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Help for Newbies (Discussion Thread)

  • #61
  • Nov 13, 2007 4:32pm Nov 13, 2007 4:32pm
Quoting jkmack
PeterFM,

An Idea for your consideration.

I read about this in the woodie cci forums. It involves graphing your equity curve and using a moving average to be determined by the individual trader.

The idea is that by graphing your equity curve, it gives you an undeniable indication of when you are losing money and therefore should ring an alarm bell for you to stop trading live or to at least lighten up significantly on position size.

Let us say that your historical tests show that you will regularly see a 10% drawdown with a small chance, say 5% chance of a 25% draw down.


You could graph your equity curve with moving averages, and if you experience a drawdown that penetrates those moving averages you switch to demo or paper trades until such time as profits from those demo/paper trades would bring your equity curve back above the moving average, you would then recommence live trading. The interim from going to losing to making money on your trades may include discovering complacency in your processes, you were fighting the market trend, the market conditions had changed substantially enough to invalidate your strategy, your phsycology had grown incompatible with profitable trading, etc. etc.

This guards against complacency. It guards against you being caught in an "up trend" mind set as the market goes flat or rolls over into a down trend. It keeps you focused on the one indicator that matters, your equity curve. So hopefully it guards against seeing 50% or worse drawdowns in your account equity, unless your trading style finds that type of volatility acceptable of course.

The moving average threshold has to be set by the individual according to their trading style/strategy and it's max drawdown probabilities plus taking into account that individuals appetite for volatility.


If the ideas piques your interest or you would like further explaination or discussion, I will try to dig up a link to the thread in the other forum.
Sounds like a solid idea, so long as the curve represents a certain set of trading conditions that are being followed to a T. If anything changes in the slightest, a new curve has to be created.
  • #62
  • Nov 14, 2007 5:08am Nov 14, 2007 5:08am
Quoting PeterFM
There is a lot more to come, time is a problem with a project like this if I'm going to do it properly.

TP is hard, and I'll deal with this later, but try this old thread of mine for a start. I don't have hard & fast TP rules, I suck it & see as the trade develops. If I look back over trades, I'm wondering why I took profit at all at some points. Hindsight & fear, really good partners in FX trading

Hi Peter FM
I would like to ask if you know anything about the indicator called Pivot Point? And would like you explain the usage on the M1 chart to me please.
Thanks
Arnoldchidi
  • #63
  • Nov 14, 2007 5:29am Nov 14, 2007 5:29am
Quoting Arnoldchidi
Hi Peter FM
I would like to ask if you know anything about the indicator called Pivot Point? And would like you explain the usage on the M1 chart to me please.
Thanks
Arnoldchidi
If you mean the normal pivots based on previous sessions Highs and Lows then I can't help you.
I have tried them, as with most things, at some point in the past but as I'm not a 'Session' player I couldn't find a style that suited me.
As far as playing the 1 minute charts that's not for me either. It's taken me a long time to settle on the Daily/4hr charts as my main trading time-frame, and I've never found anyone on this site to convince me I should switch back.
If you want to give this a try here is a good Pivot Indicator (created by Habeeb) which sets Daily, Weekly and Monthly Pivots. Leave it at default (Daily) and see how it works for you.
Download it and put it into /experts/indicators folder - re-start MT4 and select it from Navigator
Attached File(s)
File Type: mq4 AutoPivotIndicator.mq4   14 KB | 620 downloads
  • #64
  • Nov 14, 2007 5:34am Nov 14, 2007 5:34am
Quoting jkmack
PeterFM,

An Idea for your consideration.
If the ideas piques your interest or you would like further explaination or discussion, I will try to dig up a link to the thread in the other forum.
Most things about FX interest me and I'm open to any and all ideas, so fire ahead.
It wouldn't have helped last time as I managed to blow the account in so short a time, the MA wouldn't have had time to respond
But, as a reformed trader this could have benefits so, yes, tell me more.
  • #65
  • Nov 14, 2007 7:49am Nov 14, 2007 7:49am
As Renegade suggested this thread in the Woodies CCI forum is intended to be used by an autotrader trading a mechanical system.

http://woodiescciclub.com/forum/view...5f84fdbbff59f8

But the idea is valid for anyone. most system traders will stop all open positions and do a full evaluation of their system if they see a 50% draw down.
  • #66
  • Nov 14, 2007 10:08am Nov 14, 2007 10:08am
Quoting jkmack
As Renegade suggested this thread in the Woodies CCI forum is intended to be used by an autotrader trading a mechanical system.

http://woodiescciclub.com/forum/view...5f84fdbbff59f8

But the idea is valid for anyone. most system traders will stop all open positions and do a full evaluation of their system if they see a 50% draw down.
I was reading some of the turtle rules last night, and they're rule was a 10% drawdown lead to a 20% pull in funds from their account until they made up that 10% they lost..something along those lines. I'm too lazy to find the file right now, but yea.
  • #67
  • Nov 16, 2007 7:16am Nov 16, 2007 7:16am
Peter, I just wanted to thank you. Thank you so much for your great posts. I am a fresh newbie and a non-english native speaker. But your posts were so clear, succinct and helped me a lot, especially your recommendations on steps that we, as newbies, should take. Now I understand the importance of money management and psychology.

I need to thank the admins of this forum as well for sticking Peter's posts to the first page.

Rantanplan
  • #68
  • Nov 17, 2007 4:31am Nov 17, 2007 4:31am
Quoting PeterFM
If you mean the normal pivots based on previous sessions Highs and Lows then I can't help you.
I have tried them, as with most things, at some point in the past but as I'm not a 'Session' player I couldn't find a style that suited me.
As far as playing the 1 minute charts that's not for me either. It's taken me a long time to settle on the Daily/4hr charts as my main trading time-frame, and I've never found anyone on this site to convince me I should switch back.
If you want to give this a try here is a good Pivot Indicator (created by Habeeb) which sets Daily, Weekly and Monthly Pivots. Leave it at default (Daily) and see how it works for you.
Download it and put it into /experts/indicators folder - re-start MT4 and select it from Navigator
Thanks a lot PeterFM for the AutoPilotIndicator.
I have have put it into the Daily,Weekly and Monthly Charts. What next should I do to interprete its function ? And how do I place my trades? It is not my intention to bother you in any way whatever,it is just that I would want to learn from you how to use the AutoPivotIndicator most efficiently on the Daily,Weekly and Monthly Charts.
Thanks,
Best regards,
Arnoldchidi
  • #69
  • Nov 17, 2007 4:44am Nov 17, 2007 4:44am
Quoting PeterFM
If you mean the normal pivots based on previous sessions Highs and Lows then I can't help you.
I have tried them, as with most things, at some point in the past but as I'm not a 'Session' player I couldn't find a style that suited me.
As far as playing the 1 minute charts that's not for me either. It's taken me a long time to settle on the Daily/4hr charts as my main trading time-frame, and I've never found anyone on this site to convince me I should switch back.
If you want to give this a try here is a good Pivot Indicator (created by Habeeb) which sets Daily, Weekly and Monthly Pivots. Leave it at default (Daily) and see how it works for you.
Download it and put it into /experts/indicators folder - re-start MT4 and select it from Navigator
Hi PeterFm,
The Indicator show things like.DailyR1,R2,R3 and DailyS1,S2,S3 on my Daily chart. Could you please explain the function of these?
Best regards,
Arnoldchidi
  • #70
  • Edited 7:49am Nov 17, 2007 7:32am | Edited 7:49am
Quoting Arnoldchidi
Hi PeterFm,
The Indicator show things like.DailyR1,R2,R3 and DailyS1,S2,S3 on my Daily chart. Could you please explain the function of these?
Best regards,
Arnoldchidi
Arnold,

Here is a link you can check out for info on Pivot Points.
This is about as good a summary as I have found on the subject and is worth a read.

http://www.investopedia.com/articles...5/FXpivots.asp

TD.
  • #71
  • Nov 17, 2007 11:28pm Nov 17, 2007 11:28pm
Peter -

How was France? Glad to see you back!

Chris
  • #72
  • Nov 25, 2007 6:43am Nov 25, 2007 6:43am
Hello Peter!
I would also like to thank you for your hard and committed work! It's really helpful. I finally understood the terms leverage and true leverage. Your explanation of Money Managment is also very simple, yet profound, it has helped me greatly.

But I have got some questions, if you don't mind. Your idea of trading off support and resistance lines looks very good, and if I understood you correctly you just put two pending orders above it for buy, and below it for sell. But what about spikes? How do you manage this problem? How many pips up or down do you put your pending orders? It can be that spike triggers your buy order and then the price will go all the way down. I understand that you still be in profit if the price goes down as you other order will trigger too, but it also can be that the price will start ranging and your both SL's can be hit. In this case you SL's must be really huge! What is your average SL?

I'm asking because when I began trading I also tried doing something like this, though on the 1 hour, and in most cases my both SL's were hit . But I might give this idea the second chance if I understand the positioning of SL's and pending orders.

I also want to add that most of the newbies, including myself start trading form the shorter timeframe because the longer timeframe the bigger SL should be. But your explanation with nano lots helps to solve this problem.

And for the swap, is it something that should be taking in considaration while trading? There isn't too mush information about this on the forum, at least I didn't read anything.

Thank you for your help!!!
  • #73
  • Nov 26, 2007 9:18am Nov 26, 2007 9:18am
Hi I have a question I can not find the answer anywhere, I rode to not trade on monday's , month ends, quarter ends and year ends, I have my own idea why but the thing iM'm asking is what is the quarter end ( is it the all month of march,june,sept and december or juste the end of these months ). if anybody can help me with this. thanks!
  • #74
  • Dec 3, 2007 9:53pm Dec 3, 2007 9:53pm
Quote
Hi I have a question I can not find the answer anywhere, I rode to not trade on monday's , month ends, quarter ends and year ends, I have my own idea why but the thing iM'm asking is what is the quarter end ( is it the all month of march,june,sept and december or juste the end of these months ). if anybody can help me with this. thanks
yes,ill also lke you guys to talk about trading in december
  • #75
  • Feb 8, 2008 12:39pm Feb 8, 2008 12:39pm
I enjoyed reading the section on re-quotes. Good analogies there. Without brokers we wouldn't be trading. Full stop. Thanks Peter, keep 'em coming.
Gone to a better place
  • #76
  • Mar 5, 2008 7:03am Mar 5, 2008 7:03am
Peter, thanks for putting in the effort to give back. I am brand new to the FOREX but I have been trading Options for about 8 years and learning more every day. I want to learn and trade FOREX and was wondering if you could point me to any good books that may have helped you as you got started. The more specific to the FOREX the better. Thanks again for sharing.
  • #77
  • Mar 18, 2008 2:02am Mar 18, 2008 2:02am
Hello Peter,
You have taken a remarkable and highly commendable step to assist us newbies.I'll always take cognizance of your advice in your posts.
I have a query and i shall be very grateful if you help me.Will the FOMC decision today affect EUR/USD and USD/JPY?I have certain open positions and am weighing the risks in case the event goes against me.Till recently USD/JPY has markedly reacted to FOMC initiatives like the discount rate on sunday.Will it turn more volatile today?And the EUR/USD?The announcement will be after the close of the european session--so will EUR/USD be markedly affected?
Please advise.
Regards
  • #78
  • May 12, 2008 8:34am May 12, 2008 8:34am
Hello Peter, not sure if you're still monitoring this thread. I was wondering if you could comment on your use of PSAR. Does it help in your trading in any way?
  • #79
  • May 26, 2008 3:30am May 26, 2008 3:30am
Your thread is easily one of the most helpful pieces ever. you are in my hall of fame. I will like to know what informs the size of your stops on the daily.
  • #80
  • May 27, 2008 8:33pm May 27, 2008 8:33pm
I am sorry if this question has already been asked elsewhere. I would like to know what account size would be needed to withdraw 2000 dollars per month on average, and still be able to grow your account.
Assuming a viable edge and all the ups and downs that go with being in the market daily.

Thanks in advance.
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