Old School Percentage Trading

Based on whatever trading platform you use and the setup of your view - whether you use bars or point and figure or renko etc., is most definitely going to determine other things about your trading.

Let's see here ....

a market can go up or down, it can congest sideways, it can break previous highs and lows, it can bedazzle you with shock and awe, it can make you believe your broker "looooves you", what else ? .....

It caaaan ....

tell you in advance what it's planning on doing, it can use the very same areas for it to target, it can tell you when "thhheee biiiiig plaaaayers" are entering and exiting. ooooooh my !!

It can befuddle you in lots of ways or you can choose to see befuddlement as a sign of something. For me, Percentage trading at its roots hasn't changed since I began trading. Sure you have more data and tools and all that stuff, but can you tell me off the top of you head, what fraction of 35 is 6.75 ?? My point exactly.

For lots of people, this is probably a good reflection of things .....





BUT, it doesn't have to be that way.

Percentages are a language of their own.

And there are different kinds of percentages - there are comparative, co-operative, completive, angular, transitional and lots of others.

Most people have never even heard of some of these. Are you one of those people?

With these things you cannot just be told, and then expect to know it and know how to use it. No. You need to spend time with it. And then you can learn. Impatience is a killer when you're trying to learn something new. But even THIS is a sign of something. Do you know what it is? It's a sign that you are wanting to get something for sake of desire instead of learning for learning's sake. So if you want to learn, don't wait for someone else to "tell you". Why not? How do you know they themselves aren't as befuddled as you? Mmmmm? How? .......

"......And when the bow breaks, the cradle will fall. Down will come baby, cradle and all."

Percentages open a world unknown to so many. A wondrous insight.

You can use percentage insight to be actuarial.

Environment. Sentiment. Observable outcomes. Desirable outcomes. Desirable losses x observable loss variations. Observable unknowns.

Risk types. Likelihood of risk events.

If your trading premise/s cannot predict diluted behavior and movement, then you are speculating.

If you cannot distinguish between innate and sporadic, then you are guessing.

Percentages. Start playing with them and see what you can learn.


Peter

The TRUE key to understanding ... mmm ... wait. I use that word a lot .... understanding ...... but I use it in a particular format. I use it to describe your input, your knowledge, your awareness AND any insights you may have ..... so you can appreciate something in a more well rounded approach. Not as in understanding with being sympathetic of someone's feelings as you comfort them. Or, simply to comprehend something. No.

Ok moving on ...

Some of the different percentage forms...

And remember, in the beginning, DO NOT obsess over the factoids or info ON the pic, but get to know the concept of its existence .....





Peter

And now look at this one again .......





Peter

And the EURUSD Today .......




People are far too preoccupied with just grabbing a strategy, ANY strategy and trying to "make money". They would do themselves an ENORMOUS favor by putting their mind to work to generate as many "options" they can muster when looking at a chart...... before doing anything else.

A circle carries with it into every situation 360 perspectives. How is "trying to make money" going to help you feel and think your way through all of them ?!!

Something to consider and think about for a while.


Peter

It's a shame this thread died off as I think there is value in it...just that people don't necessarily understand the full intricacies of what you are trying to convey.
I myself have spent the last couple of years on a 2nd account trying to gravitate away from very short term scalping to a method of placing trades over a range in price, as opposed to sitting, waiting for pinpoint entries.

I noticed your recent posts on a CumDelta board, but as it's nothing to do with that particular strategy, I thought it best to post here. It's to do with your recent comments on drawdown and how to handle it.

"Draw downs are defined by several things... what you know and what you don't. What you understand and what you refuse to learn. You're thinking like a person who feels the need to be a perfectionist or be perfect within entry"

Now, at the moment I think i've slowly eased myself away from the "perfect entry" compulsion. I can scale into a position as it goes against me. I can work out for a certain time period, what the most likely extreme price is likely to be ...BUT...once it exceeds that price I take the loss. Ok, it happens much less frequently than the profitable trades..BUT..the losses do tend to take back a large chunk of the profit due to them being fully loaded trades at stop out. Quite often my profitable trades are small in weight due to price not going far enough into my "tradezone" to pick up orders. So, as per your quote above ... drawdowns seem to be defined by what I don't know.

I know I'm doing the trade weighting wrong but I can't work out how to fix it. We must have an emergency cut-off point for trades right? I know you are not a Martingale trader. Or are your suggesting that the drawdown is managed by opening trades in the opposite direction in some hedge-like scenario?

As price turns should I be adding on to that profitable position (to make up for it not hitting the extreme of my buy/sell zone?)

You seem unfazed by drawdown..and I am in 8 or 9 out of 10 trades too..But I just cant find a way to lessen the impact of the big whack every so often.

Regards DM

I agree Danger mouse. Some good posts.
Yes the scalping can become a bit tedious. 3 to 5 pips or so to me is scalping. Intraday trading is better perhaps?

Drawdown is defined by each person differently. For me I see it as a way to see what else can be done. Of course realize I do not trade everything that moves. If a segment of movement is getting stale, then it's likely a new segment will begin. My drawdowns are always inline with 1) bigger activity 2) My own personal previous mistakes. Let me explain here - There really only exists 3 basic strategies = before during or after a move begins. Now place this inline with bigger picture. Now consider what mistakes I have made in the past. Getting in too late in the segment usually ends up getting run over. Not following what real things are telling me is happening. Not using the segment's duration of activity to tell me how much exposure to create, as I scale down as it gets older IF I am scalping.

If you use higher Time frames to help guide you to see the direction etc of the next move, now add what segment it is (strong up or down, generally sideways) and what your experience tells you can and does come next. If it's late in the segment, trade light and be there for the movement.

(I like using the 1min chart to round out the turn so I can see its reversal.)

Reading through what you've written it sounds like you're overexposed going into the turn but I would have to see your chart view with trade details to determine this for certain. It also sounds like you are squeezing your trades. Squeezing is when you enter too early on your trade setup and your account credentials (size, leverage and broker lot limit etc) together with how many orders you send to market, outweigh what you can do once the market moves too far against you. To add, I don't know your view on stop function, if its too close or not. Additionally, I would look at what you are using to determine the turn. Do you use the chart, or added indicators, divergence approach etc etc etc. And what do you do once the turn is completed and it then moves on? Do you just take the loss and stop or do you work with it and retrieve your money and create added gains?

Private message me your trade weighting approach if you want so its private and I can look it over. Or not if you don't feel comfortable, or post it here. Or none. Your call.

For me I use the percentages to aid me in working with the market instead of fighting it. But to do this you need to test different tools to keep an eye on where it's been and then use your turning method to track its turn then it starts all over again. Usually (and this is no judgment on anyone) inexperienced traders do not calculate the costs of hedging type approaches against just trading the way the market moves. The 50% concept is a mindset. The flow percentages found in post 23 of this thread, are to be used as stages for reversals and are ways to track the market movements. I layer time frames so I can see each opportunity as one may begin.

And so, with the help of percentages and the other tools, drawdown now becomes an opportunity to trade instead of just "cutting your losses and move on without learning anything".

I hope that explains it for you.

Peter

@Peter, can you post more charts on how you trade percentage trading ,im a visual person ! :-] thank you in advance

What I show here is just one way to form a use for percentages.




Before, during and or after it moves. What segment and stage is it up to ? What is the intention of the larger position?

There's a lot of "a lot of stuff" online about trading. I find percentages to help in these ways to dissolve most BS. Whether your broker is with you or against you, doesn't matter really. All of "this stuff" is merely something I developed during the times when I had no access to computer power and processing but is still just as effective today.

On the third pic each layer of it stalling then shifting is a segment, so every time it climbs up or down sets the next segment.




This represents influence of position. It's used as a revolving door so at one end it's 0-100 and 100-0 at the other end. I use it in sideways markets along with other tools.

To use these properly you have to throw away almost all of what you see and read these sites. With this it's about activity and outcomes, not trying to impress anyone.




This one illustrates what I do when it isn't necessary to wait. I do this when I am aware of other things besides what's on the chart. I don't go for all the stuff people on here etc yack about. I am a value trader. I want outcomes that stick. It is the 1min chart of AUDUSD where all of last week it had been responding to a deep move prior to that.

For me V shaped redirection (a virgin move) is better previewed as a whole using a larger position viewpoint. Others such as wide swings are easy to navigate. Some people will enter very early (the first 25%) on these. The trick is to track it to see the likelihoods and then enter when YOU are ready.

Instead of just copying these, it's best to spend time with it and get to know it, after all they're only tools.

The percentages in this way are just helping to 'atone' for one's ignorance. That is why using a generic view is essential.


Peter

I agree. I always find these threads the most interesting because they typically make me think a bit.

Although, I usually struggle to get the meaning... which I think could be to not having the necessary life experiences yet(this is age independant I think), some type of unknown childhood trauma, or a host of other things that stops you from seeing what you need to see.

I think a lot of the results we get from trading are based on what we think, and what we think affects how we trade. Working on changing this.

This thread is not about gambling, it is in some ways, about minimizing the act of gambling. And is definitely about reducing and managing Risk of many types and forms. The difference here though, is I'm not just trying to be a book on a site, listing the risks. The words mean little when dealing with reality.

But most people want to gamble yet refuse to accept there will be losses. Hence the paradox of "To gamble or not to gamble - why do you have to choose to be so stupid in the first place?". OH .... you didn't see that one coming hah?! Yeah most people don't. Gamble or invest? Both really just the same coin but different sides to the same tale I'm afraid.

Think generic then see what you learn.


Peter

Very recently I was asked to elaborate on how I use percentages, in a different way to how I have explained things previously. Without revealing the person's name and identity, here is my reply ......

"
You must begin with ....

- What is same AKA constant? Features that exist every situation.
- What is different?
- What is similar?
- What is opposite?

Doing it this way from the start, puts your brain in focus with looking past the stuff others are obsessed with.

Percentages offer key insight but without the above, you are left only with what these sites push on people. A chart / graph must always have a center point, an indifferent axis. So despite a price chart having X and Y axis (time and price) there is always another axis unlisted. An eqilibrium you could call it. A point that is always in motion but always present. On that first pic the red line represents this central area and is clear to mark as the market shown is 'going sideways' for long enough to notice it and so you can draw a line. People believe it exists because it is a "price chart" and there has to live some 'average" point where the XY axis converge. This is not true in all contexts. They have a relationship and must agree entirely at some point otherwise there would be no controlling extremes, so your 'chart' would REALLY be random and very messy. You must have one to have the other. Consider it as ebb and flow relationships.

I was taught to use a generic view first, because in one day you might look at 50 charts of all different things.

%'s are used to show indifference NOT win potential. People want to win but hate losing, so they have created a casino or gamble mentality. But wonder why they still don't learn. Real setups possess a 50/50 potential. The coin toss idea that people yack on about is silliness to justify gambling. As you travel farther from the moving center the %'s change in line with movement of the Tier levels I mentioned at start of OTAT thread. This is why it is dangerous to "pattern trade" or mechanical trade. They might seem familiar but future does not adhere to past. Hence the disclaimer everywhere about FX CFD Stock ETF Commodities trading etc being risky.

Please read OTAT thread's latest post re: Transferable skills etc, it talks about these things.

Yes it is in part re: MTF observation and analysis and yes it is good for you to understand this.

I use %'s to help me see the difference/indifference NOT predict or gamble. I use them to see Risk not work out how to scale in or out for Tp or profit. See the difference here yet?

I don't subscribe to what modern people think is "trading" so I am looking at Risk and then the situation. Not all the other popular stuff.

So you might be having a hard time understanding because you are trying to be a "trader" etc, instead of seeing what is in front of you re: the task. Stop thinking "trading" and start focusing on what is real. Risk. What types exist? What can you control/manage? What are out of your control? What are potentials but presently unseeable?

The first thing to see, is that it is a game of 'someone knows what you do not'. So there is a risk of making bad decisions because you don't know with certainty the outcome to something. But this doesn't mean you cannot control YOUR risk. These days it's not about indicators or EA's, it's about Risk in all its forms. So now go back to the %'s thread and think only on Risk and things you don't know. Put aside all that "trading BS" found on these sites and think like a real person who wants to do something but you must weigh the types of Risks. Trading, or placing orders etc etc, is a part of the process within the activity NOT the activity itself.

%'s talk on this website is not real. Whether you do 1 trade or 100 in a row, the same specifics MUST be met - What is .... same, similar, different and opposite? The rest is just Risk according to your personal position in Life and your plan to deal with it. All of those pics on the thread with %'s in a fib tool are to work with how a market moves with Risk as the focus.

So stop thinking like a gambler trying to work out how to get something. Think about the types of risk that operate. Everything else you know and can do, are part of the skill set but cannot change what becomes the outcome. THIS is one of those simple yet obvious lessons many people just refuse to learn.

So I say again, be a person who is looking at the markets and seeing - human psychology, money and debt, need vs want, Risk. Most other things are either a tool or distraction.

****Expand and Contract. Risk. Big picture small picture. Risk. Human need and want. Risk. It's the same process over and over again. YOU just need to stop obsessing over the screens and data. Once you can see and appreciate this process in many different scenarios day after day, you'll see the common denominators and then your activity will improve.

Eg - Many people say "swing"... I say reversal. Many people say "scalp"..... I say push. See? So who's right/correct? It's just words.

Think generic not specific. Look up a dictionary for the word generic and read through all of the meanings in the many contexts and ways it can be used. And after you have read it a few times, go back to that process I typed here before with the asterisks.

I know you have many Q's. Start with this stuff. If you want to do trading long term, you need to learn how to mold your brain to see around corners.

Peter
"

I hope this helps you, the reader, to grow out of the industry's despicable ideologies. I hope you actually learn instead of just trying to "copy". Think for yourself and move ahead.

Happy learning and trading


Peter