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  • #541
  • Feb 8, 2013 10:12pm Feb 8, 2013 10:12pm
Earlier in the thread I made the statement that the job of the trader is to make good trades, nothing more nothing less. So how do we know if we are making good trades?

First are the discipline oriented answers. Did you follow your plan? Did you enter without hesitation? Did you control your risk? Did you insure that the trade has a reasonable chance to make its target? Is the trade in line with your personal tendencies (ie. are you trading in a way that you are comfortable regardless of the outcome)?

Now the technical answers: what we are all interested in. Is the entry within a reasonable distance of a relative high or low? Is the entry within the wick or wicks of a commonly traded price action bar set-up? Are you selling a rising market? Are you buying a falling market? Did the trade spend a little time at the entry area or a lot of time at the entry area? Was the trade at a critical price level or did you just enter when it looked good? Did the trade draw down a little or a lot?

If you can answer yes to all of these questions then every trade you make will be a good one. Even the losers.

Hope it helps.
  • #542
  • Feb 8, 2013 10:45pm Feb 8, 2013 10:45pm
Seneca, once again I really do appreciate everything you're doing here.

One thing I would tend to disagree with is this part of your last post:

Are you selling a rising market? Are you buying a falling market?




Clearly this is correct in a lot of situations, but obviously not when there's a strong trend.

But you're not a long term trader. One of my main goals is to become a master of the trend on the higher TF's.

I feel that if I can correctly identify the strong monthly/weekly/daily trends, a couple trades a year can make me very wealthy. Especially if I'm adding to the position on break outs of Higher highs or Lower lows.

I've recently become way more disciplined. Have way more trust in my method. Something I think you said, and definitely some other major traders I've listened to recently have said, if your method works, it should work on every time frame. This is helping me a lot. Mastering the 15 minute chart should help by making profits on a daily basis and allowing one to compound their profits exponentially over the long run.

Any thoughts on this?

Thanks again!
  • #543
  • Edited Feb 9, 2013 10:46am Feb 8, 2013 11:10pm | Edited Feb 9, 2013 10:46am
Quoting Ck87
Seneca, once again I really do appreciate everything you're doing here.

One thing I would tend to disagree with is this part of your last post:

Are you selling a rising market? Are you buying a falling market?




Clearly this is correct in a lot of situations, but obviously not when there's a strong trend.

But you're not a long term trader. One of my main goals is to become a master of the trend on the higher TF's.

I feel that if I can correctly identify the strong monthly/weekly/daily trends, a couple trades a year can make me...
If I were a trend follower what would be the lowest risk entry in a market that is in a downtrend? Is is the breakout to new lows with a 400+pip stop to the last swing high or catching the upper end of a retracement by selling a weekly high or a daily high, or some other well considered method. This is a weekly chart I have marked a few entries off weekly highs and lows and you can see the comparisons in stop distance required and the resulting increase in returns you could see. It takes guts to buy a falling market and sell a rising one but if you want to minimize your risk and maximize your returns it is the only way to trade. The three trades I have labeled here using my methods would require a stop around 140 pips. The smallest stop buying the breakouts would have needed to be over 400 pips. Which one do you think you can make more money with over time, remember the targets don't have to change.

Not trying to beat you up just want to get you thinking. Confirmed trades almost always carry higher risk and lower returns due to the stop size. There is no law that you have to have a huge stop trading off a weekly chart. Once the retracement starts I could drop down to the daily and get stopped out three or four times to get the correct entry and still cut your stop in half or less.

edit: corrected my stop to reflect monthly range should read 140
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  • #544
  • Feb 8, 2013 11:33pm Feb 8, 2013 11:33pm
Quoting Seneca pilot
It takes guts to buy a falling market and sell a rising one but if you want to minimize your risk and maximize your returns it is the only way to trade. ...... Confirmed trades almost always carry higher risk and lower returns due to the stop size.
Coincidentally, I was just watching a video (recorded webinar) earlier today that makes exactly the same point. I won't spam the link here (note to anybody: PM me if you want it).

Quoting Ck87
if your method works, it should work on every time frame.
I know your post wasn't directed at me, but if I may butt in, I doubt that this is necessarily universally true for every method. Although the psychology involved is much the same, intraday price moves are qualitatively different to longer term moves, for a number of reasons, e.g. macroeconomics, cross section of participants, lower collective averaging, liquidity needed by heavyweight players, session considerations, spikes caused by news, etc. Just my 2c.
  • #545
  • Feb 8, 2013 11:38pm Feb 8, 2013 11:38pm
Quoting hanover
Coincidentally, I was just watching a video (recorded webinar) earlier today that makes exactly the same point. I won't spam the link here (note to anybody: PM me if you want it).


I know your post wasn't directed at me, but if I may butt in, I doubt that this is necessarily universally true for every method. Although the psychology involved is much the same, intraday price moves are qualitatively different to longer term moves, for a number of reasons, e.g. macroeconomics, cross section of participants, greater collective averaging, liquidity...
I would argue that methods that only work on specific timeframes are really not robust methods. The method I use sometimes actually relies on news and liquidity spikes etc to push price to the entry point. You can literally go to any timeframe and place levels on highs, lows, closes, and opens and trade it.
  • #546
  • Feb 8, 2013 11:40pm Feb 8, 2013 11:40pm
A question Hanover: are you a commercial only because you are a paid coder? I have never seen you selling anything.
  • #547
  • Feb 8, 2013 11:51pm Feb 8, 2013 11:51pm
Quoting Seneca pilot
I would argue that methods that only work on specific timeframes are really not robust methods. The method I use sometimes actually relies on news and liquidity spikes etc to push price to the entry point. You can literally go to any timeframe and place levels on highs, lows, closes, and opens and trade it.
With respect, I believe you're possibly considering only your own method.

Whereas, as one possible example, I know a successful trader, and one of his setups involves analyzing M5/M15 candle activity within the first 3-4 hours of the US session, relative to what's just happened in the European session, to decide whether to fade the European session move. Obviously that's not going to work on D1 or W1 candles, simply because the M5/M15 detail can't be viewed on those candles. I suppose the "robustness" of his method could be debated, but he's been profitable using it for 3-4 years now.

Quoting Seneca pilot
A question Hanover: are you a commercial only because you are a paid coder? I have never seen you selling anything.
Yes, that's correct. The only software that I sell is a visual order editor, and I'm no longer promoting it, due to technical difficulties. Software development has been my career since I left high school in 1979.
  • #548
  • Feb 8, 2013 11:58pm Feb 8, 2013 11:58pm
Quoting hanover
With respect, I believe you're possibly considering only your own method.

Whereas, as one possible example, I know a successful trader, and one of his setups involves analyzing M5/M15 candle activity within the first 3-4 hours of the US session, relative to what's just happened in the European session, to decide whether to fade the European session move. Obviously that's not going to work on D1 or W1 candles, simply because the M5/M15 detail can't be viewed on those candles. I suppose the "robustness" of his method could be debated, but he's...
Point taken. I wouldn't argue with anyone making money longer than two years. I have a lot of respect for you as you have been vouched by some of the people I respect on this forum.
  • #549
  • Feb 9, 2013 12:18am Feb 9, 2013 12:18am
Quoting Seneca pilot
If I were a trend follower what would be the lowest risk entry in a market that is in a downtrend? Is is the breakout to new lows with a 400+pip stop to the last swing high or catching the upper end of a retracement by selling a weekly high or a daily high, or some other well considered method. This is a weekly chart I have marked a few entries off weekly highs and lows and you can see the compairsons in stop distance required and the resulting increase in returns you could see. It takes guts to buy a falling market and sell a rising one but if...

Hmmm, I see your point. Thank you.

Are you familiar with Donchian Channels? I know you're not a fan of indicators, but donchian channels seem to help me recognize specific S & R levels.. granted no one should need an indicator to see S & R.

The more I learn, the more I realize a naked chart with primary focus being Support & Resistance is probably the #1 way to go. Would be nice to get there one day. For now I have a couple EMA's and a donchian channel on my charts.

Hopefully one day I will reach your level
  • #550
  • Feb 9, 2013 12:22am Feb 9, 2013 12:22am
Quoting hanover

I know your post wasn't directed at me, but if I may butt in, I doubt that this is necessarily universally true for every method.
I'd agree there. There's no way it's true for every method. But probably a much higher % of methods that work.
  • #551
  • Feb 9, 2013 12:25am Feb 9, 2013 12:25am
Quoting Ck87
Hmmm, I see your point. Thank you.

Are you familiar with Donchian Channels? I know you're not a fan of indicators, but donchian channels seem to help me recognize specific S & R levels.. granted no one should need an indicator to see S & R.

The more I learn, the more I realize a naked chart with primary focus being Support & Resistance is probably the #1 way to go. Would be nice to get there one day. For now I have a couple EMA's and a donchian channel on my charts.

Hopefully one day I will reach your level
Ha ha, you want to aim for a much higher level than I am on, I sure am.

Spend some time with a few charts. If you want the trend following long term approach identify a nice trend on the weekly chart and look for those retracements where you can get the nice entries. I showed you a couple on the GJ tonite that would currently be up 2100 and 590 pips respectively. Not the way I trade but the concept is the same.
  • #552
  • Edited 3:15am Feb 9, 2013 12:32am | Edited 3:15am
Quoting Seneca pilot
Ha ha, you want to aim for a much higher level than I am on, I sure am.

Spend some time with a few charts. If you want the trend following long term approach identify a nice trend on the weekly chart and look for those retracements where you can get the nice entries. I showed you a couple on the GJ tonite that would currently be up 2100 and 590 pips respectively. Not the way I trade but the concept is the same.

I guess this would be another example.


Actually, the second one is more proper and would require a smaller stop.

I have a question for you S. Do you consider yourself OBSESSED with these markets? It seems most top traders share the obsession. I have become UTTERLY obsessed to the point where I can't really take poker as seriously anymore. I actually have started to pity poker players. What I mean by that is if someone asked me, "If you could master anything in the world ($ wise), what would it be?" In my opinion, it's pretty clear the best thing to master is the markets.

Trading makes poker playing look like child's play IMO.
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  • #553
  • Feb 9, 2013 8:08am Feb 9, 2013 8:08am
Quoting Ck87
I guess this would be another example.


Actually, the second one is more proper and would require a smaller stop.

I have a question for you S. Do you consider yourself OBSESSED with these markets? It seems most top traders share the obsession. I have become UTTERLY obsessed to the point where I can't really take poker as seriously anymore. I actually have started to pity poker players. What I mean by that is if someone asked me, "If you could master anything in the world ($ wise), what would it be?" In my opinion, it's pretty clear the...
I'd say obsessed is a fair term for me. At least my wife would agree. Its the first thing I do in the morning before the kids wake up. Its the last thing I do at night before I go to sleep.

I have played a lot of poker and it is very grinding. At least trading I have the comforts of home. If I go out my door there aren't fifty people just outside smoking in my face. To get the most out of poker you have to play way to many hours. As you know the best poker players are happy to grind out two or two and a half bets per hour in limit. Even if you play 20/40 or higher its not a lot of money for the time commitment.

If I could master anything in the world $wise i'd have to say it would be the lottery.
  • #554
  • Feb 9, 2013 8:51am Feb 9, 2013 8:51am
Quoting Ck87
I guess this would be another example.


Actually, the second one is more proper and would require a smaller stop.

I have a question for you S. Do you consider yourself OBSESSED with these markets? It seems most top traders share the obsession. I have become UTTERLY obsessed to the point where I can't really take poker as seriously anymore. I actually have started to pity poker players. What I mean by that is if someone asked me, "If you could master anything in the world ($ wise), what would it be?" In my opinion, it's pretty clear the...
The detail is a little too small for me to see as you have it shrunk down a lot. What I would do once I had identified my trend is to just start selling every weekly high or buying every weekly low to join that trend. In trading this way you will build up large structures that will carry on for thousands of pips. You will have a number of small losers along the way but the large structures that survive will pay you well.

Go to the top of the page by the login. Search" The real thing" and "Peter Crowns". Both of these guys are trend followers. They both spent their small number of posts giving out valuable information on how to build up then manage these large trade structures to make money. They only made 70 posts between the two of them but you should read every post several times. Pay particular attention to a paper that Peter Crowns posted "Trading for infinite yield" it was written by The real thing and was published in Futures Magazine.

From mid 2007 until early 2011 UJ was in a nice well defined downtrend which could have yielded sick money with a well built and managed trade structure. I would personally trail my weekly structures with a 104 period EMA (two year trail on a weekly) If you follow the Peter Crown rules you will take half off at 1/1 and leave the rest to either stop out or continue on with the rest of the trade structure to the eventual stop out at the two year stop. The initial stop is not the MA its 20% of the 4 period MA of the 4 period ATR of the weekly range at the time of entry (ie: UJ weekly range is about 256 pips currently so my initial stop would be 51 pips plus spread. I looks as though UJ might be beginning a new trend upward so I might be looking to buy every weekly low to join in the uptrend.

Posting a chart showing all the trades that made it to exit over the four year downtrend in UJ. There were many more trades along the way that stopped out or were scratched out at breakeven. These seven trades though through the four years accumulated about 12,000 pips total average about 4,000. Multiply that by your chosen lot size and you can see the possibilities. This is not an easy way to trade. You will see many promising winners go out at breakeven. You will see long periods of no income waiting for the good trend. It is a very profitable method though. I am offering the lowest risk entry method I know to join those trends with decent size. Peter Crowns offers his method in the DIBS thread.

Good luck and happy reading.
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  • #555
  • Feb 9, 2013 10:03am Feb 9, 2013 10:03am
Quoting Seneca pilot
I was going through some charts tonite and I came across this. I think this is a great illustration that price movement is not random. Prices turn at specific places for a reason. This is a chart of GJ on Mon Jan 21 The move to the far right happened during the middle of the Asian day. I don't know what the news was but it was quite a volatile move and a rather rapid movement.

Attachment

Now I will add one little line. London close from Friday Jan 18. Definately not accidental.

Attachment
great thread Seneca, and I agree session closes are good areas to trade, but they are only so because/if they are part of the current s/r cycle.

Price is not random as you say, all movements can be tracked on an s/r cycle up and down the tf's in a distinct and clear order.

GJ daily tf was in it's cycle down to the weekly s/r, the previous day closed bearish indicating the continuation, the m15 spike up was the retrace to daily s/r before the cycle was going to continue...

weekly and daily charts attached...

anyway, not trying to discredit you, just another opinion, and I will say it agin, excellent stuff here, learnt new stuff myself... always learning!
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tradewith60
  • #556
  • Feb 9, 2013 10:29am Feb 9, 2013 10:29am
Quoting 60minuteman
great thread Seneca, and I agree session closes are good areas to trade, but they are only so because/if they are part of the current s/r cycle.

Price is not random as you say, all movements can be tracked on an s/r cycle up and down the tf's in a distinct and clear order.

GJ daily tf was in it's cycle down to the weekly s/r, the previous day closed bearish indicating the continuation, the m15 spike up was the retrace to daily s/r before the cycle was going to continue...

weekly and daily charts attached...

anyway, not trying to discredit...
What I have found is that many times whatever level is strongest is the first to get hit. As you know I normally sell daily highs and buy daily lows. If however I get an entry short off the daily open I will try to hold the trade through the daily low. Sometimes it works out and the low is broken and other times the low holds and I have to exit. I only trade the London close with the GBP pairs. Dollar pairs respect NY close etc. I am glad to see that my methods fit well with your higher time frame analysis. Shows me that I am on the right track with my trading. As you know I don't really follow longer term S&R but it is nice to see it dovetail with my methods.

You're teaching me as well.
  • #557
  • Feb 9, 2013 10:40am Feb 9, 2013 10:40am
Quoting Seneca pilot
What I have found is that many times whatever level is strongest is the first to get hit. As you know I normally sell daily highs and buy daily lows. If however I get an entry short off the daily open I will try to hold the trade through the daily low. Sometimes it works out and the low is broken and other times the low holds and I have to exit. I only trade the London close with the GBP pairs. Dollar pairs respect NY close etc. I am glad to see that my methods fit well with your higher time frame analysis. Shows me that I am on the right track...
Yeah i'm with you 100% on the daily high low... I watch them like a hawk... to me the high and low represent the real s/r, or stronger s/r I should say... open and close I use for direction and strength of the markets sentiment... a close very near the high (the current s/r) shows strong sentiment to continue long.

Im sure many traders just starting out would do well if they just made themselves aware of how the previous day closed and the extreme points where the price turned...

Anyway keep it going fella this is great stuff...
tradewith60
  • #558
  • Feb 9, 2013 10:58am Feb 9, 2013 10:58am
just an example of how i trade the daily highs and lows like you mate...

they're incredibly profitable areas to trade, amazed more threads on here don't focus on it
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tradewith60
  • #559
  • Feb 9, 2013 11:04am Feb 9, 2013 11:04am
Quoting 60minuteman
just an example of how i trade the daily highs and lows like you mate...

they're incredibly profitable areas to trade, amazed more threads on here don't focus on it
As you are in the UK I will assume your dialy closes are going to differ from mine. And our highs and lows will also differ occasionally. Some of my losses will be your wins and some of my wins will be your losses. It all rinses out in the wash and you wind up with a 60ish percent win rate and big RR because you are trading so close to the highs and lows.

Most of the threads that focus on real trading methods don't go anywhere because the thread starter isn't giving out indicators to tell people when to trade and because the advise doesn't include levering to the max and compounding 200 dollars into ten million in six months.
  • #560
  • Feb 9, 2013 11:18am Feb 9, 2013 11:18am
Quoting Seneca pilot
As you are in the UK I will assume your dialy closes are going to differ from mine. And our highs and lows will also differ occasionally. Some of my losses will be your wins and some of my wins will be your losses. It all rinses out in the wash and you wind up with a 60ish percent win rate and big RR because you are trading so close to the highs and lows.

Most of the threads that focus on real trading methods don't go anywhere because the thread starter isn't giving out indicators to tell people when to trade and because the advise doesn't include...
yeah sometimes data will mess with this.. but like you say, you're trading the extremes for high probability on maximum reward...

also agree with your building position concepts... not that I do it...right now I look for grabbing 50 to 100 around the main sessions and getting out of there
tradewith60
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