Trading for Charity

Hi all

Been a good start to September on the Charity account but I will be drawing a line under this month as I really have to focus on my own account, bills to pay and all, plus a lot going on at the moment. I will just be donating a % of my own trades.

Using the SAM strategy on the charity account I can easily run it alongside as its pretty much fire and forget, but mixing in charity account trades alongside my own discretionary trades with multiple platforms/trades to manage and a lot of pairs to follow its a bit of a pain, if there was a system/software that just replicated everything it would be a whole lot easier.

Overall growth now 174%, ammount raised for Plan International £3666.57. September to date 17.57%.

All the best

Limey

Price finally reached the level I was looking to trade on GBPCHF (charts above post 38) and took a rather nice rejection, I didnt trade it on the charity account but did on my own so will donate a % of this, I did scale in but didnt get filled on the last third, only missed out by a few pips, still quite pleased with the result.

As price reached the level in a rather parabolic manner, looked vertical green on a tick, it actually closed outside the bollinger bands on the 4hr prior to the level so was quite confident price wouldnt run straight through more a reversion to the mean.

Lower tf wise almost a quad divergence scenario on the 5 min though part of my position was running at the first div.

Nothing too complicated, if you stick to glaringly obvious levels that your half blind Gran would take you wont go far wrong, the beauty of it also is your almost assured a bounce of some kind which gives you greater flexibility with trade/risk management.

All the best

Limey

Commendable Jon. Just curious, are you selling or promoting the S.A.M strategy?

Hi Pinoyboy

No I'm not selling or promoting the S.A.M strategy, neither will I at anytime in the future. I couldnt think of anything worse. I actually have a pet hate of system sellers, paid mentors and all the other crap.

As far as Im concerned anyone that sells anything with regard to trading whether this be systems, webinars, private forums you name it isnt a profitable trader (well maybe Chris Lori the only exception I can think of)

I actually made a post on a thread in the horrible zoo that is the commercial section about this last night, in the thread about why do teachers charge a fee, here it is below:

I do sometimes wonder why anyone would wish to teach, forget the money for now.

I can see the the arguments for diversified income streams, passive incomes and all the rest, but if you are a profitable trader over time I just cant see the $ positives.

Some argue its a means of increasing your trading pot for the "big" account, but again why just not trade/compound - as efficient if not more so, but without the headaches, ballaches and complaining customer service emails.

Would teach someone to trade but for free and in a totally different manner, one to one for a start/physical presence. The adage of demo for x time, then small size for x period more is utter rhubarb. Trading the J16 way as an example the sample trade size for the recommended period of time for newbies is way too small. You would learn little or nothing about your own psych make up or develop any real belief in your own edge, just misguided enthusiasm.

All genuine vendors/teachers etc should have no probs quantifying there ability via myfxbook or similar imo.


I truly believe If you can create wealth consistently overtime through trading you wouldn't sell anything, I know quite a few people would disagree with this.

They may say with regard to selling why not its easy money, less stressful etc - maybe, maybe not, but no way would it be as lucrative as trading imo. If you have an edge, this in time will produce much more than selling crappy systems or running forums.

I know also some people knock Myfxbook as you can have multi id's/nicks accounts etc so in theory you could run a 100 accounts then only show the profitable one/ones.

Myfxbook isn't perfect but certainly a step in the right direction, If a vendor were to announce they would put up there track record live and determine a start date in the future to kick it off it so people can monitor it, it would be hard to fiddle , you would still need to produce a postive return month after month in some way.

Anyway sorry for the long answer to a short question, rant over.

Cheers

Limey

Did say I would draw a line under this month on the charity account due to having to focus on my own, but this week in particular has got me going in the right direction for paying the bills as it were, was a slow start to the month but things have picked up well.

Anyway this has allowed me to take a few more trades on the charity account, surpassed the £3k mark so pleased with that.

Overall growth now 183%, 27% for September, ammount raised for Plan International £3802.34.

Will post up charts and details of trades a little later.

FX book bits and final balance on Oanda below

All the best

Limey

Here are a few of the trades taken the last few days on the Charity account, with the AU and the Cable trades I may make a video with regard to the entry criteria as its far easier and will be more useful, I often take these types of set ups. Besides the specifics, both of the shorts were coming off parabolic moves, entering late in the day, asian session still to kick in I often consider what the new bums in seats may take. The long on cable today was off the same level, lower tf signal and entry.

UJ long, with any of these types of moves coming off intervention it can be incredibly hard to gain an entry, taken off the 5 min with a tight stop. Hit target at 85.5.

After todays trading 187.50 % overall growth, 31% for Sept. Ammount raised for Plan Int now £3863.56.

All the best

Limey

I just wanted to pipe up and say I wholeheartedly agree with you. There are too many people out there trying to make a quick buck, claiming to be profitable with no verifiable proof. I think that one of the most challenging things in regards to learning how to trade forex profitably is sorting through the immense pile of tripe that permeates this forum and others.

It is perhaps for the above reason that I am still somewhat sceptical after reading through your thread in regards to the profitability of your automated trading system. The return is phenomenal for something based on mechanical entries. However, your tone and your manual trading examples suggest that you are genuinely a good trader and I think your trading for charity idea is great!

Sigh, I think I have an overactive bullshit detector whenever I read anything related to forex.

Anyway, I hope you'll get around to posting a little more about your trading approach. I've recently had a bit of an epiphany in my approach to trading that has seen me amalgamate all that I've learnt over the past year and half on this forum and elsewhere and am looking to learn different approaches to trading bounces off S/R. Concepts which involve looking at really low timeframes are of great interest to me... looking at pure price movements can perhaps give us a better picture at market psychology.

I invite you to comment on the trade journal I've just started, if you can be bothered - http://www.forexfactory.com/showthread.php?t=256298

Cheers mate

Hi Mindsphere

Scepticism and overactive BS detectors are fine mate,in a way I can understand, this industry can increase the cynicism somewhat, everyone seems to have an angle.

I have no agenda to sell anything or stage some kind of elaborate ruse to get people to depart with there hard earned for a managed fund in the future, I make my money from trading so have no need or desire to follow that path.

I have also said I have no wish to promote mechanical trading and that discretionary is far more rewarding, for me anyway. The SAM strat came about so this account could get some attention without interfering with my own.

With the returns on the SAM strat they do need to be put in context, the returns may have been high but so is the drawdown!!, 25% in a 48hr period stinks! In fact if I hadn't intervened in August I suspect the return would have been a large negative %.

All of September and the latter part of August have been traded in a similar manner to my own account namely discretionary trades based around SR, though it isnt the same in terms of numbers of trades/returns etc as I have to put my own account first.

I dont think I could have been more transparent in this Journal having posted statements and FX book stats from the outset. Plan International is a very cool charity that do some wonderful work, raising funds for them through trading a dedicated account is something Ive always wanted to do once consistently profitable, this journal is nothing more than documenting around that.

I'll try to post more about my trading approach in particular with reference to using lower tf charts in conjuction with higher tf SR, or perhaps even videos as it easier to portray that way.

Will definitely check out your journal.

All the best

Limey

Thanks Limey, I found your videos of a few months back very interesting, so it would be great if you could do some more.

Hi limey, just thought i would chime in and say your doing as a great job for a wonderful cause

I used to know you from another now rightfully extinct forum that i was unfortunate enough to be introduced to. Not the best start in this biz to say the least. But i got out before the whole thing blew up. I'm sure you can guess which one, my screenname was kcomplex.

I've been working on my trading ever since and improving well. I'd always remembered one thing you told me once - learn a few methods inside out so you can trade the best setups in each of them. i just started a journal here as well where i also post my statements so i can't hide from my own mistakes. just stumbled across your journal and i thought 'I remember that guy'!

anyway i think what your doing is fantastic and i hope you a raise packet, which you clearly will judging by your progress so far!!!

Good Luck

Hi Limey,

Sorry if I came across rather cynical, but I was quite tired at the time. I did actually think that you went to great lengths to show openness about the whole process, posting your donation receipts and myfxbook updates frequently. It's really a very altruistic thing you're doing here, so props to you

Also re the SAM strategy, sure the drawdown was high - but it had a malfunction of sorts - no?

I'm really quite interested in your description of the trading robot when it comes to dealing with SR areas. I know that much of the established "knowledge", if you can call it that, focuses heavily on candlesticks. People tend to place great emphasis on pinbars and outside bars and all that sort of thing. I thought your comment about looking at what price is actually doing, rather than the candlesticks themselves was very much along the lines of where my thinking is heading at the moment.

My current entries focus on retracements bouncing off of correlated support & resistance areas. By this I mean I might look for a good SR horizontal price, and want to see correlation with a trendline, moving average or even a 50% retracement (I don't like the other fib retracements due to their arbitrary nature, but 50% seems like a pretty good psychological barrier no matter whether you "believe" in fibs or not). As for the actual price reactions at these points, I currently look for "strength" in the price movements away from the level, but frequently that comes down to whether or not the M5 close forms a pinbar or a strong bullish/bearish candle. Sometimes I'll enter on M1, if price momentum feels like it's moving away from the level. I do watch 10sec but it's hard to quantify what I currently use it for. It somehow feeds into my decision making, but not in a clear enough way for my liking.

What I'm wondering is if you could perhaps post tick or 10second charts illustrating what you're looking for at your SR levels? I understand if you see that as an important part of your edge that you'd rather not share on a public forum, but if you're up for having a conversation about this topic feel free to PM me.

Edit: Oh and one thing I notice is that you're using H4 charts. Have you ever considered the issue with using charts based on a 4 hour time period may be that the candles are hung off different times depending on the timezone of your broker? I've always stayed away from them for that reason.

Hi Limey
Hows the charity account?
missing your insights
Cheers
Badge

Hi Badge

Hope things are good, apologies for not updating the thread... I recently got married! and with wedding planning, relatives around, honeymoons etc its all been a tad manic, I should be able to pick things up again soon so will get trading,posting and all the rest.

All the best

Limey

Yay - Congratulations old boy.
I had my 1st anniversary very recently and have to say married life is great. ( Jokes a side).
Have fun.

Badge

Congrats

Congrats on the wedding Limey! Enjoy yourself mate, we look forward to your return

Edit: Just wanted to add - the videos on your blog are great and extremely informative. Unfortunately a couple of them are no longer available for some reason. I'll be an avid watcher if you choose to make more in future (please do!).

Also, just a thought regarding your charity account. I note that you dedicate separate time to trading it as you trade your main account during the day. Why don't you use Oanda's FxManage feature and simply have it take the same trades as your main account with proportional sizing?

Oh and I'm wondering about the charting package you're using - it looks like Prorealtime. Is there any facility to directly integrate it with Oanda, or do you basically enter orders on there and then also on Oanda? It looks much more versatile than metatrader, and I'm sure the data is way more accurate.

Hi Mindsphere,

Will have to re-upload those videos to viddler, I did complete one a few weeks back so will get that one on there.

Oanda's FX Manager feature sounds ideal but unfortunately I dont trade my main account through them, bit of a bank fan so use BARXdirect and DB in the main, really for the FSA protection and the plus of just tapping into there liquidity as opposed to it going through a third party. When I trade futures I use Mirus with NT/Zen fire. It all adds up to a lot going on/running as some trades are scalps, some swing trades nearly all manually entered and managed, thats why having a 5th thing Oanda running and trading that..well its hard work/manic and not really suitable.

For charting I do use Prorealtime, I really like detachable charts as I can put them on any screen easily, with MT4 your left with stretching it across monitors or multiple installs, I also find it more resource intensive than PRT with a bit more latency perhaps, MT4's okay though just PRT suits me better, little things like scrolling on my mouse wheel to resize charts etc and also tick charts.

With regard to your questions from the other post (sorry for the delay!) the lowest tf chart I use is 2 min, using tick charts with FX is rather spurious as its OTC rather than through a centralized exchange like Futures, so its only as good as the feed however PRT's are pretty good and often show more say compared to a 3 min chart, I use 133 and 233 tick charts.

All of it is pretty much redundant without a larger market view though imo, SR from higher TFs is crucial. I predominantly use 4hr charts when drawing in my levels, as a TF its ideal, it eliminates weaker levels that may look good on an hourly but picks up what you need to from the Daily. I dont trade any prints e.g a 4 hr Pins per se so the broker time element doesnt really matter.

All the best

Limey

Thanks for the reply Limey! No worries about the delay mate, hope you had a great wedding & honeymoon.

I actually signed up for Prorealtime today after being inspired by your videos. The interface is so much more versatile than Metatrader and it's much much faster. You're right about MT4's resource-intensive nature - it's a bloated piece of junk.

After a bit of an up and down journey with my trading in recent weeks (you may notice I stopped posting to my journal), I've come to realise that what you say is true. The best price levels to trade are those levels where price has had a significant reaction in the past, visible on higher timeframes - as you've clearly shown in a few of your videos.

In addition, I've been looking at levels created after news spikes. Looking at your videos of higher timeframe analysis, I actually think that these look quite similar to what you seem to like trading, except on a lower timeframe. I'd be interested in your thoughts on the following (no rush!):



I think, at this point, I am reasonably adept at identifying good levels to trade on lower and higher TFs. Where I fall down is in identifying whether or not I should take the entry when the time comes. You appear to combine M15/M5/M3/tick charts to aid your decision-making process and you also look to divergence.

Before I start analysing divergence, I note you talk about cross divergence where price and the oscillator are in agreement prior to divergence occurring. If I understand correctly, by this you mean, for example - if we're looking to go short and we're looking for bearish divergence, we want to see the lows on price/oscillator showing no divergence. That increases its validity. If this does not occur, do you consider the divergence invalid? Is this rule applied to both hidden/regular divergence across all timeframes?

I've always been a bit skeptical about divergence - everyone seems to take it as a given. Consider the two following images, the first showing bullish hidden divergence, the second showing bullish regular divergence





What are they actually telling us? What causes a disagreement between price and an oscillator? MACD essentially plots the distance between a fast exponential moving average and a slow one. This means that it is showing the momentum with which price is moving. If price moves faster in one direction than it did in the previous direction, it will make a bigger swing on MACD.

In terms of divergence, what does this mean? Well, looking at bullish hidden divergence (1st image), we can thus conclude that price has moved faster to the downside for the final swing low than it did for the final swing high. The fact that it moved with greater momentum down, but has failed to make a new low pricewise suggests that there is building support. There is always the chance, however, that price could continue moving down.

As for bullish regular divergence (2nd image), this is telling us that price has move lower in the final swing low with less momentum than the final swing high. The fact that it made a new low pricewise is tempered by the fact that momentum has slowed, suggesting that the sellers are running out of steam.

Now, the issue to me is that these are two rather different approaches to viewing price, and should not be weighted the same. I wonder if you consider the two types of divergence differently, and if you have certain ways of judging whether or not it is valid (in addition to your cross divergence method)? I guess the trouble is that there is pretty much always some sort of divergence visible on the chart.

Sorry this is becoming a bit of a long post. Anyway, when you have the time Limey, perhaps you might feel up to making that video showing how you gauge whether or not a level will hold and should be traded or you should stand aside. Take your time though, no pressure

Need to run to work, but here's a small addendum to what I was saying earlier about divergence:



Essentially, I wonder if there's a better way of judging what we are trying to infer from divergence by just looking at price and maybe measuring the swings with the ruler tool? Maybe I think about these things too much After all, you're making money, so clearly you know what works and what doesn't.

Edit: When I say the price is skewed by the consolidation, I mean that at this point the fast EMA and slow EMAs that make up MACD would have moved closer together. Thus the peak on the MACD would drop faster here (as it is simply a measure of the distance between the two EMAs).

I propose a better measure of true price divergence as simply the distance price has travelled over time. I guess that's pure momentum (or velocity if we want to stick to proper physics terminology). Looking at those swings, the swing down after the period of consolidation actually took about 12 hours, versus 19. Thus we could say that there was a divergence in price momentum, showing a weakening of buyers at this point. I guess that's sort of what MACD divergence tells us anyway, but the concept is probably worthy of more investigation.

Just on the topic of looking when to fade resistance lines based on divergence, perhaps a better way of judging when price is running out of steam would be comparing each consecutive leg up and giving them a momentum score, based again on distance moved in pips over time taken.

Feel free to pull my proposition apart - it's just that, in this game, I feel like I need to understand what I'm doing and why. I don't like putting faith in common wisdom, which is so often wrong. Nevertheless, like I said - you've obviously been trading for a long time, so you would know whether or not there is any predictive capability in MACD divergence. Perhaps you even have a theory as to why

Edit 2:

Best to convey ideas by way of illustration perhaps... my thoughts are marked below. I wonder if applying this sort of analysis could help filter divergence signals better.

Hi Mindsphere

Easing my way back into things after the wedding so apologies for the delayed reply.

Nice post re divergence and levels and some good questions. Firstly with regard to div, your post highlights well the flaws as it were with divergence, the most apparent thing is it obviously occurs often..there's nearly always some kind of div somewhere, furthermore MACD as an indicator is rather crude - a pictoral display of the difference between two MAs as price accelerates/decelerates... not really the most reassuring thing to base trade decisions on.


Div is a very minor part of my trading decisions, in a lot of trades I take there's none visible anyway. e.g parabolic moves. You have to weight the trade decision the other way, dont make them upon what x indicator is doing. Dont base your trading around indis. I suggest start with the most important thing....the level

As an open guide I suggest the following perhaps - why not trade SR in one particular way only..? (this works)

Draw in your SR off daily/4hr charts - take everything off, I mean all the crap, no fibs, indis,previous lines, nothing, you could even take date/price figures off so you arent drawn to whole numbers. I have my charts quite fine when drawing in levels but thats a personal preference.

Establish a context for the pair/market is it rangebound ? trending ? (daily TF primarily) If you dont trust your own judgement then stick the same ma on 3 different tfs -daily, 4hr, 1hr and look for agreement 50 sma, 60 ema really doesnt matter

Now only choose pairs (to start with) that are trending down/bearish.... be a rally fader only. You should make good consistent profit becoming expert at this which is essentially simple.

Now with these pairs also bring in trendlines...plain common sense ones. Daily/4hr. But dont force them as it were.

On top of this then bring in fibs. Daily/4hr and sometimes 1hr. Fib from the "clear swing point that instigates the current leg down"

Now you may start to get some pairs showing potential e.g strong SR level that has broken as support (or will) - this is to fade short as it then holds as resistance, this also ties in with a TL or Fib level or both. If theres nothing decent...wait, military patience!

Next bring in weekly pivots then daily...these may tie in also.

Price itself... sharp sell of, weak rally.

Lower tfs for when price approaches - not only for cheap ass entries but also as a gauge on the level - Ill have to make a vid on this, Im not talking candlestick patterns, more the run in.

further down the list ( of least importance - indis) MACD/Bollingers. Cross divergence is what I use to describe say hidden on 1 hr , regular on 5 min at the same time/level - overdue a cross/recross of your 2 ma's. Bollinger...closes outside/mean reversion.


News - the calendar here is fine, if price is near to your level just prior to a major release it may be worth avoiding, if further away it could be perfect.

Trade management - will drive you mad optimising this, I wouldnt take any risk off the table until your initial is covered, TM is key but a lot of traders dont pay enough attention to it imo, im quite contrarian/left field will often scale out as a trade moves against me, and vice versa, stops trailed 1 pip at a time, lots of variants really. Do look at this when you have some hard data on your trades.

Obviously once you develop your eye for both levels and trades you can then be more expansive with dip buying and range bound, but dont underestimate becoming ultra focused on fading rallies.

Once Im fully back up to speed I'll get some videos of the subtler more nuanced aspects going.


All the best

Limey