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  • #761
  • Feb 17, 2013 10:20am Feb 17, 2013 10:20am
Guys, can we please get back on topic and talk about the ideas presented by Seneca (level trading)? Thanks...
  • #762
  • Feb 17, 2013 10:24am Feb 17, 2013 10:24am
Quoting Olarion1975
Guys, can we please get back on topic and talk about the ideas presented by Seneca (level trading)? Thanks...
Indeed, many thanks to Seneca Pilot for creating this thread...One of the better ones in FF!!!
  • #763
  • Feb 17, 2013 10:56am Feb 17, 2013 10:56am
Hey Seneca,
I came to this thread because I felt that you and I share similar insights, experiences and challanges. I also finally feel that I made a breakthrough in last few months. Now I am comfortable with my method, approach, money management and profits.

But the challenges remains:
- Keeping up with the mental and physical demands of full time trading.
- Staying up all night to trade.
- Not able to share the euphoria of wins and agony of losses.

So hopefully, here we can talk about things that really matter, such as:
Not going on tilt.
following the path of wisdom
defining our own behaviour in the face of market surprises.

P.S: Maybe you had a rough week, but "don't let the bastards get you down."
Never Trade without a defined risk, never, never, never.
  • #764
  • Feb 17, 2013 11:25am Feb 17, 2013 11:25am
Quoting Seneca pilot
On Monday morning at 8:30 I posted a chart with two lines. I said I could use that to trade successfully. Here is the same chart today. Same two lines.

I changed it to thirty minute so I could show the whole week.

I said those two lines were the decision points for the week.

Believe me now?
Talking about this post... I stopped reading after that, but it seems you are helping some people so good on you for that.
Time hides Nothing
  • #765
  • Feb 17, 2013 11:32am Feb 17, 2013 11:32am
Great post, this is what I was trying to say with my previous post that is still waiting to be approved by moderators..

Quoting hanover
Folks, IMO this is a key post; think about its mathematical implications.

The smaller the distance between your entry and SL, the higher the RR potential of a trade. For example, and everything else being equal, the trader who uses a 10 pip SL will make double the RR on ALL of his winning trades, compared to the trader who uses a 20 pip SL. And, since profit factor (aka risk adjusted return) is the product of both RR and win rate, then his PF will also be higher, provided that he doesn't get stopped out more than twice as often. So the...
  • #766
  • Feb 17, 2013 12:11pm Feb 17, 2013 12:11pm
Quoting CindyXXXX
Talking about this post... I stopped reading after that, but it seems you are helping some people so good on you for that.
Shame you stopped reading. I went on in the thread to explain the significance of these areas, why I use them, and how price reacts to these areas over and over.
  • #767
  • Feb 17, 2013 12:49pm Feb 17, 2013 12:49pm
Quoting hanover
Folks, IMO this is a key post; think about its mathematical implications.

The smaller the distance between your entry and SL, the higher the RR potential of a trade. For example, and everything else being equal, the trader who uses a 10 pip SL will make double the RR on ALL of his winning trades, compared to the trader who uses a 20 pip SL. And, since profit factor (aka risk adjusted return) is the product of both RR and win rate, then his PF will also be higher, provided that he doesn't get stopped out more than twice as often. So the...
No need to cherry pick Hanover. This chart shows two EJ trades I posted last week. I bought the previous day low and sold the previous day high on these two trades. On a fifteen minute chart (The timeframe I use for entry) these entries were just buried in the price bars at the time. Zoom out to four hour however and you can see that both entries were well within the wicks of four hour engulfing bars. Obviously my exits were not what they could have been on these but these two trades are a good representation of the point you are making and were posted in real time.

EDIT: i think these were from week before last.
Attached Image (click to enlarge)
Click to Enlarge Name: ej possibilities.jpg Size: 76 KB
  • #768
  • Feb 17, 2013 1:48pm Feb 17, 2013 1:48pm
Quoting hanover
Folks, IMO this is a key post; think about its mathematical implications.

The smaller the distance between your entry and SL, the higher the RR potential of a trade. For example, and everything else being equal, the trader who uses a 10 pip SL will make double the RR on ALL of his winning trades, compared to the trader who uses a 20 pip SL. And, since profit factor (aka risk adjusted return) is the product of both RR and win rate, then his PF will also be higher, provided that he doesn't get stopped out more than twice as often. So the key...
As you say hanover cherry picked but it does show what is theoretically possible. Crucially you've not mentioned an exit strategy, just an exit on the best price as observed with hindsight! If only. So to target 8:1 on every trade might not work in the long run. You may only hit target 1 out of 12 trades. But combine the entry criteria with an exit based also on candle patterns or a pullback to an ma/channel line/S/R and you might have a goer. As already said, picking a good entry (one with a high probability and low SL) will give you higher odds of success over a number of trades. This is a great lesson in terms of reminding us that not every trade needs to be a winner, but you need more winners out of say ten trades than loosers - well more pips that is.
  • #769
  • Feb 17, 2013 2:44pm Feb 17, 2013 2:44pm
Quoting 2ii2c
Dear Tubguy,

I am more than sorry and I apologize as deeply as anyone can!!!
You are more than gracious and a better man than I am. You have wisdom that I lack.
I owe everyone here an apology and I'm going to write and post it as soon as I finish.
Everything to follow is exactly the sentiment I owe you personally.

I'll send my private contact info to you. SP and I are pretty much on the same page, but if there is ANYTHING I can help you with I hope you will contact me.

Sincerely,
No eyes to see

Thanks for the apology. Although it was not necessary. I seriously doubt that I have any wisdom that you lack.

Just enjoying the thread and increasing my wisdom. Look forward to talking with you.
  • #770
  • Feb 17, 2013 3:59pm Feb 17, 2013 3:59pm
Quoting stevexyg
As you say hanover cherry picked but it does show what is theoretically possible. Crucially you've not mentioned an exit strategy, just an exit on the best price as observed with hindsight! If only. So to target 8:1 on every trade might not work in the long run. You may only hit target 1 out of 12 trades. But combine the entry criteria with an exit based also on candle patterns or a pullback to an ma/channel line/S/R and you might have a goer. As already said, picking a good entry (one with a high probability and low SL) will give you...
As we have discussed with respect to my struggles with holding trades for larger gains. I sometimes look like a donkey when price is trending well but on more typical days when I take profit at 3/1 I look like a genious. I don't think it is viable to look to very large R/R when trading intraday as I do but I do think it is possible for someone who has a longer horizon to target big R/R gains. There is no reason that someone could not use the same entry methods I use and target much larger moves. Hanover is correct that the hit rate would drop but wherever the two curves intersect there is a "correct" target to shoot for. I would suspect intuitively that is would be somewhere around 5/1ish. We will never get every drop of profit from our trades on a regular basis. If we can try to get just a little more each time though it has a big effect on our long term profit potential.
  • #771
  • Feb 17, 2013 4:14pm Feb 17, 2013 4:14pm
On a lighter note, here is a song about trading by Ed sykota.
Those of you who have read Market wizards remember him.
He also runs a traders support group called "The trading tribe."




Inserted Video
Never Trade without a defined risk, never, never, never.
  • #772
  • Feb 17, 2013 4:40pm Feb 17, 2013 4:40pm
Fair calls, so what are we looking at for today then?
Time hides Nothing
  • #773
  • Feb 17, 2013 4:44pm Feb 17, 2013 4:44pm
Quoting CindyXXXX
Fair calls, so what are we looking at for today then?
The day is already over for me.
  • #774
  • Feb 17, 2013 4:46pm Feb 17, 2013 4:46pm
Quoting CindyXXXX
Fair calls, so what are we looking at for today then?
No idea; I don't forecast or trade with any bias.
  • #775
  • Feb 17, 2013 4:54pm Feb 17, 2013 4:54pm
Quoting Seneca pilot
No idea; I don't forecast or trade with any bias.
I won't evenbother looking at any charts until 05:00GMT.
  • #776
  • Feb 17, 2013 5:52pm Feb 17, 2013 5:52pm
My gift to the very few who are willing to spend the time to learn.
Attached File(s)
File Type: pdf Trading and Exchanges Draft.pdf   650 KB | 2,602 downloads
  • #777
  • Feb 17, 2013 7:36pm Feb 17, 2013 7:36pm
Sorry if you have said so already, but why do you recommend this? I assume you use it in your trading and it has helped you greatly?

I have saved some of those other market structure PDFs that you posted to my iPad and plan on doing my research

Quoting Seneca pilot
My gift to the very few who are willing to spend the time to learn.
  • #778
  • Feb 17, 2013 8:18pm Feb 17, 2013 8:18pm
Quoting hanover
Folks, IMO this is a key post; think about its mathematical implications.

The smaller the distance between your entry and SL, the higher the RR potential of a trade. For example, and everything else being equal, the trader who uses a 10 pip SL will make double the RR on ALL of his winning trades, compared to the trader who uses a 20 pip SL. And, since profit factor (aka risk adjusted return) is the product of both RR and win rate, then his PF will also be higher, provided that he doesn't get stopped out more than twice as often. So the...
hanover, you said the key is basically getting a good R/R.

I agreed with this Reward/Risk.

I also believe the other real keys are:
(1) knowing where to place key Price Levels
(2) Willing to enter at those bounces off those Price Levels

Some traders may not know where to set those Price Levels.
And some traders who set those Price Levels, may not enter at those bounces but until further confirmations that may reduce the Reward/Risk.

Even though we may want to enter at Wicks, sometimes we trade based on further confirmations instead, and end up at the opposite end of the Wick instead.

It is a balancing line trading at the "Bounces" (No Confirmation but more Reward/Risk) versus trading at "Further Information (More Confirmation but less Reward/Risk).
  • #779
  • Feb 17, 2013 8:23pm Feb 17, 2013 8:23pm
Quoting slug
Sorry if you have said so already, but why do you recommend this? I assume you use it in your trading and it has helped you greatly?

I have saved some of those other market structure PDFs that you posted to my iPad and plan on doing my research
You should understand completely the market you are trading. These papers explain the structure of the markets and the resulting price reactions when liquidity is added and or removed from the market. With a thorough understanding of the market's structure you can begin to see the reason it moves not just see the footprints left on a price chart.
  • #780
  • Feb 17, 2013 8:41pm Feb 17, 2013 8:41pm
Quoting foxybunny
hanover, you said the key is basically getting a good R/R.

I agreed with this Reward/Risk.

I also believe the other real keys are:
(1) knowing where to place key Price Levels
(2) Willing to enter at those bounces off those Price Levels

Some traders may not know where to set those Price Levels.
And some traders who set those Price Levels, may not enter at those bounces but until further confirmations that may reduce the Reward/Risk.

Even though we may want to enter at Wicks, sometimes we trade based on further confirmations instead, and end...
People often speak of confirmation as if it somehow reduces risk in trading. It is actually the opposite. I am a touch trader. Once I place a level on a chart I will trade it if it is the first level hit for the day. This reduces my risk to the lowest level possible. I can have a much smaller stop than the trader who waits for "confirmation". The toughest task for most when learning to trade is to be accepting of losses. Waiting for confirmation is just another way for our subconcious mind to attempt to protect us from a losing trade. I have said it before but it bears repeating, those who are the best at losing will get all the money in the end. Losing is a part of trading and the quicker we embrace that and start controling risk and extending reward on winners the quicker we become profitable traders.
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