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Ramblings of a Forex Junkie

  • #361
  • Jan 31, 2013 12:34am Jan 31, 2013 12:34am
Quoting SemperOorah
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,...
[/i]

Well I am proud I vouched for you. You get it.

Please have your friends read this thread and join the discussion here. I have laid out all a beginner needs to know in order to survive long enough to figure this business out. You open yourself up to some pitfalls if you decide to teach and mentor them. Firstly, and don't take this the wrong way, you are still new and may not settle exactly on your current method down the road. Second, you risk friendships when money is involved. As you have already seen with your experiment, what you can do many others may not get. It doesn't mean they can't trade it just means that they may not be able to trade YOUR method. You spent a lot of time grinding to get where you are and they don't have the benefit of the same history. Warning, if they lose money (even if they don't follow your teachings) you may get the blame.

If you decide to mentor them you must sit them down and make them realize what they are getting into. You must stress to them the importance of discipline in this business. You must impress on them the near maniacal fear of risk one must possess in this business. It is critical that if you mentor them they are not allowed to open an account for more than fifty or a hundred dollars. They must give you their investor password so that you can monitor what they are doing. They must not be allowed to add funds and risk larger sums until they have traded the smaller account profitably for at least six months.

You may notice that the advice I have given you is almost exactly the opposite of what you will find on most "guru" advertisements. The crooks know the weaknesses of most people and will play on their greed. I think that most people when faced with my rules for learning will give up fairly quickly as they find out that this is not a quick road to riches. If your friends are willing to follow the rules then as a good mentor you should guide them but also make them work for the answers. What we learn the hard way sticks. Give a man a fish you feed him...

You know the rest.
  • #362
  • Jan 31, 2013 12:44am Jan 31, 2013 12:44am
This might be a tough one. Targeting the red line.
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  • #363
  • Jan 31, 2013 12:53am Jan 31, 2013 12:53am
Thanks, I will encourage them to participate here. And I certainly didn't take any of your response the 'wrong way' as it's logical and can't help but to agree with all of it. I think it's fair to say traders can mentor their friends in regards to all the reasons you started this thread, but getting down into the actual technical aspect is something a person has to explore on his own. Insightful as always SP, appreciate that.
  • #364
  • Jan 31, 2013 1:40am Jan 31, 2013 1:40am
On the subject of mentors and books, when I first started trading I read every book I could find. As with everything there where probably only 4 books out of the hundred I read that I now know held any gold nuggets. Still worth reading them though I think (for me anyway). Regarding mentors I had someone (he didn't know it) who I idolised when I was a young trader and tried to emulate. I think it's very helpful if you can find someone you admire (for reasons other than trading success too) who is generous enough to guide you and help you learn. I have since mentored only two young guys who I hired, who becaome great life long friends and pretty good traders in theor own right. (I do not put that down much to my input, they are great guys, I just like to think I showed them the blind alleys etc)
  • #365
  • Jan 31, 2013 1:50am Jan 31, 2013 1:50am
Quoting Seneca pilot
This might be a tough one. Targeting the red line.
Killed this trade Sterling acting odd.
  • #366
  • Jan 31, 2013 1:53am Jan 31, 2013 1:53am
Quoting Seneca pilot
Killed this trade Sterling acting odd.

Yen seems to be driving the bus today.
  • #367
  • Edited 8:42am Jan 31, 2013 8:11am | Edited 8:42am
Last night was a good example of why I generally trade very small positions the week of NFP. Pound didn't respect any levels and traded sort of oddly. I took a trade in pound that lost small and I took a trade in EU that won small. Worked all night and got nowhere. If I really knew how to trade I might have made some money last night. Add in that FOMC was yesterday and I probably should have gone to Florida for a long weekend. I only made money on Monday and Tuesday and could easily have given it all back the last two days. Slow week with not too much growth but I made a little.

Its been freakishly warm here this week. Closed on the new house yesterday so add moving to my list of things to do over the next two weeks. No chance I trade Friday. I don't gamble. I'll be around today if anyone is bored got a day or two before the real work starts. Back to trading Monday.
  • #368
  • Jan 31, 2013 11:52am Jan 31, 2013 11:52am
Just saw an analyst on CNBC saying buy the euro. Hmmm top could be in soon.

I'll have to check the EU thread in the interactive section. If they are mostly bullish then it is almost certain.
  • #369
  • Jan 31, 2013 12:56pm Jan 31, 2013 12:56pm
hi SP I feel its a bit like cheating asking you these questions because I could get the answer by doing lots and lots of homework. but as you are feeling so generous....

so at the mo in my trading Im researching three systems and will soon have them all on my screen at the same time and will demo trade each simultaneously. there is so much variation in just one pair from day to day so I think it could interesting to see how each sys does each day. one is my long term stoch and cci entry on 15M with recent refinements to entry criteria. one is 1h candle signal with retracement based. one is going to emulate the methods you have outlined. so two are trend based one level based. I'm most excited by the levels sys as ive never looked at the market in horizontal levels before only in trends up or down.

question would be about learning your methods through trading, so is there a handful of pairs I would be best to try your methods on? in other words would it be better to try level trading 3pairs each day or concentrate on one pair? also do you see similar moves mirrored across pairs away from and back to levels like you will see trends mirrored across pairs as the day progresses? do you focus on a particular pair depending on fundamentals? I know you refuse to allow bias to enter your trading decisions but is there anything in the world of news and economic circumstances that you see determine whether price will respect a level or break it and bounce the other way from original trade? hope that's not too many vague questions. cheers.
  • #370
  • Jan 31, 2013 1:39pm Jan 31, 2013 1:39pm
Quoting stevexyg
hi SP I feel its a bit like cheating asking you these questions because I could get the answer by doing lots and lots of homework. but as you are feeling so generous....

so at the mo in my trading Im researching three systems and will soon have them all on my screen at the same time and will demo trade each simultaneously. there is so much variation in just one pair from day to day so I think it could interesting to see how each sys does each day. one is my long term stoch and cci entry on 15M with recent refinements to entry criteria. one is...
I believe you would be better served to choose one method each month. One month is not a significant amount of trade data but it is a long enough time to get a feel for each method. After three months you would have zeroed in on one method to expand your efforts. I would not personally try to trade three methods at one time.

You know my thoughts on indicators already so I won't beat a dead horse there. The candle method will probably hover around fifty percent wins to losses so money management and trade management are going to be key there. You can increase the candle method win rate by combining candles with levels. This is actually what put me on the path to trading the way I do now. First I started trading price action candles. Then in an effort to improve my win rate I added levels. Once I got comfortable enough with the levels and saw how many times they fell within the wicks of the candles I simply dropped the candle part and focused on finding the best levels.

I basically only trade EU and GU. I have added EJ and GJ lately because the yen started to become volatile again. Last couple of years you could have died of boredom trying to trade many of the yen pairs. I would say for learning purposes and to standardize your data during testing you should only trade one pair. EU is by far the most liquid and heavily traded so the levels are more reliable. I would say that I probably trade EU about ninety percent of the time. I seem to split the rest of my trading between GU and EJ. If I had to choose only one pair to trade I would choose EU. If you are concerned with finding a pair that trends more you may have to look into some of the crosses like euro cad or eur aud.

I generally ignore fundamental data. I find that many times it is a news event that will drive price into one of my levels. The only thing I stay away from is the biggies like FOMC and NFP ECB etc. Even these though will generally drive to a level I just am not smart enough the pick the correct level so I stay away.

I am all for keeping it simple. I always fade daily highs and lows. I always take the first trade of the day and then adjust to what happens with that trade. I will use weekly highs and lows but it takes a good deal of "feel" to trade the weekly closes and opens. Price tends to range over those levels for a bit before it goes one way or the other.

Good luck, keep me posted on your progress. If I missed something ask and I will clarify.
  • #371
  • Jan 31, 2013 1:50pm Jan 31, 2013 1:50pm
Quoting Seneca pilot
I always fade daily highs and lows.
Clarify.
  • #372
  • Jan 31, 2013 2:10pm Jan 31, 2013 2:10pm
Quoting square1
Clarify.
I always sell the previous day high and buy the prevoius day low if that is the first trade triggered in a given day.

A chart example:
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  • #373
  • Jan 31, 2013 2:11pm Jan 31, 2013 2:11pm
Messing around on you tube and found this. I thought it was funny and makes the point about bias.

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  • #374
  • Jan 31, 2013 2:20pm Jan 31, 2013 2:20pm
Pay attention to this, its important to those of you who want to make a living at this. This is why I spend so much time worring about my mistakes.

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  • #375
  • Jan 31, 2013 2:33pm Jan 31, 2013 2:33pm
Where have I heard this before?

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  • #376
  • Jan 31, 2013 2:50pm Jan 31, 2013 2:50pm
Quoting Seneca pilot
I always sell the previous day high and buy the prevoius day low if that is the first trade triggered in a given day.

A chart example:
Great. Saw that somewhere.
  • #377
  • Jan 31, 2013 2:51pm Jan 31, 2013 2:51pm
Quoting Seneca pilot
Pay attention to this, its important to those of you who want to make a living at this. This is why I spend so much time worring about my mistakes.

http://www.youtube.com/watch?v=HGtpQfZ7sfc
Excellent points; I like how he takes a real example and shows how much damage it can do. I think a lot of mistakes are made when one doesn't have enough confidence in their methodology or is overconfident (greedy). When you're in between and have a healthy confidence you have the ability to cut your trades when they're proving you wrong and let them run to their target when they behave as anticipated.
  • #378
  • Jan 31, 2013 3:15pm Jan 31, 2013 3:15pm
Quoting Kanzler
Excellent points; I like how he takes a real example and shows how much damage it can do. I think a lot of mistakes are made when one doesn't have enough confidence in their methodology or is overconfident (greedy). When you're in between and have a healthy confidence you have the ability to cut your trades when they're proving you wrong and let them run to their target when they behave as anticipated.
Yeah, Van Tharp concepts helped me imensely when I was starting out. The mathes of mistakes is very revealing (well is to me because mathe is not my strong point). Like someone else who said, if you have a method that is say 66% effective, and as an individual you normally operate at say 75% effectiveness, then your results will be 49.5%.... yikes!
  • #379
  • Jan 31, 2013 4:09pm Jan 31, 2013 4:09pm
I have been pretty bored today as you guys can probably tell. I have been going through charts (when not goofing around on you tube) and have found my next project. Today London closed higher than Tokyo, no surprise we are in an uptrend. But NY closed below the London close. I am thinking I am going to do some data mining to see if there is any predictive information in the relationship of the closes to each other. Example Tokyo close A. London close B. NY close C. If A>B>C is the next day down? If A<B<C is the next day up? If the closes mix as today what is the result. This will probably be a huge waste of time but you never know.

These are the types of wild and enjoyable things I do when I am not trading.
  • #380
  • Jan 31, 2013 4:13pm Jan 31, 2013 4:13pm
Quoting Seneca pilot
I have been pretty bored today as you guys can probably tell. I have been going through charts (when not goofing around on you tube) and have found my next project. Today London closed higher than Tokyo, no surprise we are in an uptrend. But NY closed below the London close. I am thinking I am going to do some data mining to see if there is any predictive information in the relationship of the closes to each other. Example Tokyo close A. London close B. NY close C. If A>B>C is the next day down? If A<B<C is the next day up? If the closes mix as...
You should try playing some civilizations. I think that kind of game might be up your alley if you're bored.
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