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  • #257,961
  • Oct 1, 2010 9:30am Oct 1, 2010 9:30am
Quoting Sutts
Thanks Trending. When you range trade a higher T/F would you look for confirmation of a turn at the S/R level first or just enter where it rejected last time and close out if it carries on through? My guess is you just enter without confirmation going by the really tight entry prices I see posted here.

Thanks for the help.
If you are looking for information regarding price reversal, trend re-entry look for the the "Higher low, lower high system" thread in the trading systems section. Those guys there are fantastic, I learned a lot from there.
  • #257,962
  • Oct 1, 2010 9:31am Oct 1, 2010 9:31am
u live in the dream and hope

wake up ... !



Quoting TheArcher
when comfortable and cosy with the rules and techniques ....

when calls have more winners than losers ...
not euphoria follower
  • #257,963
  • Oct 1, 2010 9:32am Oct 1, 2010 9:32am
Quoting TheArcher
when calls have more winners than losers ...
huge misconception with beginners... you do not need to have more winners than losers.
check out my blog: forexmademillionaire dot com
  • #257,964
  • Oct 1, 2010 9:50am Oct 1, 2010 9:50am
Quoting trending
If you are looking for information regarding price reversal, trend re-entry look for the the "Higher low, lower high system" thread in the trading systems section. Those guys there are fantastic, I learned a lot from there.
Thanks trending, I'll take a look...
  • #257,965
  • Oct 1, 2010 10:01am Oct 1, 2010 10:01am
Quoting iqyu5an
u live in the dream and hope

wake up ... !

  • #257,966
  • Oct 1, 2010 10:07am Oct 1, 2010 10:07am
Quoting Geppy
huge misconception with beginners... you do not need to have more winners than losers.
care to elaborate ....?

willing to learn .

my thoughts and what i have gathered so far says: if u have 'guessed' a direction with the aid of TA etc and it turns out a winner more times than a loser ... if the probability is 51 / 49 .. then u could win this game ...

willing to correct my thoughts ..

thanks

  • #257,967
  • Oct 1, 2010 10:14am Oct 1, 2010 10:14am
Quoting TheArcher
care to elaborate ....?

willing to learn .

my thoughts and what i have gathered so far says: if u have 'guessed' a direction with the aid of TA etc and it turns out a winner more times than a loser ... if the probability is 51 / 49 .. then u could win this game ...

willing to correct my thoughts ..

thanks


Read through the pages on this section and you will get a better understanding by the end of it

http://www.babypips.com/school/money_management.html

Enter Signature
  • #257,968
  • Oct 1, 2010 10:25am Oct 1, 2010 10:25am
Quoting darrenware
Read through the pages on this section and you will get a better understanding by the end of it

http://www.babypips.com/school/money_management.html

thanks . really appreciate it .

one of the sites i started off with in the earlier days ... still refer to it from time to time ..


would love to hear from Geppy too .... will be useful for all beginners too ..


  • #257,969
  • Oct 1, 2010 10:31am Oct 1, 2010 10:31am
Quoting TheArcher
care to elaborate ....?

willing to learn .

my thoughts and what i have gathered so far says: if u have 'guessed' a direction with the aid of TA etc and it turns out a winner more times than a loser ... if the probability is 51 / 49 .. then u could win this game ...

willing to correct my thoughts ..

thanks

Sure, you "could win this game" guessing right 51% of the time. You could also win this game guessing right 40% of the time.

Let me give you an example:

Let's say in an average week you take 10 trades. You're very disciplined with your trades and keep a stop loss of 50 pips from your entry and your average target is 100 pips profit. Let's say your trades go like this:

1. stopped out
2. stopped out
3. target met
4. target met
5. stopped out
6. stopped out
7. stopped out
8. target met
9. stopped out
10. target met

From the above, you "guessed right" 4 of your 10 trades... or 40%. Now let's look at the results in pips:

1. -50 pips
2. -50 pips
3. +100 pips
4. +100 pips
5. -50 pips
6. -50 pips
7. -50 pips
8. +100 pips
9. -50 pips
10. +100 pips

So, what's your net gain/loss? Well, some simple math shows you that you would have gained a total of 100 pips and guess what... you were wrong more times than you were right.

Trading is based solely on probabilities and tipping those probabilities in our favor as much as possible to give us an edge.

Everyone's edge is different. In the example above, this trader's edge is not guessing "right". Perhaps he/she is poor at interpretation of fundamentals and only mediocre at technical analysis.

However, we see that this trader is disciplined with his/her risk:reward by only risking half of what he/she is willing to gain.

A trader's edge can come in many forms... risk/reward, money management, technical analysis are just a few characteristics that compile one's edge. The more you can build on different characteristics, the better trader you'll become.

I'm actually very skeptical of people who post systems with a very high win percentage. Normally anything over 80% is a red flag for me. Why? The market is completely random and being right more than 80% just isn't natural. What traders/systems like this are doing is holding their losers far too long into drawdown until they come back and can close them out for wins. It's not uncommon to see a "flip-flopped" risk/reward with these traders where they are risking much more than they're willing to gain.

That's poor trading and should be considered so by anyone's standards. It's only a matter of time before traders like that blow up their accounts.

You need to find out what combination of risk/reward, money management, technicals, fundamentals, etc. work best for you. It's different for everyone.

But I encourage you to play around with different risk/reward settings. For example, check out what happens if you can get a 1:3 risk/reward but only a 30% win percentage (i.e. 50 pip stop, 150 pip target, winning only 3 out of 10 trades spoiler: you still make 100 pips).

Find what works best with your personality and tolerance level but by no means let anyone tell you that you have to win more often than not. For some, it's mentally hard to grasp... losing more often but winning overall, but it's very important because in my experience most profitable traders lose more often than they win or are very close to 50/50.

I hope that helps... maybe this would be a good blog article for me
check out my blog: forexmademillionaire dot com
  • #257,970
  • Edited 9:37pm Oct 1, 2010 10:47am | Edited 9:37pm
Quoting Geppy


I hope that helps... maybe this would be a good blog article for me
standing ovation !




---------------------------------

excellent post !

thanks !
  • #257,971
  • Oct 1, 2010 10:49am Oct 1, 2010 10:49am
Quoting Geppy
Sure, you "could win this game" guessing right 51% of the time. You could also win this game guessing right 40% of the time.
  • #257,972
  • Oct 1, 2010 10:54am Oct 1, 2010 10:54am
Things are crystal clear if anyone can't make green ++ better back to demo.
today seems will close as i said
Damn I'm good i see exactly from where this thing will Drop LOL
Am i said Drop
  • #257,973
  • Oct 1, 2010 10:56am Oct 1, 2010 10:56am
Quoting Geppy
Sure, you "could win this game" guessing right 51% of the time. You could also win this game guessing right 40% of the time.
........
I'm going to endorse this one as good advice, though there is a variation on 'poor trading' theme I could discuss if you wish.
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  • #257,974
  • Oct 1, 2010 11:15am Oct 1, 2010 11:15am
Quoting Uphios
I'm going to endorse this one as good advice, though there is a variation on 'poor trading' theme I could discuss if you wish.
Of course there is... there are a ton of ways to be a poor trader just as there are with anything. No two individuals fail or succeed in quite the same manner.
check out my blog: forexmademillionaire dot com
  • #257,975
  • Oct 1, 2010 11:21am Oct 1, 2010 11:21am
Quoting Geppy
Of course there is... there are a ton of ways to be a poor trader just as there are with anything. No two individuals fail or succeed in quite the same manner.
No, I'm not saying that. I'm saying that the circumstance you describe is not necessarily poor trading. For example one school of thought says your entry and target should be decided by your stop loss. That is to say why would you arbitarily set a stop of say 50 pips when there is nothing 50 pips away to say the trade is invalidated. However perhaps at 62 pips is a trend line or fib or previous highest/lowest.
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  • #257,976
  • Oct 1, 2010 11:26am Oct 1, 2010 11:26am
Quoting Uphios
No, I'm not saying that. I'm saying that the circumstance you describe is not necessarily poor trading. For example one school of thought says your entry and target should be decided by your stop loss. That is to say why would you arbitarily set a stop of say 50 pips when there is nothing 50 pips away to say the trade is invalidated. However perhaps at 62 pips is a trend line or fib or previous highest/lowest.
My apologies if I took some liberties in the assumptions of my example. I assumed that a trader would have some basis for entering a trade. That's why I always put "guessing" in quotes.

The point was, you have an entry you think is good based on something whether technicals, fundamentals, etc and you can apply good risk/reward to that entry.

A person blindly clicking buy or sell and then placing their target and stop... well, that's just ridiculous (but that doesn't mean it couldn't potentially work also). I don't think anyone in here does that and that's not what I was recommending. I'd be surprised if anyone else took my post to suggest that.
check out my blog: forexmademillionaire dot com
  • #257,977
  • Oct 1, 2010 11:26am Oct 1, 2010 11:26am
Another erxample (not to be recommended!).

You reasonably judge the market will not go up or down by more than $1, 10,000 pips. You finance the account with $10000 and play a dollar per pip, never taking a loser. If you find your self in a loseing situation you can trade a dollar per pip in the opposite direction to your hearts content, until such time as both positions are loseing and now you have to sit out the market till one or other is a winner. You could be locked up in the trade for years with a fair bit of carry cost.
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  • #257,978
  • Oct 1, 2010 11:30am Oct 1, 2010 11:30am
Quoting Geppy
My apologies if I took some liberties in the assumptions of my example....
Sorry, not alluding to you suggesting that, just an example of where you may have a target for a profit of say 100 pips BUT a 50 pip S/l makes no sense, it is in no mands land. Better to find a S/L that invalidates the trade, even if it is more than 50 pips away.

Not disagreeing with what you say, just pointing out some variations. As you say, lots of sysles of trading.
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  • #257,979
  • Oct 1, 2010 11:31am Oct 1, 2010 11:31am
  •  samirb
  • | Joined Nov 2009 | Status: Investing is simple, but not easy. | 247 Posts
Quoting samirb
Gone short at 15870 ... will add one more at same level if price retest.

Reason bearish gartley..
I dont think market will make new high before NFP next week.. we will be in range for one week..

Good luck

Good day everyone,

Stops amended and holding for the weekend.

Both positions stop are set to 15880 (10 pips). I still dont feel breakout before NFP.

Happy weekend to all..

Regards
  • #257,980
  • Oct 1, 2010 11:35am Oct 1, 2010 11:35am
Quoting Uphios
Sorry, not alluding to you suggesting that, just an example of where you may have a target for a profit of say 100 pips BUT a 50 pip S/l makes no sense, it is in no mands land. Better to find a S/L that invalidates the trade, even if it is more than 50 pips away.

Not disagreeing with what you say, just pointing out some variations. As you say, lots of sysles of trading.
I think you're missing my point that was (in my opinion) very clear in my original post.

It's about risk/reward. As you said if a "50 pip S/L makes no sense" with your 100 pip profit target and you want to make sure your risk/reward is 1:2... you don't need to look for a new stop loss to invalidate the trade. That in itself invalidates it. What you need to do is wait for a better entry that would allow you a 50 pip stop and 100 pip target.

In fact, in your example if you have a 100 pip target but can only justify a 62 stop loss but refuse to let it over ride your 1:2 risk/reward... you should wait 12 more pips to buy (or sell) and now, if you're confident in your original target, you have a 112 pip target and 50 pip S/L giving you an even more attractive risk/reward.

Regardless, this isn't the place to debate this topic and you see to be rehashing obvious implications and/or assumptions.
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