How I Placed Shorts 5 Pips of the high, 9 Pips Stop Loss

This post was created in answering a question in the indo-investasi forum related to post "203 Pips on April 30th":

"pcguy007; Hi Captain, can you explain a little on your GU short trade? Did LST alert you or did you take it purely on price action?

If you could explain how you search for entry's and what you confirm when you take the trade that would help me grasp the method.

thanks"

I witnessed on the forum that most of traders still talking with the style of indicator base perspective. This implying that most of them didn't take Price Action in to their consideration. But, If they were master Price Action they would not in the forum anyway.

As I have said many times that if you master Price Action you would see the indicator, system and strategies from the true perspective and you would capable of using just any system/indicator.

You would say (as I have always say) that They/systems are talking and telling about the same thing with different language.

I treat LST as well as other system as a tool but all my decision is based on Price Action.

The further explanation use trade picture of the trades on April 30th. On Friday LST did alert me on the existence of divergence on extreme area (as designed) but I filter it by price action. As I've stated many times that during a strong trend the price would keep diverging.  Therefore, as LST demand, there should be a confirmation where should the signal to be taken.

Look at the 15M chart:

On the above 15M chart we find 4 divergence but I need a confirmation to take the short. On Friday the price have broke down the intra-day trend line but didn't take out the previous low. This has to be taken into consideration.

Later there were 2 shooting star. I didn't take the first shooting star. I waited for the price to test the high of this 1st shooting star. Additionally there were Resistance/R1 a few pips above this 1st shooting star. I placed the first 2 orders not under the 2nd shooting star but at the wick/pin of the 2nd shooting star that just 5 pips of the top.

Look at this M1 chart showing price movement on the 2nd shooting star on M15:

As I monitored the price momentum on M1 chart there were a slowing momentum of bearish while growing momentum to bullish and take out the 1st shooting star (Vladimir'sForex LST System would say this situation as MORUBOZU) but quickly rejected by R1 line and made a shooting star on M1 chart. Additionally the situation has made a narrow range of consolidation.

Before price reverse and after the first pullback against the prevailing trend the price most of the time still retrace toward the trend extreme as an effort to resume. This creates a choppy back and forth topping formation.

Sometimes this test failed to take out the initial High/Low then strongly rejected "in back of the hours" which would seen as pin (shooting star/Hammer), RR track, Engulfing etc. This situation made an M formation.

Sometimes sometimes made an overshoot but then failed (Morubozu). This is one of YTC-PAT setup; Fading Break Out Failure.

But this  is not a choppy up - down topping formation but a rounding top + tight range. This situation most of the time create a "Spring effect" where the price sharply falling and never test the initial high.

So I quickly place 2 unit short (using script + short cut button, executed on 2 chart to get it work at the same time) after the shooting star on M1. It was just 5 pips of shooting star high. With 3 - 3.4 pips GBPUSD spread I set SL 9 pips (using EA: SL-TP drag and drop). With just 9 pips risk anyone could place a bigger size lot that equal to 1-2% of account size.

But if I take the entry after the 2nd Shooting Star closed on M15 then it would be 12 pips of the high and my stop should be more than 16 Pips. Therefore, with 9 Pips Stop Loss then I could double my Lot Size with about the same risk as 16 Pips Stop Loss.

The price on M1 fell sharply and made the second shooting star on M15 chart.

After a retrace on M1 I place the 3rd short. Al Brooks PA taught to place order after L2. The L2 of this retrace on M1 was a quick fall.  This bar by bar reading only seen on M1 chart while On M15 chart  you would only see 2 consecutive "LowClose bear candle". Many would say M1 is too noisy if you use MA but if you learn YTC PAT and Read Bar by Bar as Al Brooks you won't say that.