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Fail Better

  • #1,241
  • Aug 8, 2011 7:38am Aug 8, 2011 7:38am
I think we might have missed it at 1.0287... but how should one trade this in terms of "buy on resistance" should we wait till it goes below 1.0250 or should this be a 'touch' trade given that it's only the 2nd return to support.

Either way I've put a buy limit around this level and a TP around 1.05771 and generous stop. I'm unable to watch this develop over the next 24 hours. Wait and see what happens.

I've also gone short in Gold from on a demo account to see if will close the gap - not looking promising and a back test (at least on my brokers data) doesn't yield anything like the EURUSD strike rate Tom reports. It appears that Gold tends to fill "gaps-down" rather than fill "gaps-up". I'll do some more in-depth analysis over the next couple of days and report the results if anyone is interested.
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  • #1,242
  • Edited 8:14am Aug 8, 2011 7:50am | Edited 8:14am
Quoting jfw215
gotcha. thanks. pretty big stop. not judging.. if price started to go down.. you would most likely get out at a smaller loss then taking that stop right? in other wrods, that stop is more like a E stop in case sh*t went to hell.

thanks

J
Totally. I usually start with a wide stop - particularly in this volatility and use it as an uncle point. I don't mean stupidly wide like hundreds of pips. That stop in Cable was 66 pips. But I am looking for signs that the trade is not going to work and if I see them, I will not hesitate to get out early.

Signs come in various shapes and sizes. There are general warning signs to be on the alert and then there are all out exit signs. Here are a few that I use :

Warning Signs :

- Some news comes out that should be helping my position but the market ignores it. E.g. I am long the GBP/USD, Retail Sales beats expectations and the market goes down

- When the market closes through my level counter to the way I am trading. E.g. I am long GBP/USD at a significant level and the market takes out my entry level and closes beneath it.

Exit Signs :

- When I get trapped on one side of the level and there is follow through that is counter to my position. E.g. I buy a level in GBP/USD and the market breaks this, comes back to retest this level from beneath and then this turns to resistance (I am trapped) and the market then closes on the H1 below that most recent low - nine times out of ten it's all over.

- There is an SFP counter to my position E.g. I am long GBP/USD and prices goes in my favour and then it breaks a previous swing high intraday and closes below it. It is going to take a lot to keep me in it if I see this.

The best exit sign though is to walk away from your desk and take a 10 minute walk in the cool, fresh air and empty your thoughts. Then come back, take a look at the chart. You can usually tell immediately if you want to be in or not.
  • #1,243
  • Edited 12:34pm Aug 8, 2011 8:05am | Edited 12:34pm
I've told you guys before, watching your P&L is almost always detrimental to your performance.

Check this out that I had through from a friend. He usually picked good trades but couldn't seem to make a penny over time.

He taught his girlfriend how to place orders and how to enter and exit at market and gave her £1,000.

He also taught her to calculate how much to bet on any one trade using prudent risk management.

He asked her to deposit "an undisclosed amount" of that money but not all of it into his trading account and told her he was going to call every trade that he liked to her with stops and targets and text her updates e.g. exit early etc (she was at home all day)

His strict instructions were :

a) Don't reply to my texts. Therefore he will not know trades are taken. She is under instructions to take ALL trades but he is not 100% sure if a trade is a winner or if its a loser because he has no idea whether she was in it or not.

b) Do not reveal my monetary progress to me apart from once at the end of each month (or if I reach a pre-arranged drawdown).

Therefore ; he is immune to :

- Knowing his P&L on any trade. (he doesn't know how much she deposited)

- Getting enamoured by strings of winners or discouraged by strings of losers (he has no idea which ones she took)

- Over betting (he is not in control of risk)

And hey presto, he said for the first time since he began trading years ago he is making steady progress.

I mentioned this to a student and they said "that sucks - it takes all the fun out of the process.

Never forget what the aim of this business is : It's not a fun diversion from your mundane life.

It's to make money.

Whatever it takes, folks.

Whatever it takes.
  • #1,244
  • Aug 8, 2011 8:16am Aug 8, 2011 8:16am
Closed the EURAUD from above for 60 pips!

Worked like a dream that level
  • #1,245
  • Aug 8, 2011 8:19am Aug 8, 2011 8:19am
Quoting Miko1
Closed the EURAUD from above for 60 pips!

Worked like a dream that level
No surprises.

Market broke above. Came back for the retest, into the inverse, with space.

If everyone had all their trades as good as this, everyone would be making money.
  • #1,246
  • Aug 8, 2011 8:32am Aug 8, 2011 8:32am
True. Love the way you teach Tom. It did change my whole trading

plus all the people that played the gap had their targets at that level.
  • #1,247
  • Aug 8, 2011 8:44am Aug 8, 2011 8:44am
Hi Tom and Traders,

In review...don't know if Tom would agree with this...got RR (arrow)......came back again with a doji hit as we often see to shake out the weakhands or make you go for BE for another touch and down it went....tgt hit where check mark is.
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  • #1,248
  • Aug 8, 2011 9:08am Aug 8, 2011 9:08am
Thanks Tom for that answer. That was very helpful.

J

Quoting the_wizard
Totally. I usually start with a wide stop - particularly in this volatility and use it as an uncle point. I don't mean stupidly wide like hundreds of pips. That stop in Cable was 66 pips. But I am looking for signs that the trade is not going to work and if I see them, I will not hesitate to get out early.

Signs come in various shapes and sizes. There are general warning signs to be on the alert and then there are all out exit signs. Here are a few that I use :

Warning Signs :

- Some news comes out that should be helping my position...
  • #1,249
  • Aug 8, 2011 9:15am Aug 8, 2011 9:15am
Tom, maybe I gotta try this... I've been stuck in BE range for quite awhile.. very frustrating.. and i know its because i'm caring about the money...

below is my equity cruve since may 1st... 70+ trades.. bloody stalemate.
http://img1.uploadscreenshot.com/ima...90084-orig.png
still quite haven't figured out the exact limiting beliefs.. but i'm getting there..

J

Quoting the_wizard
I've told you guys before, watching your P&L is almost always detrimental to your performance.

Check this out that I had through from a friend. He usually picked good trades but couldn't seem to make a penny over time.

He taught his girlfriend how to place orders and how to enter and exit at market and gave her £1,000.

He also taught her to calculate how much to bet on any one trade using prudent risk management.

He asked her to deposit "an undisclosed amount" of that money but not all of it into his trading account and told her he...
  • #1,250
  • Aug 8, 2011 11:10am Aug 8, 2011 11:10am
Quoting the_wizard
- When I get trapped on one side of the level and there is follow through that is counter to my position. E.g. I buy a level in GBP/USD and the market breaks this, comes back to retest this level from beneath and then this turns to resistance (I am trapped) and the market then closes on the H1 below that most recent low - nine times out of ten it's all over.

Why dont you cut/reverse at this point?
  • #1,251
  • Aug 8, 2011 11:13am Aug 8, 2011 11:13am
Quoting the_wizard
Who do you think I am, Jesse Livermore???

I am long gone...
so you dont like to run positions anymore?
  • #1,252
  • Aug 8, 2011 12:30pm Aug 8, 2011 12:30pm
Quoting NTM
Why dont you cut/reverse at this point?
I usually do!
  • #1,253
  • Aug 8, 2011 12:32pm Aug 8, 2011 12:32pm
Quoting NTM
so you dont like to run positions anymore?
I do like to try and run things but it requires a strong bias for me that would usually come from the higher TFs for me to do so.

Many of my trades I simply exit at the FTA.
  • #1,254
  • Aug 8, 2011 12:37pm Aug 8, 2011 12:37pm
long on the bounce

Thank you Tom
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  • #1,255
  • Aug 8, 2011 2:23pm Aug 8, 2011 2:23pm
Got an entry at 1.0189. Was driving home and saw what price was doing on my iphone, but I can't trade off my phone with my broker. Got home and got a better entry than if I had been sitting there the whole time!!
  • #1,256
  • Aug 8, 2011 2:48pm Aug 8, 2011 2:48pm
Quoting macbow
Got an entry at 1.0189. Was driving home and saw what price was doing on my iphone, but I can't trade off my phone with my broker. Got home and got a better entry than if I had been sitting there the whole time!!
didn`t it allready bounced with this bar?
tnx
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  • #1,257
  • Aug 8, 2011 2:54pm Aug 8, 2011 2:54pm
Quoting pex
didn`t it allready bounced with this bar?
tnx

I played the bounce in and out...can't holdem ...rarely hold ....FTA for the most part
  • #1,258
  • Aug 8, 2011 2:58pm Aug 8, 2011 2:58pm
Quoting Atc
I played the bounce in and out...can't holdem ...rarely hold ....FTA for the most part
you played now RR and sell at 1.02xx?
  • #1,259
  • Aug 8, 2011 3:12pm Aug 8, 2011 3:12pm
Quoting pex
you played now RR and sell at 1.02xx?
no not yet anyway...but I'm no Wizard!
  • #1,260
  • Aug 8, 2011 6:33pm Aug 8, 2011 6:33pm
Quoting the_wizard
Trade # 3 AUD/USD (cont)
Every big FX trader I know watches the S&P like a hawk!
Tom, could you possibly elaborate on the significance/correlations the S&P has to FX.

Grant
“Make everything as simple as possible, but no simpler.” – Albert Einstein
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