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Great GBP/USD Strategy for Swing Trades

  • #381
  • Apr 11, 2007 7:10am Apr 11, 2007 7:10am
That market looked a little sideways to me. In hindsight it was down, but before the trade it looked ranging. I would have followed the stochs. Not to say the way you are looking at is not a good idea. It may be worth a back test. You would need to set up some criteria to give you a straight answer on which way the market is trending at any given time before you make a trade.
Life is too short to have anything but delusional notions about yourself.
  • #382
  • Apr 11, 2007 7:59am Apr 11, 2007 7:59am
Quoting hoss
That market looked a little sideways to me. In hindsight it was down, but before the trade it looked ranging. I would have followed the stochs. Not to say the way you are looking at is not a good idea. It may be worth a back test. You would need to set up some criteria to give you a straight answer on which way the market is trending at any given time before you make a trade.
Very good points. It's always soooo easy to analyze after the trade is over, right?
  • #383
  • Apr 11, 2007 8:17am Apr 11, 2007 8:17am
I was very eager to get out when I was sitting at a 47 pip profit when price hit the sup level at 9600. In fact my gut was telling me to cash out due to the round number but I stuck to the rules. In this case, that 47 pip profit turned into a 50pip loss.

However, that is the nature of following a simple system with simple rules. The more I "add" to it, the more I get off track. Next thing you know, I'm always taking profit at 20-50 pips and constantly missing the 150+ runs, which is the whole point of following this system.
  • #384
  • Apr 11, 2007 8:25am Apr 11, 2007 8:25am
Quoting bugscoe
I was very eager to get out when I was sitting at a 47 pip profit when price hit the sup level at 9600. In fact my gut was telling me to cash out due to the round number but I stuck to the rules. In this case, that 47 pip profit turned into a 50pip loss.

However, that is the nature of following a simple system with simple rules. The more I "add" to it, the more I get off track. Next thing you know, I'm always taking profit at 20-50 pips and constantly missing the 150+ runs, which is the whole point of following this system.
Pretty much my same exact experience/thought process.

I still think the really good traders know when to get out. Following their gut is probably a big part of it, but they also have the ability to see things happening in real time the way I do in hindsight. I talked to one of these guys on the phone yesterday for several hours, which gave me a slightly different way of thinking.
  • #385
  • Apr 11, 2007 9:55am Apr 11, 2007 9:55am
Quoting TSK
I thought I just follow the rules of the strategy..
In the 4hrs chart EMA 13 and 4 cross over EMA 50 and %D is above %K in the daily chart ...so I go for short at 1.914...

Did I understand correctly(or I am wrong)...anyway, it is sad to sit down and do nothing to see the price movement when up by 100pips...
remenber watch the daily and if u like u can long it after SL seem worth it as i got 100+ right now
  • #386
  • Apr 11, 2007 10:31am Apr 11, 2007 10:31am
The daily chart indicates short until this very moment (%D above %K)...
Of course, you can choose to trade againt trend....


Quoting happyliving
remenber watch the daily and if u like u can long it after SL seem worth it as i got 100+ right now
  • #387
  • Apr 12, 2007 1:08am Apr 12, 2007 1:08am
Vyn,
currently GBP/USD 4 hour has both 4,13 EMA's above 50 EMA, and the Daily stochs look set to cross to a long signal.
would this be classed as a trade opportunity (once the cross on the daily is confirmed) or is it only when the Daily stochs are already long THEN the EMA's cross?
ryan
  • #388
  • Edited 4:01am Apr 12, 2007 3:33am | Edited 4:01am
Hello everybody! Newbie here.

Thanks for sharing what looks to be a great swing strategy with us,VyNNer!
I know you use this strategy for Cable only, but it looks like the USDCHF is setting up nicely for a short position. The 4ema is getting ready to cross the 50,the 13 looks set to cross the 50 too (some time tomorrow perhaps)and the daily stochs look as though they'll dip as well.I'll be waiting for the set up confirmation and I'll keep you posted.
Any thoughts,anyone?
  • #389
  • Apr 12, 2007 3:53am Apr 12, 2007 3:53am
Quoting blueruby
You probably have a good point there.

In general, when trading against the long term trend, it is best to take smaller profits and get out when signs are pointing against you.

A system, traded against the trend, will have different characteristics.

In my experience, most good traders do not follow their system to the letter. Their experience and knowledge guide them, and everyone's experience is different. Trading is definitely an art.

Recurring advice from the old timers hammers the points:

1. Trade with the trend.
2. Watch what is happening in real time.

20/20 hindsight for me, but simple stuff for the astute and nimble trader. They would have been wary of this week's trade, going against the trend. In fact, I think I mentinoed that, but then stuck with the system rules, and lost.

Had I been properly respectful of the trend, i.e. looking to get out with 1/3 to 1/2 of the normal expected profits, I might have heeded the hammer and doji on the 4 hour, or the reverse head and shoulders breakout on the 1 hour - both strong signs that it was time to take profit in a counter-trend trade.

"Contentment may be wealth, but it doesn't pay the bills" -- anonymous
I am quite new to trading, with only 3 months experience thus far, so my thoughts are just newbie thoughts but may reflect what I have heard on this board from others.

One solution would have been to cash out with one lot, and move the stop loss a little closer with the other lot. Everything was telling me to cash out, but I stuck to the rules of the system.

Now I think agonizing over this loss is a complete over-reaction, because losses are just the cost of doing business. But so many threads have popped up lately about trading with the trend, that I just thought it was unwise to take the trade against the trend and blamed the loss on that. I still don't know how to balance my discretion with the rules of a system I follow.

I also thought, as a novice, I was at fault for not positioning my stop loss closer. This was also the first time I did a live trade with this system, and it was a loss. I did a few demo trades that were all big winners. This annoyed me, but I had told myself before that I will probably experience a loss the first time, as the system seemed due for a loss.

I had psychologically accepted all the possibilities beforehand, except for the possibility that it would go my way and then reverse. That just felt like a slap in the face, I felt like I was violating the rule "don't let a winner turn into a loser." But much more experienced traders stuck to the rules and also lost on this trade.

Even though it was a losing trade, I just want to assure myself I did the right thing by following the rules because the rules create the edge of the system. Or is the edge not in the system, but in the skills of the trader and his discretion?
  • #390
  • Apr 12, 2007 5:40am Apr 12, 2007 5:40am
Quoting Doji Star
Hello everybody! Newbie here.

Thanks for sharing what looks to be a great swing strategy with us,VyNNer!
I know you use this strategy for Cable only, but it looks like the USDCHF is setting up nicely for a short position. The 4ema is getting ready to cross the 50,the 13 looks set to cross the 50 too (some time tomorrow perhaps)and the daily stochs look as though they'll dip as well.I'll be waiting for the set up confirmation and I'll keep you posted.
Any thoughts,anyone?
False alarm on USDCHF using VyNNer's method!! Sorry guys. Looks like ema's veered away at the last minute. Will keep on the lookout for Cable, after all, VyNNer said he only uses this strategy on Cable. Oh well...
  • #391
  • Edited 6:37am Apr 12, 2007 6:24am | Edited 6:37am
Quoting zamakhtar
I am quite new to trading, with only 3 months experience thus far, so my thoughts are just newbie thoughts but may reflect what I have heard on this board from others.

One solution would have been to cash out with one lot, and move the stop loss a little closer with the other lot. Everything was telling me to cash out, but I stuck to the rules of the system.
Good idea.

Quote
Now I think agonizing over this loss is a complete over-reaction, because losses are just the cost of doing business. But so many threads have popped up lately about trading with the trend, that I just thought it was unwise to take the trade against the trend and blamed the loss on that.

Analyze, don't agonize. The trend will help. I think a person should be much quicker to take profits on a trade against the trend.


Quote
I still don't know how to balance my discretion with the rules of a system I follow.

Different people have expressed different opinions on this, but I don't know by reading a post which are successful and which aren't. My opinion, again, is that the good traders are highly discretionary, trading is an art, each person makes a method their own.

Quote
I also thought, as a novice, I was at fault for not positioning my stop loss closer. This was also the first time I did a live trade with this system, and it was a loss. I did a few demo trades that were all big winners. This annoyed me, but I had told myself before that I will probably experience a loss the first time, as the system seemed due for a loss.

To me, stop losses are for catastrophes. You have to have one. But placing it too close is a good way to lose every trade, in my opinion. You cannot time every trade perfectly, therefore most will move against you. A close stop will almost always get hit. But, two days ago, a very successful trader told me I was wrong. He watches price action, picks his entry, and keeps a tight stop.

Quote
the rule "don't let a winner turn into a loser."

Cliche's are easy to say. There are lots of them out there, and they will just confuse. Look back over the charts and you'll see that many successful trades following this system went into loss before winning. Most of the big wins were probably in and out of profit a few times. That's why there's a 50 pip S/L, which VyNNeR says rarely gets hit.

Quote
Even though it was a losing trade, I just want to assure myself I did the right thing by following the rules because the rules create the edge of the system. Or is the edge not in the system, but in the skills of the trader and his discretion?

I think it's discretion, good traders know when to break the rules. Hoss is the exact opposite, he would say that a good trader always sticks to the rules. We're both right.

Every person will arrive at what works for them. I think it takes about 2 years from what I've gathered from those who have made it.
  • #392
  • Apr 12, 2007 6:31am Apr 12, 2007 6:31am
Excellent post!
Life is too short to have anything but delusional notions about yourself.
  • #393
  • Apr 12, 2007 6:40am Apr 12, 2007 6:40am
Quoting hoss
Excellent post!
Thanks! Now if I could just make some money with all this freaking wonderful wisdom.
  • #394
  • Apr 12, 2007 7:03am Apr 12, 2007 7:03am
Ha! Well, the good thing is, the odds are back on our side for the next one. I think somebody posted that they were 17-7 on this system since September. Right around 70% - nice edge.
Life is too short to have anything but delusional notions about yourself.
  • #395
  • Apr 12, 2007 7:23am Apr 12, 2007 7:23am
Them's good statistics by any measure, and a good argument for sticking to the rules.

I've just been having a problem taking profits, and letting nearly every trade go into a loss. I always think every trade is going to be the big one. So my discipline for the next week or two is to take the profits when there's a nice one.

You changed your tag line. You do come up with some great ones!
  • #396
  • Apr 12, 2007 7:44am Apr 12, 2007 7:44am
Yeah, I used to have that problem, too, with discretionary systems. I am way better off with mechanical. It's whatever suits you individually the best. I am a strict disciplinarian, so that trading style is best for me. I trade less, and have been more profitable since I admitted this to myself. I also trade on the larger timeframes now. I didn't realize David Lee Roth was such a philosopher!
Life is too short to have anything but delusional notions about yourself.
  • #397
  • Apr 12, 2007 8:42am Apr 12, 2007 8:42am
Quoting Doji Star
False alarm on USDCHF using VyNNer's method!! Sorry guys. Looks like ema's veered away at the last minute. Will keep on the lookout for Cable, after all, VyNNer said he only uses this strategy on Cable. Oh well...
Me again...
Something realy is happening in USDCHF. Earlier on I reported a false alarm, but lo and behold, we might have the makings of a good VyNNer Swing Trade set-up here.Just waiting on the 13EMA to cross the 50EMA.Daily stochastics confirm.My next 4hr candle is in 1 hour and 20 minutes' timeJust biding my time on this one. I'll let you all know how it unfolds.
Later!
Attached File(s)
File Type: doc USDCHF.doc   115 KB | 609 downloads
  • #398
  • Apr 12, 2007 8:55am Apr 12, 2007 8:55am
The 13EMA just crossed the 50. I'm not waiting for the next candle...GOING IN!!
Attached File(s)
File Type: doc USDCHF.doc   116 KB | 602 downloads
  • #399
  • Apr 12, 2007 9:14am Apr 12, 2007 9:14am
anyone long now?....its a good setup now.. and stoch daily has crossed...
1 question...will monday still be bullish?
  • #400
  • Apr 12, 2007 9:21am Apr 12, 2007 9:21am
For me the long signal occured on 4/10 with the cross. I ignored the signal due to the daily stoch rule. However, that seems to have been a bad choice as this is turning out to be a nice trade. Much better the previous short signal I took, which was validated by the daily stoch, and resulted in a loss.

When I did my backtesting, I took every entry regardless of the daily stoch and still had great results. I'm thinking I may adopt that moving forward and perhaps take partial profits at certain points when the daily stoch is against my trade direction...?
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