Sharing strategies, Robots and Trading Signals

I have published 6 of the charts above. There you can se how I do it and compare. I have used a lot of time on this today and cannot use more time on it. It is not a bible. It is my suggestions. Then you can go and take a look at your own charts and see if you agree.

Personally I will take a look next sunday of the charts. Were I right or wrong. That will be fun - I hope.

Also along the road I will tell which indicators I use and the settings on them. But I want to see if there will be more contributors to the thread. I will not be the one delivering everything.

Lets see where this goes! A fan of BigE

I made this contribution in another thread. I repeat it here.


Risk Management
For the newbies.

Many traders do not know what risk management is. Even experienced traders often got it wrong! And I seldom see it explained anywhere. This is for the newbies in this thread.

You have often heard this: Never risk more than 1 % on a trade. Therefore some people think that they may not use more than 1 % of their money on a trade. That is wrong. The rule is: If your stop loss got hit, then you should not lose more than 1%.

You can use one of the Lotsize calculators on the Internet to calculate the number of lots that will fulfil that purpose on your trade.I don't use them so I cannot point in any direction.

Or you can make an Excel sheet. Here is how to do it. You have to find the number of lots that you must buy in order to lose the exact amount of money.

The formula is:
Lotsize = Account Balance / 100 X RiskPercent / Stoploss pips / Pipvalue.

Stoploss pips - that is of cause the number of pips from the price to your stoploss.
Account Balance / 100 X RiskPercent gives the amount that you will lose if the stoploss gets hit.
Pipvalue is the cost of 1 pip in 1 lot.

Find the pipvalue here: Pip Calculator | Myfxbook. Set the trade size to 1 and the pips to 1. You need to update the pipvalues once in a while.

I attach my Excel sheet. All pairs with the same second valuta do have the same pipvalue. So if you want to invest in EURUSD, you shall use the USD row in the Excel sheet.

If you want to be a robot coder, then the formula above is vital. Use it. It is easy.

Using this method you are also able to operate the risk/reward strategy. Because you now know how much you will lose at your stoploss. If you make the R/R 1:2 (Reward = 2 times the stoploss pips), then your profit will be the exact double of your loss.

So - what is the big issue here. Why should you care??? You must care because now you know exactly at each trade how much money you could lose. Now you know how many trades it will take to ruin your account! Now you know the profit on each winning trade. NOW - you can make plans for your trading life.

Hi again Alan
Yes the BigE system is fine. And as you know, I have made a robot that tells when possible continuation trades are developing. So in this thread I will tell people about the BigE system and I will give them the robot I made.

So guys, there are a lot to look forward to - in the time to come. But again, I need other contributors to the thread also. I will not deliver all my gold and not having anything back.....

agree, would love to see the NZD/USD opinion.

OK, here you are. As you can see - I work with channels. They tend to breake and the signal are doing something else, so they are not 100% trustworthy. But that is how trading are. I have other tools, but it is manly the channels that gives me the large trend. Then I use several indicators to tell me when to get in.

In this chart the price are reaching the roof in 2 channels

Thank you so much, I would love to practice using channels on my strategy. Again thanks for the time.

Horizontal lines at supply or demand zones are more reliable for me

Jep, and fortunately we have our systems. I do not use supply and demand zones.

Please do not PM me with questions that are not of a private character. "If you have time would you explain your reason and your opinion on the money rate talks on Tuesday?".

But thank you for the question. I have no opinion what so ever. When I was younger I tried to understand fundamentals. I was allways wrong. And lost money every time I tried fundamental trading. So I am happy that famous Charles Dow amongst his rules said, that all information and all opinions are in the actual price. So I just watch the price.

In the matter fact I don't even look at the event calender. I recon that if there will come a reaction then I can be lucky or unlucky. And if I am unlucky, then my risk management is allways in place and I only can lose 1%. No problem.

Won't happen again and thanks for the lesson.

OK, then how do we paint a channel on the chart? Allways make the side that will break first. So if the trend is going down, then paint the upper line, because the new trend will start by braking that line.

When you have painted the upper line - mark it by dobble clicking. Den hold the CTRL key and grab the line with the cursor. Now you have an exact copy of the line and you can move it down to be the lower line.

You will be amazed how often the lower line fits the outer points of the low of the bars. And if they do, then you have a succesfull channel. But know this - no matter how pretty and obvious the channel is, it will often betrade you and do something unexpected.

Add 16% to your account in only 2 trades!!!
And by risking 2 or 4% if it goes wrong.

Is that really possible? Jep. There a just 2 things that MUST be fulfilled before you try this (of cause on demo).

1) You must master the risk management which I described in post 24.
2) You must be able to take 2 trades in a row that you know that you will win. So find the very best and safest setups that you have ever done.

OK. Lets go. You shall make a trade with a risk of 2% of your account. The Risk/Reward shall be 1:2. This means that if your stop loss gets hit, you will lose 2%, but if your take profit gets hit, then you win 4%. It is done by setting the stoploss at the right place and measure the take profit double so many pips in the other direction. Then calculate the amount of lots that you must trade in order for the risk to be exactly 2%. This is really a normal trade and the risk is inside the advice that most gurus are preaching.

Now the first trade is running and you are a Superman and hit the take profit. You just earned 4 %.

Now you take trade no# 2. The same recipie. R/R = 1:2 and risking 2% of your account at a loss. BUT - THIS TIME, you also risk the profit from the first trade. This means, that you risk 6%. As your R/R is 1:2, then you will earn 12% if you hit the take profit.

So 4% in the first trade and 12% in the second trade!! You earned 16% of your account in just 2 trades.

Do that 6 times and you have doubled your account.

And what is the risk! If you lose the first trade, then you lost 2%. That is normal for many traders on a trade. If you lose the second trade, then you have lost 8% but the 4 of those were the profit from the first trade, so you really get out of it by losing the normal 2*2% in 2 trades.

You can also look at it this way: If you win 16%, then you can lose 2% 8 times before you are even. I say that chances are, that you are not missing 8 times.

Then it is possible to play with the set up.

1. What if we set the risk per tade up to 4% - then the profit will be 32%. But that is more risky.
2. Or what if we set the R/R to 1:3?? Then the win is 22%. But it is harder to hit 1:3 than 1:2. So I use 1:2 because it is doable.
3. Or what if we do 3 trades and risk the 16% we have won in the 3rd. trade? That will be 50%.

But my advice is to stick with the 2 trades and a profit at 16%

Just for the record - I do know that 2% of 100$ is not the same as 2% of 116$, so we are speaking roughly here.

Let me know if somebody will try this on a demo and let us hear the results - winning or losing.

I hope this text is understandable.

Was that interesting?? Ihave more tricks in my sleeves, but it is time to let other people get in now.

I ran into a shit storm in another thread that I was participating in. The OP of that thread told his followers to follow him over in another platform - not MT4, where they can trade stocks. I answered his post that it is not OK. "We are in a Forex forum and trading stocks are not the same. " And by the way, I mean that the OP of a thread should be the last person to ask people leaving the thread. And by accident he revealed, that he is not even using the system his thread is about himself. I find that not very nice.

Now I am in that shit storm with messages lige this: Technically it is stupid. There is NO difference when trading a forex pair , a stock or an index with Technical Analysis tool.s. A chart is a chart. And your screen can show the same limited number of bars, candles etc whatever the financial product you ask it to show.

Then I was Ignored, so i cannot tell him how wrong he is. This is exactly what I feared. People do not know what they are talking about and they are bound to pay money learning the hard way.

I am talking about trading stocks - not any kind of CFD products. Stocks are traded "directly" on the exchange via a brokers software. That is where the real thing is going on.

Here are some of the differences between the Forex market and the Stock market:

1. The stock market is not open 24/5 like the FOREX market. It close every afternoon. So you do not have the same possibility to trade after your day job. Also the price action over the day is different because of this.
2. The stock market does have a period with shadow tradings. You cannot se what is traded, but it influence the price of your waiting orders and the price of the stocks that you own.
3. In the minutes before the market opens, the stock prices are recalculated and changed because of the trades that were done in the shadow period. This means that the price you had on your stocks when market closed have been changed over night and you were not able to see the proces or how much it was changed.
4. GAPS - this results in what is called Gaps. That is when the price changed very much over night. Then from the closing of yesterdays bar there is quit a difference in the price to the next mornings opening bar. So - now you either won an amount of money or you lost it. And you had no part in the decissions and you had no chance to exit the trade during the proces. Just take the loss and get on.
5. There are large trades never comming on the stock exchange because they are handled between two large parties.
6. The stock prices are over time going upwards because prices are rising. The FOREX market do not have that mechanism. The behavior of the FOREX market is very different. Prices stays in a range. A large range, but it is a range.
7. Stocks are way more often victims for market mechanisms and have large fall or rising in the price. Think of what putin is doing now. It will influence of the Forex market, but on the stock market a lot of companies will lose money and there will be a large fall in the stock prices. And those falls comes very very quick. Godbye money.
8. If you buy a stock then you risk that the company closes and you have lost all your money over the night. That will happen for many stock traders if Putin starts a war, also a small one. The forex pairs will not close. They are still there and you have the money.
9. There is a difference between stocks. Some are traded more than others. The behavior of the not so much traded stocks are different.
10. The behavior of the much traded stocks like Microsoft will be a surprice to the Forex trader. There are so many traders that wanted to buy the stock before you, and therefore you suddently find yourself in a very long queue. If you are lucky you will get your order filled, but many many times you experience, that the prices are moving away from the price you wanted to bid or ask. So you had a stock and you thought that "right now is the price right. I will exit and get myself a nice profit". But you never got the exit and the price falled and suddently you are losing money in stead of the nice winning you thought you should have. Then you have the problem: Will you exit and take the loss while it is small or do you think you get another chance where the price gets back. And if that happens will you then be lucky and get the trade or will the same thing happen again. This situation happens often. One of the more serious sides of stock trading. You learn to buy the right stocks, but the learning cost money.
11. Stocks are the real thing. If you buy a stock, then you own a little bite of a company and you are trading on a real stock exchange. Trading Forex is done on your brokers server park.

That is what I can think of right now. There are more. If a person haven't traded stocks he does not know this. Like the trader that sent that shit to me. He just sees that the charts are the same and it seems that the behavior of the bars are the same. He will get himself a surprice.

Now you guys know! It was many years ago that I traded stocks, but I think this is still how it is working.

This is not to say that trading stocks is a bad thing. Not at all. In fact it is more real to actually send your money out in the real world helping the companies to exist. And I do understand, that with 20.000+ US stocks there are many more nice rising stocks. I just point out that there are vital differences. And if you are not good at trading Forex, then don't go to the stock exchanges. It will only be worse.

Of cause if it is a CFD product, then it is another thing. Then you are not on the exchange with all those differencies.

Start your own thread using RobinHood's method. Nice.

So here you are. Putins unprovoked going to war means a lot for the stock traders.

Yes Absolutely. Stocks and FX are as similar as Chalk and Cheese. Coincidentally, we have Ukrainian Crisis to prove some of your points in real time.

Gap openings (due to market not being 24/7 for retailers) is the top one hindrance in my opinion when it comes to Stocks. Gaps of 5% or more is not unheard of while the retailer has to sit helplessly and watch the catalyst event unfold in front of his eyes before the market opens.

Also, Regulatory behavior, like example India, one is not allowed to short stocks per se. One can initiate shorts for the day but have to be closed by EOD. Shorts can't be carried overnight. Shorts on futures are allowed with carry is allowed, although the margin requirements are insane. One is faced with the same problem of gaps, one wrong day and you are toast.

The narrow window of market staying open also means potential handicap when it dealing with non continuous price data.

Great Post by the way!!!

Thank you - and for supporting my points