Make Money Everyday - A Guide to Short-Term Trading

Quick 50 pips



daily POC 89.38

as I was posting oil dropped another 50 pips - LOL!

Making me jealous ya bastard, just got in.

don't be - this trade just erased my losses in euro! i am flat for the day.

Cool method. What I'm having trouble with is figuring out exact rules for when to enter. I realized that this is discretionary method but I'm personally uncomfortable with uncertainty and discretion. I guess it's just my personality. Has anyone tried to make a more or less strict rule set for entries and exits?

Hey mate I'm glad you asked that, I have been looking at this and I'm not there yet.
I've noticed that there are a lot of variables to take into account and situations that look the same can be interpreted very differently.
Every time I go to type up my rules my head spins because there are just too many ifs/buts.

Roughly I do this:

-Buy/sell only at QTRs, take 1/2 profit at mid point then move to BE and wait for rest of profit at next QTR or BE on last 1/2 of position.

-If we are trending I will buy/sell when price moves through the next QTR at least 6 pips. If I get stopped on price pulling back through the level I will enter again with a buy/sell stop set at the level. Or I may wait for price to move above/below the level and then enter on the pullback.

-If we've been in a range I like to see price hit the mid level above/below the QTR at either end of the range before entering in the direction. Meaning 12 pips instead of 6 as in first point.

-I look for LHs/LLs and HHs/HLs to give me clues for when price may not continue to hold above/below a QTR. Or defined Ws (signaling no more shorts and a possible move up, price tried to push lower twice and failed) or Ms (vice versa).
If price is producing LHs/LLs at a figure after being long then I take that with more strength.
Yet if price has been all long and it bounces at a figure I may short as price pulls back through the figure, then tests the figure and move to the mid point below. Then take full TP there and wait to see if price moves through the figure again and will buy on the pullback. Generally want to see it break the previous level that price made on the first failed attempt to go through. Or hit the mid line above.

-If price has been long and then it fails to make the next QTR level but makes the mid, I will watch PA and generally still try to sneak a long or two on the bounce of the QTR below that mid. Taking full PT at the mid on each.
Then if price falls through the QTR I have just traded off I will look for it to move 8-12 pips below and then I will short at the QTR is just fell through (if it makes it back up to pick me up).

-If price has been long and hits the QTR above but doesn't break through it I will have an order at the QTR below, looking to go long. And depending how PA responds I will keep doing this until it breaks through the top QTR or the bottom.

-After 2-3 level moves up without a pullback and ends up 6 pips or more above a QTR I will generally not place my order at that QTR as price tends to want to pullback through the QTR. I will watch PA and perhaps enter at the mid or with a buy stop on the QTR. Or if price pulls back then goes through the QTR I will see if I can get in on a pullback there.
(Obviously the opposite of these is true for shorts, just got easier to just use longs as examples )

-Really I think the highest probability trades using this are when the higher TFs are trending in a particular direction and you are taking most trades in that direction. Obviously the daily direction is too big for us but perhaps 15M and a few above that? There are still counter trades to be had of course but it helps to keep the stronger direction in mind, but also not be too stubborn with it.. mong also uses the graph paper to see the main direction for that day.
When price is ranging on those TFs then you just play the tops and bottom accordingly or wait for price to move out of the range.

There will definitely be circumstances that I have missed out. Maybe post some charts?
I hope that it does makes a little bit of sense, it may not at all.
Now I know why mong doesn't type up rules. It's sort of like trying to share how to surf, you can tell them a few things that will be quite helpful but only when they spend time in the water will they be able to discover what works and doesn't. And eventually move from getting dumped on every wave, to standing, to moving across the wave, to being able to turn, until finally it is second nature and the knowledge of 'how' to surf is in their body.

What I have found and still find tricky with this is that price never always does something when PA says it should. So even if you made the right move, it will not work sometimes. That can be bloody confusing when trying to get familiar with PA.
I think mong says try to put yourself in the best position possible for whatever PA decides to do. I have looked through the history and logged almost 5 months worth of charts using this method so far.. a blip in the ocean really. But what I do see is that there are more than enough opportunities to be ahead at the end of the day (some days very handsomely) if you don't get freaked when PA doesn't respond how you expect it to and you know PA intimately.
If you don't like getting stopped this method will be painful. 6 pips is a tight stop and sloppy PA slaughters that. But the nights I am unprofitable have been because 1) I wasn't yet familiar with PA in the way it expressed itself (just takes more experience). 2) I had 4 or so stops, say 2 that were just part of the game, and 2 mistakes, then I got frustrated and temporarily lost faith in the edge and left the charts.
Ten times out of ten when I got back to the charts I saw that there were 2-3 opportunities that played out right after I'd left that would have covered my stops and put me nicely ahead for the night.

Ultimately it seems to be really about taking his idea and trading it in a way that is comfortable for you. enochben seems to have done that and is having great success.
I am slowly getting there, up to this point I have been testing and practicing and learning learning learning. Still more learning to come, each night I learn something still. But even with all my f-ups I was still 12% up last month, not much but I had some freakin terrible nights, without those I would have been over 80%. The potential for profit with this method is excellent, but it takes time and persistence to get a feel for it and the right trading psychology is a must.
I'm getting closer..

Flat is better than minus! Nice come back

Wow! Great post Nhen - very well thought out...

I just want to add to your point about getting stopped out - you have to gracefully take losses! It is going to be painful at first but after a while you must learn to treat those two impostors(winning&losing) the same. As long as your money management is in place losing 6 pips should not bother you - it should just be a warning to pay close attention and get ready for the next trade.

Accept losing as part of the game! Don't embrace it, just accept it.

I see. I have to be honest with myself and say: I'm afraid this method is not for me. Too much discretion.

No problem mate, thanks for the question, having to think about all that can only be good for my trading.

The thing that appeals to me about this is that it requires the trader to truly become the edge, I sense that when that happens there is more chance of longevity.
I guess all pure PA trading is always quite discretionary, perhaps at this level it is SUPER discretionary
In saying that when I see the veterans on FF talk, I often see them discuss how much of their trading is now 'instinctual', how they can sense when certain plays are unfolding and act on their gut. Doesn't get more discretionary than that!
Perhaps that is eventually how mastery in any skill-set presents itself. From surfing, to artistic endeavors, to cooking or trading.

But I totally understand your point and I hope you find a way of trading that suits you and brings you great profits!
All of that blab was more for my own path and learning that anyone else.

Trade well mate!

Thanks bud, spot on!

Well - 4 days into the new house.... Internet still not up and running (Thanks AT&T). Move has gone well so far. @nhen, @enochben - good posts - Thanks for keeping things going. @pursuit - these fellas both said it well and really this is going to be the key however you decide to trade - how you lose is key. Honestly I really hate using the term losing because of the negative connotation that it has with it - unprofitable is really much more appropriate. So let me rephrase - how you handle unprofitable trades is going to be the key. It has been said already, but let me add it again - You will have unprofitable trades. Period. However - How you respond and handle those is going to be the key to whether you can actually make a career out of trading or whether it will just be one expensive damn hobby.

Mongolian

Hope you settle in well!

-

OK here's tonight's chart, was at the charts from the light blue line. Markings before that are just what I marked after the fact, while watching London PA.
A Monday that played nice..
Perhaps could have avoided second stop, as price was rejected quite quickly compared to previous PA.

I have spent the rest of my day and now evening trying to find a broker with tight spreads who has good charting software (ie ticks and customizable tfs) and is reputable. It is driving me bonkers.. My current broker in Aus use Meta trader and I am done with that.
I'm using FXCMs charting software at present but their spreads are not that great. I am looking to start an account with MB Trading as their spreads are great, 0.5-1 pip on EU. Watching it, it doesn't go above 1 pip. Good for scalping.
But their charting software blows.. and the feed is different to FXCMs so I can't just continue using FXCMs charts but place orders with MB Trading.
Slowly it's driving me insane..

Just wanted to vent that.

Should have had pending orders set - got caught asleep at the wheel on this nice 100 pip move!



Damn! That should have been my day!

That would've been nice indeed mate

Plenty more out there!

I don't know about today - PA has gotten slow and choppy!

Maybe because Obama is speaking?

While our president is speaking, let me point out that if anyone (other than me) is using 1-2-3 breaks to enter trades, know that they are very unreliable in timeframes lower than 5 minutes. I use them on the 5 minute and when they line up with quarter levels - they are great momentum boosts - especially for scalping.

Moved a little bit then off the figure.. Anything for you?
I got a nice short around NY open, there were three good opportunities but only took one. Then got stopped twice and missed one, woopsy.
I usually call it at night around 1am my time, time to take the dog for a walk I think.

Here's my NY trades..
Could have played the two blue arrows but didn't.
First stop was not in rules so shouldn't have taken trade.
Blue arrow that followed I could have taken.
Sharp rejection at second stop perhaps should have closed order at sign of PA.

I'm downloading a trial of Tradestation, heard good things about it.. But you have to hold a certain amount with them in order to avoid a monthly fee. We'll see.

Despite your efforts to catch many moves, I have found that its best to focus on 'the main move'. Its more risky when you enter say 10 times a day rather than a good move once a week.

say you have a risk reward ratio of 2:1. With 10 trades a day, you will have a total ratio of 20:10. In a week thats a 100:50 ratio. We all know they both mean 2:1 but think about it. you are actually risking that much. If you just have a good setup weekly, youre just 2:1 with the market. I believe youd feel more comfortable trading once-twice a week.

I dont know what you believe, but if youre doing well with your system, continue and good luck.