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  • #364,421
  • Jan 13, 2011 5:04pm Jan 13, 2011 5:04pm
After I read your discussions I decided that it is time for a Heineken!
  • #364,422
  • Jan 13, 2011 5:04pm Jan 13, 2011 5:04pm
I got a PM from a newbie who has been wiped out in FOREX, asking for advice. He sent PMs to several other people on this board so some know who I'm talking about. I'm not posting his name; it would serve no useful purpose. Here's what I wrote:

This is going to be a very long, detailed response. I will also post it on the website (removing all references to you) so that hopefully someone else will gain something from this.
Keep in mind that this is not a one size fits all world and what works for me may be poison to you. You have to find your balance.


First, I've done stuff very similar to you in my trading career. (I've blown up my entire trading account a couple of times in my trading career). You're not alone. So hopefully some of the things that have helped me will help you.

Let's go into your personality. You're a risk taker; so am I. If you weren't, you wouldn't have kept with school and played it safe. Risk taking's not a bad thing; Richard Branson's been very successful as a risk taker. And quite frankly, almost every trade across every asset class (FOREX, commodities, bonds, stocks) involves risk.
In your case (and mine), there's a bit too much riverboat gambler. You have GOT to tone that down.
You're swinging for the fences; I know, I've done it plenty of times in my trading career. The initial result is binary; you either lose everything or you make a buttload. If you lose everything, it's game over. If you make a buttload, you continue to swing for the fences until one day you lose everything. Been there, done that, got the T-shirt.
You have to completely rework your money/risk management.
Let's start with leverage. In FOREX, you can go big ... up to 100:1. My broker, InteractiveBrokers, limits customers to 50:1. That's fine with me; I try to keep the sum of all positions at or below 10:1. I will, on occasion, go 20:1 but then I'm on the end of my seat, elevated pulse, making mistakes. At 10:1, I haven't got enough to lose that I'll be up at night, assuming that I've got a reasonable stop loss. I keep fairly loose stop losses because I'm not nearly as good as Cloggie, Gatorinla, and several others at calculating exact points of support/resistance; I can easily be 10-20 pips off. 20 pips at 10:1 translates into ~1.5% of my capital (based on USD as base currency and trading EUR). If I've got $100K in my account, that means I go as far as $1500 in the hole with a 20 pip stop. Obviously, this varies with account size. For a $10K account, it would be $150.
Excessive leverage will eventually kill you no matter the asset class that you're trading. Use very little leverage and you'll improve your performance greatly.

Leverage kills. So does failing to dump a losing position. Everyone has some losing positions; no one's 100%. That's why you need to constantly evaluate your position. If you've lost confidence in the direction of the trade but are trying to get out at break even, you're in trouble. Stop. Get out. Preserve your capital.

Another point is to make sure that you choose the right brokerage; commissions and spreads can eat all of your profits.
I trade with InteractiveBrokers. Perhaps not the best but I'm happy with the very tight spreads and reasonable commissions (~.27 pip for a buy and a sell for a total of .54 pip round trip in EUR although their website states .2pip). However, InteractiveBrokers has a minimum commission of $2.50 so you need to place an order for at least 100K EUR in order to meet their minimum commission cost. They also charge a $10 monthly fee but subtract that amount from commissions your account generates - it's not an issue with my trade volumes. I've had zero connectivity issues with them which is worth their weight in gold when you want to get out of a position. Lastly, InteractiveBrokers has been fantastic about keeping tight spreads even during volitile times.

Next, my setup is that I'm logged on and watching everything on my laptop. I've got my account open, a chart set to M1, FF, ForexLive, and a couple other financial websites. I'm switching TV channels between Bloomberg, CNBC, and Fox Business News. It's a very crude setup compared to most on FF and I could improve my performance if I had better data management but I find myself maxed out with this amount of data. Oh yeah, I only trade ONE pair; that's as much as I can watch at one time. And that pair is EURUSD because they're the two most traded currencies.

I've traded FOREX when I had a job. That didn't work nearly as well as now (I retired from the Air Force and am still laid off from United Airlines) that I am able to devote all of my time to it. In hindsight, I wish that I never had an open position while I was busy working. When I have an open position, my laptop is glued to me - I take it everywhere, including the crapper. As a retail guy, I'm not as fast as the pros, but I'm fast enough when I'm staring at the screen.

How do I know whether to go long or short? I can't really put that down on paper. A lot of it's experience. Know where support and resistance is. If you want to short, short when the pair's just below resistance. Long, be right above support. That minimizes your risk.

As for your comment about demo accounts, I hate them. I hate demo accounts with a passion. It's too easy to make big plays without the adrenaline pumping. When you add in real money, you can make a lot of stress related mistakes.
In order to not make stress/adrenaline related mistakes, you need to keep the size of your trades small enough for you to handle any losses.

Lastly, you lost money that you couldn't afford to lose. That's a cardinal mistake. You shouldn't be in the markets until you're using money that isn't needed for anything.
In my case, I'm retired military so I get a retirement check every month and I owe no money. My wife is in the military (drawing a paycheck) and will retire in another three years. We rent a house so we don't have a mortgage. My daughter's a senior in college and I've paid off her entire tuition/board/etc so she'll graduate debt free. My son's a freshman and he's using my post-911 GI Bill benefits, allowing him to graduate debt free. If I lose every dime of the money I have at risk, my life won't take any hits.

You need to get out of trading until you've got a bankroll built up that you can afford to lose. Get done with school, get a job, pay off student loans, and casually learn about trading. But don't trade a dime until you've got money that you can take to Vegas and lose at the tables. That's several years down the road for you.

I hope this helps. All the best to you. And it will get better.
  • #364,423
  • Jan 13, 2011 5:04pm Jan 13, 2011 5:04pm
Logging on after almost a week. Is it going up?
The Thief of Wall Street
  • #364,424
  • Jan 13, 2011 5:06pm Jan 13, 2011 5:06pm
Quoting mikej2010
I don't know when to factor it in, but the 'baby boomer' generation starts retiring this year ...

They say that for the past couple decades, we have made money off of social security and used it to pay down the deficit, but starting this year, the social security balance is going to be negative which is going to have a BIG impact in 7-15 years ...

Point being, if Washington is actual using their noggin' they will stop playing these games with Europe, China, etc....

Speculation.............. Knuckles takes a deep breath............ is the life blood of suckers. More money is lost by thinking than anything else (chasing women not included).

Right now; its a range on the daily. When it breaks thats where we are going. Until it breaks........................another deep breath.......................its a range.

IMO


For now the only trend is on the one hour (up) and when it changes it will be (down), but its still up for now. Fade the range or play the one hour trend, but guessing about what comes next................... hell just go chase women at least you'll have a good time.
  • #364,425
  • Jan 13, 2011 5:06pm Jan 13, 2011 5:06pm
Quoting kill56
kas and magix what the fook is going on dont tell me are in love and dammmmmmmmmmmm who knows
Just you wait my 666 post.
All systems of divination, like music itself,work through patterns.
  • #364,426
  • Jan 13, 2011 5:11pm Jan 13, 2011 5:11pm
Quoting kaspopsicle
Seriously, i wish you well with these tests. The stress of prescribed preparation is enough to make the healthiest person feel ill. Keep healthy, our Mag ...your advice, help and wisdom is invaluable to us all. I love you and .
Thanks Kas!


Quoting kaspopsicle
Just you wait my 666 post.
Will there be pictures? I am a very visual type fella....
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #364,427
  • Jan 13, 2011 5:13pm Jan 13, 2011 5:13pm
Quoting mikej2010
I don't know when to factor it in, but the 'baby boomer' generation starts retiring this year ...

They say that for the past couple decades, we have made money off of social security and used it to pay down the deficit, but starting this year, the social security balance is going to be negative which is going to have a BIG impact in 7-15 years ...

Point being, if Washington is actual using their noggin' they will stop playing these games with Europe, China, etc....

well the lion dos not hunt they hunt for him then they bring it to him he eats till he is full of shitt after that he lets others to eat
who have the keys for the house sure the lion, now he is the one playing games , who will benefit from low dollar sure the lion , now we have a new player china, can the chinoo do any thing with them holding a lot of US bonds no way , europe might play for a short time if the US will let them do that , man there is one master out there and the rest are pussy's , the game now 2 for me 1 for u its the lion rules
  • #364,428
  • Jan 13, 2011 5:16pm Jan 13, 2011 5:16pm
it gets interesting every minute this thread doesnt it?

Quoting kaspopsicle
Just you wait my 666 post.
  • #364,429
  • Jan 13, 2011 5:16pm Jan 13, 2011 5:16pm
Quoting iflyjetzzz
...
Nicely written thoughtful response to someone who probably feels like he's been kicked where it hurts.

BTW, EUR commission with IB is .2 per pip, but on the USD amount of the base, so about .2*1.3 for EUR. A little tricky, but that the way it should be.

BTW2, from your (what is that, "avitar"?) I suspect in your AF life you were on one end or the other of the boom more than once. I evaded the Vietnam draft as a refueling navigator, so that picture makes me smile.
  • #364,430
  • Jan 13, 2011 5:18pm Jan 13, 2011 5:18pm
good luck tomo wise man . hope all will be fine


and stay away from kas for now
  • #364,431
  • Jan 13, 2011 5:21pm Jan 13, 2011 5:21pm
Quoting kaspopsicle
Just you wait my 666 post.

669 is more ?????????????
  • #364,432
  • Jan 13, 2011 5:23pm Jan 13, 2011 5:23pm
Quoting OldQuant
BTW, EUR commission with IB is .2 per pip, but on the USD amount of the base, so about .2*1.3 for EUR. A little tricky, but that the way it should be.

BTW2, from your (what is that, "avitar"?) I suspect in your AF life you were on one end or the other of the boom more than once. I evaded the Vietnam draft as a refueling navigator, so that picture makes me smile.

Yep, you're exactly right on the commission but I didn't want to get into that level of detail. I assume a .6 pip commission with EURUSD as one of my factors to compute breakeven.

That's a RC-135; I flew them for several years. Rivet Joint and Combat Sent. Yep, plenty of receiver time. We'd fly direct Offutt, NE to Saudi with two refuelings enroute when we rotate in/out of the desert.
Was a KC-135 pilot in my previous life, sitting alert. In my post active duty life, I flew the KC-135 with the Guard for a few years until I had to find a desk job with the Reserves due to my time in service (getting close to active duty retirement). Was able to pull out an active duty retirement due to being laid off from United 6 1/2 of the last 10 1/2 years. You gotta adapt and overcome.
  • #364,433
  • Jan 13, 2011 5:23pm Jan 13, 2011 5:23pm
Quoting iflyjetzzz
[color=black][font=Verdana]I got a PM from a newbie who has been wiped out in FOREX, asking for advice. He sent PMs to several other people on this board so some know who I'm talking about. ....
Great speach! Always good for beginners as well experienced traders to read it again.

Thank you
  • #364,434
  • Edited 5:34pm Jan 13, 2011 5:23pm | Edited 5:34pm
2011-01-13 _ 23h15 CET _ EUR-USD : CLOSING (Thursday)


EUR-USD : 1.3364 (rollover)


(-06) Trend + Potential (bearish)
0.0294 Écart
1.2865 Elliott Reversal Point
1.3780 Elliott Projection (crucial reversal point below 1.3522 or elongated correction up 1.3780)

pivots + spezi

1.3762 1.3518
1.3573 1.3413
1.3383 1.3301
1.3469 1.3251

1.3279 1.3236 <= central pp zone

1.3175 1.3222
1.3089 1.3172
1.2985 1.3060
1.2881 1.2954

Erstellte Punkte

E-Punkt K-Punkt
1.3269 1.3492



Highest been given : BID
1.33833

Lowest been taken : ASK
1.30894


Vereinfacht: As long as above 1.3314 - 1.3279 or 1.3271 (which is ideal pullback zone) ... one more move up to 1.3469 or even to above 1.3518 is possible ...

After all ... as long as below 1.3522 - 1.3565 (which is likely) ... a pullback to below 1.3279 or 1.3231 - 1.3222 is possible then ...

Market rythm ... firstly further upside attempts ... then down again ...



;-|
Attached Image (click to enlarge)
Click to Enlarge Name: 2011-01-14_00h27_ EURUSD _ 015min _ (1100 x 800).PNG Size: 28 KB
2013-07-31 Today's Phrase of the Day: Hold off from any recycle bin experts
  • #364,435
  • Edited 5:46pm Jan 13, 2011 5:26pm | Edited 5:46pm
Quoting Mr Hatch
how can i calculate the point of intersection of today's candle with the circled part of the red trendline?
This may have been answered to your needs, and I think you have gone for the night, but here is a general formula for such a "touch" problem:

Denote two points on the target reference trend line or barrier as (P1,B1) and (P2,B2), where P[.] is the price level at the known points, and B[.] is the bar index, counting back from "now as zero", or absolute time like minutes since midnight, or any other constant scaling.

Then, for bar index b, the level p, at which that bar will touch the reference line is:
p = ((P1-P2) b -P1*B2 + P2*B1) / (B1-B2)

Example: Say you have a trend line at P1=120 at B1=-12 (twelve bars back), and it connects to P2=114 at B2 = -6. You want to know the level of touch at b = 1 (the next bar).

Then p = [(120-114)(1) - (120)(-6) + (118)(-12)] / (-6) = 107.
This checks from intuition, since the trend line is falling at a rate of 1 per bar.

There are easier rearrangements, but this is a general formula.
  • #364,436
  • Jan 13, 2011 5:26pm Jan 13, 2011 5:26pm
Quoting Chicky
Logging on after almost a week. Is it going up?


well yes it has been...............but we are approaching the top of the daily range.......so place your bets.

Good to see you around
  • #364,437
  • Jan 13, 2011 5:28pm Jan 13, 2011 5:28pm
Quoting kill56
669 is more ?????????????
Always thought you were French lol
All systems of divination, like music itself,work through patterns.
  • #364,438
  • Jan 13, 2011 5:31pm Jan 13, 2011 5:31pm
Quoting knuckledrag


well yes it has been...............but we are approaching the top of the daily range.......so place your bets.

Good to see you around
Bets already placed. No range lasts forever.

See you at 1.3978
The Thief of Wall Street
  • #364,439
  • Jan 13, 2011 5:34pm Jan 13, 2011 5:34pm
Quoting Magix
Thanks Kas!




Will there be pictures? I am a very visual type fella....
Ooooh yes.....once i get the hang of this computer...could someone tell me how to cut and paste?
All systems of divination, like music itself,work through patterns.
  • #364,440
  • Jan 13, 2011 5:35pm Jan 13, 2011 5:35pm
That's weird, 300 pip intraday rally against USD and not a peep out of Skyzer... Dr Evil must still have his mojo...

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