Thanks Mongolian. Great write up. Must have taken a while to do it.
Make Money Everyday - A Guide to Short-Term Trading
- #902
- Edited 9:15am Oct 8, 2011 8:37am | Edited 9:15am
So I know we don't talk MM here much but I am thinking of modifying my strategy with stops. I've ben toying with the idea of a 12 pip SL, but it kills your R:R which is annoying, especially on the nights price is playing the levels perfectly. As I don't place trades at the 6 pip levels when it's sloppy my plan falls apart somewhat when there is slop, perhaps when I'm more accomplished I will be able to adjust and use the 6 pip lines in a similar way that Mongo does.
For now I thought I might try and modify the way I approach my stops to price some room.
OK so the idea I am going to try this week is this:
Normally I risk 6 pips at 2% a trade, so I have a calculator that I enter my account size, pip value, SL in pips and what percentage of my equity I want to risk per trade. Then it tells me how many lots I can put on.
So my plan is to leave my risk at 6 pips being 2% but enter my stop as 12 pips. Equalling 4% if my full stop is hit.
Now when price moves 6 pips in my favour I will move my stop to 6 pips or lower. If it doesn't I let price do it's thing and either hit my TP at next mid or psych level or stop me for 12 (4%).
Looking through my charts and running my old MM and this possible new way, I am up % wise at the end of the day using the 2nd scenario everytime.
What I'm finding is that generally price moves a little in my favour before stopping me out most times (but not all) meaning there are enough opportunities to move my stop in so my 12 pip original stop doesn't get hit all that often. It also means that when price is sloppy I stay in and make my PT when normally I would have copped two stops at that level.
I haven't run it through enough charts to be certain so far so this may be a flop of an idea. But I will keep running charts and demo it over the weekend.
Let me edit this post and add a chart.. I'm on my phone atm.
Sorry if that is babble, posting this mainly to get it written down
So with the attached chart using my old MM rules I would have made 7%. Running the new way I would have made 18%.
Either way it's pretty tidy but so far it seems like I this could be a more profitable way for me to trade this method.
I am risking more effectively 4% (12 pips) a trade now rather than 2% (6 pips), BUT that is only initially and most times PA plays out in a way that allows me to move my stop into 2% (6 pips) or less.
Note that not all the arrows on chart are how I would have placed orders to get those numbers, roughly they are correct.
For now I thought I might try and modify the way I approach my stops to price some room.
OK so the idea I am going to try this week is this:
Normally I risk 6 pips at 2% a trade, so I have a calculator that I enter my account size, pip value, SL in pips and what percentage of my equity I want to risk per trade. Then it tells me how many lots I can put on.
So my plan is to leave my risk at 6 pips being 2% but enter my stop as 12 pips. Equalling 4% if my full stop is hit.
Now when price moves 6 pips in my favour I will move my stop to 6 pips or lower. If it doesn't I let price do it's thing and either hit my TP at next mid or psych level or stop me for 12 (4%).
Looking through my charts and running my old MM and this possible new way, I am up % wise at the end of the day using the 2nd scenario everytime.
What I'm finding is that generally price moves a little in my favour before stopping me out most times (but not all) meaning there are enough opportunities to move my stop in so my 12 pip original stop doesn't get hit all that often. It also means that when price is sloppy I stay in and make my PT when normally I would have copped two stops at that level.
I haven't run it through enough charts to be certain so far so this may be a flop of an idea. But I will keep running charts and demo it over the weekend.
Let me edit this post and add a chart.. I'm on my phone atm.
Sorry if that is babble, posting this mainly to get it written down
So with the attached chart using my old MM rules I would have made 7%. Running the new way I would have made 18%.
Either way it's pretty tidy but so far it seems like I this could be a more profitable way for me to trade this method.
I am risking more effectively 4% (12 pips) a trade now rather than 2% (6 pips), BUT that is only initially and most times PA plays out in a way that allows me to move my stop into 2% (6 pips) or less.
Note that not all the arrows on chart are how I would have placed orders to get those numbers, roughly they are correct.
- #903
- Oct 10, 2011 9:59am Oct 10, 2011 9:59am
So I tried out my new method tonight, and it was pretty much even with my original method. Now I've looked through a lot of history over the weekend and from that there were only a few nights that the old method of stops beat the new one. 75% of the time it was well up and was even around 20%. We will see how it plays out.
First trade is marked on charts. Biggest point of interest is that 3625 area.. Wish it had stayed there all night. 96 pips with both stops just in that zone. Damn I hate being a scalper
-All green arrows on chart each represent 12 pips profit.
First trade is marked on charts. Biggest point of interest is that 3625 area.. Wish it had stayed there all night. 96 pips with both stops just in that zone. Damn I hate being a scalper
-All green arrows on chart each represent 12 pips profit.
So I tried out my new method tonight, and it was pretty much even with my original method. Now I've looked through a lot of history over the weekend and from that there were only a few nights that the old method of stops beat the new one. 75% of the time it was well up and was even around 20%. We will see how it plays out.
First trade is marked on charts. Biggest point of interest is that 3625 area.. Wish it had stayed there all night. 96 pips with both stops just in that zone. Damn I hate being a scalper
-All green arrows on chart...
- #910
- Oct 10, 2011 10:11pm Oct 10, 2011 10:11pm
Nhen - I am with you on the new strategy.
I definitely don't want to heavily modify my rules at this point, that would cause me to chase my tail big time. The new way of entering my stops is really just to attempt to stay in trades that would have been profitable and avoid getting chopped up.
It does mean I stay in bad trades sometimes for 6 pips longer, but running my historical data I seem to be ahead most of the time doing it this way.
This is more of an fine tuning than a revamp
I have actually shortened my PT, before I was going for the full QTR move, taking profit along the way. Now I am closing every trade at the next 12 pip line, taking full profit. After looking at it this seemed the most profitable thing to do. It means I can grab a handful of little bounces like last night without worrying whether it is going to move another 12 pips without me.
5c@1p3r5 4 1if3?
Hi Chaps,
I've been following this approach for a few weeks now with good results. I only trade it during the asian london crossover but just took this one based on the previous failure at the 3675 level, strictly out of hours for me but very rewarding never the less.
happy pipping
doc.
Mongolian
- #916
- Oct 12, 2011 6:45am Oct 12, 2011 6:45am
Only a few trades for me in London tonight, then had to go out to dinner.
Normally I would be a little pissed that price kept flying along while I was out, but to be honest after seeing how profitable it can be trading a nice range. I kind of look forward to days when price is ranging and I can get some solid practice in
Normally I would be a little pissed that price kept flying along while I was out, but to be honest after seeing how profitable it can be trading a nice range. I kind of look forward to days when price is ranging and I can get some solid practice in
- #917
- Oct 13, 2011 12:55am Oct 13, 2011 12:55am
This month I set myself a percentage goal, and while I still may reach this goal, it recently occurred to me that there is a better goal that will get more from my trading.
That goal is to act on every opportunity that presents itself within my rules. Without question.
Trading within my rules without cherry picking trades has the potential to be stupidly profitable, but at times I am still hesitating and not placing every order.
While I'm still learning it is somewhat understandable, as there are still creases to be ironed out in my approach. But if I don't nip this in the butt now I think it has the potential to become a nasty habit.
So that is my new goal for this month. To monitor myself, PA and place every order when my rules are met.
Everything else should fall into place
That goal is to act on every opportunity that presents itself within my rules. Without question.
Trading within my rules without cherry picking trades has the potential to be stupidly profitable, but at times I am still hesitating and not placing every order.
While I'm still learning it is somewhat understandable, as there are still creases to be ironed out in my approach. But if I don't nip this in the butt now I think it has the potential to become a nasty habit.
So that is my new goal for this month. To monitor myself, PA and place every order when my rules are met.
Everything else should fall into place
