Ramblings of a Forex Junkie

Hi guys.

I have to tell you i'm really happy to see everyone checking in sometimes , even if not with the same frequency as it used to be... But it's a good way (maybe even better) to manage this thread.

I think (hope) i'm getting closer to becoming profitable, but now I have a new problem. As i'm trading the method more consistently i'm running into the "wild spread" issue. During the last month I saw at least 4 times that during news releasements (or by any other reason - I don't care) - the spread of the EU , GU (and the yen pairs of course too) became something around 10-14 pips (!!!) I was stopped out from a trade ONLY BECAUSE of this phenomenon . Needless to say that "I was right" on the trade and I would have made 3R on it but in reality I just lost 1R... (Sold GU yesterday's high - my stop was 20pp and i had a TP for 60pp but when the spread (NOT THE PRICE) went to 10pp it stopped me out).

I spoke to the broker, they said it's a regular thing and basicly told me to try to speak to God , it might help.
(I knew that during news the spread can become wider - but definitely not that much...)


This (little) change in the industry makes this method (or any other intraday method) much harder to trade successfully.
This one loss, might me the difference for me between being +3% up or -1% down for the month/week.

Any ideas what to do about this? I know there are (or at least used to be) brokers who gave you "fixed spreads" but I'm not sure I can trust those ones on other (more important) issues.

I could trade without a stop loss but that might not be the best idea either.
Thanks
RDSL

This has happened to me also in the past. It is usually not too often though. I will say that I have the stop for GU as 27 pips plus spread as of yesterday. Your stop should have been 30 to 32 pips. This might have made a difference.

I hear you. You should not feel bad about having to send people to read on their own. Personally I think most people here would respond positively to that as long as the information provided is explained well. Not that it is a life duty to teach others in a day what took you a long time to master. In fact, even if that was your purpose, it is just not possible to imprint it in others with a simple forum post. I have my own experiences away from trading on this aspect and I can tell the story if you would like to hear it but I don't want to bore you with it.

I have been around Forex forums of different types since 05'. I have seen my share of threads go quiet because of the above. Based on that experience I can put them in two broad categories...


A) Those who start a thread to show the world their trading system. This does not mean they are providing you with every possibility and that they will mechanically train you like factory line worker. Some personal intuition may need to be applied but all in all, every common detail has been laid out for you to evaluate. One great example of this would the the Cowabunga system at babypips. All information needed is in one page and the link to said page is in every post. The system has made consistent profits for as long as I remember (2006?) and very few changes were introduced. When so, they were still noted on the very same page. I am pretty sure that while keeping posts of every single trade you take for years is very busy work, you don't have to deal with the things you mentioned above.

B) And this are my favorites (sarcasm implied). The trading Mesiahs. Those who post a system, sometimes with good details but that at the end don't really tell you exactly what they are doing and you only realized that when they have you hooked on their game. They tend to create a cult around them. While they do answer questions and the portrait themselves as benign and all giving individuals, they always keep that one detail that makes or breaks the system or the continuously change it. By the time the reach page 10 of the thread, their system has mutated onto a whole different monster and no one can master it but themselves and few other courageous people (who more than likely are still on demo). I have seen plenty of this god-like figures show up and disappear, and put down anyone who dares to challenge what they are presenting. Even when the challenge is formal, respectful and technically sound. They treathen to leave the thread and require a few followers to beg and rid themselves of their dignitiy before they come back on continue to feed their glory. I honestly don't understand those who fall on this category. I can not explain them in any other way than that of a cult framework.

Provided that you may already be bored reading this, if you are an "A" then by no means should you feel down. Haters gonna hate... no matter what. If you did what you had to do, then it should be fulfilling. Not to say some good intended people that are just unorganized may fall into "B", but the difference is clearly drawn.

That, my friends... is my rambling....

If I am not seeing something, then, please people, pull my head out my ass because I am about to run out of oxygen.... (LOL... I need to put that on my signature. Some people found it funny at another thread)

Are you guys still trading the daily/weekly Open/High/Low/Close levels?

Yes, only high/low and london close for entry, open lines for exits sometimes.

I still trade them.

Started trading them live and loving the simplicity Thanks SP

According to this Bloomberg article, the London Close is 4pm (or 11amET).

Currency Spikes at 4 P.M. in London Provide Rigging Clues
Currency Spikes Point to Possible Rate Manipulation

London closes at five. The four pm price that the articles are referring to is the "official" Bloomberg price.

I've only just found this thread and I am currently reading page 22. I believe this is my first post on Forex Factory; I just don't visit so much, but I must say a tremendous thank you to SP ... Thank You!!!

I did peek back a few pages from here to find out why the thread seems to have died out and I must say it's a huge shame. Anyway, after trading at a loss - account down 16% over 3 years - largely due to one large stupid loss (literally a 16% loss in 20 minutes) - I have read as much, or more, wisdom in the first 22 pages than at any other one source - including, may I say threads by the Real Thing et al and paid membership sites.

I've searched for the holy Grail, done indicators, price action, supply and demand, even order flow. Just wanted to show my appreciation and maybe make the analogy that gaining all the experience in trading is like trying to piece together a 10,000 piece jigsaw of the desert without any picture to guide you, but reading threads like this certainly reveals a lot of the picture and gives one the feeling that it's all coming together - of course only trading it live will confirm that.

Again, many many thanks.

I still stop by occasionally to read some of my favorite threads and posts of some of the people I admire. It seems that this summer took a toll on many people and the members have been dropping like flies. Without complete discipline and a solid method the summer months can leave the best traders looking in the mirror wondering what happened. I am doing fine but I have also been taking off weeks at a time enjoying my sons as they grow up. They are sixteen months old now and are really great to be around.

The article that mmaker posted got under my skin so I decided to do a little digging. I had found a great pattern earlier in the year but couldn't justify taking the trades because I couldn't find a structural reason for what I was seeing. This article opened the door for me to understand what I was seeing. I will not expand on this, I will probably not even be back here on a regular basis to go any further into it. For those of you willing to do your own research:

Throw up a one hour chart of EU. Bracket the high and low of the hour that ends at London close. Close and retest below the range go short. Close and retest above the range go long. You guys can work out your own stops and targets. This works for EJ also. The reason for using this hour is in the article. I have only been able to see the pattern repeat with the Euro pairs. It is enough anyway. This is the best pattern I have ever seen. If you get the results with this that I have been seeing pay it forward and help someone else.

The chart example from below is from last Thursday.
Some hints.

Don't put your stop exactly at the other end of the range. I use a close outside the other side as a stop. This is not for the faint of heart. You might want something like 1.5 times the range or some other set stop.

Just like the other methods I trade you can't quibble over three or four pips. These trades can be powerful so don't miss them over a few pips. This range is competitive.

Exits can be a little tricky, W/L ratio is rather high with this but the R/R can be a little tighter. It is the trade off we all battle every day.

Finally I don't recommend entering a trade with this until you have done a lot of homework and convinced yourself that you want to give it a go. This can be a very scary method to trade.

EDIT: It should go without saying that this is a London strategy and you should ignore the Asian market with EU. EJ will give some Asian opportunities.

I am not teasing on purpose I promise. I think I just have an inner fight every time I think of posting my hard won ideas. Eventually I come to the conclusion that this forum is a small world and most people don't care what I post so there probably won't be any measurable impact by putting out some information that I think might be helpful.

Seneca,

Just wanted to say that I believe I understand aspects of your '"inner fight". You spend several years in research, gradually developing ideas that are pure gold. And then there are freeloaders who whine (just making a general comment; not targeting anybody specifically) if you don't spoon feed them a plug'n'play system of precise, guaranteed-to-be-consistently-profitable entries and exits. Some even go as far as to demand that you post a Trade Explorer, to justify your posting credentials. Incredible!

I, for one, marvel at your patience and generosity. [To anybody reading this: what benefit does a pro trader possibly gain from publicly sharing his methodology, for free, to folk who are — albeit indirectly — his potential competitors in a zero sum game? And how is he compensated for his time and effort in maintaining a thread like this one?]

I wouldn't underestimate the size of FF's target audience. The member list page shows that there were > 52,000 traders viewing the forums simultaneously, as recently as Sept 6. Hence the total number of casual viewers could be several times that. This thread has had > 500,000 views since you started it 9 months ago.

However, I guess there's some poetic justice in the fact that maintaining an arsenal of 'edges' requires a significant amount of contextual knowledge and experience, that the folk seeking the plug'n'play systems will never grasp, and hence — as you point out — this lessens the "measurable impact" of freely sharing the gems that you do.

David

I did try this way back then I read about London Close and started dig into it. My results wasnt convincing enough for me to hit live trades with it.
Anyone who wants to do some visual back testing can use hanovers daily lines boxes indi to bracket range,specific hour open,high-low etc.

If and when I can reliably trade these lines I would be happy to post but I would start another thread in any case.

"FX Concepts has now taken the decision to close its North American, British and Singapore operations, representing the wrapping up of the entirety of the firm’s business, after thirty two years in existence, during which it spent a large proportion of its operational time enjoying the prestigious position as America’s largest FX hedge fund."

From $14 Billion To Closure Within Six Years

This does not surprise me one bit. In fact, I having been expecting this for a while now.

They used momentum (trend) and carry (which is a variant of trend following). For long-term positions, both of these strategies have been decimated over the last 3 years and at 3.4 billion in assets you really do need hold into the long term, so you are forced to trade Macro. The intra-day Seneca and BRV levels can be taken advantage by smaller retail traders especially when fading short-term tops and bottoms in ranging markets. We already closed a position in profit just as the small hedgies have finished scaling into their's (at probably about the exact same price point).

http://www.ucitshedgefunds.com/issue...rency-fund.php

Good interview:

Again, just want to express thanks to Chris. Today on the EU but especially the GU there was oodles to be made. I missed some trades due to a visitor plus other distractions plus issues with pulling the trigger. Sometimes on the 15 min chart its not so clear as it it is on the 5 min chart - that's if you want to observe and then place a market order; for example, on the 5 min you can see the retests that much more clearly.

I have tentatively traded this the last 4 days and so far I am with positive balance each of the 4 days yet I have traded the method badly on each of the 4 days - if I would just follow a plan and make the trades according to the planI would be +12 expectancy (!!!!!!!!!!!!!!!!!) just today on the GU and similar on the EU - do you get that fellow traders? Do you????

When I get a moment I will post charts and my trades. Steve

Hey Bill (vulcann1) I see you there - (steve from Chris Capre)

Expectancy is much lower then that over longer term.