Strat's Long Term Stress Free Trading

Hear! Hear!

Is it James Montier?

Spinner - yes sorry my fault - It's James Montier - god knows why I put Mark?

Another great book I've just read is by Michael Covel 'Trend Following' - I'm glad I read it as there are many great quotes etc in there and reminders that it's better to park your opinions at the door. The less people question the moves and keep asking why? - the more they stand to make. Too many people 'think' they know better (thru fundamentals etc) - when in fact, as Strat has always said, 'You know jack $hit!'. It just took a few years and countless books for that to sink in.

Ed Seykota (famous trend trader) said ' You either want to be proved right or you want to win - the answer to this question will decide your fate in the market' - thinking about my own trading I have sided with being right - which is darn stupid in the face of a major trend; thinking, 'Hey, you silly market, I'm gonna prove you right, you are wrong in your direction; I'm gonna pick the top and prove how good I am and how much I know' - Egotistical and very incorrect thinking indeed!

Another gem in the book is the inability of the small trader to accept draw-downs. This usually comes from fear of giving back profits and being under capitalized. Trend followers have to accept draw-downs as part of doing business. Too many traders (me included) tighten stops to obvious places and then get hit only for the market to turn in the original direction and make a similar %age gain again. Accept there are losses and move on. Let the market 'breathe'

How the EURUSD was traded.

Posted on www.stratsforextrading.com

1 is a buy
Red check mark is partial exit
2 is taken out on a trailing stop
Red "x" is a failed entry
3 is a buy
4 is a partial exit
5 is a buy
6 was close all trades
7 was a buy
8 is taken out on a trailing stop
9 is a buy
Partial exit today

Yeah me too.decided to buy some dollars.

So now you can talk the talk - but can you walk the walk - that is the hardest bit!

Van Tharp can talk the talk and talk the talk but hasn't a clue how to walk the walk!

Very nice statement Mr.Strat.I do like what you have written in here.

i took a short on gbpchf from last night,why did i take this short?looking at the monthly,the bears are in charge,last month candle has a bit of upper wick showing the bulls initially trying to drive the market up but the month ended with the bears finally in charge, from the weekly point of view,last week also ended with the bears in charge and it was around a resistance so to say,from daily view,yesterday ended with the bears though and hence my reason for this short.I did consider some fundamentals as well but i am more of a technical trade.Besides NFP is on friday but my first take profit as been hit and i will wait till the end of today to lock in profits and see where this market will get to but my thoughts are that the chart is still going downnnnnnnnnn.i have attached the monthly,weekly and daily chats with this post.Also looking at the ema 20 and 50 on the 3 charts,price is below them on the 3 charts hence further confirmation for my short position. comments welcomed

All positions closed for a profit of 380 pips.Wish you luck all.Reason for closing this trade up ahead I see strong resistance in the face of the monthly pivot.Cheers

Continuing my thoughts on gbpnzd..

Short taken on H, Apr 28th. 2.065
May 3rd TP1: 110pips , SL remains as is 2.087.

Thank you
GB


PS: Strat, excellent post on eurusd.. "revelation trading" as far as I know

Hey Greek Bouncer,

I think you will find GBPUSD much easier to trade than that horrible thing! (And EURUSD is easier to trade than GBPUSD!)

This pair caught my eyes as it's approaching resistance.What do you think guys?

Trading with Boss trend and seeing beond candles.

Haha! Indeed Strat Indeed. Well I have sat on my hands watching silver fall because in my trading plan I have a measure to stop me taking counter trend trades (ie picking tops and bottoms) Line 1 says;
"Is it a Reversal with Trend; if counter trend has there been a prior SIGNIFICANT trend line break" - and so with silver there hadn't been a TL break so I didn't want to short a bull market.

I'm more than happy to sit and wait for a lower high once the market has shown its hand. I would also get back long for example as usually this offers a great low RR trade as people who missed out on the previous bull (prior to the TL break) get back into the action.

My major flaw over the years has been greed - manifested in trying to pick tops and bottoms and losing money. I have found that patience and confirmation leads to a healthier account balance in the long run because capital preservation remains key!

Hence I wait for a significant TL break and a lower high or higher low (depending on trend direction) prior to making my move.

I hope this is acceptable - sure I miss out on some trades but I find this quells the gambling instinct and keeps me on track.

[quote=Grimweasel;4593195]Well I have sat on my hands watching silver fall because in my trading plan I have a measure to stop me taking counter trend trades (ie picking tops and bottoms)

It doesn't matter really whether you're trading with the trend or do a counter trend.When you trade with the trend yes,you stand a better chance of winning,providing you don't get caught in a corrective move.I myself don't care much about trend as long as I trade directly from S/R levels.Counter trend trading is a more of a hit and run strategy in my opinnion.

[quote=kratun;4593460] It doesn't matter really whether you're trading with the trend or do a counter trend.

Oh yes it does!

You can get your timing wrong with the trend and the trend will pick you up - a rising tide floats all boats.

You can get your timing right against the trend but the trend will resume at any time and usually when you least expect it - paddling your canoe against the current of a river always ends up in sh*t creek!

It all sounds good, Danny boy!

[quote=strat;4593498] Yeah Mr.Strat I know what you mean,Trade with the trend until it bends,but that doesn't account for so many lost accounts from so called trend followers.I wish it were that easy.

I've read many, probably too many books on trading and the single theme that comes across from the best traders is that you should really always trade with the trend. Now, of course one may argue that there are many trends on a chart but what Strat is teaching here is that you should trade the trend on the weekly charts and use the daily for your entry. So trade the major underlying weekly trend. Look for pull-backs on the daily against that trend to get in again -with trend- on sound PASR.

I have a broker mate in the city and he said his best clients are the ones that trade the least - the guys who make the big bucks don't piss about on the 5 min charts watching their life ebb away with each bar. The winning account holders have balance in their life and use trading as a vehicle to provide them wealth to live their life - they set a few orders a week and ride the trends to wealth whilst doing other things in the day like rock-climbing, golf, scuba-diving etc. Trend trading should be almost dull and boring - those looking for excitement need to evaluate the reasons they are in the market - because this place is a real dumb-ass place to find excitement because before you know it you will be in debt. Big debt.

From Al Brooks, to Ed Sakota, to Dunn Capital Management et al, nearly all these guys have found (like Strat said) that trading with the trend is the safer bet. It just takes you time and lost money to realise that the odds will eventually catch up with you always trading against the underlying trend. Sure, you may have the odd run of good luck that may convince you that you are the next Livermore but eventually the numbers will catch up with you.

Using my trading diary I found I had a particular bias for short trades in terms of winning trades but most of my largest single day losses had been counter trend trades. So, by incorporating the TL break rule I managed to trim those large losses right back. So, keep a diary and learn from it!

The thing is most of the new guys on here will have/need to go and prove that to themselves before the reality really sinks in. You just need to remember that you are trading against the wider market - so ask yourself - are you really smarter than the WHOLE market - what is your edge - what other big, big players are in your trade - what is the new edge that you have found that consistently beats Mr market? Have you backtested your edge or has it worked a few times and led you to believe its a winning system rather than just a string of lucky trades?

I always remember Alexandria on this thread berating me as one of the 'top and bottom' pickers, providing liquidity for the with-trend players.

I've been there with the new traders - all I'm saying is that if you don't CT trade like I did in the first couple of years you benefit from my time and lost money in the market by not having to go through that yourself!

The problem with Reversal Bars is that by their nature you go hunting for tops and bottoms trying to trade every hammer and shooting star. You just need to step back before each trade and look at the price action around your reversal bar and ask 'Is this really THE point where the market turns'?

How often had a daily chart tanked thru weekly trends on the appearance of the first shooting star? - there is normally a battle, a topping or bottoming formation. Higher Volumes (on commodities and shares) etc. Markets rarely turn on a dime - wouldn't it be easier and better for your account balance if you just showed a little patience and waited for that confirmation such as a lower high with a shooter or BEEB?

This is what I have learnt about trading with the trends...all thanks to Strat - it just took a little longer for it to truly sink in due to misplaced ego and confidence in flawed ability.

Prosperous trading to you all.

Well done.

Wow, Danny boy! That was magic - your time off has really done you good.

What all the newbies forget is that profit taking comes before selling. The newbies jump in and sell and then we wait to buy back at lower prices.