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Mastering the Art of Trading

  • #1,221
  • Feb 25, 2014 11:28pm Feb 25, 2014 11:28pm
Quoting ghous
Watching for a determined close under the 1.65 RN for this setup on EUR/NZD. Good confluence with the RN, the EMAs, the consolidation box and trend line from earlier. A move down from here and the 1.64-ish region could well be in play. {image} g.
Price drops under the 1.65 but very unlike a true breakout. Not too convinced with the small range bars here. Could well be the fact that we're still caught up in the consolidation box.

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g.
I believe . . .
  • #1,222
  • Feb 26, 2014 12:31am Feb 26, 2014 12:31am
Quoting ghous
{quote} The fake out itself looks magnificent but its almost totally suffocated for space. In this context I do like your tight TP there. Tucked right where it should be for a no brainer trade. {image} g.
Ghous,

Price rocketed past my take profit, but it is making me feel bad. This is one huge psychological issue that I am facing on each and every trade. I take the profit at a logical area and then price blast through it. I promise myself before the trade that I will trail the other half, but when time comes I am unable to implement it. Fear of loosing the profit makes me close the other half at the FTA.
Do you face these psychological issues? How do you deal with it ?

Neytiri
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  • #1,223
  • Feb 26, 2014 1:37am Feb 26, 2014 1:37am
Quoting Neytiri
{quote} Ghous, Price rocketed past my take profit, but it is making me feel bad. This is one huge psychological issue that I am facing on each and every trade. I take the profit at a logical area and then price blast through it. I promise myself before the trade that I will trail the other half, but when time comes I am unable to implement it. Fear of loosing the profit makes me close the other half at the FTA. Do you face these psychological issues? How do you deal with it ? Neytiri {image}
Hey Neytiri,

Yes I do. In my case, because I am so picky, I tend to miss moves altogether but that's totally ok as long as I can logically justify my decision to pass the trade.

No trade is exactly the same as another in terms of quality or the potential. A rigid "take full profit at FTA" strategy is not a bad way of keeping things simple and subtracting the influx of emotions at the time of exit. BUT it comes at a cost, which you're beginning to see. Now only you can dig inside of you, and find out if its worth the price.

The other alternative as you pointed out is to take partial profits at key areas and simply watch to see if price will give you a runner. Yes it means you give yourself a good chance of catching a runner, but it also means taking lesser profit on some trades where you would have made more profit if you were following the other strategy.

There is no one size fits all, and neither strategy is better than the other. As I always say though, the best thing to do is to never restrict yourself to a single strategy anyway. For example with the choppy markets this week, the quick fire trades mentality would surely win over the take and hold mentality. In a swinging market the quick fire technique could hurt as you might end up killing trades before they have had a chance to really run. More specifically so much will also depend on the pair you're trading, the factors in and around the trade, setup quality, overall space etc etc.

Getting down to the AU trade you used as an example, I think the TP was superbly placed as the traffic was quite heavy above. I don't think the fact that it ran into all that trouble (and looks to be sustaining that run) should lead you to question your thinking. In the end, price will just do what it wants to. Our job isn't to nail down the market to the pip, but to nail down our actions in the market. These actions are best judged via logic and worse judged via the outcome.

hope this helps.

g.
I believe . . .
  • #1,224
  • Feb 26, 2014 3:54am Feb 26, 2014 3:54am
Quoting ghous
{quote} Hey Neytiri, Yes I do. In my case, because I am so picky, I tend to miss moves altogether but that's totally ok as long as I can logically justify my decision to pass the trade. No trade is exactly the same as another in terms of quality or the potential. A rigid "take full profit at FTA" strategy is not a bad way of keeping things simple and subtracting the influx of emotions at the time of exit. BUT it comes at a cost, which you're beginning to see. Now only you can dig inside of you, and find out if its worth the price. The other alternative...

You are so right. Logic is the way to go.
I think mentally I should try to be OK with the drawbacks of taking profit at first logical area. Look what happened soon after I took full profit - price shot up and then retraced back to where I took full profit
Neytiri
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  • #1,225
  • Feb 26, 2014 4:03am Feb 26, 2014 4:03am
Quoting Neytiri
{quote} Look what happened soon after I took full profit - price shot up and then retraced back to where I took full profit Neytiri {image}
Most importantly - It was predictable all the way!

Whatever trade management method you choose to use for the trade, as long as it revolves around the available information its good to go.

g.
I believe . . .
  • #1,226
  • Feb 26, 2014 4:10am Feb 26, 2014 4:10am
Quoting Neytiri
{quote} Ghous, Price rocketed past my take profit, but it is making me feel bad. This is one huge psychological issue that I am facing on each and every trade. I take the profit at a logical area and then price blast through it. I promise myself before the trade that I will trail the other half, but when time comes I am unable to implement it. Fear of loosing the profit makes me close the other half at the FTA. Do you face these psychological issues? How do you deal with it ? Neytiri {image}
I have been setting my stops behind the last SR area, and letting my stops take me out. This has seen me miss 40-50 pips per trade, so I have been thinking about setting set profit points, say a strong SR, or a good 2:1, 3:1 - sounds similar to what you have been doing.

This would then of course introduce the problem you've been discussing - seeing price go an a crazy run. To mitigate this I'm thinking of instead of taking profit at these points, maybe setting a super tight stop of 10 pips. So if it reverses or decides to mess around for a day or two, I'm out with a loss of 10pips or so, which I can handle. If it goes on a run, I'll catch some of it.

Sounds ideal on paper, but of course my demo implementation will no doubt work out differently. I find managing my exits difficult, and losing 40-50 pips per successful trade is hurting a lot at the moment ( my balance, and psychologically ) ...
We are what we repeatedly do. Excellence, then, is not an act, but a habit
  • #1,227
  • Feb 26, 2014 4:49am Feb 26, 2014 4:49am
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  • #1,228
  • Feb 26, 2014 6:30am Feb 26, 2014 6:30am
Quoting Neytiri
. {image}
That's a tough one IMO.

The fake out story isn't that strong and you're buying straight into resistance without ample information to suggest, rather predict, a break to the upside. I would have preferred a pull back to the LLS as shown in the chart.

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PS: How many trades are you averaging a week?

g.
I believe . . .
  • #1,229
  • Feb 26, 2014 8:06am Feb 26, 2014 8:06am
Quoting ghous
{quote} That's a tough one IMO. The fake out story isn't that strong and you're buying straight into resistance without ample information to suggest, rather predict, a break to the upside. I would have preferred a pull back to the LLS as shown in the chart. {image} PS: How many trades are you averaging a week? g.
This month the number of trades has been quite high -- I think 15 fakeout trades, out of which 4 went horribly wrong. I know the number of trades is quite high. It is probably because most of the time I have kept the risk reward ratio quite low.

N
  • #1,230
  • Feb 26, 2014 8:39am Feb 26, 2014 8:39am
Quoting ghous
{quote}...I would have preferred a pull back to the LLS as shown in the chart. ...
But after a pullback there would be 'traffic' just above wouldn't it (no room)?
Posting Demo charts, mirroring some of them live.
  • #1,231
  • Feb 26, 2014 9:20am Feb 26, 2014 9:20am
Quoting forexpiet
{quote} But after a pullback there would be 'traffic' just above wouldn't it (no room)?
Yes that is correct. I was referring to the initial pull back making it back to the LLS not a pull back from here on. Sorry if that confused you.

g.
I believe . . .
  • #1,232
  • Feb 26, 2014 9:30am Feb 26, 2014 9:30am
Quoting ghous
{quote} I have been watching this on the 1H. Haven't yet found any fake out trigger worth really going for. We had a bullish outside bar on the first touch, but as a trigger would have been very aggressive. Can you work out why being extra careful here is so important? {image} g.
to give my 2 cents...

Imho there's no much defense to the downside, this can easily drop to the very next support with no shake and if we dont see nice and quick correction at the very first pullback we are not likely to see it at the next one.

best,
Jonas


looking forward to your opinion.
Hero calls followed by margin calls...
  • #1,233
  • Feb 26, 2014 9:32am Feb 26, 2014 9:32am
Quoting MrWeiss
Hello Trades. Yesterday i remember one of my trades in Oktober 2013. I've testing my strategy under market conditions on a demo acount after backtesting. My strategy was based on PA S&R and TDI indicator. I will not bring in here other stuff and garbadge systems - BUT independent on the system it is in the end a view from a other angle on the same thing. I trade more konservative and entred a reversal at the 2 or 3th Candle in daily charts. My stops was therefore 100 Pips or more away. And here is the point where "Mastering the Art of Trading" jumps...

fakeouts sometimes offer us nice pinbar patterns at support/resistance areas, ain't that nice?
Hero calls followed by margin calls...
  • #1,234
  • Feb 26, 2014 9:32am Feb 26, 2014 9:32am
Quoting Neytiri
Fakeout followed by a nice rounded retest of brn 0.8. N {image}
.
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  • #1,235
  • Edited 10:08am Feb 26, 2014 9:49am | Edited 10:08am
Quoting Neytiri
Head and Shoulder pattern is followed by period of consolidation. There is break out of consolidation followed by a retest of the vbrn 9.0 which is a ppz. Price fall back and closes below the HHR. I entered short and my target is the bar high of the consolidation box. If price closes above the HHR (which roughly corresponds to 23% fib retrace), I will exit the trade. N {image}
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  • #1,236
  • Feb 26, 2014 10:53am Feb 26, 2014 10:53am
Quoting PhAnTi'
{quote} to give my 2 cents... Imho there's no much defense to the downside, this can easily drop to the very next support with no shake and if we dont see nice and quick correction at the very first pullback we are not likely to see it at the next one. best, Jonas looking forward to your opinion.
You made me think of making up an "order flow" story. I do not consider myself to be an expert, but I will try anyway.

Suppose in the gold rectangle area traders are waiting to go short on a retrace alongside allready traders being short. They got "captured" by the sudden strong bullish move. A pullback starts (see blue rectangle). Not as strong and fast as the bull move but decent enough I think to make a lot of traders think the downmove resumes which make the early bulls close their positions. The trapped bears are hoping they can get out with a profit. But the MM's keep the price from falling further into the red rectangle, so the shorts are stuck. After 16 hours above the 1.1050 level it seems the downside is "protected".
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Does this make any sense?
Posting Demo charts, mirroring some of them live.
  • #1,237
  • Feb 26, 2014 11:10am Feb 26, 2014 11:10am
Quoting PhAnTi'
{quote} to give my 2 cents... Imho there's no much defense to the downside, this can easily drop to the very next support with no shake and if we dont see nice and quick correction at the very first pullback we are not likely to see it at the next one. best, Jonas looking forward to your opinion.
Yeah, I too felt that there really wasn't any solid bullish story there . . .

g.
I believe . . .
  • #1,238
  • Feb 26, 2014 11:11am Feb 26, 2014 11:11am
Quoting PhAnTi'
{quote} fakeouts sometimes offer us nice pinbar patterns at support/resistance areas, ain't that nice?
You bet!

Love my pin bars as fake out bars

g.
I believe . . .
  • #1,239
  • Feb 26, 2014 11:24am Feb 26, 2014 11:24am
Quoting Neytiri
{quote} {image} {image}
You spotted the setup on the daily. Treating this as a daily trade, would have allowed you to witness some totally non-threatening "textbook stuff". I have been burnt time and time again, by zooming in on the action, to try and follow price more closely and have only ended up getting caught up in the noise.

I just prefer to keep my time frames separate and manage the setup on the time frame I analyze it on. Keeps things simple and doesn't put any harsh limitations on the setup to work "literally" to the pip.

g.
I believe . . .
  • #1,240
  • Feb 26, 2014 11:27am Feb 26, 2014 11:27am
Ghous,

In fakeout trades, do you place a limit buy order at the lls waiting for the retest to take place? Or is it like you wait for the retest price action bar to completely form on lower time scales (say 1 hr) and then make the entry. Also, do you keep the stop loss below the low of the initial fakeout bar or below the low of the retest bar?


Thanks,

Neytiri
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