have, again, entered a long position, when EDS traded above the high from 13 Mar. Unfortunately, Trading on 14 Mar would have also stopped you out, as EDS traded below the low of 13 Mar. So, now you have another 1R loss for a total of 2R in losses.

Finally, on Monday, 17 Mar, you get another blue entry bar in the DP zone and on 18 Mar, you get stopped into another long trade as EDS traded above the high from 17 Mar. So, you are now off to the races and are in your +17R trade!!!

Please don't take this analysis as a criticism of MTP - far from it. I just want to verify my understanding of the MTP trading rules.

Thanks very much,

Ben

[Steve Griffiths]

Hi Ben,

I am not sure of your question.............. as this is a perfect example of how you keep your losses small, at -1R, so when the profits come though, +17R in this example they are far far greater than the losses, and this is what makes you money over time.....

So this an absolutely perfect example of why you must keep your losses small and profit larger to be a successful trader....

Steve

[radar]

Hi Steve,

I absolutely agree with you that this shows how, if you keep your losses to 1R, you will still have funds available to catch those +17R trades.

My "question" was simply to verify that I was correctly following the MTP trading rules in my analysis of ALL the available EDS trades that presented themselves related to the DP in question around 11 to 17 Mar.

Thanks,
Ben