Quoting erikcwDislikedHas this been a great VWB week for anyone else? I am in free trades and up 50-150 pips on all 5 pairs that I traded this week. Fun stuff!Ignored
'Vegas Wealth Builder Part II'
- #742
- Edited 9:13am Apr 8, 2006 1:10am | Edited 9:13am
Has this been a great VWB week for anyone else? I am in free trades and up 50-150 pips on all 5 pairs that I traded this week. Fun stuff!
So to answer your question...this has been much more than a fun week. This is an awesome ride
:
Guys, what pairs were you using this week to trade the vegas method? I dodn't see anything but AUSUSD. Are yuou holding trades for any long period? I did make some good trade with EURJPY, but that started 2 weeks ago.
JSC and Trade1969- I have gone thru the VWB , but did not understand how the entries and the stops work. Could you enlighten. i would appreciate if you post ur entries and ur stops , till I am able to learn the ropes.
Stops are placed above the recent market high for short positions, and below the recent market low for long positions.
For entries we look at the outer fib levels starting from the fib levels defined in VWB (page 7). Then we patiently wait for confirmation of reversal, by looking for candlestick reversal patterns like hammer and shooting star (there is a lot to be found on the web about candlesticks, if you really want a good book about it read books by Steve Nison). This is the basic entry. VWB part II gives additional edges to anticipate those candlestick patterns and improve your entries, by looking at shorter timeframes (1H):
- Do not enter when the market makes newer highs in uptrend or newer lows in downtrend.
- When market moves away from a high or low with speed and momentum, you have a bigger chance of making a good entry
- The 50% retracement rule. Quoted from VWB II:
AFTER THE OPEN [3:00 p.m. Chicago time], WHENEVER THE MARKET
SURPASSES A 60 PIP RANGE, IF IT THEN RETRACES MORE THAN 50% OF
THE DAYS RANGE [FROM THE HIGH OR LOW, WHICHEVER CAME MOST
RECENTLY] , THE PROBABILITY OF IT THEN CONTINUING TO HIT ANOTHER
NEW HIGH OR LOW [WHICHEVER CAME MOST RECENTLY] IS LOW DURING
THE TRADING DAY.
Try to find at least two of these three edges at the outer fibs before you place an entry.
It's best to read those two documents (VWB I + VWB II) over and over again until you get a grip on the concepts. It also helps to look at your chart history and do some backtesting. Then you see the great trades you could have made in the past and this gives you additional confidence
Maybe I'll post some charts later, but I've said enough for now
- #759
- Apr 11, 2006 2:44am Apr 11, 2006 2:44am
There's a lot of wisdom in those VWB docs, but they don't say much about money management.
Learning about MM is what has saved my ass from what would have been crippling losses otherwise. The main point is that the distance to the stop loss determines risk, and risk determines position size. Therefore, if you have a wide stop, you must have a small position. It doesn't matter whether you're doing a long or short trade.
So I try to set my stops behind some decent S/R, but I try not to put them more than 50 pips away, about 30 on average. Some people using the Vegas systems will set stops 100 pips or more away. I don't want that kind of drawdown. I'd rather do my best analysis, be wrong, lose a little money, and get back in at a later time.
However, I do recommend thinking hard about the stuff about "dancing around" with partial positions as described in the VWB docs. This is active daytrading technique applied to long term positions, and it's something I and everyone I know is having trouble with and wants to understand more fully.
The stop placement behind S&R is an excellent strategy at the begining of a trade but ofen difficult when a trade is running. I think trade management and stop management is critical to eeking out the greatest possible number of pips available on a trade without loosing your profits.
I put the paragraphs below in the PF hoping to get a discusion on stop and trade management.
[quote]
I asked in a previous post if anyone had any comments on stop strategies. The obvious difficulty is each pair have different characteristics. Some of the trades with a 30 pip trailing stop have been stopped out with only a couple of pips then gone on another 100 or so pips
.I have been looking at the Parabolic Sars as an aid to stops but as I am unfamiliar with it and it's setting I am looking for help. Or maybe someone has other suggestions or a better system or even a suggestion of a range of stops with each pair. I thought to use the ATR as a guide for a range on pairs I thought it might have some merit with placing stops.
Any comments or any help would be appreciated.
Parabolic SAR
The Parabolic SAR ("PSAR") indicator is based on the relationship between a forex market's price and time. It is used to determine when to stop and reverse ("SAR") a position utilizing time/price based stops.
Once a Parabolic SAR is reached, the current position is exited and a new position in the opposite direction is taken. It is primarily used in trending markets and is based on always having a position in the forex market. The indicator may also be used to determine stop points and estimating when you would reverse a position and take a trade the opposite direction. The indicator derives its name from the fact that when charted, the pattern resembles a parabola or French curve.
I agree about the stop loss issue. I know how to put my entries and I know how to exit, all with great confidence, but as long as I'm not sure I'm using an excellent stop loss strategy I can't go live. Obviously because this insecurity makes me emotionally more vulnerable and increases the odds of not following my stop loss rules. Never again I will fool around with real money, have paid enough "tuition fee" in the past 
As for now I have simply decided to test the above swing high/below swing low stop loss method... I'll just give it a chance and see how it affects my demo account. Maybe it IS the best method... Meanwhile I'll do a lot of research though, backtesting every meaningful stop loss strategy I can find.
Funny SAR is mentioned because I was backtesting with this indicator this weekend... unfortunately I can't find a good setting that is in harmony with VWB
I would like to find other good stop loss strategies but I can't find much information about it... Yes there's a lot of information available about money management (the best stops related to account size) but not about the best possible stops related to price action. What is the best possible stop loss strategy giving you enough space so you're not stopped out all the time, and still minimizing your drawdowns? Every pip counts, let's say if you do 100 trades/year and win 5 pips/trade because of a better stop loss strategy, in the end that's some good money!
As for now I have simply decided to test the above swing high/below swing low stop loss method... I'll just give it a chance and see how it affects my demo account. Maybe it IS the best method... Meanwhile I'll do a lot of research though, backtesting every meaningful stop loss strategy I can find.Funny SAR is mentioned because I was backtesting with this indicator this weekend... unfortunately I can't find a good setting that is in harmony with VWB
I would like to find other good stop loss strategies but I can't find much information about it... Yes there's a lot of information available about money management (the best stops related to account size) but not about the best possible stops related to price action. What is the best possible stop loss strategy giving you enough space so you're not stopped out all the time, and still minimizing your drawdowns? Every pip counts, let's say if you do 100 trades/year and win 5 pips/trade because of a better stop loss strategy, in the end that's some good money!