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Trading Made Simple

  • #2,401
  • May 12, 2011 6:46pm May 12, 2011 6:46pm
Quoting Maharishi
Dean,

Try fib extensions for exiting and setting profit targets. I took exactly the same trade as you this morning on the EURUSD H1 at the immediate cross of the TDI (marked by the vertical green line). I stayed in the trade (although some minutes later the TDI had turned) due to the following reasons:

1) There was a sustained downtrend previously, prior to consolidation.
2) There was strong resistance in the area of 1.4236.
3) Weekly and Daily chart still in downtrend
4) The use of Fib extension allowed me to guage potential targets at 23.6...
Thank you for your help. I understand how and why you use fibs to set your TP. What I am trying to do is work out say the average TP and the max drawdown so I can just look for the ideal setups, put the trade on with set SL and TP and walk away...monitoring these trades gets me into trouble. Something like say an SL of 15 and TP of 30....just have to keep trading and see what I can come up with I guess.
SO using your method of TP and SL....do you have any idea what your average TP is and your max drawdown in winning trades??
  • #2,402
  • May 12, 2011 7:21pm May 12, 2011 7:21pm
how does the HA candle work
newbe
  • #2,403
  • May 12, 2011 7:23pm May 12, 2011 7:23pm
Going to see if I can squeeze a few pips out of this exhausted trade.
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  • #2,404
  • May 12, 2011 7:34pm May 12, 2011 7:34pm
A simple method of managing a trade eg place a 1 lot trade with a 25 pip stop loss, if trade runs your way instead of moving stop to BE take off a portion of your trade and then let the remainder run with a trailing stop of 25. If you do the maths it's a pretty simple equation:
starting risk - 25x$10=$250, when 16.6 pips in profit take off 60% of trade ie 16.6x$6=$100 which is now equivalent to your new risk position ie 25x$4=$100. If the trade runs your way and you pick up a 100 pips it's happy days, if it runs any where beyond 25 pips you make a profit and basically have stress free trading. It may not maximise your profits obviously but it does limit your downside and enables you to stay in a trade perhaps longer than you would have.
  • #2,405
  • May 12, 2011 7:41pm May 12, 2011 7:41pm
Quoting silversurfer
A simple method of managing a trade eg place a 1 lot trade with a 25 pip stop loss, if trade runs your way instead of moving stop to BE take off a portion of your trade and then let the remainder run with a trailing stop of 25. If you do the maths it's a pretty simple equation:
starting risk - 25x$10=$250, when 16.6 pips in profit take off 60% of trade ie 16.6x$6=$100 which is now equivalent to your new risk position ie 25x$4=$100. If the trade runs your way and you pick up a 100 pips it's happy days, if it runs any where beyond 25 pips you make...
The more tighter SL u use, ur entry timing must be very precise.
Since ur not letting the pair to breath much, the chance of hitting SL is very high..

Sonic
  • #2,406
  • May 12, 2011 7:58pm May 12, 2011 7:58pm
Quoting silversurfer
A simple method of managing a trade eg place a 1 lot trade with a 25 pip stop loss, if trade runs your way instead of moving stop to BE take off a portion of your trade and then let the remainder run with a trailing stop of 25. If you do the maths it's a pretty simple equation:
starting risk - 25x$10=$250, when 16.6 pips in profit take off 60% of trade ie 16.6x$6=$100 which is now equivalent to your new risk position ie 25x$4=$100. If the trade runs your way and you pick up a 100 pips it's happy days, if it runs any where beyond 25 pips you make...
Yep nice idea. I am only talking about the one hour chart here.
ANd I notice that if you get the entry right you can be up 10-20 pips pretty quickly, particularly during the London session. ANd that 10-20 can be with a drawdown of about 5-10 pips....often none. Its seems that when you let it run trying to squeeze another 10 out of it it can turn on you.
  • #2,407
  • May 12, 2011 7:59pm May 12, 2011 7:59pm
I agree, on the H1 charts 25 is reasonable, if trading off H4 and higher larger stops are needed.
  • #2,408
  • May 12, 2011 8:19pm May 12, 2011 8:19pm
Quoting silversurfer
I agree, on the H1 charts 25 is reasonable, if trading off H4 and higher larger stops are needed.
I tottally disagree. A 25 pip SL will get you stopped out of a whole lot of good trades.

I'll even go so far as to say a 50 pip SL is too small for 1H trades. Myself I use a 100pip SL for 4H 1H trades. This gives me room let the TDI tell me to get out, on a bad trade it usually ends up going negative a lot and then retracing and the TDI getting me out for much less loss.

Sure on a really good entry it goes in your favor right away, with very little drawdown.

Honestly though, even with this method and momentum on your side that isn't going to happen that often.

Almost all of my winning trades occillated back and forth between + and - 20's before going strongly my way. Heck I've had them go -50 and become a winner. Right at this moment I'm in trade that went -71 pips and now is back down to break even and most likely going to go into profit before tommorow morning.

Technically the time frames should have no bearing on the size of your SL. Price is price a good entry on the 4H is a good entry on the 5M.

The thing is if you have a 25 pips SL...... you really don't. You go in negative the spread, so say you are trading a pair with a 4 pip spread, now you really have 21 pips SL. From entry if it goes -20 ur out. Now try that on the GY with a 6 pip spread........19 pips and ur out.

Normal market occilliation will take out a 25 pip SL with no problem. Nevermind wierd spikes and slight news reactions or bounces of off resistance or round numbers you didn't take into account.
  • #2,409
  • May 12, 2011 8:34pm May 12, 2011 8:34pm
If you use a 100 pip sl what's your tp? Don't know which broker you use but a 6 point spread on GJ sounds way too high. Each broker manipulates the spread to attract customers ie a US broker will have tight spreads on USD pairs whilst a Japanese broker has tight spreads on JPY pairs. In Japan a 2 point spread on GJ is considered massive.
  • #2,410
  • May 12, 2011 9:02pm May 12, 2011 9:02pm
Quoting silversurfer
If you use a 100 pip sl what's your tp? Don't know which broker you use but a 6 point spread on GJ sounds way too high. Each broker manipulates the spread to attract customers ie a US broker will have tight spreads on USD pairs whilst a Japanese broker has tight spreads on JPY pairs. In Japan a 2 point spread on GJ is considered massive.
Yep, im in the US.

I don't trade the GJ anywho though. Just EU and GU. That way when I bet a dollar a pip, it's a dollar I don't have to caluclate what it comes out to.

I don't use TP, I lock in pips as they go and try to keep trades going as long as possible. I do however usually lock +100 since that was my initial risk.

I don't use my SL as per the classic risk reward 1:1, 2:1 thing. IME that is fantasy land, you have to take what the market gives you.

My 100 pip SL is for breathing room, so I don't get spiked out, so I don't get stop hunted on moves and so I can get out when the TDI says it's good. As IME thus far with this method getting out when the TDI says it's time to get out on a bad trade that never went postive much can often end up at BE or not to far off from it......And sometimes a few pips positive.
  • #2,411
  • May 12, 2011 9:09pm May 12, 2011 9:09pm
Lots of talk about SL today.

Big E on SL: Last week he said doesn't use them at all. That got a ton of attention.

In the original instructions he also said he hates SL trading, but added that if you must use SL place it at the top/bottom of one or two candles back.

This is because he expects 3-5 candles to follow every signal.

Big E on TP: Exit when you get the signal.

That's really all you need to know about SL and TP if you are using the TMS strategy.

Get well soon, Big E! We miss you!
Luck occurs when preparation meets with opportunity.
  • #2,412
  • May 12, 2011 9:14pm May 12, 2011 9:14pm
I was going to copy the link to the post to download that documemt but I can't find it. So I'll post it here for everyone.

It was updated by another member, sorry I don't remember who or I would give credit. Please speak up whoever it was.

Trading Made Simple
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File Type: pdf Trading made simple.pdf   70 KB | 2,772 downloads
Luck occurs when preparation meets with opportunity.
  • #2,413
  • May 12, 2011 9:15pm May 12, 2011 9:15pm
Quoting AlienFrog
Lots of talk about SL today.

Big E on SL: Last week he said doesn't use them at all. That got a ton of attention.

In the original instructions he also said he hates SL trading, but added that if you must use SL place it at the top/bottom of one or two candles back.

This is because he expects 3-5 candles to follow every signal.

Big E on TP: Exit when you get the signal.

That's really all you need to know about SL and TP if you are using the TMS strategy.

Get well soon, Big E! We miss you!
I thought he said the last swing high/low before entry?
  • #2,414
  • May 12, 2011 9:15pm May 12, 2011 9:15pm
Wouldn't expect a lot today - most bank traders are as superstitious as all hell and Friday 13 spooks them no end, in a lot of the trading rooms around the world they don't even let people have red pens on their desks!
  • #2,415
  • May 12, 2011 9:21pm May 12, 2011 9:21pm
Quoting silversurfer
Wouldn't expect a lot today - most bank traders are as superstitious as all hell and Friday 13 spooks them no end, in a lot of the trading rooms around the world they don't even let people have red pens on their desks!
No red pens?!!!

Dang now I know whats responsible for my losing trades! lol
  • #2,416
  • May 12, 2011 9:58pm May 12, 2011 9:58pm
Quoting dean
Thank you but that looks different to me.
BigE.....do you know what settings I can use to simulate the red and green lines on my other chart??? I am unable to add indicators but might be able to simulate it with something else if you know what the parameters are>>
Thank you
Dean, I was able to reproduce the TDI red and green indicator by using the following:

RSI 13 period applied to Typical Price (HLC/3)

Moving Average 3 period shift 3 smoothed applied to RSI indicator

It's not an exact copy, but it's very close.
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  • #2,417
  • May 12, 2011 10:18pm May 12, 2011 10:18pm
Last night with a stop loss of 15 pips[0.9% risk] on the the 15 min chart,I was able to garner a total of 84.1 pips,see breakdown:
GBPJPY 31 pips

EURUSD 25.9 pips

EURJPY 27.2 pips

So,84.1/15.0= 5.61
5.61*0.9=5.04%
This means 84.1 pips increase my balance by 5.04%.
With God all things are possible.
  • #2,418
  • May 12, 2011 11:42pm May 12, 2011 11:42pm
Quoting fxbr56
Dean, I was able to reproduce the TDI red and green indicator by using the following:

RSI 13 period applied to Typical Price (HLC/3)

Moving Average 3 period shift 3 smoothed applied to RSI indicator

It's not an exact copy, but it's very close.

Way Back at the beginning of this thread there was a template posted by EllisEdi that used just stock MT4 indicators. In his template he used an RSI 13 set to Typical Price (HLC/3)and a 7period EMA set to the RSI. I am using a version of it now with the addition of the middle line (34 Simple set to the rsi)however ive changed the 7 period MA to be SMA(Simple) instead of EMA....again its not exactly like the TDI (the rsi is a bit "sharper") but it works just fine for me.
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  • #2,419
  • May 13, 2011 12:04am May 13, 2011 12:04am
Quoting Juls
Does anyone have a mt4 indicator where you can just type in how many pips you want to place your stop/take profit, rather than keep working it out on the chart?
Many thanks in advance if anyone has this.
Juls.
Theres one on another forum called Swiss Army EA it is a trade manager EA it does not take trades but manages trades in a variety of ways (depending on how you set it up). It can set stops take profits trailing stops etc..... can close trades based on percentage of win/loss etc.. I have used it for years to automatically set a 50 pip stop on all my trades just so i don't forget (it has happened and it was not good lol)

I can't post a link here because it is hosted at another forum, and merlin would have a fit. But if you do a google search for it you will find it just fine
  • #2,420
  • May 13, 2011 12:04am May 13, 2011 12:04am
Lets stick back to the core of the strategy. Keep it simple.
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