Ramblings of a Forex Junkie | Page 158 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Forex Trading: Incorporating Price Behavior into a Forex Trading System 4 replies

Forex Training: What to Look for in a Forex Training Program 1 reply

The Journal Of A Macro Fundamental & Technical Analysis Junkie 26 replies

Trade Anatomy - ramblings of an old-timer 147 replies

Attachments: Ramblings of a Forex Junkie
Exit Attachments

Ramblings of a Forex Junkie

  • #3,141
  • May 7, 2013 3:32pm May 7, 2013 3:32pm
Quoting fxterrapin
{quote} Please bear with me here Chris... I thought this was a 0:00 EST level trade. Man, now you are bringing the .382 fib into the mix. How exactly did you know that the stops were built up under that level? Begging for enlightenment.
The long trade was based on EU coming down into the area of the NY and London closes/daily open. After the German news was good that trade shot up into profit in the area of the previous day high. After a .382ish retracement which would have been bought by many expecting a breakout of the top (follow through from the good news). All the stops from the fib traders and the others who bought earlier would be parked just under the low. once the previous day high rejected, those stops fueled the fire nicely to push down into the base of the original breakout. I don't trade fibs but I do know how to use those traders to help me with trade management.
  • #3,142
  • May 7, 2013 3:40pm May 7, 2013 3:40pm
Quoting biDc
{quote} Not saying it will always be 33%. This is n=1 I'm just putting things into perspective showing you can still come out positive with lower hit rate. You should check out the thread Building an Equity Millipede.
Quoting Seneca pilot
{quote} You are talking out of school here. Go back and look at his last weeks trades. I think these were only his second and third losses for the past several days of trading. 33% was for today only.
biDc,
Do you have Myfxbook or TradeExplorer for your trading? Would love to learn from your experience and gain motivation.
No longer trading forex. Looking for full time job.
  • #3,143
  • May 7, 2013 3:42pm May 7, 2013 3:42pm
Quoting fxterrapin
{quote} Please bear with me here Chris... I thought this was a 0:00 EST level trade. Man, now you are bringing the .382 fib into the mix. How exactly did you know that the stops were built up under that level? Begging for enlightenment.
I have the same problem. If there are no chart pictures, I really don't understand the words description. Many comments were made assuming the reader is looking at the same chart at the same spot, but it's tough for me to know where is "this level" "that level" "here" "there" without a picture.
No longer trading forex. Looking for full time job.
  • #3,144
  • May 7, 2013 3:42pm May 7, 2013 3:42pm
[quote=mmaker;6663644]{quote}
Quoting Seneca pilot
{quote} You are talking out of school here. Go back and look at his last weeks trades. I think these were only his second and third losses for the past several days of trading. 33% was for today only.[/quote biDc, Do you have Myfxbook or TradeExplorer for your trading? Would love to learn from your experience and gain motivation.
He is trading futures. Those were ES trades he has been posting since last week. Same levels we are using here just on futures market.
  • #3,145
  • May 7, 2013 3:45pm May 7, 2013 3:45pm
Quoting mmaker
{quote} I have the same problem. If there are no chart pictures, I really don't understand the words description. Many comments were made assuming the reader is looking at the same chart at the same spot, but it's tough for me to know where is "this level" "that level" "here" "there" without a picture.
Here you go:
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 19 KB
  • #3,146
  • May 7, 2013 3:47pm May 7, 2013 3:47pm
Quoting landsat
like this i can use leverage against the broker , exactly what the broker hate ..... he give me leverage to lose faster

This statement was a red flag and the rest of your arguments are moot because of it. I am unsure of your knowledge on the structure of the market, but if you think your broker is the one you need to overcome you are mistaken.
  • #3,147
  • Edited 4:07pm May 7, 2013 3:57pm | Edited 4:07pm
Quoting fxterrapin
{quote} Chris, let me try... The math cannot tell you WHEN the losses will occur. You can figure out your win rate for your method with fairly good accuracy, however, nothing will tell you the distribution of those losses. If you have enough consecutive losses coupled with max leverage, you can get wiped out, easily. Now, you might get lucky in the beginning of your trading and have the string of losses distributed among the winners in a way that you "overcome" the odds. This initial winning streak then (could) provide enough buffer if later on...
I'm impressed that you can explain this important point in so few words. Nassim Nicholas Taleb wrote about this in his 2001 book 'Fooled By Randomness'. His 2007 book 'The Black Swan' extended the metaphor to events outside of trading.

Even with 90% historical winning rate, you can be wiped out by 100 consecutive losers on max leverage .... because the sample size happened to be 1000 and you were caught with all losers in a row. Same argument that you can also experience 1000 consecutive losers and still met the 90% historical winning rate ..... if sample size was 10,000. I don't think that person understands probabilities and randomness when he said with high win rate you should go for max leverage. He will learn it in due course through losing his account. It's the best lesson than all these forum arguments can achieve for him.

It's the same thought process when someone did a backtesting of his system and figured out that 35% drawdown was the theoretical maximum, and that his "projected" consecutive losers won't exceed 30 trades in a row. After experiencing another poor month with 34.99% drawdown and hitting 30 consecutive losing trades ..... do you think his next trade will be a winner? Do you think he has reached rock bottom and won't lose any further in his equity drawdowns?
No longer trading forex. Looking for full time job.
  • #3,148
  • May 7, 2013 4:00pm May 7, 2013 4:00pm
Quoting mmaker
{quote} I'm impressed that you can explain this important point in so few words. Nassim Nicholas Taleb wrote about this in his 2001 book 'Fooled By Randomness'. His 2007 book 'The Black Swan' extended the metaphor to events outside of trading. Even with 90% historical winning rate, you can be wiped out by 100 consecutive losers on max leverage .... because the sample size happened to be 1000 and you were caught with all losers in a row. Same argument that you can also experience 1000 consecutive losers and still met the 90% historical winning...
I agree, an excellent post and worthy of a vouch.
  • #3,149
  • May 7, 2013 4:06pm May 7, 2013 4:06pm
i think i need to give some explanation
1.the one who want to talk about MM % risk and give me lesson saying im wrong in order to go further should be able to clearly explain and calculate the following :
1. my trading system can have 17 losing trade in a row with 15 pips stop loss , if this happen i don't wantr to lose more than 50% of my capital , what is the formula i should use at each new trade to calculate my trade size ( let say K= 5000€ and the quote is 1.3077) just a tip if you find something less than 1.87 lot for the first trade , you need to reconsider your point of view about risk % .....

2.leverage is not to fight against broker ,for sure , but broker give high leverage to forex trader because they are sure that 95% + will lose , so as they are so sure they even give you leverage ..... so if your trading system is working so why not using leverage for your good ...the sumo effect

3.why trader fail = not enough hard work , they think that one signal will work in every market condition ... they are wrong , different volatility different tools , different time different tool .... most of people here have one signal and they open position with it ... sometimes they win sometimes they lose , instead of working harder to understand why , and when the signal is at its best , or worst .. and for sure after months even years of study of their tool , they understand when to use it or not .... the one who fail are the one who use the same signal in every market condition , so they need to optimize or add filters to avoid false signal ....in fact they should work to understand when to use use it or not ....
Logic will take you from A to B Imagination will take you anywhere (A.E)
  • #3,150
  • May 7, 2013 4:11pm May 7, 2013 4:11pm
Hey Chris,

Been monitoring these levels along with my own trading charts and so far I am happy to say that they do indeed rock!

I tried googling info on this approach and have managed to scan through your linked docs. Seen quite a few math formulas in your docs so will need to leave the intensive reading part for a quieter time.

As they say, curiosity killed the cat, I will be the cat and ask just how exactly did you end up looking at this area of trading and just where and how did you start to find info on it?

Googling or looking elsewhere has given me no heads up as to why this approach should work (which it certainly seems to do) and why someone would explore this as a trading approach.

Most people would have continued to look at indies and trendlines etc hence I am very curious to know what pointed you in a different direction ?

Take care,
  • #3,151
  • May 7, 2013 4:13pm May 7, 2013 4:13pm
Quoting landsat
i think i need to give some explanation 1.the one who want to talk about MM % risk and give me lesson saying im wrong in order to go further should be able to clearly explain and calculate the following : 1. my trading system can have 17 losing trade in a row with 15 pips stop loss , if this happen i don't wantr to lose more than 50% of my capital , what is the formula i should use at each new trade to calculate my trade size ( let say K= 5000€ and the quote is 1.3077) just a tip if you find something less than 1.87 lot for the first trade...
If you find it acceptable to need to gain 100% to recover from a string of losses then risk away. What happens if you lose your seventeen in a row and then win a few and hit another run of seventeen?
  • #3,152
  • May 7, 2013 4:17pm May 7, 2013 4:17pm
i give up ... with what if .. you are right ..... you are all right , and im wrong .....with what if ....
Logic will take you from A to B Imagination will take you anywhere (A.E)
  • #3,153
  • May 7, 2013 4:23pm May 7, 2013 4:23pm
Quoting Seneca pilot
{quote} Here you go: {image}
I need some help here, I don't have the same lines as your chart. What is the reference for the lines at:

1. 1.31238 (green and red lines)
2. 1.31122 (purple line)
3. 1.30836 (yellow line)
4. 1.30655 (yellow line) ?

I have the Daily 12amET Open line at 1.30786, right where your first entry 1.30791 was. But you didn't have that line drawn. I don't have any lines at your second entry 1.31228, but you had those green and red lines.
No longer trading forex. Looking for full time job.
  • #3,154
  • May 7, 2013 4:28pm May 7, 2013 4:28pm
Quoting sniperfxtrdr
Hey Chris, Been monitoring these levels along with my own trading charts and so far I am happy to say that they do indeed rock! I tried googling info on this approach and have managed to scan through your linked docs. Seen quite a few math formulas in your docs so will need to leave the intensive reading part for a quieter time. As they say, curiosity killed the cat, I will be the cat and ask just how exactly did you end up looking at this area of trading and just where and how did you start to find info on it? Googling or looking elsewhere has...
I explained a little bit about this way back. There are so many posts at this point it would be impossible to not miss some things.

I spend thousands of hours each year looking at charts. I am rather good at spotting patterns and locating good trading opportunities. I am not a mathematician so I must rely on my eye to find good set ups. The highs and lows jumped out at me after working with pivots years ago. I got sick of my pivot levels getting crushed and watching price turn at the prior day high or low so I threw out the pivots and went to work on the lows and highs. Once I moved into forex I was still watching the highs and lows but working on price action. I got into J16 and was profitable but could not stand the drawdowns. Pins and other bars are not that reliable on lower time frames and the daily and weekly bars tie up capital for days while in draw down.

While looking for a method for lower time frames and something to trade in between the highs and lows I stumbled onto the Seiden supply and demand stuff. I found that it was not that reliable but that when a supply or demand level coincided with market closes it was golden. Natural progression of thought lead me to drop the supply and demand and simply trade the levels. I figured out the correct market open time by staring at charts and testing.

Luckily I learned many years ago when starting in futures that indicators were useless. You cannot initiate a trade based off an indicator reading and be successful more than a coin toss. Adding more indicators just muddies the waters and makes things worse.

I came by this style by trial and error. trading highs and lows is not new. Trading closes is not new. Trading opens is not new either. I just put everything together into a style that works for me. It took a while.
  • #3,155
  • May 7, 2013 4:28pm May 7, 2013 4:28pm
back again with reference to the breakout stratagy on page 80,after extensive testing even more in depth,,Im now absolutly certain this stratagy wouldent work in a million years,perhaps youd have more hope in not trading the retest but not the way its laid out,just do the back tests,unless some other criteria is being used by the auther that we,re not being allowed to be party to,just do the testing yourselves,so no way the results specified and I for one have wasted too much time on this.
  • #3,156
  • May 7, 2013 4:34pm May 7, 2013 4:34pm
Quoting mmaker
{quote} I need some help here, I don't have the same lines as your chart. What is the reference for the lines at: 1. 1.31238 (green and red lines) 2. 1.31122 (purple line) 3. 1.30836 (yellow line) 4. 1.30655 (yellow line) ? I have the Daily 12amET Open line at 1.30786, right where your first entry 1.30791 was. But you didn't have that line drawn. I don't have any lines at your second entry 1.31228, but you had those green and red lines.
Green and red are previous day high and weekly open.

Purple is last week close.

The yellow lines are the London and NY closes. I think when I took that screen shot I had already moved the London to todays close but the NY close was still in place from yesterday.

My color key is green for daily highs and lows, red for week open, purple for week close, yellow for session closes, and light blue for weekly high and low. I don't change these colors for any reason because I like to know at a glance where price is in relation to an important level. this will make it easy for you to know my levels when I post a chart in the future.
  • #3,157
  • May 7, 2013 4:37pm May 7, 2013 4:37pm
Quoting Seneca pilot
{quote} I explained a little bit about this way back. There are so many posts at this point it would be impossible to not miss some things. I spend thousands of hours each year looking at charts. I am rather good at spotting patterns and locating good trading opportunities. I am not a mathematician so I must rely on my eye to find good set ups. The highs and lows jumped out at me after working with pivots years ago. I got sick of my pivot levels getting crushed and watching price turn at the prior day high or low so I threw out the pivots and went...
Thanks you Chris,

Given all the sweat and hard work that you put into crafting a working method it is very generous of you to share it here.

Pity that it will probably only be internalised by a small hard-working minority as most are not prepared to do the hard graft to conquer the psych and execution nuances to successfully implement an approach.


Take care,
  • #3,158
  • May 7, 2013 4:43pm May 7, 2013 4:43pm
[quote=landsat;6663686]i think i need to give some explanation 1.the one who want to talk about MM % risk and give me lesson saying im wrong in order to go further should be able to clearly explain and calculate the following : 1. my trading system can have 17 losing trade in a row with 15 pips stop loss , if this happen i don't wantr to lose more than 50% of my capital , what is the formula i should use.....

Hello Landsat and All,

Perhaps you are overlooking that your system may have whatever amount of losing trades, at whatever pips per stop loss, that are necessary to blow up the account. Taleb, in Black Swan, was very emphatic that assumptions based on a normal pdf and expectancy, etc. are not iron clad. He suggested Monte Carlo simulations that really show what is possible in the universe of probabilities. (export your trade results in a format that is compatible with your monte carlo simulator. the results will shock you.)

Best to all.
TRADING. It isn't rocket surgery.
  • #3,159
  • May 7, 2013 4:46pm May 7, 2013 4:46pm
Quoting buster48
back again with reference to the breakout stratagy on page 80,after extensive testing even more in depth,,Im now absolutly certain this stratagy wouldent work in a million years,perhaps youd have more hope in not trading the retest but not the way its laid out,just do the back tests,unless some other criteria is being used by the auther that we,re not being allowed to be party to,just do the testing yourselves,so no way the results specified and I for one have wasted too much time on this.
I would encourage you not to trade it if you don't think it is viable. I have traded it for three years this month and with the exception of occasionally exiting at a high or low instead of waiting for 1/1 it has worked for me. I take every trade and it can at times be tough to trade but when we are in trend it is nice. By all means do your own testing and make your own decisions.
  • #3,160
  • May 7, 2013 4:49pm May 7, 2013 4:49pm
Quoting mmaker
{quote} {quote} biDc, Do you have Myfxbook or TradeExplorer for your trading? Would love to learn from your experience and gain motivation.
What SP said. It's pretty much what he's been teaching just on a different market. He has his myfxbook up now so you can follow that!
2 traders viewing now