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  • #5,921
  • Jul 23, 2013 7:43am Jul 23, 2013 7:43am
Quoting markmm
{quote} Thanks for the reply VEEFX. I think it's good to add on retraces to get a good price and avoid drawdown however I don't want to get into trying to forecast where price is going. One of the most important ideas that I think greame tried to communicate was in the following post. {quote}

If we agree with Greame about it being impossible to predict the next 30-100 pip move direction then the whole idea of razor sharp low risk entries on the lower timeframes is not really possible. The way forex retraces and whipsaws on the smaller timeframes means stop losses will be hit constantly. Traders might think using lower timeframes entires each day means the are participating but they will not be able to build a big position unless they happen to trade right at the top/bottom of a large move.

If you reduce your lot size so that one unit (say a micro/minilot) weekly candle move against your trade doesn't worry you too much then your entry is low risk. You can use the higher timeframes price action to give you a rough place to enter but you need to expect a drawdown on most trades before it moves in your direction (If you are on the correct side of the trend). Once your in wait until it's in the green and then look to add another trade. If you can do this across 10-20 pairs over a few months until you have positions in each direction you can then use price action to tell you when to diversify still on daily/weekly/monthly. Stop losses are essentially pointless in this situation as long as you are keeping an eye on it.

I think its a shame Greame went on to discuss 5 min entries and the thread moved off from his main compelling idea.
Economists have forecast 9 out of the last 5 recessions
  • #5,922
  • Jul 23, 2013 9:38am Jul 23, 2013 9:38am
Quoting markmm
{quote} If we agree with Greame about it being impossible to predict the next 30-100 pip move direction then the whole idea of razor sharp low risk entries on the lower timeframes is not really possible. The way forex retraces and whipsaws on the smaller timeframes means stop losses will be hit constantly. Traders might think using lower timeframes entires each day means the are participating but they will not be able to build a big position unless they happen to trade right at the top/bottom of a large move. If you reduce your lot size so that...
"but you need to expect a drawdown on most trades" - Sounds Good markmm. Reducing the lot size won't necessarily reduce your account drawdown. You WILL encounter phycological barriers in your journey of position building so be prepared to feel the 'retrace' in your emotional and confidence levels. Before going in, look deeper into what you are made of, how much hurt you are willing to endure to see positions die at BE after couple of weeks etc. I guess what I am saying is to identify your own "phycological pivot point" and factor that into your money/trade/position size management plan.

"I think its a shame Greame went on to discuss 5 min entries and the thread moved off from his main compelling idea" - I completely disagree. Folks are just hung up on the timeframe used by Graeme instead of his sincere efforts to make us realize of the low risk aspect of this method. Low risk does NOT equate to making entries on M1 or M5 timeframe ! Personally, I am very glad Graeme showed us his immense trading skills by taking live trades. Those series of posts on his focal interpretation are GOLD and it gave me a boost in my own confidence in Graeme that he is not some guy looking at history from 2008/09 when every pair has huge moves and making things up. This thread would have died long time ago if he had stopped after his first 50 or so posts with no charts. I am glad he proved in his posts that he is truly a master in interpreting price action ! After all, no one can be like Graeme as 90+% of his success is because of his phycology and attitude towards risk and long term growth. He is truly one of a kind.

Good Luck!
Staying in my lane...
  • #5,923
  • Jul 23, 2013 10:08am Jul 23, 2013 10:08am
Quoting VEEFX
{quote} "but you need to expect a drawdown on most trades" - Sounds Good markmm. Reducing the lot size won't necessarily reduce your account drawdown. You WILL encounter phycological barriers in your journey of position building so be prepared to feel the 'retrace' in your emotional and confidence levels. Before going in, look deeper into what you are made of, how much hurt you are willing to endure to see positions die at BE after couple of weeks etc. I guess what I am saying is to identify your own "phycological pivot point" and factor that...
Thanks for the great reply. I agree with you on the live trades and how to read price action, they are so full of great knowledge. I guess watching positions die at break-even after weeks/months can be mitigated by having shorter term profits. By entering on the lower timeframes you can go for 100 pips with a few stacked positions and leave one open at break-even and allow these to grow organically or not. I was just confused over Greames assertion that you cannot predict where price is going. However now I understand that it doesn't matter as long as you cut the losses and when you get it right let it run and stack.

I guess then you could take the view that you don't have a bias long term and just look to get entries in and moved to BE. If you focused on this skill alone and kept in mind to leave some positions to play out long term over months you are surely going to have some alive as well as hopefully the profits from taking some off.
Economists have forecast 9 out of the last 5 recessions
  • #5,924
  • Jul 23, 2013 10:53am Jul 23, 2013 10:53am
Quoting markmm
{quote} Thanks for the great reply. I agree with you on the live trades and how to read price action, they are so full of great knowledge. I guess watching positions die at break-even after weeks/months can be mitigated by having shorter term profits. By entering on the lower timeframes you can go for 100 pips with a few stacked positions and leave one open at break-even and allow these to grow organically or not. I was just confused over Greames assertion that you cannot predict where price is going. However now I understand that it doesn't matter...
I have moved away from moving SL to BE. This decision was based on my stats from past 3 yrs and the life style I choose to have when it comes to trading. I now use push notification alerts aggressively to my smartphone. Just by getting the frequency of alerts, I am able to gauge the momentum of breakouts, explosion of floating pips or losses. I also use Move Net SL to Net BE to give enough longevity to my recent stacks and for entire stacking episode to survive a bit longer.... it's all in or all out for me as I consider my screen time more valuable than counting pips :- My personal aspect to growth (and a barometer of my overall trading success) is to extract 10x of a YTD (or quarter or MTD or WTD or whatever) move in pips for my currency pairs.
Staying in my lane...
  • #5,925
  • Jul 23, 2013 11:43am Jul 23, 2013 11:43am
I am glad this thread kinda revive again... I was one of the quiet lurker who only started reading this thread earlier this year. I started forex about 5 years ago but like most people always searching for systems and fail. Graeme really is one of a kind trader and really lucky to learn about his trading concept.

For me, I just grab the basic concept of stacking and design my own stacking strategy. I use the daily chart and at the start of new candle, just buy/sell from yesterday trend. If yesterday is up... I buy...if yesterday is down..I sell. I do not use any stop loss. At the next daily candle if it is losing, I close the trade. If it is winning, set to break even. I do this everyday and I can say it is really working for me. The drawdown is definitely high since I do not use stop loss but once you manage to stack a few positions, the reward grows much faster than your drawdown.

Like Graeme once said, everything is relative. In smaller timeframe, you can have more positions and small losses but definitely alot of BE. My strategy has higher drawdown but higher chance of the position surviving. This is the most relaxing way of trading forex I have ever tried. I hope more people will adopt Graeme's teaching into their own trading strategy as I really believe it will change the way you look at the market.
  • #5,926
  • Jul 24, 2013 8:29am Jul 24, 2013 8:29am
I am going back through Greames posts and cutting them into my evernote notebook whilst re-reading them,also tagging them based on the points he making, i.e. entry, participation etc. I think this is a good exercise to have a reference to go back to as well as absorbing the excellent knowledge. Thanks to Calculus who suggested something similar.

In parallel I want to start practicing entering/trading for the next 6 months. I am at home 2 days of the week (U.K. based) so can trade 5 min chart these two days and perhaps 4hr chart other days as I have access to my VPS which has MT4 running and I also have it on my iPhone.

The 20x3 method seem ideal, however I thought maybe tweaking it to perhaps build some legs from it? So instead of TP at 20 you move to BE and that counts as a win. The problem is doing this from work the 3 days I am in. How did others do the 20x3 whilst at work? Maybe in the evening? Or is 2 days a week enough practice?
Economists have forecast 9 out of the last 5 recessions
  • #5,927
  • Jul 24, 2013 1:29pm Jul 24, 2013 1:29pm
Quoting markmm
I am going back through Greames posts and cutting them into my evernote notebook whilst re-reading them,also tagging them based on the points he making, i.e. entry, participation etc. I think this is a good exercise to have a reference to go back to as well as absorbing the excellent knowledge. Thanks to Calculus who suggested something similar. In parallel I want to start practicing entering/trading for the next 6 months. I am at home 2 days of the week (U.K. based) so can trade 5 min chart these two days and perhaps 4hr chart other days as I have...
my 2 cents as I am no expert.... if you plan to do 'set and forget' with pending orders then I am afraid, this exercise won't add much value in improving your price interpretation skills. The key is not to focus on moving SL to BE but to find areas in price levels which will survive for atleast 2 weeks and to gather hints when to get out sooner before SL is hit... This will help you grow with razor sharp entries to keep the 'initial' drawdowns to the minimum. Once your account grows, it becomes all relative. I know my 'emotional pivot levels' and if I am above that level, i don't even care when/where I enter probes as long as I participate for growth and take profits along the way !
Staying in my lane...
  • #5,928
  • Jul 25, 2013 8:20am Jul 25, 2013 8:20am
Quoting VEEFX
Glad you are still around pal !
Vee, thank you buddy, I feel the same about you still helping out.

I think that we have to accept that we will be checking out this thread forever :-)
  • #5,929
  • Jul 25, 2013 8:25am Jul 25, 2013 8:25am
Quoting VEEFX
{quote} my 2 cents as I am no expert.... if you plan to do 'set and forget' with pending orders then I am afraid, this exercise won't add much value in improving your price interpretation skills. The key is not to focus on moving SL to BE but to find areas in price levels which will survive for atleast 2 weeks and to gather hints when to get out sooner before SL is hit... This will help you grow with razor sharp entries to keep the 'initial' drawdowns to the minimum. Once your account grows, it becomes all relative. I know my 'emotional pivot levels'...
Unless one is able to trade full time it's going to be difficult to trade anything lower than 4hr and even that will be difficult. When I initially read the start of this thread I was enthusiastic because Graeme talked about entering on Dailies and holding for months/years, something that can be done while working full time. I would like to trade in that style but don't see how the 3x20 fits in there or even how I can do it when the time I have free is when the market is dead. I am willing to lower my size so a drawdown on daily or multiple losses won't take much capital, and also willing to wait weeks/months to build a decent position so I reckon I will just go ahead with that.
Economists have forecast 9 out of the last 5 recessions
  • #5,930
  • Jul 26, 2013 11:31am Jul 26, 2013 11:31am
Quoting markmm
{quote} Unless one is able to trade full time it's going to be difficult to trade anything lower than 4hr and even that will be difficult. When I initially read the start of this thread I was enthusiastic because Graeme talked about entering on Dailies and holding for months/years, something that can be done while working full time. I would like to trade in that style but don't see how the 3x20 fits in there or even how I can do it when the time I have free is when the market is dead. I am willing to lower my size so a drawdown on daily or multiple...

Hey Mark, Seems like you are focussing too much on the 'have nots' i.e. roadblocks versus what you have or can do! I ran into similar obstacles and one has to try and fit a strategy into your lifestyle and not the other way around. If you don't you might make money but at the expense of being utter miserable affecting your health and ultimately happiness of those around you. you will eventually evolve yourself into what works best for you. It is critical that you don't expect market to give you pips whenever you CAN trade. You have to make yourself available when opportunities arise. Unfortunately, there is no other way out :-(

With that said, this is what I did (and has been mentioned several times before).

_ do all your analysis on weekends. Pick 4-6 pairs that are trending strongly, identify key levels (major 000, monthly OHLC levels, 200EMA cross over, 5/10 ema cross etc) and put sms/push nitification/email alerts on your cellphone.
- invest your hard earned dollars in a good broker who offers mobile trading. MT4Mobile is pretty good if MT4 is your preference. There are other and far better mobile platforms too and most offer live cellphone alerts (like Oanda)
- Only trade when you can after receiving alert. If you are tied up at work, just ignore. It takes me less than 3 minutes to login and open a trade. I just excuse myself for a bio break and trade while taking a piss
- focus on compelling momentum that will hit your TP in under a few minutes. news releases etc could be planned and scheduled into your lifestyle.

Hope this helps.
Staying in my lane...
  • #5,931
  • Jul 26, 2013 1:25pm Jul 26, 2013 1:25pm
Quoting markmm
{quote} If we agree with Greame about it being impossible to predict the next 30-100 pip move direction then the whole idea of razor sharp low risk entries on the lower timeframes is not really possible. The way forex retraces and whipsaws on the smaller timeframes means stop losses will be hit constantly. Traders might think using lower timeframes entires each day means the are participating but they will not be able to build a big position unless they happen to trade right at the top/bottom of a large move. If you reduce your lot size so that...

I have to disagree. I'm currently re-reading the pdf and I'm having a lot of "lightbulb" moments reading posts on price action interpretation. There's a lot to learn from it. Especially that you can't predict the next 30p move, but you can anticipate it. You can prepare for it, participate and either give the market a small loss or take a much bigger win home. Price action interpretation is not about prediction, it's about seeing opportunities and knowing when it works and when it doesn't. And it is just the same on every timeframe, not just M5. It's all about stacking the odds on your side and fixing that game so whatever happens, you win. Different timeframes only change the scale, that's all.
  • #5,932
  • Jul 26, 2013 2:38pm Jul 26, 2013 2:38pm
Quoting VEEFX
{quote} Hey Mark, Seems like you are focussing too much on the 'have nots' i.e. roadblocks versus what you have or can do! I ran into similar obstacles and one has to try and fit a strategy into your lifestyle and not the other way around. If you don't you might make money but at the expense of being utter miserable affecting your health and ultimately happiness of those around you. you will eventually evolve yourself into what works best for you. It is critical that you don't expect market to give you pips whenever you CAN trade. You have to make...
Hi Vex, I came to that conclusion also and I have been trading using the dailies to enter. I have set up a VPS running my live Metatrader (Alpari UK SB) and created an indicator that emails me (using gmail smtp and stunnel) straight to my gmail from MT4 when price is near horizontal lines I give a certain name prefix. (I am a programmer by day) I have my gmail pushing to my phone so I get alerts instantly. I also have mt4 mobile as you mentioned, so I can trade on the go as well as remoting in to my VPS. So I am all set up for push-alert based trading on the move.

I won't use the alerts to enter though, I trade using the open of the daily candle depending on how the previous day closed and a few other high level things. It basically makes me buy when price is going up and sell when price is going down. I have no stops but use my indicator to alert me when price has drawn-down to a place where I would think I should take a look. I can do this because I have reduced my lots sizes to mini-lots. My method will make sure I am participating if there is a trend and my alerts help me cut losses. If I take a few losses in a row I would not trade that pair until price has broken out of the range that it's in.

The main thing for me is to have positions on when the trends come and be able to add over a few weeks and let it ride. I don't analysis too much as I know the market cannot be predicted, I just go with what its doing and my guidelines make sure I add as it goes in my favour. I will trade this way for a 6 months and assess how it is going, its early days and my first two positions are in profit, but based on the principles laid out by Graeme and yourself I hope to be trading this way for the next ten years at least. It's perfect for me as you say you have to trade in a way that suits your lifestyle and doesn't negatively effect your health.

Thanks for the excellent advice, and hope you catch some mega trends this year!!!
Economists have forecast 9 out of the last 5 recessions
  • #5,933
  • Jul 26, 2013 2:51pm Jul 26, 2013 2:51pm
Quoting Barbossa
{quote} I have to disagree. I'm currently re-reading the pdf and I'm having a lot of "lightbulb" moments reading posts on price action interpretation. There's a lot to learn from it. Especially that you can't predict the next 30p move, but you can anticipate it. You can prepare for it, participate and either give the market a small loss or take a much bigger win home. Price action interpretation is not about prediction, it's about seeing opportunities and knowing when it works and when it doesn't. And it is just the same on every timeframe, not...
I agree with everything you said, in a later post I also mentioned that I came to that realisation. You cannot predict but you you MUST be participating in order to catch moves. These might be 40-100 pip moves on lower TF or 1000+ pip moves on higher TF. I cannot personally trade the lower time-frames because of my day job as I work during the London/US early session. I might take a year out from IT contracting to focus on the lower time-frames and I will definitely use the PA knowledge greame has given us, as I am doing now on higher TF's. I had learned PA previously in J16 thread however greames is more coherent and sophisticated I feel. Good luck with your building!
Economists have forecast 9 out of the last 5 recessions
  • #5,934
  • Jul 26, 2013 2:58pm Jul 26, 2013 2:58pm
Quoting markmm
{quote} I agree with everything you said, in a later post I also mentioned that I came to that realisation. You cannot predict but you you MUST be participating in order to catch moves. These might be 40-100 pip moves on lower TF or 1000+ pip moves on higher TF. I cannot personally trade the lower time-frames because of my day job as I work during the London/US early session. I might take a year out from IT contracting to focus on the lower time-frames and I will definitely use the PA knowledge greame has given us, as I am doing now on higher TF's....

pipEASY mentioned that we'll naturally phase into a longer time-frame and that he recommends the M5 for developing our interpretative abilities. I would guess it's related to the less screentime needed on the M5, since events there happen a lot faster and hence you can witness a lot more for the same time.
See you at Graeme's final door!
  • #5,935
  • Jul 26, 2013 3:06pm Jul 26, 2013 3:06pm
Quoting Barbossa
{quote} pipEASY mentioned that we'll naturally phase into a longer time-frame and that he recommends the M5 for developing our interpretative abilities. I would guess it's related to the less screentime needed on the M5, since events there happen a lot faster and hence you can witness a lot more for the same time. See you at Graeme's final door!
Yes I think you would do, yet J16 says the opposite but I am inclined to agree with Greame. However I think the whole interpreting price action thing is quite simple. There are only two basic elements to a chart, price and time, and time is constant. Candles are also not to be relied on 100% as they are arbitrary snapshots of a time/price segment, although the higher you go the more reliable the guide. Recognising the current trend for your scale and knowing how to recognise weakness/strength in price movement is enough. That along with the basic principles of cutting losses and letting profits go and conquering the emotions of greed/fear etc are what I think are the most important.
Economists have forecast 9 out of the last 5 recessions
  • #5,936
  • Jul 27, 2013 11:26am Jul 27, 2013 11:26am
Reading some of the recent posts , this quote from FTI seems appropriate to post here....


"When you are young in the trades, start small build slowly and prudently. It an ants job. If you think that with your money you can come into forex and take as you wish, I emplore you to think again, carefully. Draw a line , ride the trend moves, Truly easier said than done.

To ride day positions, is good when you have already nested big profits as foreign capital to risk. Unless you can make good decisions, in the short term,
I would wonder, how longer term decisions making can be more accurate. Ultimately we trade in the short term, even if positions were to be held for the longer, they are still filled in the short term.

The only difference is that in the longer term positions, as you mention, you cut out the "noice" of short term fluctuations, by providing a larger pain threshold.
If the decision was wrong , a longer term perspective would still be wrong. Hope, may help survive the position, but thats left to the gods to decide.
No form of analysis or decision process is infallable. Risk is just that risk. My feelings is better to be wrong, in the short term, and try to correct that in the longer term when necessary, than to be wrong in the long term and be immobalised. "

Useng short term profits to build capital for long term position building.... is how I deal with frequent small losses and initial capital drawdowns.
Staying in my lane...
  • #5,937
  • Jul 27, 2013 12:29pm Jul 27, 2013 12:29pm
Here's another good story in regards to Your Learning curve....


"A man found a cocoon of an emperor moth.
He took it home so that he could watch the moth come out of the cocoon.
On the day a small opening appeared, he sat and watched
the moth for several hours as the moth struggled to force
the body through that little hole.

Then it seemed to stop making any progress.
It appeared as if it had gotten as far as it could and it could go no farther.
It just seemed to be stuck.
Then the man, in his kindness, decided to help the moth,
so he took a pair of scissors and snipped off the remaining bit of the cocoon.
The moth then emerged easily.

But it had a swollen body and small, shriveled wings.
The man continued to watch the moth because he expected that,
at any moment, the wings would enlarge and expand to be able to support the body,
which would contract in time.

Neither happened!
In fact, the little moth spent the rest of its life crawling around with a swollen body
and shriveled wings.
It never was able to fly.

What the man in his kindness and haste did not understand was that
the restricting cocoon and the struggle required for the moth to get through
the tiny opening was the way of forcing fluid from the body of the moth into its wings
so that it would be ready for flight once it achieved its freedom from the cocoon.
Freedom and flight would only come after the struggle.
By depriving the moth of a struggle, he deprived the moth of health.

Sometimes struggles are exactly what we need in our life.
If we were to go through our life without any obstacles,
we would be crippled.

We would not be as strong as what we could have been.
Give every opportunity a chance, leave no room for regrets."
Staying in my lane...
  • #5,938
  • Edited 6:40pm Jul 27, 2013 6:28pm | Edited 6:40pm
Quoting VEEFX
Here's another good story in regards to Your Learning curve.... "A man found a cocoon of an emperor moth. He took it home so that he could watch the moth come out of the cocoon. On the day a small opening appeared, he sat and watched the moth for several hours as the moth struggled to force the body through that little hole. Then it seemed to stop making any progress. It appeared as if it had gotten as far as it could and it could go no farther. It just seemed to be stuck. Then the man, in his kindness, decided to help the moth, so he took a pair...
Nice one Vee.

We are a product of adversity. Our circulatory system will only become more efficient when it struggles to cope. Our muscles will only get stronger when they can't cope. Our skin cells will only work to protect themselves when hit with UV. Our behaviour only changes when we're forced into a difficult situation where we have to change to get out of it. Etc.

That passage also says a lot about how careful people need to be when they decide to help others too. Helping them might actually rob them of a crucial lesson they need to learn.
  • #5,939
  • Jul 28, 2013 11:54am Jul 28, 2013 11:54am
I am trying this for the 3rd time to see if I get any meaningful responses from those who now fully understand all the key aspects of this trading style. I don't want to hear your opinions but facts around what YOU do. What prompted this post is the fact that I experienced a 82 pip spread widening on eurnzd a minute before NZD interest rate decision last week taking out several of my BE trades bringing me very close to a margin call. During volatile markets, price can drop a 100 pips in a few seconds... we all know that. Massive Weekend gaps occur all the time as well.

Questions:
1. How much buffer do you spare in regards to "available/free margin" to accommodate for such events without risking a margin call to close all your hard earned legs?
2. Before adding a new probe, how much % of free margin should your account have?
3. If you use pending orders across many pairs at key levels (tip of wick as an example to catch double/triple wick bounce) , how do you prevent your account from getting a margin call if your equity suddenly drops and your pending orders come close to getting triggered? An EA that can cancel pending orders based on available margin could be a possible solution. For non-MT4 platforms, how do you deal with this?

As we all know, margin is based on equity. With a lot of legs, equity increases and so does available margin. During a market volatile event, equity can easily drop 1000s of pips if you have lot of legs across many pairs risking our account to a margin call !

I have yet to receive any plausible answer to this conundrum. Even a PM from Graeme back in 2010-11 was not convincing unfortunately. The ONLY solution I can think of to prevent a account liquidation (margin call) is to have an EA run at all times and automatically close out the smallest legs when available margin drops to a certain level. Is there any such EA out there? Going into weekends, I have been reducing my margin exposure on Fridays by 10% if my stacks are heavily condensed in a currency as a precautionary measure which is not ideal!

Consider this a cry for help as this is the ONLY thing that makes me loose my sleep and it affects my mindset big time

p.s. I am not a big fan of MT4 !!!
Staying in my lane...
  • #5,940
  • Jul 28, 2013 12:35pm Jul 28, 2013 12:35pm
Quoting VEEFX
I am trying this for the 3rd time to see if I get any meaningful responses from those who now fully understand all the key aspects of this trading style. I don't want to hear your opinions but facts around what YOU do. What prompted this post is the fact that I experienced a 82 pip spread widening on eurnzd a minute before NZD interest rate decision last week taking out several of my BE trades bringing me very close to a margin call. During volatile markets, price can drop a 100 pips in a few seconds... we all know that. Massive Weekend gaps occur...
If a 82 pip spike is putting you account in danger then you are over leveraged for your account size. This is one of the reasons I like to avoid the smaller time-frames you could have a 20 pip stop at 1% of your account (or no stop) then a news spike comes and wipes 5% of your account. The way I am currently trading a 200 pip spike wont even be 1% of my account, sure I won't be doubling my account every month but I prefer to play the long game and build up slowly. Thankfully by adding mutiple legs and spreading risk over pairs you can scale up without increasing the risk.
Economists have forecast 9 out of the last 5 recessions
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