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B.S. Trading with Kenneth Lee

  • #1,661
  • Dec 16, 2011 11:14am Dec 16, 2011 11:14am
Quoting Good Lookin
More odds enhanced!

Demand Trade:


Attachment

Edit: changed demand trade total to 9-10 from 10
I had this demand trade on my watch list also. But my trigger was a bit higher at 1.0298. I didn't take it for two reasons:

1) It's similar to that EURUSD short that I took (same as you also posted). It's dollar long in both cases and they would have been triggered at the same time. This is all one trade. Although as we see USDCAD moved a lot more and is still going up.

2) Didn't like how it just stalled before the demand zone. Euro didn't have such thing that's why I took it and removed my CAD order.

EDIT: How often do you guys (Ken and others) watch correlation?
  • #1,662
  • Dec 16, 2011 11:48am Dec 16, 2011 11:48am
I personally don't know of a very effective way to use correlation in short term day trading. One thing i do is to not trade the Eur/usd GBP/usd and Eur/Jpy at the same time (although i tend to stay away from the GBP/usd in general). I also don't trade the usd/JPY because the moves are so small and it's hard on my risk management.

One thing i can say is that sometimes when looking at past trades whose stop would have been hit on the GBP/usd i'll see the same zone on the Eur/usd and it would have been a successful trade. Or visa versa, stop hit on the Eur/usd and success on the GBP/Usd.
  • #1,663
  • Dec 16, 2011 2:01pm Dec 16, 2011 2:01pm
Quoting Supernaut
I had this demand trade on my watch list also. But my trigger was a bit higher at 1.0298. I didn't take it for two reasons:

1) It's similar to that EURUSD short that I took (same as you also posted). It's dollar long in both cases and they would have been triggered at the same time. This is all one trade. Although as we see USDCAD moved a lot more and is still going up.

2) Didn't like how it just stalled before the demand zone. Euro didn't have such thing that's why I took it and removed my CAD order.

EDIT: How often do you guys (Ken and others)...

After your post i became curious and wanted to see if there was anything on the charts that would hint towards which pair would move more on this trade since the Eur/Usd and Usd/Cad base was created at the same time.

We would be looking at the charts on the 15th around 6pm(19:00) and would not see the results of the zones.

Eur/Usd
Supply zone means Euro will lose and Usd will gain
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Usd/Cad
Demand zone means Usd will gain and Cad will lose
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Eur/Cad
Demand zone means Euro will gain and Cad will lose
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In this case it looks like Eur/Cad zone correlates to the Usd/Cad zone. Does this mean its a better pick? I don't know, but the Usd/Cad moved 20.4 than the Eur/Usd.

This is a first glance analysis. I don't know if this is something that works consistently but i thought it was at least interesting enough to mention. Just trying to build on an idea.

Any critiques or opinions are welcome
  • #1,664
  • Dec 16, 2011 3:22pm Dec 16, 2011 3:22pm
Good Lookin,

That's an interesting idea. I strangely have never looked at it in a such a way. I just usually look which level looks better (based on my rules) and then pick based on that. And I still think that euro was a better pick, because of no basing before the entry.

But I must say that dollar tends to move more aggressively against commodity currencies like CAD, AUD and NZD. After that you have GBP and EUR. The weakest reaction is usually against other safe havens CHF and JPY. This is mainly when dollar is the main reason why pair moves. Just an observation, not a rule or something.

And one thing more... maybe someone will find it useful or maybe someone has a better technique. In this euro and cad case one could use ATR. For example, you found those levels yesterday. They look similar, they were created at the same time and both are dollar long. You can calculate "time to the level" based on ATR.

Example: when Friday session began it was ca 27 pips until entry point in CAD. 1 hour ATR was ca 20 pips. So it would take a bit more than a hour to hit it. 1,35ATR to be exact.

Same thing with euro. Exact same time. 45 pips to go until entry. 1 hour ATR 25 pips. 1,85ATR until entry. This means those levels are more or less similar. You want at least 2-3 times difference in ATR to be sure you are not taking the same trade on two different pairs.

It's not exact science, but it does paint a rough picture are your chosen levels similar or not. With majors you can usually eyeball similarity pretty easily, but with some crosses it becomes tricky. There are some very interesting pairs that have high correlation and are not that obvious.

Sorry for a long non-S/D post.
  • #1,665
  • Dec 16, 2011 9:24pm Dec 16, 2011 9:24pm
Something to share with you guys.
www.finviz.com
I get this website from trading academy. This is the best heatmap website for me so far, simple & clear. Easy to read and understand the current correlation. Just enter this website and look for FOREX. Really helpful for me when DXY is near the demand or supply level so that I can find the best pair to trade. Hope this will help a little for everyone here. We can also review the monthly or even a year correlation among the pairs.
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  • #1,666
  • Edited 10:43am Dec 17, 2011 9:03am | Edited 10:43am
The main idea of this trading strategy is the simplicity of it. I would caution you from trying to evaluate possible entries with correlations or much of anything else . the more you put in your way to consider the more reasons you can find to take bad trades as well as not take good ones. I will take trades on several pairs at times then drop the ones that aren't performing. A lot of times we may think we know what is driving our pair and then will see it is the opposite.

E/j comes to mind I have watched during days where it seems to follow e/u exactly then in a blink of a eye U/J take over and it reacts to it.

My search to trading this way is to eliminate as much as i can in the decision process, Which in turn makes trading simpler and less stressful.

Just my two cents.. Ken
Good Trading To All ; Ken Lee
  • #1,667
  • Dec 17, 2011 10:12am Dec 17, 2011 10:12am
Quoting Kenneth Lee
I will take trades on several pairs at times then drop the ones that aren't performing. A lot of times we may think we know what is driving our pair and then will see it is the opposite.
So if you have a similar long dollar setup in gbpusd, eurusd, usdcad, usdjpy, you would take all of them? How you manage your risk/exposure? Let say if you usually risk 2% per trade, then are you risking only 0,5% per trade in this case? Or do you still take them as separate trades and go full 2% on every trade?
  • #1,668
  • Dec 17, 2011 10:31am Dec 17, 2011 10:31am
Quoting Supernaut
So if you have a similar long dollar setup in gbpusd, eurusd, usdcad, usdjpy, you would take all of them? How you manage your risk/exposure? Let say if you usually risk 2% per trade, then are you risking only 0,5% per trade in this case? Or do you still take them as separate trades and go full 2% on every trade?
Very rarely will they all hit and enter or go into a entry level. almost always some will turn to soon and be missed. Plus I enter most trades manually so normally enter only two but have been in up to 4 at once. The risk to me is about the same if i took 4 separate trades . i do try and stay away from being to heavy in one currency.

Be better example to take say a OZ and and a A/j with a possible e/j , or maybe a e/u with a/j . I trade mostly a/u ,a/j,e/u and e/j , But will take others based off the entry levels. I can mix and match those 4 with little risk of being over exposed to the driving force of one currency.

Guess I am not making myself clear and now the thread has turned into a new tangent. It is the nature of the beast . That a simple concise idea turns into a monster with many heads. LOL

Ken
Good Trading To All ; Ken Lee
  • #1,669
  • Dec 17, 2011 10:42am Dec 17, 2011 10:42am
But you have to remember it is still about taking the best levels we see. if you have many on your charts and price is fast approaching find the ones with the best ingredients for success. moved furthest away, hasn't been hit (fresh) hasn't been near it in a good while, has a clear target with a decent r;r.

Just try and not over think it. We have only a few things to sort out. if you want to add more you can get right back where most started before this thread. In a tangle of indicators and other lagging ideas. I am not saying some have merit almost all do, but rarely will any have a good enough success rate to be worthy of our tool box.

Have a great weekend Ken
Good Trading To All ; Ken Lee
  • #1,670
  • Dec 17, 2011 11:05am Dec 17, 2011 11:05am
Thank you for your insights, Ken. Very helpful to know what a more experienced trader is doing.

It's so true that keeping things simple and not over thinking is a huge part of trading. Over time I have stopped watching news, reading what "experts" say, I stay away from forums during a week. Focusing only on supply/demand is the key. I just have been puzzled for some time about trade/money management aspects. Correlation and handling several S/D zones to be more precise. That's why I was curious. Do you and others pay any attention to it. I think I got my answer. Thank you once again.
  • #1,671
  • Dec 17, 2011 12:36pm Dec 17, 2011 12:36pm
Quoting Supernaut
Thank you for your insights, Ken. Very helpful to know what a more experienced trader is doing.

It's so true that keeping things simple and not over thinking is a huge part of trading. Over time I have stopped watching news, reading what "experts" say, I stay away from forums during a week. Focusing only on supply/demand is the key. I just have been puzzled for some time about trade/money management aspects. Correlation and handling several S/D zones to be more precise. That's why I was curious. Do you and others pay any attention to it. I think...

I don't as far as entering trades. I know Sam has the index charts up on his screens, I have never used those myself. It is hard not to watch other pairs when your trading and think they are moving opposite or together. I got my start in Forex hedging to collect interest so hedged currency pairs to stay flat basically and just collect interest off your positions. So the relationships between pairs was very important.

We had software that directed us in where and how much to place orders to keep our hedges in balance, you can guess the outcome when things went bad the software couldn't do it either.

So for me it was just another lesson against EA style trading plus if a computer can't figure out correlations I surely am not going to bother.

Then I always fall back to statements successful traders make of how boring and simple trading really is. I can see and most of the others on this thread should be able to as well. That once you get good at this and can trust your plans it will simply be a matter of taking a few minutes when you can spare it, to map out your plans. then either let them play-out as PO's or have a alarm to alert you at the appropriate times.

Ken

ps
Case in point: I have been trying to help my sister learn this method, she is in the process of moving and has no internet yet. She was at a friends home and just looked at the charts to see if she could still make sense of things. She saw a trade and placed it with all the elements in place stop and target. She was able to check on it later and saw that her planned trade had worked and she had got 60 pips. This is exactly how I plan to trade and basicly how i do i look when i can and can either get in a trade at the right spot or even join a on going move for a scalp. I am working on more PO types of trading but still not my basic method.
Good Trading To All ; Ken Lee
  • #1,672
  • Dec 18, 2011 3:55am Dec 18, 2011 3:55am
Quoting Fxfighter
Hi Anthony,
I saw you posting on begining of week questions about if your zones are right marked and end of the week you start to talk about correlation?Jesus you are very quick learner.I am not saying you are wrong with your thoughts but just didn't get where and why you try to sprint?Why not rather post your zones with strategy how you will manage trades from these levels?

fx
HI Fxfighter,

I'm still in learning stage, I feel that I can choose a quality level easier on a larger time frame, I often picks bad levels on a smaller TF, and I can't make a good TP. Although I can make profits through Supply & Demand, but I can only make 80-100 pips in a week (nett). And the price always goes further than my TP level, I often TP at the nearest opposing level. I think I have to work hard on this so that I can be like you guys making such huge pips in a week in the future.

Actually I started to trade FOREX about half year ago when I was 17 with a demo account, I start with those conventional technical analysis, I also learned a little about the correlation before. So I know a little about it. I do have a thread that let me track how I choose the Supply & Demand level. If you take a closer look on my posts about picking Supply & Demand zone that I posted here, you can actually find that there's not many people reply my post, just about 1 or 2 replies among my 10 posts. More than 2/3 of my posts didn't get any reply. The latest post that I post is about I stop my position if it does not work out after few candles, and there's no reply too So I seldom posts here about how I manage or strategy, I would rather share something here with all you guys.

I often get these kind of respond in all forum or trading room or Facebook group. Maybe I'm too young for trading and those seniors always look down at me, sometimes they will irony me. Or sometimes I will also meet some professional trader, they are good to me at first and they turned to not bother me anymore when I reject their trading course or something like their services (actually in my view, they are hunting newbies like me for business purpose). So I choose to learn quietly by reading posts that posted by experienced traders.

But not all experienced traders that I meet are like them, SELFISH & ARROGANT. Some are very kind, and willing to share with others and even spend time to help me. So I really appreciate them. But these guys are very few. I'm happy to join this thread as Ken and many traders are very kind to share their experience here. That's why I seldom posts here about my method handling trades or picking levels.

However, happy trading and wish you guys all the best in trading
  • #1,673
  • Edited 11:05am Dec 18, 2011 10:07am | Edited 11:05am
Quoting anthony_tzw
HI Fxfighter,

I'm still in learning stage, I feel that I can choose a quality level easier on a larger time frame, I often picks bad levels on a smaller TF, and I can't make a good TP. Although I can make profits through Supply & Demand, but I can only make 80-100 pips in a week (nett). And the price always goes further than my TP level, I often TP at the nearest opposing level. I think I have to work hard on this so that I can be like you guys making such huge pips in a week in the future.

Actually I started to trade FOREX about half year ago...

I never knew or care about your age , i apologize if you feel slighted in any way. I don't respond to all questions as I give others a chance to respond enhancing everyone's learning. Be careful about judging your performance against any one else s as you don't know their circumstances. They maybe working off demo a much easier way to make huge wins possible.

But in reality if a person is trading off 4 hr charts their target also off the 4hr will relate to that time frame. I trade primarily the 30 min and I tp AT BEST, right before the first opposing level , not the best Trade management . but fits my comfort zone. I have been averaging about 200 to 250 pips a week some weeks less. But with a $2.00 per $1,000 risk that equates to a solid 30 or 40 percent a week.

If I trade less per pip I may be able to hold for bigger gains but would my percentage per week increase ? That is the dilemma. I am working on the rest of the management part and will show the way we can all move forward in our attempts to gain more.

As for as any negative comments regarding recent posts . I as the thread starter fell it is my responsibility to point out any perils I see. Don't take it personally. There are a thousand ways to trade successfully but most have more to do with trade management than anything else. As long as a person lets winners run longer than losers you could flip a coin and be successful. Even just knowing how to spot the trend and the basic fact we enter on a pullback gives anyone a better than 50% edge.

It really isn't rocket science it is common sense. I am just striving to keep this system idea as simple as possible a comment here or two i ignore but when they seem to be turning into a more alteration of the core I have to comment .

Please continue to be a part of this thread as your insights are as valuable as anyone's .

Cheers Ken
Good Trading To All ; Ken Lee
  • #1,674
  • Dec 18, 2011 12:23pm Dec 18, 2011 12:23pm
Quoting anthony_tzw
HI Fxfighter,

I'm still in learning stage, I feel that I can choose a quality level easier on a larger time frame, I often picks bad levels on a smaller TF, and I can't make a good TP. Although I can make profits through Supply & Demand, but I can only make 80-100 pips in a week (nett). And the price always goes further than my TP level, I often TP at the nearest opposing level. I think I have to work hard on this so that I can be like you guys making such huge pips in a week in the future.
I really want to respond to this. First of all, I'm also still learning. I have been trading real account for like 4 months. Although I do have a lot of experience of bad demo trading with various systems. So I have been in and out of forex for 3 years or so.

I also perform better on higher timeframes (1h is the lowest). I have no problems with this. In fact it gives me better odds to survive in this game. Simply because spread is a smaller fraction of my risk and profit. Paying 2-pip spread, when your stop is 10 pips and target 20 pips is simply bad. You have to be a superb trader to cover these costs.

An guess what... I also take my profits too soon (usually at 2:1). But it's a matter of comfort and experience. Soon I will do a research how I would have fared with more aggressive approach based on my winning trades.

You are making 80-100 pips per week? Based on my stops/risk in would be great. Okay first of all, I don't actually understand traders who talk only about pips. Many pros and experts have this problem. For me it's all about percentages. How many percentages one makes (or wants to make) per week/month/year? And how much he risks to make this. That's the real question. X number of pips without context (timeframe, risk, position size) has no real value.

Professional money managers (hedge funds) consider a double-digit return (in percentages) per year as a very good year. Triple-digit returns are excellent. And if they show triple-digit returns over 10 years or so, then Jack Schwager will gonna write a book about them.

One has to ask a question, how much of return is reasonable to expect for a trader with less than a year of real trading experience. Ask yourself a question would you be happy with 6% per month. That doesn't seem like much. But it's 101% compounded over a year. That's triple-digit return. Do that for 10 straight years and you will be famous.

So where I steering all with all this? You said: ...so that I can be like you guys making such huge pips in a week in the future.

I will be very frank. That's a whole bunch of nonsense and a very faulty way to think. It doesn't matter how much I make, Ken or anyone else on this planet makes. Trading is not a competition in a sense who makes more. Use this forum to learn trading techniques and not to measure your amount of pips/money made compared to others. Trader X says my e-penis is 200 pips per week. Trader Y says mine is 500 pips per week. This is so useless and pointless. It won't make YOU a better trader.

Set yourself sober goals. How much you want to make per week, month or after 50 trades for example? I use percentages. You may like pips or dollars more.

Goals have to be sober. Base them on how much you can make now, not how much some other guy says he makes. And think what I said about money managers and their goals. Those are sharks in this business with proven records and return, not some guys on forums talking about how great they are.

BTW... if things like compound interest, risk-of-ruin sound new then drop me a PM. I don't want make this post even longer.

Happy trading.
  • #1,675
  • Dec 18, 2011 1:14pm Dec 18, 2011 1:14pm
I agree, to some point I consider myself a speculator as i am doing this to make a living not a investment. A person that speculates in almost anything normally risks more than a investor. I know a lot of equities investors have turned to forex as the equities markets soured over the past years.

I have a personal set of numbers for risk management which I have set as limits for myself. Which everyone does or should if not your not working, just gaming I guess.

I also like to show my gains in percentage but you say something like 20% a week is very doable by almost anyone and the sparks fly. But if you look at in the true sense of risk and the trades we take it is only risking $2 a pip for each $1,000.00 in equity, You make 100 pip and you will make 20%.

I know this is not a true 2% risk but it is how i figure my trades. A normal loss on a 30 min chart trade of say 20 pips is $40.00 dollars. I rarely have more than 1 loss in a row . if I had 3 in a row I would more than likely take a day or two off to rethink things. But also as My equity drops i will reduce the $ per pip usually twice as fast as I raised it . This way I lose less and less. The object is to make decent gains but before even that, is the number one goal of losing as least as you can. But never understand why we would have money parked in a trading account if not to use to purchase trades. This may be why I trade the way I do. My trading account is just for that, trading.

A investment for me would be something more solid, Real estate, precious metals or such. maybe a stamp collection who knows.

We can never tell what type of traders we are trading with on threads there are many. Some will consider my risk level extreme others not so much. The key point is what you personally can trade without letting it effect you emotionally which then will show in your decision process.

On the EO thread "trade what you see not expect" . Traders were posting pip gains of thousands a week. but i see that as a ultimate goal. With ATR's we have seen lately it could be done but even then they were very heavy in one or two currencies. Which I see as unneeded risk. My Goals are not pip related but % . But i do aim for 20% a week as a min. plus a 20% gain a week then increasing the risk as you go should give you 100% a month, insane gains.

Just food for thought, Not a guide line at all. Ken
Good Trading To All ; Ken Lee
  • #1,676
  • Dec 18, 2011 1:23pm Dec 18, 2011 1:23pm
hi Ken and the gang, nice conversation there I saw.
how r u doing guys? how's your weekend?
hope all keep well.

here I saw some prespective S n D zones, sometime it is eazy to determine zones in sideways market, because there are a lot of Rally - Base - Drop and Drop - Base - Rally, but in trending market, we will see a lot of Rally - Base - Rally and Drop - Base - Drop which we have alredy know that the validity of R-B-R and D-B-D are not good enough compared with R-B-D and D-B-R
So here I try to spot some zones that I found in 30minutes chart of some major pairs.
if there are any advices and comments, please feel free to share and discuss...
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I love PIE and RTP
  • #1,677
  • Dec 18, 2011 1:33pm Dec 18, 2011 1:33pm
Quoting ennichisai
hi Ken and the gang, nice conversation there I saw.
how r u doing guys? how's your weekend?
hope all keep well.

here I saw some prespective S n D zones, sometime it is eazy to determine zones in sideways market, because there are a lot of Rally - Base - Drop and Drop - Base - Rally, but in trending market, we will see a lot of Rally - Base - Rally and Drop - Base - Drop which we have...

Don't have time to go over in great detail but they a look good to me. Getting ready for work . it being christmas week though markets can be a bit dodgy so keep that in mind.
Good Trading To All ; Ken Lee
  • #1,678
  • Dec 18, 2011 1:34pm Dec 18, 2011 1:34pm
Quoting Kenneth Lee
Don't have time to go over in great detail but they a look good to me. Getting ready for work . it being christmas week though markets can be a bit dodgy so keep that in mind.
okey, thank you v much Ken.
there must be very cold in US and Europe,,,
watch your health guys.
I love PIE and RTP
  • #1,679
  • Dec 18, 2011 1:38pm Dec 18, 2011 1:38pm
Quoting ennichisai
okey, thank you v much Ken.
there must be very cold in US and Europe,,,
watch your health guys.
Not in key west , another Tourist council kinda day. Gets a bit boring actually.

http://www.accuweather.com/en/us/key...orecast/332323
Good Trading To All ; Ken Lee
  • #1,680
  • Dec 18, 2011 2:16pm Dec 18, 2011 2:16pm
Quoting Kenneth Lee
I agree, to some point I consider myself a speculator as i am doing this to make a living not a investment. A person that speculates in almost anything normally risks more than a investor. I know a lot of equities investors have turned to forex as the equities markets soured over the past years.

I have a personal set of numbers for risk management which I have set as limits for myself. Which everyone does or should if not your not working, just gaming I guess.

I also like to show my gains in percentage but you say something like 20% a week...
Good stuff as always. But I must stress one thing. First of all if your loss is around 40 dollars per trade (with 1000 dollars total equity). It's indeed not a true 2%. It's 4%.

Ken can handle such a risk because 1) as he said his emotionally ok with it 2) he knows his stats- he knows that how often he is going to win and how much.

A new guy like me can't say for sure how often I'm gonna win and how much. So if one doesn't have enough trades to make meaningful stats, then he should be very careful about his amount of risk. If I remember correctly then around 50-60 trades you can already see your rough stats (win%, avg win, avg loss). If someone has less trades, then I would not make any strong conclusions based on those stats.

So any not so experienced trader should be very careful about his risk. You certainly don't want to trade if you are mathematically going to bust. Don't fight math. Make it your friend.
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