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The brutal truth of day trading

  • #721
  • May 9, 2021 5:12am May 9, 2021 5:12am
Quoting giselle1723
This is not the thread theme,but what do you think about the chart below? GXY opens at GMT15:00 and close at GMT0:00. There is sometimes GAP on GXY chart, and all gaps are always filled. However, these gaps don't exist on GBPUSD chart. (Other currency index has the same gap, and always filled) It's just a coincidence, or what????? {image}
GXY is an index whereas GBPUSD is a currency pair. They are two different instruments. So, they move differently.
You are correct about gaps, they always fill.
A trade should be based on an assumption based on facts
  • #722
  • May 9, 2021 6:04am May 9, 2021 6:04am
Quoting maverick2017
{quote} Hi wave!! Ok. It becomes more brutal when the market is choppy. How did you catch 2 such huge swings? How did you set targets?
Hi Maverick,
Quote
How did you catch 2 such huge swings?
If I reflect back and gather my thoughts on these 2 trades a few things come to mind. I trade the 4hr chart.
We were reaching my yearly pivot at 1.1721 towards the end of March 2021. This was also the end of the first quarter. Price was consolidating just below my pivot and above my pivot for a week (yellow highlight). Nevertheless, I waited the week out, and going into the new month I started getting cyclic buy signals on my system. I entered my trades and locked them in on the same day. I had no idea at the time that we were going into full swing mode.
Attached Image (click to enlarge)
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Quote
How did you set targets?
Here's the trick. I don't set targets. I open my trades, set breakeven, and walk away. That's right, I forget about them. Life carries on and I don't stress over trades. All I look at is my pip growth and from time to time I take money off the table.

Anyway hope this will help someone out there.

Cheers.
Trade to trade another day
  • #723
  • May 9, 2021 6:30am May 9, 2021 6:30am
Quoting Wavegarrick
{quote} Hi Maverick, {quote} If I reflect back and gather my thoughts on these 2 trades a few things come to mind. I trade the 4hr chart. We were reaching my yearly pivot at 1.1721 towards the end of March 2021. This was also the end of the first quarter. Price was consolidating just below my pivot and above my pivot for a week (yellow highlight). Nevertheless, I waited the week out, and going into the new month I started getting cyclic buy signals on my system. I entered my trades and locked them in on the same day. I had no idea at the time that...
Quote
I entered my trades and locked them in on the same day
Do you mean you closed them on the same day?

This was an example of a quarterly trade. One you could hold on for 3-4 months. So, you can take profit from time to time. How would you deal with swings which don't last this long.
Quote
I don't set targets.
Come on!! There will be some kind of measure for closing your positions.

I also don't have targets but more often then not market will hit my SL.
Can you suggest how to deal with this. I try to trade intraday swings.
A trade should be based on an assumption based on facts
  • #724
  • May 9, 2021 7:10am May 9, 2021 7:10am
Quoting maverick2017
{quote} {quote} Do you mean you closed them on the same day? This was an example of a quarterly trade. One you could hold on for 3-4 months. So, you can take profit from time to time. How would you deal with swings which don't last this long. {quote} Come on!! There will be some kind of measure for closing your positions. I also don't have targets but more often then not market will hit my SL. Can you suggest how to deal with this. I try to trade intraday swings.
Quote
Do you mean you closed them on the same day?
I suggest you familiarize yourself with the terms that traders use. Locking in a trade means that you have placed your stop loss in such a way that if price turns against you, you will gain a few pips only i.o.w. breakeven and some pips.
The rest I don't need to answer you. Read and re-read my post. You will find all the answers. You need to expand your thought process. Small timeframes are noise and if you can trade in the context of higher timeframes your stops will not be hit that often.
Cheers.
Trade to trade another day
  • #725
  • May 9, 2021 7:11am May 9, 2021 7:11am
Quoting bubincka
Hi Rick, what happened to this strategy, it seems like a good idea, do you still use it? Best regards, Bubincka
Hi Bubincka

Yes, still trade it but with a few changes I won't give away. It still offers a nice return but it does run through periods of low return like all Algo's do.
The biggest problem for me is the reduced leverage Australia brokers now offer, meaning the $50K I used to use running 15 EA's now requires triple the account size.
I decided to only run my best EA's these days and just have a simpler life.

Many non- Algo traders think you start the EA and do nothing more - however the work in checking trade executions and ongoing testing that's required to keep the EA's optimized correctly takes double the time a day trader would put into his daily routine.

Trading EA's is time brutal.
Trading thin liquidity at the boundary of the charts
  • #726
  • May 9, 2021 8:32am May 9, 2021 8:32am
Quoting Wavegarrick
{quote} {quote} I suggest you familiarize yourself with the terms that traders use. Locking in a trade means that you have placed your stop loss in such a way that if price turns against you, you will gain a few pips only i.o.w. breakeven and some pips. The rest I don't need to answer you. Read and re-read my post. You will find all the answers. You need to expand your thought process. Small timeframes are noise and if you can trade in the context of higher timeframes your stops will not be hit that often. Cheers.
Wow, you started ignoring me after I tried to help you. Sweet dreams to you.
Cheers.
Trade to trade another day
  • #727
  • May 9, 2021 8:56am May 9, 2021 8:56am
Quoting Wavegarrick
{quote} Wow, you started ignoring me after I tried to help you. Sweet dreams to you. Cheers.
Yeah small tf really noise. Last i tried to entry on H1 its really noise and forgot the big view and i lose 13% really its my big lost. Its before BE (Emotional entry). Now i dont trade bellow H4, H4 its minimum TF.
  • #728
  • May 9, 2021 10:23am May 9, 2021 10:23am
Quoting corongumet
{quote} Yeah small tf really noise. Last i tried to entry on H1 its really noise and forgot the big view and i lose 13% really its my big lost. Its before BE (Emotional entry). Now i dont trade bellow H4, H4 its minimum TF.
Hi Corongumet,
I must tell you that I take note of your analysis. You are a good eliotician. Your entries are very good. Truth be spoken is that once our entries are made we tend to close too early. I have been a victim of this for many years. The problem is, finding a new entry that is either too late or too soon. We need to be in a trade, right? to make money. Every trade is a new risk and new uncertainties. I stick with " rather the devil I know than the devil I don't". Once I find my entry I stick with it. I would rather wake up on a sunshiny day with a clear mind and look at the butterflies and say I need to look for an entry. It does not matter how much time passes, there will always be a good day to open a trade where things become crystal clear and I have my "Eureka" moment.

Anyway, thanks for your support Bud. This is why I keep on posting at FF.

Cheers
Leon
Trade to trade another day
  • #729
  • May 9, 2021 4:18pm May 9, 2021 4:18pm
Quote
The rest I don't need to answer you. Read and re-read my post. You will find all the answers. You need to expand your thought process.

All that oomph!!
A trade should be based on an assumption based on facts
  • #730
  • May 9, 2021 7:58pm May 9, 2021 7:58pm
Quoting RickM
{quote} Hi GEfx Yes, most volume occurred during that NFP announcement and a few bars later. The liquidity wasn't any large single dump of Buys on the market but rather a machine gun attack on the market with multiple long orders. Several smaller institutional bankers tried to sell against it but they got smashed in the rise. But here was the second story of the night and if any player wants to know how to predict the markets, here it is. Some big player dumped a huge Sell order right at the to of that first spike to HALT the upward thrust. There...
Hi RickM,
Hope you had a good weekend! Thanks for the information. The NFP announcement is usually an interesting trade opportunity. About 15 years ago I'd go to breakfast or just workout on NFP Friday. I hated it. But, with a little coaching from some friends, it's become a tradeable event for me. In my experience, NFP announcements have an initial surge, then a quick and strong reversal, and finally back to normal trading parameters. We were positioned for a positive announcement (a NFP of +800k to 1,000k), and anticipated an initial dollar surge where I had an entry order positioned plus the two buy orders from Thursday, followed by a quick surge to reverse the dollar positive move. I would have loved to see your analysis, had that move worked out. When NFP hit with a thud, I exited my 2 trades after the surge, anticipating a quick fall back, which, based on your analysis, was attempted by someone.

Have a good week and good trading!
  • #731
  • May 9, 2021 9:25pm May 9, 2021 9:25pm
Yeah never saw THAT narrative coming between these two.

Would you like to get a room?

"Yes the NFP is coming out and we better find something to talk about coz trading is soooo boring for so many people."

Please, I would love to enlist the professionals here to show me the labels of the orders that coincide between the Futures and Spot where it says "ABC Bank" or maybe "XYZ Bank". I know in the many years I have been actively trading, hogswallop is a fantastic way to disguise "I'm guessing/assuming". You see ..... i KNOW it's guessing and assuming because I am honest about these markets. It always tickles my belly when people want to place their own prejudices and biases on top of these markets. And I know this is what people do because they show they don't have the appropriate information in context for it to be anything else.

I love it when people who think they've struck oil have to realize at some point, they weren't the first, nor the last .... and an approach is not a proper education.

Here is my view on a lot of this .....

Attached Image


Have fun.

Peter
Real Trading is not gambling.
  • #732
  • May 9, 2021 10:48pm May 9, 2021 10:48pm
The brutal part is definately the waiting



Inserted Video
  • #733
  • May 10, 2021 12:45am May 10, 2021 12:45am
Quoting tommydoginti
{quote} Hi traderTim, welcome back. I do think everyone has different important things to learn to trade based on their styles. It is both objective and subjective. Like for RickM, knowing the mechanism of volume is objective need as it is the tool to trade. For me it’s not playing a part in my trading decision, so I have no need (objective) but can choose to learn (subjective), vice versa I have to learn certain aspect of trading which RickM does not need to. Many may not aware that HK people is many “trade forex” (actually just buy/sell cash)...
Trading with a thick skin
Thank you for your encouraging comments. I will try and develop a thick skin to deal with the inevitable barbs and abuse. In the meantime I am more than happy to share whatever I can with others.

Although I have been trading for a long time I am no expert or guru. While I am a moderately profitable, which I don’t think is quite as rare as many people seem to believe it is, I wouldn’t rate myself as a particularly good trader.

My trading system is very simple. It is just a basic intra-day trend strategy. I look for a trend on any of the major or major crosses that look like it still has a way to go and jump on board at the next opportunity. I ride it until it starts showing signs of exhaustion. My average trade lasts about 12 hours. I prefer not to hold trades overnight so I try to open trades earlier in the day during either the Asian or London session. I aim for a profit of about 30pips on EURUSD and a bit more or less on other pairs depending on their volatility. I am happy to take whatever the market is prepared to offer me on the day. Sometimes it is just a few pips but occasionally I get lucky and have a windfall of quite a lot more. On average my winning trades are about 20 pips. The secret of success with a system like this is to cut losing trades quickly. I always use a volatility based stop loss both for protection and for risk management. I risk 1% of my capital on each trade and normally open only one position at a time. My benchmark for a good month of trading is a 5% return on capital with a maximum intra-trade draw-down of 2% or less.

My biggest problem with trading these days is what might be called a lack of discipline. I know what to do but often struggle to do it. Many people think and say that all you need is to use more will power or keep your emotions under control etc. I think this is understating the problem. You could tell someone who is overweight that all they need to do is eat less. In principle this is true but it is not going to help and may even hinder someone who is struggling with a weight problem.

I regard all this as trading psychology and consider it to be an important part of successful trading. There is a lot of information around describing the psychological problems that traders face but very little about how to go about solving these problems. I have resorted to trying to cross reference information from other fields such as sports and business performance.

I had the opportunity a couple of years ago to observe three really good Forex traders on a daily basis over several months. I have seen and monitored quite a few traders in my time. These guys were the best I have ever come across. They each used different intraday strategies.

While their best normalised trading months were not all that different to mine they were able to achieve these results consistently month after month. For me on the other hand I might have one good month followed by a mediocre month and then a couple of months where I barely break even. What these guys had over me was consistency. It makes a big difference to net results over say a year.

As we know, markets are forever changing. When this happens, it often takes me a while to find my edge again. These guys all seemed to be able to adapt to changes quickly, hardly missing a beat.

I have also been called upon on numerous occasions to analyse traders who offer their trading signals to others commercially. I suppose these people call themselves professionals but none have ever impressed me much. What often looks good to the uninitiated usually turns out to be nothing more than excessive risk. Furthermore some of these people don’t even seem to realise the degree to which they are risking their own and other people’s capital.

I don’t think it is common knowledge but all these public trade reporting systems that use MetaTrader history data are very susceptible to being “gamed” in a way that can grossly mislead people.

Tim
Don't Guess Test
  • #734
  • May 10, 2021 1:53am May 10, 2021 1:53am
Quoting RickM
{quote} Hi TraderTim Like Peter said, I am using data of Futures then applying a ratio figure to calculate the volume back on currency markets. Please read this post I placed a few days back in another thread. There is no APPARENT difference in the ratio of volume on either spot fx or futures. If volume doubles on futures on any bar, the same increase in volume also seems to visually occur in spot fx. I look at absorption and imbalance signals on my footprint chart & DOM from the futures chart, then immediately take the same trade on spot fx. Provided...
I am Confused

Hi Rick
I grabbed a Forex (FX) futures chart for EURUSD last Friday (Euro FX Sep 21 E6U21 CME) but again the daily distribution appears to be nothing like what you were describing. I also attempted to look at the previous post(s) you mentioned as well as having a look at some of the links that Peter provided to some of his previous posts.

I am struggling to figure out what either of you guys are talking about.

Based on what I have looked at so far, it appears to me that you are using order flow methodology with FX Futures charts. I presume this is an FX futures trading platform linked to Chicago Mercantile Exchange (CME) to give you real time data. My understanding is that you then use this information as a leading indicator to trade short term FX spot markets on a platform such as MetaTrader. These assumptions may be a long way off the mark but perhaps you can clarify them for me and also tell me specifically where you are getting the FX data from and/or what FX futures trading system and contract you are referring to.

To my mind it is not possible to even consider the statements that each of you are making without first understanding the basis on which they are being made.

Tim
Don't Guess Test
  • #735
  • May 10, 2021 2:24am May 10, 2021 2:24am
Quoting TraderTim125
{quote} I am Confused Hi Rick I grabbed a Forex (FX) futures chart for EURUSD last Friday (Euro FX Sep 21 E6U21 CME) but again the daily distribution appears to be nothing like what you were describing. I also attempted to look at the previous post(s) you mentioned as well as having a look at some of the links that Peter provided to some of his previous posts. I am struggling to figure out what either of you guys are talking about. Based on what I have looked at so far, it appears to me that you are using order flow methodology with FX Futures charts....


Tim,

For me (and only me as I can only speak for myself), Although I do in fact utilize futures data, I mainly use the same process a person would use when working with ETF's, Stocks and Converse Debt Finance. I use investigative methods to see into the entities that trade worldwide so I can understand their motives for why they would use exposure to offset or profit trade. For me, this is more accurate as most medium-large caps don't have any interest in 1-5 point corrective turns. Their motives vary but can be determined if one understands them so you can appreciate the medium to large corrections. The spec money is in the 1-5 point turns but proper use of Risk on Rate of return on investment methodology is in the broader turns. I myself have scalped for years so I am aware of the collage effect trading can have on capital. And this is why 1-5 point corrections do not interest me.

I hope that helps but if not we'll talk more I suppose.

Peter
Real Trading is not gambling.
  • #736
  • May 10, 2021 3:53am May 10, 2021 3:53am
Quoting le celte
Salut, I’ve been there since the 2000s, on Forex since 2005. There are hundreds, what I call thousands, of strategies here and elsewhere on other forums. As well as the best indicators (those of Mladen and others). Nothing, is winning. I mean, in the long run, nothing wins, nothing really wins. It’s incredible! Nothing Santé jf
Jacques Pierre- The French Fighter Pilot

One lovely afternoon, Jacques Pierre, the French fighter pilot was having a picnic with his new lady friend under a tree. She was very intrigued by him, as she had never been with a fighter pilot before. Soon enough, her emotions got the best of her, and she exclaimed “Kiss me, Jacques!” So he grabs the bottle of red wine- splashes it on her lips, and gives her a passionate kiss. Although she liked the kiss, the woman asks “why did you splash red wine on my lips?” He responds, “I am Jacques Pierre, the French fighter pilot. And I always have red wine with red meat.”

Intrigued, the woman decides to move things along. After a few minutes of passionate kissing, she says to Jacques “Go lower.” So he rips open her blouse, grabs the bottle of white wine- splashes it on her chest, and then sucks it off her breasts. The woman asks “why did you splash white wine on my chest?” He responds, “I am Jacques Pierre, the French fighter pilot. And I always have white wine with white meat.”

So she lets things continue as they have, and after a few more minutes she says “Go lower.” So he rips off her panties, pours Cognac all over her crotch, then lights it on fire. The woman jumps up screaming, “WHAT THE HELL ARE YOU DOING?!?!”

He calmly replies, “I am Jacques Pierre, the French fighter pilot. And when I go down, I go down in flames.”
It takes a lot for me to IGNORE you, but you can try.
  • #737
  • May 10, 2021 4:06am May 10, 2021 4:06am
Quoting TimeTells
The brutal part is definately the waiting https://www.youtube.com/watch?v=JS4fKMdvknM
Waiting and coming up with trading methods/ideas one normally wouldn't unless they are waiting is brutal.

^^ Happened to me today!
A trade should be based on an assumption based on facts
  • #738
  • May 10, 2021 5:43am May 10, 2021 5:43am
Quoting TraderTim125
{quote} I am Confused Hi Rick I grabbed a Forex (FX) futures chart for EURUSD last Friday (Euro FX Sep 21 E6U21 CME) but again the daily distribution appears to be nothing like what you were describing. I also attempted to look at the previous post(s) you mentioned as well as having a look at some of the links that Peter provided to some of his previous posts. I am struggling to figure out what either of you guys are talking about. Based on what I have looked at so far, it appears to me that you are using order flow methodology with FX Futures charts....
Hi TraderTim

The basic data I use is sourced from CME using CQG data onto my futures platform - but traded on MT4 as I have spend 3 years developing my current systems which are not transferrable due to coding issues at present.

Volume is actually a very misleading description to label the market activity to be honest because we should be looking at breaking it down further.
I first measure the daily passive liquidity that sits on a chart which is just liquidity that is traded from the left hand to the right hand and therefore is fixed in size, but increases the apparent days volume.
Then I hunt for introduced aggressive liquidity which is new liquidity entered onto the market for the first time that day from non- trading duties.
It was never on the chart before because it wasn't needed.

I made a statement the 87% of the days Volume entered the chart over those 16 candles on EURUSD ( EU6M21)
If I can now be more precise and state I believe it contained 87% of days total liquidity was contained in those 16 candles (not volume, but total size of chart liquidity).
It is always subjective of course.

I use tools on the DOM to establish the likelihood that liquidity I see on the charts is either daily current liquidity or recently introduced aggressive liquidity because my strategy is based on liquidity imbalances.

Cheers
Trading thin liquidity at the boundary of the charts
  • #739
  • May 10, 2021 11:12am May 10, 2021 11:12am
Quoting PeterCaleb
{quote} Tim, For me (and only me as I can only speak for myself), Although I do in fact utilize futures data, I mainly use the same process a person would use when working with ETF's, Stocks and Converse Debt Finance. I use investigative methods to see into the entities that trade worldwide so I can understand their motives for why they would use exposure to offset or profit trade. For me, this is more accurate as most medium-large caps don't have any interest in 1-5 point corrective turns. Their motives vary but can be determined if one understands...
So. Do you trade intraday swings?
A trade should be based on an assumption based on facts
  • #740
  • May 10, 2021 11:37am May 10, 2021 11:37am
Quoting RickM
{quote} They still believe Stop Loss runs actually exist without ever looking more closely at liquidity components.
I have been chewing what you said.
Does this mean when they make that move they are dribbling traders and sending them to the wrong side?
Or they just matching the order that is in front of them (as according to Buffett's quote below)?
What else is possibly there in that move?

I watched the Market Delta "Footprint Deep Dive" Course videos some time ago and I tried to marry the stop runs concept with the order flow and I felt something was off.

"Which, you know, has always struck me as like having a house that you like, and you’re living in, and, you know, it’s worth $100,000 and you tell your broker, you know, if anybody ever comes along and offers 90, you want to sell it. I mean, it doesn’t make any sense to me." Warren Buffett.
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