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  • #281
  • Jul 22, 2010 11:26am Jul 22, 2010 11:26am
Dear Greame,
have you ever considered using COT (Commitments of Traders) Info for your trades? I've found out that changes in Traders Commitment give a good clue about the longer term trend since the COT Report is only released once a week.

I think the main problem that keeps Forex Beginners from Trading over many months and years is that they want instant gratification. It's easier to scalpe with some indicator system for a week or two to find out wheter or not you're sucessful with it than building positions that will pay of maybe next year.
  • #282
  • Jul 22, 2010 1:45pm Jul 22, 2010 1:45pm
Hi Graeme

This may sound obvious but how do you tell if a trend has changed or is changing?

Lets say the monthly, weekly and daily are all trending down and it's quite clear from the angle of descent but what you are saying is if the short term trend changes you would diversify and go long.

What factors influence you that you need to diversify? Do you use a trendline or are you looking at candle formation in the opposite direction?

Thanks
  • #283
  • Jul 22, 2010 5:05pm Jul 22, 2010 5:05pm
Quoting pipEASY
Good evening, tommbstone

Apologies for the lack of clarity.

1. Open a demo, 5000USD @ 1:100 leverage
2. Use 0.1 lot size.
3. Choose any currency pair, timeframe
4. You can do this daily exercise on any session
5. So when you open your platform, look at current price. You can use the open price of the asian market. If this current price is higher than open price then you can only enter buy. If current price is lower than open price you can only sell.
6. You can enter as you wish. No method. Just enter when you think it will make profit.
7....
Interesting exercise. One question, the entries will have to be taken on a small timeframe like 15 min because we can't enter from the daily with a 20 stop loss. This exercise will train you to enter on small timeframes but the strategy uses daily and above. I guess that if we learn how to enter on smaller timeframes it will be the same principles on the bigger, correct ?
  • #284
  • Jul 22, 2010 5:27pm Jul 22, 2010 5:27pm
Only read the first page as I'm off to bed because it's late here in the U.K but this does look like it's worth reading and by posting I will be notified of any future updates.
I will continue the reading either tomorrow or the weekend.


Best Wishes

Harmudge
  • #285
  • Jul 22, 2010 8:07pm Jul 22, 2010 8:07pm
Just for giggles I picked 7 of the major pairs (with no consideration for correlation whatsoever) and followed the high go long low go short 20/20 entry method and to my amazement 3 hit 20pips take profit. The other 4 are in limbo and could go either way.

That's not a bad average considering I am not doing any thinking at all. Kind of the forex equivalent of cutting the head off a chicken and seeing which way it goes

So I guess the moral of the story is don't try over think it. Just keep it simple. Even with this method and perhaps slightly less than half your entries stopping out you could still make a nice profit over the long haul.
  • #286
  • Jul 22, 2010 9:58pm Jul 22, 2010 9:58pm
Quoting charvo
Master Graeme, Please mark my assignment.

Q 1: you prefer low risk entry, so i guess when adding long positions in a bullish run, it is done MORE at a pullback/retrace-down THAN at a break-up? Or you prefer to add long positions at a key level being broken up?
Good morning, all

Just continuing on to answer charvo's excellent questions.

Good question but please think about the question for me. There is nothing wrong with the question by the way.

Once again, im asked whether I pre-define my entry/decision/actions. Whether I 'prefer' to enter on pullback/retrace or at key level breakouts. I would choose to use the word and then or in that sentence.

Market is infinite, nobody can set a pre-defined limit/bound in ones interpretation of the current movement.

You cannot say;

RSI is showing overbought and it is now dropping below 80. So its a sell! - How many times did RSI dip below 80 and then go straight up to 100 for the next few hours/days and moving 200+ pips. Thats pre-defining your entry basing on an indicator which is incorrect way of thinking. Market moves before your indicator does.

In regards to answering your excellent question, let me show you a chart.

http://img39.imageshack.us/img39/443/gbpaud1a.png

Moving onto next question.
  • #287
  • Jul 22, 2010 10:35pm Jul 22, 2010 10:35pm
Quoting charvo
Master Graeme, Please mark my assignment.

Q 2: following your answer to above question, No matter in which way, you simultaneously reduce short position size, right?

Good question again Charvo.

Perhaps Im not understanding your question as intended so I apologize.

'Simultaneously reduce my short positions on long term uptrend?'

I would be inclined to disagree and agree.

When you follow the market and enter at low risk setups either buy or sell. You will be creating groups of larger buy positions (on the main uptrend) and sub-groups of smaller sell positions within. So im not purposefully reducing any short position but perhaps increasing my short positions as the market had a correction against the main uptrend for the last week or two.

But, perhaps you are asking about diversification during a correction against the main trend. So I prepared another chart

http://img249.imageshack.us/img249/4708/eurchf1a.png

Edit: Small calculation error on chart, but now fixed.
  • #288
  • Jul 22, 2010 11:01pm Jul 22, 2010 11:01pm
Quoting charvo


  1. a) but this leads to almost everyone's fundamental problem: entry picking and diversification timing. to me, this is in fact one thing--entry picking. Although in first page, you happened to mention that entry is not important, it turns out that entry is in fact essential according to your recent explanation. And solution to entry skill, per your suggestion, is to do a 6 month manual trading exercise targeting to stably achieve 3x20 pips profit every day.


Good questions, Charvo

1. Entries. As long as you are entering without any pre-defined limits such as indicators, common traders myth, and so on. Traders should be entering by judging that very moment that is happening out.

I mentioned in one of my first post that entry is not important.

Entry is not important. Its how you enter that is important. I only stopped at first sentence as I was leading all readers as per my intended flow of explanation.

Its how you enter that counts. Not only does excellent entries protect trader from unnecessary drawdowns and losses. When price ranges (and its quiet often), trader with a system and a pre-defined so called mechanical entries will face loss to the price fluctuation of the range. Traders skilled in excellent entries will have minimum drawdown and mostly breakevens. A big advantage.

2. Diversification is the easier part of your trading. Its so simple. You look at current group that you are building.

1. All sell positions and growing rapidly? Excellent downtrend.
2. All buy positions and growing rapidly? Excellent uptrend.
3. Majority sell but few buy positions? Retrace
4. Majority buy but few sell positions? Retrace
5. You look at period of growth for the current group. 1-2 months is good for short/medium term growth. Preferably at least more than 1 to 2 weeks. Anything less than 1,2 weeks is ignored.

Anything less than 1,2 weeks of growth? Just let the positions on the correction die, not worth diversifying for.

When diversifying,

You can diversify @ point 1 or 2 or 3 or 4. No golden rule as to when. But you must be diversifying for:

1. To settle all loss accounted for establishing the current group.
2. To replenish your trade capital to before you started creating the group.
3. To add realized profit into your trade balance and increasing its balance. To ensure a smooth equity curve in the long run.
4. To acknowledge that danger has passed and all loss/risk accounted for on your remaining bigger legs for now infinite growth which is ofcourse at the mercy of the markets.
5. Psychological safety: You know its over and done with that group. Legs have been closed for profits and legs have been promoted to upper group. It gets it off your mind.

Sincerely,

Graeme

  • #289
  • Edited Jul 23, 2010 12:13am Jul 22, 2010 11:17pm | Edited Jul 23, 2010 12:13am
Quoting charvo
If after 6-month exercise, I still cannot enter well. What if I change to another training method, but the target is always nice entry skill?

In fact, I'd take a bold step (when learning, I’d better be bold, please forgive me) to say that the success of your method is simply hold indefinitely (so profit is indefinite) if possible. To do that, learn how to enter market right (entry skill) first. That’s it, isn’t it?

Many thanks, Master Graeme! Sorry for my long post, but I guess you might...
Good question, Charvo

Thank you for another great question. It benefits other readers too in their learning.

In regards to exercise. Do you have a large friend? Perhaps not so muscular but big in size. Ofcouse this friend can most likely pummel anyone smaller. One day he wakes up and decided to go for a jog for the first time in years. He finds that he cant even jog for 10minutes. Thats strange, he thought he was tough. Then he decided to do some pushups for the first time years. Thats weird, he can only do 15. Now what happens next is very important for his benefits.

He can,

1. Finally realize that even though he is big in size there is a big room for improvement. So he will take a step back to basics and start jogging every morning, pushups, chinups and so on. Its very hard in the beginning and its somewhat disappointing to realize his body is infact so weak. He wakes up from his misconception. He is now on the right path. But it takes more than just a week of jogging to be an ironman contendant and he is now humble in his judgement and knows this.

2. He scoffs. Who needs to do pushups? Im 6 foot 3, I can just step on anyone like a bug. Thats most of the traders in this forum.

So you can be 1 and be on the right path towards sculptured abs or you can be 2 and continue beating your chest as a territorial warning to others in forums.

If anyone finds that 6months of that exercise was nothing but waste of time, they are more than welcome to move on.

However, that simple exercise is just more than learning about entries. It will be an enlightment with amazing related discoveries along the way.

Im honoured to be called knowledgeable by other traders, however the reason I sit here and enjoy my vast weekly growth and such comments from others is because of that exercise. Although my experience in running my imp/exp business did have a helping hand in believing long term trends but it was the exercise that created my trading abilities and insights. I did not learn it from a reading source.

At first I couldnt hit x3 20 take profit at all. Then I knew I was weak as a trader. After 6months, I rarely had a loss to take x3 20 take profit.

After 6 months, you dont even have to be a long term trader. With that much upskill in entry and hard earned insight, you can use any sensible method and it will become deadly in your hands.

Take my word for it.

Sincerely,

Graeme
  • #290
  • Edited 11:38pm Jul 22, 2010 11:17pm | Edited 11:38pm
Master Graeme:

I don't know what to say to express my gratitude for your huge efforts spent answering my questions (some of them, are dumb now, after your explanation.)

I truly appreciate your charts and explanations. I should develop a real flexible entry skills NOW before stepping on the path you've shown.

Thanks again, and please continue to my last question about my overall understanding(it is improved/completed by your recent posts!).

P.S. guys, maybe, incase you want to re-read this thread in future, you might want to save Master Graeme's charts, as i'm not sure if imageshack's hosting will be forever as FF's images......

Quoting pipEASY
[list=1]

Good questions, Charvo

Sincerely,

Graeme
[/indent]
  • #291
  • Edited 11:55pm Jul 22, 2010 11:45pm | Edited 11:55pm
Quoting babyforecast
My first question:

You explained that you try to enter to the market every day with a very short SL. And after letting the market do its work move the stop loss to the break even. I can't understand why don't you make a trail with the SL after that, let's say every 500 pips, and compensate the news hits with more legs.

Thanks
Good afternoon, xman

Thank you for letting me know.

I try my best to answer all but unfortunately some get missed out.

Moving SL is just another pre-defined exit strategy. Nothing should be pre-defined in the market.

I understand alot of traders, scale out of their positions. Its all relative. I focus on exponentially growing profits by the years and there are other traders who prefer capturing short/medium term growth.


http://img228.imageshack.us/img228/9056/eurusd2a.png

The trader with moving SL has greater accuracy than me but lesser reward.
I have lesser accuracy (my statistic shows only 3-5% of my legs become long term) but greater exponential reward.

Just on a side note, I can get rid of my diversification and my accuracy will drop even further; Most likely, 0.5% to 1% of my legs will become huge long term legs and potentially double my current weekly growth. Its because of the diversification that I can distribute risk and reward evenly and to my level of long term trading.

Sincerely,

Graeme
  • #292
  • Jul 22, 2010 11:58pm Jul 22, 2010 11:58pm
Quoting charvo
Master Graeme:

I don't know what to say to express my gratitude for your huge efforts spent answering my questions (some of them, are dumb now, after your explanation.)

I truly appreciate your charts and explanations. I should develop a real flexible entry skills NOW before stepping on the path you've shown.

Thanks again, and please continue to my last question about my overall understanding(it is improved/completed by your recent posts!).

[u]P.S. guys, maybe, incase you want to re-read this thread in future, you might want to...

Hello Charvo

Thank you for the kind compliments. It makes my efforts worthwhile.

Yes you grasped the concept properly and Im also glad to see that you see any success in the market starts from practicing your entries.

Excellent entry skills is required for any method/system. Please dont allow pre-defined rules of a system tell you when to enter. It should be your subconscious focal interpretation in your head telling your finger to hit execute.

Sincerely,

Graeme
  • #293
  • Jul 23, 2010 12:01am Jul 23, 2010 12:01am
Quoting TJPLD
Dear Greame,
have you ever considered using COT (Commitments of Traders) Info for your trades? I've found out that changes in Traders Commitment give a good clue about the longer term trend since the COT Report is only released once a week.

I think the main problem that keeps Forex Beginners from Trading over many months and years is that they want instant gratification. It's easier to scalpe with some indicator system for a week or two to find out wheter or not you're sucessful with it than building positions that will pay of maybe next year....
Good afternoon, TJPLD

Thank you for your contribution.

Unfortunately, for me COT is above and beyond my understanding most times. Im sure it is a useful tool to a trader who can interpret the information from the report into their trading habits. I just couldnt.

In regards to instant gratification. Yes, you are absolutely correct. To lose weight and look great, you need to eat less and exercise. Taking pain for gain in other words. I hope all our fellow traders also see this.

Sincerely,

Graeme
  • #294
  • Edited 12:25am Jul 23, 2010 12:03am | Edited 12:25am
Quoting willf
Hi Graeme

This may sound obvious but how do you tell if a trend has changed or is changing?

Lets say the monthly, weekly and daily are all trending down and it's quite clear from the angle of descent but what you are saying is if the short term trend changes you would diversify and go long.

What factors influence you that you need to diversify? Do you use a trendline or are you looking at candle formation in the opposite direction?

Thanks

Good question, Willf

I only diversify when I dont know what is going to happen next and there was some time of growth allowed for the current group that Im building. Preferably more than 1/2 weeks. Anything less is ignored and I let the market kill the legs for me.

Please refer to my posts that I have poested today for charvo. Your answers are also in there.

IN regards to what factors? Factors pre-define my exit so I wont allow factors to dictate my actions. Nothing tells me when to exit however when im unsure i diversify and capture profit and let the market decide the fate on the other remaining legs. It gets it off my mind.

However when the main monthly trend seems to be changing, I do not close out completely but once again diversify and close out few of the larger legs in the larger groups to capture the profit but still hold on to many.

Sincerely,

Graeme
  • #295
  • Jul 23, 2010 12:06am Jul 23, 2010 12:06am
Quoting harmudge
Only read the first page as I'm off to bed because it's late here in the U.K but this does look like it's worth reading and by posting I will be notified of any future updates.
I will continue the reading either tomorrow or the weekend.


Best Wishes

Harmudge
Good afternoon, Harmudge

Your most welcome and thank you.

Sincerely,

Graeme
  • #296
  • Jul 23, 2010 12:07am Jul 23, 2010 12:07am
Quoting mlambole
Interesting exercise. One question, the entries will have to be taken on a small timeframe like 15 min because we can't enter from the daily with a 20 stop loss. This exercise will train you to enter on small timeframes but the strategy uses daily and above. I guess that if we learn how to enter on smaller timeframes it will be the same principles on the bigger, correct ?
Good aftenroon, mlambole

Bingo.

Sincerely,

Graeme
  • #297
  • Jul 23, 2010 12:09am Jul 23, 2010 12:09am
Quoting pip_daddy
Just for giggles I picked 7 of the major pairs (with no consideration for correlation whatsoever) and followed the high go long low go short 20/20 entry method and to my amazement 3 hit 20pips take profit. The other 4 are in limbo and could go either way.

That's not a bad average considering I am not doing any thinking at all. Kind of the forex equivalent of cutting the head off a chicken and seeing which way it goes

So I guess the moral of the story is don't try over think it. Just keep it simple. Even with this method and perhaps slightly...

Good afternoon, pip_daddy

Im glad to hear you are finding interesting things during your exercise. This exercise will show you more interesting, useful insights.

After you upskill your entries to an excellent level, any sensible method will become deadly in your hands. Practice until then please.

Sincerely,

Graeme
  • #298
  • Jul 23, 2010 12:22am Jul 23, 2010 12:22am
Dear all fellow traders

I wish you all a wonderful trading career and a loving life.

Last 3 weeks has been a blessing on my par and I feel very content from my effots.

At first I anticipated about 20-30 posts and no charts but it was possible to evolve this much from the support of many.

I have no doubts that many of the readers will achieve their dreams and be genuinely happy.

As I mentioned before, I would like to take a step back now.

I will pop in once a while to say hello to all.

Answers you seek are already inside you my friends.

Sincerely,

G.S
  • #299
  • Jul 23, 2010 5:56am Jul 23, 2010 5:56am
Wow, Graeme.

I respect your trading mindset.

I recommend anyone to read
'The Black Swan: The Impact of the Highly Improbable' by Nassim Nicholas Taleb.

The book will change your perception of prediction on anything in life.

This book supports the fundamentals of what Graeme is saying here.

By the way, it's not a trading strategy book. It just applies to everything.

Quoting pipEASY
Nobody knows. Market is a generic infinite ever-changing transparent energy. Its not even a place or an item. It can be any shape and size. It has no bounds and no limits. Market is so much more than struggle between bears and bulls.

No one with 10+ voucher can forecast where the market will be tomorrow or next day. So stop listening.

Can you tell me what you are going to do tomorrow at home?

'Yeh, sure Graeme, I will be going to cafe for breakfast and then a quick drive to real estate to pay rent and then home for lunch.'...
  • #300
  • Edited 4:51pm Jul 23, 2010 6:04am | Edited 4:51pm
Quoting pipEASY
Good afternoon, xman

Thank you for letting me know.

I try my best to answer all but unfortunately some get missed out.

Moving SL is just another pre-defined exit strategy. Nothing should be pre-defined in the market.

I understand alot of traders, scale out of their positions. Its all relative. I focus on exponentially growing profits by the years and there are other traders who prefer capturing short/medium term growth.


http://img228.imageshack.us/img228/9056/eurusd2a.png...
Hi Graeme,

The only problem with this chart is that no one would have taken a short trade in the area that you have indicated. Most traders would be seeing this as a pullback and would place long positions. What would prompt any trader to take a short position in the area you have indicated? I believe this is a major hurdle for most traders, how do I know when it's time to diversify my position?

I understand what you are trying to convey here but I'm not sure how to apply this is real trading. The entries you show seem so picture perfect and I'm not sure I could come very close to those types of entries.
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