Romancing the Price

closed couple here and moved stop be+ for the remaining one..

[rant]

Who the fook thinks we're fakes? We show are fooking trades or do they think we're photoshop experts??? I even called the GBPUSD long on Wednesday BEFORE it happened as price was plummeting into our demand zone. We've laid everything bare for all to see. We have given all our knowledge and time for free and then some people have the audacity to call us fakes!!! Who are these people because although I feel as sick as a dog with this bloody virus, this is making my blood boil. Ungrateful blind mother fookers. I hope they continue to lose all their money as Mr Market takes them round the corner and fooks them up their arses time and again. They fooking deserve it for being such complete dicks!

[/rant]

it's human nature.. things we don't understand or cannot do, majority of the crowd tend to take one of the following course of action:

1. if its punishing one, they tend to make them God, like there use to be fire, thunder and so on Gods..

2. if it's something that aims to help them by offering new knowledge that they are unable to understand, then they discredit and destroy it as they burned Galileo..

tragic irony..

lets hope they won't burn us as they burned many innocent people in dark ages by branding them as witches.....

"I wrote to you earlier but got no reply...
Please help me in any way you can.
You said on your RTP thread that you post up your trades so that traders can see that it is possible to trade profitably.
Please what does one have to do to trade like you?
I have been trying and trying for a long time now..
All I have is blown account after blown account.
Please reply.."

i receive many pms such as the one above on daily basis. plus things like my trading times, brokers, risk management, how many monitors i use and so on..

i'm sure you can appreciate that i cannot answer all these basic questions many times over.. if i do, then i will not have any time for trading.. instead i'll try to answer some here for all..

i usually add links for certain posts may be of interest to many to the first post of this thread on the first page.. please always check the first post to find possible answers to your questions before firing in pm..

ok, lets get down to it....




trading times..
i use to trade all sessions with irregular sleeping times.. i gave up on this as it was starting to hit my physical and mental health..

these days, i get up 6 am [GMT] and usually finish with new york close.. sometimes i trade asian open, especially weekend market openings.. why so early start? i found catching last hour of asian session helps me a lot with synching in the market of the day as most setups starts with asian market.

so, most of my time spent with charts other than some weekend outings for drink and fun.. still majority part of weekends are spent with charts and trading related activities too.. like today.. why? simple answer is i enjoy it..

however, my doctor tells me i have to take on some form of keep-fit activity plus have to reduce down smoking and drinking.. we have a gym room and i rarely use it.. i asked my wife, if i can hire a pretty keep feet instructor for few days a week at least but she says NO..

in any case i have to take on some sport activity soon or i can see my trading will suffer..




trading hardware setup..
i use 2 pc each with 4 monitors.. in reality i use 1 pc with 4 monitors, other one is just a backup setup.. i also have 2 isp connection again for backup purposes..

however, my setup is not a must for trading successfully. 2 monitors setups are fine too imo. my all trades happens on 2 monitors.. i use remaining two for monitoring USD and EUR indexes and web browsing [well, i need to browse some pron too, you know]




brokers..
most mt4 forex brokers are similar, some are smaller some are bigger with plenty of "invalid prices", re-quotes, platform slowdowns and even freezes when you want to execute an order.. after all they are there to maximize their gains by using all possible tools at their disposal while you are trying the opposite.. working with mt4 brokers can be often a frustrating experience especially for scalpers..

many mt4 brokers demo accounts will work nicely.. so don't open an account with any of them based on your demo experience..
1. check reviews first such as forex peace academy and also threads dedicated to certain mt4 brokers here in Forex Factory.. however, keep a pinch of skepticism about all those reviews..
2. make sure they are regulated by credible financial authorities.. i'd be weary opening an account with a broker based in russia, china or in some obscure locations..
3. try their live trading with micro lots trading with minimal capital first where available..
4. if you have a good amount of capital then open a trading account with big institutions/banks where they offer brokerage services rather than mt4 brokers..
5. find out if they let you open trades in opposite direction [hedging] on same instrument, if it's important to you.. as far as i know brokers based in usa and canada don't let you to do hedging on same instrument due to local regulations..
6. and finally, don't ask me any names.. i don't recommend any broker to anybody..




risk management..
call it money management, risk management or what whatever but end of the day it's all about how well you can manage your available resources..

i like calling it risk management.. the word risk better meaning for me.. as the man said "risk comes from not knowing what you are doing".. so we can simply say risk is lack of enough data to act on.. sensible person will not act on without having enough data.. sensible trader will not enter a trades just because some indicator says so.. sensible trader will try to read his/her clean chart and price.. as RED says "Price is Everything" when it comes to trading..

let say we are sensible traders.. to make profit all we have to do is win only 4 trades out of every 10 trades.. yes, we can lose 6 trades and only win 4 trades and still end up with profit as long as we define proper stops and profit targets and don't make silly entries.. well, we said we are sensible traders.. we took the matters into our hands and thrown all those magic indicators out of the window.

it's simple.. take me as an example.. for my scalp trades i currently use 7pips stop loss and 15pips profit target..
say i lost 6 trades.. that's 6x7= 42pips loss
and i won 4 trades.. that's 4x15= 60pips win
balance is.................................................... 18pips profit

as long as you make good entries by being patient and waiting for price to come in your entry point [keeping in mind your sl tg] and assuming you can read the price, understand supply and demand levels, basic chart/candle patterns, the above ratio should be other way around at minimum. for example price is in the zone, giving some cofig but just didn't hit your entry point according to your risk pips value, let it go and look for the next opportunity.. well that's what i try to do.. i also do bit of naughty thing by expanding the profit target if i think it'll pass my profit tg.. i'm not always right ofcourse but when right it's quite rewarding..

edit:
missed one crucial point.. never expand your stops.. once profit and stop targets are defined they must be kept.. instead work on your entries to fine tune.. did i never expanded my stops [mental or hard stops].. of course i did.. we have to do silly things to prove that we are human.. however, i managed to cut down to minimum this type of silliness..

..and never ever let your winning trade/scalp into losing one.. once price moved to certain distance from your entry in your favor, move your stop to break-even.. if you think price will likely move much more than your profit tg then you may consider expanding profit target and start trailing your profit.. in my case for scalps i use 7 pips price distance to move the stop @be [done automatically by Luktom VOE EA i use] .. i have many stops @be but it doesn't bother me.. you have to decide your own stops that fits in with your trading style and psycholgy..

minimum ratio should be 2 t0 1, meaning you will be risking 1 to get 2... this ratio for scalping only.. for me anyway.. for swing trades ratio should be much bigger perhaps minimum being 3 to 1 or more.. why? while doing many scalps in a day is possible, for one swing trade you may have to wait days.. earning power should be balanced within line of your needs..

i use Luktom "Visual Order Editor" EA for most of my scalps.. more details and download link for this EA is on the first page.. [btw, i don't have any affiliation or connection with Luktom. i mentioned it few times because it's a great piece of free order manager EA imho]

the above is the basic knowledge anybody can learn but putting in practice successfully will differ from trader to trader as we all have different trading psychology.. well, if you keep closing your trades before profit tgs and keep taking fixed 7pips losses you'll most likely end the day with overall loss..




please help me.. and questions..
i'm a PA [price action] trader.. i learned A LOT from RED and made a PDF files from his charts and others for the benefits of all.. see first page, first post.. all the answers there in that PDF file.. if you are unable to understand or learn from it then perhaps you should consider trading is not for you.. your talent is in different areas.. don't fall for the attraction of easy money.. there are no easy money for us retailers.. the only source of easy money i know is lottery but odds are incredibly high..

when i was young, i wanted to go in politics to become a prime minister so that i can do wonderful things for people.. however hard i tried in our local party branch i couldn't make any headway whatsoever.. after a couple of years one of our senior in local branch told me something like this in private..

"... you are too honest and talk straight.. you'd be better of pursuing a different career.."

i hated him at that time for what he said, after all that hard work i put in.. but now, i understand him fully and very grateful.. he saved many years of my life..

everybody is good at something.. it's just a matter of finding out your true talent.. unfortunately most people give up after some defeats in wrong areas and take their song to their grave..

the other question i don't answer from those that wants everything handed to them in a silver plate without putting any effort to study materials presented to them FREELY..

i said many times before.. you just cannot trade with simple rules that applies to constantly changing environment.. in trading there is only one rule.. that's being there are no rules.. i'm not talking about basics such as risk management rules etc.. i'm talking about taking trades based on what price is telling you and managing them with all the psychological bags you have to carry around.. being able to adopt, survive and hopefully profit.

i still try to help those traders directly and freely who can present their case properly..

if you ask basic questions that are already answered in this thread i'll not answer.. sorry, but you have to put in some effort into learning basics.. i don't have capabilities to plant answers into your brain magically.. still working on magic knowledge pills tho, but no success so far..

if you say, i'm losing constantly, i've blown many account.. please help me etc.

these type of request will not get any reply too..
if you did ask yourself why you are constantly losing and tried to learn something to reverse it then your request proposal would be worded much differently with proper background..

i hope i covered some tiny ground here..


ps/. i put some pictures to break the text a bit.. hopefully it makes it easier reading..

For all you traders who keep blowing your accounts... the problem is YOU and we cannot fix YOU because you simply refuse to use proper risk management or a trade goes against you and you refuse to take the loss, hoping that price will come back. Sometimes it will but when it doesn't, kiss goodbye to your account! If you cannot understand that, you will never make it as a trader.

Btw this is what 1165 points of profit on the Dow Futures look like...

Very nice...

Great Post. Consider adding to post 1 paragraph 1. Perhaps an FAQ would do well?

I'm surprised he hasn't switched off his PM facility. I'm sure he's sick at the sight of these bloody emails.

Come on Ken, share some of your magical holy grail fairy dust that will make everyone trade like you, you tight bastard

P.S. Nice trade Al

damn Orb.. you pissed on my highest pips on a single trade record to date [personal record] it was a gold trade for 1107 pips posted on gold and oil thread..

seriously genuine congratulation on your dow trade.. well done.....

one thing made me happy on last friday was achieving one of my personal ambition of making 500+ pips on eu with a single trade.. closed with 532 pips.. upper one was just a scalp.. doesn't count..

I have got this GBPJPY trade going, already scaled some out and my next target is 1725 pips.



I am going to see how long I can hold the last position for and will let you know of the result in a couple of years time... lol (with a miniscule positive swap it is not quite the carry trade! AUDJPY is the better carry trade*)

In the mean time I will be looking to add, although obviously not right now. I will wait for price to come back down first, although I hope it doesn't come back all the way to my first entry... lol

WOOW.. such a beautiful trade.. folks observe and learn.. that's how pro traders does it.. if somebody asks why you did take that trade, i'll personally ask Orb to visit them with his piano cable..

i have scalped it few times.. i think i posted some here.. my last remaining long on gj is from 126.53 with a tiny stop..

Cheers Ken

Here is my post with the fundamental analysis behind it as to why I am keeping this trade running. Let's see what happens...

been asked about one of my GU trade..

"... 1) For your GBPUSD trade where you shorted at 1.5875, i understand there was large amounts of supply from Oct to Nov in 2011?

Does it mean that you just enter the trade because price was not able to move higher thru this zone for 3-4 hrs? Because i dont see any bearish candles when you entered the trade.

2) For exiting the trade, the demand zone was already tested twice from 14-16 Feb, plus there was a large bearish candle when you exited your short. Did you just decide to take your profits and play is safe? My initial impression was that the support would not hold given how it had already been tested twice and the size of the bearish candles suggested that this move was strong...."



i didn't look back that far.. on h1 immediate supply on the left and speed it hit the supply was enough for me to take calculated risk.. sold it on retest bull candle with 14 pips stop.. when i start to ask myself too many "what if" type of questions or try to perform surgical type of drilling it hinders my trading.. keeping it simple works fine for me so far..

there are two approaches for taking trades on sup&dem zones as far as i know..

1. when price is in the zone, enter at the top half of the supply zone with a small stop when selling, and opposite applies when buying in demand zone..

2. when price is in the zone, wait for confirmation, let price to suggest you that it may be turning by reading candle patterns such as engulf, morning/evening star and so on..

one more thing that applies to both entry types that check how price arrived into the zone.. was it like Cheetah or turtle.. remember the law of physic.. stronger you hit the ball against wall it'll bounce back with a similar force-stronger.. additional point here is that if the wall is not strong enough then ball will go through.. so try to read the price structure too..

what are the ups and downs for the above two type of entries?

with first one we take lower probability trade means risk of loss greater as we do not have enough price data that suggest us zone may hold.. on the other hand we are risking minimal amount of pips.. does this mean we just take the trade based on minimum possible pips loss and price is in the zone? no, we look left and try to read the price structure..

with second type of entry we increase probabilities in our favor as we have more data that what it may likely be doing.. however, in most cases we'll have to risk more pips.. bigger stop..

so, it's up to you how you want to play.. in my case i use both.. unfortunately, i couldn't find a way to have both in a same trade as yet..

i know, my exits usually sucks.. however, in this case banking 150+ pips helped me to take multiple trades when it did arrive to demand zone.. see the post 1721.. currently, i have one long open currently.. see above..

on the other hand my exit from UJ trades totally sucks.. i had multiple entries at almost very bottom and scalped most, then closed remaining one at first daily supply.. leaving more than half on the table so far.. melting down scalpers and swingers mentality in a same pot is bit of a hard task, but i'm working on it..

----------------

are all my trades winners? of course not..
here is an one example of losing trade i have re created as we are talking about entries.. why this trade was loser? i put down to silly mistake.. simply i fail to take proper notice of level was spiked.. i usually ignore such trades.. when a level spiked and there are no price data that this time buyers was bit more down the line, i should have ignored it..



while i have this knowledge i still made this silly mistake.. it goes to show knowing is just the start.. hardest part is turning knowledge into reflexive habits.. until then i'm sure i'll keep making similar mistakes..

on the positive side i'm still on about overall 70/30 win/loss ratio so far...

Successful traders don't THINK, they react to PRICE ACTION and base their decision on what PRICE is TELLING them, whereas failed traders base their decision on what they THINK price is going to do.

This THINKING makes you move your stop loss, this THINKING makes you ADD to losing trades because you THINK price WILL do something. PRICE doesn't have to do anything that you THINK. PRICE will do what PRICE is going to do and you're THINKING is not going to change the direction of PRICE.

THINK ABOUT IT! If you are a failed trader, the problem is YOU!

How are you going to fix YOU?

You put rules in place to prevent you from THINKING and then you STICK TO THESE RULES.

We are only human after all. We all make mistakes and will continue to make mistakes but we can learn from our mistakes and then put rules in place to prevent us from making these mistakes.

You could say that every failed trade is a mistake so even with all the rules in place, we will continue to make mistakes, it is just that the mistakes are a lot smaller.

Technically this trade is not a carry trade, it is just a position with a positive swap, although the swap on GBPJPY is a lot less than AUDJPY because of the interest rate differentials. Anyway, the swap is adding to my profit but in the overall grand scheme of things, it is peanuts compared to the profit one makes on the actual trade.

I just needed to clarify this to prevent confusion.

hey Kenny,

thank you very much for this post.

But what do you mean with '' level was spiked'' ?

kind regards,
Jonas

Jonas,

Come on mate, look at the picture and what do you see?

I will give you a clue... it is a candlestick formation and you use it to hit nails with... lol

So price broke through the demand level but was rejected... but it wasn't as it was consumption, not rejection. Hindsight is a wonderful thing, but trading on the hard right-edge of the chart is a lot more difficult and we all now know it was consumption.

Kenny then took the long with the full knowledge that the demand zone had breached but as price got quickly rejected, he thought that the long trade would work. In matter of fact any breach of a zone, reduces the probability of the trade working in your favour because sometimes it can be a false breach.

Had he thought a little longer about the trade, he might have questioned whether this was rejection or consumption and maybe he would not have taken this trade, but when trading the lower timeframes, you have less time to think about any of your decisions compared to the higher timeframes, especially when you are trading multiple instruments at the same time.

Take it easy mate!
Brian

spiky trade and a scalp......