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Trading Made Simple

  • #9,821
  • Aug 12, 2011 4:41am Aug 12, 2011 4:41am
Quoting Guitarbloke
Just jumped in on 1H. Thanks Dave.
Yeah caution with that one though. It's stalled at 6300 and if it can't breach that, will come tumbling down again.
  • #9,822
  • Aug 12, 2011 4:49am Aug 12, 2011 4:49am
I went long at 1.6220 gbp/usd netted 60 pips on one half and the other is trailed, no matter what I locked profit and waiting to see now GBP/USD to go down if it don't pass 1.6300.

Regards,
  • #9,823
  • Aug 12, 2011 5:30am Aug 12, 2011 5:30am
USD/CHF looking overbought and stocks and TDI looking nice for a possible cross in maybe 1-2 hours.

And agree would be out of GU now if still holding, its stalling at 63.
  • #9,824
  • Edited 6:21am Aug 12, 2011 5:50am | Edited 6:21am
Anyone on the JPY's going south?

By the way, no TDI angle as yet, i'm just going by my still learning knowledge of price action.
'Fail to plan, plan to fail'
  • #9,825
  • Aug 12, 2011 6:24am Aug 12, 2011 6:24am
There's one in the attachments up top called xTDI-Arrow v100. It makes an arrow for when green crosses red and another when green crosses yellow. Does that indi work work you (or anyone else). Don't really need it but sometimes when I have multi charts on the screen it might be helpful to have an arrow.
  • #9,826
  • Edited Aug 13, 2011 12:01am Aug 12, 2011 6:34am | Edited Aug 13, 2011 12:01am
I may not post much but I am reading this thread regularly so firstly a big thanks to the more experienced folks who still stick around to share their wisdom with us - much appreciated!!

A better week for me, up 12% (still on demo) ... and as always, a couple of lessons learned.

As a reminder, I'm (mainly) trading the H1 timeframe during the NZ evening (which equals London 7am - 1pm).

SL / TP

I had been using ATR(7)x2 to set both my SL & TP levels. However all the volatility in the markets meant that even on the H1 sometimes ATR(7)x2 was almost always in the 100s or 200s. Now given that my SL's are always risk adjusted to 2%, on the flipside what really were the chances of a TP of 200 pips getting hit on an H1 - not that great. More importantly, it meant my position sizes were becoming so very small that even if the trade went 60 pips positive, I was getting peanuts back.

So I adjusted my SL to ATR(7)x1 ... meaning I'm automatically taking a 2:1 Reward/Risk but more importantly meaning that a 60 pip positive movement would be much more rewarding for me. It has made a good difference to me on the H1 - I'm still yet to see if it's really appropriate on H4 (my trading time means I don't see many H4 signals). The lightbulb that switched on for me was when someone said something like "would you rather 1 lot for 50 pips or 5 lots for 10 pips" - we all know that a small movement is more likely than a larger movement.

Account Currency

I also moved from using USD based demo account to a NZD one (as that's why my live account will likely be based in). I hadn't quite realised just how much more volatile this makes your position sizing calculations - but a good lesson learned. [For anyone wondering why I'd hold an account in NZD, it's because holding a USD one would expose me to huge risk of fluctuations in value - NZDUSD is a wide ranging pair!].

Staying Flat

I've got a lot better at only taking trades that meet the conditions - much stricter on it now - although I do still think I'm overtrading a bit. I think getting good at sitting on your hands ("staying flat") is perhaps one of the bits that is hardest to practice!

MM

Still using MPTM EA to manage my trades. At present I move SL's to BE+5 when I get to +25. Absolutely that BE+5 gets hit more than I'd like, but at the same time it has protected me against some reversals that would've otherwise hit my SL. Constantly analysing to see what the optimum balance is between getting taken out unnecessarily vs being saved from a loss.

I know some people don't like the thought of letting an EA handle the closure, but I don't want to spend all night in front of a screen (I do that all day already). Even constant small gains will suit me fine.

......................

Anyways, I just wanted to share my experiences for the week to hopefully encourage others that if you stick at this you will figure it out.

The more time I spend trading this system, the more I understand it better. There is no shortcut - it's practice practice practice!

I'm flat now, time to sleep! Thanks for the info everyone, and a great weekend to all.
1 pip at a time ... if the entries are strong, the rest will follow ...
  • #9,827
  • Aug 12, 2011 6:36am Aug 12, 2011 6:36am
Quoting handy148
There's one in the attachments up top called xTDI-Arrow v100. It makes an arrow for when green crosses red and another when green crosses yellow. Does that indi work work you (or anyone else). Don't really need it but sometimes when I have multi charts on the screen it might be helpful to have an arrow.
Mate I tried downloading it too and couldn't get it to work either (just tried the drag and drop, didn't investigate any further).
1 pip at a time ... if the entries are strong, the rest will follow ...
  • #9,828
  • Aug 12, 2011 7:00am Aug 12, 2011 7:00am
Quoting antantnz
I may not post much but I am reading this thread regularly so firstly a big thanks to the more experienced folks who still stick around to share their wisdom with us - much appreciated!!

A better week for me, up 12% (still on demo) ... and as always, a couple of lessons learned.

As a reminder, I'm (mainly) trading the H1 timeframe during the NZ evening (which equals London 7am - 1pm).

SL / TP

I had been using ATR(7)x2 to set both my SL & TP levels. However all the volatility in the markets meant that even on the H1 sometimes...
Thoughtfully written and well done on your trading.
One thing that caught my attention in your post though. The comment that you say turned the light on for you. The 10 pips at 5 lots comment.
I have some issues with this because its not as cut and dried as you think. I knwo this becasue I used to think this way. I used to think...."how hard can it be to just squeeze a couple of pips a day out of the market and once I get that down pat I simply up the amount I have on the trade. Try it and see how far you get...Forex trading is hard...very hard...so dont think for a minute that 10 pips is any easier to get on a constant basis than 50. THe other issue I have with this is....so lets say you use this method to gain your measly ten pips a day....yep using this method should provide that for you, providing you are patient and pick the right trades.....but.....this is not a scalping method....this is a method where you are using 50 to 100 pip stops. So if you are aiming for 10 pips with a 100 pip stop you will eventually get slaughtered....guaranteed. One stop loss hit and you need 10 succesful trades to get you out of the hole and back to only square. Stop losses get hit...simple as that...and you WILL get a streak where they are hit often...Get hit twice and you are twentey trades out of the hole. NOt only that but lets say you are using the % method to enter trades...as in you only have 2% of your account on a trade. When your stop losses get hit your account balane reduces therefore your trade size reduces. As in 2% of 10 grand is $200. But with a loss your account may now be down to lets say $9000. 2% of 9 grand is less than 2% of ten, so digging yourself out of the hole is actually MORE trades than you first thought.....I hope I am making sense.
Dont use this system to gran 10 pips here and there if your stop losses are 5 to 10 times your TP....you wont make it and you will go broke.
Pick your trades and make sure your reward is worht the risk...because the risk side of trading WILL show its head to you.....make sure you ar ready and it doesnt hurt you. An SL hit should be part of your plan not something that buries you.
  • #9,829
  • Aug 12, 2011 7:23am Aug 12, 2011 7:23am
Probably not looking to trade any more this week. I have posted a lot of my charts this week, and I'm am okay, but not satisfied with this weeks results. This may sound crazy since I am up about 130 pips for the week. I am frustrated, mainly at myself, because I was up 250 pips by Wednesday morning U.S. time, and slowly let them slip away. One big thing I have noticed is that following the rules of Big E's system, I make a ton more pips on the 1 hour starting at 7am cst, and lost more of my pips trying to trade the 1 hour and 4 hour between Asia open (7pm cst) all the way through London open (3am cst). I took 3 or 4 4H trades that did not pan out so well (-30 or 40 pips) even though I entered with the rules, and quite a few 1H trades even though I entered with the rules. I got stopped out on the 1H (SL at 20 to -25 pips) only to have it reverse on me and over the course of a few hours, it would have been a profitable trade had I stayed in.

I guess all in all I am up 130 pips for the week.
  • #9,830
  • Aug 12, 2011 8:23am Aug 12, 2011 8:23am
I have tried for a very long time to find a strategy that would allow me to trade just the NY session at US central time. Plus only trading the e/u, y/u, gbp/u, chf/u, cad/u, a/u, & e/gbp. I had never done well, not even break even, with the Asian and especially if I let an Asian trade remain open overnight into the London.

The TMS strategy allows me to trade my personal wants and at 07:00 I have the luxury of 1st looking at the 4H and if nothing presents itself then I can look at the 1H. With each TF I look to the next lower one for confirmation. I do have a 50sma on my charts just to remind me of the overall trend but I make no decision based on it alone.

Have a nice weekend all, p.
Quoting Fitness09
Probably not looking to trade any more this week. I have posted a lot of my charts this week, and I'm am okay, but not satisfied with this weeks results. This may sound crazy since I am up about 130 pips for the week. I am frustrated, mainly at myself, because I was up 250 pips by Wednesday morning U.S. time, and slowly let them slip away. One big thing I have noticed is that following the rules of Big E's system, I make a ton more pips on the 1 hour starting at 7am cst, and lost more of my pips trying to trade the 1 hour and 4 hour between Asia...
  • #9,831
  • Aug 12, 2011 8:52am Aug 12, 2011 8:52am
Quoting 33drifter
I
If you need another indi to confirm your trade then 99% of the time it is a bad trade. the good trades are the ones so obvious that you dont even need the tdi
if your taking more than 3 or 4 trades a week you are over trading. imagine every trade has $100k on the line, would you still take it??

i hope that helps someone out there
Thanks 33drifter. This is just what I needed. I have a bad habit of forcing "trades" that really aren't there.


The Hard Right Edge Experience
  • #9,832
  • Aug 12, 2011 9:06am Aug 12, 2011 9:06am
Hi, here are my entries for today.

EURUSD LNG@1,42693 Entry: TDI Cross UP Exit: Waiting for signals or NY session close Obs: FXCM Chart - 8AM (GMT-4) Candle
GBPUSD LNG@1,62674 Entry: TDI Cross UP Exit: Waiting for signals or NY session close Obs: FXCM Chart - 8AM (GMT-4) Candle
AUDUSD LNG@1,03476 Entry: TDI Cross UP Exit: Waiting for signals or NY session close Obs: FXCM Chart - 8AM (GMT-4) Candle
USDJPY SRT@76,51 Entry: TDI Cross DOWN Exit: Waiting for signals or NY session close Obs: FXCM Chart - 8AM (GMT-4) Candle

All entries on 4H.

Regards.
"Don't pretend that things will change, if you always do the same" A.E.
  • #9,833
  • Aug 12, 2011 9:10am Aug 12, 2011 9:10am
EU H1 that is it for me to short
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  • #9,834
  • Aug 12, 2011 10:48am Aug 12, 2011 10:48am
Quoting dean
Thoughtfully written and well done on your trading.
One thing that caught my attention in your post though. The comment that you say turned the light on for you. The 10 pips at 5 lots comment.
I have some issues with this because its not as cut and dried as you think. I knwo this becasue I used to think this way. I used to think...."how hard can it be to just squeeze a couple of pips a day out of the market and once I get that down pat I simply up the amount I have on the trade. Try it and see how far you get...Forex trading is hard...very hard...so...
I agree with you dean, a stoploss based on a percentage of your account is absurd. It is taking the "only risk 2% of your account" money management out of context. Nor should a stop be placed some fixed distance away from your entry, 20 pip, 30 pip etc. The finding of a stop on any given order should be an area that proves your initial position wrong, that is to say a technical level (last swing!!). This then is where the trader can adjust LOT SIZE to use the two percent rule, and if getting 60 pips back is making peanuts then that means most likely you should wait for a trade that exhibits a closer stop loss, or you could say that adding 60 pips into my account is adding equity, and not turn your nose up at profit. This system has you opening very many counter trend trades, a well positioned stop loss is obvious in this instance. When trading with the trend the stops are not always so obvious, this is where "practice practice practice" comes in. It can be different on each pair as well, they all have thier own characteristics.
As far as moving your stops to break even after a certain amount of pips traveled in your favor, well, i would argue that this is just as absurd as my first point. However, this just speaks to the initial traders risk appetite, I have entered the market and had it go 30 pips positive, back to 10 pips negative and then on to 60, 70, or 80 pips in the good. I have also had those trades go positive and then get stopped out for a loss. My account is in the black still, because of the money management that I use, i accept a loss, and let my winners run, I have no fear or excitement any more.
You folks can take these ideas with a grain of salt or you may find some value in them. it doesnt affect me one way or the other, just thought I would pass on something that I had to learn by traveling down a long and bumpy road to get there. Maybe saving you some bumps on your journey.
  • #9,835
  • Aug 12, 2011 10:50am Aug 12, 2011 10:50am
Quoting handy148
There's one in the attachments up top called xTDI-Arrow v100. It makes an arrow for when green crosses red and another when green crosses yellow. Does that indi work work you (or anyone else). Don't really need it but sometimes when I have multi charts on the screen it might be helpful to have an arrow.
you need a certain model of the TDI running with it. Check xaphods posts, as I think he is the creator. or just search it on FFs main page to get the corresponding tdi.
  • #9,836
  • Aug 12, 2011 12:25pm Aug 12, 2011 12:25pm
Quoting XxLessoxX
I agree with you dean, a stoploss based on a percentage of your account is absurd. It is taking the "only risk 2% of your account" money management out of context. Nor should a stop be placed some fixed distance away from your entry, 20 pip, 30 pip etc. The finding of a stop on any given order should be an area that proves your initial position wrong, that is to say a technical level (last swing!!). This then is where the trader can adjust LOT SIZE to use the two percent rule, and if getting 60 pips back is making peanuts then that means...
I just have to highlight the point that you make; it really needs to be absorbed into just about everyone's trading plan.

And I need to explain it further with a few chart examples, because I think that the weakness of Trading Made Simple is A: No clearly defined entry, B: No clearly defined stop loss.

And if you don't agree with A, then obviouly you have not read the whole thread and seen how many discussions on 1st candle, 2nd candle, 3rd candle, 4th candle debate!!!

Both STOP LOSS as well as ENTRY can be established & defined with very minimum of indicators as you will see on the charts.

Then, having defined these 2 levels, as you point out, the next step is the LOT SIZE. This is simply a matter of using one of the many available calculators designed for this task.

Bear with me, and feel free to question anything you you see on the charts. what is shown are 2 Moving Averages, and a Trend Indicator - that's it, can it be any SIMPLER?
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It takes a lot for me to IGNORE you, but you can try.
  • #9,837
  • Aug 12, 2011 12:39pm Aug 12, 2011 12:39pm
So, let's follow up that 2nd trade signal and see what could have been done quite SIMPLY
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It takes a lot for me to IGNORE you, but you can try.
  • #9,838
  • Edited 3:37pm Aug 12, 2011 3:15pm | Edited 3:37pm
Quoting Erebus
I just have to highlight the point that you make; it really needs to be absorbed into just about everyone's trading plan.

And I need to explain it further with a few chart examples, because I think that the weakness of Trading Made Simple is A: No clearly defined entry, B: No clearly defined stop loss.

And if you don't agree with A, then obviouly you have not read the whole thread and seen how many discussions on 1st candle, 2nd candle, 3rd candle, 4th candle debate!!!

Both STOP LOSS as well as ENTRY can...
I've been following this thread since the beginning and Big E addresses the questions you present as unanswered. Big E's recommendation for entries is the first or second candle after the TDI cross. (He clearly states that the third candle is too late in the first few pages of the thread.) He also suggests that the swing high or swing low is the ideal position for your stop loss. Granted, for some, this is too great a distance, especially considering how much profit they hope to make. I believe that some of the confusion about these rules is caused by the numerous point-and-clickers who haven't read more than a few pages of the thread, who ask endless, already answered questions, and who want instant results without investing the thousands of hours necessary to achieve success. (Anyone who has been trading for more than a few months already knows where this will end.)

I'm not sure that posting a different method under the guise of simplicity is what Big E would want for his thread, but I'll leave that for him to answer. Your use of moving averages looks promising; however, if you look at the TDI on the same trade something interesting appears. The TDI signals an entry about 100 pips before your MA cross. A few pages back I posted a comment about longer trades and how to manage a 4hr TDI signal that suggests an exit, then within a candle or two crosses back to the original trade direction. To avoid a false exit signal, especially if you're interested in longer trades, look at the Daily TDI as a verification of the 4hr exit signal. If you had done this for the posted trade, you would have exited about 100 pips sooner, before the price fell away from the high. So, with the TDI as your primary indicator, you would have made an additional 200 pips from this trade, 100 on an earlier entry and 100 more on an earlier exit.
  • #9,839
  • Aug 12, 2011 3:38pm Aug 12, 2011 3:38pm
All entries closed. Today i remembered why we don't have to trade on Friday

EURUSD LNG@1,42693 Entry: TDI Cross UP Exit: NY Session close @1,424760 -22 pips Obs: FXCM Chart - 8AM (GMT-4) Candle
GBPUSD LNG@1,62674 Entry: TDI Cross UP Exit: NY Session close @1,627850 11 pips Obs: FXCM Chart - 8AM (GMT-4) Candle
AUDUSD LNG@1,03476 Entry: TDI Cross UP Exit: NY Session close @1,034590 -2 pips Obs: FXCM Chart - 8AM (GMT-4) Candle
USDJPY SRT@76,51 Entry: TDI Cross DOWN Exit: NY Session close @76,8220 -31 pips Obs: FXCM Chart - 8AM (GMT-4) Candle
NZDUSD LNG@0,83247 Entry: TDI Cross UP Exit: NY Session close @0,831740 -7 pips Obs: FXCM Chart - 12AM (GMT-4) Candle
GBPJPY LNG@125,077 Entry: TDI Cross UP Exit: NY Session close @125,0180 -6 pips Obs: FXCM Chart - 12AM (GMT-4) Candle

Regards.
"Don't pretend that things will change, if you always do the same" A.E.
  • #9,840
  • Aug 12, 2011 3:44pm Aug 12, 2011 3:44pm
  •  GT_Pips
  • | Joined Jun 2011 | Status: Dont hate what you dont understand. | 71 Posts
Quoting dean
Thoughtfully written and well done on your trading.
One thing that caught my attention in your post though. The comment that you say turned the light on for you. The 10 pips at 5 lots comment.
I have some issues with this because its not as cut and dried as you think. I knwo this becasue I used to think this way. I used to think...."how hard can it be to just squeeze a couple of pips a day out of the market and once I get that down pat I simply up the amount I have on the trade. Try it and see how far you get...Forex trading is hard...very hard...so...
Just to clear a few things up on when I said "would you rather 1 lot for 50 pips or 5 lots for 10 pips".

(1) It was just an example of how long you want to wait around for the trade to make good money..

(2) If the trader cant afford to trade 5 lots then the trader shouldnt and just take the lot size they can afford and enjoy that.

(3) I dont and never will trade 2% of my total account. I take 50% of my total account value and then trade 2 to 5% of that amount.
Which allows me to trade 3 to 5 standard size lots.
I don't take half ass trade entries either.
If I have to second guess myself or say this looks close enough, then I pass on the trade and walk away from the computer.
If the setup doesnt match the Big E rules and my own personal rules, I don't take the trade period.
I usally get two maybe three trades a week on each of the two pairs I trade.
If I have to go an entire week without a Big E system trade, I dont stress about it.There is always next week.
I also trade another forex system for shorter time frames while waiting for the Big E to setup.

My first entry is always 3 lots and when the trade proves to be working out. I will add on the other 2 lots (trading the 4H time frame).
Now that I have said I trade the 4H, I also look back at the 1H, 30m, 15m, 5m and even down to the 1m for the correct entry point.

(4) I do not just look for 10 pips per trade but im not too proud to take those 10 pips if means stopping out with a profit instead of a lost.
With the 4H I will look to grab 100 pips with the first 3 lots and trail 70 pips with the remaining 2.
I will also add back on the 3 lots on a retrace and bounce back to a trend continuation with a plan to grab another 100 pips if I can on the 5 lots.
If the market moved more then 200pips after i get out the total trade.
I dont care.
I traded my plan and where the market goes after that I couldnt care less until the next setup appears.

(5) As for stoploss I dont stress about having to set it at 100pips or what ever the stoploss requires.
On a 4H time frame 100pips is nothing.
If you complain about setting a 100 pip stoploss on a 4H time frame, then you should not be trading a 4H time frame.
My trading plans places the stoploss on the highest or lowest of three candles back.

(6)My trading plan might not work for some people , but it works for me.
He who wanders, never gets lost. No good deed goes unpunished.
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