Should this current sequence of CT trades be based on 4-4-1, instead of 4-2-1?
You need to treat the CT trades as individual trades even though they work together. So, if you have a loss on any CT trade that is triggered, you only increase the lot size on the CT trade that incurred the loss. For example, let's say all three CT trades are triggered and are in play with 4, 2, and 1 lots respectively. Let's say CT 1 and CT 2 have hit their targets but CT 3 reversed immediately after being triggered and stopped out. Now on the next sequence of CT trades, instead of increasing the lot size on all 3 trades, we only increase the lots on CT 3 because it was the only trade that incurred the loss, see? So the new sequence of CT trades would be placed at 4, 2, and
2 lots (1 + 1). The reason you saw 4-4-1 was because CT 1 hit target, but CT 2 did not and CT 3 was never triggered. So the only trade that had a loss was CT 2 so you increase the lot size on the next CT 2 trade to 4 (2 + 2), hence 4-4-1, get it?
Since in this regular trade, 3 lots are used, you would normally use 8-4-2 or 6-3-1.5 instead of 4-2-1 for the counter trend trades? Would like to confirm this as the examples are all based on 4-2-1 even though 3 lots are used for the regular trade.
The 4-2-1 ratio I used in my examples were just to keep things simple and basic. You can use any size ratio you desire, but try and keep it based on a 4-2-1 base like 2-1-.5, 8-4-2, or 16-8-4. The key to using the proper size ratio depends on how many Regular trades you place. If you only place a single trade, you're Counter Trend ratio is smaller because there is a smaller loss that has to be recouped. If you place 3 Regular trades, you might have to use a ratio of 8-4-2 or 6-3-1.5 instead of 4-2-1 to recoup a loss. Remember, the only function of the Counter Trends is to offset any losses from the Regular and Scalp trades.
The Regular Trade ratio is different because some traders will only place one trade and aim for the first target and be done with it. Some will go the multiple trade route (Option 3) and place 3 trades at the break out. If you use Option 3, the first set of Regular trades will always be at a 1-1-1 ratio. If you trade 5 lots then you are placing 3 trades of 5 lots to start and the 5 lots will be your base in calculating new lot sizes on a loss. It's when your Regular trades stop out is where the ratios differ. If you re-read post #7, it's explains the different ratio used with the Regular trades.
"If you use the multiple trade technique (Option 3 in post #2), you have to approach it a little differently. If you open 3 trades at 1 lot each for a total of 3 lots and you incur a loss, how do you increase? Do you just make every trade 2 lots straight across the board? No. Lower targets (123.6) are more likely to hit than the higher targets (161.8), so you want to stagger the lots where it will accomplish the most good. I stagger them in a 3-2-1 pattern, emphasizing the first target which has a higher probability to get hit. It doesn't matter if you get stopped with this configuration because whether you have a 2-2-2 or a 3-2-1 setup, the total loss is still totaling 6 lots."