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  • #501
  • Feb 6, 2013 8:28am Feb 6, 2013 8:28am
I only took the EJ trade last night. The following pairs were textbook and I hope you guys were able to take the trades. GJ, GU, UJ, all perfect, EU didn't give an entry off the daily open but it did bump up and give an entry about 5AM GMT off the rolls. Last night could have been one of those nights where your account gained a massive amount of profit without taking on excessive risk. Any one of the pairs that I listed made at least 3/1 profit and EJ and GJ made 6/1 and 5/1 respectively. I think most peope think that to get outsized gains that you have to take on lots of risk. I hope I am proving here that you don't have to risk it all to make good gains. Of course that does require being awake when the action is happening.

Back later, feeding the kiddies. If anyone had trouble trading last night please speak up. We learn from our mistakes and I can post some charts if needed to do a little training.
  • #502
  • Feb 6, 2013 10:14am Feb 6, 2013 10:14am
Quoting Seneca pilot
I have already discussed the fact that I maintain a tiny test account. Now I want to discuss testing.

Backtesting is very popular in trading. Many people test by going back through charts and manually testing their theories. The problem with this is that due to the workings of the human mind we tent to dismiss or discount problems that may be part of any given method. We tend when doing this type of testing to tell ourselves; I would never have taken that trade its obvious that wouldn't work. Of course its obvious you can see the result that occurred....
I'm enjoying reading your thread. I'm not convinced that back testing is pretty useless. I accept all your given disadvantages of back testing and I could add some more. But you have missed the main advantage of back testing and that is time spent learning. Forward testing a strategy which I have not back tested? Good luck with that. I may wait weeks for a set up or it may never even happen. How would I learn from that? I think you may need to redefine your idea of back testing.

Back testing on small time frames is the main culprit and time spent there is pretty much wasted, I agree. Getting a fill, spread, slippage and simple human error make anything under the M15 only theoretical.
Gone to a better place
  • #503
  • Feb 6, 2013 10:29am Feb 6, 2013 10:29am
Quoting Seneca pilot

I have traded other methods. Some work well, others not so much. I lost money the first four years I traded. I lost ten thousand dollars learning to trade futures after holding my own with equities. I have been there and done that. If anyone takes anything out of this thread that helps them avoid some of the trials I went through I will be a happy man.

Good thread. I lost £10.00 on 5 A4 pads and pencils and erasers trying to perfect a MACD system which was never going to work. Back testing worked for me.
Gone to a better place
  • #504
  • Feb 6, 2013 10:29am Feb 6, 2013 10:29am
Quoting smikester
I'm enjoying reading your thread. I'm not convinced that back testing is pretty useless. I accept all your given disadvantages of back testing and I could add some more. But you have missed the main advantage of back testing and that is time spent learning. Forward testing a strategy which I have not back tested? Good luck with that. I may wait weeks for a set up or it may never even happen. How would I learn from that? I think you may need to redefine your idea of back testing.

Back testing on small time frames is the main culprit and time spent...
I should clarify. I do use back testing to locate patterns and validate ideas. I do data mine to find patterns in past data. I also make use of a simulator to practice trading when I am investigating a new addition to my methods. I don't however risk full positions until I have foreward tested in my real money test account. I just don't think backtesting accurately represents market conditions. I also agree that very long term methods are pretty tough to forward test. It would take years to get enough trades to have any statistical value. You have to do what you have to do given the timeframe in which you trade.
  • #505
  • Feb 6, 2013 10:33am Feb 6, 2013 10:33am
Quoting Seneca pilot
I should clarify. I do use back testing to locate patterns and validate ideas. I do data mine to find patterns in past data. I also make use of a simulator to practice trading when I am investigating a new addition to my methods. I don't however risk full positions until I have foreward tested in my real money test account. I just don't think backtesting accurately represents market conditions. I also agree that very long term methods are pretty tough to forward test. It would take years to get enough trades to have any statistical value. You have...
Yes, thanks for the clarification.
Gone to a better place
  • #506
  • Feb 6, 2013 6:11pm Feb 6, 2013 6:11pm
Quoting Seneca pilot
I only took the EJ trade last night. The following pairs were textbook.....
If anyone had trouble trading last night please speak up. We learn from our mistakes and I can post some charts if needed to do a little training.

Can you please post some charts of the trade entries from last nigt?
And explain the reasons for the entries. I would really appreciate your help.
Still trying to figure out.
Never Trade without a defined risk, never, never, never.
  • #507
  • Feb 6, 2013 7:42pm Feb 6, 2013 7:42pm
Quoting FxGladiator
Can you please post some charts of the trade entries from last nigt?
And explain the reasons for the entries. I would really appreciate your help.
Still trying to figure out.
Will do, give me a few minutes to get a few things together and I will post several charts with the entries that I would have taken.
  • #508
  • Feb 6, 2013 7:57pm Feb 6, 2013 7:57pm
Been trying to think up something to contribute to this thread but it seems you've hit the important things. Mainly, being inquisitive and following down that path of questions that arise once you notice something in the market is enough.

To be brief, i started becoming interested in trading when i found out that one of the guys that played in my pool league made a living by doing taxes in the beginning of the year then traded forex and options on equities for the rest of the year. He and i had a long conversation that day and i decided this is was my next step. I told a friend about it and we both decided to take a course on options. It was a good course for a beginner. It cost 1k and gave the basics. Only problem is that they wanted 7k for their software and 4k for the higher level classes. So that didn't happen. I couldn't really talk to the guy in my pool league because it was tax season and he wouldn't be free for another 4 months. My friend that i took the classes with didn't really understand the concepts they were teaching and kept talking about watching CNBC and trading based on what they say. I was pretty much on my own. So i did the next best thing, I googled everything, read books, and watched the markets. I made some and i lost some. Overall i was a little under break even.

About 6 months after that class i was finally able to talk to my pool buddy. He helped me setup my first forex demo account and introduced me to candlestick patterns, stochastics, moving averages, and Forex Factory. In the following year while i lurked all the indicator threads in FF i took at least 4 demo accounts from 50k to less than $10. What was interesting is that while he was earning 7%-16% a month using his system, i was consistently losing month after month. I think he must have read every book ever created on the indicators he used while i just didn't trust them. It never made sense to me that price would react to a line just because i put it there and they always seemed to get me in after the move.

After a while i found J16 and read all that. I was finally a break even trader. They introduced me to the concept of price rebounding from specific levels based on past price movement. I dropped all indicators and used horizontal trend lines from the daily and weekly time frames coupled with pin bars and engulfings. It made sense but still got me in after the move had started. I started wondering if it was possible to get in at the beginning of that movement and came across Sam Seidens stuff. Supply & Demand trading. I watched every video he made on FX street twice. I wasn't married at the time but if i was i'm sure i wouldn't have been able to do that. I also read every thread on FF about SD trading and followed the development of all the active ones. I even started participating. This was my first introduction to the idea that there were very large traders that moved the market in their favor and it would be best if i did my best to try to follow their momentum. He also was talking about the market having left over orders in some places and i wondered how that was possible. This lead me to start research on how the market actually filled orders.

Little did i know i was only hitting the tip of the iceberg that is market micro structure. I had so many questions and so little answers. Finally after a lot of reading (which i still do) i started to see the big picture about how price moves. I was lucky enough to confirm some ideas that i had early on in my trading career through research and testing. Overall, i'd say i'm an ok trader who pulls in a minimum of 15% a month with 10:1 leverage on a balance in the $X0,000s. I use the same ideas that SP has provided as well as some others that are freely posted on other threads here on FF.

The major idea i want to get across is to follow your curiosity and get all your questions answered. If no one can or wants to tell you then go find out for yourself and keep looking until you find it. Believe it or not, the answer is right there on our charts. We just have to do the work for ourselves to find out what it is. No one can tell us.

Turned out to not be so brief after all
  • #509
  • Feb 6, 2013 8:13pm Feb 6, 2013 8:13pm
Quoting Seneca pilot
Will do, give me a few minutes to get a few things together and I will post several charts with the entries that I would have taken.
Dear SP,

Your patience and kindness know no bounds.
  • #510
  • Feb 6, 2013 9:06pm Feb 6, 2013 9:06pm
Quoting Good Lookin
Been trying to think up something to contribute to this thread but it seems you've hit the important things. Mainly, being inquisitive and following down that path of questions that arise once you notice something in the market is enough.

To be brief, i started becoming interested in trading when i found out that one of the guys that played in my pool league made a living by doing taxes in the beginning of the year then traded forex and options on equities for the rest of the year. He and i had a long conversation that day and i decided this...
Thank you, GL. Still listening.
  • #511
  • Feb 6, 2013 9:46pm Feb 6, 2013 9:46pm
Quoting FxGladiator
Can you please post some charts of the trade entries from last nigt?
And explain the reasons for the entries. I would really appreciate your help.
Still trying to figure out.
Ok here goes:

First chart is GBPJPY I have labeled the lines on this chart. The other charts are color coded the same but I didn't label them all. Notice on GJ chart the open was a few pips below the High from Tuesday. On the third bar price rose and touched the previous day high. This was our first level hit for the day and it is the trigger to enter short. The blue line is the London close from Tuesday. This made a nice target. Notice how price reacts to the London close from the previous day. An aggressive trader might have been short to that line and taken a long from there. Personally I just like to take a nice profit on the original trade and be done. Second and third charts are UJ and EJ showing the same type of entry.
Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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Attached Image (click to enlarge)
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Now is a different type of entry. Obviously all entries aren't off the high or low. This illustrates the Opening price entry. We opened Monday on GU price traded up a little and printed two complete 15min bars not touching the open price. Once price retraced to the open price we buy. Once again the London close from Friday was a nice target. Most of the time these four lines are the only thing you need on your chart to make good trades. Patience is necessary to trade this way, I don't trade all over the chart only when price hits one of my levels.
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Finally EU, this pair didn't signal an entry today. Price traded down from the open but couldn't rally back to trigger an entry. High and low not touched.
Attached Image (click to enlarge)
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Hope it helps.
  • #512
  • Feb 6, 2013 10:19pm Feb 6, 2013 10:19pm
Moving boxes all day tomorrow. I will try to check in if I can at least a couple of times. Still working on the next truth. I have a good idea but I am something of a perfectionist. I have started it at least three or four times now but have been interupted and lost my train of thought.

2ii2c I sent you a pm, thanks.
  • #513
  • Feb 6, 2013 11:52pm Feb 6, 2013 11:52pm
Quoting Seneca pilot
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...

Hi Seneca,

Just starting to read your thread.

"08:00 London open. Still the biggest forex market in the world. This is also the Tokyo close."
Isn't Tokyo close like 1-hour AFTER London's open and not the same as London's Open?

"10:30 First London gold fix."
"15:00 Afternoon gold fix."
Don't understand what is a Gold Fix mean and what actually happens here?
What is the significance of this Gold Fix to the forex trading?

Thanks.
  • #514
  • Feb 7, 2013 12:23am Feb 7, 2013 12:23am
Quoting Seneca pilot
Leverage:

Its a wonderful thing and a terrible thing. Leverage allows us to achieve things in life and in trading that would be impossible otherwise. Imagine trying to buy your first house but not having access to a loan. Imagine buying your first car without the use of leverage. You see we use leverage in our everyday life. In trading if we overuse leverage we blow out our account. In life if we overuse leverage we have our cars reposessed and our homes foreclosed. Life in our time of inflated prices and deflated currencies is virtually impossible...

"Every time I can, I reduce my leverage more. I can't wait for the day my account has reached the level that will allow me to trade without leverage. "

"If you are a beginner you should be trading with small leverage. If you are experienced and trying to get to the level of making a living you should trade with even smaller leverage. NEVER risk your account. "


Agreed with you that a beginner should be trading with small leverage.
I would even say a beginner should trade with NO leverage.

An account is always at risk when trading so it is not possible to "NEVER risk your account" unless you always playing demo only.
It is more important to reduce the risk of your account AFTER the trade is entered (initial SL in place so you know initial money risk), that is how you control your position management with stop loss management.
And NEVER to risk your total account on a Single trade or just a few trades (aka No Stop Loss situation).

For a trader who has proven results, then leverage is a great tool to have and they should INCREASE their leverage.

The main concern is to differentiate between what is "leverage" versus what is "money management" versus what is "stop loss management".

If a trader has good risk control on the "money management" and "stop loss management", then controlling leverage such as reducing/increasing leverage would be less significant than the other 2 components.
  • #515
  • Feb 7, 2013 12:25am Feb 7, 2013 12:25am
Quoting Seneca pilot
Ok here goes:

First chart is GBPJPY....
Finally EU, this pair didn't signal an entry today. Price traded down from the open but couldn't rally back to trigger an entry. High and low not touched.
Attachment

Hope it helps.
Seneca, Thank alot for replying and helping out by posting the charts.
Never Trade without a defined risk, never, never, never.
  • #516
  • Feb 7, 2013 12:27am Feb 7, 2013 12:27am
Quoting foxybunny
"Every time I can, I reduce my leverage more. I can't wait for the day my account has reached the level that will allow me to trade without leverage. "

"If you are a beginner you should be trading with small leverage. If you are experienced and trying to get to the level of making a living you should trade with even smaller leverage. NEVER risk your account. "


Agreed with you that a beginner should be trading with small leverage.
I would even say a beginner should trade with NO leverage.

An account is always at risk...
i don't think you have the slightest clue what leverage is. p.s. it's not lot size.
Congratulations ScalaFX for coming out of the closet!
  • #517
  • Feb 7, 2013 12:39am Feb 7, 2013 12:39am
Quoting Seneca pilot
So, you want to trade for a living.

You have heard the advice. You have heard that you need proper capitalization. You have heard that you need a clear concise and consistent trading plan. You have heard that you need an edge that can be quantified and proven. You have spent hours reading and dreaming about traders like Paul Tudor Jones, Bruce Kovner, Michael Marcus, Richard Dennis, Mark Cook, etc, etc. You are sure that this is the life you want. You have read and been told that these are just a few; a tiny fraction of those who have tried....
Top notch post!


If only wannabe traders know what it feel like to be a full time trader at home, then most will not want it.
It may be different if being a trader working for someone else or to be part of a community of traders.

If a person is social animal, trading is mostly very quiet affair and not for the social animal.
Trading just becomes very boring unless you love the charts and the process of trading.

Definitely need spouse and family support and understanding, you will lose more old friends and old colleagues being a home trader.

There is no sports and no golf as a full-time trader as somehow you will monitor the screen most times of the day.
You miss your sports and fitness routine unless you make it into a routine of a specified time.

Anyone out there who wants to be a full-time forex trader at home.
Don't Do It !!! (Anti-Nike slogan)

Keep your full-time job/business and have forex as your hobby.

Oh how true is this post if you only knew!!
  • #518
  • Feb 7, 2013 1:01am Feb 7, 2013 1:01am
Quoting Hyperion
So right. There is nothing new under the sun and anything you see in a indicator is just a different lagging rose tinted view of the past when the present is already creating the next past.

I would like to share the one thing I learned from Van Tharp which changed my equity curve for the better and is now the foundation of my trading. He ran a study that entered he market on a flip of a coin but crucially, he aimed for 3 to5 times profit compared to what he risked. That was the ONLY rule. It made money. Surely I thought, I can add value to...
"do the right thing and not focus on the $$ outcome"

Hard to do, good to strive for.
That is a very good mantra to have.

A recent relevant story below from Singapore show "Shooting: Teenager Martina cracks idol Ser's record" show how she done it with a perfect shooting score of 400 from 14-year old Martina Lindsay Veloso.

We also need to apply this in trading.

The key sentence in the article are:

Martina Lindsay Veloso, 14:
"We were having lunch after the competition when my coach told me I shot a perfect score," she said. "I was shocked. I asked her if she was sure because I didn't get a look at my score throughout the competition."

Lim admitted the Sports School's philosophy of "shoot, forget about the shot and then focus on the next target" helped Martina.

http://www.channelnewsasia.com/stori...252200/1/.html

In Forex, we can follow similar above strategy of:
Set the criteria, entered, exit, then forget it.
Next trade.
  • #519
  • Edited 5:28am Feb 7, 2013 5:09am | Edited 5:28am
You can actually bet on less than 5 trades a day and you are done.
  • #520
  • Feb 7, 2013 7:38am Feb 7, 2013 7:38am
Quoting square1
You can actually bet on less than 5 trades a day and you are done.
I took one trade each of the last two days and I have made over five percent for the week. James 16 describes it as hiding in the bushes and hunting with a rifle rather than shooting at anything that moves with a shot gun.
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