Disliked{quote} well said, but that still does not address the DD problem. At what point would you jump ship? Currencies trend, thats just the simple truth of it. Why not 2 scouts at a PVSRA signal, then building positions after "classic" signals, then add positions trend-wise? Just my cents thrown in...Ignored
Trading counter-MMs has also been noted in Tah's PVSRA manual. This method is good for you if you like to see profits soon first, and not realize the DD. But be careful. If you go long in a BULL trend when it has moved for some time, reversal is coming near. So you want to build longs early on. You will be in the same position if you build in the same direction late game. But this method itself has potential too as we can see that the building phase can be quite substantial. And all of us should try out what we are comfortable with and post your results. It'll show real statistical data on the success/failure of a certain method, and ultimately improve our trading methodology.
IMHO, classic positions building counter MMs are best in the beginning stages of a reversal. When a trend has gone for a long time, any additional days after a week exponentially increases the probability of reversal (Kathy Lien in one of her Trading Books). Not saying it won't continue, but based on trend length statistics. Meaning most trends last less than a week. Why is it that PVSRA has been working on a weekly bases after all? But every now and then, you will get a very long trend.
As for building with the MMs, I've noted two ways to mitigate this, and that is to trade small and start building later in the game. Zoom out to your H4 and get a feel for the average building length, where the average price would be, and then enter accordingly. If you are at the end of a build phase, great, you'll be in profit soon. If not, you're at the best position to build as you are coming near reversals, and so your average price will be exceptional. Tah has also noted to save your bullets for those final runs b/c they will drive price to load more to their positions to complete their quota.
This system is not the Holy Grail, no system is. But it's one of the most successful systems I've seen. And we are still in the progress of "cutting" this diamond.
In the end, you really have to trade with what works for you and what you are comfortable with because your trading psychology will ultimately drive your actions. I like this system as it trains your psychology. If you trade PVSRA, stop watching ticker and look at what the price action is doing. Look at the SR level action and think about how the big players are to make money. Then choose to build with or counter. Link that with proper money management, and you have prepared for the worst. We have to accept that losses are part of the game and of every system.
In reference to your DD statement, when is enough enough? Ask yourself this question. It depends on the trader. But more likely than not, you will hit margin call before that happens if you are in this position as you're loaded too much. I'm still figuring out those kinks myself. Trade more pairs = less scouts, and vice versa. Have a total number of scouts you ever have open, and no more and divide it up.
Wish you the best in trading,
--qFish
insanity: Doing the same thing over... and expecting different results -AE
