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  • #2,581
  • Edited 3:55am Sep 21, 2010 3:36am | Edited 3:55am
Quoting VEEFX
My Final trading outcome for today explained in charts:
H1 Chart:

Attachment

Account History/Trade log:
Closed Transactions:
Attachment
Account Summary:
Attachment

Trade #1 at BE and trade #2 at SL.
Good work VEEFX

Please join me and pass on our gratitude to VEEFX as he has placed alot of efforts in the last 2 days.

Please allow me to explain why it didnt work out today.

It is important to take higher timeframe hindsight. Sure there are times big trends happen first on lower timeframe however it is the higher timeframe that sets the size of the profiting ground.

Our profiting grounds needs to be large enough for us to play ball effectively.

If the higher timeframe says UP however lower timeframe says DOWN most often the DOWN movement of the lower timeframe will just be the retrace of the higher timeframe.

eurnzd 4hr

http://img375.imageshack.us/img375/5306/aa1d.png
  • #2,582
  • Edited 3:55am Sep 21, 2010 3:45am | Edited 3:55am
Majority of the new traders anticipate too early and then participate too early.

This is a common fallacy and everyone needs to stop doing that as that will erode your capital very quickly.

There is no rush but to wait for a confirmation which is simply price closing higher or lower.

The confirmation will swing the favour to your side all the time.

http://img155.imageshack.us/img155/6576/aa1st.png

Last 1hr candle closed below the previous up candle. This would have made me lose my 1 buy position from the green zone. But even though there is strong indication from the 1hr chart that the price is now heading down that down candle was just part of a retrace on the 4hr chart.

We have talked about using price interpretation to create hindsights on higher timeframe and I can see many traders doing this but are they applying their hindsight accordingly.

For myself, I have also lost 1 position which was a buy position around the green area as mentioned few hours ago. Even though my hindsight is currently proving to be correct I too have lost a -21 pip loss.

However, I do know that VEEFX will now always take the hindsight/advice of the higher timeframe and apply it accordingly to lower timeframe.

Good work and lets do it again tomorrow, starting 2 hours before london open.

Sincerely,

Graeme
  • #2,583
  • Sep 21, 2010 3:52am Sep 21, 2010 3:52am
Just one more post.

I understand why VEEFX took sell positions on eurnzd today.

He mentioned something about a strong resistance. Also many other traders use resistance and support.

What is more important?

Price movement of the last x1 candle of 1hr/4hr or price resistance that was from last week or longer?

Yes, price does 'react' at these levels but I have a question for all.

There is no area that price doesnt react to.....

Draw a trendline blindfolded and you will find that when price reaches that level it will react. Is it magic? Or is everything universal and related so everything seems to work?

I too use s/r all the time however Im most interested in what price is happening right now first then s/r second.

A very important lesson to all.

Good night and thank you for coming.

Sincerely,

Graeme
  • #2,584
  • Sep 21, 2010 4:06am Sep 21, 2010 4:06am
http://img819.imageshack.us/img819/2...10100143pm.png

I just drew 4 trendlines with my eyes closed.

It seems to me price reacts/appreciates/respects my lines that I drew with my eyes closed. How can that be?

It makes me wonder why we do analysis when 'perhaps' the easiest way to trade is to go with the flow.

If its UP then BUY, if its DOWN then SELL.

But we look for bargains that has an antiquity value on it.

Sincerely,

Graeme
  • #2,585
  • Sep 21, 2010 4:12am Sep 21, 2010 4:12am
Quoting pipEASY

It seems to me price reacts/appreciates/respects my lines that I drew with my eyes closed. How can that be?

It makes me wonder why we do analysis when 'perhaps' the easiest way to trade is to go with the flow.
Hello Graeme, excellent work you and Vee thank you very much.

If I may comment on the two statements I'd say that: price reacts to lines because there are so many market participants and each have their own focal view of what S/R lines are, so it's almost impossible to not run into a S/R line... basically the S/R lines work because there are other participants using them.

And... I think we do analysis in order to not overtrade... to maximise the profits and reduce the risk.

Kindest Regards,

Cam
  • #2,586
  • Sep 21, 2010 4:16am Sep 21, 2010 4:16am
"If its UP then BUY, if its DOWN then SELL.

But we look for bargains that has an antiquity value on it."

few things to ponder thanks graeme

regards
Success consists of going from failure to failure without loss of enthusiam
  • #2,587
  • Sep 21, 2010 4:19am Sep 21, 2010 4:19am
Quoting cameron1st
Hello Graeme, excellent work you and Vee thank you very much.

If I may comment on the two statements I'd say that: price reacts to lines because there are so many market participants and each have their own focal view of what S/R lines are, that's it's almost impossible to not run into a S/R line... basically the S/R lines work because there are other participants using them.

And... I think we do analysis in order to not overtrade... to maximise the profits and reduce the risk.

Kindest Regards,

Cam
Good answer, Cam

Excellent answer and it is definitely worth reading twice.

If I may suggest just one small correction on this sentence,

"basically the S/R lines work because there are other participants using them"

It should read: ALL S/R lines work because there are whole world of commerce that are pulling and pushing price from millions and millions of transactions that are inter-twined with its own and separate agenda.

Sincerely,

Graeme

P.S My pleasure, dongsky
  • #2,588
  • Edited 4:38am Sep 21, 2010 4:21am | Edited 4:38am
Thank you Graeme for correcting my statement and it means the world to me to have your approval because it signals I'm closer to being a professional trader.

Kindest Regards,

Cam
  • #2,589
  • Sep 21, 2010 4:24am Sep 21, 2010 4:24am
Quoting pipEASY
Good work VEEFX

Please join me and pass on our gratitude to VEEFX as he has placed alot of efforts in the last 2 days.
Thank you for showing the trades today, Veefx and Graeme.


Truly a very valuable lesson learnt, particularly the candle analyst part!

Take good rest, Veefx.
Have a good evening, Graeme.

Sincerely
  • #2,590
  • Sep 21, 2010 4:24am Sep 21, 2010 4:24am
I continue to follow this thread and am learning on a daily basis thanks to everyone involved in this thread.

Thanks Graham, Vee, Tradstar, Geoffrod and everyone else for helping me to understand trading a bit better.
  • #2,591
  • Edited 5:04am Sep 21, 2010 4:51am | Edited 5:04am
[quote=kcravey;4034653]ahhh, well said!

Comparing trading to the coin toss scenario: (something Graeme suggested we all do earlier on - here is my documented coin toss and emotional thinking along with it)

99th trade: heads (+10, +20, 2x30, +40, +50, +60, +70, +80, +90, 2x100, +110, +120, +130, 2x150, 160, 170, 3x180, 2x190, 210)
100th trade: heads again! (+10, +20, +30, 2x40, +50, +60, +70, +80, +90, +100, 2x110, +120, +130, +140, 2x160, 170, 180, 3x190, 2x200, 220)

100 trades total: -390 pips, 3060 pips in floating profit


quote]

Hi KC,
I have also done the exercise and had spectacularly good and bad results.
What I fail to appreciate in your analysis is how you have multiples of certain levels - e.g. 3x190?
e.g. if at any time you are up in x positions the next toss would put you up in x+1 positions, i.e all positions would advance by 10 or you would be up in x-1 postions and all positions would decrease by 10 - the latest addition would lose and the prior position would be off the table at BE. To be up in multiples would mean you need to be putting more than 10p bet on the next toss!

At least this is my perspective - if I have missed something let me know.

Ray

Have looked again at your analysis and it seems that one or two of your BE trades have been left as open positions. Results would still be impressive without these!
  • #2,592
  • Sep 21, 2010 5:07am Sep 21, 2010 5:07am
Quoting TradeStar
Thanks Graeme. I thought he should at least win one out of four opportunities rather than 4 attempts per opportunity

Now if gets 3 unsuccessful opportunity in a row, he would have lost 12 times already before a win; right?

Thanks again; I mean thanks is not a word for the kind of guidance you are providing us.

With much gratitude

TS
Hi Graeme,

Good Evening. Now that today's exercise is complete, I would like to continue one more thought on this subject, if you don't mind.


If 1:4 gives max of 4 shots at getting it right on each opportunity, then 1:100 RR should give 100 shots at getting it right

I mean obviously well before 100 attempts even a novice would know whether the given opportunity is a real opportunity or not.

In other words, this 100 shots 'ammunition' can be used on subsequent opportunities as well by a good trader, making newer opportunities literally free of cost.

Am I confusing or totally messed up? Can you shed some light?

Again, hope this is not too much of a trouble

Warm Regards,
TradeStar
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #2,593
  • Sep 21, 2010 5:07am Sep 21, 2010 5:07am
Quoting traderray
Hi KC,
I have also done the exercise and had spectacularly good and bad results.
What I fail to appreciate in your analysis is how you have multiples of certain levels - e.g. 3x190?
If I may be so bold as to try guess how KC did the test, if an open trade (existing coin toss) moves down to breakeven and then the next toss (new trade) is a head, both the existing and new trade would move up to the +10 position, hence that would be 2x +10.

Cheers, Beastie.

PS. There is a delay in my posts appearing, so if KC has already answered please ignore me.
  • #2,594
  • Sep 21, 2010 5:14am Sep 21, 2010 5:14am
Interesting Pa on 5 min at the last week candle wick area.


Regards,
TS
Haste not to Enter AND Haste not to Exit !-TradeStar
  • #2,595
  • Sep 21, 2010 5:14am Sep 21, 2010 5:14am
Quoting Beastie Boy
If I may be so bold as to try guess how KC did the test, if an open trade (existing coin toss) moves down to breakeven and then the next toss (new trade) is a head, both the existing and new trade would move up to the +10 position, hence that would be 2x +10.

Cheers, Beastie.

PS. There is a delay in my posts appearing, so if KC has already answered please ignore me.
Yes but the trade at BE has gone!
  • #2,596
  • Sep 21, 2010 5:50am Sep 21, 2010 5:50am
Hello, everyone.

Based on coin toss i wanted to see it on charts.

Looking at 1 hour bars regardless of trend.

Check out the last few weeks

Starting at 01/09/2010 till today
Calling green bars winners
Calling red bars losers

Placing a trade at open of each bar and exit at close of bar.

We would have had 164 winners
156 losers
16 doji = evens
Its amazing.

Its the same generally for daily, weekly its universal.
Graeme and everyone do you think there is a strategy we could apply to this. I'am sure by doing as you say and limiting the losses it could be made profitable?
Have you done any testing of this with stops and such?

Lol we may invent a strategy purely based on probability regardless of trend .
Maybe its been tried an I am being daft.
Would like to see what you guys think.
making green pips large and red pips small this is my goal.
  • #2,597
  • Sep 21, 2010 6:42am Sep 21, 2010 6:42am
Quoting paul1
Hello, everyone.

Based on coin toss i wanted to see it on charts.

Looking at 1 hour bars regardless of trend.

Check out the last few weeks

Starting at...
Interesting test Paul, but where do you place your stoploss ?
  • #2,598
  • Sep 21, 2010 6:43am Sep 21, 2010 6:43am
Quoting traderray
Yes but the trade at BE has gone!
Yes, you are right. KC seems to be classing a trade as still alive if it moves back to BE, when in fact it is dead and therefore not counted in the negative pips if the next toss is tails.

Cheers, Beastie.
  • #2,599
  • Sep 21, 2010 6:56am Sep 21, 2010 6:56am
Hello all,

I am an autotrader, and have been reading this thread with some interest. I would like to point out that the "coin flip" scenario as it is being conducted here is flawed. In fact, as presented here, the expectancy would be enormous!

The error is in the assumption that it is possible to stack the wins with a subsequent win. This is true if and only if each new trade is in the same direction as the previous trade. Missing is that each new trade could be in either the same or opposite direction to the previous trade. So one should consider 1) if the next trade is a buy/sell and 2) if the next 10 pip move is profitable for each transaction.

For example, say you buy EUR/USD at 1.3510 and it moves to 1.3520. Now you place SL for the first trade at 1.3510 and open the second trade. If you go long, a move to 1.3530 will be profitable to both the second and first trade. If you go short, with this move the second trade will be stopped out at -10 pips, and the first trade will now be +20 pips. You will lose 10 pips on one trade and gain 10 on the other no matter the result, if the trades are in opposite directions. To allow the trades to stack, you must continue to go long.

However, if you trade only long/short, this strategy will work. However, unless one has a very strong idea of the trend, a move against you will empty your account quickly.

Thanks,
/Duke
  • #2,600
  • Sep 21, 2010 7:15am Sep 21, 2010 7:15am
Quoting skyline
Interesting test Paul, but where do you place your stoploss ?
Hi I'am still playing with this, but the stop would have to be a few pips more than the longest open of candle.wick/tail. to allow for volatility.
The one hour timeframe 20 pips should do.
I think it may work for the ranging markets when there doesn't seem to be a trend like now on eur/usd.
making green pips large and red pips small this is my goal.
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