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Building an equity millipede
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Nov 2, 2010 3:32pm
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crede quod habes, et habes
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Its breaking out. Im only interested in volatile breakouts.
Is there momentum? It doesnt matter if Im trading near US close. That is irrelevant as volatile breakouts happen anytime, anywhere.
And the 5min candle closes into a pin bar...
Is that a new support happening?
Ok, we have a lower low. But are you going to stall there or continue?
Come on kitty, jump down

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Nov 2, 2010 3:44pm
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crede quod habes, et habes
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You are most welcome, cam
One of the telltale sign that the current direction is continuing is the continuous new lower low. The further spaced apart the better. Currently our new lower lows are very close together.
And the 5min closes near the low of the previous 5min candle. Is this is?
There is definitely no momentum as for a moment I thought my platform froze..
While its thinking lets quickly check on other timeframes again. Once again im looking for evidence to support my claim.
eur/usd 1hr. Goody, breakout after pin bar. Classic. Just like I anticipated. Remember anticipation and then participating at a low risk entry?
3 post back I said Im taking this trade cause I took hindsight from 1hr chart. That was the pin bar on the above 1 hr chart.
It is playing out correctly at the moment.
Then... if this hour is going to be a bold down candle where is the best place for a position to survive?
Correct, it is at the open of the candle or retrace wick. I have my sell position on the retrace wick. Double good.
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Nov 2, 2010 4:03pm
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crede quod habes, et habes
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You are most welcome, carolco
First warning
The next 5min candle. Second warning
Time to move stop loss to tighter. Just incase.

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Nov 2, 2010 4:10pm
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crede quod habes, et habes
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Lets have another look at whats currently happening
eur/usd 1hr
Could the current 5min retrace be the small retrace of the new 1 hr candle? I dont know but Im participating
eur/usd 30min
Could the 30min chart hinting that it is going into pennant on the 30min chart? I dont know but Im participating
Whatever happens Im cotrolling my risk.
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Nov 2, 2010 4:34pm
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crede quod habes, et habes
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Lets see whats happening live on 5min chart
And the decision is coming up soon
I have added another sell position as this would be a tight entry if it works. If it doesnt work out I risk very few pips for something very large. Having more positions doesnt necessarily mean you have to lose more. More positions means more profit when the risk is controlled. At the moment if I lose both positions, I lose a total of 7 to 14 pips but I can also control my exit and try for a tighter exit. Worse case scenario that is an average loss of -7 pips per position. A definite bargain
Now nobody knows which way it will breakout. But lets think about my current r:r
Im risking 14pips for x2 lots of +100 pips. My positions are also in a better area where it will survive the next few candles
And if my positions does workout I will continue adding as this stall on eur/usd could be the next new swing. You never know until you participate with low risk entries.
Sincerely,
Graeme
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Nov 2, 2010 4:46pm
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crede quod habes, et habes
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Most traders believe;
more positions = more potential loss
I assure you with good price action interpretation which could also translate to good money management, it means;
more positions = more potential reward
I wince at the notion of placing 1 trade at SL for 50 pips and TP of 100 pips and then raising lot size.
If we look at my trades of yesterday. It was going up. So I bought and bought and bought. Mostly near opens of 4hr candles.
I used price action interpretation to control risk to risk very small for 10 positions of +100 each. (kept 1 of them. You can see it on my chart)
Im encoding excellent r:r into my trading approach and not using r:r as a mathematical formulae.
What you are witnessing now is a very very tight pennant.
If it doesnt work, I shrug and wait for next opportunity.
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Nov 2, 2010 4:58pm
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crede quod habes, et habes
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Is it breaking out? There is something moving. A new sign of hope as the current 5min candle makes a new lower low
Anticipate and participate via low risk entry
Current realized loss is now -5 pips
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Nov 2, 2010 5:22pm
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crede quod habes, et habes
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Well this time it didnt work out. I hope my price action interpretation is helpful. My current realized loss is at -16 pips with 0 positions (I dont consider the surviving buy position from yesterday. This is afresh)
Current average loss per position is -5 pips. What a bargain.
Current net profit for this week, +760 pips
If the volatile did happen, I risk very little for a larger reward which is also amplified with multiple positions.
Thank you for watching.
Good day all. I will return later.
Sincerely,
Graeme
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Nov 2, 2010 8:14pm
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crede quod habes, et habes
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Good morning, all
I have mentioned yesterday that I believe 1 out of 5 days in a week of trading one of the asian session does have a good burst on eur/usd. It is a belief that I have taken advantage of at least 2 years.
My new set of trades.
Why/how did i take them?
This is my anticipation on 4hr chart
I dont know what will happen. It could be a wick bounce on the top one, or the middle one. Or a descending wick pattern at a classic 45 degree angle. It could be anything. But I will not know until I participate in a low risk entry and hope for a volatile breakout after I enter to capture it.
eur/usd 5min
It looks like I got one of my anticipation correct which was descending wick pattern. Sometimes I get none of my anticipation correct which means I lose few small positions. But then again I will control my risk and ensure that I do not lose much.
One side note about descending/ascending wick pattern is that it doesnt work all the time but enough times in a week for a keen intraweek trader to take advantage of. I do it all the time
eur/usd 5min
Current realized loss is at -29 pips with 4 positions established. Average loss per position is -8 pips per position. Still within my -15 pips per position threshold. I have bought these positions at a discount.
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Nov 2, 2010 8:17pm
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crede quod habes, et habes
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Now there is a movement against my intention. Is this just a short blip or permanent change?

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Nov 2, 2010 8:20pm
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crede quod habes, et habes
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This is currently happening.
I need the price to at least stall for me.
If not this is over.
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Nov 2, 2010 8:27pm
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crede quod habes, et habes
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Im still holding as Im still little bit in profit.
I wonder why there is sharp retrace like this? Lets find out why on other timeframes.
eur/usd 15min
I see a good pin bar setup on 15min chart which is on the wrong direction as my anticipation. Lets see other timeframes then.
Oh. But look.
Closed all positions.
Lost -14 pips from 4 positions.
Current realized loss is -43 pips with 0 positions established.
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Nov 2, 2010 8:39pm
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crede quod habes, et habes
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I say something important for all.
When you experience a loss. Make sure you wait until price moves away from the area you have lost. This is just my personal thing and it has saved me alot of anguish from ranging periods.
Always reassure yourself there are many more opportunties soon.
My new anticipation
Some may wonder why I come to such anticipation. Most of the pairs when considering to trade intraweek will fluctuate in between 100-200 pips.
If you are aiming at intraweek trading you should be looking for 100 pip opportunities.
My anticipation is quiet simple.
I buy when sellers run out of money.
I sell when buyers run out of money.
And this is simply done by noticing exhaustion which is;
when price cannot make anymore highs or lows.
Exhaustion of sellers or buyers.
There are plenty of intraweek 100 pip opportunties. Sometimes there are multiple oppotunities in a week and sometimes there are only 1 or 2.
I aim to capture only 1 of them per week that will give me plenty of pips for the following 2 weeks or more.
Lets look at last 4 weeks of eur/usd on 4hr chart
I have placed orange line at only compelling +100 pip opportunities. There are plenty of opportunities so there is no need to rush.
Every intraweek 100+ pip opportunity is profitable once you maximize your profit taking and control your losses.
Good day all
Sincerely,
Graeme
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Nov 2, 2010 9:32pm
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crede quod habes, et habes
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Re-attempt
Stacking
eur/usd 4hr. I anticipated that it will be down. First 4hr candle of the day (asian session) looks like it will be a bold down. For how far, im not sure. But I have my position at the best spot which is on the retrace wick and open price of the current 4hr candle. This will ensure that any minor retrace of next 4hr candle is far away from my positions
And voila.
Current realized loss is -63 pips with 9 sell positions established. Average loss of -7 pips per position (I still have 1 buy position which I dont even consider as it has already been paid and settled for).
I will continue watching until price is at least 20-30 pips away before releasing my finger off the mouse.
Thank you for the compliment, maxxtrader.
Sincerely,
Graeme
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Nov 2, 2010 9:40pm
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crede quod habes, et habes
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Just before I consider everything to be ok. Let us check current status
eur/usd 5min. Compelling momentum
eur/usd 15min. Clear breakout with momentum
eur/usd 1hr. Support breakout with no retrace candle
However, I wont walk away until most of my positions SL moved to BE or very small loss.
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Nov 2, 2010 9:43pm
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crede quod habes, et habes
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And when everything looks so rosy
I can only watch and control my risk
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Nov 2, 2010 9:51pm
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crede quod habes, et habes
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If I had a wish, it would be
The current 4hr candle to close below the previous open price of the up candle + also close below the 1.40000
That would be the best anticipation I can hold for now.
Currently, eur/usd 5min
Come on kitty, jump down.
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Nov 2, 2010 9:56pm
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crede quod habes, et habes
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Eklavya - Thank you for the compliment. Yes. Correct. As mentioned very early in this thread, if anyone wants to be pro trader you need to read the price action very well. My trading approach is the same but I do not trade intraweek. Yes, but you can do this on higher timeframe but with bigger stop losses and bigger rewards.
Aud - Thank you for the compliment. Hopefully my new showing is different angle. However I will continue on with VEEFX short time in the future
Update eur/usd 5min

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Nov 2, 2010 10:00pm
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crede quod habes, et habes
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Good. Danger is passing away.
Oh. Now 200ema is coming up. Interesting.
Let us watch. Still keeping my guards up
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Nov 2, 2010 10:08pm
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crede quod habes, et habes
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Ok. Danger is over for myself.
Apologies but I need to lie down for a bit. However my showing for today is complete for now.
Current realized loss is -63 pips with 9 sell positions established. Average loss of -7 pips per position.
Moved TP of 8 sell positions to 100 pips each.
Keeping 1 sell with no TP.
I still have 1 buy position from yesterday.
Just to continue answering to Eklavya. The first skill you need to acquire is correct price action interpretation on lower timeframe. I upskilled from x3 20 TP exercise for few months.
Once that is done and you are profitable on intraweek or any short term trading you will naturally phase out to longer timeframe as you get more confident.
Current status on eur/usd 4hr. Im near the open of the current 4hr candle. Which means I have placed myself to be in the better position as the retrace of the next 4hr candle most likely wont reach this far.
Good day all.
Sincerely,
Graeme
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Nov 3, 2010 2:23am
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crede quod habes, et habes
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Thank you for your continued interest.
I had to take a nap before continuing.
Update.
eur/usd 4hr
Im now looking for buy opportunties.
Looking for sellers to run out of steam before I start opening buy positions.
Never marry a direction.
While many traders are looking at sell opportunities while the market is moving down, I prefer to be already in the market before the main action starts.
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Nov 3, 2010 3:21am
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crede quod habes, et habes
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Quote:
Originally Posted by hubbahubba
Hi Graeme,
Quite an impressive real time demonstration. You make it look so easy. Unless I am mistaken, isn't this a somewhat different style for you? Unless I am mistaken I seem to remember you starting at higher time frames before dropping to 5min for entry. Are you talking about TP at 100 pips just as an arbitrary point for demonstration purposes?
What are you looking at for exits with this method? Are you just looking to establish long term millipede legs or are you looking to exit when you gain perhaps 100+ pips and then price action goes...
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Good question.
I trade only the higher timeframes however I have received many requests for a trading approach on the lower timeframe as most dont see the necessity or the need to hold onto positions over a long period of time.
Many of the readers cannot stomach the thought of closing only half of positions that are in profit and keeping the rest over a prolonged period for growth.
Hence, Im showing everyone how a simple price action on intraweek can also be profitable. To meet most traders threshold and my personal trading methodology, I keep just 1 of the larger legs at every bundle of position.
You might wonder why everything seems to work with Graeme?
Without any notion of self egoness, Im confident I can trade any setup, any timeframe, any indicator (or no indicator) and still produce profit within my skill set. And Im trying to help everyone to also do what I do. However everyone includes all the traders in this public forum with different skill level, experience and threshold.
Nothing has changed for myself; the price action interpretation, intention to keep positions indefinitely.
Everything Im showing from Monday is same to what I do on higher timeframe. Just the scale has changed to smaller timeframe so it is now more suitable for the majority of the readers as per request upon request.
Hopefully Im helping.
Update.
eur/usd 4hr
Nice europe open. I missed the volatile breakout up. This move closed 4 of my sell positions. Nothing I can do except when entering positions it is best to have them closer to the open of the candle.
Still looking for buy opportunities but it seems I have missed a good burst. No need to chase a bus that has already left. I wait for the next one.
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Nov 3, 2010 3:45am
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crede quod habes, et habes
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Just to further answer to Hubbahubba as I had missed it out in my previous answer.
I AM still taking hindsight from the higher timeframe first before taking trades on 5min chart. Just like we always talked about.
This was Monday eur/usd.
I had 4-5 sell positions. Why? My price interpretation on 5min timeframe is same as any other timeframe. And what does my price interpretation indicate on Monday?
So, on Monday (look back few of my posts, its there)
I took sell positions only as per my hindsight on 4hr timeframe.
Lets look at yesterday, Tuesday
So, yesterday what did I do? I started buying (look back few of my posts, its there)
Someone asked me if it really is that simple to buy when its up and sell when its down.
....yes it is.
Today, there is an exhaustion of buyers. If I were to sell this is the best time to sell. I just went with the flow and sell sell sell
At the moment then?

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Nov 3, 2010 4:06am
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crede quod habes, et habes
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And there is it. Volatile breakout.
Thank you for your compliments mamood. Charts are now in jpg.
This takes all my sell positions out leaving me with a realized loss of -72 pips for todays little selling endeavour.
Current net profit of this week is +704 pips.
Now lets stop. Lets find out why there was such big movement. There is no such thing as "yeh Graeme, Europe opened and decided to go up today."
No. There is always a price interpretation hint somewhere before it happened.
Lets have a look.
eur/usd 1hr.
Pin bar before the volatile breakout. Not every pinbar works but; small body, much longer tail, at s/r + at exhaustion.
eur/usd 30min.

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Nov 3, 2010 4:20am
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crede quod habes, et habes
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Thank you for the compliment, VEEFX.
You should take a break and rest as you have work tomorrow.
I just read your PM and will reply little later on.
You are correct, everything should work on all timeframe.
There is no such thing as one system only works for 15min timeframe but doesnt on 1hr or any others.
Sincerely,
Graeme
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Nov 3, 2010 4:37am
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crede quod habes, et habes
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Every single timeframe tells you something.
Each timeframe is telling a story. At first you will be confused at the story 4hr chart is telling you to a daily chart.
You fail as a professional trader when you only listen to one timeframe.
Lets listen to eur/usd daily chart
Then eur/usd weekly chart
Look at this weeks weekly candle. 'If I anticipate that' it will go up the best place to open trades that has higher probability of surviving in the upcoming weeks is the open of the candle. Which is around now.
Can all these hints tell me that this week it will finally breakout up?
You never know until you participate on a low risk entry
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Nov 3, 2010 2:24pm
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crede quod habes, et habes
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Good morning,
Pippirate - Your price action interpretation looks good for pin bar/fb entries. Your question is more to how/why is my positions getting stopped out at BE when they were so hard to get it established. Especially when they have doubled/tripled your account balance in unrealized profit and then, to see them hit BE few hours/days later.
This is the question that is asked many times. Why is it happening? How can I prevent it?
Each trader needs to buildup at least 100 hours of trading. Demo or live. At the moment most readers do not have any statistical data on their trading. They dont know how much they are spending to establish 'x' number of positions. What their median profit taking is. And the average drawdown before 'x' multiplication of account equity.
I have been trading for some time to know exactly what my statistics are. And Im also risk tolerant and confident to hold onto my positions for the best golden runs. Some readers believe it is because I have large capital but its not the capital but self awareness of my statistics.
When you first start, you % rate will fluctuate for the first few weeks.
1st week - 50%
2nd week - 80%
You cant stop there and say, "my average win rate is 65% over the 2 weeks" so I will adjust my r:r accordingly. 1:2 should be enough
But then..
3rd week - 20%
4th week - 10%
Now your average win rate is 40% and you find that 1:2 made you lose money.
Then traders will give up, log into forum and post saying it doesnt work because they have already spent all their capital on the first 4 week.
Your true win rate, median drawdown,
Do you know your:
1. win rate
2. median drawdown
3. average realized drawdown per week
4. average realized drawdown per month
5. largest unrealized profit by monthly
6. median unrealized profit by monthly
You need to know your statistics, just like a shop owner knowing how much they buy items from wholesale and how much they sell for to retail.
Pipfirst - The horizontal line is just drawn at 50% of the previous candle to show that current 4hr candle retraced and bounced. You will find this very often. Also it is resistance and open price of the day
Roadrunner - Good trading plan. There is one catch to stacking positions on small timeframes. You need to know when to trade and above all control your risk. Never try too much in one sitting or one 4hr candle.
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Nov 4, 2010 1:42pm
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crede quod habes, et habes
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Good morning, all
Very good questions and thoughts.
Im glad to hear some of the questions that are asked.
I have read all the posts and perhaps this post aimed at everyone will further clarify.
First, lets talk about personal threshold as questioned by VEEFX.
Although it sounds like a good logic to say,
'Ok. I know from my previous experience I have the confidence to aim for 1500 pips but I cant see myself getting a 800 pip realized loss to get there. So, when I reach -800 pips I will stop."
Nice goal of 1500 but there are ways to know that it will not work out before losing 800 pips.
You must consult with the price action of higher timeframes all the time whether your goal of 1500 is still achievable.
This week I have been looking for 100 pip swings on intraweek of eur/usd.
Lets just double check of weekly chart agrees,
So, your price interpretation this morning would be 'up.' Then execute that hindsight on the lower timeframe. Trading at the optimum time.
This is eur/usd 4hr
However you still dont know if your plan will work as the first chart. But you have participated into the action as per your plan and you are now setting yourself with that -800 pip threshold.
Its not the other way around by planning a 1500 pip profit with 800 pip loss threshold without planning with daily/weekly chart beforehand.
To aim for 1500 pip profits you must choose the correct scale to play on. 1500 pip profit is achievable on weekly, monthly charts. Consult with them first and then you scale down to lower timeframe to start executing.
Knowing when to trade - You must consult with higher timeframe with your intentions
Executing your plan - You must take risks on the lower timeframe whilst aiming for your plan of the higher timeframe
The above will only work when you have upskilled your price interpretation and have few things that does work for you all the time.
Mine is:
1. Judging the movement of power from looking at the % of retrace. Less retrace before going towards the direction I want means more power
2. Price likes to double wick bounce, triple wick bounce, open price bounce, 50% fib bounce. One of them always always happens
3. Pin bar, engulf, flying buddhas
4. Volatile movements on 'good' ema crossovers
When I plan my goal on the higher timeframe and start executing. Sometimes it will work straight away and then start phasing out and not working. Then something has changed in the higher timeframe.
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Nov 4, 2010 2:58pm
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crede quod habes, et habes
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Quote:
Originally Posted by hubbahubba
Sorry to be a bother again but can someone help me understand what Graeme is doing with stops on these recent trades? I have read the whole thread and those links don't help. He is swing trading now anyways which is different.
I think where I am getting confused is that his broker perhaps allows him to set close all position stops on each pair. My broker doesn't have that feature.
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Good question.
Im showing intraweek swing trading as there has been many requests for a trading approach on the lower timeframe.
I prefer not to swing trade however I can if I wanted to.
I can also swing trade and then leave at least 1 position on each swing without closing it.
This showing could start a new encouragement to traders to not close all their position but at least have 1 position left behind for free.
Like member aud mentioned, 'a stepping stone was needed.'
My main focus on current showings is the very important and much needed price interpretation which most traders can still upskill further.
Imagine everything I do now on intraweek exactly the same as higher timeframe of weekly/monthly. Whereas stop losses/losses on intraweek means small pips which most traders seem to stomach whileas stop losses/losses on higher timeframe is larger which most traders cannot comprehend.
However, once you find that you can trade profitably on smaller scale you will naturally evolve to trade on the larger scale as this means much bigger rewards but less number of wins than intraweek.
Sincerely,
Graeme
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Nov 7, 2010 4:32pm
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crede quod habes, et habes
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Good morning, all
Apogies for the delay in replying to your private messages. I had many things to catch up in the last few days. Im trying to spread my attention to few things and one of them includes the contributions on this thread.
I hope traders have studied my price interpretation that I have posted in the last few pages.
Without good price interpretation you wont be able to make near short forecast. Price interpretation is not correct all the time but enough times for you to take advatange of and create profit.
Some of the questions I receve is, what do I exactly do? Why isnt there an exact trading strategy within this thread?
Im certain that I have provided enough encouragement and insight into this matter for the reader to formulate their own 'exact' trading system whilst I have provided most of the ideas on trading approach.
A professional trader can create profit with any strategy, method within his hands. Because he/she knows that the vital requirements for profitable trading is universally/generically the same.
1. Participation
2. Low risk entry
3. Growth
This morning, I would like to touch base on one of the most requested questions I have received;
'Graeme, I dont have enough time to trade on 5min TF or any of the lower. Could you advise any tips on higher timeframe'
Im sure there are many traders who has work committments with their trading.
So let us think together.
First question.
"What type of candle do you prefer?"
Have you ever considered this question? Not many has. I have mentioned few times in this thread that Im very interested in candles (on any timeframe) that open and charges forward without any retrace. If you have not thought about this, it is time to think.
Let us look at eur/usd daily chart
I have highlighted candles that has little or no retrace and then moves towards the direction of ema crossover.
As you can see, most (not all) candles that does move forward without any retrace also has higher probability of survival for the longer term. And this happens on any timeframe; monthly, weekly, 4hr and so on.
Let us view few more examples on weekly
Once again, I have marked candles that moves forward without (or little) retrace towards the direction of ema crossover.
And this happens on any timeframe.
If you havent thought about this, it is time to as this is one of the tools on my belt.
The smart readers will now jump up and ask, 'Graeme, I have already thought of that but how do we know in advance that the next candle will be a good bold one?'
I dont know. However you can use money/position management to extrace profit if it does work. And for that to happen, you will need to participate on a low risk entry.
I have mentioned few pages ago that I know my statistics very well and that one of the methods I currently use is risking 10 pips for potential 1000 pips on eur/usd. And if you think carefully you will know how I do it here.
Continuing on..
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Nov 7, 2010 5:14pm
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crede quod habes, et habes
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This is my train of thoughts.
1. Open eur/usd daily chart at start of new candle (for myself its the asian session)
And ask myself 1 question. Is it going up or down? And this simple question is governed by the ema crossover. We all know ema crossover has flaws but 'most' times the candles do move forward as per the direction of the crossover.
Let us consider the last few days on eur/usd daily chart
Now with the daily candle deleted appropriately
So, the 1 question I ask myself is, "is it going up or down?"
Ema is crossed over to go up so for now I choose up.
Now I anticipate its going up
Whats next?
Participate in a low risk entry
How do I do that? It is by anticipation.
You need to anticipate that today will be a good day before it happens. You must assume that today's daily candle will be up with no retrace. Now this is where your personal threshold of stop loss comes into play.
For this type of method I choose 15 pips on 4hr chart, 25 pips on daily chart, 70 pips on weekly chart, 120 pips on monthly.
This setting needs to be tweaked by yourself through trial and error and find your own confortable level.
Lets go back. Since the above chart is daily, I have 25 pip stop loss. So as soon as the day opens, I will open 1 position towards the direction of the ema with my personal threshold. So on this day, I have a loss of -25 pips as the retrace is more than 25 pips.
Let us look at a day it did work out for me, eur/usd daily
In the month of september it looks like there were 4 days that my stop loss of 25 pips was not hit and would have survived.
This is where I ask myself another question.
"Ok. Position has survived the retrace and it now 30 or 40 pips in profit. How can I amplify the profit taking if this the day that price will never come back" Alot of ifs when im anticipating.
I will open another position and move the first position to breakeven. If today is a good volatile day then price should not make any more newer lows (or highs).
With 2 positions in play, you are covering few scenarios.
The first position is at BE at open price of the daily candle whilst second position is at -40 or -50 pips with SL at the lowest price of the retrace. That is an average loss of 25 pips per position however the second position has a bigger breathing space.
Price will charge on with both positions in profit or price might retrace near the open of the day closing the first position but price does not make a new low so the second position survived to end up as profit at end of day.
I would like to stop you here and advise you, you can alter few things above.
1. You dont need to add second position if it doesnt suit your trading style. However, you will need to find other means to amplify your profits.
2. Your personal threshold of stop loss for the first position could be larger than my 25 pips or lower than my 25 pips. Bigger stop loss will see you more positions surviving till end of day however bigger losses. Smaller stop loss will see you more number of losses which are smaller but less opportunities.
Now this method above will ensure that you capture those volatile bold movements.
Take profit is only again to your personal threshold. I aim for 1000 pips for each positions. Once again you can tweak this setting to your personal threshold.
You can aim to catch profit totalling 1000 pips with few positions - This means that you will have few more wins over the course of year than myself.
I aim to catch 1000 pips per position - This means I will have less wins than the above trader but bigger potential profit in the long run.
You could even adjust the take profit pip of 1000 to 500 with few positions totalling together or 500 pips each position. The adjustments you could do is endless.
This method works as 3 vital ingredients were added.
1. Participation - for a volatile breakout
2. Low risk entry - risking 25 pips on daily chart
3. Growth - letting the position grow to its greater extent
You will need to demo or live (on small account) for some extended period of time collecting data on your trading statistics and tweaking the above settings.
There is one more thing I wish to add..
Continuing on..
Last edited Nov 7, 2010 7:07pm
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Nov 7, 2010 5:39pm
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crede quod habes, et habes
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I believe what Im showing in depth today is from the very first post of this thread.
Opening positions at the open of the day.
There is something else I also add in to the above method.
If today is just another typical day where the daily candle does follow the ema but with usual retrace.
Sometimes the retrace is greater than my 25 pip stop loss, so that gets me out of the game. However.
Some days there are retraces of more than 25 pips that will come back and charge forward.
Let us look at last few days on eur/usd daily
So the day had more than 25 pips .
When I watch a retrace happening, I set an alarm on my phone so I get alerted when price comes back to open of the day.
When I get alerted,
This is where I tell myself, 'if today is going to be a typical day up price should not make any more newer lows and move forward from here'
Then I would open a position at the open of the daily candle with stop loss at the lowerst price of the retrace. This is where personal threshold comes in.
1. I do not want to see any retrace larger than 50% of the previous candle. This is important. I prefer less than 33% retrace on previous candle.
2. Preferably not bigger than 50 pips retraces.
And if my anticipation is correct I will find that price will move on. If it doesnt then Im not interested in a day where price fluctuates between open price and low price of the day.
So the first method aims for volatile moves that does not have any retrace and charges forward. These are the best movements in forex market.
Second method aims for price to first retrace and then enter when price resumes its anticipated direction.
I use both methods simultaneously.
Having touched on the framework of my higher timeframe trading, I would like to add as I have been asked few times.
Why do I put in the effort to share?
Some traders believe that, giving away trade secrets hinders their own profit taking however it is not. If Im going up and more people join in then it is a benefit for myself. However even a large number of followers wont affect the market movement at all. It is still assuring to know that our interest lies together and not against each other.
Sincerely,
Graeme
Last edited Nov 7, 2010 7:08pm
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Nov 7, 2010 6:02pm
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Quote:
Originally Posted by cameron1st
Thank you Graeme, very good articles, read them with much interest and still thinking about the ideas presented.
Kindest Regards,
Cam
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You are most welcome, Cam
I will answer your PM shortly. Apologies for delay.
For the last 4 months on this thread we have covered many many topics. I have given my thoughts and experience on many aspects of trading and replied to most of the requests received.
Now this might confuse many readers as I seem to be jumping from short timeframe trading to higher timeframe trading but it is all explained as per requests received.
Some traders prefer the excitement and pace of 5min charts or lower timeframe while some can only trade on 4hr or daily.
The method I have shown have proven profitability for myself on eur/usd for the last 2 years. Some had great drawdown but have never came back to starting capital once the ball started rolling. Nowadays I dont even consider capturing 1000 pips. But just let it run and diversify the positions when needs be.
I hope the smart readers can learn the successful trading approach and mould the best method out of their own mind.
You can try the method I have presented today on just the 3rd 4hr candle everyday with great results. Hope you use the above method with your upskilled price interpretation for a better result.
You will find at least 1 out of 5 3rd 4hr candle is the start of move that is at least 100 to 150 pips on any pairs.
Just with the above statistics, you could work out stop loss size and so on.
Sincerely,
Graeme
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Nov 17, 2010 8:00am
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crede quod habes, et habes
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Good evening, all
Thank you for the continued interest and the private messages. Apologies but I will get around to them.
Last 2 weeks I have been catching up with my personal life whilst I was away.
First of all, Im very happy to see that alot of traders are truly thinking as professional traders. What this means is that you have finally admitted defeat that you cannot predict the direction of the price. The only thing you can ever do is enter and follow. However, as we all know enter and following is not simple as 1-2-3.
The reason is that the market moves slower than most traders anticipation vs time.
In reply to the last few posts about price moving during asian session as well. Good observation. Allow me to explain why this happens.
Few posts ago I asked everyone what type of candle do you like?
I personally love/adore/cherish/treasure full bodied candles with very small retrace. These are normally very strong movement with much higher probability of price not coming back. And this type of excellent candles happen on any timeframe. If you open a daily chart on any pair, you will see daily candles with no retrace. Those candles are the ones you have found price to start from asian and charge straight forward. You will also find that most times this type of movement is strong and continuous. From personal experience eur/usd has the highest number of these full bodied long candles with no retrace on daily/weekly/monthly chart.
I do not wish to add confusion to any readers but I believe that you will find alot of information already discussed in this thread.
It is time to mould your skill set.
Sit down with a piece of paper and pen. Plan your trading. And everyday execute as per your plan. Do not deviate. After few months or few hundreds of trades, you need to start analyzing your trade statistics.
Your own trade statistics will help you optimize your trading plan.
2 years ago when I first started building my millipede, I had few bundles of positions that grew for few weeks. One of the first diversification I did was on eur/usd and I closed more than half of the positions and left 3 legs. At that moment I was pleased to see that I have replenished my account balance and added large profit. I learned nothing then. Few months later, I specifically remember closing 2 legs of the remaining 3 legs to find that these 2 legs brought in more profit than all the legs combined in the first diversification. Infact it was almost triple.
Traders choose to see their current winning positions closed and finalised to see their account balance replenished with minor profit added than a greater potential reward later on.
I remember feeling content after the first diversification as I had -400 pips that I was anxiously trying to replenish only to notice few months later my anxiousness about -400 pips actually cost me few thousands of pips of potential profit. And I would have never made this discovery if I did not audit all my past trades. Your personal trading statistics is very important.
I never went back to my old self about counting how many pips im currently down as I know 'inevitably' market will return it back to me + so much more. Inevitable.
I hope my little story answers 2 things. 1) Your current emotional hurdle of watching your current realized loss and placing unneccesary doubts on your trading abilities. 2) Looking back at your past trade statistics to see areas of improvement is of critical importance.
Sincerely,
Graeme
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Dec 16, 2010 10:12pm
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crede quod habes, et habes
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Good morning, all
This post is a response to a private message I have received earlier which I found the need to answer in depth.
Thank you for the detailed response.
There is nothing wrong with your approach however please dont focus too much on price pattern setups. They are not the road to riches. Im sure you are aware but the difference in the data between brokers will show a pin bar in one chart while it may show something else in other. This is mainly due to the time difference of the brokers and what the broker choose to have as open time of the day. And there are so many discrepancies in between the information traders look at that a perfect looking pin bar on one platform means nothing to other traders. Then one has to wonder how reliable is a price pattern. Have you ever thought of it like this?
Many traders base their trading decisions solely upon certain indication like price pattern when it should be more of a confirmation than a recommendation. In my explanations throughout the thread, I refer many times to certain price patterns and they are very important tool on my belt however I do not soley rely on them to state that they are main source of my profitability. Hope this provides food for your thoughts.
Increased risk doesnt necessarily increase your reward. There are times in the market to stack positions and there are times in the market to just probe and watch. Unknowingly a trader might be overexposing himself to the market whilst he assumes that he is stacking correctly. Dont we all believe one thing but in reality the opposite is in effect. So when is the correct time to stack? It is time to stack when you are absolutely positive that the direction of the current movement has a purposeful meaning; main monthly trend. It has been a long time since I discussed monthly trends but I assume all traders understand and know the importance of monthly trends as they are the fundamental and technical movements of the market.
I look for buys above open price of monthly candle and sells below open price of monthly candle. Sounds familiar? Yes, my price interpretation doesnt differ inbetween timeframes something I have preached for a long time. Having said that, there are periods when all 3 timeframes allign in one direction; monthly UP, weekly UP, daily UP usually a good indication of major trend that is happening or about to happen.
And it is happening right now in eur/usd.
Monthly eur/usd
Weekly eur/usd
Daily eur/usd
And the breakout I was waiting for just now on 5min chart
Continuing on..
Last edited Dec 16, 2010 10:37pm
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Dec 16, 2010 10:34pm
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Just briefly, at the moment in regards to eur/usd I am looking at buys. I have 4 positions near the open of the candle. First was just a probe to test my theory and as the market plays out I will add more.
However, I do not solely focus on buys today as today could be a down day. And if that happens and price retraces down then I would reenter near the open price of the day as it comes back down. Sometimes it will retrace down and then stall and continue on UP, then I would enter more positions as it continues on. Timing of stacking is very important.
I know alot of the readers do not find the necessity of 3x20 exercise but there are 3 main things you learn from it.
1. You will notice stalls very quickly and easily and you will be also able to forecast how soon it will blow out of it. I like to refer to it as an aura. Sometimes a passive aura with the usual ups and downs and then an imminent red aura when I know its going to blow out of its tight range. It is then up to my price interpretation to align my positions preferably/usually before the blow happens. Sometimes I get the direction wrong which I would quickly change and capture the compelling movement.
2. You will also gauge the strength of the buy and sell. And this is very very very very very very important. The skill to gauge the strength of the retrace/dips/continuations. You know a retrace has little strength when it can only make small bold candles and then to have the original momentum overcome it with one single bold candle.
3. Timing. Without timing your stacking will not work. Infact, without timing your whole trading process is in jeopardy. Like falling in love, timing is a critical factor to know when to trade and when not to. You must be able to know when to add positions, subtract positions, aggressive attack, aggresive defend. But obviously timing alone cannot help as you would need the knowledge to gauge the strength of the movement from point 2.
eur/usd is now approaching 1.33000 and my positions are well ahead but this is just the beginning. Depending on the 'style' of the stall at 1.33000 which will show on the shape of the next 4hr candle. If a mini stall appears with less than 2 or 3 1hr retrace candle, I would safely say that we are aiming at 1.34000. If the stall around 1.33000 is somehow prolonged then there will be a retrace and I will watch again near the open price of today @ 1.3238. Until then my positions are SL to breakeven and Im at the mercy of the markets. Im placing 2 alerts to my cell phone, 1.3320 incase of a strong upward movement to stack on or 1.3240 when the retrace is coming back down.
4hr eur/usd 5/10 ema is about to cross. I never base my trading decisions on ema crossovers but I do know that a good movement if it does happen usually happens just after the cross. Not all the times but enough times for me to take advantage of with careful planning.
Sincerely,
Graeme
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Dec 16, 2010 11:16pm
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crede quod habes, et habes
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Quote:
Originally Posted by cameron1st
Thank you very much Graeme. I realise now that I lost perspective and have been looking too close at the candle patterns and not nearly enough at the big picture.
Kindest Regards,
Cam
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You are most welcome Cam.
Just like the audnzd you send me earlier, it is best to enter early and anticipate. When your anticipation is slowly confirming to be right, add more positions with valid reasoning. Many traders call it adding on the dips and I agree. However, I am far more aggressive when the market is favouring me and simply walk away when it doesnt. You need to know when to srike. Beginning of the month, beginning of the week, beginning of the day, beginning of a new 4hr candle all means opportunity for myself. Sometimes you get so absorbed in one direction that you forget the opposite and there is a good posibility that the direction you chose is just a retrace before going against you. I cover this by entering on the flipside with valid reasoning. And this works great on some months with 100 or 200 pip retrace before direction changes and I have positions on the retrace with the right direction. Definitely a huge bonus to my profit statement and worth the effort. And I also cover those other months that opens and just continues in one direction. As long as there is a price range withing a given month I know I will profit. And the confidence grows on you until you overlook losses endured to reach the end of the month when you settle your losses. And you evolve to a point where losses mean nothing but just a stepping stone of the greater picture.
Once a monthly direction is set and continuing, I will zoom into all levels of timeframes to add positions mercilessly but with valid reasosn.
I find that many many traders search far and wide when the answers that were overlooked for its simplicity might have been the holy grail after all.
Sincerely,
Graeme
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Dec 17, 2010 3:54am
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Quote:
Originally Posted by nomask
Hi Graeme
glad you're back... i know you simply say you buy when its above the open and vice versa but i also remember you considering it up when it only closes above the previous down candle's open...i mean for the daily it has not made a close above the previous down candle yet..
would you explain that more if you don't mind?
thanks...
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Good question, Nomask
And yes, the rule always applies to myself.
Look for buys when price closes above open of the previous down candle
Look for sells when price closes below open of the previous up candle
The above rule ensures that you will remain within the main direction. And I use the above small rule to always guide my focal interpretation.
However, that is not the only tool on my belt and Im worried to say the next as readers might shift their views away from the rule above but I do use probes during asian session to capture days that open on asian session and charge straight forward until end of the day. Something I did mention many times in the thread from the beginning.
Flexibility is key to trading. Sometimes your gut feeling and just the blind following of the market is better than any measure of forecasting.
I have many positions on the retraces of the monthly/weekly/daily candle which means I have gone against the simple rule more than once. It has worked wonders for myself as positions on the retraces/wicks has a higher probability to survive any pullbacks as the trend continues.
When price agrees with the small rule and also the direction of the day, this is the time for a very aggressive positioning.
But what made me go long into eur/usd today was a small single probe that I placed at open which kept on growing. And I just followed.
This chart might look confusing but if you are interested in my thought process before I took the trades this morning on eur/usd.
Daily chart eur/usd this morning without open of todays candle.
Sincerely,
Graeme
Last edited Dec 17, 2010 4:12am
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Dec 17, 2010 10:55pm
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Quote:
Originally Posted by nomask
thank you for clarification..just to make sure i was on the same page...
i'd like to post my latest trades (live) on eurusd as per my hindsight.I too sometimes try going against my hindsight with very small risk but today i was waiting a down move...
i've spent 38 pips total of 7 trades to build those three positions..its around 6 pips per trade...
even if i close the smallest position of those three positions I'd be covering all my losing trades at once...
my intention here is not to show off but assure everybody following this thread about Graeme's...
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Thank you for sharing.
Excellent trade.
This post is very important and also answers to fugly's question as well.
I hope all other readers realize what nomark has achieved here.
Nomask had a hindsight of down for this month of gbpusd. Most likely cause of the large bold candle of the previous monthly candle which was an engulf pattern. The main trend is definitely down.
However, during this month there was no significant sell opportunities as the first two weekly candles of the month was more or less up/retrace.
eurusd weekly
It is only this week when gbpusd kicked into gear and started to drop.
eurusd monthly
In this drop which is now forming to be the wick of presumably this months down candle, nomask has now positions on the wick. If his hindisght is proven to be correct (and it doesnt matter if it doesnt) his interest is in the best possible place for the maximum profit taking.
Few traders ask why I break my own rule of buying when price closes above open price of previous candle and vice versa. I adhere to the rule however I send probes into the market all the time. It is far better to watch a probe either grow or die then watching raw price feed fluctuating. But when the rule is confirmed, I would take stacking to the next level in aggressiveness.
Now I have something that I request all readers to think as there is an important point here.
Nomask, if your hindsight proves to be correct for this month. And now that this weeks candle did close below previous open price of up candle as per our small golden rule. What will you do?
A. Watch your 3 probes grow and bask in the glory?
B. Start designing an excel spreadsheet to tally up your unrealized profits and brag in forums.
C. Spend the next week focusing alot more on gbpusd as it is 'starting' to confirm your 'hindsight' and take maximum profit taking advantage.
Nomask, what will you do if your monthly hindsight doesnt work out?
A. Log into forum and complain
B. Move onto new method and feel angered by -150 pip loss?
C. Look for another good monthly price setups on other pairs and place price alerts to your phone?
Nomask, what will you do if your monthly hindsight does work?
A. Start writing a resignation letter as verbally abusive as possible
B. Close 3 probes and place a huge smile
C. At the end of the month you settle your losses and to your personal discretion close few more to take realized profit now or close few less for potential bigger reward in the future.
Nomask, what do you anticipate from now? Assuming your monthly hindsight does work.
A. 10+ vouchers in forums
B. More positions this week without overexposing risk and valid reasoning.
C. Keeping your hindsight intact however also covering the fact that it might not work out by placing few probes against your hindsight. But also aggressively adding more and more when the price action does play out to your favour in the following weeks and months
I do not know how far the current gbpusd will drop however I can ensure all readers that 1 correct hindsight on a monthly 'scale' would be few thousands of pips profit at the very least. And the profit taking is further amplified with addition of multiple position the longer the trend prevails.
1 correct hindsight on 5min chart means nothing but 1 correct hindsight on a monthly chart (using ofcourse the same price interpretation) means everything. Give me a price range on a month and I will profit from it.
Dont allow the 3x20 exercise on lower timeframes confuse you. That exercise is to learn price action to apply on higher timeframe to gain hindsight. We do the exercise on the lower timeframe as it is much faster for more practice and we know that there is no difference between timeframes except the scale. Everything that works on 5min chart works on other timeframes; weekly, daily, monthly.
This is an interesting fact for most, average price range of all common pairs is more than 1500 pips for a given year. In other words to achieve this average range all pairs do move from one spectrum to other to cover this distance. A professional trader noticing such movement happening will ensure that he captures most of that move from all aspects. Intraday, intraweek, position trading. Perhaps this is just an elaborate version of 'follow the market' but most traders dont.
I hope this is start of something new for nomask and all readers who do take my suggestions seriously. Nomask, if this gbpusd does work out to your favour nothing stops you from doing the same thing over and over again on all pairs.
Sincerely,
Graeme
Last edited Dec 18, 2010 12:04am
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Dec 18, 2010 7:15am
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crede quod habes, et habes
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Quote:
Originally Posted by MidKnight
The key with your above comment is IF you closed any position at all then you'd cover losses. Two weeks ago I had a rough week were nothing would stick and as such ended up down some pips. Then Monday happened and I was on the right side of the market for pretty much all of that move up. Six positions were stacked and I was thinking this is great. I could cover all of last weeks losses with a single leg, but instead I will give time a chance to make this work out. Anyhow, we all know what happened on Tuesday. Everything got taken out BE as...
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If I may step in and explain for the benefit of all.
The only thing certain is that nothing has any certainty.
Im assuming the above post is about your experience from gbpusd? It was wise to follow the initial up movement early in the week (I did) but when it stalled for a prolonged period (more than x2 4 hour candle is uncomfortable for myself) there is a reason. There is always a reason.
Im sure you do but do you consult with monthly and weekly timeframes? Monthly timeframe is both fundamental and technical movement of the markets. gbpusd is definitely a down trend for this month and that thought must always be in your head. When price goes against your thought you still cover it by few positions here and there. But when it stalls and continues as per monthly trend then you know its time to add positions on the new correct direction.
However, your monthly hindsight could have been wrong from the start; gbpusd could be destined to go up from here. Then your 6 positions are at the very best positions for the largest profit taking if you allow it to grow. And ofcourse you wouldnt stop there, you would add positions every day, every week, every month as long as trend prevails. You might look at your current small loss and feel frustrated but soon you hit that golden major trend of the year that does treble your account or more and then notice that all you have to do is just hold on and stay in the game until it does happen. The feeling of '1 leg will cover all my losses for this week' is not what I expect you to encounter. You should be looking for '1 leg covering all my losses for several months or a whole year" and it all starts from 1 correct hindsight on the monthly taken down into all timeframes for maximum profit taking.
Just on related topic, some might wonder if the reward is worth its effort. The juice is definitely worth the sqeeze. All you have to do is find a pair that looks ready to explode on monthly and then filter is down to lower timeframes. How do you find such pair? If you have practiced 3x20 exercise on lower timeframe (like 5min) you just know from experience that such setups need to move. And when it does move you know that it will go at least few candles. And thats all you need to know. Just a hint that it might go few candles. Few candles on 5min worth nothing but a few candles on monthly chart is worth alot of profit, few thousands at the least.
From experience 2 consecutive months of same movement (so 2 same monthly candle) is on average 3000 - 6000 pips gross with few additional positions.
From experiece few positions with the 200 ema on weekly/monthly for a year means a few years paycheck for most.
And in the midst of all uncertainties the only thing certain with forex is that it might not move in the next 4 hours but it will definitely move in a year. Think about it. You would be very foolish not to take advantage of such surety
No disrespect to midknight but I hope this explanation gives you the right nudge.
Sincerely,
Graeme
Last edited Dec 18, 2010 10:31am
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Dec 18, 2010 8:11am
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Quote:
Originally Posted by MidKnight
Hi Graeme,
Sorry, but I should have said that my story about last week was for EUR/USD  But I get all your points - thanks for the post.
Merry Christmas,
Matt
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Merry Christmas to you too Matt.
eur/usd shared the same fate with gbp/usd.
In regards to eur/usd and gbp/usd, monthly 5/10 ema has just crossed over, 50% retrace of previous monthly candle has been achieved and it came tumbling down. I am however not pleased to see that the retrace was 50% as I always prefer less than 33% as this usually leads to a very bold move down.
I anticipate a good 5/10 ema crossover on monthly and hope it travels far. Im not sure if it will happen but I will always anticipate and participate.
eur/usd and gbp/usd is currently looking to be a bold monthly candle down. I will probe early monday and stack heavily when I know buyers have no strength (usually at dip) or compelling momentum.
I definitely like the current looks of it and have my hindsight as down but will participate on both direction.
One of the common myth is that there are no participants during festive season. I will not disagree publically but I had my best months in December for the last 2 years on all pairs. Infact all months have been good for myself.
Never stop trading cause of general beliefs. Stop trading when there is nothing to trade on.
Merry Christmas to all.
Sincerely,
Graeme
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Dec 18, 2010 9:38am
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Quote:
Originally Posted by nomask
great questions with obvious answers in it...
i know what you trying to say by all these questions and I'm well aware of the fact it my not work out after this point per my hindsight..
but when i see that i had my positions on that monthly wick and they're all moved to b.e...It's all i can do for now rest is totally up to the market..if this month closes down as my hindsight i'll close my smallest position to cover my expenses and leave rest to grow..if things get changed not in my favour..i'll just do the same thing but in the opposite direction..i...
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Very sound approach and very similar to my approach
Only minor difference is that I cover the opposite side just incase Im wrong with the hindsight.
Im very happy to hear your trading approach as it is logical, sensible and realistic. And im sure within that 4 weeks you would have added more positions as the direction continued on. It is these large chunks of few thousands pip profit that kick starts your capital.
All there is for us to do is to remain in the game and hold on until such move happens on the 'higher' timeframe first.
Rinse Repeat and rest is history.
Well done.
Graeme
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Dec 18, 2010 10:09am
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Quote:
Originally Posted by nomask
i find the trades very fast to move in my favor if I'm in the right direction..as you can see last trades were in the right direction but with no momentum at that time...i just closed them as they were ranging and making closes above my 5 min entry..and as i got better opportunity i just re-entered..this how i like to do..
but its all up to you.but since i was already "not bad" at low risk entries i implemented this from Graeme's idea easily...
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Good.
And I promise this be my last post as I do tend to get carried away when talking about trading.
For myself, I trade 5min when I see red aura in the market. It doesnt happen all the time but enough times to get my pulse running.
I do not wish to stay in a trade, not 1 minute longer than required if its going against me or something is amiss. And how do you know that? It is very simple. You execute and no one else does...
When I enter on 5min chart I expect to see at least 'few' of the following:
1. It has recently come out of range that had more than 5 candles at the least. (if im trading breakout)
2. Stall before 5/10ema crossover. Small candles that has almost same open price and close price in a row and then price moves out and ema crosses. (if im trading breakout)
3. The candle I enter has less than 33% retrace or maximum 50%. Alarm bells start ringing if a) retrace goes to 50% and stalls and goes up further b) price closes against me; I enter sell and the price closes above the open price of the previous down candle (this is a big no no and I would really hesitate to stay in the trade)
I focus on point 3 heavily.
The most important thing I observe is the retrace and the size of it. Why? This is gauging at the oppsite side's strength. If I sell I want to know for a certainty that there are much less buyers than sellers. I do not wish to turn up at the party all dressed to find no one there.
I enter and price stops? I judged the momentum incorrectly. Correct definition of momentum? Your position goes to positive as soon as you enter. 5 star.
Personally I choose to use small 5 pip, 7 pip ammos when probing the 5min chart and have no remorse to losses (unless I overrisked myself and gambled more than trading). It is necessary part of trading to lose some. It amuses me to know that in a few weeks one trader will be cashing out a big cheque of few thousand pips and he stops to worry 100 pip loss this week? Yes it will concern you if you are playing with lot size above your current financial level. And these type of traders worry me as they try to rush and market doesnt like getting pushed around. Most often these traders will see their capital bust out before the inevitable profit arrives. Very poor money management.
Believe me when I say that a 5000 USD account on 0.1 lot size ($1 per pip) will be more than enough and you are looking at few tens or hundreds dollar per week on average calculated over few months period.
Thank you all
Graeme
Last edited Dec 19, 2010 3:40am
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Dec 19, 2010 7:08pm
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crede quod habes, et habes
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Quote:
Originally Posted by nomask
Hi Graeme i hope you'll keep helping us here..
Ive been holding a question for a long time to ask you...
do you ever close all your trades after some point..I know you mentioned about diversifying them but do you always hold your largest position until it gets taken out at b.e or close it when you believe that major trend has changed..?
on the chart attached i'd love to hear how you would manage those 5 short trades ,where and how you would diversify them..is there any position among them you'd be still holding today..
thanks a lot ...
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Good question and one of the most common question received.
Many traders prefer to have a flow chart of solutions whereas if a happens then do b, if c happens then do d. And this is more or less defining your actions and we have discussed how much rigidity in trading does not work out well.
But, I do have few rules that readers already know that governs the principal of my trading approach.
In regards to answering to nomask, the best time to diversify is when the direction you took is running out of steam. But.. this stall may be nothing more than just a short term stall. You must keep both thoughts in your mind and always cover both scenarios even if it costs you a little more to maintain both sides of the arguments.
There are no set rules but a rule for myself is that 'I never diversify for a loss.' In my diversification I will always replenish my account balance to the point of previous completed diversification and add realized profit into it.
On a side note, counting the first 4 legs that are still growing + just the 1st diversification
2600 x 4 = 10400
1300 x 9 = 11700 is over 20000 pips which covers all my potential losses for a whole year in all pairs that I trade assuming I lose at an average of 400 pips per week in necessary trading losses.
It is this type of huge boost that will see that you never come back to previous profit levels.
But what is more interesting is what happens afterwards and this would answer you more,
But what is more more interesting is what happens after that..
Where I currently stand.
Just calculating the positions that I still hold just in the red area which are 16 positions @ 28000 unrealized profit. Do I kick myself if they die at breakeven. You evolve to a point that you dont even care. Infact you dont even know there presence.
And I have this same scenario happening on all major trends of all major pairs. Perhaps it is this wide exposure that dulls me in senses to one particular pair or group of profitable legs.
Some newer readers think I have rules after rules after rules..
But if you continue reading you can summarise my trading approach with 5 or 6 key rules and thats it.
Paul 1 - Nice to hear from you Paul. Correct. It would be very foolish to ignore such 1000+ pip moves that is happening RIGHT NOW on higher timeframe because a trader is too busy looking at 4hr chart with a magnifying glass looking for the next 20 pip profit... Ironic I say.
And I forgot to mention that I still have a group of positions from the green area going up. They are not worth much as the biggest is only 850 pips but there are 17 of them.
Sincerely,
Graeme
Last edited Dec 19, 2010 8:21pm
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Dec 19, 2010 8:27pm
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crede quod habes, et habes
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Thank you for the compliment Cameron.
Just before I head out the door for the day and finishing off answering to nomask.
After the explanation above with 5 charts.
Where does that leave me??
I cover ALL POSSIBLE SCENARIO/MOVEMENT that EURUSD can make.
Why cover both?
Its because I dont know which direction it will go. Do you and which system could that be?
You are only hedging against your own positions so you dont make any money.
Do I? Seemingly yes but my profit statement shows otherwise.
Just do one direction
I can. Sooner or later I miss the major trend that went against me which I didnt participate
Worth the trouble?
Absolutely without a shadow of doubt
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Dec 20, 2010 3:59am
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crede quod habes, et habes
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Very good questions and I will try my best to answer it as thoroughly as possible
Quote:
Originally Posted by VEEFX
Hello Graeme,...
1. NEVER DIVERSIFY FOR A LOSS: I completely agree with the logic behind this but I feel an exception needs to be made during the initial days/weeks of trading. I gained about 18% of my starting balance by the end of first week and then I had to take a break from trading for personal reasons and lost most of that profit and a/c balance eventually went into negative territory during week#3. I have emotionally mastered the art of holding on to legs when my ending balance is in positive territory but feel extremely challenged...
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Half full glass of milk stands on table.
Is it half full or half empty?
Ofcourse there are no correct answer but your perception to the matter.
I have a certain expectancy of a profit target when I trade. I aim for big chunks out of main trend of the year. And I know for a fact that I will arrive at my level of profit taking sooner or later cause I have witnessed it and tasted such success repeatedly.
At first alot of traders starting to trade has no idea what to expect. All they seem to know is the direction towards successful trading but they just dont know what is waiting for them when they reach the goal.
Once a trader taste success on a big scale (taking big chunk out of the main trend of the year), this trader will never go back to 2nd best option.
I started off same as anyone else and worried about my realized loss vs unrealized profit. -100 pips loss so far and my unrealized profit is 300 pips. What should I do? Take profit now? It sounds so attractive to take profit now. Not only do I replenish my losses but add 200 pips of realized profit into it. And then to add further insult, price reverses and takes the stop loss out at breakeven.
If the above happens you would feel irritated at the failure. Is it a failure? Whos perception are you considering the above as a failure? It is only yours. Your own perception that the above scenario was a failure when infact it could be the start of a success. Do we really need 300 pip legs? Ofcourse when you are starting new 300 pip means the whole world but assure you that 300 pip is nothing and can be achieved in few good days. We aim few thousands of pips on average every 2 to 4 months.
But I understand the psychological factors involved with traders focusing on the realized losses and not the potential win of the future. And mainly it is because they have not yet witnessed a large win but I assure you once it does happen a trader will never go back to being frugal with such losses.
The other reason why a trader might focus on realized losses is that they are trading with lot size above their current financial level. I assume most traders still hold onto their day job. Support your trading from your income until a large win propels you high enough so you dont need to support your trading anymore. Above all lower your current lot size so -600 pips realized loss is still only a few days of work.
When I first started with diversification I was diversifying more legs than now. Like all traders I was focusing on getting the losses back up and banking some big profits. And I was content that my trading was profitable. It was slowly building up. However it wasnt success but failure in disguise when I was missing out large trends and it was overall hard work to profit little by little.
Nowadays, when I diversify I aim to replace my losses to the point of previous profit levels and add 'little' profit into it. Just enough to maintain my capital but also growing little at a time. My main aim is to cash out gigantic slices out of large trends that happens everywhere all the time.
In regards to diversification, a trader needs to experience a scenario where he believes that they have just performed a perfect diversification only to realize few weeks later that they missed out on few thousand pips. In their state of fear they have unknowingly selected to settle their -100 pip realized loss than cash out a few thousand pip cheque few weeks later. That is a failure; to take only 3 hundred pip when infact the market was offering you few thousands. Not the act of a professional trader.
Continuing on..
Last edited Dec 20, 2010 4:45am
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Dec 20, 2010 4:13am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Hello Graeme,
2. MOVING SL TO BE: I am wondering if we could touch the topic of moving SL to Breakeven as I feel this becomes more crucial when we have a leg open and start sending out probes at times of uncertainty by taking unidirectional or bidirectional trades to assess whether to diversify or continue with the trend. During my practice, if I randomly move SL to BE as a constant 10+ or 15+ pips into profit, I feel my BEs are easily taken off. Alternatively, when I wait for confirmation and then move SL to BE (i.e. Engulf bar in the...
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Good thought.
We have discussed 5min trading to great lengths in this thread. And yes, a trader will be taken out continuously on the 5min timeframe. However, if you pinpoint the timing of the trade you will find that 5min timeframe provides the best risk reward possible. Pinpointing timeframes is when everything is aligned correctly to your hindsight with an imminent breakout about to happen. A red aura in my vision.
If a trader prefers to enter and keep a fixed stop loss or no stop loss at all please go ahead. However keep an eye on news releases.
This might cause controversy but I have mentioned few times before that I dont even use stop loss most times as I know a sudden price fluctuation of anything greater than 20 pip is not going to happen unless a big news is being broadcasted.
Sometimes one attempt with larger stop loss is better. A trader who tends to jump in and out on 5min chart cause more damage by doing so. I lose once and I stop stacking. Maybe twice but very rarely 3rd attempt.
Continuing on..
Last edited Dec 20, 2010 4:52am
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Dec 20, 2010 4:18am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
3. SMOOTH or UNEVEN UNREALIZED PROFIT CURVE??: This is becoming a bit of pet peeve for me for a while so need to get it out of my mind. I am convinced your approach is the best possible approach that I have come across when in comes to keeping a smooth "account balance" curve.
In my experience during practice, I found my unrealized PnL (total account equity) to be very volatile for my taste. To minimize the impact, I went to smaller position size and span my trades across 40+ pairs out of the 130 pairs that my platform offers to see the...
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Great question.
When you look at your equity curve for the past 1,2,3 week, yes it is not smooth. It never will in such short period of time.
It is only when you zoom out and chart your equity curve of last 3 to 6 months when you notice the smooth gradient.
A traders current zig zag looking equity curve for now is 'part of' the smooth curve of the future longer term gradient.
My current fluctuations on my unrealized profit varies. But even the seemingly wild fluctuations of day to day is nothing in the long term. Also when you have greater exposure and spread the risk out everything stabilizes.
This is why many corporations own sub groups of businesses. The hotel division might flourish at the sharp increase in tourism but its retail division could diminish cause of increased interest rate. It evens the keel by spreading exposure around. It might look like they have broken even but the expected positive return on both division is calculated annually and not day by day.
I do not see a jaw dropping volatility as a minus here is overcome by a positive there. But considering all my positions as a whole portfolio I do enjoy an amazing return calculated over the period of last 12 months.
A new trader will experience greater fluctuations than myself as he has interest in only one pair.
Everything stabilizes once you get the ball rolling.
Continuing on..
Last edited Dec 20, 2010 4:30am
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Dec 20, 2010 4:41am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
4. TAKING A BREAK FROM TRADING: I like the idea of continuos participation in the market with routine probes to see if the trend is reversing or continuing. I had to take a break from trading and experienced a significant change in to PnL in a week's time. This got me thinking whether you have any tools up your sleeve to deal with this. Curious if you considered any repositioning of your trades when you took time off recently from your trading.
One approach that I can think of is to calculate each currency's 'net' exposure in your account...
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Very good question again.
Apologies but could all readers please hit refresh and read my answer in the above post. Question 3. I added something very important for all.
It may seem like alot of work but I trade with least effort. Infact I spend more time setting up price alert to my cell phone than trading.
Phone rings - I read the message
"price moving out of range on eur/usd"
Goto computer
Look. Is it moving out with momentum? Yes?
Sit down and focus
Enter. Stack. 1 loss. Try again. Another loss. Get up and walk away.
Reset new price alert
Sometimes..
Phone rings - read message
Goto computer
Is it moving with momentum? No?
Reset new price alert and walk away
This helps with my stress and actually helps prevent any over trading as well.
In regards to averaging out positions. It is a good idea but that would add more work to what I currently do. And no one wants to work more. Currently I have more than doubled my initial capital in very short period of time as realized profit and I hold 15 times that amount in unrealized profit. If world does end tomorrow and my unrealized profit vanishes I am still very pleased with the realized profit that I have already taken. That is just how I see it. But ofcourse I will have to bury few people as retaliation at the very least.
I have never had the opportuntity to reposition myself as I always held onto positions. I would however add more positions if trend continues.
Sincerely,
Graeme
Last edited Dec 20, 2010 5:22am
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Dec 20, 2010 5:10am
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crede quod habes, et habes
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Thank you for the continued interest.
Currently there are few traders present that do contact me in a regular manner to update me of their progress.
It is a honour to have such faith from other traders and I do monitor their progress carefully. Sometimes it is like watching myself trying to do my first diversification few years ago.
The point is that if these traders persist and defend their vision, it will be formed into reality. Price might not move in this hour or the next 4 hours but it will definitely move for you from now and the next few weeks. Price must move and it is this inevitable fact that will create your reward.
All you have to do is keep it simple and stay in the game. Please refrain from verbally abusing your boss yet as it is later than now.
For now, keep it simple, choose one pair and watch the higher timeframe using the same price interpretation you have upskilled. When it hints you that it might move few candles on the chart of monthly candles. Go for it.
It might cost you few hundred pip loss if your hindsight is incorrect but it could also mean a few thousand pip reward. And please dont settle for less. If the market moves 1000 pips in 6 weeks for you, I expect no less than 2000 pips from your first try. From the point you start to the point you cash out (or diversify) I expect at least twice what market moved for you as unrealized profit.
Dont worry about diversification for now. Just attempt to catch a large move on higher timeframe and amplify your profit taking with at least 1 or 2 more positions. After few weeks of growth, 'try' and keep 1 of them. And be proud of your accomplishment as you have just driven around the block without a helping hand. But for your sake I do hope the price continues on further when you see for yourself that you didnt make money few weeks ago but you actually lost potential profit. That feeling is much sicker than the feeling of -100 pips you currently look at your realized loss statement.
..Its like winning the lottery only to have thrown out the ticket
Thank you all
Sincerely,
Graeme
Last edited Dec 20, 2010 5:24am
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Dec 20, 2010 9:12am
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crede quod habes, et habes
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Quote:
Originally Posted by GrRt
I use this service http://www.mobile4x.com
Very useful for me, quick registration, but sometimes there is delay with sms and real price, lets say 2- 4 mins ...
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Good.
I use a VPS server with mt4 to send email alerts to my phone but these days I use mobile4x to receive sms alerts. Great thing about mobile4x is that I can update price alerts by simply replying back to the sms whereas with VPS I would have to log in. However with VPS I can add simple message (which is very useful as I have price alerts across the whole board and forget what is what most times) that will show up in the email that I receive and it is instantaneous while mobile4x does have 1 or 2 minute lag.
It is now 1am here in sydney and nothing is happening across the board.
I have multiple alerts to wake me up on
eurusd 1.31900, 1.31150 as I really want this breakout in my possession.
The price has stalled for a very long time. Usually a prolonged stall triggers a burst of momentum with great reward. Im currently -32 pips with eurusd.
Know when to trade and today is a no no. We have no one else to piggyback on.
Set up your alerts and catch up sleep or spend time with your loved ones.
Good night.
Sincerely,
Graeme
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Dec 20, 2010 11:05am
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crede quod habes, et habes
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It has now moved out of range with great burst.
Just before I went to sleep I opened 1 position @ 1.3160 with hard stop loss above the high point of the day 1.3190. It was more of a probe which respects my hindsight but I had valid reasons (near open price of day, and price bounced off 200ema which seems to be invincible today). I edited price alerts so I receive alert @ 1.3140. I have 2 positions in @ 1.3135. All moved to breakeven.
It is 3am here and I do need to rest as late nights does effect my health.
For nomask, cam, grrt, geoff, veefx, rustam dont forget your hindsight. Follow it through. It does not matter if it doesnt work but it is simply negligence if you are not sincere with your own hindsight that you have analysed. Make it into reality.
Usual stall at .00 area. Also start of new 4hr candle. Anticipate the best possible scenario that it will have less than 33% retrace. If so, take advantage of it and juice it out (not too many attempts) for the next 4 hours. And when it stalls, stop. Let the buyers take over control for awhile and then enter when they lose strength.
I know all readers are more than capable and there is no need for my commentary above but it is there if you need to confirm your own beliefs.
Good night all.
Sincerely
Graeme
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Dec 20, 2010 11:21am
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crede quod habes, et habes
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Quote:
Originally Posted by VEEFX
Thanks Graeme for your awesome and detailed responses to my questions. Price just recently broke downward so hope you caught that. I couldn't but here's another question I have a bit of struggle with especially on M5 TF concerning breakout and momentum.
In the attached EU chart, I took a long trade (probe) at London open last night but tuned out to be a false breakout. My reasoning was a strong up candle piercing through the daily open price point (green line). I probably retraced back as I was against the trend which I knew but this was just...
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Good question it would be unfortuantely last for today.
I wrote yesterday that when I enter there are few things I do not want to see.
One of them (especially when I trade 5min) is to have the price retrace more than 50% of previous candle. I prefer to see less than 33% retrace which shows the lack of strength from opposition. Sometimes when you wait 2-3 5min candle you missed the whole opportuntity. Probe it first. Just add 1 position and watch what happens. If it grows then add again. For some psychological reason you will find probing with a position and watching its value increase or decrease is far more effective than watching raw price fluctuations. The strength of the move also depends on the setup before the move. Was there a stall? If so, was it prolonged? Just like now on eurusd. Sometimes it happens at a key s/r. That is order flow. You can sense where most traders placed there buy stops and sell stops when price approaches .00 then punctures straight through with increased speed means there was large buy/sell stops at that .00. Sometimes it approaches .00 and then bounce away sharply which means the mass has placed their TP at that .00. Every little information helps but it is also important not to overcrowd your thoughts. The most direct answer to your question would be the retrace and probe. Watch retrace and send out probe. Watch and add more to it.
The last part of your paragraph. When you wait for all timeframes to align up is when I see red aura in the markets. And the skill grows to a point where it becomes very reliable. But sometimes when you wait for it align up the battle is over. Probe first. When monthly, weekly align up except daily. I would send out a probe when price bounces back down from retrace towards the open price of the day and towards the aligned weekly and monthly direction. Most often that probe is on the wick of the days candle.
Hope this answer helps.
Good night
Graeme
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Dec 20, 2010 11:23am
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crede quod habes, et habes
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Quote:
Originally Posted by cameron1st
Good night Graeme, thank you for the message, even at 3 AM you are thinking about our progress, and wanted to say that is very very much appreciated.
Kindest Regards,
Cam
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It is my pleasure.
Thank you for the warm compliments.
Apologies if I dont acknowledge them publically but they are noted and greatly appreciated.
Thank you to acim and maaj for their kind words before and apologies if i missed your name here.
Sincerely,
Graeme
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Dec 20, 2010 9:05pm
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crede quod habes, et habes
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Good afternoon all
I would like to talk about going against your hindsight today.
Now this topic is subjective if you plan to only execute as per your hindsight and there is nothing wrong with that. You will however need to be more patient as an incorrect hindsight on the monthly chart could mean that you sit out for few weeks or months. I prefer not to.
We can never be 100% right with our hindsight but we could admit to it and cover both sides. It costs very little to keep both sides of the argument.
There are few readers (including myself) that we have hindsight down on eurusd, gbpusd, eurgbp. However, just what if we are incorrect.
Lets have a look at eurusd this morning and what I did to simply cover both situations.
eurusd 4hr
And there was a sudden big movement going up. This should confirm your ascending wick theory that it is now buyers control.
Send 1 probe.
The next area I focus is here:
It is the first resistance that I can see. Price cuts through it like butter with hardly no stall. Add 1 more as the probe is now 10-15 pip profit.
The next area 'and the most important' is here:
The reason is that 'assuming' this 4hr candle is complete buyers control then the optimum scenario 'for the buyers' is to have the current 4hr candle close above the open price of previous sell candle. Remember this small rule? What do you do then? You try and enter a position before the line as the price nears it.
What does the above cover on the higher timeframe?
eurusd daily
It covers the scenario where a traders down monthly hindsight could be wrong and this might be the start of something huge going up. You just never know. If the daily candle closes above open price of previous down candle it would mean re-evaluating your current monthly hindsight but before that I already have 3 positions in place going up while most traders think about it. React first.
HOWEVER..
eurusd daily
All this could be a retrace for our DOWN hindsight. In which case you would wait until the current up movement loses strength and starts to drop. You will notice descending wick patterns and stalls before the price tumbles down. And when it does, prove your theory early with 1 position and then start stacking as it continues down and go aggressive when a 4hr candle finally does close below the open price of previous buy candle.
As most readers will notice I say the similar thing over and over again. And this is all I do everyday.
Sincerely,
Graeme
Last edited Dec 20, 2010 9:17pm
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Dec 20, 2010 10:53pm
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crede quod habes, et habes
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Thank you for the kind words Taurus.
I would like to talk about one more topic. This wasn't discussed before but was asked the most times.
When is it time to cash out?
I received PMs from few traders who had over 2000 pip unrealized profit in the last few weeks to watch it diminish to nothing. This is not their fault as they are not aware what to exactly expect.
Here is a rough statistical answer from my personal experience of the last few years:
Any growth between 2000 to 4000 pips within the range of 4 to 6 weeks on a single pair of currency is ripe for picking.
Im not going to impose all to keep most legs as you will eventually evolve.
Taste your big success and bank that huge jump. Try and keep at least 1 leg.
After the taste of your first big success you will crave for more. Financial reward from the market has similar psychological effects to taking drugs. You start building tolerance level and crave for the higher level of jolt. After your first taste it will be you who choose to close less legs as you know 'inevitably' soon or later you will get another hit of big jolt. This is what i mean by evolving. And once your addicted you will keep raising your levels until you are now taking huge few thousand pip slices from monthly chart that grew for few months and less number of smaller few thousand pip hits.
You don't need to force yourself to be a position manager or position builder. It is the surreal high you receive when you capture the next high jump that propels you so high that it would be impossible without recklessness to come back down to previous profit levels.
Some pairs have been in the same trend for more than a year, some few years. Believe me when I say a big cash out day of 20000 pips to 30000 pips is nothing when you continuously add position year after year after year. It will inevitably happen on the currency pair you have chosen. Just hold on until then.
Sincerely,
Graeme
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Dec 20, 2010 11:36pm
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crede quod habes, et habes
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Quote:
Originally Posted by geoffrod
Hi Graeme,
thanks again for taking the time to share with us all,
i have a question regarding what you have said below,
when you say 2000 to 4000 pips growth, are you meaning 2000 to 4000 pips movement of the currency pair or are you saying 2000 to 4000 combined growth in ones position on the pair????
sorry if this sounds confussing
cheers
Geoff
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Hello Geoff
Apologies as I should have been clearer.
I definitely mean 2000 to 4000 combined growth in ones positions on one particular pair at a given period of 4 to 6 weeks. This is rough estimate that will help traders decide when to cash out.
At the above profit taking level, expected annual profit taking would be 12000 to 24000 pips per pair. And that sounds about right to what I achieved.
Ofcourse the net profit is less when it comes into your pocket as you need to cover your essential losses endured throughout the trading year.
Anywhere from 100 to 400 pips net profit per week is realistically achievable.
All the figures above are from personal experience based on the average performance of last few years.
Sincerely,
Graeme
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Dec 21, 2010 6:10am
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crede quod habes, et habes
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Good evening, all
Nomask has just said the golden phrase.
"dont want to sit stuck in a stall"
Yes, that is arriving at a party best dressed but no one there.
Today is very similar to yesterday. There are no traders to piggyback on and you will end up alone at the party.
I like to further discuss about stacking.
Many traders detest the idea of stacking. Perhaps its from the fear of amplified loss. Stacking is your best friend as it does the opposite of what you perceive it does. Stacking is the tool in maximizing your profit taking opportunity. Without an addition of at least 1 further position, you are looking at a grim static risk reward that might slowly make you a winner but not a rich winner.
Stacking does carry the same magnitude of risk compared to the potential magnitude of reward. However, since you are striking when the iron is hot, the severity of a failed scenario whilst stacking is definitely less than the achievable reward. This trading approach itself is the best risk:reward ratio.
I find alot of traders jump in at the first sight of movement with 1 position followed by another, followed by another within few minutes. I do this when I know for certainty that it is currently moving with great momentum. And this doesnt happen often. Perhaps 3 or 4 times a week.
I personally like nomask's very tight approach as he has shared with me in detail of his analysis and the gentleman certainly knows how to defend his capital against recklessness. However, some traders just get figgity to trade with 6 pip stop loss. The difference is that nomark uses momentum when it happens hence a 6 pip stop loss when momentum in full swing is realistic. Infact if you judge momentum well your position should be positive almost as soon as you enter.
Fugly, if you wish to trade with 20 pip stop loss that is fine but use it as a probe. Probe is like a dispensable scout. Be prepared to lose plenty of them but when a scout sticks and survives, take as much as possible.
I use probe both with trend and against trend and use plenty of them.
This is a past example that happened last week Friday on eur/usd
Early in the morning at asian session I told everyone that I had positions going up and that it would break 1.3300 and if there wasnt any prolonged stall it will aim 1.3400. It was somewhat correct as price did break 1.3300 but reversed from around there. But I managed to take majority of the drop back down.
eurusd 4hr
eurusd 4hr
eurusd 1hr around 0800 london time
eurusd 30min
And I ask myself:
1. So, this could be the turn of the direction. 30min just had flying buddha and the 2nd candle (10:30) had less than 33% retrace.
2. Im only interested in big momentum moves which means that if there is any retrace it will be less than 33% preferably or less preferable 50% or worst case scenario a stall.
3. Lets just assume it will be less than 33% so open a probe with hard stop loss @ 50% retrace.
So I had a probe @ open price 1.33081 with SL @ 1.33220. A 16 pip probe. Tiny and cute.
Always assume the best possible scenario
Then...
Last edited Dec 21, 2010 6:50am
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Dec 21, 2010 6:36am
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crede quod habes, et habes
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The probe died within a pip. If only stop loss half a pip more it would have survived. Not happy but there is nothing I can do.
eurusd 15min chart right after death of the probe @ 11:30
I didnt enter at open of 15min because its where my probe died. But when price reached approximately half way down I looked at the current uncompleted shape of the 15min candle and start assumign again.
1. My first theory about direction changing is getting warmer
2. If this candle has no more new/higher retrace than it would be a perfect looking candle.
3. I want momentum to break that support
So I opened another @ 1.3306 with SL just above the small retrace 1.3318. This time 14 pips.
And I got it right.
Now I see red aura. This is the move of the day. I can feel it and the confirmation is getting stronger as the time goes
This is where one stacks but with valid reasoning on all timeframes as hell is about to break loose.
Still eurusd 15min
When things are right you will have multiple chance in a row to stack
And when the new 1hr candle/4hr candle opened at 12:00. I stopped as I was expecting a retrace as always. All 3 positions in little profit with 2 moved to BE. Even if i lose all 3 now it would have cost me -20 or -30 pips. Pocket change when you consider that this move is ALSO ALIGNED TO THE DIRECTION OF MY MONTHLY HINDSIGHT
And it doesnt matter which timeframe you switch to but I switched back to 4 hour.
What I should have done is continued to trade as there was no reason to stop but I was held up. This is what I missed, an opportunity on every timeframe for the next 4 hours.
Last edited Dec 21, 2010 7:10am
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Dec 21, 2010 6:44am
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crede quod habes, et habes
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And I will admit now it was poor management from myself as I missed the next 4hr candle as I was held up.
And this is what I missed out
eurusd 1hr
eurusd 30min
and plenty more on 15min
When I see blood like that I would cover the whole region in positions.
All would agree that market does not trend all the time. It perhaps give you 2 or 3 opportunties within a week that does move 100+ pips for you. And you are settling for 2nd best if market moves 100 pips and you take profit 50 or less. That is not professional. If market moves 100 pips I expect no less than 200 unrealized pips for anyone who is serious about trading professionally.
Probe. Probe. Probe.
And once a probe sticks there is a reason it survived.
Taurus just phrased what I was trying to say perfectly. Thank you.
Most traders trying to stack lose more pips from aimless stacking when those ammos could be used as single probes.
Hope todays explanation add further insight to when to probe and how to probe. Always assume the best possible scenario and make it into reality gentlemen.
Apologies but I need early night sleep today as health has been playing up.
Sincerely,
Graeme
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Dec 21, 2010 6:58am
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crede quod habes, et habes
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Quote:
Originally Posted by nomask
When i read Graeme's posts i feel like I'm watching a great movie or reading a bestseller...
i just love the way he trades 
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Thank you for the warm compliment it makes my efforts worthwhile.
Today is same as yesterday. No trades. Im doubtful US session has anything. It is rare for the market to not move like this but we now draw closer to a better day as we had 2 consecutive non-profitable days.
In regards to the above story I still hold onto those 5 positions. I thought it was 4 but my journal shows 5 so I have slipped one in there that I cant remember.
Good night all
Sincerely,
Graeme
P.S Placing price alert just above the open price of today.
Last edited Dec 21, 2010 7:16am
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Dec 21, 2010 7:28am
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crede quod habes, et habes
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Quote:
Originally Posted by Edd Ganuelas
Graeme,
It is getting clearer. Thank you for sharing your input. And by the way welcome back. On the monthlly TF, do you consider only one monthly bar or several bars?
Thanks,
Edd
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Good question Edd.
There are no set number of candles to consider. The same price interpretation that I perform on any timeframe is equally applied to monthly. Sometimes I judge with just 2 candles (engulf, inside, FB) or even just 1 candle (pin bar) or even 4 or 5 or more (stall, pennant).
It sounds like many rules but Edd, but thats all there is.
To upskill your price interpretation, 3x20 exercise which is basically open a 5min chart (or any chart, but lower the better as you can practice faster and more) and enter in aim to catch just few candles right after your entry. Few candles right on the monthly chart is a huge reward while few candles on 5min chart is few pips.
Hope this helps you.
Sincerely,
Graeme
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Dec 21, 2010 8:08pm
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crede quod habes, et habes
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Good morning, all
Yesterday we spoke about
1. Going against hindsight which covers scenario against your higher timeframe hingsight.
2. Recommended take profit/diversification level
3. Effective way to stack and most importantly when to stack
Hope it helps with your trading.
As most readers will notice, I dont invent new things to say on a daily basis. An avid reader can most likely summarize my whole trading approach with less than 500 words. Yes, there are many factors involved with my trading approach and at first it might be daunting but you start performing it subsconciously.
This morning I would like to talk about 2 topics that we discussed yesterday but both complementing each other. They are 'making anticipation into reality' and effective probing.
One of the earlier post of yesterday, which was this graph
eurusd daily with completed daily candle
THis means that you should have a position/s on the long wick of the daily candle which is now at the best chance of survival todays pullbacks. It is ok if you missed it due to life outside trading but it is no excuse to anticipate such outcome and then not execute it as per your envision.
And where last night a trader would have successfully placed probes, positions. There are many opportunities that I can see,
eurusd 4hr
eurusd 1hr from noon london time
So, we just had a FB completed on 4hr and it now a new 4hr candle at 12:00. Lets see what is happening on 1hr ( while trading I always flick through timeframes as one may show opportunity but other doesnt).
Once probe sticks, once again I flick through all timeframes and I see multiple opportuntities to stack
eurusd 30min

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Dec 21, 2010 8:13pm
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crede quod habes, et habes
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eurusd 15min
And the 4hr candle completes
But this is only the start as the next 4 hr is also favourable. Rinse and repeat
Where does this leave us??
We now have positions as per our monthly hindsight.
We are turning our hindsight into our reality
eurusd daily
eurusd weekly
And if it all goes wrong. What is there to lose? 30 or 40 pips? Can you see how excellent r:r is encoded into my trading apporach and not a mathematical formulae that so many traders tend to apply with static xx:xx ratio.
Hope all readers notice that my approach is a cycle of similar actions again and again and again.
Sincerely,
Graeme
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Dec 21, 2010 8:38pm
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crede quod habes, et habes
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Hope todays post highlights what we have spoken yesterday.
Today as a off topic and also in reply to one of the private messages received.
Do I ever use sell/buy limits or stops.
Yes. But least often these days
Im sure there are more scenarios to apply successful limit or stop orders but I use it mainly as a fishing.
Have you ever watched the charts wondering why it is stuck and not moving? And then you wonder which way it will move? And while you are thinking about it the price moves very sharply and hit yourself for missing it as this is one of the volatile breakouts Graeme talked about.
Hmm..
But how do you catch such sharp 10 -15 pip move. Not even graeme can execute that quickly as it moved within few seconds. I mean all we knew the breakout is imminent but I dont think Graeme could even catch a move that quick.
Correct. I cant catch a move that quick. Infact I have trouble typing posts in forums let alone catch speeding bullets
But I like fishing.
The act to place baits in the area where it might catch. I might lose few baits here and there but I know the better areas to fish that bring in those whoppers occasionally to take home. It only cost me time and few baits and the patience.
Another
Fishing has very low hit rate but you wont suffer losses as most often it will never be hit.
If it does hit but doesnt move, close it out asap for -1 or -2 pips. Usually you lose nothing. Sometimes little larger but you will have wins more often than loses when orders are executed
The key to fishing is that once it hits, within few seconds it should be profit. Anything else is a fail
Fishing provides one of the best risk:reward
Fishing has low hit rate as most orders are never hit. You will have high success rate when it does hit as most often it is a volatile breakout
If you find your orders are hit often only to find yourself closing it quickly, you are placing order too close to the current price. This improves with time and your executions become much quicker
Dont place orders at price where it has recently visited
Last edited Dec 22, 2010 2:00am
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