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5 PIPS - Only Five

  • #781
  • Nov 13, 2014 9:42am Nov 13, 2014 9:42am
There seem to be many posters on this thread that are fixated on black & white rules, seemingly believing that this is what TK5 was offering at the beginning.

This is not the case, TK5 showed us how he sets his charts up to make what he considers are the most reliable entries, but the basic premise of the thread, unless I am misunderstanding is that however you choose to do it, simply jump on a wave of momentum and jump off before it stalls or reverses.

The original aim of TK5's thread, if he doesn't mind me predicting this, was to demonstrate that there are regular points in the market where a discretionary trader using common sense and basic price action recognition can easily grab 5 pips and bank them, then wait for the next opportunity. The 5 pips per hour headline may have been a bit sensationalist but it grabbed attention, 5 pips 4 times per day is more than sufficient to make a handsome living.

Those who are fixating on entry rules or criticising where a perceived 'by the rules' entry fails are sadly missing the point.

I hope tk5 and others who are properly on board with this ideology are not put off by the negativity.
Getting there, slowly but surely...
  • #782
  • Nov 13, 2014 10:36am Nov 13, 2014 10:36am
Quoting Edlich
There seem to be many posters on this thread that are fixated on black & white rules, seemingly believing that this is what TK5 was offering at the beginning. This is not the case, TK5 showed us how he sets his charts up to make what he considers are the most reliable entries, but the basic premise of the thread, unless I am misunderstanding is that however you choose to do it, simply jump on a wave of momentum and jump off before it stalls or reverses. The original aim of TK5's thread, if he doesn't mind me predicting this, was to demonstrate that...
Great summary Sir,
You're on the money !!
No Trend, No Trade!!
  • #783
  • Edited 1:41pm Nov 13, 2014 10:38am | Edited 1:41pm
Edlich, very proper generalization buddy

-------------------------------------------------------------

BOTTOM LINE:

If you INDEED wanna make real money as a retail trader

(Deposit from 400-500 USD)

(Have 1:500 leverage)

(ONLY ECN!! ONLY. STANDARD STP WONT WORK)

1. DO THIS> open each lot 30-50K > grab 5 net pips > leave > repeat 4-5 times a day

2. DONT DO THIS > open each lot 5-10K (crappy 0.01-0.1 lots) > fantasize about 20-40 pips > waste your nerves

Option 1 MUCH MUCH MUCH EASIER to accomplish than Option 2!!!

Now close your eyes and understand the difference between those two options.
always draw trendlines
  • #784
  • Nov 13, 2014 10:58am Nov 13, 2014 10:58am
LoL what a blast I took 7 trades on AJ and got 7 winners, Im not even able to get an ma with a shift nor am I using any of the other indys, just staying with the bigger trend and basing the entry off pullback into a std 5 ma,, most trades would go beyond the 5 pip if I let them run on multiple candles or used other information but for the sake of following the idea best as I could I was taking 5 pip profits, never suffered more than 7 pip drawdown even using AJ (average spread 2.5). Thanks for the effort and sharing Tk5.

Is it fool proof heck no, and neither is anything else out there, use some common sense,,, it took me less than 5 minutes to get the jest of things and start making profitable trades, simple as all get out and I was able to get a good hit rate, although I personally would run a tighter stop but if a wide one fits ones style go for it,, sure beats the clueless punting that gets posted and there is a lot of that, just check the trade explorers once, many will have you shaking your head .
  • #785
  • Nov 13, 2014 12:28pm Nov 13, 2014 12:28pm
Hi,

there are two common ways in trading.
#1: big position in short time
#2: small position in long time

it depends on your choice, no need to agree or argue
  • #786
  • Nov 13, 2014 1:45pm Nov 13, 2014 1:45pm
Quoting firewight
{quote} Hi Moonie, could you elaborate on how this is supposed to work? Thanks!
No problem, refer to Dee's pdf in post 737 to know what to look for.

This indicator tries to detect divergence and draws the lines, gives you an alert and an arrow to show which way to go. I then wait for the cross of the 5EMA before entering.

I have provided a picture below which should make it clear.

Moonie

Attached Image (click to enlarge)
Click to Enlarge Name: moonie_stoch_div.png Size: 106 KB
  • #787
  • Nov 13, 2014 2:33pm Nov 13, 2014 2:33pm
Quoting tk5
Edlich, very proper generalization buddy ------------------------------------------------------------- BOTTOM LINE: If you INDEED wanna make real money as a retail trader (Deposit from 400-500 USD) (Have 1:500 leverage) (ONLY ECN!! ONLY. STANDARD STP WONT WORK) 1. DO THIS> open each lot 30-50K > grab 5 net pips > leave > repeat 4-5 times a day 2. DONT DO THIS > open each lot 5-10K (crappy 0.01-0.1 lots) > fantasize about 20-40 pips > waste your nerves Option 1 MUCH MUCH MUCH EASIER to accomplish than Option 2!!! Now close your eyes and understand...
OK.
But what happens when you have 10 wins in a row at 5 pips each and the next trade you lose 200 pips ?
... it's all fun and games until someone yells "margin call"
  • #788
  • Nov 13, 2014 2:43pm Nov 13, 2014 2:43pm
Quoting Mingary
{quote} OK. But what happens when you have 10 wins in a row at 5 pips each and the next trade you lose 200 pips ? ... it's all fun and games until someone yells "margin call"
too naive.. 200 pips cant be a matter to take place in this trading approach.
always draw trendlines
  • #789
  • Nov 13, 2014 3:10pm Nov 13, 2014 3:10pm
Quoting tk5
{quote} too naive.. 200 pips cant be a matter to take place in this trading approach.
.. I think you are saying it can't happen.
ok. Can you explain how you will survive losing streaks?
thanks
  • #790
  • Nov 13, 2014 3:34pm Nov 13, 2014 3:34pm
Quoting Mingary
{quote} .. I think you are saying it can't happen. ok. Can you explain how you will survive losing streaks? thanks
That's where the discretion, common sense and basic price action knowledge comes in. Basically, if you're not a noob or a Indie addict, applying a 5 pip TP strategy means that if you have a losing streak, then you are unable to identify short term momentum (the entry set up suggested by TK5 being one way of doing so) you need to stop for a while and go back to the drawing board. i.e. discretion and common sense.
Getting there, slowly but surely...
  • #791
  • Nov 13, 2014 3:48pm Nov 13, 2014 3:48pm
Quoting Mingary
{quote} .. I think you are saying it can't happen. ok. Can you explain how you will survive losing streaks? thanks
answer is in your head and ability.
always draw trendlines
  • #792
  • Nov 13, 2014 4:38pm Nov 13, 2014 4:38pm
If you can do this 5 pip thing so consistently with high leverage, you'll be way more profitable doing it in the direction of a large trend and setting it to breakeven right after 5 pip is reached... You may fail say 5-10 times, but you'll probably catch a big move after...

But of course, it's a big IF.
Build good relationships with others.
  • #793
  • Edited 6:12pm Nov 13, 2014 5:29pm | Edited 6:12pm
Quoting Moonie
{quote} No problem, refer to Dee's pdf in post 737 to know what to look for. This indicator tries to detect divergence and draws the lines, gives you an alert and an arrow to show which way to go. I then wait for the cross of the 5EMA before entering. I have provided a picture below which should make it clear. Moonie {image}
Thanks Moonie, that makes sense, so its just an early warning indicator, we will still trade the combined thinking of this thread.

Thanks TK5 and everyone who has contributed for the great thinking!

1st candle opens after 5EMA(2 shitf) cross gives confirmation.
The bigger the candle, the stronger the signal.
Trade with the trend
Under 200MA = short (sell)
Over 200 MA = long (buy)
TP at 5 pips, or pull SL to BE and watch closely for your exit.

Great work guys!
Life is like a snickers, its full of nuts!
  • #794
  • Nov 13, 2014 8:39pm Nov 13, 2014 8:39pm
Quoting bubincka
Here's two trades in which it didn't work. {image} {image}
Even if these 2 trades had the legs to head into profit they would come up against strong resistance in less than 10 pips. We have our signal green[5 ma cross] but like an intersection in driving we would not tear off into the side of a stalled semi even if the light is green. Think of support/resistance as a stalled semi. Eventually we get around it but better to find an open road. Sorry for the lame analogy but its the best i could come up with.
  • #795
  • Nov 13, 2014 10:54pm Nov 13, 2014 10:54pm
Quoting bubincka
Here's two trades in which it didn't work. {image} {image}
Have been reading this thread avidly and trying out the methodology. With regard to these two trades bubincka shows there are a few things I would like to mention.

1. Babincka is not using heiken ashi - for the yen trade the HA candle did not close above 5 ema and the next candle did not open above it so basic "rules" not applied. Price was bouncing off daily pivot/daily open and 200 ema. On any currency price will come down to daily pivot usually bounce then go back re touch pivot and either break or bounce. The daily pivot is like a magnet, until a decision is made to bounce or break it. The correct entry was 4 candles after, when price closed above 5 ema, drawdown was only 2.5 pips then it went 15 pips.

2. The chf trade was showing a break of daily pivot and price was going back to retest pivot and rejected off it. Babincka entered long 2-3 pips just under daily pivot which has become resistance. 20 ema on any timeframe provides a support and resistance area. On the chf trade price touched the 20 ema on 15 min, then continued downward, it broke mid S1 then went down close to S1 and bounced.

Pivots are like magnets and I believe all intra day technical traders should apply pivots to their charts as it makes it much clearer why a trade suddenly turns and changes direction, bounces or continues. It is a great exit point for short term trades.

20 ema as I said on any timeframe is a support resistance area, the 5 ema with shift 2 on 15m is actually fairly equivalent to the 20 ema on 5 min timeframe. What is brilliant about using 5 ema shifted on 15 minute is that is highlights a clearer break of 5 min 20 ema, eg if price is trying to break 20 ema on the 5 min, it seems that the 15 min close is more respected, so each 5 min which closes on the quarter hour ie 15 min candle can be taken more notice of than the other 5 min candle closes. This has been particularly helpful for me on my 5 min charts.

On every chart I put the 20 ema, pivots, daily open, close, yesterdays high and low, and round numbers if you do this you will be aware of support and resistance areas more clearly. These support and resistance areas work well in no news times and very well during Asian trading times.

Using TK's method plus support and resistance/pivots etc allows more discerning entries, its not a mechanical enter all instances, HA is not to be taken as if every change of colour results in 5 pips. When looking for entry sometimes it is advantageous to wait for slight pull back to get better entry. You sometimes miss out but its safer entry for tighter stop loss.


I have applied a money management strategy which is working well for me, enter high lot size relative to account, tight stop loss, have support or resistance in your favour, take 50% off at 5 pips, move sl tighter and hold balance for extra 5, 10, 15 pips, or hold to next pivot if possible. This improves profitability, makes up for those occasional losses or mis timed entries.


I use 7 pip sl during asia, 50% at 5 pips, move sl to -4 which is effectively break even, but allows a little more breathing space than a simple Break even at 5 pips, hold second trade if possible to 10 -20 pips or if looks dodgy exit with small profit on 2nd trade. I use an aussie ecn account which has commission but tight spreads, typically 0.1 to 0.7 on majors, commission $5 thereabouts roundtrip 1 lot. Aussie regulated company and bank account is held in Australia. FXOpen AU not saying they are the greatest or perfect but they offer what I need.
  • #796
  • Nov 14, 2014 12:11am Nov 14, 2014 12:11am
Quoting julie1585
{quote} Have been reading this thread avidly and trying out the methodology. With regard to these two trades bubincka shows there are a few things I would like to mention. 1. Babincka is not using heiken ashi - for the yen trade the HA candle did not close above 5 ema and the next candle did not open above it so basic "rules" not applied. Price was bouncing off daily pivot/daily open and 200 ema. On any currency price will come down to daily pivot usually bounce then go back re touch pivot and either break or bounce. The daily pivot is like a magnet,...
Very insightful piece and well explained. Tx
No Trend, No Trade!!
  • #797
  • Edited 1:36am Nov 14, 2014 1:15am | Edited 1:36am
Quoting Edlich
{quote} That's where the discretion, common sense and basic price action knowledge comes in. Basically, if you're not a noob or a Indie addict, applying a 5 pip TP strategy means that if you have a losing streak, then you are unable to identify short term momentum (the entry set up suggested by TK5 being one way of doing so) you need to stop for a while and go back to the drawing board. i.e. discretion and common sense.

Quoting tk5
{quote} answer is in your head and ability.
I do like the idea of having no method / strategy at all.
No rules. I like it.
Indeed, if the method works then you are following the method!
However, if the strategy does not work... then it's your fault; you are not following the method.
This is a perfect trading system.

... some ugly girl asks the self-help guru: "Sir, I can't get a boy friend"

The guru says: "Try harder, you are not following the method I taught you"
  • #798
  • Nov 14, 2014 1:54am Nov 14, 2014 1:54am
Quoting Mingary
{quote} {quote} I do like the idea of having no method / strategy at all. No rules. I like it. Indeed, if the method works then you are following the method! However, if the strategy does not work... then it's your fault; you are not following the method. This is a perfect trading system. ... some ugly girl asks the self-help guru: "Sir, I can't get a boy friend" The guru says: "Try harder, you are not following the method I taught you"
Sorry if I'm not getting you here but isn't strategy and method one and the same thing?
"patience grasshopper"
  • #799
  • Nov 14, 2014 2:09am Nov 14, 2014 2:09am
Quoting Soupdragon
{quote} Sorry if I'm not getting you here but isn't strategy and method one and the same thing?
Yes, they are synonyms.
  • #800
  • Nov 14, 2014 2:12am Nov 14, 2014 2:12am
Quoting tk5
Edlich, very proper generalization buddy ------------------------------------------------------------- BOTTOM LINE: If you INDEED wanna make real money as a retail trader (Deposit from 400-500 USD) (Have 1:500 leverage) (ONLY ECN!! ONLY. STANDARD STP WONT WORK) 1. DO THIS> open each lot 30-50K > grab 5 net pips > leave > repeat 4-5 times a day 2. DONT DO THIS > open each lot 5-10K (crappy 0.01-0.1 lots) > fantasize...
thats what I do in day trading. simple price action.

http://www.forexfactory.com/showthread.php?t=484850
don't predict direction, but dance with flow of water
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