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  • #101
  • Jun 8, 2012 10:14pm Jun 8, 2012 10:14pm
Quoting Zac
X,
Ive just done something ive never done before. Read someones personal thread from start to finish.
I was engaged the whole time with your thoughts and developments.
I really admire your desire and committment.

Im new to trading as such and very new to Forex. Just like you, what I like about Forex trading as opposed to Equities (Value Investing) is making sense of fundamental data seems to be a little easier and data more reliable.

Ive subscribed to your thread and look forward to your future posts.
Well Zac, I'm very pleased to hear that you find this type of "community sharing" i'm doing here to be of interest. I am glad I can provide you and some of the others here an opportunity to see what a "successful", yet still developing trader goes through in terms of how they look at the markets, the type and level of analysis, and most importantly the psych aspects.

I'm getting a great deal out of this actually, a lot more than I thought I would when I started, so it's kinda a two way street i suppose.

If you ever have any questions, or have a comment, etc...just post it here, or contact me via PM. either way, i'll get it and respond within a couple of days, if not right away.

X
  • #102
  • Jun 8, 2012 11:57pm Jun 8, 2012 11:57pm
So, I decided to go back through my trades since starting this particular account in my trade explorer...and see just how well they may have done if i had let them just run for large amounts of pips... 100+

And I noticed something peculiar... i didn't always have a shocking 100+ pip run from my entry points...

but what I did notice is, with I believe only 2 exceptions, every trade I entered was profitable before I experienced a 25 pip drawdown against my entry price.

In other words, my winning trades almost never moved against me during the duration of the trade for more than 25 pips. if they did, they almost always lost (with I believe 2 exceptions, though I want to go back over that more carefully to be SURE)

This is really interesting information to me. The most clear message is that I am good at picking market turning points. Not just successful trades that profit before stopping out... but, my stops really overcompensate for the realistic risk that I could take.

This means that if I have a trade that is more than 25 pips against me... it's basically not going to go my way over 90% of the time.

The implications here are somewhat exciting... it means that I can automatically reduce my risk down to approx. 25 pips on nearly all my trades. Compare that to a typical 30-45 pip risk I take..and this alone could increase my per trade profit by 15%-75%. That's really interesting

But, furthermore, in almost all cases where a trade did not pull back more than 25 pips from my entry price, it moved at least 25 pips into profitability..and in most cases, it moved 40-50 pips or more.

This means, I can just about comfortably take 25 pip stops, 30 pip targets, and reduce risk once I hit 20-25 pips of profit.... and doing so will have almost no effect on my win rate.

I have many many many trades that are profitable by 2 pips, 6 pips, 11 pips, 15 pips, etc.

I am thinking how much more i can make if they were all profitable a minimum of 20 pips, and no trade ever stopped out at more than 25 pips.

This could literally double my weekly income, which could increase my yearly profit by a log or so....

actually, a bit overwhelming, but without a doubt, something I will start to consider and build into how i set my stops and targets, and how and when i close trades out early...

just knowing that nearly every winning trade never had a 25 pips drawdown at any point is really gonna make a big difference in my trading over the coming weeks...

at any rate...i'm looking forward to finding out...
  • #103
  • Edited 9:37am Jun 9, 2012 9:26am | Edited 9:37am
Quoting forextraderx
So, I decided to go back through my trades since starting this particular account in my trade explorer...and see just how well they may have done if i had let them just run for large amounts of pips... 100+

And I noticed something peculiar... i didn't always have a shocking 100+ pip run from my entry points...

but what I did notice is, with I believe only 2 exceptions, every trade I entered was profitable before I experienced a 25 pip drawdown against my entry price.

In other words, my winning trades almost never moved against me during the duration...
Congratulations on that thread. I think the way you approach the markets is enduring and will ensure consistent profitability in the long-term. I think Paul Tudor Jones is approaching it very similarly. By the way, where do you get your information from to make your sentiment analysis. Obviously some from the ff calendar, probably newspapers and central bank websites. Anything else?

cheers
  • #104
  • Jun 9, 2012 2:35pm Jun 9, 2012 2:35pm
Quoting Custos
Congratulations on that thread. I think the way you approach the markets is enduring and will ensure consistent profitability in the long-term. I think Paul Tudor Jones is approaching it very similarly. By the way, where do you get your information from to make your sentiment analysis. Obviously some from the ff calendar, probably newspapers and central bank websites. Anything else?

cheers
Thanks man... and I'm sure it will provide long term profitability... really it's continuing to develop, test, modify, and indoctrinate myself and my behaviors into a comprehensive plan that focuses on building my own psychological strengths, while protecting me from those psych weaknesses.... this is really what it's all about for me now.

Methodologically, my understanding of various edges, market structure, intentions of other players, technical, fundamental, and sentiment analysis, etc... are tops. I'm not saying that to brag... Just...over the last year, I can really only think of maybe just a couple other people who seem to know more than me with regards to daytrading the capital markets.

I'm sure there are more (but they just don't post much, or i don't know them, or haven't read their posts, or they dont' discuss most of what they know...etc...), but, that's not the point. the POINT is... that since I feel I know more than 75% of the PROFESSIONAL trading community, and more than 90% of the professional retail trading community... and if i'm anywhere close to correct about this, then how come i'm not stupid rich?

It's because i'm lacking in the most important part... the mental game. I have it enough to make money, but lets say I believe I could increase my annual income ten fold within 12-24 months if I can bring my mental game up to where my trading skills currently are.

And this year, I realized because of a drawdown how really tired I am of feeling like I can out trade most other professionals... but I probably make less than 75%-85% of them. This is backwards.

At least, i'm saying this because I am assuming your comment was on whether the mechanics of my trading will provide consistent profitability. They will, I never questioned that.

It's whether I can act on that knowledge and understanding on a consistent basis... THIS is the part i'm working on here...and this is the part, no matter how good my "skill set" is... this is the part that will undermine me every step of the way.... like an anchor or an albatross.

I'm not sure how this will end up working out... really. It's still too new,...but so far, i'm very happy overall with the insights i've had, and I will play this out to the end of the year to see if by then, I really can align the various psych aspects with the already advanced and pretty well developed market mechanics skill set.

Man, it would be nice.... guess we'll all find out together eh?

X

P.S. oh, for the news info... #1 site is bloomberg. Important headlines, and all the news in the "currencies" section. #2 is reuters... again...important headlines, and all the news in the currencies section. I pay close attention to themes that show up in several articles across both sites...

#3 a live newsfeed from dow jones and IFR markets.

#4 forexfactory news, oanda news... ya, that about covers it. but really, 1 and 2 for my analysis, #3 and #4 just to see if anything obvious was missed.

Thanks for the V man... and the comment. I really do like to hear from folks, otherwise i suppose i'd just keep a private diary eh?
  • #105
  • Jun 9, 2012 2:39pm Jun 9, 2012 2:39pm
Quoting Custos
Congratulations on that thread. I think the way you approach the markets is enduring and will ensure consistent profitability in the long-term. I think Paul Tudor Jones is approaching it very similarly. By the way, where do you get your information from to make your sentiment analysis. Obviously some from the ff calendar, probably newspapers and central bank websites. Anything else?

cheers
Oh...I did have a question about your comment that I'd really like if you could answer.... PT Jones eh? well, then I MUST be doing SOMETHING right... I take that as a high compliment.

but, what makes you say this? did you hear a speech or read an interview by him or something? My own knowledge is extremely limited of him... I know his market wizards interview, I know the movie "trader" from 1986-87... other than that... i don't know anything about his trading style.

Or, maybe if you could reference more specifically what similarities you see in my approach and his?

I just try to take any opportunity I can to model and learn from great traders, and the more specific info I receive the better i'm able to do this...

THanks!

X
  • #106
  • Jun 9, 2012 3:05pm Jun 9, 2012 3:05pm
Quoting forextraderx
Oh...I did have a question about your comment that I'd really like if you could answer.... PT Jones eh? well, then I MUST be doing SOMETHING right... I take that as a high compliment.

but, what makes you say this? did you hear a speech or read an interview by him or something? My own knowledge is extremely limited of him... I know his market wizards interview, I know the movie "trader" from 1986-87... other than that... i don't know anything about his trading style.

Or, maybe if you could reference more specifically what similarities you see...
My knowledge is as well limited with regards to him. But from what I could see from the interviews I read and his movie he has three major parts to his trading.
1. tape reading (which might today be regarded as candle-stick analysis with volume)
2. getting an idea about fundies and their impact in the next trading session
3. correlation (of other instruments as well as the past)

Essentially with these three things he is trying to identify market turns and skewed risk-reward situation. I think maybe the only thing you don't do in your trading is finding past charts which correlate to the present. I also don't know of a program that can scan through past price history to find correlating price behavior.
  • #107
  • Jun 9, 2012 3:08pm Jun 9, 2012 3:08pm
Quoting forextraderx
Thanks man... and I'm sure it will provide long term profitability... really it's continuing to develop, test, modify, and indoctrinate myself and my behaviors into a comprehensive plan that focuses on building my own psychological strengths, while protecting me from those psych weaknesses.... this is really what it's all about for me now.

Methodologically, my understanding of various edges, market structure, intentions of other players, technical, fundamental, and sentiment analysis, etc... are tops. I'm not saying that to brag... Just...over...
and thanks for the info about where you get your news from.
  • #108
  • Jun 9, 2012 3:42pm Jun 9, 2012 3:42pm
Quoting Custos
My knowledge is as well limited with regards to him. But from what I could see from the interviews I read and his movie he has three major parts to his trading.
1. tape reading (which might today be regarded as candle-stick analysis with volume)
2. getting an idea about fundies and their impact in the next trading session
3. correlation (of other instruments as well as the past)

Essentially with these three things he is trying to identify market turns and skewed risk-reward situation. I think maybe the only thing you don't do in your trading is...
Ya, I've heard he's pretty big on pairs trading and related concepts... It's funny, i've taken a trader personality test once or twice, and every time I come up the "strategic trader"...it's a Tharp thing... and the example he gives of a strategic trader in the text is Paul Tudor Jones...I just didn't see the correlation at the time tho...maybe because I felt I didn't have a good enough understanding of PTJ and how he trades exactly.

If anyone wants to take the test, here's a link. it's kinda fun and insightful:

http://tharptradertest.com/default.aspx?question=1

X
  • #109
  • Jun 9, 2012 5:42pm Jun 9, 2012 5:42pm
I just write up a rather lengthy article on my perspective of the euro currency and how it may trade over the next few weeks... I'd think most will find it interesting, and really, I would like whoever sees it and disagrees to post the flaws as they seem them over there.

I think i'm right, but I really want to use this as an opportunity for "flaw finding"... if this exercise provides some overwhelming evidence one way or the other, we could all as a group stand to gain some insight on the directional bias of the euro over the next few weeks.

X

The link to the article: Hey all, I just posted up an article on the euro and why a bullish move won't surprise me much.... here's a link. Comment as you see fit...

http://currencytraderx.wordpress.com/
  • #110
  • Edited 8:05pm Jun 9, 2012 5:52pm | Edited 8:05pm
Hey, I actually am curious. anyone else ever take this thing? care to share your results? did it give you any insights?

Since i've shifted my attention to the psych game of trading recently... i'm curious to see what tools or viewpoints others are familiar with, and how they may or may not have helped you all...

http://tharptradertest.com/default.aspx?question=1
  • #111
  • Jun 9, 2012 6:52pm Jun 9, 2012 6:52pm
I'm going to make this post with the assumption that when you refer to the Euro, you are referencing EUR/USD.

While it may augment your trading strategy, I have my own personal reservations about using the COT as a tool for gauging market positionning. After doing some digging, according to a couple of investment banks, it wasn't the panacea of positionning that it is commonly thought to be, especially when they took into account their own client positionning/order flows. However, I will agree with you that the market is without a doubt, quite short Euro.

According to your anecdotal evidence, none of the traders surveyed in the small sample were long Euro. The overextended positionning of a market, does not imply that a short squeeze will necessarily ensue in the near future.

Sure, the shorts are already short, but if they remain justified in their analysis, and nothing from the Eurozone convinces them otherwise, then they can be quite happy sitting on their shorts until the next development. They might even notch on a few more positions in the event that more BS is spewed from the politic apparatus in the EZ. The fact that nobody wants to be long Euros simply tells them that they don't have to worry about buyers coming in and squeezing them out of their positions. The only real issue here is a rapid race to the exits - short covering - due to something which quickly changes perceptions about the European situation.

When there is a paradigm away from "crisis, crisis, crisis" to "not so bad, resolution, growth" that will entice people to reconsider and perhaps get long Euros, then you have the perfect storm for a combination of short squeee and short covering. You will know when this is happening.

What's on the horizon that would bring about such a change? There are a few event risks on the horizon, the nearest one being the Greek Elections next Sunday. It's not clear which party has the edge, and we may very well get another repeat of last elections. If we do get a repeat, or SYRIZA manages to get enough votes to form a majority coalition, then the Euro tanks on political uncertainty. If the New Democracy can pull through, then I'd expect a relief rally, but then what? Literally nothing will have changed - you have the same people in parliament that have been there all this time - will they really be expected to be harbringers of change?

Let's not even get started on what happens after elections and the Spanish bailout, when the Greeks try to negotiate their bailout deal, to get favorable terms, citing the Spanish bailout as a prime example. The issue is that the political risk involved makes the situation an uncertain one, especially when Greece will want to play chicken with Germany to see who will blink first. Uncertainty doesn't bode well for a short squeeze...who's going to buy the Euros? Fundamental traders? The fundamentals of the EZ explicitly suck and are sucking harder with each quarter. Throw in a Central Bank head who's effectively playing his own game of chicken with the EZ governments and a range is what seems likely in the interim.

Notice I didn't even factor the US leg into the equation, nor the fears of a global slowdown, with China not necessarily chugging along at full speed.

In short, I'm not ruling out a short squeeze, but I'm not going to base my anticipation of one solely on market positionning - a mere prerequisite. If it does come to fruition, and it's worthwhile, you'll know, and you can bet I'll be along for the ride. I don't mean this to imply that I think the Euro is going down either. I actually have no idea what's going to pan out in the next few weeks, and to be quite honest, I prefer it that way. While they may work for you, I've learned the hard way that keeping biases is not necessarily the most beneficial thing to my trading. As talking points? Sure! Would I trade on them? No more.

Regards,
xXTrizzleXx
  • #112
  • Jun 9, 2012 7:48pm Jun 9, 2012 7:48pm
Quoting xXTrizzleXx
I'm going to make this post with the assumption that when you refer to the Euro, you are referencing EUR/USD.

While it may augment your trading strategy, I have my own personal reservations about using the COT as a tool for gauging market positionning. After doing some digging, according to a couple of investment banks, it wasn't the panacea of positionning that it is commonly thought to be, especially when they took into account their own client positionning/order flows. However, I will agree with you that the market is without a doubt, quite...

Triz. Best response yet. Made me think. I appreciate that, and kudos to such an organized and well constructed counter argument.

I think this comes down to you and I looking at this a little bit differently than one another. And, don't get me wrong. I'll probably go both long and short the euro this week as I nearly always do... I'm not positioning with conviction for a short squeeze... but nevertheless, I do feel a move up, or at least a failure to move down and range is a lot more likely than almost anyone is giving credit to.

Unfortunately, this would be better to go in depth on via a live debate forum, rather than this typed up internet thread...but i'll try to convey some of the more pressing considerations for a move up over the next couple weeks....

Last week, we moved up in the E/U driven primarily by the hope of a RUMOR of a USD QE. Last week, we all knew, QE or no...it would do nothing to address any of the issues that you listed above.

Yet, the market didn't care... just any reason to buy was good enough, non-rumor hoped for that is irrelevent to european problems be damned. I don't know who bought, but someone did. And they did this in spite of looking down the barrel of the gun of economic armageddon.

As you say, uncertainty does not bode well for a short squeeze, and I agree. I think short of disorganized dissillusion, ANY resolution will quell some of the fear, and the market will move up accordingly

The devil you know to the devil you don't...

If last week hadn't moved up on such bullshit "transparent fluffy ethereal idea of possible hope", I wouldn't be so tuned in to the possibility.

But, it did.... and I think this holds more weight than most are considering.

Now, as far as the COT goes, ya.... those are very good points, and I don't have a direct response, as COT is an area that I am not very well versed in (I just know how it has played out in the past)

And anecdotal aside... can you think of any trader of any significance (ie full time trader, retail, institutional, or otherwise) that is looking to get long the euro? Me neither. and for good reason.

I just think the biggest reason of those good reasons IS uncertainty.

Not actually a fiscal nightmare in the EZ. because, lets keep it real. It's already here... it moved in, set up camp, invited friends, and everyone sees that, and has seen that, and I don't see over at LEAST this week if there is anything left to see.

Therefore, I believe we are more likely to move up a couple hundered before making any new significant lows.

I know this is a risky position to take. It's hard to defend. I just feel the panic is priced in... and the more reasonable rational fear is probably valued a bit higher than where we are now.

X
  • #113
  • Jun 9, 2012 8:22pm Jun 9, 2012 8:22pm
Quoting xXTrizzleXx
I'm going to make this post with the assumption that when you refer to the Euro, you are referencing EUR/USD.
And actually, I was really saying euro with euro priced against other major currencies in mind as a whole...

but, mostly as priced against USD and JPY...

and not really as it's priced against AUD.
  • #114
  • Edited 9:17pm Jun 9, 2012 8:37pm | Edited 9:17pm
Quoting forextraderx
Hey, I actually am curious. anyone else ever take this thing? care to share your results? did it give you any insights?

Since i've shifted my attention to the psych game of trading recently... i'm curious to see what tools or viewpoints others are familiar with, and how they may or may not have helped you all...

http://tharptradertest.com/default.aspx?question=1
Thats a rather neat quick test.
Im apparently an Innovative Trader.
  • #115
  • Jun 9, 2012 8:46pm Jun 9, 2012 8:46pm
Quoting forextraderx
Hey, I actually am curious. anyone else ever take this thing? care to share your results? did it give you any insights?

Since i've shifted my attention to the psych game of trading recently... i'm curious to see what tools or viewpoints others are familiar with, and how they may or may not have helped you all...

http://tharptradertest.com/default.aspx?question=1
The test seems to be quite accurate. I have also taken the Jung and Briggs Myers personality profile. The two when combined helped me understand a little better what is going on with my brain cell. INTJ for personality

As for the trader test.

Enjoy the thread.

Rufus
Attached Image (click to enlarge)
Click to Enlarge Name: 2012-03-11_2132.png Size: 25 KB
Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #116
  • Jun 9, 2012 8:48pm Jun 9, 2012 8:48pm
Quoting Zac
Thats a rather neat quick test.
Im apparently an Innovative Trader.
Researched and Methodical yet allow emotions to get in the way.

I must admit thats probably accurate. I get complimented at how indepth my research is and I do know ive made some silly decisions based on emotion.
Ya, it's kinda cool. Glad to hear your comments on it. If I remember correctly, there's like, over 15 or 20 possible outcomes... and about 2/3 of them are very capable of achieving a real proficiency in their trading aspirations... and the other 1/3rd... well, a career in law isn't for everyone either.

I'm sure the innovative trader is on the list of "people who have enough talent to become professionals"

The strategic trader has problems admitting they are wrong, and therefore can hold losers or refuse to admit a loss (guilty, absolutely), as well as difficulty seeing emotional roadblocks due to a heavy focus on logic.

Strengths are ability to synthesize and connect data in unique ways that provide high probability low risk opportunities, and a strong drive and willingness to persue trading excellence, as well as original thinking that can accept or reject the popular views with ease, as they see appropriate to.

Maybe we'll get some more takers who care to share... interesting if nothing else.
  • #117
  • Jun 9, 2012 8:50pm Jun 9, 2012 8:50pm
Quoting Rufus
The test seems to be quite accurate. I have also taken the Jung and Briggs Myers personality profile. The two when combined helped me understand a little better what is going on with my brain cell. INTJ for personality

As for the trader test.

Enjoy the thread.

Rufus

Ahh...there ya go, strategic as well. I have some familiarity with Jung's work...though I'm know I'm not an INTJ...If I recall an I was NT... but E, and I don't know the last letter.

I like the little graphic. better than just randomly pulled improperly quoted phrases.

X
  • #118
  • Jun 9, 2012 9:02pm Jun 9, 2012 9:02pm
Quoting forextraderx
Ahh...there ya go, strategic as well. I have some familiarity with Jung's work...though I'm know I'm not an INTJ...If I recall an I was NT... but E, and I don't know the last letter.

I like the little graphic. better than just randomly pulled improperly quoted phrases.

X
I have reached a stage in my trading where all I work on is myself. My trading system is par excellence. So with this in mind it is keeping the brown matter out of the gray and white matter that will be the key to trading success.

Off to take my wife out for dinner.
Illegitimi non carborundum - Noli pati a scelestis opprimi.
  • #119
  • Jun 9, 2012 9:08pm Jun 9, 2012 9:08pm
Quoting Rufus
I have reached a stage in my trading where all I work on is myself. My trading system is par excellence. So with this in mind it is keeping the brown matter out of the gray and white matter that will be the key to trading success.

Off to take my wife out for dinner.
Not there yet Ruf...though I feel I have everything I need (and then some) to distill down a trading method "par excellence"... and yes, I speculate then my ONLY work will be the mental game. well put.

Enjoy dinner...i'm gonna relax a bit more myself. Market talk is relaxing for me, but, so is star trek

X
  • #120
  • Jun 9, 2012 9:14pm Jun 9, 2012 9:14pm
Heres a cut n paste of my graphic lol and accurately quoted
Attached Image (click to enlarge)
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