A revision

So after losing a couple of trades earlier (on admittedly awful entry points) I'm back to analyzing my risk/reward strategy. My general strategy has been to enter on favorable price action at support/resistance levels. Consolidation after solid moves, fib level retracements, broken S&R levels with retracement and rejection are typically how I've been picking my smarter entries. But after looking back at the trades I've placed which have gone badly, I've found that more often than not, my stop-loss levels are, for lack of a better word, arbitrary. They've been falling in between S&R levels, off fibo retracements in non-strategic places and in general are placed where I feel the loss of money is going to be much too great for me to stomach any longer, despite that these losses are often times less than even 1% of the capital I have. After review of some of these trades, I've found that simply revising my stop-losses to sit just above or below previous S&R levels I would have had several of the trades that I enter go in exactly the direction I planned after consolidating and bouncing off some previous key levels or consolidating around my entry. Naturally, this means that several of the trades I've been stopped out of at arbitrary locations would've turned into highly profitable trades by comparison with the stop levels simply by respecting a simple fact: I'm not wrong about the trade I've entered until price convincingly breaks a previous level. These levels occur on the medium and shorter terms at pretty tight intervals allowing for very reasonable stops as long as you maintain good entries, while also providing the most security for the trade. If a level has been tested before then when it's moving in the opposite direction of your trade the same is likely to happen, however, if the PA simply breaks the S&R level you're looking at then clearly you misjudged the price and it's time to stop your trade, and reevaluate your position.

As a matter of interest I've included a chart which I traded (unsuccessfully as I mentioned before) earlier but with a revision in strategy would've worked out very well depending on how confident I was in the prevailing trend.

The first possible entry I might have eyed here occurred at the 1.3848 level where an appropriate stop level would have been above the 1.3861 level. As you can see price climbed a bit after testing the resistance level and then dropped back down breaking the 1.38323 level and retracing up, offering another opportunity to reload short with a stop above 1.3832 and  a similar scenario on the retrace and consolidation at 1.38. Another level of interest occurring right now would've been an entry about 20 minutes ago at 1.3774 with a stop around 1.38. As of right now the price is still in a bit of consolidation but the price action feels quite a bit more bearish to me still. Naturally managing these trades would require that you continually move the stop-losses of your previous positions down to preserve your profit depending on how confident you were that this downmove would continue to lower and lower levels. At this stage you would probably be sitting on 4 trades at at least BE+5 pips for the recent ones and about +70 on the opening two or so for SL with one still running in an advantageous position. I think I'm flat for the night and am going to sleep a bit before the morning session really gets moving.

EDIT: In the few minutes since I finished up this little fake trading scenario, the price which I was watching at the time of writing this has plummeted another 40 pips from my last possible entry point. It's just a shame that fake trades are just that, and until you actually put your money on the line and enter none of your analysis really matters. The point is, by now on this imaginary chart for the last few hours of work you'd be sitting on 4 trades with an average profit level of somewhere around 80 pips. By now most of your stops would be placed well enough that even if price turned completely against you you'd still take a hefty profit. At this point on my own analysis, I'd say that if I were smart enough a few hours ago to have traded this strategy my stop-loss would be just above the last support at 1.3780 to preserve the vast majority of the profit I've taken with the last trade probably placed with a stop-loss of around BE+5 (+5 pips profit, obviously).

In sum, I can't believe I haven't realized this odd behavior of mine before and I'm glad I went back and really analyzed my mistakes from earlier so that hopefully I can really learn from it and employ this strategy in future trading opportunities. This has been a really long post, and if you understand it (that is, you're actually trading or interested in trading) I hope it was useful and interesting. As mentioned to the right, feel free to leave comments or contact me at factorof2@gmail.com if you have any questions, criticisms, or just want to discuss the market. Obviously, this post also contains a lot of hindsight analysis which is certainly not the greatest, but for what it's worth the final trade I mentioned in this post is actually still running and breaking the next major support level as I type this very sentence. I guess I'm finally on to something and I hope that this was a good read for anyone who saw it. As of right now there's another possible entry stacking up at 1.3730 (a pretty serious level). Since the previous level of S&R is about 50 pips up from here, I might enter with a small lot to allow such a swing before exiting the trade. The next hour or so will probably tell us where it's heading from this level, and we'll see how my strategy might have played out soon. At the moment I still see no reason to enter short or long at this level.

Luckily, there's always another day and plenty of other opportunities to trade and take money out of this market. Also, this last support level appears to have melted under the bearish pressure, price broke below it by over 20 pips in a single 5M bar.