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  • #341
  • Jan 29, 2013 2:32pm Jan 29, 2013 2:32pm
Quoting Seneca pilot
A warning: I am posting my trades today.
You are forgiven.

Thanks for sharing the details SP it really helps. You can get more of an idea of how to trade this way in a dynamic market - like you say you need to be ready for anything to happen. The levels are not cast in stone but are very useful reference points. The way you can cover some of your stop on the large trade with small high probability trades off the levels is very interesting. All helps to reduce drawdown. One thing I'm not getting forgive me if this seems stupid but you 'sold the daily open' (at 3456?) Is that just a sell as soon as the market opens or is there a historic level you are selling there? Thanks.
  • #342
  • Jan 29, 2013 2:43pm Jan 29, 2013 2:43pm
Quoting Seneca pilot
Going back to our earlier discussions about longer term holds. The chart below illustrates what could be the entry for the week, quick touch of last weeks close. Maybe, maybe not. With NFP week you never know and I tend to use smaller positions and take profits earlier. Unfortunately i didn't buy here because I was busy taking profits on my short and I am generally an idiot sometimes.
I wouldn't beat myself up over that one. It's not easy to manage a 1H short trading around your entry and at the same time watch for a 4H long with entry on a spike. Having said that if you had the weekly close level on your chart what were you thinking of? A classic. Do you have enough screen space?
  • #343
  • Jan 29, 2013 3:34pm Jan 29, 2013 3:34pm
Quoting stevexyg
You are forgiven.

Thanks for sharing the details SP it really helps. You can get more of an idea of how to trade this way in a dynamic market - like you say you need to be ready for anything to happen. The levels are not cast in stone but are very useful reference points. The way you can cover some of your stop on the large trade with small high probability trades off the levels is very interesting. All helps to reduce drawdown. One thing I'm not getting forgive me if this seems stupid but you 'sold the daily open' (at 3456?) Is that just a sell...
I consider my daily open 00:00 Eastern. This is 05:00 GMT I mark the price when the candle opens. I then wait for price to move away and create some separation. My definition of separation is minimum two complete fifteen minute candles that do not touch the open price. I can then simply enter a pending order (sell in the case of today) and go to sleep. I have an alert if the trade is stopped out. Notice on the chart my entry criteria were met within the first forty five minutes after the open but the entry didn't trigger until 03:30 (08:30GMT). Had price traded down to yesterday's low before returning to the daily open I would have gone long there instead and cancelled the pending short. My broker has OCO orders.

If this isn't clear ask and I will try to explain more.

A chart to illustrate. Everything is cleaned off except for the daily open line and the trade.
Attached Image (click to enlarge)
Click to Enlarge Name: daily open.jpg Size: 77 KB
  • #344
  • Jan 29, 2013 3:51pm Jan 29, 2013 3:51pm
Quoting square1
Thanks again, i closed all my remaining longs with a +20, each +10. so, i am good. I have a sell at 1.35, i will watch it when i wake up in the next 6 hours. I am sure, if it is hit and price goes up, it will retrace back at some point.

But Seneca, i haven't yet mastered using ATR and am a little reluctant to use it because like other Indis, it shows the previous price movement and my mind has a problem validating an entry with that. Am surprised that its the one you use to determine your stops.
So, like you requested, below is my trading horizon:
I...
I don't use ATR to determine trade entries. I use no indicators for trade entry. I only use ATR to set stops. My testing and experience tell me that I want a stop that is approximately 20% of the five period EMA of the five day ATR on EU. (say that five times fast) for intraday trading. At the current ATR the stop I am using for intraday trades on EU is sixteen pips. Yesterday it was seventeen. In recent memory it has been as high as twenty six pips and as low as twelve or thirteen. It can change every day. I made a post a few days ago about this specific method for setting stops and my reasons.

The weekly ATR is currently 225. If I were trading the weekly levels and looking to hold longer for larger targets I would have a stop of 45 pips. For example, if I sold last week's high with the intention of holding for a 150ish pip drop I would have my stop at 1.35286. Of course nothing is certain but in my experience if price moves 20+% past one of my levels it is broken and I will reverse if the price retraces to the level.

A chart example:
Attached Image (click to enlarge)
Click to Enlarge Name: breakout retrace.jpg Size: 82 KB
  • #345
  • Jan 29, 2013 4:03pm Jan 29, 2013 4:03pm
Quoting Seneca pilot
I consider my daily open 00:00 Eastern. This is 05:00 GMT I mark the price when the candle opens. I then wait for price to move away and create some separation. My definition of separation is minimum two complete fifteen minute candles that do not touch the open price. I can then simply enter a pending order (sell in the case of today) and go to sleep. I have an alert if the trade is stopped out. Notice on the chart my entry criteria were met within the first forty five minutes after the open but the entry didn't trigger until 03:30 (08:30GMT)....
Great explanation I get it now couldn't have been clearer SP. You must hate the sound of your stopped out alert, it wakes you up and gives you bad news. With the OCO is that standard practice to prevent you having opposing positions?
  • #346
  • Jan 29, 2013 4:30pm Jan 29, 2013 4:30pm
Doctors complete college then go to medical school. Then they serve a three year residency. Only then after many years of school are they allowed to practice their profession. Attorneys complete college then go to three more years of law school and have to pass the bar. Then they serve a few years at a firm until they are able to become a partner and share in the profits of the firm. Pilots must have intensive training and then spend years in lower levels of the industry as flight instructors, banner towers, cargo pilots, traffic reporters, etc until they have the experience to get a good job making real money. I could go on, dentists, accountants, nursing, there are so many examples it gets boring.

Why then do we often seem to think that we can read a couple of books, open an account with all of our hard earned savings and trade to millions within a couple of years. I have traded for ten years plus. I LOST MONEY for the first four. I still make mistakes every day. I have pointed out many of them in the last weeks in this thread. Beginners should not risk more than one hundred dollars learning this business. Beginners should plan on at least three or four years of intense practice before reaching the level of treading water.

The barrier to entry in forex is very low. The trader can open an account with as little as fifty dollars and start learning. In an industry with a failure rate as high as trading why would anyone want to risk any more than you have to. Oanda is a good broker and they allow the trader to trade with tiny lots. You can trade for a penny a pip, hell you can trade for a penny every ten pips if you want. As I have said I don't think demo trading has much value. The tiny real account though can be invaluable and will not risk your life savings or your lifestyle.

I am saddened as I read stories on this forum and others where traders lose large amounts of money and when pressed admit that they have only traded for a short time. Please I beg if you are a beginner and have an account over one hundred dollars, either withdraw down to a smaller amount or open a sub account and trade it until you prove yourself. If your broker doesn't support microlots find another broker that does. Once you have your smaller account go to your account management section and reduce the leverage for the account to no more than fifty to one (twenty to one would be even better). This forces discipline with position size and makes it virtually impossible to blow the account in just a few trades. Now that you have an account that is set up for success instead of failure the only thing left is to learn how to trade.

The truth:

If you are new to this you are not ready for a large account. Learn how to grow a tiny account before you start working on a large one.

Hope it helps.
  • #347
  • Jan 29, 2013 4:34pm Jan 29, 2013 4:34pm
Quoting stevexyg
Great explanation I get it now couldn't have been clearer SP. You must hate the sound of your stopped out alert, it wakes you up and gives you bad news. With the OCO is that standard practice to prevent you having opposing positions?
Yes if you remember a few days ago i chose my direction for the day based on the first hit of a level. If the first trade that fires off is a long then I am looking long until stopped out. If I have a bias at all its after the first trade of the day.
  • #348
  • Jan 29, 2013 4:38pm Jan 29, 2013 4:38pm
Quoting square1
Thanks again, i closed all my remaining longs with a +20, each +10. so, i am good. I have a sell at 1.35, i will watch it when i wake up in the next 6 hours. I am sure, if it is hit and price goes up, it will retrace back at some point.

But Seneca, i haven't yet mastered using ATR and am a little reluctant to use it because like other Indis, it shows the previous price movement and my mind has a problem validating an entry with that. Am surprised that its the one you use to determine your stops.
So, like you requested, below is my trading horizon:
I...
You should determine your TP not by a dollar amount but at a logical place where price may stall or reverse. If you are trading for a dollar amount you may be losing some profit by closing too early or you may be getting stopped out too often because your target is beyond some barrier that will reverse price.
  • #349
  • Jan 29, 2013 6:34pm Jan 29, 2013 6:34pm
Quoting Seneca pilot
You should determine your TP not by a dollar amount but at a logical place where price may stall or reverse. If you are trading for a dollar amount you may be losing some profit by closing too early or you may be getting stopped out too often because your target is beyond some barrier that will reverse price.
True.
  • #350
  • Jan 29, 2013 7:45pm Jan 29, 2013 7:45pm
Quoting square1
Thanks again, i closed all my remaining longs with a +20, each +10. so, i am good. I have a sell at 1.35, i will watch it when i wake up in the next 6 hours. I am sure, if it is hit and price goes up, it will retrace back at some point.

But Seneca, i haven't yet mastered using ATR and am a little reluctant to use it because like other Indis, it shows the previous price movement and my mind has a problem validating an entry with that. Am surprised that its the one you use to determine your stops.
So, like you requested, below is my trading horizon:
I...
From now on, i am going to try using SL. Risking 2%. It is easy for me since i am using 0.1 lot size= $1 per pip.
If i risk 20 pips on every trade it will be $20. The lesson it teaches here is that i have to be extremely careful on placing any trade and i should avoid un-necessary trades as it brings the emotions of fear and anxiety under test.
  • #351
  • Jan 29, 2013 7:57pm Jan 29, 2013 7:57pm
Quoting square1
From now on, i am going to try using SL. Risking 2%.
Remember, determine the stop placement first then adjust your position size to the correct units. Two percent is just a guideline your may want a little less or a little more. The amount you risk on any trade is a function of your maximum allowable drawdown and the maximum number of consecutive losses your method will produce.

Example: if your method historically produces maximum ten losers in a row and your maximum drawdown tolerance is twenty five percent then you could safely risk up to 2.5% per trade.
  • #352
  • Jan 30, 2013 7:05am Jan 30, 2013 7:05am
Quoting Seneca pilot
Your next critical level is 1.35. If the price retraces back below last weeks high after hitting 1.35 you may be in danger. Remember anything can happen be ready for anything.

The current weekly ATR is about 225 so in my view the short at last weeks high isn't violated until price goes 45 pips above the level.
It retraced back a little after hitting the 1.35 and short up-again to 1.3562. It hit my S/L of 20 pips. I am now relaxing as london is about to close.
  • #353
  • Jan 30, 2013 8:21am Jan 30, 2013 8:21am
Quoting square1
It retraced back a little after hitting the 1.35 and short up-again to 1.3562. It hit my S/L of 20 pips. I am now relaxing as london is about to close.
London closes at 17:00 GMT so you still have a little time.
  • #354
  • Jan 30, 2013 8:23am Jan 30, 2013 8:23am
Quoting square1
It retraced back a little after hitting the 1.35 and short up-again to 1.3562. It hit my S/L of 20 pips. I am now relaxing as london is about to close.
Unfortunately it did retrace a little after hitting 1.35 but not far enough to trigger my buy at 1.34790.
  • #355
  • Jan 30, 2013 10:41am Jan 30, 2013 10:41am
Quoting Seneca pilot
London closes at 17:00 GMT so you still have a little time.
True, i usually take it between 08:00 am to 16:30 pm GMT. By close time, i am tired and i want to log my day.
  • #356
  • Jan 30, 2013 6:07pm Jan 30, 2013 6:07pm
Quoting Seneca pilot
Well Square 1 it looks like you may get the breakout after all. The time of day isn't good for you and you may have to sweat it out a while. Could still go either way. If I were long I would probably have my stop around 1.3455 and be ready to move it to BE as soon as it broke above today's highs. This is NFP week and Fed tomorrow so anything can happen.
Great stuff Thank You
  • #357
  • Jan 30, 2013 7:08pm Jan 30, 2013 7:08pm
Quoting danc
Great stuff Thank You
I'm glad you enjoyed. Feel free to post if you have anything to add. I'm always open to learning.
  • #358
  • Jan 30, 2013 8:46pm Jan 30, 2013 8:46pm
Wow, look at that, it really was the entry of the week.
Attached Image (click to enlarge)
Click to Enlarge Name: entry of the week.jpg Size: 79 KB
  • #359
  • Jan 30, 2013 10:22pm Jan 30, 2013 10:22pm
Do any of you guys have any specific questions I have not covered? I am planning to continue with the essays but wonder if I am missing anything that might be on your minds. I am sure I don't know all the answers because I am thick at times but I am also sure we can learn together so ask away please.
  • #360
  • Edited 10:52pm Jan 30, 2013 10:41pm | Edited 10:52pm
Quoting Seneca pilot
Why then do we often seem to think that we can read a couple of books, open an account with all of our hard earned savings and trade to millions within a couple of years.
SP, I hope you don't mind I have copied and pasted your first two paragraphs and e-mailed them to a couple friends. I have been having a very interested dilemma the past few weeks. I'll start by saying that I feel people I explain my forex ambitions to fall into two categories. The "Yea you know stocks? right I trade those" category, and the family/ close friends who are actually interested and entitled to more information. Well, now that I have been consistently profitable for a few months and my goal of going full time gets closer and closer, something I didn't expect happened. I had 2 friends insist I teach them my strategy. They have not even begun to understand risk management, or develop a system with trading parameters. By teaching them my "strategy" they mean my strategy to quit a full time job, have financial freedom, be your own boss etc. They are absolutely falling into the trap of focusing on just the positives of this business. I think that post you made helps truly quantify the level of commitment and understanding you need to be successful.

This experience also led me to another realization. I actually spent several hours live trading with one of these guys. They certainly understood my logic and reasons for trade entries and exits at the time. But once I wasn't there, not able to deliberately point out opportunities, he could not make a profit whatsoever. He took screen shots to show his positions with messages like "isn't this exactly what we talked about? Why isn't it working?" The trades he showed me, I never would have took. The realization I came to was this: No matter how many books you read, no matter how much mentorship you have, no matter what you do to understand someone else's strategies and reasoning behind trades, it will only be a piece of the gigantic puzzle of you developing your own system.

I think that's an extremely relevant point to be aware of on a public forum that is constantly being scoured by those who are just getting started.
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