The System (Irony included)

Quoting fti

Disliked

Hi All,
@ ownshook

I answered some one the other day on this R/R thingy already.
For this thread I will repeat myself.

PURE nonsense.

R/R ratios is a money management tool for risk & compliance depts, to gauge the trading performance of an individual over time. It calculates the "value at risk" against P&L against time to determine the skill rating and compensation for dealers/traders. The formulation is standadise to measure all deal "at value" to equalise dealers at par to limits.

R/R ratios on singular trade exposure means nothing.
Accuracy (profitability) and ability in turning to favourable trend following is paramount in singlar exposures.

If you want to calculate risk to your stop loss probabilities, then read about my respond to stop loss orders in forex on this thread.
BUT if you were trading structured markets , eg exchange traded instruments (indexes futures. Currency Futures contracts, commodities ,,etc), using stop loss orders can protect or limit your overexposure to losses, this is because these markets are localised.
Rule of thumb , never place stops in OTC instruments (eg forex, OTC indexes, OTC options, CFDs, any synthetics etc)however tempting.

Hope this helps.

regards

Ignored

Quoting fti

Disliked

Hi All,

@ Green_David
Oh, David , from your discription , you may be suffering from "trigger" problems.
The inability to "pull the trigger" on trades due to self-doubt or being out of step.

That self doubt can be caused by many factors.

1. could be too many bad stop-out experiences,
this can creating mental blocks on your bicameral mind..
That's why I say its best not to use stops orders.
Either make a resolution to watch your baby with full dedication or, quit, this may not be for you.

Faithfulness to market dance is important.
Your Stops have very high probabilities of being taken out if not managed properly
and normally , it would always happen at the worst timing and levels.
The cause is because of par excellence marketmakers and of course "Murphy 's Law"
If baby sitting the market is not your cup of tea,
then you should learn about new instruments and synthetics, like options e.g.
where its not necessary to baby sit, only that there's a premium to pay for that luxury.
That, is a whole different kettle of fish, though.

Watch out for market over-runs.
Every market has a rythemic dance characteristics, you got to learn how to dance in tune with it.
If she's dancing 4 steps and you're dancing two, chances is she's not gonna dance well with you.
Take note of this, she will never change her tempo to follow you,
it's you that have to get close and personal and feel her tempo instead.

Once in sync then, do your magic,
When you have to move forward, just move don't think anymore and invite imaginary ghost to haunt you.
Your actions will speak louder than your words. Follow the flow.(trend)
Suit up for battle,then do the necessary.

KISS, keep it strong & simple, your feelings, that is.
If you have to, "bite the bullet" and take the pain. Cut losses if things don't feel right.
"Run away today, to survive, to come back to fight another day."
yes, you have to learn to feel and forget about levels and dented egos.

2. Trading too close to the financial edge.
going too near your financial cliff, is unhealthy for your body(mind) and wallet.
always leave room for contingencys, remember market tend to alway over-run.

I may show you how to money manage, when I have time.
also known as game plan, plan your work, then work that plan.
plan your work, doesn't mean to have pre-concieved ideas of market.
Like I mention in 1. You have to ask her what she's actually doing and feel if its correct.
Work your plan , basically means set aside adequate risk capital, to be utilised when needed.
Never walk into gun battles carrying knifes.
Also never ever try to catch falling knifes and shooting rockets. by adding to bad positions.

If she's not giving you clear indications, sit on you hands.
be patient, she 'll tell you soon enough.
And when you see clearly, but feel that the dance is too near the end.
then wait for the next dance. then ask again.
Like ledgesww said wait for the next "bus".
It'll come, be patient and prepared but don't be too eager. Find the balance.( yin yang)

Never ever trade with money you need for your living.
Doing that builds bad vibes and can cause lots of silly and unneccessary mistakes.

3 Guts and Glory.
In this game , there's no prize for seconds, must come in front, always.
like the title says, no guts, no glory.
Pay the price and capture the prize.
Never think in terms of the money, always treat the risk capital as ammunition in battlefields.
Like the saying goes, traders may lose money,
but never ever lose your balls, or its game over.

I can go on all night elaborating the finer points.
In a nut shell, its all about preparedness and mindset.
That's half the battle. YOU!

SunTze's Art of War teaches clearly, "know thyself and the batlle is nearly won,
know thy enemy and surely the battle is won."

The other half is skills from experiences and analysis.
Never over analyse, but just enough to identify trends, then watch and feel her.
Like feb adviced you to, don't over complicate your charts visually,
making it dazzling in all sorts , only to decieve and confuse you.
Use what works for you, we are all alittle different,
and throw all the other junk away.
What matters is profits, all other things are just "a mean to an end."

For that I must add, it is easier said than done.
Sometimes its doublely hard to retrain old dogs with new tricks.
The fact that you have been following this thread closely ,
already shows that the some mindset change has begun.
Only more time, and hard knocks is required to allow this to set and become an internalised reflex.

Remember when you, first learned how to drive,
there's like a million things to remember.
But now with the necessary "setting" of internalised skills, it becomes second nature to you.

My major fear is that, all here are at differing levels,
and some may not comprehend what all this, babling is about.
All I can wish for, is that the little that I have given you, in this space and time.
will point you in good directions for your education and development.
And that your learning curve be positive sloping.

It took me years to aquire the necessary skills.
Fortunately for me, someone else was paying the bills while I was learning, the banks.

If you are young and dedicated to the trade, you might just have that opportunity, if you knock hard enough.
Beg for the opportunity, if you have to. Again, don't let ego get in the way.
The banks are always looking for talent.
Personally I have a structured program of training, called "the bourse game" for my men at the bank,
but I guess for now this should sufface.

One last point I like to make is with regards to the market place.
David you did mentioned that "My ECN broker won't give out their liquidity providers names"
This factor is really red flagging me.
Because as an veteran from Bank's Treasury, I am inclined to believe that,
it would be their honour to publish themselves openly,
that as a part of their community and public service resposibilities,
that they had taken upon themselves to open up a service and afforded general customer participation,
in the fastest and biggest markets in the world.
Its really a red flag thats nagging at me for now.
I guess its for them to know why, and for me to probe further to find out.

feb, I am so sorry that it seems, that I may have hijacked your thread for a while.
(I do so, sighting complimentary doctrine)
If that refects your sentiments , please accept my humble apologies.

regards

@ iandekoker
I believe that we can as gentlemen , agree to disagree on my postings.

on the subject of Brokers, out to get traders. I think you may has misread.
I said no such thing, I impllied market machanism, sweeping stops not brokers.
regards

Ignored

Quoting feb2865

Disliked

This stops rigth here

no more talks about money management R/R and the like.

People let's get back on the subject

Peace

Ignored

Quoting feb2865

Disliked

This stops rigth here

no more talks about money management R/R and the like.

People let's get back on the subject

Peace

Ignored

Quoting iandekoker

Disliked

Ok lemme try and explain my logic behind risk/reward ratios.

ps. Did you know you could have 90% winning trades and still loose money in forex. You make 9 winning trades out of 10 attemps. And in each trade you make 20 pips (9 X 20 pips = 180 pips) BUT you put your stop loss 200 pips away on each trade. So if your stop loss gets hit only once then you have lost 20 pips (200 stop loss - 180 winning trades = -20 pips). Ok i know i have stretched the 200 pip stop loss to illustrate my point but i am sure you get the idea Always try and make at least double the pips you risk on any given trade.

And this is one of the main reasons why most traders dont make money in forex. Yes they make lots of winning trades but their risk (stop losses) kill them.

Ignored

Quoting iandekoker

Disliked

This is very dangerous and irresponsible advice that you are giving. Even if you think you are trading without stop losses you actually are......your account is your stop loss. Once you get a margin call then you know your stop loss has been hit.

Ignored

Quoting ownshook

Disliked

I agree that this thread started turning into personality duels, banter, vino chatter

Ignored

Quoting feb2865

Disliked

This stops rigth here

no more talks about money management R/R and the like.

People let's get back on the subject

Peace

Ignored

Quoting Mr Trend

Disliked

Hey feb... contact smjones... he'll clean this thread up for ya...

Ignored

Quoting Vintage man

Disliked

Hello to all...I have been a "stealth" reader/participant since this thread begun. Feb, my thanks for all your guidance/wisdom in trading...it has helped me tremendously.
Leigh..you've got it right, referring to your last post, having fun. While I have not been trading for that long, I am experienced in other fields where the intensity of the occupation is sever one, and must have an outlet. Having fun/being playful is the best outlet there is to relieve the stress. Also it is a good way to insure a marriage for life.
If one concentrates on trading only, constantly without a little relief, r errors can and will creep in, so to all who can't bend a little, even on a thread, my condolences.

Ignored

Quoting fti

Disliked

@ leighsww,
I am sorry that I cannot return your PM, am still restricted after a ban recovery by the moderator. What you mentioned is not necessary.

Ignored

Quoting Trader_V

Disliked

An update on the USD/JPY trade.

I just wanted to point out how I am managing my trade and show you how I make some of my decisions.

On the chart we can see the bar where I entered the trade (indicated by the first blue arrow. We can see how price has moved down nicely and my stop is at break even for a free ride plus a couple of pips.

Now this is where a lot of traders get nervous and exit sometimes prematurely and sometimes it turns out to be the right decision.

I am watching where price closes on this current bar. If you look at the large bearish outside bar indicated by the second blue arrow you will see it was a strong move down. If prices close above this bar or move with some force above the high of this bar I will exit the trade.

Alternatively this is also where I would look for a possible continuation of the major trend headed down. Being cautious near the newest support area indicated by the yellow area and cautious again in the area of the horizontal line.


Cheers!

Ignored