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  • #141
  • Jan 18, 2013 4:03pm Jan 18, 2013 4:03pm
[quote=stevexyg;6378001]
Quoting Seneca pilot

In only 9 pages I think you've done an excellent job SP of showing a way to approach the market. Like you say not everyone will trade this way but your insights are not specific to this way so it is a broadly helpful thread I would say with great little gems which I'm sure have not been discovered overnight. Having been around 10 years have you any observations about the changes in the market over that time? Could you have traded this way 10 years ago? The markets don't seem to trend like they used to but do they react...
The market does not and will never change. Traders are people with fear and greed and orders will always stack up in the same places. Some methods are more or less profitable with changes in volitility and some methods do lose their edge over time. This will be a controversial thing to say but I believe that those are not trading methods but gimmicks. Can you make a lot of money with a gimmick? Sure just ask Richard Dennis. Just don't ask him what happened to his money when the gimmick ran its course. (He lost a lot) People have made millions with the method I use all the way back in time. You don't even need charts to do what I do only prices to transact at. Trading in its simplist form. Its not for everybody. Some people cannot pull the trigger without some form of confirmation from some combination of indicators. I won't deny that those methods can be profitable in certain market conditions. The question is, can they work over thousands of trades.

Levels work in chop. Levels work in trend. Levels even work for most news events. I trust what works.

I the past ten years I would say the biggest change has been the loss of the big trends. In the current market environment you need a method that deals well with chop. The daily ranges are puny compared to just a few years ago.
  • #142
  • Jan 18, 2013 4:17pm Jan 18, 2013 4:17pm
Quoting Seneca pilot
The market does not and will never change. Traders are people with fear and greed and orders will always stack up in the same places. Some methods are more or less profitable with changes in volitility and some methods do lose their edge over time. This will be a controversial thing to say but I believe that those are not trading methods but gimmicks. Can you make a lot of money with a gimmick? Sure just ask Richard Dennis. Just don't ask him what happened to his money when the gimmick ran its course. (He lost a lot) People...
Confirmation typically should only come at the cost of a small amount of the return you expect to get; I suspect that taking every level by intution probably serves as well but if you don't have a lot of experience it doesn't hurt much to wait and see how price reacts. As an experiment last night, though, I went ahead and opened up some hour chart trades on my demo account just to see what would happen if I traded without confirmation, and my results were surprisingly good. Have a look for yourself:

69136230 01815979 EUR/USD 10 B 1.33367 1.33148 -21.9 -21.90 0.00 1/18/2013 05:44 1/18/2013 08:00
69135177 01815979 GBP/USD 10 S 1.59504 1.59202 30.2 30.20 0.00 1/18/2013 04:20 1/18/2013 07:59
69106004 01815979 EUR/USD 10 S 1.33863 1.33376 48.7 48.70 0.00 1/17/2013 23:34 1/18/2013 04:24
69116063 01815979 GBP/USD 10 B 1.59706 1.59740 3.4 3.40 0.00 1/17/2013 20:06 1/18/2013 03:29
69106090 01815979 USD/JPY 10 B 89.696 90.050 35.4 39.30 0.00 1/17/2013 20:14 1/17/2013 23:26
69116019 01815979 USD/CHF 10 S 0.93632 0.93722 -9 -9.60 0.00 1/17/2013 20:05 1/17/2013 22:19
Total 86.8 90.10 0.00

There was also a swissy trade as seen above, but it was a small loss so I won't include the chart for that as the level was invalidated. Luck? I don't think so. Discretionary trading with levels is the way to go.
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  • #143
  • Jan 18, 2013 4:17pm Jan 18, 2013 4:17pm
I would like to make one more quick point that I believe might be helpful. In the chart below you will see the long trade I posted earlier. This was NOT one of my levels. I took it because I thought it was going to go up from there. As soon as I came to my senses and the thing started to come down on me I killed it quick. No harm no foul but that type of lapse in discipline is the reason for this thread. I make mistakes every day and I post here to try and help myself to be better. I can be a complete moron sometimes same as anybody.

Where did price finally turn? Yesterdays open, where else?
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  • #144
  • Jan 18, 2013 4:20pm Jan 18, 2013 4:20pm
Yes I can tell you are a perfectionist now! Someone could say to you, you know you are doing just fine, very well infact. You are getting impressive returns so be happy with that. OK that's a clique through and through but deeply accepting you are actually doing acceptably well so that you did become content with the 'not as good as it could have been trades' would mean two things. One, you would be a bit happier with your trading day. Two, with that reduction in stress and fretting you might just relax enough to allow yourself to let those trades run. In a way we beat ourselves up about bad decisions and that creates a higher likely hood that next time we will indeed make another bad decision. This is because we are either trying too hard not to fail because we don't like the feelings of failure, or we are just thinking generally about our past failures and that takes our eye off the ball and concentration is lost. Maybe they are the same thing. In another thread I'm reading mention has been made about 'accepting your losses'. That's key I think. Agony is not good and if we are constantly running away from agony our attention is not where it should be. It's all very subtle the finer control that the trader needs but one thing is for sure beating yourself up about a bad decision is one root cause of more bad decisions. Let's hear you say it 'I love my bad trade decisions as much as I love my good ones. I AM calm, what do you mean calm down???'
  • #145
  • Edited 4:54pm Jan 18, 2013 4:22pm | Edited 4:54pm
Quoting Kanzler
Confirmation typically should only come at the cost of a small amount of the return you expect to get; I suspect that taking every level by intution probably serves as well but if you don't have a lot of experience it doesn't hurt much to wait and see how price reacts. As an experiment last night, though, I went ahead and opened up some hour chart trades on my demo account just to see what would happen if I traded without confirmation, and my results were surprisingly good. Have a look for yourself:

69136230 01815979 EUR/USD 10 B...
Hi Kanzler,

You will find also that when a level fails and you are stopped out typically there is a retest of the level and you will be able to enter in the direction of the sentiment driving the trade. These can often be held longer to earn back the prior loss in addition to the normal profit targets.
  • #146
  • Jan 18, 2013 4:25pm Jan 18, 2013 4:25pm
Quoting Seneca pilot
Hi Kanzler,

You will find also that when a level fails and you are stopped out typically there is a retest of the level and you will be able to enter in the directin of the sentiment driving the trade. These can often be held longer to earn back the prior loss in addition to the normal profit targets.
Classic support turned resistance and vice versa. When one learns about supply and demand this concept makes a lot more sense, but I completely agree. In fact, I find that typically they're more reliable. This stuff is gold Seneca pilot, and it surprises me to no end that people would rather search for the right combination of indicators than see what's right in front of them on their chart. But hey, we have to make money from someone, right?
  • #147
  • Jan 18, 2013 4:43pm Jan 18, 2013 4:43pm
Quoting stevexyg
Yes I can tell you are a perfectionist now! Someone could say to you, you know you are doing just fine, very well infact. You are getting impressive returns so be happy with that. OK that's a clique through and through but deeply accepting you are actually doing acceptably well so that you did become content with the 'not as good as it could have been trades' would mean two things. One, you would be a bit happier with your trading day. Two, with that reduction in stress and fretting you might just relax enough to allow yourself to let those trades...

Excellent: Exactly the type of exchange I was looking for with the thread. Information I needed.

On Monday My trading account passed a threshold, a big round number that I have trying to reach for some time. I think those types of events play on me and make it harder to hold trades beyond my comfort zone. I clearly made some trading decisions this week based on not wanting the account to fall below that number instead of where the trade might run. It is a double edge sword though. I do not forecast. I simply take the first level that is hit during the day and trade from there. I have no bias so often I don't know if I want to hold a trade beyond the next level because I have no bias to justify thinking the level will hold. (did that make sense?)

Many days the price will ping pong from level to level never really breaking out so often the best practice is to only go for a level. Markets don't always trend and all my testing is based on exiting at the next logical level or before if I like the R/R. Hell all this might just be a waste of energy anyway I didn't hold through any levels this week and my gain was fantastic I just hope to get a little better each week. Life is good.
  • #148
  • Jan 18, 2013 4:59pm Jan 18, 2013 4:59pm
Any time I feel the market is a bit scary I just use this

Inserted Video


or this

Inserted Video
  • #149
  • Jan 18, 2013 5:14pm Jan 18, 2013 5:14pm
Perfectly natural. That's the thing with distractions like yours this week, we are it seems almost programmed to constantly have anxiety about one thing or the other and being driven to distraction especially by significant things (or things which we have made ourselves believe are significant) is life. That's why this is as much a mind game as a strategy one. The attention required to complete a successful days trading is actually immense and maintaining that attention can be exhausting if you are always fighting off your unwanted tendencies. As you are probably aware you can't just tell your mind to 'keep quiet for a bit I'm busy'. It's doesn't work like that and the opposite is likely to occur. These things which we commonly see as 'negative' can't be controlled or subdued, they need to be understood - not to be conquered but simply to be set aside or allowed to end. I first read about this area specifically in regards to trading in Trading in the Zone but can't say I've finished or completely absorbed everything in the book. But it drew parallels with other books about the nature of mind I'd previously read which is why it would be at the top of my trading books to read list. It's well know maybe you've read it but Douglas does has a grasp of the finer points.

In terms of bias you are talking to a trend follower so everything I see has bias and if it doesn't I scroll back some more to find some or move to another instrument in disgust. How can you not see bias?! I'm going to have to get two sets of charts set up now, one for trend following one for level watching.
  • #150
  • Jan 18, 2013 5:32pm Jan 18, 2013 5:32pm
Quoting stevexyg
Perfectly natural. That's the thing with distractions like yours this week, we are it seems almost programmed to constantly have anxiety about one thing or the other and being driven to distraction especially by significant things (or things which we have made ourselves believe are significant) is life. That's why this is as much a mind game as a strategy one. The attention required to complete a successful days trading is actually immense and maintaining that attention can be exhausting if you are always fighting off your unwanted tendencies. As...
I make it as simple as I can. It really is just take the first level hit and go from there. I have no bias either way. Funny how price can rise for three days straight and on the fourth morning bounce off the highs and rocket down all day. Helps to have no long bias in that situation. Many trend followers would tend to try and long it all day at every stall in price. I have no bias so I am short if goes down long if it goes up. If I take a long trade and it stops out I just figure its a down day from there and get short on the retest. Occasionally I will stop twice in a day and then the third one will work out. Its all about confidence in the method and taking that third trade. I rarely lose more than two in a row. Go back through some charts and look at how often your entries can be just a few pips off the top or bottom of the day trading this way. It opens your eyes.

I have trading in the zone and agree its good stuff. I am working on myself every day. I can say without a doubt, though I have a long way to go.
  • #151
  • Jan 18, 2013 6:37pm Jan 18, 2013 6:37pm
apologies, i said i was averaging 1300 pips earlier but this was due to compounding so the actual figure was a lot less but in money terms it was .
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #152
  • Jan 18, 2013 6:47pm Jan 18, 2013 6:47pm
rambling time, Its good to help people (i try) but once you inform them of how you trade you then get the trolls or annoying bas*ards telling you it is wrong. A year or 2 ago i was showing people compounding and i took £20 or £30 upto £600 or £800 if i can remember, this started from 50p per pip. The next thing you know i had people saying it was wrong and not good trading. It is good going against the trend or with the trend as long as you get the pips (pips means money), like 1 2 3 or a b c -i b/ob - high /low resistance/support all these pointers will either be broken or retraced and once you refine your trading you/ll get pips, This post is aimed to evreryone not just to thread owner so take care weveryone and study.
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #153
  • Jan 19, 2013 1:13am Jan 19, 2013 1:13am
Greetings SP.

Before I want to get my point through to you, I want to start of with a little bit of background info. I've said it before, I'm still an unprofitable trader and I've been working hard, with my allowable time, to find my edge. I've traded a few different strategies last year, mostly a combination of my own ideas. There was only one time for about a month towards the end of last year that I had partial success, but more importantly, the way I was trading felt so right for me. It's like everything started to align. The method I used was trading important levels (weekly open, previous day/high) with a small risk.

Due to that feeling or mind state I encountered, I knew that was the way I want to trade. After a good break during December, I've decided to focus on this method in the new year and just keep on testing it until I'm satisfied. Then, as luck may have it, you started this thread! You have really helped me accelerate the learning process with your great advice and also proved to me that I'm on the right track. So a BIG thank you!

I would like to suggest something that you can try to help you hold onto some trades a bit longer. I also think trading from level to level is the better option in the long run with current conditions. However, surely you've noticed that about half of the weeks in a year, and this is a fact, price will move mostly in one direction, either up or down obviously. You can see this by opening a weekly chart and seeing those large full bodied candles with small wicks. Generally they close about 200-250 pips above/below the open of the week.

If you then look into a week's price action, you'll notice that generally price will look for direction Monday and early Tuesday, crossing the weekly open a few times. Eventually though (usually late Tuesday, early Wednesday) price, located say at about 60-80 pips above/below the open will move towards the weekly open, but instead of going through, it will bounce off the level and never touch that level for the rest of the week, resulting in the full bodied candled as mentioned.

So my suggestion to you is, since you will more than likely trade off the weekly open ie. The bounce. Why not hold that trade for the rest of the week. This way you still trade level to level with all your other trades, which is your preferred way at this stage, but you allow yourself to hold one trade, which can easily go to 200+ pips about 40-50% of the time. Worst case your trade goes out at BE, where you could've made 30-40 pips. To me that is still worth a shot.

At the same time, you will practice holding onto trades for longer, while still keeping your normal trading method, while at the same time remove that feeling of indecision of whether you should change your style of trading level to level or holding on for longer periods.

So in summary, take only one trade setup and hold it for a longer period. If it doesn't work it will only slightly affect your performance, but if it does work it will drastically improve your performance.

Just an idea, use it, don't use it.
Have a good one.
  • #154
  • Jan 19, 2013 3:58pm Jan 19, 2013 3:58pm
Quoting PiptheRipper
Greetings SP.

Before I want to get my point through to you, I want to start of with a little bit of background info. I've said it before, I'm still an unprofitable trader and I've been working hard, with my allowable time, to find my edge. I've traded a few different strategies last year, mostly a combination of my own ideas. There was only one time for about a month towards the end of last year that I had partial success, but more importantly, the way I was trading felt so right for me. It's like everything started to align. The method I used...
I am working on the longer term trading in my investment account. I guess the real thing I need to work on is identifying the trend days from the days that its best to take profits more quickly. I have generally just opened my trade and closed at stop out or taken profit at 2/1. Only recently I began opening two units instead of all in one unit so I can close one at 2/1 and hold the other until 3/1 so I have made some progress. Not that long ago I would have had difficulty holding through any type of draw down at all Three years ago I was a firm believer in the (can't go broke taking a profit) BS But I learned the hard way that the profits actually have to be bigger than the losses.

Holding all week; I don't know. Probably beyond my skillset right now. I work on it with my test account but the units are so small I don't go through the fear and greed responses. I know its going to be pretty hard to watch thirty or forty pips draw down when each pip is thirty dollars. I haven't completely been able to divorce myself from the money. I am getting there but its a slow process. Its the reason I did an essay on it, many of the things I stress in the thread will be things I am working on perfecting. I learned these things the hard way. The art of trading is much more about control of emotions and proper execution of the trading plan and less about entries. If people spent a little time on method and a lot of time on discipline there would be lots more profitable traders. Unfortunately most new traders spend all their time looking for the perfect method and go broke before they find out you can make a mint and be wrong 40% or more of the time.

It takes a lot of discipline to trade the way I do. There isn't any indicator to tell me when to buy or sell. I often, as I have stated in the thread, am stepping in front of a fast moving train when I trade. It takes a lot of discipline to pull the trigger in those instances. I still hate to be stopped out. I still take it personally when I lose money. I don't think you can be successful in this type of venture though if you aren't very competitive. Lots of us can't get past the hate for loss and end up burning an account by averaging down and increasing size trying to recover a trade. It took me over a year to get over doing that. I still occasionally have the instinct to try it and have to really concentrate to make sure I don't. I think its these types of things that really break traders not method. I think I'll probably do the next essay about this.

You are correct that most of the weekly moves are set late Monday through early Wednesday. They almost always originate from the weekly open or the previous weeks high or low. Most weeks the EU will go from 125 to 250 pips once the move starts. The stops are pretty reasonable so there is definately room for a good r/r on the trades. For me the hurdle is the long holds. Joel Rensink (the real thing) has a weekly breakout method where he brackets GU and enters the breakout and holds the trade until 4PM Eastern on Friday win or lose. I wish I had his patience.

Thanks for the encouragement and if I can help you with learning the method I will be happy to point you in the right direction.
  • #155
  • Jan 19, 2013 4:47pm Jan 19, 2013 4:47pm
[quote=PiptheRipper;6378434]Greetings SP.

Before I want to get my point through to you, I want to start of with a little bit of background info. I've said it before,


greetings, like i said earlier every trader trades different. i could never make a trade and hold it several days or weeks (thats me).Scenario just suppose you make a trade and hold it 10 days and you make example 200 pips, if i did the same trade i would make example 800 pips through compounding and yes folks i will have losses but it is all taken into consideration and worked into my trades. be good
SEE LINE,TRADE LINE..PRICE HAS TO GO SOMEWHERE,,, PRICE WILL GO SOMEWHERE.
  • #156
  • Jan 20, 2013 12:46am Jan 20, 2013 12:46am
Nice thread. I'm a poker player and I've made a lot of money playing online. Never had a job in my life. Dropped out of school at 16 and was paying my own rent since. But now I'm getting sick of poker as I don't like the feeling of people being able to get lucky vs me and take my money.

I'm still a losing trader and working on it. I would probably be better off just sticking with daily charts and trading the longer term time frames. I messed up day trading many times. I won't give up though. I'm all about risk/reward and I've seen how good I am at getting big moves. I just get stuck in the short term too much. I'm learning more and more every day now though and I think I'm getting to the point where I can become a profitable day trader. What I need to work on is the take profit aspect now. If one can combine profitable day trading with longer term trading, they'd have 10's of millions.

My ultimate goal is to be able to trade any style profitably. Day trades , trades for 2days-1week, 1 month, 3months, etc.

I think it can be done but I do get a bit too obsessive about things, as I am a perfectionist like you.

Anyways, I'm enjoying your rambles. Thanks!
  • #157
  • Jan 20, 2013 1:36am Jan 20, 2013 1:36am
Quoting Ck87
Nice thread. I'm a poker player and I've made a lot of money playing online. Never had a job in my life. Dropped out of school at 16 and was paying my own rent since. But now I'm getting sick of poker as I don't like the feeling of people being able to get lucky vs me and take my money.

I'm still a losing trader and working on it. I would probably be better off just sticking with daily charts and trading the longer term time frames. I messed up day trading many times. I won't give up though. I'm all about risk/reward and [b]I've seen how...
I am assuming that you are letting winning trades turn into losing trades.
If you were to go over your recent winning trades and average them, then set a fixed target of something a bit less than this, and exit at this point every time, would this help your overall profitability??
  • #158
  • Jan 20, 2013 9:19am Jan 20, 2013 9:19am
Quoting Ck87
Nice thread. I'm a poker player and I've made a lot of money playing online. Never had a job in my life. Dropped out of school at 16 and was paying my own rent since. But now I'm getting sick of poker as I don't like the feeling of people being able to get lucky vs me and take my money.

I'm still a losing trader and working on it. I would probably be better off just sticking with daily charts and trading the longer term time frames. I messed up day trading many times. I won't give up though. I'm all about risk/reward and I've seen how good...
Three or four years ago I was playing in a midnight madness tournament at the Taj Mahal in Atlantic City. We had been playing for about two hours and I had busted a few guys and was going well. The player to my left was also going pretty well. We were down to two tables and I had just busted the biggest stack on our table over a series of hands where he tried to run over the table and I just kept calling him and doubling up. I and the guy to my left were the chip leaders and I had him covered maybe by a couple of thousand. Then came the hand, I am in the big blind he's first position. I have 8/9 suited. He opens for a smallish raise of twice the big blind. Folds around to me and I flip in the chips to call. Board is 6/7/10 rainbow. Bingo! I figure he raised and I want to know what he has so I bet into him about half the pot. I figure if he has a big pocket pair I am going to clean him out right now. He raises big, a raise that says I have a big pair fold now. I push and he instacalls. I turn over the 8/9 and he says shit and turns over Kings. Turn card King river card ten. Guy goes perfect perfect to beat my straight.

So why the story? Well that is part of poker, and if it drives you nuts then trading will be the same. You see I can't tell you how many times I have been close to a take profit when someone important around the other side of the world says something at his brother's birthday party and it gets posted to twitter and the market rockets the other way through my stops. Once back when I was trading futures during the financial crisis when the SP moved twenty five points a day I had a trade going up eight points or so when Obama came on camera and opened his pie hole. Twelve seconds later stopped for a one point gain. This crap happens all the time. Its part of trading. Same as bad beats is part of poker. Its definitely possible to make money at trading but the frustrations will still be there.

If you are profitable over the long term at poker then you already have the skills you need to succeed at trading. If you are good at money management and have the discipline to make profits at poker you can transfer these skills to trading they are the same. I suspect that if you are losing at trading you are pretty new and haven't figured out your style and what works for you. Go back and read the post I made about breakout trading. There is a style I posted there that will get you profitable while you figure out how you want to trade. Remember The key to being profitable is use a method that works and stick to it. Changing from method to method will kill you. The breakout method I posted is profitable and I use it in my long term account every day. The longest run of losers I have had in over 1.5 years trading these european session breakouts is four. This is a style of trading where you will make one or perhaps two trades a day and hold them until TP or the next breakout, whichever comes first. If you need clarification on the rules ask here and I will answer any questions you have.

Good luck:

PS. strategy is in post 80
  • #159
  • Jan 20, 2013 9:59am Jan 20, 2013 9:59am
I want to expand a little on day trading. I am a day trader. I finish most days flat. I think most people have an image of a daytrader as someone who enters twenty or fifty or a hundred trades a day or more. While there are certainly those that do that I think they are nuts. If everything goes right I make one trade per day per pair. I usually will not have more than one trade at any given time. I rarely make more than three trades in a day. I have posted it before if you are trading all over the chart up and down using a one minute or tick chart you are going to have a tough road in trading. I believe it is super important to pick your spots and limit your exposure to the market.

If any of you have read the papers and books that I linked earlier then you may be starting to understand what this market can do to you. There are situations that happen where there may not be a bid or ask for several handles. The market can and has had a vaccuum of orders for several cents not just a few pips. When bankers get scared they pull their bids and offers until they figure out what is happening. I think it is extremely important to try and limit the possibility of these exposures. I guess that is why I hesitate to hold positions for one second longer than I have to. A stop is not guaranteed at any certain price. It is a market order once the price is violated. The broker will fill it at any available price and that can be hundreds of pips away if the situation is dire enough. Imagine if Russia invaded Germany tomorrow. Where do you think the bids would be for Euros.

Wow this one really is rambling, so what's the point? I guess I believe in moderation. I think its dangerous to take fifty trades a day. I think its dangerous to hold trades through weekends and thin markets. I believe in limiting your market exposure and carefully selecting where you will risk that exposure for profits. Just my beliefs though, if others don't share them I am not offended or surprised.

New essay on the way soon.
  • #160
  • Jan 20, 2013 10:37am Jan 20, 2013 10:37am
Quoting Seneca pilot
Imagine if Russia invaded Germany tomorrow. Where do you think the bids would be for Euros.

New essay on the way soon.
The market would be relatively slow to react. Unconfirmed reports would come through and people would react, but market participants would receive this info at different times and would have different interpretations. Then more confirmed reports would come through and people would react accordingly at different times according to when they receive the info. This may take seconds, minutes or hours and unless you have a large stop loss and are not monitoring the market at the time then there would be time to get out. Point being, black swan is bullshit. If you are monitoring the market you will have a chance to get out before a huge gap occurs. Confirmed news doesn't come in at this kind of rate, it is not a publish and immediate reaction kind of affair. The only time you are going to see serious gaps is during major news releases when everyone is working off the same information at more or less the same time. This is the only time you need to limit your exposure.
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