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  • #401
  • Feb 17, 2006 12:10am Feb 17, 2006 12:10am
The rolling wedge of frustration. How very appropriate. I called it the "God I want to hurl my laptop against the wall and jump on it" trend. That being said, when you feel like you have some understanding of what the market is doing, it makes it a lot easier to sit on your hands, though I did get stopped out for a small loss today.
  • #402
  • Feb 17, 2006 12:16am Feb 17, 2006 12:16am
Quoting vegas

"Oh, that's easy. I want to make 50 or 100,000 dollars a year"
People trade to make 50-100k? Trading's a business, an enterprise, not a job.
  • #403
  • Feb 17, 2006 12:26am Feb 17, 2006 12:26am
Quoting vegas
Lambrecht,
Nothing like the present.

What is a "free trade"? The short answer [without writing a book] is to be in a position for a big gain without any risk. It is a mindset of looking past scalping and a few pips and putting yourself above that.

Let me state the obvious. Every trader is in the same place when they push the button. If you buy and I buy at the same time, do I have an advantage? Does the market know any difference between us? The answer of course is no. But after the trade comes on, this is where traders go on different paths.

I know that when I'm buying or selling the market is ripe for a move in my direction. History [probability] tells me that. But history also tells me there is a chance that I am wrong. So when I get up on a trade the "golden rule" comes into play: never ever let a winner become a loser, for any reason, no matter the scenario, you get the idea. I call this a "free trade" because I have put myself in a position [marble game] where history tells me there is a darn good chance a big move is on the horizon, and I have no risk. So if I'm looking for 200 - 1000 pips over the coming days, what do I care about it coming back and costing me 20 - 100 pips?

The psychology of doing this, though, is very tough for a new trader. If he/she is up on a trade by 30 pips and it starts to retrace, odds are the position is coming off. Just can't stand to be up money and watch it bleed away. New traders in the pits used to tell me, "You can't go broke taking a profit", to which I would reply, "Yea, and you don't get rich either". You have to look at the bigger picture and ask yourself what you're doing here.

"Oh, that's easy. I want to make 50 or 100,000 dollars a year", say many, to which my reply is, "Why risk your bank account for that? Why put a limit on your results?" If you have free trades why not ride them out?

Nobody knows where this stuff is going. And to this I will add that in 3 weeks time, where it's trading will surprise you greatly [Gosh, can it really rally/break 12 days in a row?]. Take this chaos and randomness and use it to your advantage. I have never, ever, met anyone in the last 30 years who could chart the course of a market, with success, day-in day-out and never be surprised. They don't exist, so don't try and be one.

Not getting your ass handed to you has two aspects to it. 1) never get caught in a freefall long or a melt-up short [especially with big numbers]. How is this accomplished? Learning to fail successfully by not being stubborn about losses. 2) Having a method that puts you in a position to succeed. All the work on your method has been done away from the market so you are not influenced by the moment.

The numbers I look at tell me things [probabilities] based on the past. I've done my homework, so in essence the numbers translate into the marble game. I simply can't ask for anything more from the market.

Hope this short answer helps.


Dear Mr Vegus

You the Guru "here".

Fantastic
Did you want that with Fries?, you would have to ask that Fries person.

I'm still digesting your short answer, I have saved it off in a note pad to read again, later and I will read it over a couple times there is a lot of thought in that short note you produced. Its the mind set of the trader after they push the button that determines alot of how you will do.

Just a couple key points here I think I have been revealed of tonight, correct me if I am off the wall.

I guess one of the key things a person needs to determine from what you said is why the heck they are trading if they are after small gains, your point is well taken that to get rich more risk is required or even to make all the hard work woth the grind, but first gotta know what heck your doing before you blow it all.

1) In the begining get your trade to break even as soon as you can meaning when it gets enough pips to sustain it self. If it goes straight south just take the loss at the pre-determined stop or before that if you catch it. This assumes your entry was great with all the rules met. Question what determines it is a loser like today?

3) Once the trade has reached sustainability and you have a high probabiltiy trade under your belt running for a couple days or weeks let it run don't let the pip fluctuations bother you, move your stop up to a point where you wont get the trade closed out on a Minor/Medium retracement.

4) Just keep riding the market which ever way it is going until it tells you itself it is no longer going your way. In other words let the Market do the thinking for you and tell you which way it is going rather than second guess it and make decisions to get out before the market has shown you that decision.

?? Are there any Numbers you look for when a trade is just getting underway like todays trade you seemed to know that if it retraced a certain percent that the trade was up to no good. Say it shot up then retraced
50% of the Momentum movement? Is this what you look for.

Thanks again...

I have to quit for tonight got to go to work tommorow.

Catch you in the morning bye.
  • #404
  • Feb 17, 2006 8:15am Feb 17, 2006 8:15am
Vegas,


You write, "So when I get up on a trade the "golden rule" comes into play: never ever let a winner become a loser, for any reason". In the same paragraph you write, "So if I'm looking for 200 - 1000 pips over the coming days, what do I care about it coming back and costing me 20 - 100 pips?

The first statement implies that once you are in a winning trade, you adjust your stop to breakeven. The second statement contradicts that so I must not be understanding the "free trade" concept.

Thanks,

Zach
  • #405
  • Feb 17, 2006 8:20am Feb 17, 2006 8:20am
Hello, rex, and 5MinuteStudent

Great work on the work sheet and trade sheet -

I just downloaded the amended version by rex but I received (2) GBPUSD trade sheets - shouldn't one of them be the GBPUSD work sheet?

If you have one, and can post it for download that would be great.

Thanks again for this great work and for sharing with this great forum.
  • #406
  • Feb 17, 2006 8:38am Feb 17, 2006 8:38am
Quoting Zach
Vegas,


You write, "So when I get up on a trade the "golden rule" comes into play: never ever let a winner become a loser, for any reason". In the same paragraph you write, "So if I'm looking for 200 - 1000 pips over the coming days, what do I care about it coming back and costing me 20 - 100 pips?

The first statement implies that once you are in a winning trade, you adjust your stop to breakeven. The second statement contradicts that so I must not be understanding the "free trade" concept.

Thanks,

Zach
Hey Zach,

How does the second contradict the first?

My read here is that Vegas wants his best position for a pending move!

And he doesn't want to pay anything for it!

Once he can comfortably cover positions a BE, lets say it moves 100pips in his favor it starts to retrace and he covers for profit at 50 pips. (its a "Save") The position then turns and runs away in the intended original direction. for 500pip gain. vegas is now sitting there with his 50 pip save. If he woulda stuck to his BE, he'd be feelin' pretty good. Anytime you trade 500 pips for 50, your kidding yourself if you think youve won!

Free Trades Rock!

HeavyJ
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #407
  • Feb 17, 2006 8:50am Feb 17, 2006 8:50am
Vegas Welath Builder II,


News Highs and Lows section

  1. There is approximately a 75% probability that once the market moves farther than about 45 pips from the open, it isn’t coming back.

With regards to the above, I've been studying the price action for February 2006 in cable, and noticed the following:

Out of 13 trading days in Feb, only 5 have behaved this rule, or 38%.

But one thing stands out pretty clearly on my 15 min chart - - -- if the 45 pip level was hit from European session start onward, and the 45 pip level was hit by a large bar (speed/momentum), there was an excellent chance of success - - - - but if price eased or rambled or chopped to get there was very little chance of success.

I have not done the math, but on the surface it appears that a resting stop in place would work if price is 35 pips or further away, waiting for a large bar, maybe a spike, to activate it - - - - but if price trickles on over to within say 10 pips of my entry stop I'd remove my stop and forget that day. Seems that initial stoploss of 20 pips once entry stop hit, trail down to break even after +20 pips profit, and then trail down every 20 pips more chunk of profit staying about +20 away from price would have worked on those 5 big days when maximum gains from a 45 entry would have been from +55 to +148 pips . . . . all the other 8 days weren't worth my time . . . .

  • #408
  • Feb 17, 2006 9:01am Feb 17, 2006 9:01am
Quoting Zach
Vegas,


You write, "So when I get up on a trade the "golden rule" comes into play: never ever let a winner become a loser, for any reason". In the same paragraph you write, "So if I'm looking for 200 - 1000 pips over the coming days, what do I care about it coming back and costing me 20 - 100 pips?

The first statement implies that once you are in a winning trade, you adjust your stop to breakeven. The second statement contradicts that so I must not be understanding the "free trade" concept.

Thanks,

Zach

Hi Zach,

I agree with you, this is a tough one to comprehend, but knowing that Vegas means what he says, this is how I have it figured.

eg. [not taken from VWB trades. Just Numbers]
USD/JPY
114.5 Buy 4 @ [Jan 23rd]
116.5 Close 2 @[Jan 26th]
{400 pip profit Booked}
116.5 Two Trades remain Open and are up 400 pips.

112.5 To Breakeven on THE ENTIRE TRADE [All 4 Units], USD/JPY would have to collapse to on my remaining 2 lots to give up my 800 pip profit. [400 booked, 400 open]

115.5 Stop on remaining 2 Units [loss of 200 pip pullback on max profit]
"what do I care about it coming back and costing me 20 - 100 pips?"

Net Profit from 4 Units Trade = 200 pips
  • #409
  • Feb 17, 2006 11:07am Feb 17, 2006 11:07am
Missed the 50% entrance this morning, anybody else thinking about entering this now besides me?
  • #410
  • Feb 17, 2006 11:39am Feb 17, 2006 11:39am
I think that rule is a 50% retrace from the first direction from new CME currency session open in US afternoon all the way till now (I use Asian session open in forex) - - - - plus market needs to attain at least a 60 pip or better range then look for 50% retrace of that original first direction - - - isn't it ?
  • #411
  • Feb 17, 2006 11:47am Feb 17, 2006 11:47am
When a new day come for you? 00:00GMT, 5:00pm chicago time, 8:00est??

thanks
MATIAS
  • #412
  • Feb 17, 2006 12:23pm Feb 17, 2006 12:23pm
I mean it passed the 50% way from the low and the high back around 8 a.m..... so I was debating if i should enter or now. I did enter..
  • #413
  • Feb 17, 2006 12:46pm Feb 17, 2006 12:46pm
Quoting sarbot
Vegas Welath Builder II,


News Highs and Lows section

 

  1. There is approximately a 75% probability that once the market moves farther than about 45 pips from the open, it isn’t coming back.

With regards to the above, I've been studying the price action for February 2006 in cable, and noticed the following:

Out of 13 trading days in Feb, only 5 have behaved this rule, or 38%.

But one thing stands out pretty clearly on my 15 min chart - - -- if the 45 pip level was hit from European session start onward, and the 45 pip level was hit by a large bar (speed/momentum), there was an excellent chance of success - - - - but if price eased or rambled or chopped to get there was very little chance of success.

I have not done the math, but on the surface it appears that a resting stop in place would work if price is 35 pips or further away, waiting for a large bar, maybe a spike, to activate it - - - - but if price trickles on over to within say 10 pips of my entry stop I'd remove my stop and forget that day. Seems that initial stoploss of 20 pips once entry stop hit, trail down to break even after +20 pips profit, and then trail down every 20 pips more chunk of profit staying about +20 away from price would have worked on those 5 big days when maximum gains from a 45 entry would have been from +55 to +148 pips . . . . all the other 8 days weren't worth my time . . . .


Sarbot,
One month is not history, just one month.
vegas
  • #414
  • Feb 17, 2006 1:03pm Feb 17, 2006 1:03pm
Everyone,
Today was like the old days. Unusual intraday volatility today, especially in the euro. Anybody else notice the 10,000 - 20,000 contract offers on globex when the euro tanked. Somebody on the e-platforms sold about 3.5 bln euros [nice trade].

If you're wondering why we didn't get long cable, there are 2 reasons. 1) Most importantly the market has strayed from the 3rd fib line to the 2nd fib line and nothing has happened in the last 5 days thus significantly lowering our risk/reward, and 2) the range put in before the 50% retracement today was very small [69 pips] with not so great momentum from the lows.

Add to this a 3-day weekend with position squaring and you get a choppy to slightly higher market. Not the kind of scenario we want to be long 20 contracts in with not much of a lead.
vegas
  • #415
  • Feb 17, 2006 1:25pm Feb 17, 2006 1:25pm
True, only one month.


About the 50% retracement rule - - - do I understand correctly that is measured from the first primary direction price takes from the new session open (in US afternoon)?

If so, it's been a mixed bag so far this month for that as well:

2 winners
2 losers
1 questionable

Hope March is better
  • #416
  • Feb 17, 2006 1:26pm Feb 17, 2006 1:26pm
To all,

here's a copy of the worksheet from Rex, I made some changes on the formula. i.e., corrected the range of cells for the calculation of the medians on the GBP sheet. Row inserted on the Data sheet for the current day will always be included in the calculations. Hope this helps.
Attached File(s)
File Type: zip Copy of VWB II-rex.zip   23 KB | 432 downloads
  • #417
  • Feb 17, 2006 1:34pm Feb 17, 2006 1:34pm
Quoting sarbot
True, only one month.


About the 50% retracement rule - - - do I understand correctly that is measured from the first primary direction price takes from the new session open (in US afternoon)?

If so, it's been a mixed bag so far this month for that as well:

2 winners
2 losers
1 questionable

Hope March is better
Sarbot,
50% rule pertains to any range over 60 pips from the most recent direction. However, as I use it, it only matters when we are out at the outer fib numbers. As I stated in my last post, we aren't there anymore.

If you daytrade then it takes on added importance. Granted, like everything else it's not perfect [nothing is so stop looking for it], but most importantly it keeps you out of trouble when you find yourself on the wrong side of a move. Remember, just because it breaks the 50% area doesn't imply a reversal; it just means the odds for a continuation of the latest move is most likely over. Therefore, no need to remain in the position.
vegas
  • #418
  • Feb 17, 2006 2:07pm Feb 17, 2006 2:07pm
Quoting pinoytrader
To all,

here's a copy of the worksheet from Rex, I made some changes on the formula. i.e., corrected the range of cells for the calculation of the medians on the GBP sheet. Row inserted on the Data sheet for the current day will always be included in the calculations. Hope this helps.

Thanks a lot for this spread sheet, It is Fantastic !

GS
  • #419
  • Feb 17, 2006 4:43pm Feb 17, 2006 4:43pm
All this was a good week for me. I took 4 trades this week ... 2 gbpusd trades that got stopped out on both for +4 pips ... 1 eurjpy trade that hit the tunnel and came all the way back stopped me out for +30 pips ... 1 usdjpy trade that hit the 2 fib right before the news .... I'm currently still in the trade sitting at +50 pips, stop at breakeven ... Very good for me since I've never traded with any consistency before.

I was able to risk no more than 2.3% on each trade. I may get stopped out after the long weekend on my usdjpy trade, but I'll just move on to the next setup when it occurs. Happy trading everyone.
If it is not broken, fix it until it is!
  • #420
  • Feb 17, 2006 4:49pm Feb 17, 2006 4:49pm
Quoting vegas
Today was like the old days. Unusual intraday volatility today, especially in the euro. Anybody else notice the 10,000 - 20,000 contract offers on globex when the euro tanked. Somebody on the e-platforms sold about 3.5 bln euros [nice trade].
I wonder about those three and a half yards:
-Where they to open a position?
-To close a position?
-Was there an offset in the 11880 area (yes a rough guess as to the futures price)

Hum.....
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