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Indicator Free Trading - Skunny

  • #1,081
  • Jan 4, 2008 12:15pm Jan 4, 2008 12:15pm
Quoting macbow
Looks like we have another completed cycle here. (Presuming the 162 is the cycle end). The more I look, the more I think ol' Skunny boy may be right about the markets not being random. There is hope for the boy yet

skunny told newbies to stay away from GJ! careful the fed has gotten involved again on this dow drop.... also bigger timeframe issues gong on with the gj! stick to other pairs!
  • #1,082
  • Jan 4, 2008 12:24pm Jan 4, 2008 12:24pm
Quoting dagoods
skunny told newbies to stay away from GJ! careful the fed has gotten involved again on this dow drop.... also bigger timeframe issues gong on with the gj! stick to other pairs!
Appreciate it mate. Would not trade that myself. As you can see I am just on a demo so not risking any money anyhow. Just fascinated with how the fibs can line up.
  • #1,083
  • Jan 4, 2008 12:28pm Jan 4, 2008 12:28pm
Quoting sizzler
Hey Hey,

here is something that is muy interesante or not. I am going to post 2 charts. both the same chart on different tfs. I suggested people do this on a post from Y.A.K.

(YAK how is your cycle 162 work going? )
So many cycles were completed today based on 162 being hit that I haven't even had the time to update all of my charts.

An interesting note is that most of the weekly 162's have been hit thus completing those cycles on the last trading day.

As for money management with drawdown, it's my largest concern right now with any trading method. I'm not expecting anywhere close to 100% with a method, but 70-80% of reaching at least 3/4 of my target price is my goal. The problem is that you have to leverage down so much and experience such a huge drawdown to trade the way Skunny showed in some of those charts. Put simply, I'm not comfortable with that kind of drawdown without having complete certainty that my diagnosis of the market was correct. What I do in the meantime is only trade within narrow ranges from one Fib to the next (usually 0/100 to 138) and put my S/L somewhere between the 0 and 50 Fib lines depending on how strong I believe in the move based on the fundamentals and overall trend.

It works more times than not.... except this morning's London session when some orders got triggered and whipsawed right in front of my targets (ouch) and then proceeded to hit T/P later in the day.

I'd love to hear some of the money management tactics being used with this strategy.
  • #1,084
  • Jan 4, 2008 12:40pm Jan 4, 2008 12:40pm
Quoting sizzler
Indeed sir so what would you do to define your trade?

1.) to the pip and risk it
2.) manual and get out when you feel like or fib walk if inside a larger range?
3.) set a fuzzy tp based on logical numbers or a range of the target ie tp plus 10-20 pips or tp is 212.64 set 212.80

what are your thoughts?


Sizz
At this point I am just testing these methods, and do it manually. As you may have noticed with vhands a candle will not be doing much and then all of a sudden shoot up to 138 and retreat quickly. What I do is when it comes close put a stop closely behind the price action and tighten the stop as it gets closer to 138. If it blasts through it, I am still in the trade. If it retreats quickly, I get stopped out very close to 138.

The problem is this is not a set and forget method. What would be ideal is if there was platform that allowed you to place a trailing stop (say 5 pips behind price) that does not activate until it reaches a certain point, say just shy of the 138 level. That way it locks in profits on those quick moves but also keeps you in the market for it potentially moving more.

Another method (similar) is to do the same thing but scaling out with multiple positions. Keep the stop on one far enough from the price action not to be stopped out by noise so it can ride the market further. Tighten stops as mentioned above on the others in a scale like fashion.

See my trend following scalping strategy for more detail on scaling out (not a system btw, it is very discretionary)

http://www.forexfactory.com/showpost...00&postcount=3

more detail:

http://www.forexfactory.com/showpost...78&postcount=1
  • #1,085
  • Jan 4, 2008 12:47pm Jan 4, 2008 12:47pm
Quoting youalreadykn
Put simply, I'm not comfortable with that kind of drawdown without having complete certainty that my diagnosis of the market was correct. What I do in the meantime is only trade within narrow ranges from one Fib to the next (usually 0/100 to 138) and put my S/L somewhere between the 0 and 50 Fib lines depending on how strong I believe in the move based on the fundamentals and overall trend.

It works more times than not.... except this morning's London session when some orders got triggered and whipsawed right in front of my targets (ouch) and then proceeded to hit T/P later in the day.

I'd love to hear some of the money management tactics being used with this strategy.
Ever thought about just opening a position in the opposite direction (hedging) when the drawdown gets uncomfortable? You lock in a pre determined loss, which if the market becomes more predictable down the road you can turn into a win. If it doesn't become more predictable, you close all positions and take the loss.
  • #1,086
  • Jan 4, 2008 12:49pm Jan 4, 2008 12:49pm
Quoting macbow
Appreciate it mate. Would not trade that myself. As you can see I am just on a demo so not risking any money anyhow. Just fascinated with how the fibs can line up.
Hey Mac, good to see your still around.How's your trading been?
  • #1,087
  • Jan 4, 2008 12:52pm Jan 4, 2008 12:52pm
Quoting Jared
Ever thought about just opening a position in the opposite direction (hedging) when the drawdown gets uncomfortable? You lock in a pre determined loss, which if the market becomes more predictable down the road you can turn into a win. If it doesn't become more predictable, you close all positions and take the loss.
I don't personally believe in hedging... the way I trade is that I have to believe in the trade to accept any kind of drawdown. Hedging implies a lack of belief in the trade IMO and thus goes against my philosophy.

Beyond all of that, I trade through Oanda which makes hedging extremely difficult if not impossible.
  • #1,088
  • Jan 4, 2008 12:56pm Jan 4, 2008 12:56pm
Quoting Jared
What would be ideal is if there was platform that allowed you to place a trailing stop (say 5 pips behind price) that does not activate until it reaches a certain point, say just shy of the 138 level. That way it locks in profits on those quick moves but also keeps you in the market for it potentially moving more.
That exact thought has been on my mind for a while now. It's precisely the kind of stop loss that I need for my scalping.
  • #1,089
  • Jan 4, 2008 12:56pm Jan 4, 2008 12:56pm
Quoting Bobokus
Hey Mac, good to see your still around.How's your trading been?
G'day Bo,

Hadn't been trading at all. Got every priority in my life completely our of whack for a while, and then I got mad, and made everybody else mad.....you know what I mean????????

Actually should have been at work a while ago, but it is cold outside and this stuff is fun. Skunny told be you have been doing good which is good to hear. Heard you treated the missus to a little vacation. Way to go Bo!
  • #1,090
  • Jan 4, 2008 12:58pm Jan 4, 2008 12:58pm
Quoting macbow
Appreciate it mate. Would not trade that myself. As you can see I am just on a demo so not risking any money anyhow. Just fascinated with how the fibs can line up.
Well, if ain't my good friend Macbow. How's my little Tex-Aussie doin?

Glad to see you get involved. I don't understand your "Queen's English" but maybe others do:.
Robonacci com
  • #1,091
  • Jan 4, 2008 12:59pm Jan 4, 2008 12:59pm
I thought you were sick Skunny? Obviously not sick enough...:
  • #1,092
  • Jan 4, 2008 1:04pm Jan 4, 2008 1:04pm
Quoting Skunny
Well, if ain't my good friend Macbow. How's my little Tex-Aussie doin?

Glad to see you get involved. I don't understand your "Queen's English" but maybe others do:.

What don't you understand? Maybe I can elaborate for you. Maybe I should open up another thread because it may take a bit of getting it across to you and I don't want to pirate this thread...

Hope you are feeling better mate.
  • #1,093
  • Jan 4, 2008 1:07pm Jan 4, 2008 1:07pm
Quoting youalreadykn
I don't personally believe in hedging... the way I trade is that I have to believe in the trade to accept any kind of drawdown. Hedging implies a lack of belief in the trade IMO and thus goes against my philosophy.

Beyond all of that, I trade through Oanda which makes hedging extremely difficult if not impossible.
Well, too bad for Onada! There are pro's and cons to hedging, so I can see why some might not think this is a good idea.

Pros: say market goes against you (or farther then you expected anyway), hedge and when the market becomes more predictable (such as consolidation/ranging) exit long position at overbought and exit short on oversold. Sometimes you can turn the looser into a winner.

Cons: If you exit on what you think is overbought but the market keeps going up (end of consolidation period) then you loose even more $(because you still have an open short) .

OR, how it could be used in this strategy:

Say there is a false breakout long and you are in the market, only it reverses and heads down so you hedge. It keeps going down and starts to break out on the short side. Close your long at the breakout and keep the short open and ride it to 138, then close it.

You at least make up for the loss and possibly then some. "A penny saved is a penny earned".

I'm not saying this is the best way to do it, just sharing ideas. In fact I think I will try this on vHands and see how it goes.
  • #1,094
  • Jan 4, 2008 1:09pm Jan 4, 2008 1:09pm
Quoting youalreadykn
That exact thought has been on my mind for a while now. It's precisely the kind of stop loss that I need for my scalping.
If anyone knows of a broker that you can do this with please share. Or maybe with the proper persuasion a broker might make this option availible!
  • #1,095
  • Jan 4, 2008 1:24pm Jan 4, 2008 1:24pm
I have a question on the 162 cyclic completition:

my philosophical argument is this after soul searching :

could it not be consider just mental mast...excerise to do so as if the method stands to that then why not focus on smaller tfs and who cares?

that Eureppy?? trade that Skunny posted messed me up I am pretty sure you could have execute on a 15m. PLus I have been trading with a gent from this thread who favors lower tfs and guarenteed so to speak pips.

If you "know" where it is going... and "know" where it won't go.. then use your MM set the tightest stop known to man because if you were wrong.. well theres proof good you are out.. if not... you have surgical highly profitable trades.

theoretically you could set a say 1-4 pip stop loss to scalp 30-50 pips and drop an increased amount of lots on the trade Scan your charts a few times a day and be perfectly fine.

Currently for MM:
on this I am using my normal mm and price action and slowly swapping my s/r for fib sr as I get more trades in and using a mini cycle for more definition and sl placement and taking d1 trend moves



I think that keep it simple stupid is a universal theme. I have no quantifiable data on that though


Sizz.
  • #1,096
  • Jan 4, 2008 1:35pm Jan 4, 2008 1:35pm
I'm not sure what you mean about the 162... please explain.

As for the MM, I trade on 30sec/1min charts but the shortest time frame I'll Fib is the 1hr. 1hr/1day/1wk are the Fibs I make. The only reason I trade on the 30sec/1min charts is to get a clearer picture of the noise and pinpoint entries/exits.

Having said that, there's no way I'd enter any of these trades with a 1-4 pip S/L. The probability drops like a rock with a S/L that tight and when you're losing 7/10 trades you are losing serious money. I'd say more than half of my trades don't reach my T/P because I'll take profits early when the smaller time frames tell me a retrace may occur. Because of that, I'd be losing 1-4 pips + spread pips (0.9-6.5) and would need some huge trades to make up for those losses. After 3-4 losses in a row, your next win would just be making up for those losses and you would breakeven.

I could see how the strategy would work if you only took trades with a 1:10 risk to reward ratio and above, but those opportunities seem to occur infrequently (maybe 1-2 per day).

If you can manage above a 40% winning pct. on those trades though, you would make a killing barring a 10+ trade losing streak.
  • #1,097
  • Jan 4, 2008 1:39pm Jan 4, 2008 1:39pm
Quoting macbow
I thought you were sick Skunny? Obviously not sick enough...:

Don't get lippy mate.....I know where you live and your sheila is on my side
Robonacci com
  • #1,098
  • Jan 4, 2008 1:47pm Jan 4, 2008 1:47pm
I thought I would ask this in my search for getting my own technique bases on what I have learned here and other factors....

On the subject of money management, I have seen several posts...one from Sizz and one from Skunny that indicated a big drawdown in a particular set up on the charts that were either posted by them or someone else. As a matter of fact, someone asked skunny about the drawdown being 100 + pips on a particular chart set up and he said something like "yeah so what" . I don't think he was being irresponsible but yet making a point that if you know where the market is going then don't worry about it. I am sure he wouldn't let it go that far...or maybe he would....maybe he can address this post when he gets well. I can't believe though, that if he was going for let's say 10 pips with much bigger lots, that he would even think about trading a break out unless it is coming out of small consolidation. That would be bad money management right? Too much risk of a head fake at the time and a retracment so even if he had a stop... head fake and it's over. My take, and I am still struggling to stick with this rule because the market will suck you in and not let you go, is sit on your hands. If I can do that and it does not retrace to a good level for me and then shoots to freakn mars, so what???? Did I lose??? No I 'm just mad as a rabid dog that I did not trade the break, right? WHY???WHY WHY WHY???? The way I am seeing this market now, we have trades on many different pairs occuring every day, sometimes several times a day so why do we risk the drawdown? I believe, speaking from experience that many of us feel the need to be in the market, but I know this for real...the highs of winning are sure not even close to the lows of losing, emotionally speaking. One thing my mentor has tried to instill in me is do not trade without stops and if you want your stop to be in a good spot so you don't get stopped out on every trade, wait on the pull back at a good support or reistance level and trade it there. You might not have drawdown, emotionally or finanically and you picked up extra pips just for waiting. NOW IF I CAN JUST FOLLOW MY OWN ADVICE. I have always been told the market can do anything it wants and if that's the case, no stop trading will one day bankrupt your account.....or will it?? So back to the first of this post, do we trade with stops or without letting it draw down our account, or do we wait until we feel confident of our entry and stop as well?
I guess we will find out in due time thanks to ole skunny.

Daniel
  • #1,099
  • Edited 2:17pm Jan 4, 2008 2:14pm | Edited 2:17pm
Lets play a logic game,

I know I want to play monoply too but hey

for the purpose of this game

lets assume that the market is NOT random within reason and follows predetermined cycles ok?

then lets assume that the fibs when drawn accurately will , infact, measure this. with near accuracy. Ok?

Now we aren't dealing with 70%. we are dealing with 99.97 percent. say that percent is oh tick data slop ok?

So the market move in cycle we can predict with high accuracy. Wow. Sounds good. No?

everything you or I have ever learned about trading says differently and is basically probability gambling math but .. just check you bias at the door and go with it. that is the theme of thread it doesnt "kind of" predict

I am simply stating that IF one knows how to measure the market under this rule set.. it is IMPOSSIBLE for my sl to be hit. it can;t go past the opposing break line.

if i had a range between 100/0 and we broke 100 we could set the sl at 0 - handful and it wouldn;t be hit until our tp was. so theorectically on a big retrace to say fib 0+1 you would have a 0 pip sl - fuzz to allow for noise.

Does that make sense?

162
As far as plotting out the major movents of the market... what is the point?

I know what you are going to say but pretend you are wrong and you can just look at lower timeframes and follow them with out conflicting with major tfs... after all 1m is just like a million bazillion quadrillion 15M or 5M or something. I was trying to do what you are doing right now.. academic but questionable trading value IMO... UNLESS you carry trades

in a simple form... what practical reason is there to not take advantage of a smaller tf to get in and out and under the assumption of this thread have little fib atr ( drawdown) and max profit.

this is hard for me because I am 4H1D PASR trader I like hundreds and hundreds of pips. worth a handful of lots not a handful pips worth hundreds and hundreds

Sizz






Quoting youalreadykn
I'm not sure what you mean about the 162... please explain.

As for the MM, I trade on 30sec/1min charts but the shortest time frame I'll Fib is the 1hr. 1hr/1day/1wk are the Fibs I make. The only reason I trade on the 30sec/1min charts is to get a clearer picture of the noise and pinpoint entries/exits.

Having said that, there's no way I'd enter any of these trades with a 1-4 pip S/L. The probability drops like a rock with a S/L that tight and when you're losing 7/10 trades you are losing serious money. I'd say more than half of my trades don't reach my T/P because I'll take profits early when the smaller time frames tell me a retrace may occur. Because of that, I'd be losing 1-4 pips + spread pips (0.9-6.5) and would need some huge trades to make up for those losses. After 3-4 losses in a row, your next win would just be

making up for those losses and you would breakeven.

I could see how the strategy would work if you only took trades with a 1:10 risk to reward ratio and above, but those opportunities seem to occur infrequently (maybe 1-2 per day).

If you can manage above a 40% winning pct. on those trades though, you would make a killing barring a 10+ trade losing streak.
  • #1,100
  • Jan 4, 2008 2:28pm Jan 4, 2008 2:28pm
Quoting sizzler
I am simply stating that IF one knows how to measure the market under this rule set.. it is IMPOSSIBLE for my sl to be hit. it can;t go past the opposing break line.

if i had a range between 100/0 and we broke 100 we could set the sl at 0 - handful and it wouldn;t be hit until our tp was. so theorectically on a big retrace to say fib 0+1 you would have a 0 pip sl - fuzz to allow for noise.

Does that make sense?

As far as plotting out the major movents of the market... what is the point?
1. Assuming 100% accuracy this method still only predicts an endpoint/destination, not the exact timing of the market reaching that endpoint. Your S/L could be hit whether it's 1 pip behind or 10 pips behind depending on the pair. I believe what Skunny referred to at the start of this thread was that a pair can be in many cycles at once and if price moves against your profit target then you may have missed a cycle. Given 100% accuracy and 100% preparation in this case, I still don't believe you could prevent someone from taking your stop loss out if it were only 1 pip away.

2. As for as plotting out the major movements, my goal is to not trade into known S/R on the smaller timeframes. While I watch 30sec/1min for entry/exit timing, my signals for trades come from the 1hr/1day chart and the breach of S/R levels.

I'm not sure how far this is diverging from the thread's topic, so I'll leave it there unless you want to start a separate thread about money management and stop losses.
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