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Fail Better

  • #5,501
  • May 31, 2013 6:56am May 31, 2013 6:56am
Quoting Pinbar
Not sure I agree with BE being a bad thing. I often use what I call a virtual be. Where, I will close a percentage of a trade that has potential to move past an FTA for a bit of a run. For example. closing two thirds of the trade and I do not move the stop to the physical entry point, because I took two thirds profit, I am still going to be at BE+ even if it comes back on me before getting a chance to move to the physical BE. I feel at the FTA we have to take some measures to protect our investment and not try and hope it will break through the...
But what you are doing is not really what I mean. It sounds like what you are doing is taking enough off at the FTA that it means you won't be DOWN on the trade if it comes back to your original stop point where you are WRONG on the trade idea.

This is worlds apart from taking nothing out and moving to BE where the trader is NOT wrong on their trade idea but simply refuses to take a loss on it anymore.
  • #5,502
  • May 31, 2013 6:58am May 31, 2013 6:58am
Another trade Ive just taken. Scored 1.48 R after wasting 1R in a stupid USD/CAD trade this morning. Retest on the 5m against yesterday's SFP Kiwi swing low.
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  • #5,503
  • Edited 7:34am May 31, 2013 7:06am | Edited 7:34am
Quoting pipz4me
One observation I would make is that the more times a level has been touched does not make it an inferior setup, far from it. Its a far better approach to assess the overall context than to base entries on the number of previous touches.
I would have to disagree with you here as years of observation has taught me that it does.

But, like anything it depends what you are trying to achieve.

I talked to a trader yesterday who asked me what I thought of the EUR/USD H1 SFP (through 1.3000) and I said to him that had been back to the level too many times for me to want to short that. It promptly collapsed over 50 pips making me look "wrong" not to have taken it.

However, it turned on a dime (there as no discernible FTA for me) and then went straight up and through the high. The spider pattern was evident in the H1 EUR/USD all along and to my mind that breakout was very likely.

The point I am making is that, in my opinion, the probability of a decent swing to the next clear FTA is reduced if we keep hitting a support/resistance level from the same side.

You have to remember that a lot of this depends on the trader. The wrong trader will take a loser on that trade because it doesn't reach their target. The right trader could well have taken profit out of it.

Which leads me onto your point about not being so "rules based". Your point is good but I think you overestimate people. Someone that has a huge deal of market experience and goes about the process of trading correctly (via a journal) can begin to get a feel for what to do based on constant observation. This trader might feel that it is beneficial to them to act more instinctually. There is nothing wrong with this; I do it myself.

But your point - in the wrong hands - will lead to someone ditching all rules and just piling in at levels they they fancy on a whim.

And there is no way that will work out well.
  • #5,504
  • May 31, 2013 7:22am May 31, 2013 7:22am
Thanks for your insights, Tom!

Ill probably have to read it a couple more times to fully digest it.
  • #5,505
  • May 31, 2013 9:09am May 31, 2013 9:09am
Another possible SFP incoming in Kiwi against Daily/Weekly Swing Low.
  • #5,506
  • May 31, 2013 9:56am May 31, 2013 9:56am
Quoting the_wizard
{quote} I would have to disagree with you here as years of observation has taught me that it does.

Well really my point is that we should not try and learn trading in a rule based way as the market doesn’t care about rules and any rules based system will have a miniscule edge (if any at all) where only trading it in huge volume makes it profitable (HFT) and even they can be profitable for only very short periods.

Show me a trader with a rule based approach and I bet you his edge is almost zero

Of course a new trader will lack the experience to trade on instinct but that should be his end goal. His only rule should be based on risk management. First he should study the market and try and understand what stages it goes through. Forget about actually trading it initially.

Unfortunately most traders want someone to teach them a method, a rule based one, but that’s a very lazy approach and one that won’t lead to profitable results in most cases. The market is dynamic, constantly changing and very uncertain most of the time which means that we must trade in a way that reflects that and a static rule based approach is not the way to go.

Just my humble opinion of course! I am sure many will disagree.
  • #5,507
  • May 31, 2013 11:24am May 31, 2013 11:24am
Rules and setups are like the oasis in the desert. They look appealing, but they just don't exist. I remember the Mark Douglas book and I'm going to really badly paraphrase here to the point where it probably doesn't even resemble what was written, and I can't be arsed to look it up. Anyway, a newbie trader goes into head trader's office and says, I'm going to buy some contracts at the support level. Head trader says, "What this support level here at x price?", newb says, "Yeah, will buy there because that's support". i.e. SFP.

Head Trader waits for market to get to the "level". "support is here?"

"Yes"

"Market should go up now?", says head trader.

"Yes, it's at support.", says the newb.

Head Trader picks up the phone and sells a shit-ton of contracts at the market. Market tanks. Support doesn't even exist.

My point is the market is a bunch of people buying and selling from each other and this activity gives the illusion of setups. We have to realise that any "edge" we have is minor and fleeting and the art to trading is all in the risk and money management. Setups mean shit. I have to agree with the more eloquent pipz4me in that trading rules are crutches, or a soother for a baby. To become a good trader you just need to watch the market and get out quick when you're wrong and stay in long when you're right. Hope when there's fear and fear when there's hope. Simples.

Oh and the two biggest things you need to be successful?

1) A clear mind without bias.
2) A strong desire bordering on obssession to succeed.

Sorry for the sloppy writing but it's 5pm on a Friday and I am about to reach for the fridge...
  • #5,508
  • May 31, 2013 7:11pm May 31, 2013 7:11pm
Quoting the_wizard
{quote} But what you are doing is not really what I mean. It sounds like what you are doing is taking enough off at the FTA that it means you won't be DOWN on the trade if it comes back to your original stop point where you are WRONG on the trade idea. This is worlds apart from taking nothing out and moving to BE where the trader is NOT wrong on their trade idea but simply refuses to take a loss on it anymore.

Totally agree with that as, there is no point entering a trade in the first place to be satisfied with BE, why even risk a penny in that situation.
  • #5,509
  • Jun 1, 2013 1:37pm Jun 1, 2013 1:37pm
Quoting Pinbar
{quote} Totally agree with that as, there is no point entering a trade in the first place to be satisfied with BE, why even risk a penny in that situation.
Because there is no certainty in any trade you take and you have to re-evaluate all the time. I take breakeven trades all the time and am very happy with that, but my trading is based on taking very small losses and letting winners run, and run. End result = lots of small losers/small winners and breakevens, and then a few very large winners.

So I guess it all depends on your approach. Each to their own.
  • #5,510
  • Edited 7:51pm Jun 1, 2013 7:35pm | Edited 7:51pm
Quoting pipz4me
{quote} Because there is no certainty in any trade you take and you have to re-evaluate all the time. I take breakeven trades all the time and am very happy with that, but my trading is based on taking very small losses and letting winners run, and run. End result = lots of small losers/small winners and breakevens, and then a few very large winners. So I guess it all depends on your approach. Each to their own.
Why would you be very happy taking breakeven trades all the time?
Would it not be better to take trades with enough space to the FTA to take whole or partial profit so that you were taking more BE+ trades and catching a runner more often? Thus, paying the spread less and increasing overall profitability.
At least that is what I am trying to accomplish.
  • #5,511
  • Jun 3, 2013 9:24am Jun 3, 2013 9:24am
Quoting Pinbar
{quote} Why would you be very happy taking breakeven trades all the time? Would it not be better to take trades with enough space to the FTA to take whole or partial profit so that you were taking more BE+ trades and catching a runner more often? Thus, paying the spread less and increasing overall profitability. At least that is what I am trying to accomplish.

Well I dont want to hijack this thread with how I trade so I wont so any more about what I do apart from saying that I dont use fixed targets and I use very tight stops so I am more often wrong than right. If that's a statistical truth then I am minimising my downside by getting out of a trade at breakeven. My number one goal is to not lose money. My second rule is never forget rule 1! I dont have any goals in terms of making money. The market either pays me a load on a big move, or it doesnt pay me at all, either as a breakeven trade or small loss. the market is always hard to read so I dont expect anything, I just concentrate on taking good entries and managing my risk. I dont care about a single trade, I care more about performance over 100 trades.

As for increasing overall profitability, I have not found a more profitable approach, and I have tried hundreds of different methods.

All the best
  • #5,512
  • Jun 3, 2013 10:02am Jun 3, 2013 10:02am
Quoting Pinbar
{quote} Why would you be very happy taking breakeven trades all the time? Would it not be better to take trades with enough space to the FTA to take whole or partial profit so that you were taking more BE+ trades and catching a runner more often? Thus, paying the spread less and increasing overall profitability. At least that is what I am trying to accomplish.
I took a short on the Dax last week (still in it). Distance to FTA at the time was 50 points. I could have taken profit there.

OR

Accept the possibility of the market coming back to my entry and stopping me out for BE (which happens often), and sometimes (not rarely), the market moves in my favour a long long way. Market has so far moved 220 points in my favour (440 ticks) and is currently trading over 120 points. No intention of getting out yet, and this one could move hundreds of points... (or not)
  • #5,513
  • Jun 3, 2013 10:14am Jun 3, 2013 10:14am
Quoting pipz4me
{quote} Well I dont want to hijack this thread with how I trade so I wont so any more about what I do apart from saying that I dont use fixed targets and I use very tight stops so I am more often wrong than right. If that's a statistical truth then I am minimising my downside by getting out of a trade at breakeven. My number one goal is to not lose money. My second rule is never forget rule 1! I dont have any goals in terms of making money. The market either pays me a load on a big move, or it doesnt pay me at all, either as a breakeven trade or...
Thanks for not hijacking this thread.

If you don`t find what you are looking for You have come to the wrong place.

This thread has been started by a professional trader and his followers has the utmost respect for his work and witty tweets in between. I can only suggest you attend some of his Sunday webinars . He doesn`t wait for confirmation any more and he gave his reasons. Others still want confirmation but still use his ideas. You have your own unique style and I respect that.

Most of all he continuously add value to this thread.
  • #5,514
  • Jun 3, 2013 10:47am Jun 3, 2013 10:47am
Check Aussie/Dollar for possible SFP. 13 Minutes to get it up there .
  • #5,515
  • Jun 3, 2013 2:43pm Jun 3, 2013 2:43pm
Quoting banco
{quote} Thanks for not hijacking this thread. If you don`t find what you are looking for You have come to the wrong place. This thread has been started by a professional trader and his followers has the utmost respect for his work and witty tweets in between. I can only suggest you attend some of his Sunday webinars . He doesn`t wait for confirmation any more and he gave his reasons. Others still want confirmation but still use his ideas. You have your own unique style and I respect that. Most of all he continuously add value to this thread.
"he doesnt wait for confirmation any more and he gave his reasons. Others still want confirmation but still use his ideas" I am sorry but I have no idea what you are talking about, I havent come here looking for anything.
I merely offered my own observations about trading that some might or might not find useful.
One thing you mention though that I cant pass by - "started by a professional trader and his followers has the utmost respect for his work" Dont accept anything you are told in trading, vertify everything, at that point you become accountable for your own results and arent reliant on anyone but yourself.

All the best.
  • #5,516
  • Jun 4, 2013 12:00am Jun 4, 2013 12:00am
Quoting daveone
Check Aussie/Dollar for possible SFP. 13 Minutes to get it up there .

It triggerd a hour late, but still worked out nicely. Could have run it till the level around 0,9696. Thats the level Tom mentioned in the free webinar on sunday.
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  • #5,517
  • Jun 4, 2013 2:07am Jun 4, 2013 2:07am
Quoting daveone
{quote} It triggerd a hour late, but still worked out nicely. Could have run it till the level around 0,9696. Thats the level Tom mentioned in the free webinar on sunday. {image}
This is a RR ( Rounded Retest).
  • #5,518
  • Jun 4, 2013 2:08am Jun 4, 2013 2:08am
On Tom's twitter he mentioned he took a buy at 99.45 on the USD/JPY. Can anyone clarify why he took this level instead for example 99.90?
  • #5,519
  • Jun 4, 2013 2:16am Jun 4, 2013 2:16am
Quoting Flamegs23
On Tom's twitter he mentioned he took a buy at 99.45 on the USD/JPY. Can anyone clarify why he took this level instead for example 99.90?
i guess this is why

jon
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PATIENCE... DISCIPLINE
  • #5,520
  • Jun 4, 2013 2:21am Jun 4, 2013 2:21am
Quoting Flamegs23
On Tom's twitter he mentioned he took a buy at 99.45 on the USD/JPY. Can anyone clarify why he took this level instead for example 99.90?
It was the last high pre-breakout of the range. Price often finds its way back here.
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