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Strat's Long Term Stress Free Trading

  • #2,701
  • May 7, 2009 5:29pm May 7, 2009 5:29pm
Quoting CrudeCraig
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...
Craig, do you understand the principles of PASR? Do you know basic price action? Do you understand how price behaves at support and resistance?
15 YEARS OF PASR ON FOREX FACTORY!
  • #2,702
  • Edited 9:28pm May 7, 2009 5:45pm | Edited 9:28pm
Quoting Stuart14
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."...
Stuart, you have missed a huge chunk out of this. To trade for a living, you have to treat it as a business, right? Now if you were setting up a business, what do you need most of? Capital. It is exactly the same with trading for a living. You set yourself up with a MINIMUM of 6 months living expenses or equivalent previous salary (1 year is much better). This is so that you can live in the event you don't trade or make a profit. This is independent of your trading account.

You do not pay living expenses out of your trading account! Instead, you sweep a certain % into your chequing account for that purpose.

This frees you up from having ANY targets whatsoever. Your income from trading will reflect and parallel the market. When the market is trending we make really good money, when it's doing nothing, we make nothing. Overall, in the course of a year, we will have made lots of money but it will have come in cyclic bursts so that one month might be peanuts while the next month may be equivalent to 6 months previous salary etc.

We have no targets, nor do we need targets - we just take what the market gives us WHEN it gives us - as simple as that.

Having a MINIMUM 6 months "living account fund" to live off is what most wannabe traders forget or ignore - they only think about funding a trading account. Doing without this is a recipe for fast failure.

Does this explain why we have no targets?
15 YEARS OF PASR ON FOREX FACTORY!
  • #2,703
  • May 7, 2009 7:50pm May 7, 2009 7:50pm
Here is a pretty chart for Baba G.
This is the highest price crude has been this year. If this hammner breaks I am looking for the price to drop down and test the top of the range for support.
My only concern would be that I would like to have seen this shooting star off the $60 level which was the next level up that I had.
The dollar looks to be having a bit of a rally tonight which is bearish for crude prices.
I know it is NFP tomorrow but ... Im hoping this all happens before the US opens.

Targets ... first $54, second $52.50
Attached Image (click to enlarge)
Click to Enlarge Name: wti nic.gif Size: 14 KB
  • #2,704
  • May 7, 2009 9:02pm May 7, 2009 9:02pm
Nice exhaustion bar on GBP/JPY. Poking right up into the 150 super psycho. Looking for a test of support at 147.50 and then 146.50.

http://img4.imageshack.us/img4/9100/gbpjpyx.gif
Bang.
  • #2,705
  • May 8, 2009 12:38am May 8, 2009 12:38am
Daily shooting star on Gold. For a pure 'pin-bar' one would like to see the candle body within the body of the previous candle.
Still, the candle appears after a small daily rally, is just above the SR zone circa 910 and has Fib confluence with the 38% Fib from the daily H to L.
I'm gonna pass on this one though as the RR is not very good with around 16 pips risk faced with a reward of only 12 pips to the next SR level and 28 pips to the rising TL - Oil may be a better play in terms of RR.
Attached Image (click to enlarge)
Click to Enlarge Name: gold.gif Size: 31 KB
Trade less and become more profitable!
  • #2,706
  • May 8, 2009 12:44am May 8, 2009 12:44am
PS
My hunt for a chart provider continues-currently using ODL but their daily bars close at Midnight UK time and I can't stay up that late as I get it in the neck from zero-alpha. Plus I have to drive to work at 0600 so I can't really check the chart in the morning, plus by then 6hrs have passed!

I may go back to NorthFinance as their dlys close at 2200 UK time - this tallies with the NY close too I believe. Really I want to be seeing the same daily bars as the US players, so I guess NF would be the next feed.

ProRealtime allow EoD data and their charting package is excellent, but again they close their dly bars at UK 0001hrs!

How are other UK players approaching this? Cheers
Trade less and become more profitable!
  • #2,707
  • May 8, 2009 12:56am May 8, 2009 12:56am
Quoting strat
Stuart, you have missed a huge chunk out of this. To trade for a living, you have to treat it as a business, right? Now if you were setting up a business, what do you need most of? Capital. It is exactly the same with trading for a living. You set yourself up with a MINIMUM of 6 months living expenses or equivalent previous salary (1 year is much better). This is so that you can live in the event you don't trade or make a profit. This is independent of your trading account.

You do not pay living expenses out of your trading account! Instead, you...
Hi Strat.

It does and it doesn't!

I put away 12 months salary for living expenses and have no worries about that for now. So for 12 months I just trade what the market gives me, rain or shine.

What about next year though? If I haven't made enough this year for next year then the pressure is on.

Lets say my living expenses for the year are £50k, and my trading account is £200k. I need to make a 25% return this year to survive the next.

25% would be a damn good return on the year.

I understand the need to release the pressure of p/l from ones trading, but without having the minimum target of at least covering ones living costs surely you are on a one way street to ruin anyway.
  • #2,708
  • May 8, 2009 1:08am May 8, 2009 1:08am
Quoting Grimweasel

How are other UK players approaching this? Cheers
WHC closes at 11pm so I'm currently using it.

FX Pro closes at 10pm but they have Sunday Bars (2 hrs) which I don't like.

Might take a look at North Finance.
  • #2,709
  • May 8, 2009 1:16am May 8, 2009 1:16am
Quoting elitejets
The dollar looks to be having a bit of a rally tonight which is bearish for crude prices.


This morning looks like the euro/dollar has consolidated over
support 1.3350

Attached Image (click to enlarge)
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  • #2,710
  • May 8, 2009 2:25am May 8, 2009 2:25am
Thanks Bloom - I may check them out. As the biggest global player I want to see the same EoD data as the major players in the US.
Trade less and become more profitable!
  • #2,711
  • May 8, 2009 2:32am May 8, 2009 2:32am
Hi Grim

I've switched from ODL to FXPro, because Bloom says they close at 22:00. However, I only get 1 Sunday bar..?

It would be great for us in the UK if we could get a daily close around London close at 16:00 or even 20:00..I haven't come across any brokers yet though.

I have asked myself 'what do the money managers etc do in large institutions' that are based in various time zones when working off daily charts. Do they want their dailys to close towards the end of their working day, so that they can plan/set up their trades for the following day? Or do they prefer dailys to close at the start of their working day, so they can plan/set up at the beginning of the day and monitor throughout the day..?

Just got me thinking the other day when I was looking for a provider of Meta 4 with an earlier close.

Maybe Strat, Swami, Blackeagle and BabaG can comment?
Cheers, Nicole
  • #2,712
  • May 8, 2009 3:43am May 8, 2009 3:43am
Quoting FxPippy
Hi Grim

I've switched from ODL to FXPro, because Bloom says they close at 22:00. However, I only get 1 Sunday bar..?
I meant the Sunday bar only has 2 hours of data i.e. 10pm - midnight. So it really only contains data of the Australian open. It would be nice if they rolled those 2 hours into the Monday candle. But I suppose they are easily ignore.
  • #2,713
  • May 8, 2009 4:35am May 8, 2009 4:35am
Quoting AstonDan
I second
Hi All

Best use of my time this week. I stepped through each point BlackEagle listed, marking up my chart accordingly and double checking that I could 'see' and understand the point being made by only looking to the left (ie without taking into account what actually happened afterward). A few times I wan't too sure if I understood the point, so I went back to it read it very slowly (splitting it into its component parts) and going back to my chart, if anyone else had been in the house at the time they would have thought I had gone mad, muttering out loud what BlackEagle had written and then again whilst looking at and marking up my chart.

The most powerful mesages for me were SR (you don't spend any time on detailed analysis until you have a close 'at' your already predefined SR level) and patience....

very many thanks BlackEagle for taking the time and trouble to write this excellent 'masterclass' post. I am sure I will return to it many more times

best
Paul
  • #2,714
  • May 8, 2009 4:47am May 8, 2009 4:47am
Quoting FxPippy

Maybe Strat, Swami, Blackeagle and BabaG can comment?
Cheers, Nicole
I use IBFX and also a data vendor for my Metastock and other charting software. My trading is normally based on NY daily close data. But it doesn't matter which data you use, you should trade what you see. Because sometimes Alpari UK shows a shooting star whereas the very same bar is a normal bar on IBFX or vice versa. In the long run, they compensate each other, IMO.
  • #2,715
  • May 8, 2009 5:29am May 8, 2009 5:29am
Thanks everyone for your kind words re. my EURAUD post. We should all thank to Strat for starting this thread and spending his valuable time to teach us all.

Now, please go to post #2567, open your current daily chart and based on EURAUD post, try to develop a similar complete trading plan. And we'll all appreciate if anyone share that plan with us.
  • #2,716
  • May 8, 2009 5:37am May 8, 2009 5:37am
Quoting Stuart14
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.
When I have a losing trade, I'll share it too, no problem at all. But when a trade fails, normally I get stopped out with my initial SL level (because I prefer to be lazy to trail stoploss to leave enough room/time for the trade to develop), therefore, there is no trade management most of the time, actually, for failed trades. The reasons for taking the failed trades are the same as winning ones since, as I have explained on EURAUD case, I try to trade discretionary method mechanically to leave emotion factor out of the equation.
  • #2,717
  • May 8, 2009 5:40am May 8, 2009 5:40am
Quoting Sid
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
I don't use both strategies, because it is not related to setups/scenarios, it is related to your risk profile and you cannot have both aggressive and conservative risk profiles at the same time.
  • #2,718
  • May 8, 2009 5:52am May 8, 2009 5:52am
Quoting Life of Pi_p
In the spirit of Blackeagle's post this morning, I have posted the following chart on GBP/CAD. 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.
Good analysis and I am also watching this one, but I like EURCAD chart better (GBPCAD and EURCAD should have high correlations, so no need to open positions on both at the same time).
  • #2,719
  • May 8, 2009 7:53am May 8, 2009 7:53am
Hi Blackeagle and Team Strat,

This is my plan and I have attached my 2 charts of weekly and daily. Please feel free to comment. Thanks, Nicole

SR lines are at 1.5700 and 1.6900 which are the range boundaries since Jan 09 and prior to that 1.7500 level Nov Dec 2008 & 1999. (as far back as my data goes).

Price has moved in waves down since beginning of Mar 08 from 1.6900 level.
Last few days it broke the 1.5700 but continues to hit it’s head on the trend line around 1.5500 level.

Confluence

Watching for a break, combined with PA candle with momentum, around level 1.5700 to show that the buyers are back in force, would look for good volume in conjunction with the daily PA candle/s.

From Swing Low around 3 Nov 08 to Swing High 29 Dec 08 (close of) FIB level retracement 61.8% a long at around 1.5717 (Not drawn on daily chart attached).

Combining all with Weekly PA candle (I know it's not quite closed yet, but PA looking very good)

Inital indications are, Stop Loss below the TL (around 1.5454); Final Stop Loss to confirm once PA type known and % & £ risk within my tolerance to accept prior to trade.

Targets previous SR, Stop Loss moved to close of each daily bar.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: 2009-05-08_1310EurCadWeekly.jpg Size: 164 KB
Click to Enlarge Name: 2009-05-08_1317EurCad_daily.jpg Size: 160 KB
  • #2,720
  • May 8, 2009 8:14am May 8, 2009 8:14am
[quote=Stuart14;2720623]Hi Strat.

It does and it doesn't!

""What about next year though? If I haven't made enough this year for next year then the pressure is on""

Stuart, you have to go back to the "real life" business model. If you were running a business and it didn't make enough what would you do? You have to change it, and keep changing it until it meets your requirements.

You have two main options until you get it right:

1) Improve the ROI on your trading

2) Reduce your costs and expenses to suit your income

You must not pressure or stress yourself with a goal or target of x% ROI in trading as YOU have NO CONTROL over what the markets will do.

Let's say for the first 11 months of the year the markets were directionless (never happened but.....) and you had a profit target of 15% ROI but to date you are only 3% ROI, in other words, you are 12% behind your target.

This means you have 4 weeks left to make up that 12% of which 1 week is a holiday PLUS the month of December is always low volume and liquidity and not all that good for trading. How do you think you will feel going into that last month? You will be an emotional wreck and because of the pressure and stress you have burdened yourself with, will be "looking" for trades and making trades that are not there (very high risk) and will, more than likely, lose everything you have gained and probably more.

It is obvious to me that you are a salaried person enjoying the same income month after month. When you work for yourself, that "security" of a regular income goes out of the window. You now live off YOUR input and hard work. This brings freedom but also uncertainty. You have to accept that trading for a living will never provide a "regular" income, some months will be nothing, while others will bring more than you ever dreamed of. You will be living by the sword and dying by the sword and enduring feast or famine.

Now, there are things you can do to improve your ROI. You can have more than one method or system so that you can benefit from most market conditions. You can also have separate trading accounts - a regular account and an "aggressive trades" account. There are many things you can do BUT you can only do this when you have a MINIMUM of 3 years PROVEN, consistent equity growth, in other words, when you are experienced and successful.

For example, Baba G has two methods he trades, Blackeagle already stated he has two methods, Swami S has two methods. I have several methods I trade.

As you develop as a trader, you will also develop other methods BUT first and foremost, YOU MUST LEARN THE BASICS as is being taught on here. Then, you must demonstrate consistent equity growth over a minimum of 3 years before EVER doing anything else. This is your foundation for your trading building block. Without the foundation (successful basic trading practices), your trading building will SINK and take you with it.

I hope this helps
15 YEARS OF PASR ON FOREX FACTORY!
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