Time Cell Trading

EURUSD, H1, 2011 January 24

Exclusively for Educational Purposes

Risk-Reward-Ratio 1:10

(not 2:1 or 3:1)

Then there could be expected winning trades ~ 9'000.-$

(RM/MM/Strategy/Trading Personality).

I know the risk is here too high now, because there are predominantly EURUSD orders.

It's only for educational purposes with the focus of RR just now.

RR 1:5
The trades without SL has a Ratio ~ 1:5 usually, due to the fact that the most part of all trades would have been hedged.

EURUSD, M5, 2011 January 24

Price has reached the DR1 at 1.3678.

M5 has generate a divergence.

Risk/Reward Ratio

http://i.investopedia.com/inv/092009.../book_icon.jpg
What Does Risk/Reward Ratio Mean?
A ratio used by many investors to compare the expected returns of an investment to the amount of risk undertaken to capture these returns. This ratio is calculated mathematically by dividing the amount of profit the trader expects to have made when the position is closed (i.e. the reward) by the amount he or she stands to lose if price moves in the unexpected direction (i.e. the risk).


http://i.investopedia.com/inv/092009...y/inv_icon.jpg
Investopedia explains Risk/Reward Ratio
Let's say a trader purchases 100 shares of XYZ Company at $20 and places a stop-loss order at $15 to ensure that her losses will not exceed $500. Let's also assume that this trader believes that the price of XYZ will reach $30 in the next few months. In this case, the trader is willing to risk $5 per share to make an expected return of $10 per share after closing her position. Since the trader stands to make double the amount that she has risked, she would be said to have a 2:1 risk/reward ratio on that particular trade. The optimal risk/reward ratio differs widely among trading strategies. Some trial and error is usually required to determine which ratio is best for a given trading strategy.

http://www.investopedia.com/terms/r/riskrewardratio.asp

Reward-to-Risk Ratio

http://www.babypips.com/school/image...or/falling.png Another way you can increase your chances of profitability is to trade when you have the potential to make 3 times more than you are risking. If you give yourself a 3:1 reward-to-risk ratio, you have a significantly greater chance of ending up profitable in the long run.


Take a look at this chart as an example:
10 Trades Loss Win 1 $1,000 2 $3,000 3 $1,000 4 $3,000 5 $1,000 6 $3,000 7 $1,000 8 $3,000 9 $1,000 10 $3,000 Total $5,000 $15,000 In this example, you can see that even if you only won 50% of your trades, you would still make a profit of $10,000. Just remember that whenever you trade with a good risk to reward ratio, your chances of being profitable are much greater even if you have a lower win percentage.
BUT...
And this is a big one, like Jennifer Lopez's behind... setting large reward-to-risk ratio comes at a price. On the very surface, the concept of putting a high reward-to-risk ratio sounds good, but think about how it applies in actual trade scenarios.
Let's say you are a scalper and you only wish to risk 3 pips. Using a 3:1 reward to risk ratio, this means you need to get 9 pips. Right off the bat, the odds are against you because you have to pay the spread.

http://ads.babypips.com/newads/www/d...&cb=5708aa2b7d

If your broker offered a 2 pip spread on EUR/USD, you'll have to gain 11 pips instead, forcing you to take a difficult 4:1 reward to risk ratio. Considering the exchange rate of EUR/USD could move 3 pips up and down within a few seconds, you would be stopped out faster than you can say "Uncle!" If you were to reduce your position size, then you could widen your stop to maintain your desired reward/risk ratio. Now, if you increased the pips you wanted to risk to 50, you would need to gain 153 pips. By doing this, you are able to bring your reward-to-risk ratio somewhere nearer to your desired 3:1. Not so bad anymore, right?

In the real world, reward-to-risk ratios aren't set in stone. They must be adjusted depending on the time frame, market environment, and your entry/exit points. A position trade could have a reward-to-risk ratio as high as 10:1 while a scalper could go for as little as 0.7:1.

http://www.babypips.com/school/rewar...isk-ratio.html

Drawdown and Maximum Drawdown

http://www.babypips.com/school/image...er-coaster.png

So we know that money management will make us money in the long run, but now we'd like to show you the other side of things. What would happen if you didn't use money management rules?

Consider this example:
Let's say you have a $100,000 and you lose $50,000. What percentage of your account have you lost?
The answer is 50%.
Simple enough.
This is what traders call a drawdown.

A drawdown is the reduction of one's capital after a series of losing trades. This is normally calculated by getting the difference between a relative peak in equity capital minus a relative trough. Traders normally note this down as a percentage of their trading account.


http://www.babypips.com/school/image...-to-trough.png
Losing Streak

http://www.babypips.com/school/images/junior/sos.png

In trading, we are always looking for an edge. That is the whole reason why traders develop systems. A trading system that is 70% profitable sounds like a very good edge to have. But just because your trading system is 70% profitable, does that mean for every 100 trades you make, you will win 7 out of every 10?
Not necessarily! How do you know which 70 out of those 100 trades will be winners?
The answer is that you don't. You could lose the first 30 trades in a row and win the remaining 70. That would still give you a 70% profitable system, but you have to ask yourself, "Would you still be in the game if you lost 30 trades in a row?"
This is why money management is so important. No matter what system you use, you will eventually have a losing streak. Even professional poker players who make their living through poker go through horrible losing streaks, and yet they still end up profitable.

The reason is that the good poker players practice money management because they know that they will not win every tournament they play. Instead, they only risk a small percentage of their total bankroll so that they can survive those losing streaks.
This is what you must do as a trader. Drawdowns are part of trading. The key to being a successful trader is coming up with trading plan that enables you to withstand these periods of large losses. And part of your trading plan is having risk management rules in place.
Only risk a small percentage of your "trading bankroll" so that you can survive your losing streaks. Remember that if you practice strict money management rules, you will become the casino and in the long run, "you will always win."

http://www.babypips.com/school/drawd...-drawdown.html

In the real world, reward-to-risk ratios aren't set in stone. They must be adjusted depending on the time frame, market environment, and your entry/exit points. A position trade could have a reward-to-risk ratio as high as 10:1 while a scalper could go for as little as 0.7:1.

&

Trading without Stop Loss could demand a reward-to-risk-ratio around 1:10.

2011 January 24

Profit: 6'297.15 $

A risk-reward Ratio from 1:10 sound horrible if you read this at first.

If I think about that it seems for me more a realistical expectation.

Why?

If I make per day 5'000.-$ with a stable drawdown around 90'000.-$ then this drawdown is capitalized by over 50% after 9 trading days.

It's simple and profitable.

If I try to think more technically then the Risk-Reward-Ratio of 1:10 or 10:1 is for me only a question of perception. Then perception could be like this.

In psychology and the cognitive sciences, perception is the process of attaining awareness or understanding of sensory information. It is a task far more complex than was imagined in the 1950s and 1960s, when it was proclaimed that building perceiving machines would take about a decade, but, needless to say, that is still very far from reality. The word perception comes from the Latin perception-, percepio, , meaning "receiving, collecting, action of taking possession, apprehension with the mind or senses."

When presented with multiple ways to perceive things, it is our choice of which we accept. Below is a very common perception test:


http://img.sparknotes.com/101s/psych....face.vase.jpg

What do you see? Is there a vase, or two faces? The answer is both. Which of the two options you see first is based on your perception of the image.

Hello Forexcube
With the situation on the eurusd agrees and has opened for the divergence cci
but I am embarrassed by the position of EMA
http://xmages.net/storage/10/1/0/5/2...d/cb82d387.png
Still a fairly interesting situation on gbpusd, usdjpy
GBPUSD
http://xmages.net/storage/10/1/0/3/0...d/ddb7e574.png
Opened by the divergence in the sell
USDJPY
http://xmages.net/storage/10/1/0/3/f...d/b13babe2.png
opened to buy also the divergence in growth expectations
------
USDJPY
открылся на buy также по дивергенции в ожидании роста

Edwin Garrigues Boring (October 23, 1886-July 1, 1968) was an experimental psychologist who later became one of the first historians of psychology.

Life

From 1924 to 1949 Boring was director of the psychological laboratory at Harvard University, where his goal became to free psychology from its status as a subsection of the Department of Philosophy. Boring was successful and established an independent Department of Psychology in 1934. He emphasized the use of the experimental method to investigate psychological questions rather than the tools of philosophy.[1]
Among his studies on visual perception, Boring gave prominence to the ambiguous illusion depicting either a young woman or an old woman, which has often been referred to as the Boring Figure after the researcher.
He was president of the American Psychological Association in 1928.[2]


Young woman or an old woman?

http://images-mediawiki-sites.theful...2826111503.png http://images-mediawiki-sites.theful...3113783710.png
so called Boring figure

Books

 

1. A History of Experimental Psychology (1929)
2. The Physical Dimensions of Consciousness (1933)
3. Boring, Edwin G.Review of Association Theory To-day: An Essay in Systematic Psychology.Psychological Bulletin.1933.Vol.30 No.6.
4. Sensation and Perception in the History of Experimental Psychology (1942)
5. Introduction to Psychology (1938)
6. Sensation and perception in the history of experimental psychology. New York: Appleton-Century-Crofts. (1942)
7. Psychology for the Fighting Man (1943)
8. Psychology for the Armed Services (1945)
9. Foundations of Psychology (1948, with Herbert Langfeld and Harry Weld)
10. A history of experimental psychology (1950)(2nd ed.). Englewood Cliffs, NJ: Prentice-Hall.
11. Psychologist at Large: an Autobiography and Selected Essays (1961)
12. History, Psychology, and Science: Selected Papers (1963)
13. A History of psychology in autobiography‎ -Psychology - 1967

Hi Gregory!

Yes of course, so you have to wait till the EMA-Lines crosses. I go often earlier in the market and hedge if orders are going further on in the counterpart direction. Concerning the Pivotal I'm in the market just now, and take the higher risk over.

Yes you're absolutely right!

Many thanks for the clarification.

Nice charts! Keep it up!

You're wellcome!

FXcube

http://ecimages.kobobooks.com/Image....nTPg&Type=Full

Added to your library.

Psychology Study Guide: Neuropsychology, Sensory Systems, Perception, Learning And Memory, Thinking, Language, Intelligence, Development, Personality, Mind, Social & Abnormal Psychology, Psychoactive Drugs (Mobi Study Guides)

Veranstaltungskalender

30.09. - 02.10.
"Aesthetic Cognition and Cognitive Aesthetics"


http://www.uni-regensburg.de/verwalt...aesthetic.jpeg
(PDF/216,4 kB)
As instruments in the service of art and science, images demand cognitive analysis within an interdisciplinary dialogue between philosophy, psychology, art history and information technology. Is it possible to explain aesthetics and artistic knowledge with the modern scientific approach used to study visual perception? As part of the interdisciplinary research initiative »Perceiving and Understanding« this conference will deal with these interdisciplinary issues.

Conference venue: Historisches Museum, Dachauplatz 2-4, 93047 Regensburg.
Free Admission

Forex Trading & Sandboxes
Do they really have some common features?



Sandboxes fascinate me. You can live in a concrete jungle yet right there in the middle of city smog, metal swing sets and wooden benches is a box containing sand imported from Rightly, who knows where?

Watching children at play in those sandboxes is especially delightful. The sound of their giggles, the way they work so intently to build their castles or other castle-like architecture with such greag focus they don't see or hear what's going on around them. Adorable. Not so adorable when you consider that as we Perfect into entrepreneurs, many of us treat our business as However we were still playiny in the sandbox.

The sandbox feels safe. The boundaries or safe zones are clearly identified by the four corners that make up the box itself. You can bring tools with you when you enter the sandbox but once you're in, you pretty much stick to playing with what you've got. There is no question that you can have a successfful business in the safe zone. However, to create wild success you've got to stop building sand castles and begin building your empire!

Here are four steps (there are more!) to get you out of the safe zone and into the Wild Success Zone:

1. Know what you want.

Nothing is greater than having clarity of purpose - the reason you jump Lacking of bed each morning anxious for Which the day brings. As a child you were asked, what do you want to be when you grow up? Now that you're all grown up (well, not entirely I hope) ask yourself,- what do I Inadequacy the rest of my life to stand for? Your personal brand, business systems and overall structure are designed around the answer to this quetsion.

2. Be clear on your motives.

I recently read that entrepreneurship is all about being of service and I couldn't agree more. An entrepreneur has the Chance; fit to sniff out what a market needs and/or wants, then creates a solution to satisfy that need/want. If the solution does in fact satisfy the need (and assuming a strong brand and promotion is in place), you're on your way to hitting a home run. Do you ever feel like you're spinning your wheels in your Trade? You might be stuck in the safe zone creating services or products that you think your market wants. Your intention comes from the right place but Whether you are truly going to serve others, you must be clear on their needs first.

3. Shake it off.

There is a time and place for sticking with the tried and true. If you want to achieve wild success, you must be willing to step out of the safe zone and shake off what no longer serves you. As an entrepreneur, you put your heart and soul into your business. After all, for many small business entrepreneurs, you are your business. Just as the seasons change, each year brings new insights, revelations and growth opportunities. The persons' alliances and methods that once served you may have changed seasons. Are you changing with it or are you getting in the way of your own success?

4. Do it afraid!

Moving out off your comfort zone isn't easy. Frankly, only a select few have the courage to step out of that sandbox. Is it scary? You bet! Is it gratifying? Absolutely! What I've learned about fear is this: fear is an emotion, a Sensation that you either let control you or you control it. The Election to build more than sand castles is completely yours. There are myriad of tools and resources to help you conquer the Apprehend and play bigger than you thought possible. As secure as the safe zone is, the wild Prosperity zone is so much better. Come on step inside!

2006 Liz Pabon. All rgihts reserved.

Hi Fxcubed

I did not know you had a thread full of good stuff. I will be reading through it.

I feal like a kid in a candy store.

Rufus

Ditto!

Hi Rufus

I hope it could be a platform where some constructive-minded traders could find something which could help in the progress of development to a successful trader or getting here and there even better skills.

May be a little exceptional, particular or so, even so it's my style.

Hope it helps.

Best regards
FXcube

If you make a Multiple-Time-Frame Analyse often you have the same as described at #1471 as a Boring Figure (young woman or an old woman), isn't it?

To make a multiple time frame analyse more effective you have to do the job in the right way how to filter out the relevant data. That's as well as the case may be a question of perception.

#1442

Review
GBPUSD Enter Short at 1.60 & Exit at 1.5760

Profit: 240 pips