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100% profitable method - tight SL, and large TP

  • #1
  • First Post: May 25, 2010 9:42am May 25, 2010 9:42am
Ive read that averaging is generally bad, which is reasonable since the market trends a lot. People add to positions when it goes against them, not when it goes in their favour.

But wouldnt the opposite benefit you? Averaging down instead? Doing the opposite,should according to logick be beneficial. WHich means, that you only close some positions when the market goes against you, and not when it goes in your direction.

Other things that amateurs do is: Small take profit, and they close their positions fast. I cant count how many times ive lost due to this.

SO having a tight sl, and larg tp, should make you instantly profitable.

Noobs buy at the bottom against the trend. You sell at the bottom, with larg tp, and tight sl.

Any comments? Seriously, all these should be profitable. It will generate, many small losses, and few very large profits.


I think everything is because, you adapt yourself to the fact that the market is trending lots of the time. Amateur methods would only do ok in ranging markets. However, they lose because, the market moves more pips when it trends, compared to when it ranges.

where

pipchange in trending market is bigger than: tp in ranging market

this fact explains why amateurs lose.

I think pros already now that large tp is good and tight sl, but now i thought i would explain the reason behind it.

I think the above, where you take into account, price action,techinical levels, and ob/os levels will generate profit.
  • #2
  • May 25, 2010 9:49am May 25, 2010 9:49am
what is the opposite to:


tight tp, large sl, adding to losing positions?


is it, closing a part of your position when it goes in your favour? or is it closing when it goes against you..
?
To be totally reverse, it must be, closing when it goes in your favour?
  • #3
  • May 25, 2010 9:52am May 25, 2010 9:52am
Quoting woo
Ive read that averaging is generally bad, which is reasonable since the market trends a lot. People add to positions when it goes against them, not when it goes in their favour.

But wouldnt the opposite benefit you? Averaging down instead? Doing the opposite,should according to logick be beneficial. WHich means, that you only close some positions when the market goes against you, and not when it goes in your direction.

Other things that amateurs do is: Small take profit, and they close their positions fast. I cant count how many times ive lost...
95% of traders lose. 95% of the advice you'll get on this forum is from losers. The good advice will not be what the majority thinks it's good advice. For example, the majority "advice" is to have a positive risk-reward ratio (TP > SL). Maybe that's not actually what you need to do. Think about this
  • #4
  • May 25, 2010 9:56am May 25, 2010 9:56am
Quoting Adal
95% of traders lose. 95% of the advice you'll get on this forum is from losers. The good advice will not be what the majority thinks it's good advice. For example, the majority "advice" is to have a positive risk-reward ratio (TP > SL). Maybe that's not actually what you need to do. Think about this
I know for sure that ametueurs have bigger sl than tp. They blow their accounts because they do this. So having tight sl and large tp, should be advised instead.


Noobs, are intrigued by many small winners, and they hold on to losing trades. Letting the winners run, goes against their instincts,they close it prematurely.
  • #5
  • May 25, 2010 9:58am May 25, 2010 9:58am
Quoting woo
I know for sure that ametueurs have bigger sl than tp. They blow their accounts because they do this.
But do you know what the pros do?
Quote
So having tight sl and large tp, should be advised instead.
Then why aren't so many profitable? After all, this is a very simple thing to do
  • #6
  • May 25, 2010 10:02am May 25, 2010 10:02am
Quoting Adal
But do you know what the pros do?

Then why aren't so many profitable? After all, this is a very simple thing to do
Noobs buy at bottoms and sell at highs. so it should be accompanied by:

selling at bottom, buying at high, with tight sl, and large tp

And averaging down where you close a part of yoru profit, and letting the other one run.(because noobs average up)

Try this



BECAUSE: IF YOU DO THE EXACT OPPOSITE, YOU WILL GET THE EXACT OPPSOSITE PROFIT COMPARED TO A NOOB, WHICH SHOULD BE MORE DOLLAR IN YOUR ACCOUNT.

thats the logic. case closed.
  • #7
  • May 25, 2010 10:04am May 25, 2010 10:04am
Quoting woo
Noobs pick bottoms and highs. so it should be accompanied by:

selling at bottom, buying at high, with tight sl, and large tp

And averaging down where you close a part of yoru profit, and letting the other one run.

Try this
I don't need to try anything, I already have my methods thank you.

I'll let you try it and experience death by a thousand stops
  • #8
  • May 25, 2010 10:06am May 25, 2010 10:06am
Do you know why it works:BECAUSE: IF YOU DO THE EXACT OPPOSITE to what all noobs do that start trading, YOU WILL GET THE EXACT OPPSOSITE result. COMPARED TO A NOOB, WHICH SHOULD BE MORE DOLLAR IN YOUR ACCOUNT.

this is pure hard logic.
  • #9
  • May 25, 2010 10:13am May 25, 2010 10:13am
woo i am embarrassed for you.

if your logic is so infallible go trade it and stop talking crap.

you are so severely wrong, deluded, and yourself a complete noob. you have only now just crossed step 1 of 1 million steps and you think you have it all worked-out. your posts in this thread prove how little you know of anything, and i'd love to know what it was that prompted turveyd to give you a vouch.

again, i'm embarrassed at your lack of knowledge accompanied by your conviction that your 'logic' is logical.

trade it and learn why you are so wrong.
Congratulations ScalaFX for coming out of the closet!
  • #10
  • May 25, 2010 10:19am May 25, 2010 10:19am
Quoting nubcake
woo i am embarrassed for you.

if your logic is so infallible go trade it and stop talking crap.

you are so severely wrong, deluded, and yourself a complete noob....

Well because im an expert scalper:

here is my journal (where i use a compeltely different method, only based on PA)

www.cashfxspot.blogspot.com/

I dont want to sound arrogant, but i think what makes me good is because im putting so much mental effort, philosozing,thinking, ive done it for 7 years. I may be wrong as well, but its these adventerous thoughts that help me reach new levels of insight. I may also create a very noob like thread like this, hampering my image of having one vouch and a knowledgable trader, but i dont care, i may put myself in an inferior positions,open for other peoples questions.





Edit: the oppsosite to adding to losing positions should be: adding to a winning trade.
  • #11
  • May 25, 2010 10:23am May 25, 2010 10:23am
Quoting woo
People add to positions when it goes against them, not when it goes in their favour.

But wouldnt the opposite benefit you? Averaging down instead?
averaging down means:
Quote
The process of buying additional shares in a company at lower prices than you originally purchased. This brings the average price you've paid for all your shares down.
So, you bought at 1,50. In order to average down, you have to buy when the price is lower. That means that the trade went against you . And you're adding to your losing position ?
I don't get it:
Quote
People add to positions when it goes against them........But wouldnt the opposite benefit you?
where "the opposite" means adding to your winnings. But that is not averaging down..or am I too tired?
  • #12
  • May 25, 2010 10:27am May 25, 2010 10:27am
Quoting Pollux
averaging down means:

So, you bought at 1,50. In order to average down, you have to buy when the price is lower. That means that the trade went against you . And you're adding to your losing position ?
I don't get it:
Inserted Code
People add to positions when it goes against them........But wouldnt the opposite benefit you?
where "the opposite" means adding to your winnings. But that is not averaging down..or am I too tired?
Ok, i may have used averaging down completely wrong. Now that you mention it, your description of what average down means is true, and i just med mixed it up with something else.

Lets forget averaging down.

Losers do: adding to a losing trade

so doing the opposite, should be: adding to a winning trade.
  • #13
  • May 25, 2010 10:28am May 25, 2010 10:28am
Quoting woo
Do you know why it works:BECAUSE: IF YOU DO THE EXACT OPPOSITE to what all noobs do that start trading, YOU WILL GET THE EXACT OPPSOSITE result. COMPARED TO A NOOB, WHICH SHOULD BE MORE DOLLAR IN YOUR ACCOUNT.

this is pure hard logic.
If you sell at the bottom then that person shorting at the top while you averaging down at the top is stealing your money. Think about what you are saying here. Support and resistance is there for a reason, why do you think stop hunting occurs because the brokers know the retail brokers place their trades 10-15 pips outside their stop loss (then only to see the trade go exactly in the directin as they intended), so the brokers are shorting at a better price. So as a retail trader you overcome this by accepting a bit of drawdown before you start coming into profit.
Know when to hold em, Know when to fold em!
  • #14
  • May 25, 2010 10:32am May 25, 2010 10:32am
Quoting woo
Ok, i may have used averaging down completely wrong.

Lets forget averaging down.

Losers do: adding to a losing trade

so doing the opposite, should be: adding to a winning trade.
well, that gives birth to strong trends. Position traders always add to a wining position. And yes, averaging down may turn as a very bad solution.
On the 7th of May the euro gained some pips. One may think that there is a temporarily bottom so he decides to buy, thinking that the retracement should work by 1,3114 (the low of April, 28). So on Monday, when market opens he decides to buy (after all, there is a gap up that may indicate buying pressure). Instead the price reach only 1,3094. Imagine he would have continuously averaging down since then .
  • #15
  • May 25, 2010 10:32am May 25, 2010 10:32am
The complete system, to do opposite of a noob is:

1 Large TP
2 Tight SL
3 By at high, sell at low
4 Adding to a winning trade.


Thoughts: the positive thing about this, is that you start low, you only enter a small part, as you want to add to your winning trade later on. As a result, your losing trade will be much lower on average, because of this as well.
  • #16
  • May 25, 2010 10:40am May 25, 2010 10:40am
Quoting goods
If you sell at the bottom then that person shorting at the top while you averaging down at the top is stealing your money....

Actually, i used the term averaging down completely wrong.

Noobs: add to losing trades= averaging down. SO what you should do, is average up.
  • #17
  • May 25, 2010 10:40am May 25, 2010 10:40am
Quoting woo
The complete system, to do opposite of a noob is:

1 Large TP
2 Tight SL
3 By at high, sell at low
4 Adding to a winning trade.


Thoughts: the positive thing about this, is that you start low, you only enter a small part, as you want to add to your winning trade later on. As a result, your losing trade will be much lower on average, because of this as well.
1 and 2 are part of money management. If you would have a 5 pips SL and a 1000 pips TP you'd be still losing money.
3- you can't just enter on the market based on your gut. Buying at high and selling at lows are still part of a losers strategy. Thare are more fakeouts than brake-outs. Instead, buying/selling on retracements after new higher highs/ lower lows have been made is better.
  • #18
  • May 25, 2010 10:46am May 25, 2010 10:46am
Quoting Pollux
1 and 2 are part of money management. If you would have a 5 pips SL and a 1000 pips TP you'd be still losing money.
3- you can't just enter on the market based on your gut. Buying at high and selling at lows are still part of a losers strategy. Thare are more fakeouts than brake-outs. Instead, buying/selling on retracements after new higher highs/ lower lows have been made is better.

Yea, this strategy would inevitably generate many small losses, and few very very big winners.

However, im not sure what a complete oppositite system to a noob would be. I would appreciate help on this.

The reason why i think this could work out, is because, the market trends a lot ofter than ranging. WIth this system, you are looking for these big impulsive pricemovements, that you see all the time. If you hit one, you will generate much profit.

Since you have tight sl, your losses will be held to a minum.

I will for sure try out this system, as im not sure.

I think SL should be 20 pip lower than previous 15 min candle for example. That would be good.


i cant argue any more about this. I want other traders to experiment with the idea to do in complete oppsosoite manner to a noob.
  • #19
  • May 25, 2010 10:52am May 25, 2010 10:52am
Here is the best advice I can give to new traders:

1. For now, forget scalping.

2. Look at daily, 4hr, and 1 hr charts

3. Find a pair that is trending nicley.

4. Wait for a pull back to previous swing high (or low) area and get in there. Postion yourself for trend continuation.

5. Get out if the previous swing high (or low) is violated. Do not average in. Do not even think about adding to a loser. Get out with the minimum damage possible. (This is were most fail)

6. Take profit when a new swing high (or low) is made. Or, in the alternative, add 1/2 postion to your winner when the new high (or low) is achieved. If you do add 1/2 position, move stop to a profit level equal to at least 1/2 of the profit of your 1st trade.

Yes, this is boring. But it will save young traders a lot of money and give them a decent shot to be profitable after 6 months.

Good trades to all,
  • #20
  • Edited 11:31am May 25, 2010 11:02am | Edited 11:31am
You have to determine the trend and trade according to it. Did you watch Floored? Search for the thread and watch it. See how is a floor trader trading (at a computer) I think it's episode 8 or something like that. He just clicks with the mouse every time he has the chance to do it. I often see people teaching others to trade "naked charts". It's the only way to success. Naked my ass... I've never seen a bank's chart without any indicator. If you add a line to your chart, then it's not naked anymore . No matter how much you'd like to call it in that way, brushing you ego with thoughts that you have the superpower of predicting the price just on a glance...in fact they saw that the graph start on the left top corner and ends somewhere in the mid, after reaching near the right bottom corner. Conclusion..down trend..yeah..a MA would have lied to you. Anyway, some may refer to naked chart as without indicators (trendlines , fibonacci, pivot points are exceptions). Actually they've learned the price action for that time frame. It went from x to Y. It was a big move , so retracement is inevitably. We are in a down trend. I only sell. I won't be buying this pull-back, but sell at the next resistance. Anyway, this only comes after lots and lots of hours examining the charts. You can't trade GBP/JPY the same way you trade EUR/USD.
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