kharvell's new experiment =|

trade mentioned earlier netted +35 pips, went ahead and entered again as based on my 5-minute chart. Currently +3 locked in.

EDIT: Trade S/L hit, +3 it is

Considering you popped by to say hi its only right for me to do the same.

I have read through the thread and looked at the charts and im going to throw some ideas through, ideas that should work for you regardless of timeframe. Firstly do you use market orders? I know they are low TFs and entries would have a little something to do with those squiggles (its blasphemy I tell ya lol) but have you thought of using Stop orders and making adjustments in the event the market continues to move down/up away from you.

So I mean you get a touch of 'x' ema, instead of entering at that point wait for the close and place an order above/below the high low. Now if the market continues away, instead of being in and down you are not in and moving the order lower/higher (whichever way your trading it). This way when you do get the break in your favour you will have more room to run.

The other thing, and I only mention this because I LOATHE trailing stops, is perhaps if you are looking at gaining higher rewards try removing a portion of your order at a point where you gain 1:1 or 2:1 on your initial risk. So if you trade with a set SL of say 10 pips then set a profit target for 10 pips (+ spread) and exit half you trade at that point. This will give you an opportunity to leave a trade running while leaving a buffer in place (your SL stays where it always was). In the event the market comes back to it then you have lost nothing but an opportunity to gain further ground.

EUR is perfect for the above. Low spread means there will be times where you risk will be 10 pips and the spread less than 1. You get your 1:1 and the rest runs, especially if you are with the overall trend.

I only mention these because being a day trader with a typical view on longer, larger profit maturity you would understand that good trades can net very big returns. It is more or less what I was trying to get at with my thread of Risk and Reward. Having a small SL can be a double edged sworded in that you are frequently at the mercy of market fluctuations, however on the other side those fluctuations can be highly rewarding and in alot of cases you can make 5x + reward (55 pip return) or better which in my view can make a huge difference to growth. If you more aggressive like myself then you can set the 1/2 off situation ONCE the market has moved through. This then means that for a period you will have a full trade running with the potential to bank more. An example is a small trade I took last week on the A/U. It had a 16 pips risk and is now up 194 pips on a full trade. Thats over 13x reward and I have moved my 1/2 off to 10x.

I can understand scalping smaller TFs, my thoughts are though that too often traders shoot themselves in the foot by not taking a longer approach to profit taking, in most case they have the risk and the reward backwards in an effort to maximise win rate because they cannot get away from small returns.

Just my 2 cents for you cobber.

Take care and once again hello

Razor

A great chart to hammer home what I mentioned. The first trade would have come back and you would be at half your position with the other half off at 1:1, this trade could have still been in play an with the 2nd touch back on the EMA where you have entered again could be managed in much the same way. Now you have 2 positions running, worst case scenario is total BE and the opportunity to run with the trend is in play.

Considerations to higher level Support/Resistance could be a target point or a move down through the EMAs could signal short term trending over and profit taking to kick in.

Razor

Surely you'd have to take half the take profit at 20 pips not 10 pips. That extra 10 pips in this case is a long way on eu.

max

I am also curious about the number of MAs here. Is it a case that each time you hit an MA you place an order? If so then if the market goes against you, you can place four trades that will all fail? Or maybe its a low timeframe thing?

max

Hello Razor,

Nice of you to stop by and expend so much effort on my measly little experiment You have a way of writing good quality posts my friend. Commenting on your comments below in RED. Not sure what your experience with smaller timeframes is; mine is admittedly limited, but I still have certain opinions about why I do things, will try to express them below. Please let me know if you horribly disagree with anything, know that it will be considered. Thanks for stopping by, Razor

Regards,

Kevin

Considering you popped by to say hi its only right for me to do the same.

I have read through the thread and looked at the charts and im going to throw some ideas through, ideas that should work for you regardless of timeframe. Firstly do you use market orders? I know they are low TFs and entries would have a little something to do with those squiggles (its blasphemy I tell ya lol) but have you thought of using Stop orders and making adjustments in the event the market continues to move down/up away from you.

So I mean you get a touch of 'x' ema, instead of entering at that point wait for the close and place an order above/below the high low. Now if the market continues away, instead of being in and down you are not in and moving the order lower/higher (whichever way your trading it). This way when you do get the break in your favour you will have more room to run.

This is an interesting idea. I am definitely a big fan of market orders, but one thing that I've found is that on the shorter time-frames, you never really know how big the move you are about to ride is. To me, I'd rather get the best price with the trend than to wait for the break out. Sometimes, this is the difference between 6 pips or more, and when each pip is so valuable, this can't be neglected in my eyes. On losers so far, with the trailing stop, that you hate, usually what happens is the trade goes in my favor, exposing me to less risk, and then I lose. I know this is effective because I am waiting for strong, trending MA's that show a clear trend, so am fairly confident that the trend will continue like the very recent past. I will definitely take this idea into consideration though.

The other thing, and I only mention this because I LOATHE trailing stops, is perhaps if you are looking at gaining higher rewards try removing a portion of your order at a point where you gain 1:1 or 2:1 on your initial risk. So if you trade with a set SL of say 10 pips then set a profit target for 10 pips (+ spread) and exit half you trade at that point. This will give you an opportunity to leave a trade running while leaving a buffer in place (your SL stays where it always was). In the event the market comes back to it then you have lost nothing but an opportunity to gain further ground.

EUR is perfect for the above. Low spread means there will be times where you risk will be 10 pips and the spread less than 1. You get your 1:1 and the rest runs, especially if you are with the overall trend.

I only mention these because being a day trader with a typical view on longer, larger profit maturity you would understand that good trades can net very big returns. It is more or less what I was trying to get at with my thread of Risk and Reward. Having a small SL can be a double edged sworded in that you are frequently at the mercy of market fluctuations, however on the other side those fluctuations can be highly rewarding and in alot of cases you can make 5x + reward (55 pip return) or better which in my view can make a huge difference to growth. If you more aggressive like myself then you can set the 1/2 off situation ONCE the market has moved through. This then means that for a period you will have a full trade running with the potential to bank more. An example is a small trade I took last week on the A/U. It had a 16 pips risk and is now up 194 pips on a full trade. Thats over 13x reward and I have moved my 1/2 off to 10x.

I like this idea a lot Razor. My initial idea was to create emotionless, quick trading. To capture the quick, strong trends where I am in and out in under an hour or two, very profitable, and off to enjoy the rest of my day. While I like letting positions ride (you can trust me on this (see my "Pip Farming" experiment) I am not fond of the emotional attachment. You know how it is, when you have a position open, you are going to check on it when you can. Obviously, using your ideas, there is really not a need to check on it, but I usually do so anyway, even if I'm winning. I'm going to have to think this idea over very carefully because it appeals to my logic, but I'm not sure that I'm willing to do it yet.

I can understand scalping smaller TFs, my thoughts are though that too often traders shoot themselves in the foot by not taking a longer approach to profit taking, in most case they have the risk and the reward backwards in an effort to maximise win rate because they cannot get away from small returns.

Just my 2 cents for you cobber.

Too true, I hope not to be one of those traders shooting themselves. The one promising thing is that my methods so far has enabled me to catch some nice moves. 20-50 pips on a few trades so far. This Risk:reward is good enough for me, and provided I trade with discipline, should get me through any tough stretches. Though 13:1 R:R does sound phenomenal.... Thanks again Razor

Take care and once again hello

Razor

Hey max,

I'm assuming this question is directed towards me No it's not the case that I place an order every time MA's are hit. Firstly, I am allotting just about 2/3 my whole account per trade so I don't have the capacity to make another equal trade. Secondly, the MA's must very trendy looking, which usually means you will only see a retracement back to the 8 or 12 MA's. If you get on the smaller timeframes and watch how price reacts during trending moments, usually you will see a little hesitation at the MA's which indicates the trend may resume. However, I've noticed that strong moves into the MA's should be avoided. Endroute also suggests that if you see the price bounce off an MA it can be good. See posts #19 and 20

Good luck,

Kevin

You can take the half off at whatever point you like. The 10 pips is just a 1:1 barrier that effectively allows the trade to be taken from a mental standpoint of BE, therefore in theory it will minimise the emotional role that limits us from looking beyond the normal rewards.

Like I mentioned, I used to take this approach however I have move to acceptance of risk in the initial stages, once a trade moves through my 1:1 point THEN i put the wheels in motion. IN the end if the market comes back to that point then once again you are 1/2 out with 1/2 in. I am no expert at EMAs or scalping, and my comments are based on the theory that being able to secure some very low risk trades and having them work for longer, you can grow your account slightly quicker.

This is not a race, so dont take from that comment that I am talking boosting your account 10 fold week in week out. My maximum risk is 2% which seldom happens with most trades taken with less than 1%. I trade longer setups so my Reward is naturally a longer process with trades being held for weeks or longer. My ideas are based on the world of low risk (high risk in the fact that very small stop losses are used) entries and what would be the best approach to maximising returns. To often I see traders and threads that risk small pips and take limits at small or smaller pips and then claim high win rates. High win rates are great but if your profit factor is low, less than 1.00 then you are really fighting for growth. In most cases you see rediculous risks of 5% or more. 5% on a system that focuses on such a high risk setup can be killer, factor in also the limited returns and you HAVE to have a high win setup. Problem is that even high win models experience at times a run a compounding losses, which when you only get a return of 1:1 or less when you win, well you do the long terms maths.

This idea of 1 off at 1:1 is not my own, in fact it came from the DIBs thread where most of my past year has been spent. The longer you leave a trade in play the more likely it is that it will survive. Look at any time in history and pull out the times when you may have taken a trade. Follow the progress and see where it would have ended up, or is it still in play today. History is written with ample opportunities to hold a few small trades that can make you and your account, problem is that looking back on history doesnt really give you a feel for the "time". By this I mean that each day now that we trade can feel long, so tracking a trade from 2002 that may still be in play today 7-8 years later doesnt really register in our minds. We are not able to sum up the emotional ups and downs of that particular trade. We can however see that there was an opportunity and the fact remains that that opportunity is still in play. So trading today I am looking for opportunities to have trades that I can look back on in weeks/months or years.

Razor

Thanks for the reply bud. My experience with small timeframes is about 1 min in total over 5 years lol and that 1 minute was probably watching a 1 minute chart wondering if it could work. I run a business so my emotional attachment to my trades is very little. Most days I get in from work I look at what has happened, make some minor changes if needed and then log off. My trading is taken 99% of the time off the previous daily candle, so when I wake up in the morning I look at the market and try to decipher opportunities set up trades and go to work. Rinse and repeat and you have my daily structure.

I dont know if I could handle being at home too long. I doubt I could handle looking at charts for longer than I need. Even now my charts are closed until I wake in the morning. But that suits me to a T and it is what my business (trading) plan is formed around. I am glad to see a long term trader take a swing at some smaller markets. Perhaps one day I will do the same, open a small account and try to grow it with the theory of high growth through strong R/R. I know it is possible, I follow the works of Joel Rensink who has a blog available to the public in which he is looking to turn a small account of $500 into more than 100K in less than 10 years. He is currently up over 1100% or roughly 600% per annum. He doesnt trade the small TFs but his mindset is growth. In the end he is a professional trader and $500 is a simple risk for a challenge.

Thanks for the warm reply, ill drop in from time to time to see how things are going.

Razor

Thanks for the encouragement razor Will look into this Rensink guy next I get a chance.


Took my first loss folks for -6 pips. It was a decent trade, I just lost. It's a bit unnerving to trade around 1.5000. May enter again here soon due to the hesitance of price crossing 48 EMA, and historic bounces right off it in the last several hours. Hoping to get better price.

15 minute chart looking very hesitant at 8 and 12 EMA's. Place an order at 1.4995 to get a better price, but I may be too late, we'll see.

EDIT: Trade triggered and going south with some umph. Might lose this one, but still a decent trade in my eyes.

DOUBLE EDIT: Jeepers, we are volatile. May learn a lesson here: 1.5000 is scary

TRIPLE EDIT: GOod lord, took my +2 pips and left. Let me pass my 2 pips on to you. Do not try to short-term trade E/U around 1.5000

QUADRUPLE EDIT: haha of course when I leave, the trade continues in my favor. oh well, at least I didn't lose..

Towards the end of my trading day, I was dumb and trading a flat market all around 1.5000. I knew it was bad news, but I wanted to test my entry points. All in all, I'm pleased with today, I've learned that I again need more patience, and I shouldn't waste my time on flat markets. Done for today, I finished out at +2.80%, which is a decent first day. Would be nice to get 10% a week. If I had stayed out of all my dumb trades, I'd be at +3.44%, but that's why I made this experiment: to learn from my mistakes. Check out how flat/shaky the 15 minute chart is.

First trade of today: lost. Tried to sell at a bounce of the 120, seeking the same price as when it actually happened. I got my price and adjusted risk to what it would have been if I had entered at the appropiate time (If I had sold right at the bounce, price would have moved 4 pips in my favor, thus I set my S/L to 6).

Not sure about whether I should be trading right now. E/U is near 1.5000 like yesterday.. We'll see how the London open goes I guess.

Not sure what I am doing other than killing yesterday's profit. Lost another trade for -8 pips. I'm being pretty dumb, I mean.... come on buying 10 pips from 1.5000 after a clear bounce away... Live and learn

Ugh, 3 losses should put the cap on this trading session. Going to wait until US open to see if things shape up. Rest assured, if price is near 1.5000 you can count me out.

Check 1-hour chart for flat markets. If price is consolidating in a 100 pip or less range, then wait for movement to resume trading.


Well guys, I've dented my account, down to $97.83. I attribute this to my desire to make a flat market make me money, but as we can see, it's not very profitable, and results in dumb trades. I believe this new rule will filter out most of my losses, but also cause me to trade less. This is ok by me as I would rather trade less and win more than trade more and lose more.

Contemplating switching to a consolidation strategy when I know markets are flat. For instance, this week, a sell order for 1.5010 and a buy order at 1.4960 may have resulted in a couple of good trades. Hard to tell if this is hindsight bias, but I will be considering this strategy during flat times.

Dont fall to the lure to change things when it isnt going your way. It is an amateur habit to make changes based on times when plans dont quite work out. If your testing has given you a statistical edge over time then just shrug this off as a bad time, trust me you will have plenty off them.

Stay focused, trade your plan to the best of your ability and move forward when things seem tough. It is a fundamental difference between the good traders and the great.

Take care

Razor

Hi Razor,

Generally speaking, you are right. But what I mention above is very valid. Why trade during flat markets when more pips are outside of them? I am not necessarily changing the method I trade, but am changing WHEN I trade the method. Appreciate your input, I like to be questioned; it causes me to think about what I am doing, but in this case, I believe I am right.

Regards,

Kevin

I entered one bad trade for a loss of 10 pips because I thought that price had left the consolidation channel(1.5010-1.4960). As it turns out the consolidation channel goes down to 1.4950. Knowing this, I placed an order @1.4950, why not, it's an experiment Result: pretty decent, 5 pips when Trailing stop hit. Tried again @ 1.4950, Result: +10. Not too shabby. There might be something to this.

Obviously, I would eat a loser once the consolidation channel breaks, but trading at the very brink of the channel for a solid, semi-low risk trade seems like a good idea. This must be better than trying to guess up or down in the middle of a range, when your best chances of up are at the bottom and your best chances for down are at the top. For this reason, I set two orders again. One short at 1.5010 and one long at 1.4950. See hourly chart for a look at how price falls in this range.

Managed to squeak my account back to $98.26 from it's low of $96.84. Going to call it a day unless either of those orders is hit.

EDIT: upon further reflection, i think channel goes up to 1.5020, adjusted accordingly

Anyone every notice that:

EUR moves most during LONDON open
USD moves most during NY open
JPY moves most during TOKYO open
AUD moves most during SYDNEY open
????

Does it not make sense then to trade EUR/JPY from Tokyo open to London close?

Does it not make sense then to trade EUR/USD from London open to NY close?

Does it not make sense then to trade AUD/USD from NY open to Sydney close?

Does it not make sense then to trade USD/JPY from NY open to Tokyo close?

Does it not make sense then to trade EUR/AUD from Sydney open to London close?

Any thoughts anyone?