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Amazing Black Magic Trading Method

  • #261
  • Aug 17, 2012 12:58am Aug 17, 2012 12:58am
Quoting Chicky
Never read 10%, but it seems good. It should be NAV.

250 pips is an arbitrary figure. Normally a big move is about 700 to 1,000 pips, sometimes even 2,000. Therefore 250 seems reasonable sl for the first trade. But as we enter all 3 or 4 trades to complete a position, can narrow down sl to 50 or 100 pips below our support/resistance level.

ps. Risk should never be more than 25% of all positions combined. We start from 10%-15% and by the time we complete building position, it may come to around 25%. This way we get few lives before reaching...
The 10% was what he said about when his trades were being pulled when he lost in the scalpers room. To me , that sounds like 10% on the value of the trade itself, not necessarily the NAV.

NAV makes sense though, especially if you start trading other vehicles simultaneously
  • #262
  • Aug 17, 2012 1:29pm Aug 17, 2012 1:29pm
Quoting Chicky
I never felt a need to understand short-term moves. Just play few pips bounces at critical levels.

I am long because of fundamentals. Primarily, on EU's comments to save euro at whatever cost. 1.2250 support is a technical indicator. The good thing about longer term trading is that if you are wrong on fundamentals, by the time you realize it, fundamentals change in your favor - and you go from there
Yes, me too i was bullish because of these comment. I was even more bullish when Draghi said that there s not point in shorting the Euro. But there is still posibilities that they will print money. But in the other hand, if they say so, you would have the time to change your position and go with the flow.

I now understand why you went long, but do you realize that you long could be open for months. The ECB or germany could react to this crisis in December. If that happen, will you be able to make profit with all the swap fees you will have to pay ??
Alternatives are more important than the plan itself
  • #263
  • Aug 17, 2012 4:38pm Aug 17, 2012 4:38pm
Quoting -Melo-
Yes, me too i was bullish because of these comment. I was even more bullish when Draghi said that there s not point in shorting the Euro. But there is still posibilities that they will print money. But in the other hand, if they say so, you would have the time to change your position and go with the flow.

I now understand why you went long, but do you realize that you long could be open for months. The ECB or germany could react to this crisis in December. If that happen, will you be able to make profit with all the swap fees you will have to...
Yes. My long could remain open for months and they would attract swap.

You may wonder why I am taking big risks on this demo account and not reducing the leverage after several margin calls.

Here is the answer. There is something called "Over Trading", which means one is "Highly Leveraged", that means one's "Debt:Equity Ratio" is too high. If you start a new but a promising business, you go for borrowing times more than your equity. Just like getting a mortgage with 5% or 10% down payment. This is Over Trading, a high risk situation. But you take this risk becuase you know that your business resources are strong enough to get decent market share. Starting from zero market share, you have only one direction and that is up. If every dollar invested in this new business earns 45 cents, you don't mind paying 7 cents on every dollar borrowed. The only limitation you will have is how much you can borrow. This way, you keep on retiring your loans and by the time you get near to your market share target, you establish a decent Debt:Equity Ratio. Because, you know that your business now has less growth potential and many new entrants will now try to take away some of your market share.

Similarly, 50% or 70% risk that I am currently taking on this demo account balance will become 5% or 7% in the future. I am paying high swap as cost of capital but one success will fetch me much more than this swap cost. Will I be able to maintain that high risk percentage in future?..... Definitely not. This is one reason I mentioned initial capital should be 'As Little as Possible". We are not looking at earning in percentages, but in times............. just like JL.
The Thief of Wall Street
  • #264
  • Aug 17, 2012 9:42pm Aug 17, 2012 9:42pm
Quoting Chicky
Yes. My long could remain open for months and they would attract swap.

You may wonder why I am taking big risks on this demo account and not reducing the leverage after several margin calls.

Here is the answer. There is something called "Over Trading", which means one is "Highly Leveraged", that means one's "Debt:Equity Ratio" is too high. If you start a new but a promising business, you go for borrowing times more than your equity. Just like getting a mortgage with 5% or 10% down payment. This is Over Trading, a high risk situation....
So what he did was to take huge amount of risk to gain huge amount of profit on a very small account. Wouldnt it be the same as taking medium amount of risk for a very big account or average account ??
Alternatives are more important than the plan itself
  • #265
  • Aug 17, 2012 10:04pm Aug 17, 2012 10:04pm
Quoting -Melo-
So what he did was to take huge amount of risk to gain huge amount of profit on a very small account. Wouldnt it be the same as taking medium amount of risk for a very big account or average account ??
I think he took big risks. He never compromised on his risk taking, the only precaution he used is to enter after getting confirmation that he was right.

I recall him saying a number of times that his loss was never total loss, he managed to salvage some balance to fight another day. Then again, whenever he had small sums i.e. margin enough to buy 500 or so shares, he never limited his position size to a fraction of that margin, instead waited for the right time and took the risk.

But we have our own calculation, that says 15% to 25% maximm risk.
The Thief of Wall Street
  • #266
  • Aug 18, 2012 11:36pm Aug 18, 2012 11:36pm
Quoting Chicky
I never felt a need to understand short-term moves. Just play few pips bounces at critical levels.

I am long because of fundamentals. Primarily, on EU's comments to save euro at whatever cost. 1.2250 support is a technical indicator. The good thing about longer term trading is that if you are wrong on fundamentals, by the time you realize it, fundamentals change in your favor - and you go from there
The weekly chart show a down trend exhaustion. your longs might be winners after all
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Alternatives are more important than the plan itself
  • #267
  • Aug 21, 2012 9:45am Aug 21, 2012 9:45am
Seems pa is going to stall near 1.2500 before deciding its ultimate direction.

If it closes the day above 1.2400, we will have a HH.
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The Thief of Wall Street
  • #268
  • Aug 21, 2012 10:47am Aug 21, 2012 10:47am
Quoting Chicky
Seems pa is going to stall near 1.2500 before deciding its ultimate direction.

If it closes the day above 1.2400, we will have a HH.
Chicky...one question.


Are you limiting yourself to only EURUSD for this exercise?


Nice win, btw
  • #269
  • Aug 21, 2012 11:01am Aug 21, 2012 11:01am
Huge optimism today. This trend wont stop. you made good decision chicky by keeping your longs open.
Alternatives are more important than the plan itself
  • #270
  • Aug 21, 2012 2:56pm Aug 21, 2012 2:56pm
Quoting -Melo-
Huge optimism today. This trend wont stop. you made good decision chicky by keeping your longs open.
Last night, I got a short signal went short to lose few pips on my real account, but changed the direction to north before going to bed. Booked some profit in the morning. Trading in the direction of general fundamentals but also keeping in mind that short signal. KEEP POSITION AS SMALL AS POSSIBLE.

Here is the line in sand.
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The Thief of Wall Street
  • #271
  • Aug 21, 2012 3:01pm Aug 21, 2012 3:01pm
Quoting almo
Chicky...one question.


Are you limiting yourself to only EURUSD for this exercise?


Nice win, btw

Yes. One pair is enough.

This win could be temporary. I am still over leveraged, but won't reduce position unless 1.2250 is taken. Will let it adjust by itself.
The Thief of Wall Street
  • #272
  • Aug 22, 2012 11:54am Aug 22, 2012 11:54am
Quoting Chicky
Seems pa is going to stall near 1.2500 before deciding its ultimate direction.

If it closes the day above 1.2400, we will have a HH.
So, we had a HH.
The Thief of Wall Street
  • #273
  • Aug 22, 2012 12:08pm Aug 22, 2012 12:08pm
I think it is of vital importance that a trader should be a knowledgeable person. Whether or not understanding macro-economics directly relates to your trading method, understanding will help you become more knowledgeable person.

Will try to post something useful here. Here are two links

http://en.wikipedia.org/wiki/Macroeconomics

http://www.imf.org/external/pubs/ft/...2/01/index.htm
The Thief of Wall Street
  • #274
  • Aug 22, 2012 12:12pm Aug 22, 2012 12:12pm
Quoting Chicky
I think it is of vital importance that a trader should be a knowledgeable person. Whether or not understanding macro-economics directly relates to your trading method, understanding will help you become more knowledgeable person.

Will try to post something useful here. Here are two links

http://en.wikipedia.org/wiki/Macroeconomics

http://www.imf.org/external/pubs/ft/...2/01/index.htm
It will be very much appreciated, if visitors to this thread post similar links. We want to provide something useful to the readers. Thanks

ps. Just make sure contents are from reliable sources and are of non-commercial nature.
The Thief of Wall Street
  • #275
  • Aug 22, 2012 5:32pm Aug 22, 2012 5:32pm
Time to set stoplosses.
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The Thief of Wall Street
  • #276
  • Aug 22, 2012 9:36pm Aug 22, 2012 9:36pm
Quoting Chicky
Time to set stoplosses.
Closed all positions. Things not looking good after chinese data
The Thief of Wall Street
  • #277
  • Aug 22, 2012 9:50pm Aug 22, 2012 9:50pm
Quoting Chicky
Last night, I got a short signal went short to lose few pips on my real account, but changed the direction to north before going to bed. Booked some profit in the morning. Trading in the direction of general fundamentals but also keeping in mind that short signal. KEEP POSITION AS SMALL AS POSSIBLE.

Here is the line in sand.
That one on 5M is good enough.
Attached Image
The Thief of Wall Street
  • #278
  • Aug 23, 2012 11:15pm Aug 23, 2012 11:15pm
Quoting Chicky
That one on 5M is good enough.
Chicky,

Your breaking the rules again!

Last time you yelled at us for not telling you.....
  • #279
  • Aug 24, 2012 12:09am Aug 24, 2012 12:09am
Quoting almo
Chicky,

Your breaking the rules again!

Last time you yelled at us for not telling you.....
ThAnks


Let me open the position but this time it will be based on above mentioned rules.

I am not so sure about fundamentals.

Opening 1/3rd lot
The Thief of Wall Street
  • #280
  • Aug 24, 2012 12:26am Aug 24, 2012 12:26am
Quoting Chicky
ThAnks


Let me open the position but this time it will be based on above mentioned rules.

I am not so sure about fundamentals.

Opening 1/3rd lot
Our base now is 1.2500 and risk will average between 15% and 25%.

We are going until trend lasts . If 1.2500 support becomes visible on Daily, will adjust the position by adding more and sl at 1.2400 ie 100 pips below our support and maybe 250 to 200 pips from our average entry
The Thief of Wall Street
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