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Roadmap - A Way To Read Markets

  • #561
  • Apr 25, 2020 3:28pm Apr 25, 2020 3:28pm
Quoting LauraT
{image} This was a trade where I was targeting the previous day low. You'll notice that it didn't quite make it. I got out after a bar closed above the channel. It shouldn't be closing above the channel if it's going to keep going down, so I could smell a rat. Sometimes you'll find price initially goes in your favour but then turns. Don't be afraid to take a few pips if so. In the end I only took 7 pips from the move but I was happy with how I managed it.

you had the right Target, Laura and he reached it, cleared and turned around)
Attached Image (click to enlarge)
Click to Enlarge Name: 2020-04-25 23.21.15.png Size: 86 KB
  • #562
  • Apr 25, 2020 3:59pm Apr 25, 2020 3:59pm
Quoting FinInsTrader
Thanks Laura for sharing your gold mine with other traders...Your way of trading reminded me with CrucialPoint trading philosophy...FOLLOW the trend,not predict but just follow. -Setting up boundry (buy/sell) -Entry (countless entry criteria) -Exit (most difficult part to master)
I don’t agree that Laura is following the trend. Laura improvises according to her own rules and you should understand them faster until you blow up your deposit))) And getting out of trade correctly is simple, if you set goals, where the price collects a crowd of such traders following the trend and collects money from them and turns around at lightning speed
  • #563
  • Apr 25, 2020 5:48pm Apr 25, 2020 5:48pm
Quoting mik2012
{quote} you had the right Target, Laura and he reached it, cleared and turned around) {image}
Does this chart bear any resemblance to Laura's method? If it does, then I can't see it. This chart would give me stretch marks on my brain.
All you touch and all you see, is all your life will ever be.
  • #564
  • Apr 25, 2020 9:41pm Apr 25, 2020 9:41pm
Quoting LauraT
I trade small position size relative to my account size. I risk less than 1% per trade.
Hi Laura. Lovely work on the start of your journal.

I'm interested to know more about how you decide on your position size for a trade since you use an emergency stop.

Do you base your 1% risk on your distance in pips from Entry to Emergency Stop.
Do you use a set position size for each trade knowing that you will never let price hit your emergency stop as you manage the trades manually?

Let me know if these questions aren't clear.

Cheers
Anthony
Empty your mind and let the market guide you
  • #565
  • Apr 25, 2020 11:14pm Apr 25, 2020 11:14pm
Quoting LauraT
...... to the subject of trade management. ........ for the market to prove us wrong. ... If you wish me to explore another topic, or address a specific area related to the topics I've already covered, please feel free to ask.
Thanks for sharing your knowledge. Would you you please make a list which explains the conditions where market proves you wrong?

Regards,
Blackeagle
  • #566
  • Apr 26, 2020 12:46am Apr 26, 2020 12:46am
Quoting SunnyCoast
{quote} Hi Laura. Lovely work on the start of your journal. I'm interested to know more about how you decide on your position size for a trade since you use an emergency stop. Do you base your 1% risk on your distance in pips from Entry to Emergency Stop. Do you use a set position size for each trade knowing that you will never let price hit your emergency stop as you manage the trades manually? Let me know if these questions aren't clear. Cheers Anthony
HI sunny,
When you base your risk on a stop and you only place a emergency stop it's quite clear then that you use that stop to calculate your risk. Also it's less than 1%, trading small according to your balance would not knock you off your feet when there are a string of losers...
Bear in mind that as larger your account grows it gets easier to use small % off risk.. What you also could do is to use the global close manager ea to protect your balance...

Hope I was able to answer your questions a bit, have a good day ahead..
  • #567
  • Apr 26, 2020 1:02am Apr 26, 2020 1:02am
Quoting LauraT
{quote} Hi - thanks No, on the daily I wouldn't add anything to replace those tools. It's a bit different trading that timeframe as you are only taking the two basic setups (channel failure and channel entry). I've attached a chart that shows both. Bear in mind, the gains and losses will be large compared to shorter timeframes. {image}
If you work on 1m to 15 m tf screen size working in tandem with ADR by trial and error you will be able to figure out markets natural rythm,(exceptons will.always be there) for trading in normal times.
Practice makes a person perfect
  • #568
  • Apr 26, 2020 1:06am Apr 26, 2020 1:06am
Quoting LauraT
{quote} Hi, Interesting question! I consider effective hedging to be an art that takes some time to learn so I'm not going to go into too much detail about how and when I use it (for now).
Pyramyding, Averaging and Hedging all must be mastered instead of depending on signals or indicators to show green and red signals.
Practice makes a person perfect
  • #569
  • Apr 26, 2020 2:40am Apr 26, 2020 2:40am
Quoting Loftboy
{quote} Does this chart bear any resemblance to Laura's method? If it does, then I can't see it. This chart would give me stretch marks on my brain.
Hey there Mr Chart Police,

Does this chart bear any resemblance to Laura's method?

or am I going straight to

Attached Image (click to enlarge)
Click to Enlarge Name: 2020-04-26_17-38-00.jpg Size: 310 KB
It takes a lot for me to IGNORE you, but you can try.
  • #570
  • Apr 26, 2020 3:12am Apr 26, 2020 3:12am
Just wanted to say thanks again to LuaraT, Patje and the many others who have been positing trades, questions and answers. Initially I had many questions and concerns with my trades and performance. However, after reading the thread for the 3rd or 4th time and started reviewing my trades each day. I could see where I didn’t quite follow the rules, overlooked RSI and MTF indicator, Chasing the trade when it had already sailed. Or other times when it just didn’t work out. It was nice to see I wasn’t the only one. Hopefully I will be more prepared for next week. In the meantime, I have attached a chart with some of the trades I took Friday. Would appreciate any feedback on what others would have done or what I may have done differently to reach a better outcome.

Attached Image (click to enlarge)
Click to Enlarge Name: GBPUSD.png Size: 89 KB
  • #571
  • Apr 26, 2020 5:18am Apr 26, 2020 5:18am
Quoting SunnyCoast
{quote} Hi Laura. Lovely work on the start of your journal. I'm interested to know more about how you decide on your position size for a trade since you use an emergency stop. Do you base your 1% risk on your distance in pips from Entry to Emergency Stop. Do you use a set position size for each trade knowing that you will never let price hit your emergency stop as you manage the trades manually? Let me know if these questions aren't clear. Cheers Anthony
Hi - thank you

I'm in a fortunate position where I can base my risk on my emergency stop and still comfortably be under 1% of equity. I fully recognise this is not such an easy task for those who are building smaller accounts. Because the emergency stop is not a realistic stop and will likely not be hit (assuming you are managing the position actively), a person could increase their risk threshold if account size dictated it.

That dilemma reinforces the importance of trading small size in relation to account size (where possible).

I now tend to enter with a fixed lot amount and place the emergency stop a set distance away. That way it makes risk calculation pretty simple and fast.
  • #572
  • Apr 26, 2020 5:25am Apr 26, 2020 5:25am
Quoting Blackeagle
{quote} Thanks for sharing your knowledge. Would you you please make a list which explains the conditions where market proves you wrong? Regards, Blackeagle
The market proves us wrong when our setup is invalidated.

So, if you were trading a channel cross, it would be invalidated when the channel crossed back to the other side of the SMA. If you were trading a channel failure, it would be invalidated when the channel fully crossed the SMA. As you can hopefully imagine, that means your potential loss is smaller when trading a channel failure.

This is based upon only exiting when you know you are wrong but I acknowledge that some people will not have the stomach for taking those sorts of losses. They could experiment with a fixed stop loss of X pips but I think it would be less effective as the trades wouldn't have as much 'wiggle room'.

This all, again, reinforces the importance of trading small size in relation to account size.

Hope this helps.
  • #573
  • Apr 26, 2020 5:27am Apr 26, 2020 5:27am
Quoting Erebus
{quote} Hey there Mr Chart Police, Does this chart bear any resemblance to Laura's method? or am I going straight to {image}
Hi Erebus,
Do you mind to share the template and its components of that chart? Would be much appreciated.
Trading S/R with PA only. No indicators anymore!
  • #574
  • Apr 26, 2020 5:33am Apr 26, 2020 5:33am
Some people have been doing an exercise and I think it might be useful to post it here.

Pick an instrument and go through the last week of data. Imagine you were entering every channel cross of the SMA while temporarily ignoring what the RSI bias might have been at the time. Roughly establish how much of a profit or loss you would have made on the trade.

So far, people are finding a win rate of over half and, due to winner values exceeding loser values, a Profit Factor of 3+.

(You could do the same exercise for channel failures too).

Let me know how it goes if you choose to do this
  • #575
  • Apr 26, 2020 5:36am Apr 26, 2020 5:36am
Hi Laura. First, thank you very much for sharing your knowledge with us. Also you trading journal looks very interesting, good presentation. I hope you will explain further how and when do you place your stops, because right now, this is the part more confusing regarding your system. That's because in your examples you usually are showing your entry and target, but not the stop loss, so it would be great if you can explain more about where to place the stop loss.

I have a question regarding the Dow Jones and oil. Are you using also european midnight for them, as a open time?
  • #576
  • Apr 26, 2020 5:45am Apr 26, 2020 5:45am
Quoting Jordi
Hi Laura. First, thank you very much for sharing your knowledge with us. Also you trading journal looks very interesting, good presentation. I hope you will explain further how and when do you place your stops, because right now, this is the part more confusing regarding your system. That's because in your examples you usually are showing your entry and target, but not the stop loss, so it would be great if you can explain more about where to place the stop loss. I have a question regarding the Dow Jones and oil. Are you using also european midnight...
Hi - thanks for the kind words

I can certainly provide some examples of stop placement if that's helpful. In general, you want it to be far enough away from the action so as to not interrupt your trade while it remains valid. I'll find a few charts and highlight where my stop would be. Bear in mind this is based upon my risk percentage but it should give a rough idea.

As for Dow and Oil, yes I use European midnight for all instruments.
  • #577
  • Apr 26, 2020 5:58am Apr 26, 2020 5:58am
Quoting Jordi
Hi Laura. First, thank you very much for sharing your knowledge with us. Also you trading journal looks very interesting, good presentation. I hope you will explain further how and when do you place your stops, because right now, this is the part more confusing regarding your system. That's because in your examples you usually are showing your entry and target, but not the stop loss, so it would be great if you can explain more about where to place the stop loss. I have a question regarding the Dow Jones and oil. Are you using also european midnight...
Attached Image (click to enlarge)
Click to Enlarge Name: AUDCADM5.png Size: 41 KB


Here we see an indication of where my stop would be if I were entering that AUDCAD trade. As I've said though, this is based on my risk model rather than it being strategic placement. If placing a stop strategically instead of based on risk percentage, I'd imagine I'd have placed it just under the previous day low.

Remember, these are not stops we expect to be triggered. You should be managing the position actively and exiting as soon as you are proved wrong, regardless of your stop not being hit. In reality, I'd probably have lost around 18 pips on the trade if it had proved me wrong.
  • #578
  • Apr 26, 2020 5:58am Apr 26, 2020 5:58am
Hi Laura,
I have a question regarding managing your position. It is obvious that you don't wait until your security stop is reached to take you out of the market. Then the questuin rises where you take a loss instead. Is that e.g
the normal 'just a few pips behind previous H/L ?
I guess a few pictures of loss trades would ecplain a lot.

Then there ate the multiple entries on partial lot size. Where are circa the additional entries? Again some chart exemples will tell the story.

Appreciate your dedication to your threat a lot!
Trading S/R with PA only. No indicators anymore!
  • #579
  • Apr 26, 2020 6:24am Apr 26, 2020 6:24am
Quoting Jazz1964
Hi Laura, I have a question regarding managing your position. It is obvious that you don't wait until your security stop is reached to take you out of the market. Then the questuin rises where you take a loss instead. Is that e.g the normal 'just a few pips behind previous H/L ? I guess a few pictures of loss trades would ecplain a lot. Then there ate the multiple entries on partial lot size. Where are circa the additional entries? Again some chart exemples will tell the story. Appreciate your dedication to your threat a lot!
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDM5.png Size: 47 KB


Here's an example of a trade where you'd be proved wrong. If you enter as the channel crosses the SMA, the trade becomes invalidated once the channel crosses back to the other side of the SMA.

Hope this helps. I will aim to post some live examples next week if I get the chance.
  • #580
  • Apr 26, 2020 6:26am Apr 26, 2020 6:26am
Quoting LauraT
{quote} {image} Here we see an indication of where my stop would be if I were entering that AUDCAD trade. As I've said though, this is based on my risk model rather than it being strategic placement. If placing a stop strategically instead of based on risk percentage, I'd imagine I'd have placed it just under the previous day low. Remember, these are not stops we expect to be triggered. You should be managing the position actively and exiting as soon as you are proved wrong, regardless of your stop not being hit. In reality, I'd probably have lost...


Thank you very much for your quick answer. It's a great example . Another question regarding the stop loss. If the risk-reward ratio is less than 1, do you take the trade? what ratio do you usually use to enter a trade?
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