Ramblings of a Forex Junkie

Greetings SP. Let the green pips be with you this week.

Would you please expand on the topic of SL sizes. You have mentioned it earlier in the thread that you set your SL as a percentage of ATR and that you believe it's the best way of doing it. Do you mind giving more details about it?

If it's a topic that you would rather talk about later in the thread, then that's fine. I don't mind the wait.

I will get back to you on this a little later. Buying a house and have some work to do with that today.

Would you please expand on the topic of SL sizes. You have mentioned it earlier in the thread that you set your SL as a percentage of ATR and that you believe it's the best way of doing it. Do you mind giving more details about it?


The short answer on stops is 15 to 25 % of average of five day ATR. You will be able to figure as you look at different pairs which ones need to be on the lower end and which ones on the upper end. Cable for example needs a wider stop then UJ. EURGBP is probably the smallest but it trades nicely most of the time. Lately GJ has been pretty tame but sometimes it can really be tough.

Posting a chart below. MA overlaid on the ATR is 5EMA. I take the 5EMA value of the five day ATR and use the percentage for the pair. In case of EU I generally use 20% in normal market conditions. If you can read the posted chart you will see 88.3 pip average of five day ATR which results in 17pip stop plus spread.

Using 20% of the ATR for the stop gives plenty of room for the take profit to be hit if our first trade is in the correct direction. 2/1 RR only requires 40% of ATR to hit TP. A more aggressive TP of 3/1 RR still only requires a move of 60% of ATR.

It is important to set the stops close enough for a couple of reasons. Obviously we want to require the smallest move possible to get to the TP to make life easier. Also though you want to make sure that If your trade level is going to suffer a breakout and retest that you stop out soon enough to get in on the other side of the trade. (hope that makes sense)

Very concise answer, Thank you SP.

I'll keep it in mind and use it during my testing and trading.

Wild ride on the Yen pairs tonite woohoo. Sold the weekly open and stopped out. Sold last weeks close and BIG win.

Should have said EJ.

Ok so here is the carnage. I am still unable to hold long enough but wow this went down fast. This is the type of trading I face a lot of the time. If any of you were watching this happen I don't have to tell you how hard the price was moving when I sold at the weekly close. To be truly transparent I have shown the stopout at the weekly open price as well. Can't win them all.

I made a small mistake by closing the position on a line that I had on the chart. The line was meaningless I had it floating there waiting for the price to print for my daily open. You can see that I was able to reenter on the next bar and got a slightly better price so the mistake didn't cost me any thing. Why didn't I reenter at the purple line again? Because I am human and a pussy. I waited for that one to confirm.

This is why I don't trade price action any more. Especially kills you on lower time frames. Also look where this one turned.

seneca, what time frame was your last chart on and good morning from uk

i just looked myself 15 min i guess.

it is still too early to ramble yet lol. So far today i traded e/u breakout daily and managed to make 2 trades a high and low breakout. and now i can concentrate on g/u high/low break plus i got triggers set on oi for any spike l.Actually i might set a trigger on oil for high/low on the daily. Have a good day guys

i just noticed that oil low has already been busted then retraced so i will give that a miss, it looks like it might be a lucky escape lol or it means i do not have to work hard to make it right again

GU is in a good position to go long

it looks that way bud. and the 4 hour candle looks good too if your into that sort of thing

this isn't a journal thread, and it isn't in the interactive trading section. plz take this OT talk elsewhere.

Thanks Nub, I think its partly my fault they're trying to highjack the thread. I am showing trades and it seems to encourage everyone to throw in their two cents with their own trade ideas. The trades I am showing though are to illustrate the points I am making in the thread.

Please guys if you want to suggest your trades open a thread in the interactive section. I want to keep this thread to concepts.

Thanks

[quote=Seneca pilot;6384456]Thanks Nub, I think its partly my fault they're trying to highjack the thread. I am showing trades and it seems to encourage everyone to throw in their two cents with their own trade ideas. The trades I am showing though are to illustrate the points I am making in the thread.

so what do we talk about, you said no trade talking no charts no back testing and what happens you talk trading and and back testing. i will ramble on because i dont give a stuff who says what or does what in government,banks fed etc i trade. Put down a line and trade. Does anybody really know what is happening and should we care, just trade its quite easy once you simplify it. Take care and ramble over.

Since this thread began I have been talking about important times in trading. I think its time to list a few. Every market has its important times. Every instrument in those markets has its important times. It is the traders job to identify which times apply to their chosen market and instrument within that market. The times in forex are different from those in commodities. They are traded by different traders, in different locations and for different reasons. I am not going to go into Highs and lows in this post because they are widely known and don't really need to be expanded on. They work, enough said.

Since most of the forex volume is traded in London I will give all the times in GMT. It seems that any time a thread lists any times other than GMT the thread goes on a three page questionfest about time zone confusions. Hopefully we can avoid that as I want to keep the thread on topic. (Oh by the way can anyone code an EA of my methods for me...)

00:00 GMT Tokyo open. I will not trade between NY close and Tokyo open. If you disagree be my guest. Some of the Yen pairs respond well to this time later in the session.

05:00 GMT This is midnight Eastern US time. This also is when the middle east and russian traders come into the market. Many of the major pairs respond to this price later in their sessions.

07:00 GMT Frankfurt. The Franky fake is often talked about but I am not sure many people understand why it happens. In my opinion the only reason that those traders would willingly go against the grain as often as they do is to find orders. I seem to enter the majority of my trades in this time.

08:00 London open. Still the biggest forex market in the world. This is also the Tokyo close. Many of the Yen pairs will respont to this price in the Asian session.

10:30 First London gold fix. I know there are trading strategies using this price but I haven't figured them out yet. I don't really need another line on my charts anyway three or four is enough.

13:00 NY open. Lots of large moves happen in NY and earlier trade areas will often be retested during NY.

13:30 Not really a place to put a line on a chart but the US news comes at this time and the USD pairs will often be affected at this time. It is simply a time that the trader should be paying attention if they hold a trade.

15:00 Afternoon gold fix.

17:00 London close. I have covered this earlier. The GBP pairs are especially likely to react at this price later in the trading day. GJ reacts well through the Asian session and GU during London the following day.

22:00 NY and London rolls. Very important price, many businesses use this price for contract stipulations and there is much trading around this price.

Ok there are a few prices that I look at each day. Of course I don't place a line on my chart for the price at each of those times. I do take the information into consideration in my trading though. I am sure I missed a few that some of you may find important. Please feel free to add those you think are imortant.

The truth:

The times are simple to locate. I am sure that many of you are aware of most of this already. Learning how to apply these prices to your own style and chosen trading instrument is the key. So how do you do it? Work, work, work. Nothing in this business is easy and to succeed you must be willing to spend thousands of hours designing a trading style around the facts you know.

[quote=billytt;6384696] As I said its my fault, I have posted live trades here and its not the purpose of the thread. I won't post any more live trades. I will only post those that I feel make a point I am trying to emphasize in the thread, and only after they are closed. I do not want this thread to degenerate to a live posting thread. No signal services here. Please if you feel that you want to post a GU trade suggestion place it in the GU thread in the interactive section. As for backtesting I have only said that I think it serves little purpose and the only testing I put any weight to is live real money forward testing.

Thanks.

[quote=Seneca pilot;6384785]
i disagree with the opposition to back testing,Firstly in one sense as you say it serves no purpose as it is very easy to adjust ones trading to fit in with the past.But it is real history stick a chart up with the weather ie oil see what happened, check what happened if any unrest in the world. check inside bars for instance see how they perform over time and doing this you can see odds and percentages of it doing it again. and yes you'll learn better using real money and lots of it ie not micro lots