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The Zen art of trading

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  • First Post: Sep 28, 2007 8:50pm Sep 28, 2007 8:50pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
The purpose of this journal is less about posting trades, and more a blog about the parallel nature between spirituality and trading. I hope that others will benefit from it, and that some of the points resonate with something you can’t totally put into words.

I have been learning forex for almost 2 years. I trade part-time, as I keep a day job. During the most intense parts of my forex learning journey I had been researching, reading, looking at charts, etc upwards of 4-5 hours a night, and 14+ hours a weekend.

When I first started learning about forex it was something that appealed to me greatly, I wasn’t sure what exactly about it. At first admittedly much of it was financial freedom more then anything else. I blew two accounts in the beginning, one small, one big (Relatively, but that’s all that matters). Many months later I realized just how strongly trading resonated with my deepest spiritual self. The self that is aware of the thinker. This was not only something I could do for a career, but something that would parallel my primary purpose in life – to be self-aware. Out of self-awareness comes true freedom, happiness, and clarity. I had found my internal martial art, the mirror that would teach me, and truly put the power of abundance directly in my own hands. I had found my path.

The more I learn, and the more I experience with trading the more enamored with it I become. The difficult times are the times which produce the most internal growth and bring you closer to your goals. When you are in a difficult spot, always remember this fact.

I no longer have any question on whether or not I will succeed. It’s the fact that in my mind, I have already succeeded. Time will just need to pass before I experience more in my journey.

I had many revelations, “paradigm shifts”, even moments of satori. Several times things just “clicked”. The biggest shift, and the one that finally changed everything, was the last shift. The shift to practicing patience.


Patience at the core is self-awareness – the ability to stay focused in the present moment - above the noise of the endless (and illusory) thoughts of past and future.

The mind always wants something to do – it’s never quiet. People are always in a rush. People don’t like to wait for anything, especially standing in lineups with nothing else to occupy the mind. Fast food, 30 second commercials, preprocessed meals to the max, diet pills. This affliction of course, does not automatically disappear when you start trading. Quite the opposite, especially when you are starting to learn because you just want to find out whether or not what you are doing is right (therefore not making you wrong). Therefore, I believe patience is the key element of trading. In entry, exits, learning, testing ideas, and most importantly – money management.
To be one with the market, you must first be one with yourself.
  • Post #2
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  • Sep 28, 2007 9:09pm Sep 28, 2007 9:09pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Just a bit of background on my trading methods.

I am primarily a price action trader. Trend lines, support/resistance, fibs, candlestick patterns, sometimes a couple of EMAs. I also trade on somthing that i've found very powerful, which I learned from DownRiverTrader - value. Areas where price gathers, which are mutual points of balance. These areas go by many different labels, but are extremely powerful in telling you where areas of accepted value (majority agreed price) are - price acts on these areas. I generally use 3% risk in my trades.

Market Profile perhaps captures the essence of the value method, but without the volume. Again, I don't trade with market profile, and only have a basic understanding of its principals. I also can't tell you exactly what value trading is, much of it is intuition, and just knowing how to read the charts after many long hours, and unfortunately much to all of the material provided by DownRiverTrader is no longer available.
To be one with the market, you must first be one with yourself.
 
 
  • Post #3
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  • Sep 28, 2007 9:20pm Sep 28, 2007 9:20pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Here is a new demo account I opened for September. My goal for October will be to keep drawdown below 6%. This generally means I either have to reduce risk by lot size, or reduce the amount of large stop trades. I made a mistake on my first couple of trades, I missed a SL on a trailing stop, which was the result of the 12.59% drawdown. I won't do that again

I have (and do trade) a live account, but stopped using it months ago to further perfect my style before I go live again. This takes discipline, a skill to further hone. Knowing I could be making this live instead is a emotional challenge, and I love rising up to it.

I agree and disagree on the opinions of demo. I feel that if you have experienced a margin call, and felt the fear of loss, and have overcome it, then demoing is far harder then a live account. I feel that way because essentially you are trading for _nothing_ other then perfecting your skill - and taking as much time and patience to take the right trades on demo takes a lot of determination.
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To be one with the market, you must first be one with yourself.
 
 
  • Post #4
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  • Edited at 9:18pm Oct 6, 2007 9:03pm | Edited at 9:18pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
I've since realized only having a 6% drawdown is absurd. Even with 2% risk, that means I would be limiting myself from having any more then 3 loosing trades in a row. The amount I would be risking to achieve 6% would be below 1%... to me, that's way too little of a risk for my account size and system.

My problem is that I knew that the drawdown was an uncomfortable emotional area for me that needed to be addressed. Suddenly it occured to me I was trying to get rid of the emotional pain by trying to get rid of the drawdown. The key is acceptance, not elimination. I need to know what is normal, in order to accept it.

Now I am doing studies into running monte carlo simulations using my win/loss ratio with variance and a strategy to cut down lot size after a string of losses. Once these simulations are complete, and I accept the new risk and drawdown estimates, and incorporate scaling down into my plan, I will know i've filled another major gap in my overall methodology - and advance the confidence level in my system.

I am currently almost finished reading "The new market wizards". The contradictory nature of the top traders in the world in saying what they believe to be right is a clarity I needed. I see it on the board here at forex factory (from old and new alike), and I see it from the top traders in interviews. The underlying message?

Nobody is right at what the right way to trade is - you have to find your own path that works for you. Take anything anyone has to say as an opinion with a large grain of salt.
To be one with the market, you must first be one with yourself.
 
 
  • Post #5
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  • Oct 7, 2007 1:13pm Oct 7, 2007 1:13pm
  •  Xenaga03
  • | Joined Feb 2006 | Status: Member | 144 Posts
Very interesting indeed.


A suggestion for the drawdown, you might want to consider upto 10%. After 3 bad trades, you reduce your position with each trade. If you get down to 10% drawdown, you stop trading and do paper trading for a bit.
Similiary, when your having a hot winning streak, you might consider increasing your position from more then just 2%. Just a thought.
 
 
  • Post #6
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  • Oct 7, 2007 2:21pm Oct 7, 2007 2:21pm
  •  exxx
  • | Joined Aug 2007 | Status: Member | 49 Posts
SUCH a great post unforeseen, keep posting your journey...
 
 
  • Post #7
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  • Oct 9, 2007 10:50am Oct 9, 2007 10:50am
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Quoting Xenaga03
Disliked
Very interesting indeed.


A suggestion for the drawdown, you might want to consider upto 10%. After 3 bad trades, you reduce your position with each trade. If you get down to 10% drawdown, you stop trading and do paper trading for a bit.
Similiary, when your having a hot winning streak, you might consider increasing your position from more then just 2%. Just a thought.
Ignored
Thanks for your input

That is exactly what I plan to do, however after crunching the numbers i'm willing to accept a 15% drawdown. I will take a total break from trading for at least a couple of days to a week when (not if )I have 6 loss trades in a row. After the third loss, I will do a reduction strategy of halving the lots in succession, 1/2, 1/4, 1/8th, etc

With these calculations I have determined my max exposure at any one time cannot exceed 3 trades at 4% risk each (Otherwise it will violate the reduction after three losses rule), but that's a max I will usually only employ if I have a high confidence level of trades and am on a winning streak.

Here is the numbers that allowed me to create these logic rules:
Attached Image
To be one with the market, you must first be one with yourself.
 
 
  • Post #8
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  • Oct 9, 2007 10:58am Oct 9, 2007 10:58am
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Quoting exxx
Disliked
SUCH a great post unforeseen, keep posting your journey...
Ignored
Thanks, hope it helps, I am always open to input.
To be one with the market, you must first be one with yourself.
 
 
  • Post #9
  • Quote
  • Oct 12, 2007 10:54am Oct 12, 2007 10:54am
  •  M.A.C.Doug
  • Joined Jul 2007 | Status: Member | 1,760 Posts
My journey is very similar to yours. Similar time and effort has been put in. I have tried exponentially harder at this than anything I have attempted in my life. I have recently gone live again after six month forced break after the last of my trading funds dried up as my account was liquidated. I lost $20,000 - half of which was borrowed funds in one of the most trying and difficult times. I am a father of two boys and losing funds I didn't have cost them our traditional summer holiday two year running as I desperately chased my losses only to continuously fail. Only by addresing my spiritual poverty, precisely what you are talking about in your thread. Was I able to turn my trading experience completely around Though much of this cannot be described using words, It can understood by others as the experience is identical. My focus this year has been on my desire for truth. All here is illusiory as you mentioned but experience in the market will reflect only your awareness of love. If you are aware, then you know you need nothing. Needing nothing in the knowledge of your own complete state brings inner peace and joy. It is this inner joy based on truth, or love that will then automatically show up before your eyes in the illusion, our personal drama,that we think is real. Success in the market is then a natural outcome from this approach.The outer "dream" world reflects what is going on in the inner world of thought Now I read the news, do my TA and sit and wait for an invitation to trade from the market. I now can see very clearly obvious high probability opportunities almost every time I trade. The impossible frustration of being a losing trader has now become easy and fun. Monitoring my emotional attatchment to winning and losing is what keeps me free. Whenever I slip the market quickly makes my error known and I take a break and think about what is happening and why. I started with $700 in my account 5 weeks ago and the first 2 trades lost me $100 dollars - I could have cried, however I took the next trade, and the next and the next and won every day for a month straight and doubled my account! - amazing!! .Then i faltered, got greedy, changed what I had been doing in an effort to try to insure I could repeat my results and bang - lost 150 pips and about $250 draw down. that was on monday it is now fri and I have $200 of those losses back in my account trading at only 2-3% risk per trade - amazing!! You are on the right path Unforseen. Belief in myself is my greatest tool but I couldnt believe in myself until I knew who myself was and that was the most startling revelation! Im going to hang out here for a while but I have a feeling its going to be a little quiet. The holy grail seekers are likely to completely overlook a thread like this. I look forward to comparing notes further. And your absolutely right about the difficulty of demo trading once you've been live - I tip my hat of to you for that - I had no option but yours is a wise choice for patience and discipline
 
 
  • Post #10
  • Quote
  • Oct 12, 2007 11:01am Oct 12, 2007 11:01am
  •  melpheos
  • Joined Jan 2007 | Status: Stochastic pipster | 1,657 Posts
Dont rely too much on demo account. I was able to grow a 5M$ account into 8M$ in less than a month with 97% success ratio and max drawdown of 1.3% (and that was trading it really for only 10h total time spread within around 10 days in this month )

Those figures do not mean much really (unfortunatly)

I would advise you to open an account with Oanda with a very minimum balance (maybe 100$) and trade with that thanks to the "use any size lot you want" policy of Oanda.

You will have the thrill of the real but not the "real pain in the ass i lost my shirt" of the real
 
 
  • Post #11
  • Quote
  • Oct 14, 2007 7:18pm Oct 14, 2007 7:18pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Quoting M.A.C.Doug
Disliked
My journey is very similar to yours. Similar time and effort has been put in. I have tried exponentially harder at this than anything I have attempted in my life. I have recently gone live again after six month forced break after the last of my trading funds dried up as my account was liquidated. I lost $20,000 - half of which was borrowed funds in one of the most trying and difficult times. I am a father of two boys and losing funds I didn't have cost them our traditional summer holiday two year running as I desperately chased my losses only to continuously fail. Only by addresing my spiritual poverty, precisely what you are talking about in your thread. Was I able to turn my trading experience completely around Though much of this cannot be described using words, It can understood by others as the experience is identical. My focus this year has been on my desire for truth. All here is illusiory as you mentioned but experience in the market will reflect only your awareness of love. If you are aware, then you know you need nothing. Needing nothing in the knowledge of your own complete state brings inner peace and joy. It is this inner joy based on truth, or love that will then automatically show up before your eyes in the illusion, our personal drama,that we think is real. Success in the market is then a natural outcome from this approach.The outer "dream" world reflects what is going on in the inner world of thought Now I read the news, do my TA and sit and wait for an invitation to trade from the market. I now can see very clearly obvious high probability opportunities almost every time I trade. The impossible frustration of being a losing trader has now become easy and fun. Monitoring my emotional attatchment to winning and losing is what keeps me free. Whenever I slip the market quickly makes my error known and I take a break and think about what is happening and why. I started with $700 in my account 5 weeks ago and the first 2 trades lost me $100 dollars - I could have cried, however I took the next trade, and the next and the next and won every day for a month straight and doubled my account! - amazing!! .Then i faltered, got greedy, changed what I had been doing in an effort to try to insure I could repeat my results and bang - lost 150 pips and about $250 draw down. that was on monday it is now fri and I have $200 of those losses back in my account trading at only 2-3% risk per trade - amazing!! You are on the right path Unforseen. Belief in myself is my greatest tool but I couldnt believe in myself until I knew who myself was and that was the most startling revelation! Im going to hang out here for a while but I have a feeling its going to be a little quiet. The holy grail seekers are likely to completely overlook a thread like this. I look forward to comparing notes further. And your absolutely right about the difficulty of demo trading once you've been live - I tip my hat of to you for that - I had no option but yours is a wise choice for patience and discipline
Ignored
Great to hear you are coming along well, and it is always fascinating to hear of other's journeys down the forex path

Glad to know you are on the right path
To be one with the market, you must first be one with yourself.
 
 
  • Post #12
  • Quote
  • Oct 14, 2007 7:28pm Oct 14, 2007 7:28pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Quoting melpheos
Disliked
Dont rely too much on demo account. I was able to grow a 5M$ account into 8M$ in less than a month with 97% success ratio and max drawdown of 1.3% (and that was trading it really for only 10h total time spread within around 10 days in this month )

Those figures do not mean much really (unfortunatly)

I would advise you to open an account with Oanda with a very minimum balance (maybe 100$) and trade with that thanks to the "use any size lot you want" policy of Oanda.

You will have the thrill of the real but not the "real pain in the ass i lost my shirt" of the real
Ignored
I'm not sure I totally understand your points, if the data streams are the same, then execution can be the same (Perhaps not in millions of dollars but in the amount I trade I have seen no execution delays / slippage between live and demo). You mention a few bits of data on the demo account, but don't really say why that's a result of a demo account?

I turned a $50,000 dollar demo account to $300,000 with 0% drawdown, and 100% wins. How? 100% risk, 3 consecutive winning trades. Would that have happened in live? Sure, if I was willing to risk $50,000 on one trade.

I don't really get a thrill off of real that I don't get on demo, as I do have a live account as well but choose not to use it. The thrill to me is in successful discipline and seeing my entire system in action, knowing the edge exists and whether or not I profit or fail is if I break my own rules.

A turning point for me was when I stopped focusing on the money, and instead focused on the execution. Really it all comes down to discipline of execution, entry, exit, and risk allocation. I get upset not if I loose a trade, but if I failed at any part of my execution. Money is simply a byproduct of good execution (execution of your edge). When I stopped focusing on the money (or actual outcome of a trade) and rather on the execution, that was a major turning point for me.

Cheers and would always love to hear more input on this
To be one with the market, you must first be one with yourself.
 
 
  • Post #13
  • Quote
  • Oct 15, 2007 5:10am Oct 15, 2007 5:10am
  •  M.A.C.Doug
  • Joined Jul 2007 | Status: Member | 1,760 Posts
I think Melpheos is referring to the fact that, although everything you say about focusing on execution is accurate, a live account has an effect on your decision making that a demo account does not have. You cannot be harmed trading a demo account. You are perfectly safe and your subconscious knows it. The minute you go live, your mind now perceives a threat of loss. This is a dramatic difference and almost guarantees that your trading decisions will not be the same as they would have been trading demo. You need to allow for this when going from demo to live. I appreciate the discipline it takes to just demo but melpheos is correct that live practice is imperative to determine what your strengths and weaknesses are and what areas need improvement to ensure your success. This is where your zen approach will become tested. only live trading will test your reactions to fear and greed. If you believe you have an edge then you are ready to test it and yourself, just don't be surprised if the results turn out different to your demo stats
Quoting Unforeseen
Disliked
I'm not sure I totally understand your points, if the data streams are the same, then execution can be the same (Perhaps not in millions of dollars but in the amount I trade I have seen no execution delays / slippage between live and demo). You mention a few bits of data on the demo account, but don't really say why that's a result of a demo account?

I turned a $50,000 dollar demo account to $300,000 with 0% drawdown, and 100% wins. How? 100% risk, 3 consecutive winning trades. Would that have happened in live? Sure, if I was willing to risk $50,000 on one trade.

I don't really get a thrill off of real that I don't get on demo, as I do have a live account as well but choose not to use it. The thrill to me is in successful discipline and seeing my entire system in action, knowing the edge exists and whether or not I profit or fail is if I break my own rules.

A turning point for me was when I stopped focusing on the money, and instead focused on the execution. Really it all comes down to discipline of execution, entry, exit, and risk allocation. I get upset not if I loose a trade, but if I failed at any part of my execution. Money is simply a byproduct of good execution (execution of your edge). When I stopped focusing on the money (or actual outcome of a trade) and rather on the execution, that was a major turning point for me.

Cheers and would always love to hear more input on this
Ignored
 
 
  • Post #14
  • Quote
  • Oct 15, 2007 1:56pm Oct 15, 2007 1:56pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Quoting M.A.C.Doug
Disliked
I think Melpheos is referring to the fact that, although everything you say about focusing on execution is accurate, a live account has an effect on your decision making that a demo account does not have. You cannot be harmed trading a demo account. You are perfectly safe and your subconscious knows it. The minute you go live, your mind now perceives a threat of loss. This is a dramatic difference and almost guarantees that your trading decisions will not be the same as they would have been trading demo. You need to allow for this when going from demo to live. I appreciate the discipline it takes to just demo but melpheos is correct that live practice is imperative to determine what your strengths and weaknesses are and what areas need improvement to ensure your success. This is where your zen approach will become tested. only live trading will test your reactions to fear and greed. If you believe you have an edge then you are ready to test it and yourself, just don't be surprised if the results turn out different to your demo stats
Ignored
Ahh yes totally. I have traded more on a live account then on a demo account, and totally respect the pychological differences between them.

The main reason I stopped live was to address those weaknesses I did find, and I found major holes in my money management. It wasn't that I lacked the discipline so much, as that I needed drawdown rules defined to apply the discipline to in the first place. I am continuing to hammer away at ensuring the risk is totally handled before I go back to live.
To be one with the market, you must first be one with yourself.
 
 
  • Post #15
  • Quote
  • Oct 16, 2007 4:49am Oct 16, 2007 4:49am
  •  M.A.C.Doug
  • Joined Jul 2007 | Status: Member | 1,760 Posts
Quoting Unforeseen
Disliked
Ahh yes totally. I have traded more on a live account then on a demo account, and totally respect the pychological differences between them.

The main reason I stopped live was to address those weaknesses I did find, and I found major holes in my money management. It wasn't that I lacked the discipline so much, as that I needed drawdown rules defined to apply the discipline to in the first place. I am continuing to hammer away at ensuring the risk is totally handled before I go back to live.
Ignored
keep up the good work!
 
 
  • Post #16
  • Quote
  • Oct 19, 2007 8:20pm Oct 19, 2007 8:20pm
  •  Ohka
  • | Joined Oct 2007 | Status: Member | 230 Posts
Quoting Unforeseen
Disliked
Here is the numbers that allowed me to create these logic rules:
Ignored

Unforeseen,

a great thread, keep it up. If your number crunching is not yet finalized, please consider also adding current volatility as a measure to determine your next position size. The relation is an inverse one: with higher volatility, you should reduce position size, with lower volatility one should increase position size...

The ratio for this: with higher volatility, if you're on the wrong side of the market, you're going to make losses big and fast, so you want to reduce risk by having smaller positions. If you're on the right side of the market - with a smaller position - you're going to earn anyway, as the higher volatility will yield more pips.

Reducing position size when current volatility is higher is key to getting a smoother and more consistent equity curve. Put this relation into your model, you'll be surprised....
 
 
  • Post #17
  • Quote
  • Oct 22, 2007 10:54pm Oct 22, 2007 10:54pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Quoting Ohka
Disliked
Unforeseen,

a great thread, keep it up. If your number crunching is not yet finalized, please consider also adding current volatility as a measure to determine your next position size. The relation is an inverse one: with higher volatility, you should reduce position size, with lower volatility one should increase position size...

The ratio for this: with higher volatility, if you're on the wrong side of the market, you're going to make losses big and fast, so you want to reduce risk by having smaller positions. If you're on the right side of the market - with a smaller position - you're going to earn anyway, as the higher volatility will yield more pips.

Reducing position size when current volatility is higher is key to getting a smoother and more consistent equity curve. Put this relation into your model, you'll be surprised....
Ignored
Thanks Ohka

I definitely plan on doing this and already do it somewhat, however it's quite poor. I use a multiplier system by pair, neutral being EURUSD (or 1). For example, for "The Dragon" GBPJPY I use a 0.3-0.4 multiplier, which cuts the actual risk per pip down 60-70% from EURUSD.

I plan on using ATR or another volatility instrument to get a more efficient and rule based system in place, with the goal of normalizing as best as possible across all pairs.

I have been doing testing all month using the new system and so far it's doing poorly (I'm breaking even... consistently). I am used to mental stops and many times I am finding I am getting stopped out as i'm now using hard stops and then the pair takes off in the direction of my position.

I figure I have two choices, the first one being putting the stops quite a bit further away, well above areas of value. The second one being to use some sort of variable system. Say, determining between 2-3%, hard stop at 4%, and then making a judgment call. I would use line alerts to SMS me if these areas are reached so I can make a decision.

I already have a good feeling the first option is my best one, but of course, I won't know which one is going to work for me until I try both and give it enough time to show results. I will start with option one.

I haven't posted in a week or so as I am taking a bit of break from trading, and will probably break for another week or two. I often can just feel when I'm out of balance and I need to bring my focus inward, which is what I have been doing and I already feel much better and clear headed. I also found taking a break gives you "space" in your mind away from trading, and kills that craving to feel to need to trade... in other words, it greatly enhances your ability to be patient (at least for me). It also allows you time to reflect on the big picture, which I have found is hard to do sometimes when you put so much focus and attention on trading. My biggest revelations and subsequent step forward in my trading have been very shortly after returning from break periods.
To be one with the market, you must first be one with yourself.
 
 
  • Post #18
  • Quote
  • Oct 23, 2007 10:11pm Oct 23, 2007 10:11pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Unfortunately dropping in has sparked some thoughts

I realized that while close stops greatly decrease w/l ratio, they also make conditions where one good trending trade captures a large profit, while the rest generally break even.

The "problem" is still the same, which method(s) are more profitable long term?
Only trying them out, and time, will tell.

It's just an observation at this point. Now i'm not sure what i'm going to do, try to increase stops at less profit, greater w/l ratio, but better profit?

Maybe not. Attached is my statement so far for this month. See the chop from the tight stops, but see the runaway? This was an ideal setup and intuition trade that ended up running. The final profits are very close to last month, so i'm going to stick with my tight stops until the end of the month. This month also resulted in 4% less drawdown.

The question is... how often will these runaway trades happen? Is it a market condition, or just luck?

I will also leave on something I stumbled upon on soultrader's thread, written by him.

"Support and resistance should not only dictate your entries but also your exits and your stop position.

You will hear littered through this forum "i was long but got taken out by my stop" - "my broker went stop hunting and got me" - "damn thing took me out to the pip on my stop"

These statements show someone who fails to take responsibility for a trade's demise. They use a stop to make a decision for them to exit a trade.

Real traders exit their own trades with their own fingers. Stops are there for two reasons - when you need to sleep or go out and play golf, or to protect your capital from unforseen circumstances like an earthquake in canary wharf.

Stops shoudl always be placed further away than you think price will hit. If your assumption is that the market will not go lower than 2.200 on cable then your stop should be at 2.150 at the absolute closest and preferably further than that or not at all in the market."

This post in its entirety can be found here:
http://www.forexfactory.com/showpost...&postcount=202
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To be one with the market, you must first be one with yourself.
 
 
  • Post #19
  • Quote
  • Edited at 6:52am Oct 24, 2007 6:34am | Edited at 6:52am
  •  Ohka
  • | Joined Oct 2007 | Status: Member | 230 Posts
As to entries & stops:

the stops I put in the market are purely meant to be a last resort in case of an emergeny - events that make it impossible to contact my broker and close my positions.

I close my positions myself, using another set of stops that I do not put in the market.

The closer you can place your entries at a reversal point, the tighter the mental stops can be. If you're good at this, it even allows you to size up your position without risking more than your pre-set limit.
My personal position sizing method is simply "fractional-f", where my effective risk (i.e. effective leverage) is limited by the mental stops I use.

My entries are based on reversals at Fibonacci- and Pivot Point levels and Bolling band extremes, but only so when at the same time MACD/RSI show a divergence with price action.
Currently I'm investigating using Imran's system (here on FF) as an entry confirmation at those price levels...

Happy trading
Ohka
 
 
  • Post #20
  • Quote
  • Nov 14, 2007 10:12pm Nov 14, 2007 10:12pm
  •  Unforeseen
  • | Joined Oct 2006 | Status: Member | 117 Posts
Back from my break... it was well worth it to ponder things and do some more reading on money management with being away from the charts and trading. I can't stress enough the value of a break to bring clarity of mind, this break gave me a great boost to my resolve that discipline of my plan is the only way to succeed. It is sometimes hard to clearly see and resolve to do the obvious when you are knee deep in all the thoughts and other distractions that come from trading.

I came back to a nice short trade I opened late October that went well on GBPJPY, decided to close it for 498 pips today.

I am ready to fund my live account again, i'm thinking of doing it for December. I'm Canadian so i'm mulling changing my broker to a broker that offers a Canadian denomination and not having to worry about the hedging factor that is UCAD
To be one with the market, you must first be one with yourself.
 
 
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