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The art of Staying Out Of The Market

Quoting Rolandlc33
Are you guys playing NZD tonight? You know i can't hold back.. ha ha

Best of luck!

Ro
Well my short on this pair worked pretty well. You could have entered after the data and avoided some risk. Now lets see if support holds at .7080! I hope not because i want to hold it down to .7050. Stop loss is now at break even for a free trade .
Stop and reverse systems only work well on high volatility pairs. AUD doesn't have that reputation.

I only trade 4 at most and 3 regularly. If the volatility is low on any particular week, I just increase the lot usage to compensate.

I'm not into dozens of charts....I like my three regulars; and since I work 50-60 hours a week as well....I don't search for nothing.

If you can do 3-10% on just three, wouldn't you?
Capital Preservation is key to long term wealth accumulation
Quoting MuddBuddha
Stop and reverse systems only work well on high volatility pairs. AUD doesn't have that reputation.

I only trade 4 at most and 3 regularly. If the volatility is low on any particular week, I just increase the lot usage to compensate.

I'm not into dozens of charts....I like my three regulars; and since I work 50-60 hours a week as well....I don't search for nothing.

If you can do 3-10% on just three, wouldn't you?
I understand your work dictates your schedule so that certainly alters your trading strategy. I'm similar in I don't use a bunch of charts and indicators. I believe price action is the best clue to where the market is headed.

The secret is to trade the way that works best for you. I can't fathom trading only 3 or 4 times per week, but for some it works. I appreciate you taking the time to explain your strategy.

Best of luck!

Ro

PS. How do you have time for all the girls & drinks? :
in longer time frame , the opportunity also comes in less often,
if we miss that, may we have a vacation while waiting the next ride?
up till now i only find "no" as answer.
Quoting mbqb11
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"
Over trading has never been my issue, I am too particular and that can be a problem too as I miss out on many trades by merely waiting for something too perfect.

Nonetheless, I have worked with many traders over the years and it seems to me that the 'agony' of missing a move is more powerful for most people than the 'agony' of taking a loss - hence over trading.

A lot of newer clients to my research often send emails to me/staff wondering why we have not done a trade for a couple of days - their impression of trading is quantity; not quality. Granted to the untrained eye, each move looks as though it could have been predicted - but seasoned eyeballs know that to be not true. Bottom line - do what works for you - keep a checklist of parameters that need to be met and until those are met, there is no trade.

I came from a hard-core scalping background of equities from the mid-90's after my days on the FX desk at Standard Chartered. When I went back to FX in 2001 it was, and to some degree still is, hard to shake that play every wiggle mentality that scalpers live by. First, FX is NOT the place for scalpers - just my opinion, secondly, the quality of time spent analyzing and managing trades that last for hours/days is simply more conducive to the head and also the bottom line.

As for Christian Siva-Jothy - great interview, lots of good nuggets in there - and he too is human, his new fund after leaving Goldman has hit a rough spot and seen some large redemptions - I say that not to poke fun, but to let folks realize, that no trader is infallible, we all hit the skids once in a while, and as a close colleague of mine often says, "You cannot trade your way out of a slump."

Time away from the screens every couple of months allows you to see things you would not have when you come back.
  • Post #26
  • Quote
  • Edited 8:01am Sep 13, 2007 7:51am | Edited 8:01am
That was an excellent post, Dave.

My Old New England father used to say, "There's more pride to work done well, than work done quickly."

Being able to earn as much within a given period by trading less is not only smarter, but a more mature method of trading. I'm past the days of having to always be in a trade because subconsciously to me it was a competition.

Once your trading goals are set in concrete, then the only obstacle left standing to your success is a properly planned and executed trading plan.

And by goals, I mean the real ones...not the a-typical, "Make a million" goal. I'd be more than content making a good living for me and my wife in a nice home somewhere we've always wanted to live.

I'm glad WTB started this thread as it brought out some excellent and insightful comments.
Capital Preservation is key to long term wealth accumulation
wow dave great post, spoken like a true veteran. for a moment i felt like i was in a peaceful forest in oregon with you
Relax and be happy.
This is my first post in the 1KT forum, so my opinion only counts for 70% of a normal one.

I think the "road to riches" is lined with a lot of waiting. Actually, for myself, it was reading James16's thread about 100 pips per month/per pair thread that got my head right in this category.

Do I still occasionally screw up? Sure, but it is happening less and less each week.

I tend to look at 4 hour charts. Sometimes a nice daily one. (And never check on the charts more than once an hour.)

I have found with proper money management, this is the way for me.

I keep reminding myself that I am doing this for financial freedom. Freedom by definition is not sitting at a computer all day.

If you do a simple spreadsheet at 2% gain per week, you will see what not getting overly involved can do. Playing around with Excel alone has made me think a little more about risk. When I see I am up 3% for the week, I tend to be a little more cautious.

If I feel the "need" to trade, it is just my brain letting me know I am bored. So sometimes I will open up a demo account in the futures market, play with that a bit. It's harmless, and "feeds the need".

Alright, like I said.....only 70% of that post was worthwhile. Which 70% is up to you.

Clockwork71/Chris
"If I feel the "need" to trade, it is just my brain letting me know I am bored. So sometimes I will open up a demo account in the futures market, play with that a bit. It's harmless, and "feeds the need"."

This was my favorite part!

Makes a lot of sense.
Capital Preservation is key to long term wealth accumulation
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.
Merlin,

Have you ever tried "Demos" again to satisfy your "addition"?

You could have fun and preserve capital @ same time!

:

iiivb
Quoting iiivb
Merlin,

Have you ever tried "Demos" again to satisfy your "addition"?

You could have fun and preserve capital @ same time!

:

iiivb
Especially when it's a market you know nothing about. While you are waiting around for some action in Forex, read a little on something off-the-wall.

The other day I was demo trading the Rough Rice futures. I didn't even know it was traded until about 15 before I placed my first demo trade. I spent some time reading what drives that market, etc.

Something really odd happened. I made demo money! But, I also was given a great lesson in "A chart is a chart".

James16 killed the "mystery" of this market for me. Damn pinbar trades.

:

Clockwork71/Chris

Oh, PeterFM pointed out to me earlier that 70% of my opinion counting could be a little high, we settled on 30! lol
Quoting clockwork71
Especially when it's a market you know nothing about.
Talk about Irony... Rough Rice Was What Got This Whole Trading Thing Going.

Started the Futures Markets because Samuri would Contract to Pay Armourers from their Rice Endowments which were to arrive "In The Future" {Harvest}

OH, & btw, They devised Candlesticks to time their purchases.
Quoting Bemac
Talk about Irony... Rough Rice Was What Got This Whole Trading Thing Going.

Started the Futures Markets because Samuri would Contract to Pay Armourers from their Rice Endowments which were to arrive "In The Future" {Harvest}

OH, & btw, They devised Candlesticks to time their purchases.
I mentioned this and the url to it when someone went "if someone had invented a way to forecast markets we'd all be trading it" in a FA thread one of the last few weeks ;p

Sorta not that brand new anymore, but oddly enough not everyone using it...good good... ;p

Found it very interesting =)

And now Jim's (and a few others) our modern day Homna ;P


Are we practicing the art of staying out right now, too? Does perusing FF count?
Trust price. Know yourself.
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!
I agree, it is important to know when to "sit on your hands". gotta wait for compelling set ups.
Can anyone share the criteria they use (regarding news announcements) in deciding weather to stay in or out?
  • Post #36
  • Quote
  • Last Post: Mar 20, 2010 6:06pm Mar 20, 2010 6:06pm
"Can anyone share the criteria they use (regarding news announcements) in deciding weather to stay in or out?"
**************

First of all, one must be aware that not all news is created equal. Some reports have much more impact upon markets than others. The easiest way to tackle the question whether a pending report is possibly going to impact a market you are interested in is to use Forex Factory's color-coded calendar. Simply look for Red. If the currency in Red is anywhere within the FX-pair you are trading or interested in trading, then you must take precautions. If you are already involved in a trade that may be impacted by upcoming news, tighten stops. Protect any profits, or insulate yourself from further losses.
I myself am an intraday trader. My personal rules for pending reports are as follows:
1. If already in a trade, exit 15 minutes before a reports release.
2. No new positions taken beginning 30 minutes prior to a pending report.
Markets generally go dead heading into a report. There is no reason to
initiate a new position in this type of market condition.
3. After the report is released, two things must happen before I may begin
initiating trades again...
a. At least one price period of whatever time frame I'm trading must
have elapsed (If trading a 5 min chart, then 1 whole 5 min.
price bar must have closed after the report was released).
b. The spread of whatever pair I'm trading must have returned to
normal level.

These guidelines are quite simple and have served me well.
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