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Trading Made Simple

  • #12,201
  • Sep 30, 2011 11:54pm Sep 30, 2011 11:54pm
Quoting funwithbux
I am no math wiz, but isn't that something like a 600% return on your money per year. If you could do that Goldman Sachs would be hiring you at close (or over) a million a year.
Maybe I am too pessimistic, but 600% a year. Really?
I will qualify this by saying I am new to this as well. So who knows, maybe that's why this forums founders no longer participate that much - sitting on their megayachts in Monaco....
Therein lies the problem. 4% compounded weekly on 5K returns that result but can people consistently average 4% weekly? I know Big E doesn't use stop losses as such but his rules are to get in on the first or second candle and he's mentioned others set the SL to below the reversal candle. So assuming a 6-8 candle run as has been mentioned and getting in on the end of the 1st candle (reversal) you'd be looking at an RR of 1:5 - 1:7. In my original example I only allowed an RR of 1:1 which would equate to a 2 candle run getting in on the start of the second. Add to the fact I only allowed a 60% strike rate but Big E predicts, with practice, an 80% strike rate I could have been giving a quite pesimistic forecast.

Look, as I said I'm pretty new to all this but that is how I interpret the figures put forth. Regardless I think you'll find throughout this thread and the previous one a lot of people pulling substantially more than 4% per week.

PS this is my first week trading this system and I made about 60 pips. I did 4 days averaging 35 pips then gave 80 pips back one day because I broke the rules and screwed with my stop losses and MM. 60 pips on my $300 account is still 2% for me. I'd be real happy if I averaged 2% a week compounding. If you want to hire me for a million a year I'd have to demand a car allowance too hehe.

PS thanks for the Auto Sessions indi. I'll check it out.
Everyone's got a plan until they get punched in the face
  • #12,202
  • Oct 1, 2011 12:07am Oct 1, 2011 12:07am
thanks for share this great strategy..
any update TDI setting for 1H TF?
  • #12,203
  • Oct 1, 2011 12:45am Oct 1, 2011 12:45am
Response to MichaelSimon

Ok so got and reading "Trading in the Zone". Will try and get through it over the weekend. Not only get through it, absorb it and believe it

In the meantime Im still practising on demo but opened a new one with $1000 and trading 0.05-0.1 lots depending on where I need my tp.

Got some great input that really opened my eyes from you guys the past couple of days and it is greatly appreciated so thank you for putting in the time and effort.

Believe it or not, I read through the entire thread(!) before I started demo or posting here. I truely believe that if I stick to this system strictly, and keep discipline high, I can make a profit. My main problem is, that Im still not sure how to do it without over-leveraging myself. A profit is a profit, start to think in %, you are focusing on making big dollars to much.

Of course unless I have about $100k just lying around. What Ive seen is that on the longer tf's, say h4, sl's need to be set much further, especially since they are supposed to be past the last high/low. So even if Im using small lots, I still feel like I need to set stops far, and if I try and be a good boy and stay at 2% max risk per trade, I feel like Im trapping myself because I think sl may get hit before PA goes my way. Answer me this question, really, before you place your next trade - which trade has the greater loss, one with 50 pip stop loss or the trade with 100 pip stop loss?

Many times, TDI and Stoch are screaming short on the h4, but if I go down to 1h (I try not to, but swap around before I open a position because I still want to get a bigger pic, like am I with the overall trend or not?) I will see that the tdi is showing setup for long pos. Now ofc that makes perfect sense to me, obviously when we trafe a certain tf, we dont want to get distracted by the small back anf forths, but problem is that is seems I need to set my sl far away to make sure it isnt hit before the trade goes my way... Again, this is where you need to set the parameters of exactly what you are going to use as your trading method, and the need to prove to yourself that it works, for the next 20 trades, 100 trades. Adding more analysis will only cloud the decision making, what if it works on 1 trade and not the next? It is all about the edge and probabilities..

Does that make sense to anyone at all? Or am I totally missing something here? Yes, the first thing, apart from having the DISCIPLINE to place your 20 exercise trades, is to prove to yourself that your system has the edge you need to trade successfully.

I know that I should always adjust lot postition size to match risk according to my needed sl, but that gets me to where I need to take 0.01 lot which is 10 cents a pip, and even making 150 or 200 pips a day, it would take me about 2 lifetimes (not that Ive done the math yet) to get enough equity to allow me to actually make money.. Assuming I start with $3000-$5000. I cant realistically risk anymore than that. And I know I need to make sure its money I can afford to lose. I try to look at it as a sort of tuition.
So whats the catch? Not sure what you are asking here, but read my signature, and think in percentages, not dollars.

By the way, overleveraged or not, Ive been sticking to this system for about a week now, and doing extremely well, which is even more worrying, because I keep wondering when the storm is going to hit... Mark Douglas "Anything can happen"
Michael

PS: please show me your calculations for an example trade. Taking the worst case scenario, Account only $3,000, 2% risk, I see that it takes a Stop Loss of 600 pips to get a Position Size of the 0.01 (1 micro) you mention; surely the stop is not that large, therefore your position size can be larger? A stop of 60 pips allows 0.10 which is 10 times what you claim to be holding you back. Account size of $1,000 requires stop loss of 200 to get position size as low as 1 micro.

PSS: read & study the post & charts by Phx62 - excellent information contained in them, thanks for posting.
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  • #12,204
  • Oct 1, 2011 4:05am Oct 1, 2011 4:05am
Quoting Phx62
I don't check the H4 or Daily. All the information I need is found on the H1 chart to take a H1 trade. I can find recent trend, structure (S&R levels) and candle patterns on the H1 chart. That, along with the TDI & Stoch agreement is all the information I need to enter a trade.
No, I do not exit on the hook of the TDI unless it hooks at the beginning of a trade. If I enter and the TDI hooks or reverses immediately, I know I probably miscalculated the entry. Otherwise, I will keep the trade open until it hits the TP or SL. If I am unable to monitor...
Hello Phx62,
I find your approach very interesting.
I have a question:
1 - do you wait for the TDI crossing in H1, then look in M15 to confirm
or
2 - do you wait for the TDI crossing in M15, then look in H1 to confirm?
Best regards
Vcary
  • #12,205
  • Oct 1, 2011 5:53am Oct 1, 2011 5:53am
ESSENTIAL READING, especially for the new traders attracted to this thread. They are not very long but contain volumes of important material to be absorbed!

Information For Beginners

Help for Newbies. What can you learn on Forex Factory?
It takes a lot for me to IGNORE you, but you can try.
  • #12,206
  • Oct 1, 2011 6:21am Oct 1, 2011 6:21am
Really these kind of trading is very important ..Using this much less indicators with price action trading is wonderfull ..

Great
Institutional traders are nothing but eating retailers
  • #12,207
  • Oct 1, 2011 7:41am Oct 1, 2011 7:41am
Quoting Erebus
The resources here on FF are the best on the web, so good in fact that there is a complete sub-forum for them, amazing what a little search over there can bring up.
Erebus - excellent! You are correct, FF has many lifetimes worth of resources... Thanks, and next time I will search, my bad....
  • #12,208
  • Oct 1, 2011 8:00am Oct 1, 2011 8:00am
Quoting Dud45
...but can people consistently average 4% weekly?
...
PS this is my first week trading this system and I made about 60 pips.
...
If you want to hire me for a million a year I'd have to demand a car allowance too hehe.
You bring up very good points and I would have to agree the math is correct, it is the input that needs to be verified. I think the point you make about consistency may be the key. There are all sorts of market conditions over time. Some tradable, some not, some very profitable, some not. And then there are those days that just set your hair on fire, both up and down. It appears to me that the market conditions we are in right now are very good, but will that continue, and if they don't will this same system still be relevant to the new conditions, and how long will it take a trader to realize there has been a change and adapt to it?
When you are fully invested in the market, any market, all it take is confidence, (lack of humility), and a 'black swan' event to reverse a whole bunch of x% weeks.
I am only offering opinion here, I do not know any of this from first hand experience, so take it all for what its worth.....
On the up side, congrats on your first week returns/success, but, just remember this too will pass.....
On the hiring question: you are first on my list after I make the first million...(car allowance, ok, but it has to be a Prius)
  • #12,209
  • Edited 10:00am Oct 1, 2011 9:28am | Edited 10:00am

  1. Looking weak.
  2. Price far away from both high and low.
  3. 43 pips away from next hundred level (1.3600).
  4. I count just one blue candle on last up reversal..
  5. No consolidation, EMA5 isn't flat.
  6. Little candles.
  7. Medium EUR news right now.
  8. TDI angle12-2, however green appears to be touching red instead of crossing.

On top of these dealbreakers, H1 was countertrend when you look at H4.
Stayed out of this one.

Quoting eelfranz
Remember when your looking at PA... it loves to return to previous hi or lo levels... check out a few charts.

Remember to always consider your forex basics when thinking about entering a trade...

Does it look week or strong...

How close are we to previous hi's or lo's...
...
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Financial independence is what I live for
  • #12,210
  • Oct 1, 2011 9:58am Oct 1, 2011 9:58am

  1. Strong looking. H4 and H1 both down.
  2. Real close to previous low...
  3. Just 10 pips away from 1.3500...
  4. Five candles on last down reversal.
  5. No consolidation.
  6. Large candles.
  7. Medium EUR news just passed 15 minutes ago. Next news at 10am.
  8. TDI angle 4-6, bounce trade: green bounced off red.

Stochs flat and near oversold. Decided to stay out, mainly because PA was close to 1.3500.

Quoting eelfranz
Remember when your looking at PA... it loves to return to previous hi or lo levels... check out a few charts.

Remember to always consider your forex basics when thinking about entering a trade...

Does it look week or strong...

How close are we to previous hi's or lo's...
...
Attached Image (click to enlarge)
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Financial independence is what I live for
  • #12,211
  • Oct 1, 2011 10:24am Oct 1, 2011 10:24am

  1. Very weak PA and H4 down whereas H1 is up.
  2. PA far away from high and low.
  3. PA 60 pips from 1.3600.
  4. Just one candle on last up reversal.
  5. EMA5 not flat, but previous candle is a doji. I think we're looking at consolidation.
  6. The candles are large, but their bodies are small with long wicks.
  7. No important news.
  8. TDI angle is 12-2 and stochs are confirming.

Not a valid trade.

Quoting eelfranz
Remember when your looking at PA... it loves to return to previous hi or lo levels... check out a few charts.

Remember to always consider your forex basics when thinking about entering a trade...

Does it look week or strong...

How close are we to previous hi's or lo's...
...
Attached Image (click to enlarge)
Click to Enlarge Name: Screen 00004.jpg Size: 221 KB
Financial independence is what I live for
  • #12,212
  • Oct 1, 2011 10:41am Oct 1, 2011 10:41am

  1. Strong PA. Both H4 and H1 down.
  2. About 10 pips away from low.
  3. Price is at 1.3496, in other words close to a hundred level. However, low is at about 1.3486 reached by previous candle. Therefore, IMO the support has been broken.
  4. Just two candles on last down reversal...
  5. EMA5 is flat, but PA isn't. No consolidation.
  6. Large candles.
  7. Low and medium USD news an hour and a half away.
  8. TDI angle 4-6, stochs pointing down as well and not near oversold.

This time the pros outnumbered the cons for me, so I decided to go short.

Quoting eelfranz
Remember when your looking at PA... it loves to return to previous hi or lo levels... check out a few charts.

Remember to always consider your forex basics when thinking about entering a trade...

Does it look week or strong...

How close are we to previous hi's or lo's...
...
Attached Image (click to enlarge)
Click to Enlarge Name: Screen 00006.jpg Size: 222 KB
Financial independence is what I live for
  • #12,213
  • Oct 1, 2011 10:52am Oct 1, 2011 10:52am
Quoting vcary
Hello Phx62,
I find your approach very interesting.
I have a question:
1 - do you wait for the TDI crossing in H1, then look in M15 to confirm
or
2 - do you wait for the TDI crossing in M15, then look in H1 to confirm?
Best regards
Vcary
I normally trade the H1 and as I stated before, I gather all the information needed from the H1 chart and take the trade on the H1. Last week, I was off work so I experimented with the M15 time frame, with the rules of my trading plan. However there was a lot more screen time required on the M15 and a lot more fake out trades. In answer to you question, when trading the M15, I do not check the H1 before making M15 trades. Based on last weeks trading, I will stick to the H1 for the majority of my trading.
  • #12,214
  • Oct 1, 2011 10:53am Oct 1, 2011 10:53am
Quoting Numb3rs
This is a quick compilation of rules with links to indicators and template.

Edit: updated document.
Updated again with cce's template and indicators.
Thanks cce
Couldn't open the .Doc file in this post, my office xp showing "some part may missing or invalid file"
I downloaded several times but the problem was as same as i said above.
Can u upload it please.
So Thanks.
  • #12,215
  • Oct 1, 2011 11:00am Oct 1, 2011 11:00am
Trade taken at 1pm GMT+1 turned out to be a winner.
Automatic trade management took care of moving my stop up.
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Financial independence is what I live for
  • #12,216
  • Oct 1, 2011 11:11am Oct 1, 2011 11:11am
Quoting mfinab
Hi,

Maybe I'm posting too much charts in here ???

If my setups are not the way it should be, don't you guys hesitate to tell me...
USD CAD
http://my.jetscreenshot.com/4229/201...55qo-498kb.jpg
.........

Mfinab,
some of your chart image is not showing here it just showing a window where written jetscreenshot and nothing happened when i tried to click on those image attachments.

Hope we will see them freshly , am new to this thread so i missed those images when they were shown properly.
Thanks
  • #12,217
  • Oct 1, 2011 11:57am Oct 1, 2011 11:57am
Quoting NZ Chris
Hey Michael, I was reading another thread that detailed how you could turn $500 into $1,000,000 (yes... ONE MILLION DOLLARS) in 300 trades. I looked a bit further into it and worked out that you can actually turn $50 into $1,000,000 in two years with a 10 pip profit per day in your account. Sounds far fetched but it is true. Don't worry about what seems like tiny profits, just make sure that profits are added regularly. As you account grows you continue the same %age risk but your lot size will increase and so will your profits. Beware the temptation...

In my opinion, one should never really have a goal of pips per day or pips per week, etc. You should have a goal of only taking the best trades. If you concentrate on only taking the best trades, you will find that the pips will be there.

Based on the $500->$1M in 300 trades only targeting 10 pips per trade, if my calculations are correct, you would need to earn 5% per trade to accomplish this. So, if you started with $500, you would be trading 2.5 mini lots to start. Someone can correct me if I'm wrong, but I don't think I am.

The bad thing about the forex market is that the profit potential is very intoxicating. People have dreams of becoming millionaires virtually overnight. The good thing about the forex market is that if you take the turtle approach(slow and steady) as compared to the hare approach(super fast), you will find that you really can turn any and all of your dreams into reality.
  • #12,218
  • Oct 1, 2011 12:32pm Oct 1, 2011 12:32pm
A lot of posts about doing exactly what my signature says

Which group are you in?

Here is what new traders need to do, read this attachment

Getting Through Your First Month of Forex Trading
Attached File(s)
File Type: pdf Getting Through Your First Month of Forex Trading.pdf   276 KB | 1,954 downloads
It takes a lot for me to IGNORE you, but you can try.
  • #12,219
  • Oct 1, 2011 1:48pm Oct 1, 2011 1:48pm
Quoting funwithbux
You bring up very good points and I would have to agree the math is correct, it is the input that needs to be verified. I think the point you make about consistency may be the key. There are all sorts of market conditions over time. Some tradable, some not, some very profitable, some not. And then there are those days that just set your hair on fire, both up and down. It appears to me that the market conditions we are in right now are very good, but will that continue, and if they don't will this same system still be relevant to the new conditions,...

I don't know how long you have been trading.. but I disagree with you that this is the best time for market conditions.. this is crap markets... total crap. Especially during the London.. IMHO... way too much negative crap being said in the news and way too many talking heads out there spouting crap.. no.. these conditions are total crap!

However, learning in this type of an inviroment is probably a good thing though, for beginners.. because if they can weather this.. then, hopefully, once all this mess with Europe and US gets better.. it might go back to better market conditions.

Anywho.. that's just what I think.. others may disagree.

Also, wasn't trying to be rude.. It's just what I think! I would agree that you have the right to disagree!
  • #12,220
  • Oct 1, 2011 1:52pm Oct 1, 2011 1:52pm
Quoting Phx62
I normally trade the H1 and as I stated before, I gather all the information needed from the H1 chart and take the trade on the H1. Last week, I was off work so I experimented with the M15 time frame, with the rules of my trading plan. However there was a lot more screen time required on the M15 and a lot more fake out trades. In answer to you question, when trading the M15, I do not check the H1 before making M15 trades. Based on last weeks trading, I will stick to the H1 for the majority of my trading.
I too have experienced this ... and I've been doing pretty much exactly what you have been doing!
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