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  • #1,501
  • Apr 1, 2009 11:39am Apr 1, 2009 11:39am
Quoting AminAS
Strat, do you agree with The Phantom's two rules? What parts do you personally do or do not follow. Do you assume you are wrong the second you place a trade, and then remove it if it doesn't move quickly enough?
Amin,
There is a saying "One man's meat is another man's poison" which means what might be good for me, may be bad for you. As you build and develop your style of trading you will try different things until you get to a place where you feel comfortable.

As I was developing my style, I tried just about everything I found, so with regard to these rules:

Rule #1
Assume your position is wrong - didn't work for me, made me negative
Remove position early - not part of my plan
Don't keep a position - not part of my plan
Don't wait for the SL - not part of my plan
Learn to be wrong - made me negative
Think - when position is correct...............correct

Rule #2
Increase your position - definitely
Always start with a smaller position - yes and no
If initial position.......yes and no
In a WINNING trade - most definitely
Most of your profit - depends what type of trader you are
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,502
  • Apr 1, 2009 11:43am Apr 1, 2009 11:43am
Quoting Dennis330A
Good morning everybody,

I want to share my good experience with FF. Since i'm reading the posts of Strat,James16 and many others i'm for the first time making profits with forex trading.

I have a test-account at FXCM and won over 160 pips in 2 weeks. With a time investment of 5/10 minutes a day.

The best advice i've learned is to trade with daily-time bars. And use common sense

Regards,

Dennis aka Duckman
Congratulations, Dennis. Is this demo or real money?
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,503
  • Apr 1, 2009 11:48am Apr 1, 2009 11:48am
Quoting Stuart14
Hi guys.

I've a question.

I've read a few sources now, including here discussing Risk v Reward.

Now, calculating risk is easy. Your position size x your stop loss is your maximum loss. So at £5 per point, with a 100 point stop, your risk is £500.

Now, the suggestion is that you should not take trades with a RR below 2:1, ideally 3:1. So if you are risking 100 pips, you should be looking for 200 or 300 pips.

Fine.

However, that totally goes against another favourite saying about "Running your Profits".

It also goes again "Cutting...
Thats whats demo for....to find out.........its only ever your calls and no one will be able to tell you cause its not your system....does that make sense....g
  • #1,504
  • Apr 1, 2009 12:11pm Apr 1, 2009 12:11pm
Quoting Stuart14
Hi guys.

I've a question.

I've read a few sources now, including here discussing Risk v Reward.

Now, calculating risk is easy. Your position size x your stop loss is your maximum loss. So at £5 per point, with a 100 point stop, your risk is £500.

Now, the suggestion is that you should not take trades with a RR below 2:1, ideally 3:1. So if you are risking 100 pips, you should be looking for 200 or 300 pips.

Fine.

However, that totally goes against another favourite saying about "Running your Profits".

It also goes again "Cutting...
Stuart,

You are talking common sense which many "so called traders" have little of or don't know how to deal with. They get so wrapped up in their "trading world" they forget to apply or even think common sense.

What you have stated here are facts which no-one can dispute. If you go back and read some of my answers and posts, you will see I say the same things.

I personally don't use R/R - if I did, I would probably never take a trade.
I do start out with risk no more than 2% of my account.

Cutting your losses - it's part of my plan and is controlled by my SL - I have already accepted the loss BEFORE I enter the trade.

Running your profits - the only reason I trade - see my EURJPY trade

Nobody, I repeat NOBODY, can tell where a trade might go. Sure, we have a good idea, others have fib projections, others have S & R, others have trend lines, others have pattern projections, others have pitchforks, others have cycles, others have time projections etc., etc. History can ONLY guide us to where we think the trade might go but that is all it is, a guide. Ultimately, the Queen (the market) will take us wherever SHE wants to go. The only thing we can do is jump on her train and stay on as long as it goes in our direction.

As I've said before, for me, I'm only really interested in trading big moves, or what I think will be big moves, major swings and new trends which at least have decent profit potential.

Stuart, I understand where you are at. You are being blinded by BS and hype and are trying to apply common sense to it. You are smart and have recognised that despite their grandiose claims, they have no more idea than you. Now, accept that and move on, for knowing this, you are already ahead of those traders with their "heads in the sand".
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,505
  • Apr 1, 2009 12:20pm Apr 1, 2009 12:20pm
Blackeagle has been a FF member since 2005 and has made many valid, positive and constructive comments on many threads.

He is very welcome to post here and I hope he becomes a regular contributor and joins our team
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,506
  • Apr 1, 2009 12:26pm Apr 1, 2009 12:26pm
Quoting Stuart14
Hi guys.

I've a question.

I've read a few sources now, including here discussing Risk v Reward.

Now, calculating risk is easy. Your position size x your stop loss is your maximum loss. So at £5 per point, with a 100 point stop, your risk is £500.

Now, the suggestion is that you should not take trades with a RR below 2:1, ideally 3:1. So if you are risking 100 pips, you should be looking for 200 or 300 pips.

Fine.

However, that totally goes against another favourite saying about "Running your Profits".

It also goes again "Cutting...
ok but think about this. technically if you don`t know where your trade 'will' go, then we do not have a known fact with our risk (stop) either. because it could go either way. if it hits our stop we then know our risk, if it hits our first target then we know our reward. then we should adjust our stop and then try running our profits....
  • #1,507
  • Apr 1, 2009 12:29pm Apr 1, 2009 12:29pm
you put that so much better than me pal.........i dont think i understand what i said myself.......sorry


Yeah blackeagle said some really cool stuff welcome indeed....
  • #1,508
  • Apr 1, 2009 12:31pm Apr 1, 2009 12:31pm
Quoting jub1
ok but think about this. technically if you don`t know where your trade 'will' go, then we do not have a known fact with our risk (stop) either. because it could go either way. if it hits our stop we then know our risk, if it hits our first target then we know our reward. then we should adjust our stop and then try running our profits....
But you need to learn price action and S/R.......go back and look at some of the posts that Strat and i have done and you will see where and why we did what we did.......but if you cant read bars and candles then your just plain old blind dude..........g
  • #1,509
  • Apr 1, 2009 12:41pm Apr 1, 2009 12:41pm
I think if i may be so bold to point out that if you cant read price action all the speculation in the world about risk reward ect.. is all for nothing cause you will be applying these great structures to your trade......but you will lose so its pointless.


Learn price action............the rest will flow.
  • #1,510
  • Apr 1, 2009 12:41pm Apr 1, 2009 12:41pm
Coming around again BG...
  • #1,511
  • Apr 1, 2009 12:48pm Apr 1, 2009 12:48pm
Quoting AstonDan
Coming around again BG...
What's coming around? Yes CHF/JPY, but the bar hasn't closed yet. New York markets stay open for a couple more hours.
Bang.
  • #1,512
  • Apr 1, 2009 12:50pm Apr 1, 2009 12:50pm
The INDEX is now posted on the 1st page.

We owe a debt of gratitude to Lance (rogueforex) who first of all created the index on excel and then, when it became too big to upload to the thread, completely re-did the whole thing again as a web - site.

In addition, he has taken it upon himself to keep it updated with important and valid points from the thread.

Now that is dedication to this thread and helping his fellow traders and for that, Lance is awarded 2 bronze picks.

Very sincere thanks, Lance.
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,513
  • Edited 12:55pm Apr 1, 2009 12:54pm | Edited 12:55pm
Just noticed the link on the first Strat. Site looks great. Well done

Can't believe it's created so much info in only a few weeks!

And well done Lance
  • #1,514
  • Apr 1, 2009 12:56pm Apr 1, 2009 12:56pm
Quoting strat
You can ask anything Lance, you know that.

Isn't Blackeagle's post the answer or maybe my post "EURJPY - It had to happen" or maybe my reply to Naws?

If not, I'm not sure what you are really asking for. Could you maybe re-phrase it?
It was the E/J post I was commenting on. You mentioned the three phases of a trend turn. I see the consolidation (where levels are re-tested and coils form), the break out and the congestion phases, I was curious on your comment about breaking the rules and how it made you a "bit better" trader.

Also, are these the phases you identified, or do you have a different look on how the train turns on the turn-table?

Thanks

PS thank you for the notice on the index, it has helped my learning greatly.
  • #1,515
  • Apr 1, 2009 1:08pm Apr 1, 2009 1:08pm
Quoting AminAS
What's coming around? Yes CHF/JPY, but the bar hasn't closed yet. New York markets stay open for a couple more hours.
Hey Dan, even 17 year olds are noticing you can't stop meddling!

Still 3 hours to go to NY close!

Are you sure you shouldn't be playing with something faster?
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,516
  • Apr 1, 2009 1:11pm Apr 1, 2009 1:11pm
Quoting strat
Hey Dan, even 17 year olds are noticing you can't stop meddling!

Still 3 hours to go to NY close!

Are you sure you shouldn't be playing with something faster?
Nothing wrong with looking if you don't touch...

I said yesterday it was based on BOTH weekly and daily PA and i'm sticking to my plan.
  • #1,517
  • Apr 1, 2009 1:28pm Apr 1, 2009 1:28pm
Quoting AstonDan
Nothing wrong with looking if you don't touch...

I said yesterday it was based on BOTH weekly and daily PA and i'm sticking to my plan.
But how long can you go on looking without touching?

Always been my weakness, and always gets me into trouble especially when they know you are looking and they want you to touch!

Heaven forbid, there's a country song "If I could only get my hands on what I got my eyes on!" - one of my theme tunes!

What were we talking about - oh yes, trading - GOOD - stick to your plan, Dan.

(Stick to your plan, Dan - there's got to be a song there somewhere)
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,518
  • Apr 1, 2009 2:09pm Apr 1, 2009 2:09pm
Quoting Stuart14
Hi guys.

I've a question.

I've read a few sources now, including here discussing Risk v Reward.

Now, calculating risk is easy. Your position size x your stop loss is your maximum loss. So at £5 per point, with a 100 point stop, your risk is £500.

Now, the suggestion is that you should not take trades with a RR below 2:1, ideally 3:1. So if you are risking 100 pips, you should be looking for 200 or 300 pips.

Fine.

However, that totally goes against another favourite saying about "Running your Profits".

It also goes again "Cutting...
My interpretation of risk/reward is that it should be used as a guideline, not as you method of determining your take profit. You should always base your trades on price action and SR so don't exit when you reach your goal of 2:1 or 3:1, exit when price action tells you too. Also you should not hold your trade no matter what just because you want to reach your desired ratio, if PA is telling you to exit then exit, even if you did not reach your 3:1 ratio.

R/R should also be used when planning your trade so if you see that price might only realistically reach 150 pips when your SL needs to be 200 then you might not want to take the trade.
Just remember don't base your trade on your r/r alone, use it as a guideline, price action is king!
  • #1,519
  • Apr 1, 2009 2:51pm Apr 1, 2009 2:51pm
Quoting rogueforex
It was the E/J post I was commenting on. You mentioned the three phases of a trend turn. I see the consolidation (where levels are re-tested and coils form), the break out and the congestion phases, I was curious on your comment about breaking the rules and how it made you a "bit better" trader.

Also, are these the phases you identified, or do you have a different look on how the train turns on the turn-table?

Thanks

PS thank you for the notice on the index, it has helped my learning greatly.
EURJPY TRADE

Further explanation on the 3 phases

I am looking to enter the next trend or major swing but I don’t know where or when the current trend is ending or going to end so I have to tread very, very carefully. You might say well stay out until the new trend is established and I do that also but doing it this way provides me with a stimulating challenge which also positions me with a profit base which gives me the financial platform and confidence to do what I need to do further along the trade.

The long hammer was a sign that we are putting in a bottom – might not be the bottom yet, but the Queen is basically saying she has had enough. Each time I see a long bar, no matter what the type, I always expect an IB. I want to establish my long position with a view to riding it to the very end but I know it may not happen on the first try. Until the bottom is in, I know I have to be on my toes and react to any price action which tells me the bottom is not in yet.

This first stage is the very high risk area (listen to the words of House of the Rising Sun/Honky Tonk Woman). In trading terms, it is the first sign of Distribution. The long tail is usually the big boys unloading their positions. In our train analogy, the train has reached it’s destination and passengers are getting off BUT new passengers, who may be on the wrong platform, are also getting on.

The second stage is after putting in a bottom, where do we go from there? Do we go straight into the next trend? Do we go in to consolidation? Do we form a double bottom or ? We KNOW something is happening – we just have to look and watch for the signs to tell us what is happening. We need to be taking all long positions but we can start to give the trade more room to breathe and relax our stops a little and maybe ignore what we think are insignificant price reversal bars. The more signs the Queen gives us that she is on her new route, the more confidence we have with our trades.

This stage is still risky with regard to loading up on positions but nowhere near the risk of the first stage. This is the stage we EXPECT something to happen so we have to watch very closely and analyse each bar and the bars around each bar relative to where price is at. Hence Sting’s “Every Breath You Take”. In trading terms, this is Accumulation where new buyers, particularly the big boys, are positioning themselves for the next phase or trend. In our train analogy, the passengers have got on, the train has left the station BUT we don’t know whether it’s going on the turntable or on it’s way to it’s next destination.

The third stage is after the trend has established itself, gone through a test, and passed the test, thus proving that it is for real. At this point, we believe the trend is at it’s strongest and everybody and his uncle are buying into it. This can take many forms but is always evident when you look back in history. The key is to recognize it happening in real time before your very eyes. This is my “Fat City”. This is where the “Fill yer boots” trades are. Hence the Everly Brothers’ “ Bye Bye Love (Buy Buy Love!).

In trading terms this is the beginning of Distribution. The big boys have suckered every one into it, the analysts and talking heads are telling everyone to buy, everybody and his uncle are now buying – while the big boys are starting to unload. This can happen in a sort of organized fashion as this trade worked out or it can be a blow off top or it can go into congestion. In our train analogy, the train has reached it’s final destination and is pulling into the station. Some passengers are jumping off before it stops (the big boys) while the others are still on board, some still sleeping from their long journey.

I recognized the shooting star as my exit but since I had profits coming out of my ears, I thought I would give it a “Dr. Joe” which I don’t normally do (I hate giving the Queen my pay checks). I wanted to show that Dr. Joe’s method IS for real and DOES work. My gut feeling knew that my last trade was a loser hence John Lennon singing “You’re Gonna Lose That Girl” and “I’m A Loser” and sure enough, it was.

The third phase is where I throw away all rules and trading discipline and go into a “balls to the wall, pedal to the metal, seat of the pants” trading style. It is VERY RISKY to trade like this. It is NOT recommended and will NOT be taught on this thread. You can only SUCCESSFULLY do this when you have reached the point where you feel “one with price” and are “dancing with the Queen and feeling her heart beat.”

This is where I become a “bit better trader” both in growth and money.

I have over simplified these three stages as they come in many different forms. This was a reasonably “clean” example which is why I chose to share it. Many times, the stages are not easily identified and run into each other but, for my method and my style of trading these are the three stages I am always looking for.

It also allows me, after identifying the stages, to jump in at a later stage but then my trading strategies are different.

Don’t think it is as easy as this because it is not. Many times I am stopped out for losses of 100 – 200 pips in trying to position myself for the long haul.

Hope this answers your questions
15 YEARS OF PASR ON FOREX FACTORY!
  • #1,520
  • Apr 1, 2009 3:09pm Apr 1, 2009 3:09pm
[quote=strat;2645028]EURJPY TRADE

Further explanation on the 3 phases

I am looking to enter the next trend or major swing but I don’t know where or when the current trend is ending or going to end so I have to tread very, very carefully. You might say well stay out until the new trend is established and I do that also but doing it this way provides me with a stimulating challenge which also positions me with a profit base which gives me the financial platform and confidence to do what I need to do further along the trade...

SUPERB

I think the big boys need that momentium to unload their larger positions without bringing everything to a grinding halt. They need everyone and their uncle to be buying so they have a market to sell into without losing all their paper profits.

The trick is to watch the price action for when the end of the line is coming. That way we can also hop off before joe public even wakes up.

Hence, 95% of traders lose money; they got on the train late, took a nap and didn't wake up before the train started back for home. When they finally do wake up, realize they are headed back from where they came, they panic, jump off and invariably die a horrible death.

Thanks for the analogy, it is cementing everything in.
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