Hello guys.
The purpose of this thread is to address my “testing the market” views I’ve been asked many times. But first, in order to avoid misunderstandings, let me lay down some ground rules, with all respect.
1) This is my own , personal, individualistic, biased view about the market. If anybody disagrees or is outraged with my “crazy views”..as anything negative in my life, I don’t give a fuck…thanks.
2) I am not here to discuss or argue my views with anyone, nor proving accepting or rejecting any new stuff.
3) I am not teaching your how to trade, nor showing you any new “system” , “strategy” or “method”.
4) You need to know at least some basic stuff about trading, This thread is not for newbies. I apologize in advance but I believe, with all respect, there’s plenty information everywhere about basic stuff.
5) I am an old school dog. I use not common words like ”load”, “bets” bankroll” etc. It’s just the way I’ve been raised by other dogs , older than me of course LOL!.
6) Don’t be shy to ask. Don’t apologize or refrain yourself if you have problem with English. Just shoot the question, In my world, everyone is equal – have 1 nose two ears, one mouth, etc. I welcome everyone even if you’re an alien writing from x planet( who knows? Right?)
The system II post #495 reads:
“I am a hyper-scalper by nature. Although I am not a scalper in terms of looking for short profits, I follow the same guidelines. In my lil book on futures, which is my bread and butter, I give no quarters. I use very tight stops. I really don't care if a miss a move. But that's me. It takes probably a lot of practice. You don't have to do that.
But...just try it to see if it works.
The main thing about exits is that you must reduce your risk immediately as soon as the market moves in your favor.
Remember that my hit ratio is low....less than 50%... I traded my (hit)<corrected word was misspelled> ratio for consistency many moons ago”
It was kinda off record commentary, which has sparked a lot of curiosity. Simply put, is based on the all so venerable ” Keep your losers short and let your profit run” comment. Although is very true, people don’t have a clue what the hell is all that about. Easier said than done. Like many stuff here on this game.
I “test” the market many times because I place small bets every time I am out on a trade. I am not looking for any amount of fixed dollar/pips/ticks to win every day, but to squeeze out of the market, whatever I can get from that “small bet”
My bets are not necessarily based on % of risk but in how much I am willing to lose. How much is too much???
The shorts profits I mentioned on that post are not short in the sense of “quick” but based on a small bet. Just for clarification.
The scalping part, which is a generic word by the way, comes from how many “small bets” I am willing to put in order to catch a big wave. At least a profitable one.
Once I’m ridding on a wave, I begin to cover my ass, giving the trade a reasonable time AKA expectancy, before moving my stop. How much time? How far/distant the stop will be trailed? I can’t tell you that. Maybe a tight stop for me is too tight for you. How much time? I don’t’ know…maybe 5 minutes is an eternity for me… … and hour is too short for you.
My favorite trades ever are the one’s that can be surfed all the way to the end of the session. If I’m trading mini’s or stocks and I catch the wave at 10:00 AM will be sweet if I can ride that fucker all the way to 4:30PM. On Forex, if I catch the wave between 9:00 AM and 10:00 AM , will be nice to surf it up to 00:00 (eastern time).
I won’t get the chance to ride the baby into the closing all the time. I should say that occurs less than often. But I MUST bet there just in case opportunity knocks. If I can’t ride the wave all the way, then I just play along with the market.
As I place small bets during the day, I can “afford” to lose several times in order to get on the bus. Here’s why I disagree with this “you must risk x % of your equity per trade” if I do that, I will be broke by now. Of course, there’s a limit on my testing. There will be days when I simply close my platform and go do something else…period.
Here’s how I balance things out. Let’s assume I am putting myself a limit of 4 trades in a day or $100.00 daily loss limit (this is an example ok, don’t take it by heart). I will probably give more leeway to my first trade than my last. As I lose my first bet, time and lack of volatility are running against me so I need to speed things up from my side. Or, I can opt not to trade if I feel I gave my first bet way too much room…..discretion plays a big role on this.
If I am on a losing streak, common sense dictates that I have no reason to be there.
As simple as It might see, I see many people falling flat in their asses with equity comes down in place.
Positive equity can only be built over time. There’s no quick-fix to this. It won’t matter if you’re a hyper super scalper or a position trader. Positive equity is all that matters. I chose to be a high- frequency trader because it’s the way more comfortable for me to build positive equity over time. Period. Actually I do place bets long term, don’t get me wrong. But that’s another story.
Here’s a typical scenario:
“I have this system, backtested, forward tested, Under-tested, Over tested. Oven-tested and I am SURE that at least I’ll make 500 bucks a day….just 10 pips a day is all I need…ah baby I can do thaaaat(with inflection on the voice).” After all’ I’ve been hatching this system under my ass for 5 years already…on demo…(oh brother!)
Allrigth, it’s all good. But there’s a lil’ problem.
As I said before, when market change cycles , it shifts, like a tremor. I mean, like the land shifts after an earthquake. Then you realize “gee, this 10 pips a days are getting harder and harder to get” In the process, you get a lil’ impatience and here’s when all hell breaks lose. Here’s when negative equity starts to pile up.
What will be the exact timing when the market will tremor? Ahh if we all knew…
My own view on consistency is based on the realization that in this game, losing is just a way to be closer to positive equity more and more. So consistency is not wining every time but to keep a quality of trade up to a certain level. I must know what to look for when I trade, my goal and expectancy for that trade if I want to be consistent in the long run. Here’s why consistency and equity are married.
I need to know my load if either will be adjusted based on risk or fixed……all beforehand of course. Managing the load goes hand in hand with consistency, In this age in which you can trade on micro-lost that shouldn’t be a problem. Hope Obama doesn’t go crazy and create another “rule” like he did with hedging. Yeah something like” for now, only full-lots can be used for trading” ahh who knows?
I think this is all. I will post some charts with some stuff, just to give you an idea how I do it.
Also I would like to say that I am a tape reader (I don’t use charts) and will be real hard to express here the mechanics of my trading. But I’ll do my best on the charts.
Please be aware that the charts are for illustration purpose only. I am taking some random swings based on hindsight This is not a “buy Y sell Z” stuff.
I’ll be checking this thread quite often.
Thanks for the time.
Good Karma.
The purpose of this thread is to address my “testing the market” views I’ve been asked many times. But first, in order to avoid misunderstandings, let me lay down some ground rules, with all respect.
1) This is my own , personal, individualistic, biased view about the market. If anybody disagrees or is outraged with my “crazy views”..as anything negative in my life, I don’t give a fuck…thanks.
2) I am not here to discuss or argue my views with anyone, nor proving accepting or rejecting any new stuff.
3) I am not teaching your how to trade, nor showing you any new “system” , “strategy” or “method”.
4) You need to know at least some basic stuff about trading, This thread is not for newbies. I apologize in advance but I believe, with all respect, there’s plenty information everywhere about basic stuff.
5) I am an old school dog. I use not common words like ”load”, “bets” bankroll” etc. It’s just the way I’ve been raised by other dogs , older than me of course LOL!.
6) Don’t be shy to ask. Don’t apologize or refrain yourself if you have problem with English. Just shoot the question, In my world, everyone is equal – have 1 nose two ears, one mouth, etc. I welcome everyone even if you’re an alien writing from x planet( who knows? Right?)
The system II post #495 reads:
“I am a hyper-scalper by nature. Although I am not a scalper in terms of looking for short profits, I follow the same guidelines. In my lil book on futures, which is my bread and butter, I give no quarters. I use very tight stops. I really don't care if a miss a move. But that's me. It takes probably a lot of practice. You don't have to do that.
But...just try it to see if it works.
The main thing about exits is that you must reduce your risk immediately as soon as the market moves in your favor.
Remember that my hit ratio is low....less than 50%... I traded my (hit)<corrected word was misspelled> ratio for consistency many moons ago”
It was kinda off record commentary, which has sparked a lot of curiosity. Simply put, is based on the all so venerable ” Keep your losers short and let your profit run” comment. Although is very true, people don’t have a clue what the hell is all that about. Easier said than done. Like many stuff here on this game.
I “test” the market many times because I place small bets every time I am out on a trade. I am not looking for any amount of fixed dollar/pips/ticks to win every day, but to squeeze out of the market, whatever I can get from that “small bet”
My bets are not necessarily based on % of risk but in how much I am willing to lose. How much is too much???
The shorts profits I mentioned on that post are not short in the sense of “quick” but based on a small bet. Just for clarification.
The scalping part, which is a generic word by the way, comes from how many “small bets” I am willing to put in order to catch a big wave. At least a profitable one.
Once I’m ridding on a wave, I begin to cover my ass, giving the trade a reasonable time AKA expectancy, before moving my stop. How much time? How far/distant the stop will be trailed? I can’t tell you that. Maybe a tight stop for me is too tight for you. How much time? I don’t’ know…maybe 5 minutes is an eternity for me… … and hour is too short for you.
My favorite trades ever are the one’s that can be surfed all the way to the end of the session. If I’m trading mini’s or stocks and I catch the wave at 10:00 AM will be sweet if I can ride that fucker all the way to 4:30PM. On Forex, if I catch the wave between 9:00 AM and 10:00 AM , will be nice to surf it up to 00:00 (eastern time).
I won’t get the chance to ride the baby into the closing all the time. I should say that occurs less than often. But I MUST bet there just in case opportunity knocks. If I can’t ride the wave all the way, then I just play along with the market.
As I place small bets during the day, I can “afford” to lose several times in order to get on the bus. Here’s why I disagree with this “you must risk x % of your equity per trade” if I do that, I will be broke by now. Of course, there’s a limit on my testing. There will be days when I simply close my platform and go do something else…period.
Expectancy
Here’s how I balance things out. Let’s assume I am putting myself a limit of 4 trades in a day or $100.00 daily loss limit (this is an example ok, don’t take it by heart). I will probably give more leeway to my first trade than my last. As I lose my first bet, time and lack of volatility are running against me so I need to speed things up from my side. Or, I can opt not to trade if I feel I gave my first bet way too much room…..discretion plays a big role on this.
If I am on a losing streak, common sense dictates that I have no reason to be there.
The nature of the markets.
Equity
As simple as It might see, I see many people falling flat in their asses with equity comes down in place.
Positive equity can only be built over time. There’s no quick-fix to this. It won’t matter if you’re a hyper super scalper or a position trader. Positive equity is all that matters. I chose to be a high- frequency trader because it’s the way more comfortable for me to build positive equity over time. Period. Actually I do place bets long term, don’t get me wrong. But that’s another story.
Here’s a typical scenario:
“I have this system, backtested, forward tested, Under-tested, Over tested. Oven-tested and I am SURE that at least I’ll make 500 bucks a day….just 10 pips a day is all I need…ah baby I can do thaaaat(with inflection on the voice).” After all’ I’ve been hatching this system under my ass for 5 years already…on demo…(oh brother!)
Allrigth, it’s all good. But there’s a lil’ problem.
As I said before, when market change cycles , it shifts, like a tremor. I mean, like the land shifts after an earthquake. Then you realize “gee, this 10 pips a days are getting harder and harder to get” In the process, you get a lil’ impatience and here’s when all hell breaks lose. Here’s when negative equity starts to pile up.
What will be the exact timing when the market will tremor? Ahh if we all knew…
Consistency
Correspondence among related aspects; compatibility
Sounds like big words but the definition is true to it’s matter. I like the “related aspects” because they’re not necessary in sequence, just simply related and compatible.
My own view on consistency is based on the realization that in this game, losing is just a way to be closer to positive equity more and more. So consistency is not wining every time but to keep a quality of trade up to a certain level. I must know what to look for when I trade, my goal and expectancy for that trade if I want to be consistent in the long run. Here’s why consistency and equity are married.
I need to know my load if either will be adjusted based on risk or fixed……all beforehand of course. Managing the load goes hand in hand with consistency, In this age in which you can trade on micro-lost that shouldn’t be a problem. Hope Obama doesn’t go crazy and create another “rule” like he did with hedging. Yeah something like” for now, only full-lots can be used for trading” ahh who knows?
I think this is all. I will post some charts with some stuff, just to give you an idea how I do it.
Also I would like to say that I am a tape reader (I don’t use charts) and will be real hard to express here the mechanics of my trading. But I’ll do my best on the charts.
Please be aware that the charts are for illustration purpose only. I am taking some random swings based on hindsight This is not a “buy Y sell Z” stuff.
I’ll be checking this thread quite often.
Thanks for the time.
Good Karma.
Peace