Menu
Sister Sites

Options

Bookmark Thread

First Page First Unread Last Page Last Post

Print Thread

Similar Threads

Are you a trend trader or a counter-trend trader? 29 replies

Is Grid Trading (combined trend following and counter trend) Profitable? 3 replies

Ichi Trend & RSI Trend Catch 4 replies

Automatic Trend line, trend channel, support, resistance detection 3 replies

"Trend" , how do you actually trace the current trend ? 23 replies

Attachments: Trend Trading
Exit Attachments

Trend Trading

And of course, here is the adjustment to the stop. Note that I eyeballed the stop up to 1/2 the distance to the entry and to put it right below a recent support, so it may not be exactly reduced by 1/2. No math is required really. I'm not sure how trading could be simpler than that. Questions? Comments?
Attached Image (click to enlarge)
Click to Enlarge Name: 00 UChf.PNG Size: 35 KB
Quoting Graviton
I'm not sure how trading could be simpler than that.
Get someone to manage adjusting your stops and open and close positions for you? Oh, and always make sure you have a cool beverage (or something warmer, given we're heading into Autumn) on hand, without having to ask?

---

But yes, thinking back to the first few years of my trading, I've slowed it waaay down, lowered position size slightly, close off trades that have slipped or aren't doing much...but by far, the biggest, clearest advantage to profit when trading is A) letting trades run and B) adding more trades to positions that are in profit.

Doing trading this way won't make you feel like a real, savvy intraday trader perhaps, but it really should allow you to be profitable. Which is really the point of doing all of this nonsense, isn't it?

In any case, no harm in doing M5 short trades for fun sometimes, just to scratch that itch once or twice a week. ;-)
Quoting Graviton
Well, I can hardly wait to get into money and risk management, so I'll post just a quick note on it. Please feel free to comment on trend spotting as you like. Suppose a trade looks good with a 50 pip ADR and you think it can probably run for 200 pips, or a 4 to 1 return to risk ratio. If the trade goes up 50 pips from entry, how is the easiest way to increase the potential return to 8 to 1 while simultaneously reducing the risk and increasing the probability of staying in the trade? Anyone who was paying attention earlier knows the answer to this...
Hi G, Working off this example, a question about application of Margin "mobilized". Let us say that a typical position would be 10 lots with a SL 50 pips - so total Risk = 500 pips. Now Price behaves well and for whatever reason you now decide to halve your Risk by moving SL to -25. Do you use that freed margin or do you keep it in the bank in some sort of Margin Savings account if you will. I guess the question is - how aggressive are you in working your available Margin? Thinking about the unthinkable(Swiss) - Do you have an aggregate exposure limit even though your active exposure may only be 1%?

Sorry if you have answered this before,
AG
Do not dwell in the past, do not dream of the future, concentrate the mind.
Quoting Nefser
{quote} Get someone to manage adjusting your stops and open and close positions for you? Oh, and always make sure you have a cool beverage (or something warmer, given we're heading into Autumn) on hand, without having to ask? --- But yes, thinking back to the first few years of my trading, I've slowed it waaay down, lowered position size slightly, close off trades that have slipped or aren't doing much...but by far, the biggest, clearest advantage to profit when trading is A) letting trades run and B) adding more trades to positions that are in...
I've never been any good at making profit off the short time frames, 15 min and below, so the only fun I get is to open and close trades and manage stops. Well, it really is great fun to remove the risk from a trade and run it up to 10 to 1 or better. That takes a bit of skill and lots of patience, but that rare reward is worth every bit of effort. It's not the money so much as the thrill of the hunt and the accomplishment of a difficult goal. Someone said, I think it was Ed Seykota (net worth about $200 million if anyone's counting), to succeed you have to have a passion for trading. If you don't have a passion for it, then quit and go do something you have a passion for. Something to consider I suppose. - G
Quoting AlbinaGrande
{quote} Hi G, Working off this example, a question about application of Margin "mobilized". Let us say that a typical position would be 10 lots with a SL 50 pips - so total Risk = 500 pips. Now Price behaves well and for whatever reason you now decide to halve your Risk by moving SL to -25. Do you use that freed margin or do you keep it in the bank in some sort of Margin Savings account if you will. I guess the question is - how aggressive are you in working your available Margin? Thinking about the unthinkable(Swiss) - Do you have an aggregate...
Hi AG. Excellent question. Everything will happen with price eventually, including 800 pip gap moves in the CHF. I only nominally risk about 0.5% of my account per trade and I only trade half my margin or less. Even still, that puts a lot of risk on the board when those black swans show up. An 800 pip gap, like what happened with UChf a while back could cost me between 6 and 7% of my account in a single trade. I don't know of a cost efficient method to hedge against such huge gap moves. Any hedge against such a move, like a futures contract, would cost more than the risk one is likely to experience. I made up my loss pretty quickly after that wild swing, probably back to even in a week, but there's no guarantee I wont face something 2 or 3 times worse in the future. My aggregate risk is limited to 50% of my margin, which works out to about 7% of my account at risk when I'm running trades in about 14 pairs. That's not that unusual for me. At the moment, I have 10 trades running on 4 pairs. Since most of those trades are already set to break even or stop out at a small profit, my actual exposure is a little less than 0.5% risk per trade X 4 trades, or about 2% of my account at the moment, excluding gap moves. Since I may have 2 or three trades on a single pair, an 800 pip gap move at the wrong moment could put 20% of my account at risk. I could recover from that, but it would hurt for a while. Other than limiting trade size (and expectations), my advice has little to do with Forex. Forex is one market. If one invests only a portion of their available funds in Forex, they have a hedge in diversification. Other investments can be trend traded as well, like equities, bonds, commodities, real estate, options, etc. Just about all markets trend, and if you can ride the bucking bronco of Forex, most others seem a lot more tame. I probably wouldn't advise anyone to invest more than 10% of their net worth in Forex. Actually, about 2 to 5% is probably more prudent. - G
can i share signal with my own set up here? so i dont use your chart set up. will it be okay.
Profit growth tells you the trader ability.
Quoting voketexpert
can i share signal with my own set up here? so i dont use your chart set up. will it be okay.
Well, does it have anything to do with trend trading? If so, sure!
Please help me!

Here's a short backstory. I'm 37, flirted with trading off and on since I was about 21, never sticking with it until this year. Opened a Robinhood account in 2015 and traded for short periods until I hit a small drawdown, freaked out and quit for months. Then in January this year I started again, and its been good! I've weathered the DDs and got to about 29% YTD.

I've been trading all time highs only (long only), preferably ones breaking out of consolidation, and lately been rating stocks by 6mo performance and punishing stocks for volatility to narrow my list since there's been so many all time highs. I use ATR trailing stops to get out, multiples of 3, 5 and 8, depending on my gut reaction (8ATR for stocks i can see why they are trending so high). I currently position size based on about 3% of my portfolio to each stock since I dont have much money, but will probably size by initial risk or daily volatility in the future.

Now I want to diversify into forex. I have Oanda and I am starting with almost no money. But thankfully because I have Oanda I dont need to buy a lot or even nano lot, can buy as little as 1 base currency.

I was thinking of trading only the majors, in direction of a 50 day high breakout, daily candles. 8ATR trailing stop. Risk .05% of my acct each trade. Adding to my position as it breaks out again for maximum risk for any pair of 2%. Alternatively I could trade a lot more pairs and not add to any position, just have the .5% initial risk.

I would love feedback on if an 8ATR stop would be reasonable in Forex as it is in stocks. Also would this system make sense in general? Am i missing anything important? Should I stick to the majors or trade everything available on Oanda?
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_20181001-000556.png Size: 83 KB
Quoting brianjames
I was thinking of trading only the majors, in direction of a 50 day high breakout, daily candles. 8ATR trailing stop. Risk .05% of my acct each trade. Adding to my position as it breaks out again for maximum risk for any pair of 2%. Alternatively I could trade a lot more pairs and not add to any position, just have the .5% initial risk.
I'm not sure exactly why you've dropped your query in this thread, nor can I really see the link to what you're asking vs what is being discussed.

Unless somehow "Adding to my position as it breaks out again..." is a tie-in, or the fact that Graviton mentioned stocks (only in reference to someone considering diversifying with their investment capital) himself?
Hi guys... it seems like I finally found my clique. I never really subscribed to intraday trading. I mean why would you hold a trade with just a 50 pip profit when you can turn it into 500 pips or more if you stack.

In any case, I take cues from fundamentals. They give me a long term view of the market which makes me at peace when I place a trade. I then identify currencies which have good fundamentals to those who don't. Right now, CAD and USD are good buys while EUR and JPY are good sells. Then, I try to see if I can trade a pair with a positive swap. UJ and CJ are my longs rn with NU as short.

I mainly trade the daily chart... sometimes looking at the 15 min if there's big news. Indicators are ichimoku, stochastic, and AO... though I don't use them traditionally. For ichimoku, I use it for stop loss levels and risk levels. I use stochastic and AO for reentries. Might change that though.

Same with Graviton, Graeme heavily influenced my trading philosophy. Will be looking at this thread closely
I've read Nefser's approach to stacking and I do find it interesting. Will have to visualize how it would go in my charts once I get home since that might be a better and simpler way to go aout it.
Quoting Nefser
{quote} I'm not sure exactly why you've dropped your query in this thread, nor can I really see the link to what you're asking vs what is being discussed. Unless somehow "Adding to my position as it breaks out again..." is a tie-in, or the fact that Graviton mentioned stocks (only in reference to someone considering diversifying with their investment capital) himself?
Can't see the link to trend trading?

I first described how I currently trend trade with stocks. Then I asked for feedback on a specific trend following methodology I am considering using with forex pairs.

The adding to my position part would be to get greater exposure if I only traded 8 instruments instead of having the huge amount choices that pop up when I follow my stock all time high strategy.
Quoting brianjames
Please help me! Here's a short backstory. I'm 37, flirted with trading off and on since I was about 21, never sticking with it until this year. Opened a Robinhood account in 2015 and traded for short periods until I hit a small drawdown, freaked out and quit for months. Then in January this year I started again, and its been good! I've weathered the DDs and got to about 29% YTD. I've been trading all time highs only (long only), preferably ones breaking out of consolidation, and lately been rating stocks by 6mo performance and punishing...
Hi Brian, I'd suggest you demo trade your system for at least 3 months before you trade live cash. When you make profit 3 months in a row in demo, trading exactly as you would live, then you are ready to advance to trading micro lots. 0.01 micro lots are about 10 cents a pip and most find trading live cash harder than trading demo. If you can trade micro profitably 3 months in a row at your first attempt, you must be a natural. Once you do make three months in a row profitable, you are ready to launch. It took me years, so don't be surprised if it takes longer than you planned. Forex is a different beast and much more volatile than the stock market. I can't evaluate your planned system since I haven't traded it, but I do discuss how I trade in this thread and I give some very detailed examples. My stops are usually around 1 ADR and I only trade the majors, crosses and such, a total of 28 pairs. I don't trade the many exotics listed on Oanda because they have crazy high volatility and spreads. Best success. - G
Quoting Graviton
{quote} Hi Brian, I'd suggest you demo trade your system for at least 3 months before you trade live cash. When you make profit 3 months in a row in demo, trading exactly as you would live, then you are ready to advance to trading micro lots. 0.01 micro lots are about 10 cents a pip and most find trading live cash harder than trading demo. If you can trade micro profitably 3 months in a row at your first attempt, you must be a natural. Once you do make three months in a row profitable, you are ready to launch. It took me years, so don't be surprised...
Thanks! I'll look at expanding a bit beyond the majors.
Quoting rescuenava
Hi guys... it seems like I finally found my clique. I never really subscribed to intraday trading. I mean why would you hold a trade with just a 50 pip profit when you can turn it into 500 pips or more if you stack. In any case, I take cues from fundamentals. They give me a long term view of the market which makes me at peace when I place a trade. I then identify currencies which have good fundamentals to those who don't. Right now, CAD and USD are good buys while EUR and JPY are good sells. Then, I try to see if I can trade a pair with a positive...
Welcome Rescuenava. I am trading CadJpy and UsdJpy at the moment. My trend analysis showed both Cad and Usd to be strong trending pairs as well. There is a theory that all fundamental information is reflected in the price but I'm not sure that can be proven to always be true. Of course, sometimes price will run counter to fundamentals for unknown reasons. I look at fundamentals a little now and then, but I'm not sure if it changes my trading. My entry signals are very simple and many fail with small losses. Maybe fundamentals confirm a decision I've already made from time to time. If you are getting good entries though, keep it up! For me, once the decision is made to enter a pair, systematic trading takes over. Glad to have you aboard. Best success. - G
So, here's what I get passionate about. This is a live trade I've showed earlier. It's a long CadJpy on the H1 chart. It now has 4 trades stacked for about 500 pips total. I started out with a little less than 50 pips sl, so it's hit the 10 to 1 risk to reward ratio. At least from the original sl risk view. I also look at the current running risk view and the total risk to profits. Of course, once I have no sl risk, like this one now, the current running risk is only my risk to profits, which is now about 354 pips if I did the math right. I normally just trade these visually for the most part and don't do hardly any math. Like I know when all the stops are dead center in a 4 trade stack, if I hit all the stops I'd exit dead even. The stops are about 1.6 ADR below price, which should keep me in the trade for a while while price trends upward. So, this is now my best trade. No stop loss risk, some profits locked in and a 10 to 1 return to risk ratio achieved. If they all looked like this, I'd be ahead of Warren Buffett. If course, they don't and I'm not. But this is the goal I hope to reach as often as I can.
Attached Image (click to enlarge)
Click to Enlarge Name: 00a.PNG Size: 33 KB
When you get a nice clean move and build up a stack of trades, it's almost a tad unnerving the first time. It looks like a scary, large pile of pips that is never going to materialize as actual profit at the end...whenever that is.

Like anything, the more you do it and you get used to see these trades stacks built...by your own hand...in your own account, the more you can accept the reality of following this process.

It really has almost nothing to do with whatever process or tools you want to identify and add these trades. The trick is to actually just do it .
Here's the fun part, I'm just getting started. This is really all just a setup for the real trade I'm looking for. I'll now want to move the stops up as price continues to trend up (but not quite as fast). Since each of the 3 trades stacked above the base is 60% of my base trade, I'll be locking in profits at more than twice the rate the pips move up in price (1+.6(3)= 2.8 pips profit locked in for every 1 pip move up in price). The faster I move stops up, the more profit I lock in, but the slower I move them, the more likely I'll be able to stay in the trade and ride the trend. Like everything in life, it's a balance.

Eventually price will retrace. It has to or currencies would eventually go to infinity or zero. That can happen anytime. It's a statistical distribution and the longer the trade runs, the bigger the retracements it will encounter. Since I'm subject to FIFO in the US, I can only take trades off starting at the bottom. But the number of trades I can stack up at 1 to 2 adr spacing is also a statistical distribution over time, a Poisson distribution to be precise. Trying to predict it is futile, but we can know some things about it. One thing we do know, is if we keep doing this, one day we'll see one trend go very very far. Then we can close that trade and retire to our private island. Now, isn't this great fun? I think that's what Ed Seykota meant when he said you have to have a passion for trading to succeed at it. - G
Quoting Graviton
{quote} Welcome Rescuenava. I am trading CadJpy and UsdJpy at the moment. My trend analysis showed both Cad and Usd to be strong trending pairs as well. There is a theory that all fundamental information is reflected in the price but I'm not sure that can be proven to always be true. Of course, sometimes price will run counter to fundamentals for unknown reasons. I look at fundamentals a little now and then, but I'm not sure if it changes my trading. My entry signals are very simple and many fail with small losses. Maybe fundamentals confirm a decision...
Hi Graviton. Thanks! In any case yeah... I use fundamentals to strike aa deal. I also don't know if everything is reflected in the price xD

But I'm still learning, as with all of us. Some points for improvement for me are lot size (risk) and reentries. I touched a bit on reentries earlier in my post and am still experimenting on it xD but I fon't really know if my risk allocation is efficient. The way I do it, I risk normally around 5% of my account with SL's at key ichimoku levels. That's a minimum of a hundred pips in an SL... so yeah, maybe I missed some of your posts but I'll go reread the thread and maybe I'll get some gold nuggets regarding that matter
  • Post #320
  • Quote
  • Edited Oct 3, 2018 1:18am Oct 2, 2018 1:43am | Edited Oct 3, 2018 1:18am
I'll dive into money and risk management a bit while it's quiet. As I said before, I start a trade risking about 0.5% of my balance in stop loss risk. Of course, I may stack many more trades on top of that base pair, but I remove the stoploss risk as I go, so my stoploss risk doesn't exceed 0.5% of my account. Proper position sizing is the most important aspect of money and risk management. There are some very good money management formulas, like the Kelly formula, but one must be very careful in applying them. The full Kelly position sizing produces maximum investment for risk that is barely on the sane side of risk taking. Half Kelly is also popular with many who use it. It produces reasonable returns with fewer breathtaking draw downs.

It's also important to consider black swan risk. Those are rare events that have a nasty habit of showing up when one would least expect it. Even trading only 2.5% per trade could wipe out my entire account if I were to get hit with an 800 pip gap move (as happened in CHF) and had 4 or more trades stacked up. With a gap move, stop losses won't necessarily help and where I have multiple trades stacked up on several similar pairs, each one can experience the entire 800 pip move several times over. The only way I know to limit that black swan risk is to reduce position sizing. By the time I reduce that risk so the worst case gap move I'm likely to suffer will only wipe out 20% or less of my account, I'm down to trading 0.5% per trade. I could recover from a 20% gap hit. Much more might drive me off to the retirement home. It's something to consider. How much do you stand to lose if you get hit with an 800 pip gap move? - G
0 traders viewing now