Strat's Long Term Stress Free Trading

Thanks Strat,

I have went back and looked at my entry and studied where i believe i went wrong.

After looking at the PASR we have available to us now my entry is looking quite risky! I could have very easily been stopped out on a test of .7300 as new support. An entry above the BUOB that formed on my feed today looks like a much safer entry now as price was pushed down by the sellers to the .7334 level but could'nt hold and was pushed back up to a strong close when the buyers stepped in at .7300 which is now confirmed support.

Am i getting warmer??

Hi guys,

I'm still here, sort of! Still reading the thread, but not trading at the moment.

Strat, I saw this part of one of your posts.

"YOU CAN ONLY GET WHAT THE MARKET GIVES YOU

whether that is on a daily basis, weekly basis or monthly basis - IT DOES NOT MATTER!

ONLY TRADE WHEN THE MARKET HAS SOMETHING TO GIVE YOU

FORGET ABOUT SETTING TARGETS - what it is at the end of the month is WHAT IT IS!

STOP THINKING IN PIPS - FORGET ABOUT PIPS - think only in terms of % relative to your account."

Now, I totally agree with this, and it is for this reason that I am currently rethinking my trading. To trade for a living most people would "Have" to have some sort of target. Mortgages have to be paid, bills, food, rates etc

There is a minimum amount that needs to be cleared each month to survive. If the market doesn't "give" you this, then you are screwed.

I'm sure that I can trade successfully as a hobby, making what the market gives me, but to make enough to live off, without having any of the pressures of trying to reach targets seems a long way off right now.

Sid is me paying homage to Hermann Hesse's "Siddhartha".

Yes, the evil adrenaline rushes. When I started off trading (vs. investing what I had a wee bit more experience with) the adrenaline rushes were AMAZING. For two weeks I felt like on steroids - until I crashed in unison with my account.

Even though I have calmed down massively compared to that, you are absolutely right - the inner Gollum is still hissing "My pressiousss!".

I really like what you you say in terms of how trading reveals our true self and demands us to know ourselves. That's ONE of the reasons WHY I am trading. Trading brings the worst out of me, which I consider a good thing as long as I am able to transform this experience, learning and growing as a consequence.

My second reason is more mundane - I wanna make money, to live an independent life style.

Thirdly, if I ever get there I will use my time and money to tackle certain issues in our society, but I'd like to keep that for myself until that time has arrived (which might take a long time).

Thanks for making the effort to comment Strat. Fantastic pointers! You are already having an impact on my behaviour (ie. NOT trading)

I am going to post a chart that I am currently watching, though not trading.

Cheers
Sid

Anyone watching this? (sorry for the crappy chart - I usually use the somewhat better charts of IG Index but on the Bund they only provide 2 months worth of data).

I see an opportunity to short a possible break of 121.63.

Cheers
Sid

What i have learnt from this thread and the other two threads that i read is having the right psychology, i know thats what use to be my problem,there is a psychology to trading that 5% of traders have including strat and the big boys here,i am wth them also.

My discovery is that even if you use the simplest of all strategy and have the right psychology you will break through,i was never a 15 or 30 mins fan,i started wth 1hr but from january i have shifted to 4hrs upwards with quantifiable success


I also found out to have a small account might not be too ok,ask yourself this question,the big boys on this forum how much does the least of them manage?let start from there,my reason is this if you see a dood setup on the daily and you want to risk 1% of 300 dollars in your account(3 dollars) on a 150pips daily candlesticks,it not possible to take that trade wth 1% risk unless you increase your risk which might be going out of your psychological risk comfort zone(creating pressure for your self).

I discovered that when i lose even when i wait for the right setups it pains me,and i feel it shdnt be,i now discovered that if i lose more than my psychological risk level thats when losing pains me.


This is my experience and i hope it will be useful for someone,thanks again to strat and the team,you are duely appreciated.thanks

Sorry about that Boss

I am going to show you a trade recently I took and will try to explain what I am doing before the trade and how I am managing while holding the position so that anyone who has a similar trading style can benefit.

My SR line is at 1.8600 and I have been watching this pair since April 2nd, 2009 when daily close was at 1.8792.

Lesson #1 - You should have your SR lines ready on your chart, and most importantly they should be at correct places.

Since Oct. 2008 the price was moving first in a wide range and then forming a triangle, until traingle was broken down. Although one can trade triangle pattern, the safest move was to wait the price to go 2.08 or 1.86 levels, where we have the range boundaries.

Lesson #2 - As it has been said over and over again almost on every page in this thread, patience is very important and you should wait until price gets close to your pre-determined levels. Because you know your trading levels days-weeks before taking a trade.

Between Apr. 2-9, I didn't see any PA confirming long trade, so everyday, it took only a few seconds to check daily close and move on to other pairs.

Lesson #3 - That's why this trading style allows you to do other things in life and it is stress free.

April 9th was an important day for this pair as we saw a decisive break of a major SR level. From now on, I looked for a test of 1.8600 level again to see a PA to confirm the break was real and then, of course, to open a short position.

Lesson #4 - There shouldn't be any hesitation in your trading plan, it should be clear and should answer all " if " questions (like if support holds, look for long trades, if PA confirms take long, if take long, SL should be known... etc.)

We saw a test of 1.86 level on April 20th, but PA didn't confirm the short trade. If you go down to H4 time frame, you can see some confirming PA, but this is where Strat's teaching comes to play, especially for volatile pairs like this.

Lesson #5 - Daily bar includes 6 times more info than a single H4 bar, yes, sometimes it is costly but most of the time it's safer. Remember our first goal is not to lose.

On April 28th, we saw another test of 1.8600. And next day, the daily close was a bearish engulfing bar. After the second test of 1.8600 level and confirming PA, the break was real and I have opened the short trade with confidence.

Lesson #6 - Even if the trade goes against you, do your homework properly, only that matters.

Stoploss was above 1.86.

Lesson #7 - It does not matter how many pips your SL is away. Percentage loss and determining your trade size accordingly matter.

Re. take profit levels, I could use 1.80 and 1.77 levels (btw, I know these levels before taking the trade, so not changing my trading plan at all) with partial exit strategy, but generally I prefer to wait and see PA around TP levels. So after seeing 4/30 and 5/4 bar closes and PA, it was proved that 1.80 psycho. level was an important support level and I have decided to exit half of the position with a limit buy order at 1.80 and keep watching PA at that level.

Lesson #8 - The exit strategy is very important. You can either use a fixed TP level strategy or keep watching PA around TP levels like I did.

5/5 daily close was below 1.80 level with a good bearish bar, but I still didn't move my stoploss for the remaining position I have.

Lesson #9 - You should leave enough room for the trade to develop. Patience while holding a position is important as much as patience before opening the trade.

Yesterday low was 1.7742, close to 1.7700 SR level, so I have moved my stop above 1.80 level and again decided to hold the position to see PA around 1.77.

Lesson #10 - For this kind of trading style, trailing your stoploss is important but your new SL level should have a meaning and again leave enough room, this time to catch a possible long trend.

Today, although daily bar hasn't closed yet, price is approx. 100 pips below 1.77. If it closes like this, I'll move my stop above 1.77. But if I see a close above 1.77, it is highly probable that PA will be bullish around an important SR level and I will exit my short position.

Last Lesson - As you can see above, every stage of the trade has been planned before opening the position which take emotions out of the equation. Although PASR is a discretionary trading method, you can still trade it mechanically and exclude human factor as much as possible.

Sorry for this lenghty post but I hope it helps you improve your trading as it includes "bits and pices" re. planning a trade, executing, managing, and even money management aspect.

How will you know the break is real? There are mainly two strategies to trade breakouts and you can choose one of them depending on your risk profile:

1- Open position as soon as price breaks your pre-determined level.
2- Wait and see if break is real, so after the break watch 121.63 level, for this case, to see if it acts as resistance.

Both strategies have pros and cons.

Don't be, that was excellent. I've gotten into a few trades through this method, but my management of them could have been better. Your example helps a lot.

Thanks

Bloom

I second

Great long post.

I'd really like to see some similar posts where the trade hasn't worked out though. Clearly that happens a lot.

I'd like to see an experienced traders view, reasons etc for taking a trade and their management of it when it fails.

Hindsite is a skill I don't think i'll ever get.

Amazing post. Printed out and taped to the wall in my office.

Reading examples like yours is very helpful, Blackeagle, thanks it's amazing

Hi Blackeagle

An excellent post, many thanks for taking the time to post this for all of us on The Path. Examples like this really do help

Sorry for this lenghty post but I hope it helps you improve your trading as it includes "bits and pices" re. planning a trade, executing, managing, and even money management aspect.[/quote]

great great post:
wish more of such posting, cause noobs like me can learn lots about themself only reading and thinking through the process you point out so nicely!
again very educational post.

shall read your post over again and try to find a way how I can do the same, cause i realize that planning and patience is key in FX.

Hey Blackeagle,

Do you use both strategies depending on a certain setup/scenario? If yes what would be your criteria that lets you know which strategy to use?

Really enjoyed reading your analysis! Thanks for posting it!

Cheers
Sid

Thanks Blackeagle for the great post.

Thanks Strat for the many great posts!

Hey Strat and all. Finally have some time to catch up on things around here on the Path of Learning. Been busy trying to tackle the Path of Earning

In the spirit of Blackeagle's post this morning, I have posted the following chart on GBP/CAD. We're stuck in a long 700 pip consolidation for the last 4-5 months. Now would be a great time for a bullish PA bar to make an appearance. I wish I had been awake to this at the beginning of April when we had a few bearish shooting stars form at the top of the range. If we break below the range, I would love to see a pullback to 1.76 and a nice PA bar to take us lower. Same for an upside breakout if that happens, but we'll deal with that if we get back up there.

Hi Strat & Team

I've been reading the homework for those registered on The Path, and on checking the charts tonight I see an example of a Head & Shoulder pattern. Volume dipped a bit on the left & right shoulder..anyway I have marked up a chart for this pair...Nicole

I'm not really the best guy to answer on demo and demo account size because demo does NOT work for me. I can be the world's best trader and outperform anybody with a 95%+ success rate on demo BUT the moment I trade with REAL money and put my emotions in the equation, I drop down to ultra conservative trading. My fear of losing cancels out my risk averse approach.

For me and my trading psyche, demo serves no purpose because it doesn't bring my emotions into play. As an example, I have been running REAL money on my experimental momentum, cycles and momentum cycles stuff because that is the only way I can accurately measure their performance. In addition to knowing whether it is going to be profitable, I need to know how it affects me, how it plays with my emotions etc.

Since trading psychology is such an important factor, I don't understand why it (trading psychology) should be ignored by trading "false" money on demo. But that's me.

I do accept that it is useful for other people and right now Baba G is demoing crude with Nicola. So for Baba G, demo works.

As far as demo account size is concerned, my common sense tells me that you should demo with the exact same size of account as you will fund with real money.

I don't see the point or benefit of trading a $100,000 demo account if your real, funded account will only be $1,000.

Perhaps Baba G, Blackeagle or Swami will provide another view point