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  • #6,621
  • Mar 13, 2009 4:02am Mar 13, 2009 4:02am
Bingo with what I just added previous. Glad im not the only one thinking Money Management.

Great post. It outlines the multi lotting strategy nicely

Cruze

Quoting Wellspring
Just a simple suggestion to you all involved with this discussion.
I've seen these issues mulled over in several threads and other forums in the last several yrs.

*The basis features a variation of the multi-lot trade (especially useful in volatile periods--with such graphic action as we see now --eg. Euro's ADR of 150-200+ ps --with its ups & downs in large retracemt swings).
////////The 3 lot (or more) trade --be it std., mini. or micro
//////// Of course good entries at range extremes help immensely --but if you find that you've...
  • #6,622
  • Mar 13, 2009 4:50am Mar 13, 2009 4:50am
Seems like the bulls are running out of steam.
I am short half size at 1.2870,1.2900 and 1.2950 hoping that we have a top in the H4 at 1.2960
50% of 1.2456-1.2958 is at 1.2707

here is to hoping!
Some drink at the fountain of knowledge. Others just gargle !
  • #6,623
  • Edited 6:47am Mar 13, 2009 6:36am | Edited 6:47am
Coscorp, Wellspring,

I understand what you are saying but I disagree. After reading Van Tharp his argument against that type of money management is that you have a full contingent (in this case 3) on at the riskiest part of your trade and only 1/3 or so on the running portion. For example if you have a hardstop of 100 pips and the trade goes against you then you lose 100 pips on all 3 portions ( for ease call it 300 pips). If the trade goes to you then you get 20 pips on all three, 50 pips on 2 and say 100 pips on 1 for a total of 60+100+100 or 260 pips. So in this case you risk 300 to gain 260.

I realize that i have used a very simple example with 3 std lots but it is the same if 3 micro or 3 mini. Only the scale is different.

I do use a Money management strategy and I do believe that it is key to my success. I follow FijiTrader over at J16 PF and I have to say his MM and psychology section is great.

Coscorp, I do want to thank you for your comments on my questions. I like your approach to your trading and your no nonsense approach to my question.

Though on this particular point I may disagree, it is not a matter of right or wrong, just a matter of different approaches.

Anyway I do not wish to take jacko's excellent thread off-topic and turn it into a MM thread.

I thank everyone for their efforts in trying to teach me. I am slow but disciplined.
  • #6,624
  • Mar 13, 2009 7:43am Mar 13, 2009 7:43am
Lol...My math was all wrong on the last post. You may only get 20+50+100 for a total of 170 as the 2nd 50 is already included in the 100.

Or am I just messed up this morning. No coffee and too many charts.
  • #6,625
  • Mar 13, 2009 8:07am Mar 13, 2009 8:07am
Quoting flyer415
I understand what you are saying but I disagree....
That is assuming that each entry is considered a trade, which is clearly not the case when using a scaling tactic.
  • #6,626
  • Mar 13, 2009 8:21am Mar 13, 2009 8:21am
Quoting dwildes
That is assuming that each entry is considered a trade, which is clearly not the case when using a scaling tactic.
dwildes, perhaps i misread his post. i thought he was scaling out of a position but your comment made me go back and re-read the post. Was he scaling into (pyramiding) the position.

I will also go back and re-read Van Tharp and Fijitrader. Still learning.
  • #6,627
  • Mar 13, 2009 8:26am Mar 13, 2009 8:26am
Quoting flyer415
dwildes, perhaps i misread his post. i thought he was scaling out of a position but your comment made me go back and re-read the post. Was he scaling into (pyramiding) the position.

I will also go back and re-read Van Tharp and Fijitrader. Still learning.
No worries - but also be careful, it's not pyramiding either.
You must think more 'fluid' and not so static if you truly want to understand it. If you don't have that mindset - just don't worry about it and move on as it's very important to pick a style/method that fits "YOU" and your mindset. Otherwise you'll be in constant conflict with yourself.

To get a decent understanding - try a book called: Bird Watching in Lion Country. Not saying that's exactly what is going on here, but it does help you understand the scaling in/out method/mentality more accurately.
  • #6,628
  • Mar 13, 2009 8:29am Mar 13, 2009 8:29am
Thanks, i will get the book.
  • #6,629
  • Mar 13, 2009 9:29am Mar 13, 2009 9:29am
Money4Nothing, is that deadsouls EA you are using there? I think i have that but not had a chance to check it out. it basically writes 1, 2, 3's for the elliot wave correct?

much thanks
bulls



Quoting Money4Nothing
Thanks for sharing.

I am learning to trade when I see a "3". Read THIS (http://www.forexfactory.com/showpost.php?p=2589240&postcount=283)


http://i44.tinypic.com/2pr6z2d.gif
Whats happening in EUR/USD should be happening to you!
  • #6,630
  • Mar 13, 2009 11:05am Mar 13, 2009 11:05am
Just a thought on MM and scaling out of positions.

A guy who has been supersuccessful, has helped me alot and always speaks logically when it comes to trading often says to me that if you don't have the conviction to put on your full position and trade it as one then you shouldn't be taking the trade. He thinks that if you are taking trades according to your system then you should back yourself to do it fully and if you are wrong then you have an area in which you exit your position totally. move onto the next trade.

i guess it comes down to

1. having a defined entry rule ( or if you don't at least have the next 3 )

2. having a defined s/l

3. having a defined exit rule

and

4. having the correct position size

If you have these then you should have confidence in your trades.

He also says that scaling out will cause confusion as there will be some you get right and a lot you will get mostly wrong ( in how you scale i mean ) and that will only add to your fear and greed emotions.

anyway i just thought i'd throw it out there. whilst i feel he is right i'm sure there are others that will heartily disagree and can perform scaling easily.

his bottom line is that if the trade meets your rules then you should have no fear in trading it as one. if you are doubtful on this then don't take the trade in the first place. i have to agree with the poster before me who said about van tharp and that you are risking everything at entry to then possibly only reap full benefits on part of your position. it's a bit like a reverse risk reward ratio. for e.g your set up might suggest a 3:1 RR but through your money management and scaling you actually reduce it to 1:1 in the end.

by the way this guy started as a one contract trader and now trades at about 15k per point on the e minis .
  • #6,631
  • Mar 13, 2009 11:41am Mar 13, 2009 11:41am
Quoting BullsAndBear
Money4Nothing, is that deadsouls EA you are using there? I think i have that but not had a chance to check it out. it basically writes 1, 2, 3's for the elliot wave correct?

much thanks
bulls
It's an indicator not an EA.
TRO
  • #6,632
  • Mar 13, 2009 12:01pm Mar 13, 2009 12:01pm
There is another version of scaling out and that is to take profit on your first 2 lots and leave the 3rd at BE and continue trading. Now imagine a scenario where you final lot is at the bottom/top of a longer term trend. Sure there will be times when the SL will be wiped, however there could be times where that SL doesnt get visit again.

At the start of this thread and on Jackos page he mentions his call on where he thought the market was heading in a 12 month period. Imagine if you will having 1 trade at the bottom of that trend. $1 at the bottom of a trend that has risen some 1000 pips. The risk worth it now. what if along the way you had a couple of entries that are in similiar circumstances, however your lot sizes are slightly more agressive.

This is another approach to the multi lot strategy. Trends start somewhere, and whilst we are in a big downtrend now, it was only 12 months ago the trend was the other way. If you had a short posi at 5900 or 6000 (doesnt seem that long ago) you be up over 3000 pips on that trade. depending on your capital that single unit, that cost you nothing if it got stopped out or worse $50 assuming 1 lot cost $1 and your SL got hit in the beginning (in which case I wouldnt be talking about that 1 lot) is now worth $3000. What would your starting capital be if you where trading 1 lot at $1. Possibly $1000 (risk 50 pips at 5% risk). So you could have grown your account significantly off 1 possible unit.

Food for thought from a more aggressive POV
  • #6,633
  • Edited 1:07pm Mar 13, 2009 12:52pm | Edited 1:07pm
Quoting flyer415
Thanks, i will get the book.
Flyer415 -

Do a search on google
  • #6,634
  • Mar 13, 2009 12:59pm Mar 13, 2009 12:59pm
Quoting Nanook438
Flyer415 -

Have you seen this link?

http://www.4shared.com/get/46459166/26e253dd/Bird_Watching_In_Lion_Country.html

Thank you for the link. I picked it up elsewhere this morning and now at page 148 of 236 while i wait for my trade to play out.
  • #6,635
  • Mar 13, 2009 5:12pm Mar 13, 2009 5:12pm
Quoting Money4Nothing
It's an indicator not an EA.
Can you describe how you put it to use? Has it been reliable. I keep wondering if it is lagging like most indicators. for instance a 3 would change to a 2 if price went up above the 3. Because you can see in history that the 3's are pretty much the highest point with the biggest moves. Thanks for your insight.

bulls
Whats happening in EUR/USD should be happening to you!
  • #6,636
  • Mar 13, 2009 5:14pm Mar 13, 2009 5:14pm
Quoting BullsAndBear
Can you describe how you put it to use? Has it been reliable. I keep wondering if it is lagging like most indicators. for instance a 3 would change to a 2 if price went up above the 3. Because you can see in history that the 3's are pretty much the highest point with the biggest moves. Thanks for your insight.

bulls
HUH? Lagging? 3 to 2? I have no idea what you are on about?

I just trade. If you can't trade without indicators then you really can't trade with them. If you can't do calculus by hand, a calculator really isn't much use to you because you don't understand the math. Ditto for trading.
TRO
  • #6,637
  • Mar 13, 2009 5:20pm Mar 13, 2009 5:20pm
Quoting cruze2005
There is another version of scaling out ........Trends start somewhere........your SL got hit in the beginning .......What would your starting capital be if you where trading 1 lot at $1.
Food for thought from a more aggressive POV
Provided, you do not change your SL (in price not in pips) when you re-enter in another attempt to catch that big move.

Any comments will be highly appreciated.
The Thief of Wall Street
  • #6,638
  • Mar 13, 2009 7:10pm Mar 13, 2009 7:10pm
Quoting Money4Nothing
HUH? Lagging? 3 to 2? I have no idea what you are on about?

I just trade. If you can't trade without indicators then you really can't trade with them. If you can't do calculus by hand, a calculator really isn't much use to you because you don't understand the math. Ditto for trading.

LOL

M4N,

Dont worry about it man. You're obviously a too far skilled trader to answer newb questions about indicators (not ea's) that you use, oops, I mean NOT use because you are far too skilled of a trader. I withdraw my question about the indicator you posted a pic of that you do not use because of your highly honed in trading skills.

Peace,,,,,have a good weekend,,,,,wish you lots o pips on Monday

bulls
Whats happening in EUR/USD should be happening to you!
  • #6,639
  • Edited Mar 14, 2009 8:18am Mar 13, 2009 7:17pm | Edited Mar 14, 2009 8:18am
Quoting Money4Nothing
HUH? Lagging? 3 to 2? I have no idea what you are on about?

I just trade. If you can't trade without indicators then you really can't trade with them. If you can't do calculus by hand, a calculator really isn't much use to you because you don't understand the math. Ditto for trading.

Damn MFN, he's just asking a question.


Bulls-
I believe the indicator he was using is called 3_level_ZZ_Semafor. You can either do a search for Semafor or it's discussed in the forum below starting with post 113.
http://www.forexfactory.com/showthre...=132537&page=8 (http://www.forexfactory.com/showthread.php?t=132537&page=8)

It does repaint and the numbers will move as the price moves. I've just recently started playing around with it - jury is still out.

Hey let's all help each other out. Sharing is caring.

-Nick
  • #6,640
  • Mar 13, 2009 9:24pm Mar 13, 2009 9:24pm
Hi all,

Can a trendtrader make money in a tight range market?

In a day when the market had a total range of less than 100 pips (1,2957- 1.2861= 96 pips), and spent 95% of that time in a tight 50 pip range (from 1.2930 -1.2880=50 pips), we had an enjoyable day and made some money.

The very tight range for the day made it interesting but we came out positive with minimal risk. Add in the leverage to allow big numbers of contracts and the dollars roll in for the day.

Next week we will do it again and make some more money.

Is there a better job/business on the planet? I don't think so.

.
Jacko
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