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  • #21
  • Jan 20, 2007 5:58am Jan 20, 2007 5:58am
Quoting smjones
Darn, where are those green dots? I would like to give Dopey a few of them.

That post was great advise...

Another thing you might check into is the way the original Turtles took their profits. It was a 4 fold approach where the previous profits paid for the next tear. I found a PDF on google search. One of the original Turtles published it and said it was for open publication... If you cannot find it and want a copy I can post it up.

I think a modified version of this would suit your approach well...

just a thought, as you can never go broke taking a profit, no matter how small...

BTW, it is good to see your words Peter...
With all the other stuff around me this week, I've not had time other than to scan this file, it's the next piece of study work on this voyage of discovery. If I have any questions (maths not being a strong point, in case you hadn't realised) I'll get back.
Thanks for the kind comment re my words. I cut down my posting as I found I spent so much time trying to help others, with my limited knowledge, I was actually losing money due to not watching my screens . Thanks again
  • #22
  • Jan 20, 2007 6:02am Jan 20, 2007 6:02am
Quoting philmcgrew
I have never understood why anyone would promote the idea of holding their stops to the last pip but scale out of their winners before the move is over. You need to cross the finish line with all your tires on the car, don't start taking a couple off to save on tread wear. It just doens't make sense. You know your stop, you know your risk and worst case scenario, you have a belief about where the market can go, you know your risk:reward, now put the trade on and see what happens. Given the statistics that you posted you are right fairly often, now go out and get what belongs to you. Don't start stacking the odds against you by reducing your position. You are going to need those pips to cover your losing trades.
Simple when it hits you in the eye, Phil, isn't it. Apart from some stuff I had scaled out of before the previous weekend, I've left everything well alone. One less decision to make amongst the bear-traps laid out before me.
Thanks
  • #23
  • Jan 20, 2007 6:04am Jan 20, 2007 6:04am
Quoting philmcgrew
That is great advice (wish i would have said that ) All you need to do is go back and review your trades on a scaling vs. non-scaling basis and see which yields the better results.
See post #18
  • #24
  • Jan 20, 2007 6:08am Jan 20, 2007 6:08am
Quoting chantspel
I believe it is already hosted here at FF. http://www.forexfactory.com/turtlerules.pdf
Got it, just need to read and digest it
Thanks
  • #25
  • Jan 20, 2007 6:14am Jan 20, 2007 6:14am
Quoting lwojtow
Some time ago I made a simulation on various MMs. Assuming you stay in a trade as long as it have more chances to go your way, the best option is to piramide, that is, adding to winning posiotion. Not so bad idea is scaling out of losing position and, surprise surprise, adding to losing position. They both increased profit factor comparing to doing nothing. The worst option is to scale out of losing position. Yes, it's psychologically very nice, but unless you're trading huge posiotions, don't even bother.
Regards
Hi lwojtow
In the early stages of looking at this method, scaling in seemed the way to go. But as I didn't have the confidence in it at that stage, I often chickened out at the slightest sign of trouble.
Once I am happy with the basic entry method, I may run a demo with scaling into the trend, again, and see how it compares.
Thanks for reminding me of this alternative.
  • #26
  • Jan 20, 2007 6:26am Jan 20, 2007 6:26am
Quoting bundyraider
Scaling out.

Taking 100% loss target, but 50% at profit target.

...In the end it's like turning your 80% win/loss ratio into %66

Do I have the math right?? LOL
Seems right to me, I said maths is not my strong suit, but that seems obvious now as I read it.

Quote
I'll never forget backtesting an MA based system (No. Not crossover )

I spent much time theorising and thought I'd come up with a good system that took the first profit at a fib line, then the second at the next fib line ,and so on. I manually backtested this bar by bar!

It didn't seem to make sense. The profit/loss percentages didn't match my original visual walkthrough. On a simple basis, the number of potential winners to potential loosers was high. The actual profit/loss though, after the bar by bar backtest, was pretty ordinary. :

I went back through it again.
This time taking all profits at the first fib. This brought the results in line with the original expectations.

Other ideas were played with. ...Thinking I was a genius...LOL

This included taking MOST of the position off at the first target (which by this time was the second fib line I was using) and then letting the remaining portion run, just to be "in on the trade".
This was useless too! The small portion that was left over was peanuts! Often that remaining profit, when taken, was smaller than the winnings from the first and larger parcel. Even though that remaining run was much much larger.
I think this is where I had arrived when I posted the question
Quote
I played with all sorts of portion ratios.

But what worked in the end??

Fib projections and existing Support/resistance lines. (which incorperates Pivots and MAs Confluences)

...They are solid areas on the chart that will most likely bring about the main reversal against your trade.

It's contradictory to advice in this thread , and the above story, that my account balance has been moving forward since going breakeven and taking a portion off once the closest possible "hurdle" is hit.

When a target is reached I'll watch to see if it is a strong level. If so I'll take a portion off.
If price breaks through reasonably easy I'll watch for an oppurtunity to add to the position. Depending on how close the next hurdle is, of course.
If I had removed a portion earlier, but the reasoning for it is negated, I'll just re-establish any removed portion. I pay the spread again and maybe a slight pip penalty. (Or else I don't add if it's gone too far)

Is this approach OK?

It's been working for me so far.
I'm not big on Fibs, although I understand the concept. I've really been trying to get the screen as clear as I can (almost naked trading) while testing this method out. I may use Fibs in future, along the lines you suggest.

Quote
It's a long road learning to maximise profits while limiting risk.
This approach is working for me in my current state of trading experience. It works with my nerves and helps overcome my original psychological failings.

As I get better at this, I'll probabilty go a step backwards and try old ideas and other suggestions, but with wiser eyes and more experience. Not to forget better disapline.

It's all baby steps.

It's all ok suggesting someone do this or that, but I know for me I've had to go throught certain stages of development. What works for me now would have fried me six months ago. Yet I may be doing something even better in a years time.

There I go ranting again!
We all need to find our own way, I agree, but even a blind man needs a stick at least to help him on his journey.
Being a member here is like having the most intelligent guide dog preventing you stepping off the kerb too often in rush hour traffic.
  • #27
  • Jan 20, 2007 8:33am Jan 20, 2007 8:33am
Peter,

Keep up the positive work and attitude...it's more than half the battle. Too many people on forums don't take constructive criticism the right way, mainly because they're more concerned about their feelings than the truth (a main deficiency of the human race, imo). You have and already you're making progress.

At first glance this idea has some merit to it.

"As I'm on a miro-mini, this is what I've now decided to do. For the next 6 months, I'll trade it strictly by the entry rules, ignoring any other factor before setting entry points. As time goes by, I'll look to keep an eye on recurring factors that may inhibit winning trades, but primarily I want to know that the core of the method has potential. By that time I'll have a feel for the sort of length of trade I can expect, and, coupled with some of the points raised here, will have a clearer idea of where exits should be targeted."

However, it leads one to believe that the entries are more important than the exits. They're not. Think about how imprecise entries really are. We can use so many different methods to enter, as simple or as complex as we chose, but it's still imprecise because we truly don't know if it's going to go our way or not in the next 5 minutes. There is nothing but precision in exits. We pick a price and get out there. Whether it's a win or a loss, it's precision. We don't have that when we enter.

One of the major problems in trading is knowing what we do and don't control. We have no control over the price...when it retraces, trends, etc. The ONLY thing we can control is how much we risk and when we enter and exit. However, given the imprecision of entering we realize that it's somewhat of a crapshoot. Either it goes our way or it doesn't. But we have total control over the size of the loss or win because of the precision of exits. Does this make sense?

I understand the need to compartmentalize the learning process (I taught at university for 16 years) of something such as trading. However, the danger in doing so is giving too much emphasis to the wrong aspect of trading. It's an observable fact that new traders spend most of their time and effort trying to perfect their entries. Try to avoid this soul sapping and time wasting approach. You need a logical, consistent entry system, to be sure, but your exits, along with risk control, are what need the most time and effort.

With time, trading becomes holisitic for some. It's hard to see the big picture at first, but try.

Nat
  • #28
  • Jan 20, 2007 9:14am Jan 20, 2007 9:14am
Quoting PeterFM
Hi lwojtow
In the early stages of looking at this method, scaling in seemed the way to go. But as I didn't have the confidence in it at that stage, I often chickened out at the slightest sign of trouble.
Once I am happy with the basic entry method, I may run a demo with scaling into the trend, again, and see how it compares.
Thanks for reminding me of this alternative.
I've just read my comment and realised I've made a mistake :-/
It should be:
Some time ago I made a simulation on various MMs. Assuming you stay in a trade as long as it have more chances to go your way, the best option is to piramide, that is, adding to winning posiotion. Not so bad idea is scaling out of losing position and, surprise surprise, adding to losing position. They both increased profit factor comparing to doing nothing. The worst option is to scale out of winning position. Yes, it's psychologically very nice, but unless you're trading huge posiotions, don't even bother.

Sorry about the confusion,
Lw
  • #29
  • Jan 20, 2007 9:42am Jan 20, 2007 9:42am
I think bundyraider was on to something along the lines of, you should exit when the market is telling you that your thinking the direction it is headed is wrong.

Whether you use fibs or ma's or whatever - have a target and once it is reached exit if breaches an area you think it should hold. Otherwise continue to hold the position.

+ + +

As to going back and looking at previous trades and calculating what would be different if this or that was done - it don't work. Can't turn back the clock and pretend things would work out differently.
  • #30
  • Jan 20, 2007 10:07am Jan 20, 2007 10:07am
Quoting Dopey
Peter,

Keep up the positive work and attitude...it's more than half the battle. Too many people on forums don't take constructive criticism the right way, mainly because they're more concerned about their feelings than the truth (a main deficiency of the human race, imo). You have and already you're making progress.
I'm 63 and have always worked with the attitude that there is always something you can learn, whatever you're doing and whoever is doing the teaching.

Quote
At first glance this idea has some merit to it.

"As I'm on a miro-mini, this is what I've now decided to do. For the next 6 months, I'll trade it strictly by the entry rules, ignoring any other factor before setting entry points. As time goes by, I'll look to keep an eye on recurring factors that may inhibit winning trades, but primarily I want to know that the core of the method has potential. By that time I'll have a feel for the sort of length of trade I can expect, and, coupled with some of the points raised here, will have a clearer idea of where exits should be targeted."

However, it leads one to believe that the entries are more important than the exits. They're not. Think about how imprecise entries really are. We can use so many different methods to enter, as simple or as complex as we chose, but it's still imprecise because we truly don't know if it's going to go our way or not in the next 5 minutes. There is nothing but precision in exits. We pick a price and get out there. Whether it's a win or a loss, it's precision. We don't have that when we enter.
That's powerful, and I think, on reflection is what I shall concentrate on. The entry rules are pretty well cast in stone for me, so unless I start to see repetitive causes that make the method a non-starter, I'll focus on exit strategies.
Quote
One of the major problems in trading is knowing what we do and don't control. We have no control over the price...when it retraces, trends, etc. The ONLY thing we can control is how much we risk and when we enter and exit. However, given the imprecision of entering we realize that it's somewhat of a crapshoot. Either it goes our way or it doesn't. But we have total control over the size of the loss or win because of the precision of exits. Does this make sense?
Completely
Quote
I understand the need to compartmentalize the learning process (I taught at university for 16 years) of something such as trading. However, the danger in doing so is giving too much emphasis to the wrong aspect of trading. It's an observable fact that new traders spend most of their time and effort trying to perfect their entries. Try to avoid this soul sapping and time wasting approach. You need a logical, consistent entry system, to be sure, but your exits, along with risk control, are what need the most time and effort.
Your teaching experience shows, and the lesson has been taken on-board.
Quote
With time, trading becomes holisitic for some. It's hard to see the big picture at first, but try.

Nat
Rely on it, thanks
  • #31
  • Jan 20, 2007 10:14am Jan 20, 2007 10:14am
Quoting lwojtow
I've just read my comment and realised I've made a mistake :-/
It should be:
Some time ago I made a simulation on various MMs. Assuming you stay in a trade as long as it have more chances to go your way, the best option is to piramide, that is, adding to winning posiotion. Not so bad idea is scaling out of losing position and, surprise surprise, adding to losing position. They both increased profit factor comparing to doing nothing. The worst option is to scale out of winning position. Yes, it's psychologically very nice, but unless you're trading huge posiotions, don't even bother.

Sorry about the confusion,
Lw
No confusion, lwojtow, I read your first post a couple of times and guessed, in the context of the thread, you may have got it the other way round. I appreciate the correction, though, and I'm sure any other newbie reading this will also.
  • #32
  • Jan 20, 2007 10:17am Jan 20, 2007 10:17am
Quoting goodthings
This is some information I have on gbpusd. Still needing to tweek it but have come up with some interesting and helpful tips.
When it moves 0-9 pips from the days opening the probability of it reversing the trend is 75%.

When it moves 10-19 pips from the days opening the probability of it reversing the trend is 55%.

When it moves 20-29 pips from the days opening the probability of it reversing the trend is 40 %.

When it moves 30-39 pips from the days opening the probability of it reversing the trend is 25%.

When it moves 40-49 pips from the days opening the probability of it reversing the trend is 13%.

When it moves 50-59 pips from the days opening the probability of it reversing the trend is 8%.

When it moves 60-69 pips from the days opening the probability of it reversing the trend is 4%.

When it moves 70 pips from the days opening the probability of it reversing the trend is less then 1%.
Thanks goodthings, I've printed a copy to post by the computer, much appreciated
  • #33
  • Jan 20, 2007 10:25am Jan 20, 2007 10:25am
Quoting SunTrader
I think bundyraider was on to something along the lines of, you should exit when the market is telling you that your thinking the direction it is headed is wrong.

Whether you use fibs or ma's or whatever - have a target and once it is reached exit if breaches an area you think it should hold. Otherwise continue to hold the position.
OK understood

Quote
As to going back and looking at previous trades and calculating what would be different if this or that was done - it don't work. Can't turn back the clock and pretend things would work out differently.
Fair comment, but it was worthwhile in this case just to prove to myself what the responses to the thread were telling me.
As scaling out is no longer an option, the excercise doesn't need to be repeated. I've never been one for looking back, anyway, in life or trading.
Thanks for your input
  • #34
  • Jan 23, 2007 8:37am Jan 23, 2007 8:37am
PeterFM, tx for your reply in my thread and for pointing me here, the one post that I really valued was the one from Dopey, tx
  • #35
  • Jan 23, 2007 8:55am Jan 23, 2007 8:55am
Quoting Fx1618
PeterFM, tx for your reply in my thread and for pointing me here, the one post that I really valued was the one from Dopey, tx
But, yes, Dopey's post really got my head to spin on my shoulders and re-evaluate what I was doing.
I'm glad it was of value, let us know how it's going.
  • #36
  • Feb 3, 2007 3:16am Feb 3, 2007 3:16am
Hey Peter,

I've been worrying over this, too.
I think my main problem is mixing timeframes too much. If I enter on a 1H setup which may be against the main trend and there isn't a reversal setup on the daily YET, then I usually expect my small TF setup to stem the entire current direction and reverse things and instead of taking profit at a 2:1 or 3:1 relation to my stop, I either let it be killed for a small loss or close for a profit smaller than the stop.

The problem is - basically, trying to catch the big reversal or breakout or continuation IS eventually most profitable, even if you miss 8 out of 10 times. But you got to know what you're doing and keep the faith.
Reading Steviet's trade journal I finally saw someone producing live proof of that concept.
See, the basic idea for me is that we only can go two ways, yes? Up or down.
When do we change direction? When we see signs/setups of a reversal. DBHLC/PB, etc. You get the idea. So if we ARE heading in the same direction as my trade, why on earth would I close it out?
Why not trail it as long as possible and let the market tell me when it goes invalid?

There again trying to squeeze all pips can be counterproductive when you start to bail out on reversal signs on smaller timeframes than your entry timeframe instead of just obeying a daily trailed stop e.g.

So basically I guess it's back to basics: like Bundy I like to use s/r and FE(fib expansions) to estimate likely places of reversal/pivotal potential and if a PB or similiar forms there it's time to either close or reduce the position. But the thing is - if you've been trailing your stop already anyway, then the market will take you out anyway.

Am I trying to overcomplicate "Let your profits run"? Probably. Daily trailing stops seem sound even if they get whiplashed tons on ranging periods, but they DO keep you in in those 500-800+ pip runs, too. That much more than any short term projection or smaller s/r problem should make the money, no?

Again, Steviet really impressed me there....keep believing

Regards,

SeekingLight
Trust price. Know yourself.
  • #37
  • Feb 3, 2007 4:28am Feb 3, 2007 4:28am
Quoting SeekingLight
Hey Peter,

I've been worrying over this, too.
I think my main problem is mixing timeframes too much. If I enter on a 1H setup which may be against the main trend and there isn't a reversal setup on the daily YET, then I usually expect my small TF setup to stem the entire current direction and reverse things and instead of taking profit at a 2:1 or 3:1 relation to my stop, I either let it be killed for a small loss or close for a profit smaller than the stop.
That's one rule I picked up early on in one of the 'Editor' threads, I think. The basic advice is trade on one time-frame and stick with it. If you trade dailies (like me) your entries and exits should be based on that alone, if you trade hourlies same rule applies. It's hard when you're new, and introduced to FX on 5/15 min charts, to resist the temptation to go looking for more pips on entry, and then panicking when it starts to waver after a reasonable profit is achieved. As I get more skillful with my own method I hope to add enough to my armoury to reduce the number of bad entries, and, more importantly recognise when is the RIGHT time to get out.
Quote
The problem is - basically, trying to catch the big reversal or breakout or continuation IS eventually most profitable, even if you miss 8 out of 10 times. But you got to know what you're doing and keep the faith.
Reading Steviet's trade journal I finally saw someone producing live proof of that concept.
Trying to catch the right turning point is what my method aims to do. It's still a work in progress and I don't, at the moment, allow any measure of discretion to enter the equation. Once I've done this for a few months I'll know whether there is potential and then start being selective, maybe. I haven't really looked at that thread as I'm trying not to let anyone else's thought influence what I'm doing at this stage, but maybe I should have a read.
Quote
See, the basic idea for me is that we only can go two ways, yes? Up or down.
When do we change direction? When we see signs/setups of a reversal. DBHLC/PB, etc. You get the idea. So if we ARE heading in the same direction as my trade, why on earth would I close it out?
Why not trail it as long as possible and let the market tell me when it goes invalid?
I need to sharpen up my PA studies as I think this is the best hope for me to spot opportunities, and although I understand the main points, mentioned above, I'm not really using them as well as I should. Back to Jim's threads for me.
Quote
There again trying to squeeze all pips can be counterproductive when you start to bail out on reversal signs on smaller timeframes than your entry timeframe instead of just obeying a daily trailed stop e.g.
Agreed.
Quote
So basically I guess it's back to basics: like Bundy I like to use s/r and FE(fib expansions) to estimate likely places of reversal/pivotal potential and if a PB or similiar forms there it's time to either close or reduce the position. But the thing is - if you've been trailing your stop already anyway, then the market will take you out anyway.
Setting the right TS is another thing that will, hopefully, become more clear as I go along. I've set them too close at times (fear again) and lost out too soon.

Quote
Am I trying to overcomplicate "Let your profits run"? Probably. Daily trailing stops seem sound even if they get whiplashed tons on ranging periods, but they DO keep you in in those 500-800+ pip runs, too. That much more than any short term projection or smaller s/r problem should make the money, no?

Again, Steviet really impressed me there....keep believing

Regards,

SeekingLight
I think we all tend to make this harder than it really is. I'm not, for one moment, saying that it's easy, far from it, but now I have an almost naked screen things are starting to open up for me.
I appreciate your time, it's always good to read your stuff.
  • #38
  • Feb 5, 2007 8:52am Feb 5, 2007 8:52am
I use the pascal's triangle, as that's internally optimized for almost all situations of scaling..

There be gold in them pascal hockey sticks!!
google:
  • #39
  • Feb 17, 2007 11:20am Feb 17, 2007 11:20am
Quoting goodthings
This is some information I have on gbpusd. Still needing to tweek it but have come up with some interesting and helpful tips.
When it moves 0-9 pips from the days opening the probability of it reversing the trend is 75%.

When it moves 10-19 pips from the days opening the probability of it reversing the trend is 55%.

When it moves 20-29 pips from the days opening the probability of it reversing the trend is 40 %.

When it moves 30-39 pips from the days opening the probability of it reversing the trend is 25%.

When it moves 40-49 pips from the days opening the probability of it reversing the trend is 13%.

When it moves 50-59 pips from the days opening the probability of it reversing the trend is 8%.

When it moves 60-69 pips from the days opening the probability of it reversing the trend is 4%.

When it moves 70 pips from the days opening the probability of it reversing the trend is less then 1%.

Sorry to ask, but... wow, where did you get that from? That's great info, if true. One can build a whole system out of that!
  • #40
  • Feb 17, 2007 12:03pm Feb 17, 2007 12:03pm
Quoting philmcgrew
I have never understood why anyone would promote the idea of holding their stops to the last pip but scale out of their winners before the move is over. You need to cross the finish line with all your tires on the car, don't start taking a couple off to save on tread wear. It just doens't make sense. You know your stop, you know your risk and worst case scenario, you have a belief about where the market can go, you know your risk:reward, now put the trade on and see what happens. Given the statistics that you posted you are right fairly often, now go out and get what belongs to you. Don't start stacking the odds against you by reducing your position. You are going to need those pips to cover your losing trades.
Absolutely...
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