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Money Management is everything

  • #101
  • Dec 18, 2013 10:35am Dec 18, 2013 10:35am
Quoting Boy Wonder
What you're saying appears to be that price action is random. {image}

Luca: We seem to be getting a better class of reader since you started talking about Modigliani and James Milner.......
by the way.............do you really believe that price is random.................

Me: I have no idea.............it might be random and it might not ................it's irrelevant to me........as long as my money management
is o.k. I will be alright. By the way your sister ( the one who went to art college) loves his retro monochrome chart.

Luca: I'm not taking any investment advice from someone who obviously can't afford a colour monitor.
  • #102
  • Dec 19, 2013 4:38pm Dec 19, 2013 4:38pm
Luca: That Fibonacci bloke .........he is.... the ultimate God of all traders - what do we think of him........?

Me: I think he did a lot of sound research into the reproductive habits of small animals with big ears...........

Luca: Yes ............but surely the number of rabbits next year has some influence on the price of the eurusd.........?
  • #103
  • Dec 20, 2013 8:33am Dec 20, 2013 8:33am
Quoting Paddy9
Luca: Yes ............but surely the number of rabbits next year has some influence on the price of the eurusd.........?
I am not an expert on rabbits.......so don't quote me on this ... ...but I think that the fib. rabbit theory goes as follows...........

Although the number of rabbits may not directly affect a currency price.....if enough people believe that it does and they act on this belief .............it then becomes a self fulfilling prophecy.

Of course Mr Fib's rabbit theory isn't perfect ....for example his theory assumes that no rabbits get run over by cars, or die from natural causes. They live for ever.

That' s gotta be a problem with the theory .............it's a bit like a staunch Fib currency trader assuming that the Bank of Japan will never intervene in the currency market to manipulate the price of the Yen.
  • #104
  • Edited 8:55am Dec 20, 2013 8:42am | Edited 8:55am
The title is interesting, but I don't get what you're saying...
Please just post a chart that you took a trade (doesn't matter if it won or lose). Then, explain what you're trying to do.
  • #105
  • Dec 20, 2013 8:52am Dec 20, 2013 8:52am
Here's a chart - I post them to amuse Luca..........I like to ask him what happens when we get a white candle
under the red wavy line........you would like to think that by now he could do his own curve fitting.........
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  • #106
  • Dec 20, 2013 9:07am Dec 20, 2013 9:07am
Quoting Paddy9
{quote}
To me the time of the exit is always key. Lets look at the history of a hypothetical trade
1. We sell EURUSD at 8a.m
2. The trade goes up by 50 pips by 9.00a.m
3.The trade falls back to break even at 10.a.m
4. The trade moves in to a draw down of 50 pips by 12 noon.
5 The trade moves to 100 pips down at 1pm.
So depending on the time of our exit our profit could be 50 pips or no pips or a loss of 50 pips or a loss of 100 pips. In this particular hypothetical trade it didn't matter whether we sold or bought at 8.a.m either trade...
The title of the thread is meant to be a funny reference to the name of another thread..............nothing is everything.

The quote above sums up the whole thread.
  • #107
  • Dec 20, 2013 11:33am Dec 20, 2013 11:33am
Luca: Do you ever read other peoples threads .............you never post on them.
Me: I 'm too busy here at the cutting edge of forex system design..........our SMS system is already a legend and I haven't even finished it yet.
Luca: I have been reading a thread by a guy who places his bets based on "rabbit theory and harmonicas".
Me: I am not aware of his work ............but it is probably based on "Fibonacci Ratios and market Harmonics"..........
Luca: What are "Harmonics" ?
Me: Dunno.........I think that it's a posh word for a mouth organ..........and by the way do not EVER use the word "bet" on my thread again!
  • #108
  • Dec 20, 2013 9:39pm Dec 20, 2013 9:39pm
Paddy9
Thank you for a truly entertaining thread. If forex trading doesn't make you rich, try writing comedy. You are clever. Even my "Mission Control" has been asking "what are you reading". She won't look at forex but finds this thread interesting.
I'm not sure just what I have learned so far, but you have caused me to stop and re-evaluate my trading methods. Sometime ago I gave up basing my entries on indicators and now rely solely on price breaking either direction from a "price stall". Works just as well as indicators for me.
Larry Williams stated in one of his many books, that Money Management is the "holy grail".
Please keep posting your thoughts.
gmcc
  • #109
  • Dec 22, 2013 9:23am Dec 22, 2013 9:23am
Quoting gmcc
Paddy9 Thank you for a truly entertaining thread. If forex trading doesn't make you rich, try writing comedy. You are clever. Even my "Mission Control" has been asking "what are you reading". She won't look at forex but finds this thread interesting. I'm not sure just what I have learned so far, but you have caused me to stop and re-evaluate my trading methods. Sometime ago I gave up basing my entries on indicators and now rely solely on price breaking either direction from a "price stall". Works just as well as indicators for me. Larry Williams...



Luca: Here ‘s an interesting post………. this guy has written a little domestic scene with two talking characters…..him and his wife……..the male lead is sitting at his computer …reading a cutting edge thread….. and naturally he is chuckling to himself.

The female lead (his wife) is curious…. so she asks him “what are you reading ? “…..

It turns out that although the female character has no interest in handing over her drinking vouchers to Oanda…….they both have a
mutual interest in silly forex threads…

Me: And your point is ?

Luca : Do you think that the idea of talking charcters in a forex thread will ever catch on

Me: No chance
  • #110
  • Dec 23, 2013 9:37am Dec 23, 2013 9:37am
When me and Luca came back from the Rat and Parrot last night Mrs Paddy9 was reading her new book.


Luca: Hi Mrs P9 whats your book called ?

Mrs Paddy9: Watership Down.

Luca: Whats that all about then ?

Mrs Paddy9: It’s a bit like James Bond only it’s a story about rabbits…..

Just like in James Bond no matter how dangerous the scrape that they get into …the rabbits always come out of it alive……….at the end of the book the hero rabbit falls asleep and is whisked off to rabbit heaven where he will live for evermore……


Luca ( grinning from ear to ear ) … so it’s a far fetched story about rabbits that are never run over ….and they never die of natural causes is it ?


Mrs Paddy9: Yes…. it sounds as if the author got high whilst reading the thoughts of a famous mathmatician from Pisa………..I think his best seller was called Liber Abaci.

Luca ( incredulous ) Do you mean Fibonnacci ?

Mrs Paddy ( with a viscious grin) you may call him Fibonacci but his real name was Leonardo Pisano Bigollo….he was famous for stealing the ideas of previous mathematicians and making himself a few quid in the process. He was like an early version of Bob Dylan.

Me: I don't know if I have mentioned it before but......................I hate everthing.
  • #111
  • Dec 23, 2013 11:50am Dec 23, 2013 11:50am
As you know....... I now hate everything.

This includes sitting having a pint in The Rat and Parrot public house.

My drinking partner... Luca ...is telling all the locals that Mrs Paddy9 is barking mad.

He says that Mrs Paddy9 thinks that Fibonacci named himself after Duce Bigallo ( something to do with an unpleasant film )....
....furthermore he accuses her of thinking that the world famous rabbit theory appeared in a book called Librace ( a camp ivory tickler) .....

I sit there.... sadly..... looking at an almost full pint........she who must be obeyed is never wrong........I am not gonna bother to google it to find out the truth............the truth is Mrs Management has closed the only avenue of pleasure that I had left .... my forex blog.......for the first time ever I know what Basil Fawlty was going through..........

..........rats.....
  • #112
  • Dec 26, 2013 6:41pm Dec 26, 2013 6:41pm
Luca: It's a thread not a blog.
  • #113
  • Jan 2, 2014 9:23am Jan 2, 2014 9:23am
Luca: Did you have any trades today ?
Me: Yeah.
Luca: Did you win ?
Me: Yeah.
Luca: You must have been lucky........just like that golfer... Gary Player... he was always telling people how lucky he was.
Me : Yeah ......the luckier he got the more he prac.............................
  • #114
  • Jan 2, 2014 3:27pm Jan 2, 2014 3:27pm
Hi Paddy6
Would you be willing to share in more detail your thoughts on money management. I'm sure Luca would be more capable of better responses if he knew a little more detail about your trading techniques. You teased in some earlier posts, by asking Luca questions about some charts. Luca, like me may need more detailed info. I'd like to be setting on a bar stool in the Rat & Parrot next to Luca as the conversation begins.
Again, I have great respect for traders like you, who come to FF and freely share their talents. My work career was in an industry where very little info. was shared between competitors.
Thanks
  • #115
  • Jan 7, 2014 2:53pm Jan 7, 2014 2:53pm
The Legendary world famous Sans Merit Forex system for curve fitters.

It's not so hard to work out:

1.If the red wavy line is above the three green wavy lines - what are you thinking ?
2.If you get a white candle what are you thinking ?

3. If you are speaking to Luca... and he has been looking at brochures for large floaty things ...what question comes to mind ?


The easiest question to answer is question 3....... you simply reply ........did you ever study French at school ?
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  • #116
  • Jan 7, 2014 3:10pm Jan 7, 2014 3:10pm
Luca: I know that you are making fun of me .......... you had a dodgy looking trade today... did you win ?

Me: Yeah........ I was lucky.

Luca: I think I'm starting to hate everything as well......
  • #117
  • Jan 8, 2014 10:34am Jan 8, 2014 10:34am
Hi Paddy9
I am not sure if your earlier post was meant as a question for me or not. I hope you understand that I'm an older trader, who is totally lacking in creative ideas. I think I understand how you are choosing your trades, although your last NZD/USD chart did not appear to me to be one I would have chosen to trade- trend seems to have weakened.
I assume you use the 3 green moving average lines to establish the trend. Then you use a pullback below a faster (red) moving average to filter an entry when you get a fresh white hieken ashi candle. Those all appear to be good entries but how is your money management technique incorporated.
I hope Luca knows what each of your ma's are, I have not been able to match them up yet. But I still believe your management of each trade is more important than your entries.
Luca and I may be a real test of your teaching ability.
  • #118
  • Edited 4:49pm Jan 30, 2014 3:28pm | Edited 4:49pm
The Legendary world famous Sans Merit Forex system for curve fitters.



Luca: I love our satirical system.... do you think that anyone will believe that we mean it ..?
It would be a gas...........I have just opened a buy for NZDUSD at 0.81495.


Me: Yeah....... and I have just won the U.S. open...........who is the biggest liar.....?

Luca: When you say that the clue is in the title.........what do you mean exactly.........?
  • #119
  • Edited 3:59am Jan 31, 2014 3:25am | Edited 3:59am
I'm glad that you have addressed some issues that are prevalent on this board.

I think i know what you are doing. You are opening multiple positions based on the coin flip and at very low effective leverages. Then you are setting a stop and TP at a favourable risk/reward ratio and watching the losers to see if they are likely to come back. If you think that the chance of them reversing and hitting your TP is small, then you close them out, while at the same time allowing your winners to continue up, and probably reopening the closed trades based on new coin flips. It has me wondering what kind of SL and TP you are using, but i don't think that you should tell us.

I'm going to try this on a demo account.

Edit. From your trade explorer, it looks like your TP is 20 pips and you close out for just under that when you lose.
  • #120
  • Sep 17, 2014 5:16pm Sep 17, 2014 5:16pm
Luca: What does stultifyingly boring mean ?
Me: Hang on.............I'll look it up in the Gullible Traders Dictionary.............the definition is ...
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