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Domino's Price and order flow trading

  • #641
  • Apr 12, 2010 11:19am Apr 12, 2010 11:19am
Quoting pipmutt
Oh come on, there's more to it than simple pnl, you know that yourself.
Everything else that does not have to do with p&l is away from the reasons I trade nowadays. I don't care (anymore) about making extra 100 pips, I don't care (anymore) about having "predicted" that strong move. Sure it is good for my self-esteem, but self-esteeem is not the reason I trade. I used to have the need to be right, and it was trouble all across the park....

There are very few hard and fast rules in trading

You make a plan and you follow it as long as it works. If it stops working, you change your plan to adapt to what is happening. If changing doesn't work, you come up with a new plan. I don't want to be a trader, I am looking for the market to serve me up with opportunities to make money.
The quality of your life is brought about by the quality of your thinking.
  • #642
  • Edited 10:15pm Apr 12, 2010 11:20am | Edited 10:15pm
Quoting Porkpie
But my point was ok you adjust your risk so the risk ends up being the same as the high prob trades BUT you are using capital (a % of account) you could be using for higher probability trades at full lot size (rather than the half lot size for the 50% higher risk trades). Its not just the money you are using to trade its your time also. Spend it wisely my mother kept telling me after she gave me a couple of pence for some penny chews (yesterday lol), and there was no way I was going to buy the beautifully crafted chocolate mice when I could...
lol, funny post

I think we've come about full circle since this post. Bottom line is I'll trade anything which has a probability of being profitable simply because it costs me very little to find out if I'm wrong and potentially it's a trade which could make (substantially) more than the risk, which is what I believe trading is all about. That's my entry criteria, less focussed on having everything line up before I'll pull the trigger. That was why I was interested in statistics in this post.

Anyway I'm going to quit while I'm ahead, I'm sure I can hear Domino coming!!

Good trading all, hornet, porky, dan, nub, and anyone else reading my drivel, yep even you jolany!!
  • #643
  • Apr 12, 2010 11:36am Apr 12, 2010 11:36am
good order flow is like sex
it keeps going nicely till well.... till ur done and the end result is profit or well the whole thing is profit. or it needs to be at least

on a serious note im enjoying this thread. the majority of people on here have provided some great insight and ive left it on my laptop ever since it started. checkin it every now and then

weeeeeeeeeeeeeeeeeeeeeeeee
  • #644
  • Apr 12, 2010 1:00pm Apr 12, 2010 1:00pm
Quoting pipmutt
No obviously not, but I don't much care (although I would prefer they all were!)

This is my theory about why the majority of traders fail, they spend too much time and effort looking for something which tells them where price is heading but not enough time learning how to exploit a trade when it heads in a favorable direction.
first of all daytrade nice posts.. thanks ..

.. my theory is traders spend to much time to predict and dont trade what is happening as well.. price is breaking out off good support take the trade.. the hard part is understanding the support which I believe if you take many many many trades you start to see important factors of those support and resistances.. for example somedays I dont trade Ill open up my platforms and Ill start looking Ill spend hours going through charts looking to see if they are near a strong support or resistance if not I just close them.. if they are I label them.. if its above a SZorRZ7 or so D(prefer something newly swapped) setup Ill mark up the chart and shift it off to the side watching it while looking for new charts.. Ill try to watch when price breaks it has my full attention ill sell sell sell sell as price drops and conversely buy buy buy as many time as I can while still in profit and still moving down or up.. its this simple .. trading really is easy once you learn to do your premarket.. then just trade.. if price moves up you buy if it moves down you sell..
  • #645
  • Apr 12, 2010 1:05pm Apr 12, 2010 1:05pm
Quoting pipmutt
See and I think a different way. Exploit trades which are profitable by increasing exposure, and conversely reduce exposure when they're not. Trade every opportunity and adjust risk according to probability. Use (a percentage of) profit as risk capital and reduce leverage/risk when there isn't any, thereby limiting risk, preserving principal, and maximizing return.

Creative money and trade management can be more productive IMO, like you say it's all about the money.
I think you consecutively hit important points.. in controling risk

If price breaks out low.. and you sell.. at 0 leverage your actual risk is low .. if it turns out to be a good breakout and runs then you make much more if it retraces small and rebreaks and you sell again do you have and more risk than the first entrance.. usually no.. the initial risk for the trade is the same after the 2nd sell you are essentially increasing exposure without increasing initial risk.. which if your into this type of stuff... increase your natural risk:reward ratio over average trades.
  • #646
  • Apr 12, 2010 1:24pm Apr 12, 2010 1:24pm
Quoting eurotrash
Cheers. Have compiled this into a single pdf.
Beautiful! Many thanks!
  • #647
  • Apr 12, 2010 1:40pm Apr 12, 2010 1:40pm
Quoting Porkpie
I think this is key. Knowing what the odds are from forward and back testing. If over a period of time you end up taking 50% more higher risk Pipmutt trades your profits are going to be lower than taking your higher probability Hornet trades over the long term.
This is not key but seems like its amped up among forums.. I dont ness think this is the correct way.. there is no true way to understand high probability in trades.. what is high probability? 51% win to 49% losses? or is that mid probability.. its not relevant to trading because you never know and the markets rules are always changing .. there is always new dynamic and new things happening that may have never happened before effecting the markets in ways theyve never seen how can high probability remain high probability if things are constantly changing.. what could be high probability before may not be high probability today.. when your dealing with probabilities also your not safe in just knowing you have a higher probability of something over X runs.. you may have high risk of ruin at 1%.. and the odds may swing unfavorably for so long as to kill your account before the law of large numbers pulls the trades back into profit.... so its a gamble..
Quote
If you then have a string of bad losses (cuz they happen), you are more likely to weather the storm with a higher percentage of lower risk Hornet trades. Adaptability and flexibility may be more colourful but when it comes to longer term profitability, then why bother with higher risk set-ups. Its not about knowing whether a trade is going to work out or not, its having an idea of the probability of such trades making a profit over the longer term.
even hornet high trades at low risk with one entrance can ruin an account over 200 trades especially once hornet psychology is affected by the streak as well.. your more likely to weather a storm with lower initial risk with constant reapplication of leverage into a profitable trades... even at low probability.. this maybe outside of mosts ability tho as we need to have the feeling of a certain % a day or week .. which can not happen.. evenly from day to day or week to week.. or even from month to month..

example a 150 pip trade with 4 entrances on the way down spread evenly.. inital risk maybe first trade .25% risk at 30 pip stop.. then resell same amount 50 pips down then again at another 40 pips down then again at 20 pips down and exit form another 10 pips down..

now initial risk was .25% of account but with resells as price moved down.. we increased exposure and had 1.25%+.7%+.4%+.1% or 2.45% return on .25% initial risk.. or 1risk to 9 reward..
Quote
I can't imagine many traders bother to work out the odds of lower risk trades and then adjust their risk accordingly for each currency pair especially when there are several pairs to choose from for a quota of high probability trades. Why not make your money work harder for you.

The key would be to find a way of stacking the odds in your favour if using lower risk set-ups, such as waiting for an entry confirmation or entering only at monthly lows/highs and such like.
its not about odds.. there needs to be a good reason to trade... take a strong resistance..on daily chart price breaks and runs up on the daily its gonna be huge series of breaks on 3 or 4 hourly.. if your buying you can reduce risk with the initial break and rebuy all the way up and create huge imbalances in your PnL distribution..
  • #648
  • Apr 12, 2010 1:46pm Apr 12, 2010 1:46pm
Quoting pipmutt
Talking of Soros did anyone see him being interviewed on Bloomberg the other day? He seemed a bit confused, stumbling over words and such, very noticable in a man who's usually so coherent.
hes getting very old..
  • #649
  • Apr 12, 2010 2:06pm Apr 12, 2010 2:06pm
continuing on GBP.CHF my original short order at 15400 or something like that was gapped over so I sold at market originally rode the initial reaction then sold off waiting for the gap to be filled now Im waiting for confirmation short and have pending orders.
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  • #650
  • Apr 12, 2010 2:18pm Apr 12, 2010 2:18pm
SZ12C-SWAPPED looking for longs in here..willing to wait for more compression.
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  • #651
  • Edited 2:55pm Apr 12, 2010 2:38pm | Edited 2:55pm
Quoting domino
first of all daytrade nice posts.. thanks ..

.. my theory is traders spend to much time to predict and dont trade what is happening as well.. price is breaking out off good support take the trade.. the hard part is understanding the support which I believe if you take many many many trades you start to see important factors of those support and resistances.. for example somedays I dont trade Ill open up my platforms and Ill start looking Ill spend hours going through charts looking to see if they are near a strong support or resistance if not...
so, you are looking for high probability set ups. The good reason for entering a trade IS stacking the odds in your favour surely? ...Its a fuzzy area I agree its not an exact science. Its giving yourself a chance whether your win to loss ratio is high or not (but this one needs to know as it is paramount to ones strategy and as you point out it is how you manage your trades to the changing circumstances (I only painted half the picture with the above discussion) eg. entering a trade knowing that in the past only 30% over x amount of time trades were successful but with tiny losses compared to the winning runners. Its setting yourself to gain big when you win and small when you lose. You know the odds are better when entering near an SR level. This is no different to Hornet's reason for entering.
  • #652
  • Apr 12, 2010 2:45pm Apr 12, 2010 2:45pm
Quoting Porkpie
so you are looking for high probability set ups. The good reason for entering a trade IS stacking the odds in your favour surely? ...So, I am not sure what you mean when you say you do not understand what I mean about probabilities. Its a fuzzy area I agree its not an exact science.
no not really Im only predicting volatility.. not price movement. By finding a place where there is a ton of orders and very noticable.. i know there will be good volatility.. so whatever happens will happen on good volume..
  • #653
  • Apr 12, 2010 3:38pm Apr 12, 2010 3:38pm
ie. when the bomb goes off you want to be riding the blast not standing in its way. I call them mine fields in the stock market. Confirmation of direction usually comes quickly.
  • #654
  • Apr 12, 2010 6:54pm Apr 12, 2010 6:54pm
we could be possibly consolidating.. what do you think..
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  • #655
  • Apr 12, 2010 10:26pm Apr 12, 2010 10:26pm
Quoting domino
your more likely to weather a storm with lower initial risk with constant reapplication of leverage into a profitable trades... even at low probability..
That's a good description and makes perfect sense when thought about logically.
  • #656
  • Apr 12, 2010 10:33pm Apr 12, 2010 10:33pm
Quoting domino
we could be possibly consolidating.. what do you think..
lol, I reckon you could be right!
  • #657
  • Apr 13, 2010 2:19am Apr 13, 2010 2:19am
Quoting domino
no not really Im only predicting volatility.. not price movement. By finding a place where there is a ton of orders and very noticable.. i know there will be good volatility.. so whatever happens will happen on good volume..
Quoting domino
price is breaking out off good support take the trade.. the hard part is understanding the support which I believe if you take many many many trades you start to see important factors of those support and resistances.. for example somedays I dont trade Ill open up my platforms and Ill start looking Ill spend hours going through charts looking to see if they are near a strong support or resistance if not I just close them..
Domino,
I think what we both do is pretty similar. We both wait for price to show us a turn in direction and then we enter, differently for sure but, we are looking for same things initially. I like to take the first 2 pushes because I have experienced that the 3rd one is usually not as good. Doesn't mean all 3rd ones are bad. You do the same thing when you look at a turn coming from a good support. You feel better when you see a good orderflow coming from a good support and showing a nice upward break than when you see good orderflow coming from a BAD support and showing a nice upward break. Sometimes you close your platform and do not trade because the setup is not high probability. This because, from experience, you have learnt to see what makes a difference. This does not mean they all work out bad. So, we both know what makes a setup higher probability. It is all probabilities for sure and % change depending on market conditions, on volatility, on time of the year down to time of day also. You're looking to enter close to high volatility areas because that improves your odds of having a decent move. In the end you're still trying to improve your odds. It is all just the same difference
The quality of your life is brought about by the quality of your thinking.
  • #658
  • Apr 13, 2010 3:36am Apr 13, 2010 3:36am
Quoting pipmutt
You're really hung up on this probability and odds stuff aren't you.

How did you decide what criteria makes a trade good odds and high probability, statistical analysis sampling years of data? What odds would you give one of your trade set-ups?
LOL

All trades I take have the same probability of working out at 50%. But with experience and observation I have found that you can higher those odds since human behaviour is repetitive. So when ABC happen, D ususally follows... If AB happen, C does not follow and then D happens....maybe that is, over the long run, not as clean as the first example. So I avoid taking the trade, nothing more nothing less.
The quality of your life is brought about by the quality of your thinking.
  • #659
  • Apr 13, 2010 4:39am Apr 13, 2010 4:39am
EU 30mins

point 4 below point 1, no entry
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The quality of your life is brought about by the quality of your thinking.
  • #660
  • Apr 13, 2010 4:47am Apr 13, 2010 4:47am
Quoting hornet
EU 30mins

point 4 below point 1, no entry
How about keeping an eye on EU to the downside?
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