Speaking of obsessions, I don't watch my live charts anymore, but when I do my QC review of each trade I always look at what happened, not only to ensure my EA operated correctly, but also to see what happens often, for new trade ideas.
I see the following happen a lot - a H12 bar high or low is broken by a fraction of a pip, or only a few pips, before price reverses, and no subsequent bar that follows the smaller timeframe bar bar that broke the H12 bar high or low breaks the high or low of the bar that made that break, i.e. its a smaller timeframe fakeout bar. The classic example is the H12 buy setup I had on the GJ last night which triggered a long entry at the high, only to reverse and the the low triggering my stoploss (and a stop and reverse sell order):
Sometimes I'm unlucky and the stop and reverse order also makes a loss, but usually it makes some profit that ends up offsetting against the stoploss, so my stats say I am better off also taking the stop and reverse entry.
But of course I have missed out on the range in between that high and low (and in fact lost money on that trade so the party has been at my expense).
But as I review these trades (and all the ones from my backtesting), I see several ideas for shorter timeframe trades that can offset against a H12 trade like the above that ends in a stoploss. The one above is a classic example - see the corresponding M1 chart below with the blue lines representing the H12 bar high and low:
So I often see a single M1 (or sometime an M5) pin bar responsible for triggering my H12 entry. To me, that pin bar is clearly designed for one purpose, to trap buy orders like mine concentrated in a pool of liquidity at that level into a losing trade. Such pin bars are also often followed by some effort to retest the pinbar high (and my sometimes break that bar by a fraction of a pip) - and the consequence is often that price reverses afterward and goes on to break the H12 bar low.
When I am at my desk and happen to see an M1 setup like above, I sometimes place a manual trade as shown (in an account I keep for manual trades, but I don't do many), and it has a good strike rate. The nice thing about it is that the risk:reward is usually high (in the above example its about 1:4). So imo it qualifies as a nice setup to hedge my H12 trades and the neat thing is its fairly simple to decribe the event (an M1 pinbar that breaks level based on the previous H12 bar) and either entering on the close of the pinbar or entering on a 50% retest of its high/low, or some similar entry strategy, with a take profit at the H12 bar low. It therefore makes a good idea for an EA either to hedge directly on markets where I have H12 trades, or I may scan more markets looking for this type of setup.
If you watch pure price action long enough, patters like the above will pop out and poke you in the eye..
Cheers, Sharks
