Trading with 100% of your capital

Pin bars are bars that have a long "nose" - hence the name which is an abbreviation of pinocchio (the boy whose nose grew longer the more he lied). When you see one you can take a high probability trade in the opposite direction to the way in which it points. (although the position of them is the key) You can find out more about them at the J16 thread.

So - here is an example from the foreign exchange market and one that would be paying you interest all the way down.

USD/CAD.

1. Monthly forms a pin bar at a swing high. This is a reasonable enough trade to take in its own right. Many traders might target the ascending TL. Little did they know that this is about to start a six year bear market.

2. Shorter term traders are vindicated. It bounces at the TL and they are stopped out. But then it comes right back up and stalls near the highs once again. When it turns the second position could be added as the TL gives way.

3. TL has now gone and monthly is a double bar high, lower close. (DBHLC) This is a setup that you can learn more about in the J16 thread. Third position could be added on a break of this lower.

4. This pin bar is right off the 38 fib of the whole move down. Add fourth position as price moves on down below this.

5. Previous support has now become resistance. It is tested and the price forms a candle known as a doji. (Long wick either side with open and close near the middle which indicates indecision)You could add your next position as this doji breaks lower. Stops on all positions could be placed above the horizontal support. See how they look like steps as the bear market develops?

6. Have a look at the second step down which is around 1.1895. Very aggressive traders could have added as this higher step was tested from below and failed. More conservative traders would wait for the most recent step which formed a pin bar that tested it from below. This would have been a good place to take your sixth position.

This trade would be still open with over 6,000 pips profit on the first position alone not to mention the fact you now have added five more times on the way down.

Wrong - the price of the future is adjusted to take into account interest/divi - and will go down over time if the underlying stays flat.

Just read this gem from Niederhoffer's "Education of a Speculator":

"When I first started speculating in organised markets, I quickly ran a $40,000 initial stake into $22 million. My technique was simple: I bought gold at $290. Each time it went up $10, I pyramided and added to my holdings with my profits"

like I wrote before, you understand...

Niederhoffer often writes about that one trade. In his other book, he writes about his overtrading and how disappointed he is with himself after he sees short-term trading's lower payoff than longer-term held positions.
I have to warn you however. One tends to act a lot more logically when all of their holdings do not henge on ONE position.
Good luck.

Isn't this the guy who blew up yet again this year?

For speculation...on the Euro monthly back in March 02, using our psychic abilities, we could have entered, (1st blue box), on the beginning of our uptrend. In 02 and the beginning of 03 we establish our trend line, (green), with possible other 1st entry. In Aug-Sept. 03 we have a dip penetrating our TL. We wait and see that trend continues and add. We add again in Aug-Sept 04. In late 05 we have a dip lower than our 3rd position. Do we close all, only the 3rd, or add 4th and laugh to the bank? Knowing Wiz, he would probably have wanted to add more frequently on some of the other dips.

If I had followed that buying pattern I would have looked to exit all the positions when the move retraced that far (lower than the third position on your chart).

However, you could have started building again on the start of the next leg.

Playing monthly and looking long term we know we have some SR in that area. It would be hard though to actually hold a position for a year as it down trends.

For me, the important thing to remember is that if a market is trending when you enter it, why have a fixed target or take profit at the first sign of the market turning against you?

I was just looking back at an old journal that I kept. In early April 2007, I am placing an order to go short USD/CAD at 1.1523.

If I had just held that trade (even without adding a single increment) I would have made more money than I have made trading in and out of the market in the six months since and suffered considerably less stress.

I read through many threads and journals and although I see some great entries and exits, I rarely see traders adding. Yet it seems to me that this is the easiest way to come out ahead in this game.

It is funny I am playing with this kind of ideas since months now...

Please do update us on your progress bullrock and I wish you all the best

I've had a grid type strategy where without SLs but with TPs I've bought at regular intervals the GJ. I could cover 2000-3000 pips down and had a very special and strict MM policy behind that made sure my equity never drops 40% even the amongst the most disastrous environment.Could handle 5-10000 pips drops. Then one day I had this funny idea what if I would do the exact revers but instead of having TPs trailing the SLs and entering at regular intervals as the price moves in my favour. Then I have started to calculate ratios regarding the optimal distance and "how far can I go" in the builing of the pyramid....

This may well be a good time to look into new trends.

I think it is always a good time to look into new trends. Any given day may be the start of a multi-year trend.

I'd like to illustrate this with a link.

Of all the posts I have read here at FF this one by Habeeb is the most memorable for me. It's a short one - go and take a quick look (it will be worth it): http://www.forexfactory.com/showpost...&postcount=591

Habeeb is doing what most of us do. He is watching a market, seeing it post a high probability setup and then making a good judgement call to go long. But I think (and maybe Habeeb would comment if he ever sees this) that he had no idea at the time what he was about to get on board. This is somewhat illustrated by the fact that he has a target only a handful of ticks above his entry at the first place that the move might stall (the R2 pivot).

It's been a long time since I read the J16 thread all the way through, so I can't remember whether Habeeb won or lost on this trade. BUT, whether this trade was a winner or a loser is not the point. The point is, we never know if we are picking the absolutely optimal time to get into a market.

Have a look what Gold did after Habeebs post. NB: The red arrow is where he suggests going long.

I agree. What I was trying to say is that I think the market is almost ready to resume and make up its mind. I'll check out the post.

Have you got any capital left?