Razors Journal - Basic trading with PA at S/R

Looks very good, we appear to be at the top/bottom of some swings and reversals may be the order of the week. This is a time where we can hold some trades and take much nicer cleaner profits especially if you can get some orders in early.

Already today there were a number of good low risk IBs (none for me though as I was at work) that have gone well past 4:1. As mentioned (here or on DIBs) another way to look at your 1:1 free trade is to place the SL after the market has passed through your 1:1 point. If you got in today early you could be up 4:1 on your full lots if you adopted this method.

Here are some weekly charts

Take care

Razor

yesterday saw some good IBs on alot of pairs with some great moves. I took 5 trades in total, 2 losses, 1 manual close for 0 pips and 2 trades went better than 1:1.

currently in USD/JPY short which may see some continued action through asia which is 1.2:1 and the USD/CAD which was 1.4:1.

The biggest moves saw pairs eclipse some 4:1 R/R and better and there were plenty of IBs to be taken even after currencies had bettered there ADR.

Take care

Razor

I recieved an article from a trading friend which is available at Black Swan Capital. It mentions in there the total amount of money commited by the US and EUR governments. I have cut and pasted it below.

FX Trading – The $18,100,000,000 question!
The numbers are staggering…really incomprehensible…it’s the kind of stuff that if you made it up no one would believe you…I’m talking about the amount of money both the US and European Union have committed to this crisis:
• The US government and Fed spent or lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year.

• European governments have approved $5.3 trillion of aid, more than the annual gross domestic product of Germany ($3.3 trillion).
If we break the US spending down to per person living in the US, we get:
$12,800,000,000,000 divided by roughly 304,000,000 = $42,105 per person
Now I know what you’re thinking; if our government, in its infinite wisdom simply doled out that much money directly to every man woman and child, you can bet our crisis would be solved. Heck, in the Crooks family alone, four kids, my wife, and I would have racked up a cool $252,630! Granted, the kids would want their pound of flesh given that all are of age, but still, we could have paid off a whole lot of debt and bought some pretty cool toys with that, deleveraging and stimulating along the way. And I bet you a dollar to a donut that I could more efficiently spend that money than some government agency that’s only trying to "help" me by saving various dinosaur financial institutions and companies throughout our fair land.
Before I went off that tangent, I was going to say that what is really quite amazing is that with a total of….
$18,100,000,000,000
…committed by the US and Europe, one wonders about a couple of things:
1) How in the heck can banks screw up so catastrophically? Still an open question.
2) Why in the heck don’t we have ragging inflation by now? Still an open question.
When you consider that other governments besides the US and EU (China has been busy along with Japan, Brazil and Russia) are into the money pumping game, and we haven’t seen a whole lot in the way of global traction in demand, and even more surprisingly we haven’t seen any inflation per se from the "growing" countries, it has to make one very nervous.
In fact, as John Ross pointed out yesterday, we keep seeing deflation instead. Just today, as highlighted in the key news above, German wholesale prices fell 9% in May from a year ago! Say what? Yikes!!!!
And did anyone notice US consumer prices went negative year-over-year for the first time since 1954! Yikes!!!! [Highlighted below; source Economagic]

Ok so 18 trillion dollars is just a number, but no less is real.

To show the scope of such a large number click here http://www.dailycognition.com/index....lar-bills.html

I just said WOW

Razor

Razor

Thanks for your reply,Just to clarify my understanding on the DIBS techique. At the open of London which is 5 pm Sydney time you will draw a horizontal line from that open and any inbar which opens above that line you will go long if below you will go short. You do not pay any attention to the underlying trend. Is that correct ? Additionally can I ask how long is the inbar valid for i mean if the 1 hr inbar which indicates a long is not triggered within x hourly bars does it become invalid ? Also can I ask with respect to the inbar and again a but siuation if the close of that bar is down does this invalidate the trade or simply becasue its above the open is enough to trigger a trade ? I appreciate your help and your warm welcome. Gerard

Yes that is correct. I give more emphasis with a trend trade then against, but i will take both. There are times when a counter trend trade can yield very good results, and the best part is more often than not the only damage is 1:1.

With regards to the Time held. For me I like to see it go within the session. There will be times though that you know it isnt going to be hit. Such time may be a counter trend trade that sets up but the market quickly resumes the trend. It can be different at different times.

Razor

New - EUR/GBP short FT at the moment
USD/JPY short FT (1.2:1) and up 150 pips
USD/CAD Long FT (1.4:1) and down 20

Overall good results so far this week

hey razor hows it goin?

i've been real busy this week but managed to trade a bit ( not able to watch the trades much) so got a couple of 1% trades yesterday.

i'm in the eur/gbp short (same as you i believe)
I also took gbp/usd long that happened in the same bar although it's hit resistance atm

both trades have 1%locked in so i'm gonna leave them for a few hours ( bank meeting always fun)

catch you soon

Good to hear m8,

I have been active alittle more these past 2 weeks so I have had more trades. i try to mention as many of these as possible here but with the group being quite active my time is either there or looking at charts or reading books. Im currently listening to Atlas Shrugged e book and reading some works on Toby Crabel (gold stuff really). It is busy busy busy. The upside is im slowly getting my partner round to giving me more time to focus on this (i managed to show her a the EUR/GBP trade I place just as it broke out whilst showing her the account growing. I think it opened her eyes alittle, she is still unable to fully comprehend how you make money without going to work??? lol)

Take care m8, talk soon

Razor

Long AUD JPY already went 1:1 almost immediatly and added long to the USD/JPY whilst it is heading that way

Razor

On the DIBS thread there have been a number of questions relating to what level we are looking to trade above or below.

I have added a chart that might help to clarify

Razor

Sorry chart didnt attach

Well this week has been excruitiating and has hurt. Last 5 trades have not gone 1:1 but cost me the complete amount which can really hurt. Couple that with some trades that held really good promise before being killed at 1:1 or slightly better and we can see why so many come and go from setups like this.

ME on the other hand will be around for a long time. If I have learnt anything it is to work ourway through these times, trade the system and you will get the big ones when they come. The hard pill to swallow is that my account which was up around 34% last month is now back to just a measly .72%, BUT it is still profit and not a bust out by anymeans. Keep trucking cobbers, I hope you avoided some of the hung and quartered IBs this week.

Razor

AG June = -16.62% (.72%)

Patience and just going through it works. Trust me I have losts lot but worked out in end

Welcome aboard,

I have followed alot of Joels videos and works and understand wholly that things take time to manifest. I have patience and plenty of time to get the big trades that pay off with dividends.

Razor

After spending some good time looking over alot of Joel Rensinks works it has hardened my resolve that if you keep at something you will be rewarded.

Far too many traders follow the threads that promise 80% or better win rates. They get caught up in the hype. In the real world such methods usually intail gross miscalculations. Whilst a system may have a 80% win rate is impressive, but over how long has it been tested. Most I guarentee have been tested for less than 1 year, and even more less than.

Alot of the work that Joel and Peter have and still trade with are tested. They are backwards tested for vast periods of time and they have been implement for more than a decade, much longer in most cases. It was after watching a video on Joel the other day that my resolve was hardened. In the video he goes through the setups for a VBO (volitility Breakout) method that tested over 1800 trades came back with a 46% Win rate.

Let me put that in capitals 46% WIN RATE. Now let me Bold and increase the font size.

46% WIN RATE.

However the profit factor was 1.4 (which is great) and the setup and execution was a simple as turning on the lights. No fancy lines, no fancy terms, just simple 1 2 3 and your away. The account growth was phenomenal and I will post a screen shot for those to show you. But heres the catch. Most people wouldnt trade it and heres why?

1) The win rate for starters would have people second guessing the success. Its less than 50% how can it possibly be profitable.
2) There was a period during testing that you encountered 12 straight losses, the biggest which cost over $5000. (remember the account size here is relative, the bigger the account starting the greater that loss could have been and vice versa).
3) there were periods were you had to grind it out.
4) they refuse to accept that a method that has no lines, no indicators and requires little analysis can be successful
5) As you will see on the pic. Gross Profit 930K (WOOOOOW from 20K), Gross Loss (665K WOOO WOOO WOOO back up a second thats WAY to much <----- sarcasm on my half) meaning a total gain of of over 250K

$250K profit from a 20K start is great but that is over a 20 year period. This is just one method on 1 small part of 1 market.

Would the majority trade for 230K increase over 20 years (11K a year). i certainly would because as mentioned this method was done on just 1 thing, in this case Bonds but could easily be a currency pair.

What im trying to do here is outline that the above situation has been traded through recession after recession after recession, that in itself is an edge that very few methods have. Most go with the trend but when a major reversal happens people loose there accounts because their system is not tolerant to a 'Black Swan' event. There indicators Lag therefore taking up too much time before getting the signal that a massive reversal has already happened. There lines are broken but they are still looking to buy on the dips, not realising that the dips are now upside down and your positions are very short lived while your losses continue to mount.

I dont worry about the future of my account, the only thing we can do is trade now and manage the trades in (hopefully but not always) an effective manner. I have watched many trades so far since starting get to a good profit level only to see it come back to breakeven. I have seen trades just pass my entry and come back to stop me out for a loss. I have also seen, not just in my own trades but members of a trading group im with everyday, eclipse barriers that most would be able to stomache, 10:1 trades and greater, and then adding to that position time and time again.

Long tails and the 5% trades are what makes a 40% win ratio profitable.

Razor

This is the picture of the summary. Notice down the bottom the return on equity

Razor

Hang in there you are an inspiration.

Gerard

Lol we had a shocker this week. Talk about wipsawed to death. However if you not in it then you stand little chance of catching a great trade.

It is interesting watching and reading information of players who have been in the game for more than 25 years such as Peter and Joel. This week was tough but I can guarentee you there will be tougher periods.

I was watching the video as you know and Joel was talking about coffee futures. He has been trading them for most of his life (along with alot of other commodiities). He showed a graph (if I can find it I will post it). On the graph there were periods of inactivity. By inactivity I mean the graph was literally flat. The latest period was close to 10 years long. 10 years of small gains, small losses. As he said you got to stay involved because you just dont know when that big breakout might happen.

my account was wounded but ill bandage it up and throw back into the war with these nasty spikes and yoyo daily patterns. Not good IB weather at all but the sun will shine soon.

Take care

Razor


As much as it was a bad week the next week may be worse, it may be better we dont know, but if we stick to our method, which we know has an edge be

good... at least consistent..

Hi Razor,

Can you post the link for the video?

thanks tdeu