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  • #381
  • Jan 31, 2013 4:14pm Jan 31, 2013 4:14pm
Sounds similar to the sell Gold on London open and buy it on the NY open. The equity curve is extremely impressive but with spread and costs etc I'm not so sure. Also 50% drawdowns once or twice in the last 7 years which it's always recovered from but personally I couldn't handle that.
  • #382
  • Jan 31, 2013 4:18pm Jan 31, 2013 4:18pm
Quoting Kanzler
You should try playing some civilizations. I think that kind of game might be up your alley if you're bored.
Already playing the biggest game in the world every night. I need a rest from my "playing" from time to time.
  • #383
  • Jan 31, 2013 4:20pm Jan 31, 2013 4:20pm
Quoting Hyperion
Sounds similar to the sell Gold on London open and buy it on the NY open. The equity curve is extremely impressive but with spread and costs etc I'm not so sure. Also 50% drawdowns once or twice in the last 7 years which it's always recovered from but personally I couldn't handle that.

Yep its probably one of those things that means nothing. I spend a lot of time looking into things like this and most mean nothing. You never know though when you will find something useful even if not earth shattering.
  • #384
  • Jan 31, 2013 4:57pm Jan 31, 2013 4:57pm
Quoting Seneca pilot
Already playing the biggest game in the world every night. I need a rest from my "playing" from time to time.
Haha, fair enough.
  • #385
  • Jan 31, 2013 5:45pm Jan 31, 2013 5:45pm
Quoting Seneca pilot
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.
Thanks for that SP I'll take on board everything you've said there. With the spend one month on eash sys advice I would find that very very hard esp with only one, two or three trades per day playing the significant levels. You have to realise I've only just weaned myself off 40+ trades per day on the 1M chart. Pathetic I know. If a retail trader in Switzerland sneezed I'd short it. Then long it 2mins later. Then cry. What I'll promise to do is only live demo one sys at a time and only look at the other two out of market hours that should keep focus on one before I try the others the same way. Ideally - and probablly it is idealistic - I'd like to trade 3 methods at a time and tailor my trading to the behaviour of the market on any particular day. I realise that may take superhuman feats of concentration and might not even be possible. The thing is my trend following sys is a catastrophe on a ranging day but gives 80% winners in a good trend. It's not always possible to predict when a trend will fatigue or a range will form however so you can get easily caught out. And sitting around for hours waiting for the trend can push you into impatience and stupid dead end entries.

Totally agree the candle signal entries could only benifit from watching the levels closely. Off to watch the posted vids.
  • #386
  • Jan 31, 2013 6:12pm Jan 31, 2013 6:12pm
Quoting Hyperion
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!
The idea of charting your mistakes and placing them into categories seems absolutely superb. What better way to overcome your mistakes than to see what they are in black and white, see how often you make them and see why you make them. With the constant awareness of that data (it should be next to your screen) you will have a much better grasp of what you are doing wrong as you actually do it. That's the best way to prevent trader sabotage - to always be aware of what you are doing - and what you are capable of doing if you don't switch off your charts and take a break.
  • #387
  • Jan 31, 2013 6:54pm Jan 31, 2013 6:54pm
Quoting stevexyg
Thanks for that SP I'll take on board everything you've said there. With the spend one month on eash sys advice I would find that very very hard esp with only one, two or three trades per day playing the significant levels. You have to realise I've only just weaned myself off 40+ trades per day on the 1M chart. Pathetic I know. If a retail trader in Switzerland sneezed I'd short it. Then long it 2mins later. Then cry. What I'll promise to do is only live demo one sys at a time and only look at the other two out of market hours that should keep focus...
I understand. Sometimes if I am bored I will break out the test account and just trade away. This way I don't have to worry about losses and I can get it out of my system. Can sometimes be tough in the wee hours of the morning waiting for price to get to your entry. I think everybody struggles with the discipline aspect of trading from time to time. I know I sure do.
  • #388
  • Jan 31, 2013 8:22pm Jan 31, 2013 8:22pm
Hi SP,

Attached is an equity curve for trading your significant level of LWC (Last Week's Close). It is VERY CRUDE but shows the concept is sound.

The rules are simple using EURUSD Daily Data NY time:

Buy Stop at LWC + 20 pips. Sell Stop at LWC - 20 pips. TP is +15 pips, SL is -5 pips (3:1). Lot = $100,00 = $10 pip.
Your comments about coding the discretionary nuances are correct so I used 15 & 5 to see whether it makes money or not.

It boils down to $10K (to cover the max draw down) will make you $22K over three years. Not bad, sans nuances.

Also, your "fade yesterday's high or low" works for this reason:

If yesterday was an up day, 81% of the next days will retrace (dip) to the 33% retracement.
If yesterday was a down day, 74% of the next days will retrace (rally) to the 33% retracement.

Using a 50% retracement, 73% dips to 50% and 65% rallies to 50%.

PS. Prior performance is no guarantee of future performance.
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  • #389
  • Jan 31, 2013 10:03pm Jan 31, 2013 10:03pm
Quoting Psychofant
Hi SP,

Attached is an equity curve for trading your significant level of LWC (Last Week's Close). It is VERY CRUDE but shows the concept is sound.

The rules are simple using EURUSD Daily Data NY time:

Buy Stop at LWC + 20 pips. Sell Stop at LWC - 20 pips. TP is +15 pips, SL is -5 pips (3:1). Lot = $100,00 = $10 pip.
Your comments about coding the discretionary nuances are correct so I used 15 & 5 to see whether it makes money or not.

It boils down to $10K (to cover the max draw down) will make you $22K over three years. Not...
You, sir earned a vouch. I knew there were some people who wanted it bad enough. My percentages are not quite as high as yours but I have a larger data set going back ten years. I tested to the .382 and the .50 as well. I don't have data on the straddle that you tested because I generally fade. However if you test the same strategy using twenty percent of four week ATR as your trigger and target the 50% level (1.5/1 RR) you may like the results. I also assume that you used a flat unit size instead of compounding for ease of coding. Obviously with compounding the power of the method really shines. Many of the losers that you had just fading the daily highs and lows are not actually taken in the course of normal trading because if the daily open trade happens first I will often be holding through the high or low of the previous day and not fade it.

Thank you for going to the trouble to put the info out there. Maybe some of these guys won't think I am crazy any more. I have this data but I paid a lot for as I am definately not a coder. This was something I was not willing to make public.
  • #390
  • Jan 31, 2013 10:45pm Jan 31, 2013 10:45pm
It seems that the Japanese are going to drive the Yen into the ground. They seem perfectly willing to drive the euro to the moon in the process. We haven't had these nice trends in a while.
  • #391
  • Edited 12:28am Feb 1, 2013 12:14am | Edited 12:28am
This is quickly becoming my favorite thread. It's like Seneca pilot is speaking directly to me with the lessons and anecdotes he's provided.

Anyway, the Van Tharp video where he breaks down the 4 common mistakes of trading definitely piqued my interest. Thinking back of my recent trades, those mistakes he mentioned hit home with me, especially the closing out too early part. After being frustrated with the results on my trades, I made a decision tree to help me manage my trades based on avoiding the mistakes that occurred on my poorly managed trades.

Using the 4 mistakes that Van Tharp mentioned, I'm gonna look back through my trade log and mark off the mistakes that occurred on each poorly managed trade and see if I can make any adjustments or add notes to the decision tree. It'll probably take some time, but it'll be worth it.

This is from EURAUD. I only trade 3-4 pairs and look for which ones offer the best setups for the week, and stick to that pair.

First chart is D1. Some of these are losing trades, others were profitable for a short time then reversed, the rest were poorly managed. It's not easy to tell from the D1 which trades were which, but it's easy to see where I closed the trade right before it took off, often times near break even after it went into profit.

The second chart is H4, which represents my most recent trading and it's easier to distinguish the trades compared to the D1.

I'm putting in extra work to help correct those mistakes and I'm grateful for the wisdom you guys have shared. The lesson on being willing to accept the loss and letting your T/P and S/L do the trading is something that I still have to accept. Ironically enough on my last trade (H4 chart), I told myself I wouldn't close the trade manually. I actually stepped away from the computer for this very reason. For some stupid reason, I came back, checked on the trade, and got out at B/E. After 18 minutes had passed, EUR/AUD went parabolic for over 200pts, exceeding my final target for the trade.

It's frustrating that I don't have nothing to show in terms of profit when I look back, but I take it in stride and look at it as clearing that final hurdle before becoming profitable.
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  • #392
  • Feb 1, 2013 1:32am Feb 1, 2013 1:32am
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:
So basing on the early pa,one needed to go long. Qtn: If you were to make an entry on EU today basing on yesterday's day high or low. How would you have known that it needed you to buy yesterday's low instead of sell yesterday's high.

To me, the daily gave me mixed signals since the candle was pretty small. The only thing i saw was a engulfing bar in the 1H and 30Mn Charts.
  • #393
  • Feb 1, 2013 7:33am Feb 1, 2013 7:33am
Amart and Square 1 I will have answers to your questions tonite. I am off to Gettysburg with the wife for the weekend. When I get the computer up and running later I will respond to your posts and throw up a chart of my trades last night. I wasn't going to trade but the setups were too good to pass on.

Later
  • #394
  • Feb 1, 2013 7:34am Feb 1, 2013 7:34am
If anyone else has questions post here I will be away for a few hours but I will answer later.
  • #395
  • Feb 1, 2013 5:19pm Feb 1, 2013 5:19pm
Quoting square1
So basing on the early pa,one needed to go long. Qtn: If you were to make an entry on EU today basing on yesterday's day high or low. How would you have known that it needed you to buy yesterday's low instead of sell yesterday's high.

To me, the daily gave me mixed signals since the candle was pretty small. The only thing i saw was a engulfing bar in the 1H and 30Mn Charts.
The first trade in the euro today was a short. I am assuming that you are trading a GMT broker and your new day starts at 00:00 GMT on your charts. I have included a chart that is marked to show what I am explaining.

The red vertical line is the first new bar of the day. The green horizontal line is the high from the previous day. Six bars into the new day the price touched the previous day high signaling a short entry. Several bars later this trade was stopped out at 17 pips (15.5 pips + spread) which was the stop size suggested by the ATR at the time. Five bars later at 8:15 GMT a long entry was signaled and this trade went on to make 51 pips. This was 3/1 reward to risk which paid for the previous stop out and gave 2/1 profit which is the minimum I like to earn on any trade.

When this day started you had no chance to buy the low from the previous day. You never know whether the price is going up or down. The thing is you just take the trade that is signaled now. You will never be able to eliminate losses. You can be extremely successful though if you contain them. When the price is trending upward the way it has this week you will often be stopped out on the first trade of the day but you will pay for that and make a nice profit after by changing direction with the second trade. This is why I preach so hard to not have a bias. If the first trade of the day is a short one I am a bear until that trade fails, then I turn bull. Today I was a bear on EU with my first trade. I would have been a bull but I didn't get a reentry signal until nearly time for the NFP news so I skipped the long entry. I close all trades, win or lose before NFP.

A chart:
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  • #396
  • Feb 1, 2013 5:48pm Feb 1, 2013 5:48pm
Quoting Amart83
This is quickly becoming my favorite thread. It's like Seneca pilot is speaking directly to me with the lessons and anecdotes he's provided.

Anyway, the Van Tharp video where he breaks down the 4 common mistakes of trading definitely piqued my interest. Thinking back of my recent trades, those mistakes he mentioned hit home with me, especially the closing out too early part. After being frustrated with the results on my trades, I made a decision tree to help me manage my trades based on avoiding the mistakes that occurred on my poorly managed...
In looking at your charted trades it is very clear that you are really fearful of a loss. Many of the trades would have gone to very large profits had you held them. I would guess from seeing those charts that you tend to move to breakeven with your stops rather quickly. This is a bad thing to do. As I said in one of the first posts the stop is there for a reason. As you know my stops are carefully considered. The only time I move to breakeven is when price gets very near to my TP. That is my bad habit and I am trying to break it. I repeat IT IS A BAD HABIT TO MOVE TO BREAKEVEN EVEN WHEN PRICE IS VERY CLOSE TO TP. I can explain this way. When you open a trade you are risking say twenty pips to make sixty. Now lets assume price gets to within five pips of the TP and you move the stop to breakeven. You are now risking fifty five pips to make five. Now that's a bad RR. It is very common for trade levels to be retested; sometimes they are retested two or three times.

So, how do you cure this problem? There are a few ways. My preferred way is to have a small practice account separate from you main account. I like to use this "test" account to do many things and one of them is to do drills. Athletes do drills to improve why not traders? A basketball player wouldn't think of going through a day without shooting freethrows and layups. A golfer wouldn't play at a high level without going to the practice range and working on his form. A trader needs practice just like any other professional who depends on performance for their paycheck. Earlier in the thread I proposed a drill that I used to become comfortable with losses. I used this drill and it works. It also helps to get comfortable holding for gains as well. If you don't remember ask and I will repeat the rules. If you are not willing to take time from trading to work on drills then I would suggest that you reduce your positions to the smallest size your broker allows. Trade this position size until you can let it go. Then slowly increase the size as your comfort level grows.

I can relate to your problem. I had the same problem and it took a year to beat it. You may be more disciplined than I was and come out of this sooner. I wish it was easy but luckily for us at least its simple.

On a side note I see that you are using shooting stars and pins for entry. While these bars work, they are only reliable around support and resistance. If you intend to continue to use price action bars for entry you will need to tighten your entry criteria and pass on the ones that are "floating out in space". Only trade them at significant price points. If this is your preferred method of trading you should spend a little time at the James 16 thread and especially reading the posts of MBQB as he is one of the best price action traders I have seen and very picky.

Hope it helps and if you need more clarification I am happy to help.
  • #397
  • Feb 1, 2013 5:51pm Feb 1, 2013 5:51pm
Today's trades:

Pound was perfect with 3/1 RR sell the previous day high.

Euro was stopped out at first and the reentry came too close to NFP so skipped.

Two trades one loss one gain 2R profit for the day. Pretty typical day.
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  • #398
  • Feb 1, 2013 6:24pm Feb 1, 2013 6:24pm
Quoting Seneca pilot
Today's trades:

...

Euro was stopped out at first and the reentry came too close to NFP so skipped.

...
Todays Euro trade was the bounce near yesterdays London close. There was enough action on the way down to signal that people were interested in buying for a possible run at 700. This plus the stall right above it gave me the signal for the trade. I didn't do the research but it looks like a one touch got taken out.

Btw, great info you have here. There's enough info in the first couple of pages for the inquisitive to find out if this is the profession for them.
  • #399
  • Feb 1, 2013 8:05pm Feb 1, 2013 8:05pm
Quoting Good Lookin
Todays Euro trade was the bounce near yesterdays London close. There was enough action on the way down to signal that people were interested in buying for a possible run at 700. This plus the stall right above it gave me the signal for the trade. I didn't do the research but it looks like a one touch got taken out.

Btw, great info you have here. There's enough info in the first couple of pages for the inquisitive to find out if this is the profession for them.
I agree. The price didn't quite reach the London close on my price feed but that would have been a good trade. I was on the road travelling so I missed everything after NFP.

One of my favorite things to do with NFP is to trade the fifteen minute bar after the announcement. The price action today was typical of NFP announcements. The fifteen minute bar from 08:30 to 08:45 (13:30-13:45 GMT) was quite large as usual. The next bar was an inside bar which is also quite common. You can trade the breakout of that inside bar with a small stop and often the trade goes really well. It went sixty plus pips today before turning just before the London Close from Thursday. If the inside bar doesn't print I will wait for a fifteen minute close outside the NFP bar then trade the retest of the breakout. I am not a news trader but NFP is fairly reliable when traded this way.

I know there was a DNT on 1.35 that went out earlier in the week and I think there were some exotics at 36 and 3650. I would have to go back and check. I don't really trade the option stuff too much. It was darkstar's favorite thing to do I think. His book covered the strat but I stick to levels. I do try to stay aware of the option strikes though because it helps sometimes to extend targets or get out of trades just before the defense areas around the strikes.

Thanks for the compliment.
  • #400
  • Feb 1, 2013 8:18pm Feb 1, 2013 8:18pm
So, you're thinking why go through the stop out on EU today? Why not just wait for the breakout above yesterday's high and buy the retest. Well here is the reason, GU. Gu was in an uptrend just like EU. I sold it too. Was I exposing myself to two stopouts? Sure but you can't have a big winner if you don't take the trade. We have to lose to trade. The best trader is the one who loses eight million while winning ten. Never forget, losers are a necessary part of this business and they give you information. It can be compared to poker where sometimes you make bets and play hands where you know you may be behind just for the information.
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