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The System II (Yes with irony)

  • #14,561
  • Jan 28, 2010 1:45am Jan 28, 2010 1:45am
Some advice please. I was going to go long at 1.4028 level with a bracket breakout but the upside is being very weak. Would you wait for a clearer break or still take the trade to catch the early bus and use 2g+?
  • #14,562
  • Jan 28, 2010 1:49am Jan 28, 2010 1:49am
Quoting scubro
Some advice please. I was going to go long at 1.4028 level with a bracket breakout but the upside is being very weak. Would you wait for a clearer break or still take the trade to catch the early bus and use 2g+?
just my opinion: there was a bk to the ss earlier, with small weak candles. did not take it. i'm in the long because the momentum of the longer bull cdl tells me that it's worth a test. you bet, #2G+
  • #14,563
  • Jan 28, 2010 1:57am Jan 28, 2010 1:57am
Thanks Bubola
Got caught on the short breakout hence my query. Will take your advice on board. Good luck with your trade.
  • #14,564
  • Jan 28, 2010 2:00am Jan 28, 2010 2:00am
Quoting scubro
Thanks Bubola
Got caught on the short breakout hence my query. Will take your advice on board. Good luck with your trade.
scubro, please, i did not intend to offer any advise. i'm in no position to do it. i just shared my thought process, that's all....please, do not ever take my word for anything
  • #14,565
  • Jan 28, 2010 2:01am Jan 28, 2010 2:01am
Mrng legends .... hope your day so far enjoyable .... are we ready to play? ))

I went long on the break higher of the BB .... am long at 1.40282 .... looks not like an impressive break thus far. However am giving it some room.
  • #14,566
  • Jan 28, 2010 2:03am Jan 28, 2010 2:03am
Quoting DesertFX
Mrng legends .... hope your day so far enjoyable .... are we ready to play? ))

I went long on the break higher of the BB .... am long at 1.40282 .... looks not like an impressive break thus far. However am giving it some room.

Watch this hurdle area 1.4038/40 .... would be nice to get a candle close above 1.4040 ...
  • #14,567
  • Jan 28, 2010 2:04am Jan 28, 2010 2:04am
Quoting DesertFX
Mrng legends .... hope your day so far enjoyable .... are we ready to play? ))

I went long on the break higher of the BB .... am long at 1.40282 .... looks not like an impressive break thus far. However am giving it some room.
long as well, looking good now tho (crosses fingers)
  • #14,568
  • Jan 28, 2010 2:06am Jan 28, 2010 2:06am
Moving stop to 1.4021 just below that bar below the level line.
  • #14,569
  • Jan 28, 2010 2:11am Jan 28, 2010 2:11am
Quoting DesertFX
Moving stop to 1.4021 just below that bar below the level line.
Moving my stop now to BE ... and let my heart rest a bit .
  • #14,570
  • Jan 28, 2010 2:11am Jan 28, 2010 2:11am
Bubola,

No problem with that. I'm new to this and on steep learning curve so opinions/advice always welcome. It's up to me to decide whether to go with it or not and I'll live or die by that - trading wise of course!
  • #14,571
  • Jan 28, 2010 2:12am Jan 28, 2010 2:12am
Ok, first hurdle crossed, now #1 sc1 in play.
  • #14,572
  • Jan 28, 2010 2:13am Jan 28, 2010 2:13am
1.4050/55 area presents some resistance and potential hurdle ... I love this method of trading ... it brings out so many different emotions.
  • #14,573
  • Edited 3:14am Jan 28, 2010 2:15am | Edited 3:14am
Quoting Bakuli
Good morning Bubola,
Yes it's been a rough night ! Well it actually should have been sweet but I f--ked up, lol! Expensive lessons but it sure is sticking into my brain (what's left of it! lol). A few more expensive mistakes like this, I think it will be forever engraved in my brain. Behaviour modification is a costly and painful exercise, lol!

Interesting comment you make there Bakkers - people think that harsh punishment modifies behaviour, but all the research shows this isn't the case...in fact it is the least effective method – it merely spawns anxiety, represses impulses (good ones and bad ones) and causes spurts of delinquent behaviours…i.e. the very behaviour you want to decrease (we call them ‘Extinction bursts’ - a great example of which is 'revenge trading'). I have thought about this a great deal and incorporated it into my trading – so I hope this is useful to someone out there…if not just ignore this as the rantings of a mad scientist.

I have applied this to my own trading because I am prone to repeating the very behaviours I want to change and tend to punish myself. My wife is using this with her kids at the school where she is head teacher and she’s astonished by the results.

It seems to me there are two issues in learning this philosophy, both of which come from the most modern developmental psychology available that we use in my professional world to shape behaviour –

1) There are behaviours you want to increase or ‘reinforce’ (e.g. entering in the right places more frequently, cutting losers short, letting winners run)...in which case you need a reward for getting it right. (Positive reinforcement and negative reinforcement* (which is NOT the same as punishment but refers to the removal of a negative stimulus - sort of takes care of itself in trading)

2) There are behaviours we want to decrease – (entering too early, cutting runners short and letting losers run)…in which case the effective methods are what we call RESPONSE COST (having something taken away) and TIME OUT (being removed from the stimulus that causes the behaviour). Positive Punishment is another, but as I say this is the least effective.

You might think that pip loss and pip gain might be the reinforcement, but as Fx always teaches, watching the money takes us into fear and greed. So money cannot be the primary ‘reinforcer’ – that way madness lies, freezing in the headlights, 'f**k it trading' etc.

So to change our behaviours it seems a good idea to have a different set of rewards and penalties. The achievement is execution of the perfect trade – whether it profits or loses money. Losing is part of the game and so losing well is an achievement. The P/L is a by product of playing the trades well and needs reviewing, but later.

I love Jelly Babies. I started my session yesterday with 10 which I am not allowed to eat until my session is closed – and then only those that I have left. I make terrible mistakes – often going off plan like yesterday. One terrible trade, perfect entry, crap execution, but it made money. If profit was the measure then I could fool myself into believing I had done a great job. So, there has to be a RESPONSE COST for me to learn and decrease the specific behaviours that made it a bad trade, so I take away a Jelly Baby for each element of the trade that was a bad behaviour I want to decrease, and get one back for each good behaviour that I want to increase. Yesterday I made +37 pips profit, but I ended my session with only 3 Jelly Babies – that’s a bad day. It forces me to engage with my behaviours in detail, whereas I could take my 37 pips and tell myself I’m a good boy.

Also the worst time to trade is when I am excited/anxious – that is when I make my worst decisions – so I have a scoring system out of 10. If I am calm I score 1 – if I am manically anxious or over-excited I score 10. If I get to 5 or above then it is TIME OUT time – get away from the stimulus to the anxiety – the stimulus is the charts…shut them down for a while, get back to a 1 or 2 score and go back to basics. Leaving the market is OK – it will still be there after the break…even if I don’t calm down for a couple of days!
$urvive, Pre$erve & RESPECT THE TEACHER
  • #14,574
  • Jan 28, 2010 2:16am Jan 28, 2010 2:16am
Morning all, my brothers and sisters!!!!!


This long is my second trade for this morning (I have now 10:14 am)

My first trade was BB short trade which did give me -8 pips loss....

But - look at this - this long trade which I did take above 4021 is - BAMMMMM!!!!!

Now I settle my runner mentality... and (BAMMMMMM!!!!!)

lol...

Good trades to all my family!
  • #14,575
  • Jan 28, 2010 2:18am Jan 28, 2010 2:18am
Quoting DesertFX
1.4050/55 area presents some resistance and potential hurdle ... I love this method of trading ... it brings out so many different emotions.
Desert FX, we don't look at S/R for this style of trading. Just have to use the #1 sc1 play to manage the trade once first hurdle crossed i.e approx 25 pips gain. I did the mistake of letting SR influence my dance during Asia session and that was a costly mistake. Just trying to help (and also to remind myself , ).
  • #14,576
  • Jan 28, 2010 2:25am Jan 28, 2010 2:25am
Quoting mac1956
[color=black][font=Verdana]Interesting comment you make there Bakkers - people think that harsh punishment modifies behaviour, but all the research shows this isn't the case...in fact it is the least effective method – it merely spawns anxiety, represses impulses (good ones and bad ones) and causes spurts of delinquent behaviours…i.e. the very behaviour you want to decrease (we call them ‘Extinction bursts’ - a great example of which is 'revenge trading'). I have thought about this a great deal and incorporated it into my trading – so I hope...



VERY.... VERY USEFUL AND GOLD POST!!!!!!!!!!

Mac, you are Super!

Thanks for another wisdom from you!!!
  • #14,577
  • Jan 28, 2010 2:27am Jan 28, 2010 2:27am
Quoting mac1956
[color=black][font=Verdana]Interesting comment you make there Bakkers - people think that harsh punishment modifies behaviour, but all the research shows this isn't the case...in fact it is the least effective method – it merely spawns anxiety, represses impulses (good ones and bad ones) and causes spurts of delinquent behaviours…i.e. the very behaviour you want to decrease (we call them ‘Extinction bursts’ - a great example of which is 'revenge trading'). I have thought about this a great deal and incorporated it into my trading – so I hope...

Good post Mac, emphasizing that one should focus on the method and to ignore dollars/pips, as too not be fooled by the dollars/pips, in an attempt to gain more dollars/pips

Mac, do you give yourself more than 10 jelly beans when you execute the plan all day to a tee, or 10 is the max for the day?


Cheers
  • #14,578
  • Jan 28, 2010 2:27am Jan 28, 2010 2:27am
Quoting Bakuli
Desert FX, we don't look at S/R for this style of trading. Just have to use the #1 sc1 play to manage the trade once first hurdle crossed i.e approx 25 pips gain. I did the mistake of letting SR influence my dance during Asia session and that was a costly mistake. Just trying to help (and also to remind myself , ).

Cheers Bakuli ... my friend I am trading naked )) not literally of course ... I was merely mentioning a potential hurdle as there was a big previous FCR around there. However I do take your point. Most appreciated.
  • #14,579
  • Jan 28, 2010 2:29am Jan 28, 2010 2:29am
Quoting skris
Good post Mac, emphasizing that one should focus on the method and to ignore dollars/pips, as too not be fooled by the dollars/pips, in an attempt to gain more dollars/pips

Mac, do you give yourself more than 10 jelly beans when you execute the plan all day to a tee, or 10 is the max for the day?


Cheers

I'm on my last set of teeth, so ten is the limit - I get to keep ten if I do really well, but it is rare that I keep all ten - if I run out I can either re-set the supply, or stop for the session depending on how I feel (1-10).
$urvive, Pre$erve & RESPECT THE TEACHER
  • #14,580
  • Jan 28, 2010 2:33am Jan 28, 2010 2:33am
FX ... I understand now bro what it means to leave pips on the table when you are searching for a runner ) ... needs courage.
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