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Trading Made Simple the right way, and other trading lessons 334 replies

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Trading Made Simple(r)

  • #7,421
  • Feb 8, 2022 2:41pm Feb 8, 2022 2:41pm
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First T.P ok...
  • #7,422
  • Edited 1:45am Feb 9, 2022 1:30am | Edited 1:45am
Quoting RiskFighter
Risk Management For the newbies. Many traders do not know what risk management is. Even experienced traders often got it wrong! ...... NOW - you can make plans for your trading life. This is not what this thread is about. Hope that RH bear with me. {file}
Hi Riskfighter, good post and I think technically correct. But again it depends on ones strategy ... so how you develop / customize a trading system that is designed to suit "your personality and your interpretation of the market, your risk management should cater to the rules of your system and not particularly conform to some ideology unless ofcourse it makes perfect sense to your strategy.... but yes i remember the 1 to 2% per trade rule one should be careful is doesn't become a handbrake!
IMHO Risk Management is not a one size fits all...

Edit: Apologies your post does say Risk Management for the newbies i think I extended some graduate advice lol

I note your:

  1. Trading Philosophy: Risking small % - you get small winnings.

Cheers mate!

The more you learn, the more you see
  • #7,423
  • Feb 9, 2022 2:16am Feb 9, 2022 2:16am
Quoting RobinHood
I want to introduce a concept that I have never talked about in this thread before. Many years ago when I created and coded computerized mechanical trading systems I would often include the use of RSI into them. As everyone here knows, we normally only want to initiate Long trades when the RSI(14) is greater than the 50 Purple Line OR we normally only want to initiate Short trades when the RSI(14) is less than the 50 Purple Line. The problem is, when there is no trend the price often just moves back and forth mainly sideways which then causes the...
So you sell when the RSI is below 55 or 45?
  • #7,424
  • Feb 9, 2022 4:24am Feb 9, 2022 4:24am
Quoting Marcusv007
{quote} Hi Riskfighter, good post and I think technically correct. But again it depends on ones strategy ... so how you develop / customize a trading system that is designed to suit "your personality and your interpretation of the market, your risk management should cater to the rules of your system and not particularly conform to some ideology unless ofcourse it makes perfect sense to your strategy.... but yes i remember the 1 to 2% per trade rule one should be careful is doesn't become a handbrake! IMHO Risk Management is not a one size fits all......
You are exactly right about the small winnings and that is as you say for the newbies. Personly I can easily have 10 trades running at 2%. That gives 20%. But I won't lose them all, so this way the risk is further spreaded out.

I still think that the vital in risk management is that you must know exactly what you can lose. And that is what this metholody does. That does again give you the possibility to know how far to set you TP in order to have the wanted R/R.

There are other ways also to cope with risks, but this is the most common methode I think. I know a trading millionaire that says "I use the whole account". "Why should I have money not working for me"? True, but he put 200.000$ in the account to trade the day and then he has 100 times that amount in the bank.
MetaTrader 4 - so many advantages.
  • #7,425
  • Feb 9, 2022 4:48am Feb 9, 2022 4:48am
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All 1st T.P very deep inside in the pockets
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  • #7,426
  • Feb 9, 2022 5:30am Feb 9, 2022 5:30am
Quoting RiskFighter
{quote} So if I should code a trade picker for this strategy it would be: HULL[1] = GREEN && HULL[2] = RED && HULL[2] > EMA5[2]. Possible Long trade. This would pick the files who had a possible continuation and then the trader should look into if the rest of the confluence is in place. I can easily do that if anybody want it?
@ RiskFighter

Would appreciate if you can do that trade picker would help getting on to good trades quicker

Thanks
  • #7,427
  • Feb 9, 2022 5:58am Feb 9, 2022 5:58am
Quoting RobinHood
{quote} If you are trading a 4 hr. chart, I would not be too concerned about what the Weekly chart is doing, only the Daily. Remember, the 4 hr. chart has to turn before the Weekly chart does. The Daily chart you are showing has been in an extended uptrend for nearly 2 months so I would be hesitant to take short trades on the 4 hr. chart, but obviously some of them will work. Ideally, you want to trade in the same direction as the next higher time frame because overall it stacks one more thing in your favor. I always try to remind myself that it...
Thanks for the tip, appreciate the extensive explanation on your strategy. I am extremely grateful. Thanks you!!
  • #7,428
  • Edited 7:25am Feb 9, 2022 6:52am | Edited 7:25am
I'll be honest, I don't understand and I am very surprised on how this thread doesn't have more interaction (I'm not complaining). Maybe because it is so simplistic and uses basic indicators that it deters people away.

I just love how the rules don't change whether you are on the 15M TF or Daily TF. You look for the same reactions to the indicators and pull the trigger.

Robinhood, thank you for the tip in regards to the "RSI 50 Channel". It definitely helps filter out some of the sideways movement. Would you bother putting the "channel" on the higher TF that you use for confluence?

One thing I am still trying to work on is holding trades longer into the 1.5 - 2:1 RR. It's hard to see your account up 1% and not just close out the trade...

Does anybody have any trading videos they recommend to watch (while I am bored at work)?
Remember, the market never lies. It is only we who lie to ourselves.
  • #7,429
  • Feb 9, 2022 6:56am Feb 9, 2022 6:56am
Quoting nanacarter
{quote} So you sell when the RSI is below 55 or 45?
RSI below 45 for short trades, and greater than 55 for long trades, but do not use this as a stand alone entry method.

The 45-55 zone is to give the RSI some wiggle room.

When I am using this, I also don't exit a short until the RSI goes above 55, and the opposite is true for long trades.
Always a Student, Never a Master - Emulate What Works
  • #7,430
  • Edited 8:43am Feb 9, 2022 7:31am | Edited 8:43am
Here's something interesting that I have noticed about the Advanced MTF-RSI indicator.

I am presenting this concept using a Daily chart and the Advanced MTF-RSI indicator set to one time frame higher, which in this case is the Weekly Chart.

I have marked* the turning points of the Advanced MTF-RSI indicator (*with no regard as to where the candles are on the charts) with red vertical lines, meaning the points when it starts stair-stepping up or down (in the lower window). I also removed all of the indicators from the lower window(s) (ONLY for clarity). Otherwise, I would have all of our usual indicators in the lower window on the chart.

Attached Image (click to enlarge)
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Now it's not 100% accurate all of the time, but it can often signal the beginning and/or the end of a trend, and sometimes even before the price does. How cool is that??? And when it's wrong, it's usually wrong small.

Personally, at this point, I plan to always use this indicator on all of my Forex charts, and here is how I very conveniently display it on my charts:

Attached Image (click to enlarge)
Click to Enlarge Name: Advanced MTF-RSI Indicator on Chart.PNG Size: 87 KB

I know that many here will now want this indicator, but may not know how to easily find where it's located this thread, so here it is:

Attached File(s)
File Type: mq4 Advanced MTF RSI.mq4   11 KB | 677 downloads
Attached File(s)
File Type: ex4 Advanced MTF RSI.ex4   35 KB | 560 downloads
Always a Student, Never a Master - Emulate What Works
  • #7,431
  • Feb 9, 2022 7:36am Feb 9, 2022 7:36am
Quoting RobinHood
Here's something interesting that I have noticed about the Advanced MTF-RSI indicator. I am presenting this concept using a Daily chart and the Advanced MTF-RSI indicator set to one time frame higher, which in this case is the Weekly Chart. I have marked* the turning points of the Advanced MTF-RSI indicator (*with no regard as to where the candles are on the charts) with red vertical lines, meaning the points when it starts stair-stepping up or down (in the lower window). I also removed all of the indicators from the lower window(s) (ONLY for clarity)....
I'm glad an indicator I came across can benefit your method in a completely different way than originally intended. That is why I love this method.
Remember, the market never lies. It is only we who lie to ourselves.
  • #7,432
  • Feb 9, 2022 7:39am Feb 9, 2022 7:39am
Quoting stiffdogg06
{quote} I'm glad an indicator I came across can benefit your method in a completely different way than originally intended. That is why I love this method.
And I really appreciate you posting it!

On Page 1, Post #1, I said...

My hope is that other traders will recognize the power of these templates and contribute even more ways to trade them, hopefully in ways even more effective than I have presented, and that they help traders make a lot more money trading the Forex.

And we all benefit when someone does it.
Always a Student, Never a Master - Emulate What Works
  • #7,433
  • Feb 9, 2022 7:44am Feb 9, 2022 7:44am
Quoting RobinHood
Here's something interesting that I have noticed about the Advanced MTF-RSI indicator. I am presenting this concept using a Daily chart and the Advanced MTF-RSI indicator set to one time frame higher, which in this case is the Weekly Chart. I have marked* the turning points of the Advanced MTF-RSI indicator (*with no regard as to where the candles are on the charts) with red vertical lines, meaning the points when it starts stair-stepping up or down (in the lower window). I also removed all of the indicators from the lower window(s) (ONLY for clarity)....
You don't think that this happens after the fact? I find all my MTF indi's seem to alter as time moves on.
  • #7,434
  • Feb 9, 2022 7:49am Feb 9, 2022 7:49am
Quoting Detto
{quote} You don't think that this happens after the fact? I find all my MTF indi's seem to alter as time moves on.
I only trade Daily charts and so I only have the Advanced MTF-RSI indicator set to weekly on them. That one line moves so slowly that I have never seen it "alter", nor even considered the possibility to be honest. Possibly someone who trades lower time frames could chime in on this?
Always a Student, Never a Master - Emulate What Works
  • #7,435
  • Feb 9, 2022 8:02am Feb 9, 2022 8:02am
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This is my favorite way to trade the system.
I hope it is helpfull for somebody.
  • #7,436
  • Feb 9, 2022 8:03am Feb 9, 2022 8:03am
Quoting RobinHood
{quote} I only trade Daily charts and so I only have the Advanced MTF-RSI indicator set to weekly on them. That one line moves so slowly that I have never seen it "alter", nor even considered the possibility to be honest. Possibly someone who trades lower time frames could chime in on this?
With any mtf indicators you can only be sure it was actually stepping up or down with the close of that higher timeframe candle whereas your lines are on the open. It still can be very useful though if taking a trade on the lower timeframe.
  • #7,437
  • Feb 9, 2022 8:11am Feb 9, 2022 8:11am
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I think is better now.Sorry.
  • #7,438
  • Feb 9, 2022 8:36am Feb 9, 2022 8:36am
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  • #7,439
  • Feb 9, 2022 9:14am Feb 9, 2022 9:14am
Quoting stiffdogg06
I'll be honest, I don't understand and I am very surprised at how this thread doesn't have more interaction (I'm not complaining). Maybe because it is so simplistic and uses basic indicators that it deters people away. I just love how the rules don't change whether you are on the 15M TF or Daily TF. You look for the same reactions to the indicators and pull the trigger. Robinhood, thank you for the tip in regards to the "RSI 50 Channel". It definitely helps filter out some of the sideways movement. Would you bother putting the "channel" on the higher...
1. Less is better...2. The system is not simple. Looks simple from the outside view. It's sophisticated when you go deeper inside.
Autopilots in aviation are just one button. Very simple for the user...But it's very complicated when you start to fix one...Needs time and a lot of cups of coffee, testing, testing, and testing. This system is second generation autopilot. As it gives you good profits. If you read 5 times the thread it becomes third generation autopilot and if you backtest times after time and you add also something of your knowledge it will become a very powerful gun.
  • #7,440
  • Feb 9, 2022 9:18am Feb 9, 2022 9:18am
Quoting stiffdogg06
I'll be honest, I don't understand and I am very surprised on how this thread doesn't have more interaction (I'm not complaining).
I have thought about posting my entries on the thread for both examples and critique from others. I know that my analysis is not great yet because I have yet to make or lose money on this method. I keep hovering around break even. It would be helpful for me, at least, to post the entries and have other give their advice or suggestions. I try hard to follow the method, but sometimes I do not see things correctly.
My only worry is that I do not want to flood the thread with my posts, but it may be helpful for others to see my entries and then the critiques from others.
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