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The art of Staying Out Of The Market

  • #1
  • First Post: Sep 11, 2007 1:08pm Sep 11, 2007 1:08pm
I often read plenty of threads here at the Factory about trading systems, setups, entries, exits, money management, David Beckham's last hairstyle, etc. But I wonder why we don't see more threads about one of the most important aspects of trading: to learn when to not get involved in the markets.

Today, as I finished scanning my charts like every morning, I decided that there was nothing I liked to trade. Not only my charts were totally messed up, but moreover we had plenty of news announcements for multiple currencies, two important speaches and whatnot. Yet I came here to the Factory and the folks were posting entry calls left, right and center. So I looked again at my charts scratching my head and still not seeing anything clear at all.

I definitely respect that everyone has their own systems and stuff, by why don't we see more "today is one of those days I won't trade" threads? It's crucial to know when to remain on the sidelines in my opinion!
  • #2
  • Sep 11, 2007 1:37pm Sep 11, 2007 1:37pm
This is my first post today just for that reason alone. Nothing to really trade today. although a few setups are looking good right now, I will wait for the right moment which might not happen in this current market direction.
Just Trade It
  • #3
  • Sep 11, 2007 1:46pm Sep 11, 2007 1:46pm
Quoting WTB
I often read plenty of threads here at the Factory about trading systems, setups, entries, exits, money management, David Beckham's last hairstyle, etc. But I wonder why we don't see more threads about one of the most important aspects of trading: to learn when to not get involved in the markets.

Today, as I finished scanning my charts like every morning, I decided that there was nothing I liked to trade. Not only my charts were totally messed up, but moreover we had plenty of news announcements for multiple currencies, two important speaches and whatnot. Yet I came here to the Factory and the folks were posting entry calls left, right and center. So I looked again at my charts scratching my head and still not seeing anything clear at all.

I definitely respect that everyone has their own systems and stuff, by why don't we see more "today is one of those days I won't trade" threads? It's crucial to know when to remain on the sidelines in my opinion!

Hi WTB...

Yes, this indeed looked like one of those days. Just about since Midnight EDT!!! & I am in complete agreement with what you state above.

My question, to kick around and chew on.

What would any member advise the traders that earn their keep from trading on a daily basis?? i.e.....Banks, Inst.'s, Hedger's, Full-time traders, Corps, and the such, etc.....or is this Thread directed for a certain type of trader.

I hope you follow my thought....Because Trading happens even on "days nothing looks good".

I look forward to reading more here....You bring up a great point!

Fxj
Proper Prior Planning Prevents Piss Poor Performance
  • #4
  • Sep 11, 2007 1:58pm Sep 11, 2007 1:58pm
Quoting WTB
I often read plenty of threads here at the Factory about trading systems, setups, entries, exits, money management, David Beckham's last hairstyle, etc. But I wonder why we don't see more threads about one of the most important aspects of trading: to learn when to not get involved in the markets.

Today, as I finished scanning my charts like every morning, I decided that there was nothing I liked to trade. Not only my charts were totally messed up, but moreover we had plenty of news announcements for multiple currencies, two important speaches and whatnot. Yet I came here to the Factory and the folks were posting entry calls left, right and center. So I looked again at my charts scratching my head and still not seeing anything clear at all.

I definitely respect that everyone has their own systems and stuff, by why don't we see more "today is one of those days I won't trade" threads? It's crucial to know when to remain on the sidelines in my opinion!
Great post WTB

I trade almost exclusively off the daily charts and as time has gone on I've learned to stay out of the market more. If there are no set-ups I like, I don't trade - simple as.

When I first started I was in the market all the time - now I decide when I want to be in and it's much less stressful for me. If I don't trade for a few days, so what? The market isn't going anywhere!

Of course some trade on shorter timeframes and there will be more frequent set ups. However, there's lot to be said for staying out when there's no reason to be in if you catch my drift

Kind Regards
Steve
  • #5
  • Sep 11, 2007 3:51pm Sep 11, 2007 3:51pm
It was a slow day but despite that the GBPJPY has moved up 175 pips in the last 24 hours, the EURJPY 118 pips, and the CADJPY 157 pips. The common theme is JPY of course. I think if you look around there are pips to be made.

I do agree that discretion is the better part of valor and I certainly can go a day or three without trading when appropriate. The markets this summer and early fall have been a lot better than they were for the first quarter of this year. I still think that there's opportunity to be had provided that you are willing to look for it. I think a few people got spoiled when the likes of the GBPJPY was moving an average of 500 pips a day. That's not normal!
  • #6
  • Sep 11, 2007 4:52pm Sep 11, 2007 4:52pm
WTB and gang. I too am trading mostly off the dailies these days (sometimes will look at the 4hr). It has been a real learning experience for me coming from the shorter time frame charts, and taking trades nearly every session on those short TF charts; To get into my methodology that No Position, IS a position. . . and just staying out. Those STFs really ingrained in me a "daily bread" mentality and philosophy of trading that i'm slowly doing away with. But it is verrrry hard not to trade just to trade at times.

: ) Thom
  • #7
  • Sep 11, 2007 5:29pm Sep 11, 2007 5:29pm
Quoting accrete
WTB and gang. I too am trading mostly off the dailies these days (sometimes will look at the 4hr). It has been a real learning experience for me coming from the shorter time frame charts, and taking trades nearly every session on those short TF charts; To get into my methodology that No Position, IS a position. . . and just staying out. Those STFs really ingrained in me a "daily bread" mentality and philosophy of trading that i'm slowly doing away with. But it is verrrry hard not to trade just to trade at times.

: ) Thom
Hey Thom...

I liked the "Daily Bread" analogy....Something I also suffer from. Along with the "Blue Collar" mentality...working 40 hours a week for a days pay!!
Sometimes I feel like a squrriel storing nuts. It doesn't matter how many nuts I stored yesterday, I have to store more nuts today for the winter/dry spells.

Fxj
Proper Prior Planning Prevents Piss Poor Performance
  • #8
  • Sep 11, 2007 8:39pm Sep 11, 2007 8:39pm
Anyone playing the break on EUR/USD at 1.3850? This is one of my favorite set ups! I think London will want to test the highs and I'm sure there are tons of stops up there. Risk reward looks good here.......

Ro
  • #9
  • Sep 11, 2007 11:19pm Sep 11, 2007 11:19pm
Quoting FxJarhead
Hey Thom...

I liked the "Daily Bread" analogy....Something I also suffer from. Along with the "Blue Collar" mentality...working 40 hours a week for a days pay!!
Sometimes I feel like a squrriel storing nuts. It doesn't matter how many nuts I stored yesterday, I have to store more nuts today for the winter/dry spells.

Fxj
Spot on FXJ, i know that there were several posts over in the PF on the phycology end of this very issue. For myself one of the most destructive routines that i got into (i'm only talking to myself here) was sitting down in front of the screen before London Open expecting to get into a trade that session. I would often talk myself into seeing a trade(s), when in reality i should have been doing everything to talk myself OUT of getting into a trade.

: ) Thom
  • #10
  • Sep 11, 2007 11:33pm Sep 11, 2007 11:33pm
i never quite learned this art

as some of my friends here can attest to, i have such a trading addition that i play around with small lot sizes all day to suppress my urges. LOL! yes, i got problems to say the least.
Relax and be happy.
  • #11
  • Sep 11, 2007 11:43pm Sep 11, 2007 11:43pm
Quoting merlin
i never quite learned this art

as some of my friends here can attest to, i have such a trading addition that i play around with small lot sizes all day to suppress my urges. LOL! yes, i got problems to say the least.
Well I think you are doing the best thing to control your urges in the proper way for YOU. I can only relate this to my card playing days when I would enter into high buy in tournaments/cash games online. I would open up multiple smaller money cash games to keep me patient in the big money games. Sort of a way for me to blow off steam and not get antsy. This is a huge downfall for poker players not being patient as it is for traders(I relate nearly everything from trading to poker).

So I think you are controlling your addiction in a healthy way.

I was just reading through Inside the House of Money again and this is fitting for this thread

Christian Siva-Jothy

"One of the most difficult things about trading is not to trade. That's probably one of the most common mistakes that people starting out in this business make. Over trading is as bad as running losing positions for too long"
  • #12
  • Sep 12, 2007 12:26am Sep 12, 2007 12:26am
Quoting Rolandlc33
Anyone playing the break on EUR/USD at 1.3850? This is one of my favorite set ups! I think London will want to test the highs and I'm sure there are tons of stops up there. Risk reward looks good here.......

Ro
Now that was a solid break and I cleaned up on this burst through resistance. I hope some newbies made some money on this trade!
  • #13
  • Sep 12, 2007 12:35am Sep 12, 2007 12:35am
yeah hell of a move there! "burst" is the operative word!
Relax and be happy.
  • #14
  • Edited 12:54am Sep 12, 2007 12:54am | Edited 12:54am
Quoting Rolandlc33
Now that was a solid break and I cleaned up on this burst through resistance. I hope some newbies made some money on this trade!
Hey Roland,

Your post here, reference #8, reminded me of that possibility.....

I placed a buy stop at 55 with a 75 target and a 45 Stop.....it did indeed burst. +20

THX for that Post.... Glad I ran across it in here!

Fxj
Proper Prior Planning Prevents Piss Poor Performance
  • #15
  • Sep 12, 2007 3:41pm Sep 12, 2007 3:41pm
Quoting FxJarhead
Hey Roland,

Your post here, reference #8, reminded me of that possibility.....

I placed a buy stop at 55 with a 75 target and a 45 Stop.....it did indeed burst. +20

THX for that Post.... Glad I ran across it in here!

Fxj
Sure Jar glad you made some pips there!

I love these technical breakouts even though im a fundie all the way.. LOL

I am doing a demonstration of this technique in a webinar in a few days and would be happy to post it here if it's allowed. It will cover NFP, Round Number Breakouts, and a few other surprises.

Are you guys playing NZD tonight? You know i can't hold back.. ha ha

Best of luck!

Ro
  • #16
  • Sep 12, 2007 4:20pm Sep 12, 2007 4:20pm
Quoting merlin
i never quite learned this art

as some of my friends here can attest to, i have such a trading addition that i play around with small lot sizes all day to suppress my urges. LOL! yes, i got problems to say the least.
That was one of my main problems, too.

Slowly starting to get rid of it.

Trying to listen to this kid who wrote:

Quote
"It's not about trading EVERY day, it's about trading that ONE RIGHT DAY......You make money by waiting, not by trading. Sounds so silly nobody wants to believe it, but it's true."


Also tried to force it into my head with the signature part "no setup = no trade".

Even a slow bleed of 0.1% risk adds up to 2% gone if you make 20 boredom trades a day.

Guilty as charged etc, but now reinstated on probationary terms ;p

(Also I thought I remembered Trader888 writing something about this, it appears he didn't address this in particular. There are however some really other great points over in http://forexfactory.com/showthread.php?t=35982
about trading, life and trading as a job..sorry it's off topic, just thought it worth a mention)
Trust price. Know yourself.
  • #17
  • Sep 12, 2007 4:55pm Sep 12, 2007 4:55pm
Here's an example that validates this whole thread.

I'd been trading the GBP/JPY using various methods but my favorite was/is a simple stop/reverse system that stays in the trade until FLAT by a trend reversal. Good results for the most part and a profittable system.

So, I'm playing around with it the other day and realize that using a mere 65 point limit reduced the number of trades by over 75 in a three month period but only reduced the profit factor by 1%.

So, I could trade much less often, suffer fewer stop outs....and still make the same money?! Instead of hanging on through 200-300 pips only to give back 2/3rds of that in small stop outs while the price consolidated, I get to hold on to my winnings....

Wow...what a hard pill to swallow. I'm well up this week, but haven't had a trade since early yesterday morning. It's killing me not to be in one....but it's not killing my wallet!

Sometimes the most logical things are the hardest to implement.
Capital Preservation is key to long term wealth accumulation
  • #18
  • Sep 12, 2007 5:11pm Sep 12, 2007 5:11pm
Quoting MuddBuddha
Sometimes the most logical things are the hardest to implement.
*nods*
Trust price. Know yourself.
  • #19
  • Sep 12, 2007 5:14pm Sep 12, 2007 5:14pm
Quoting MuddBuddha
Wow...what a hard pill to swallow. I'm well up this week, but haven't had a trade since early yesterday morning. It's killing me not to be in one....but it's not killing my wallet!

Sometimes the most logical things are the hardest to implement.
So your telling me you you couldn't find a trade in the past 36 hrs? There was an amazing record break out in EUR/USD! Why would you be looking at Yen pairs when all the action is elsewhere? Even AUD/USD busted through resistance at .83 to run for 140 pips. The most important thing is choosing the right pairs, not waiting around for something to happen.

Please tell me you were on vacation or busy and not that you couldn't find a valid trade setup! LOL
  • #20
  • Sep 12, 2007 6:07pm Sep 12, 2007 6:07pm
i can't speak for MB, but i know some here will only trade one particular currency pair, and then only take the "A" setups on that one! an acquaintance of mine has been trading the EurUsd off daily charts practically since it's introduction and has no reason to trade anything else.

: ) Thom
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