What expiry is
Time as part of the idea, not as a default setting.
Choose the trade time as a parameter of the idea rather than out of habit.
ATR shows the average candle range — the expiry is checked against it.
You choose the expiry before entering. It is the moment the result is fixed — and at the same time all the time the market has for your idea.
The most common mistake is always setting the same time. An idea about a reaction to a level, an idea about a trend continuing and an idea about a false break all live on different horizons.
- A reaction to a level
- — usually 1-3 candles of your working timeframe
- A continuation after a correction
- — 3-5 candles
- A false break
- — 2-4 candles, the move is often fast
The second half of the choice is volatility. The same time on a quiet and on an accelerated market means different distances price will manage to cover.
The rule is one: the expiry contains the idea, not the other way round. If an idea does not fit the time available, that is not a reason to shrink the idea — it is a reason to skip.
The usual mistake
Setting the same expiry for every situation. For some ideas it is far too little; for others it is mostly noise.
A note from Leon Mercer Academy
Record in the journal not only the expiry you chose but how long the move actually took. After two weeks it will be visible where you systematically give yourself too little time.
A practical example
On M5, mark the last three reactions of price from a level and count how many candles the move lasted in each case.
The median of those values is your working expiry for this instrument and this situation. It is a specific number, not a feeling.
Lesson 4 of 15 in “YOUR FIRST TRADE”